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Choose to buy local: President Ramaphosa (SAnews)
President Cyril Ramaphosa has encouraged South Africans - whether individuals or businesses - to always choose to buy local to support livelihoods, small business development and job creation. The President said that by buying locally-produced goods, people will be supporting investment in research, new technology and innovation. “As long as we are producing quality local goods, we should also be buying them,” he said.
The President said a growing local market enables producers to expand and to start exploring export opportunities in other markets.
President Ramaphosa said the pandemic has both exposed the fragility of global supply chains and revealed the great capacity in South Africa for innovation and adaptation in manufacturing. In the space of just two years, through collaboration and out of necessity, South Africa managed to build local production capability in ventilators, hand sanitisers, medical-grade face masks and gloves, vaccines, and therapeutic drugs and anaesthetics. “Not only did we produce these goods to meet local needs, but also to meet the needs of other countries on the continent. Local production is important because it encourages national pride in the goods, services and products made on our home soil,” he said. The President added that he supports the growth of small businesses and the expansion of larger firms. Local production also supports the manufacturing sector.
Major highway upgrades coming for South Africa – including a massive trade corridor (BusinessTech)
Government plans a major expansion of the road corridor connecting Johannesburg and Durban as part of a push to turn South Africa into one of the continent’s major trade hubs. The proposal is included in the government’s national infrastructure plan 2050 which was published by public works and Infrastructure minister Patricia De Lille on Friday (11 March). The project – which has been dubbed the ‘Durban-Free State-Gauteng logistics and industrial corridor’ – will see several developments aimed at strengthening logistics and transport corridors between the main industrial hubs. These planned projects include: Improving access to Durban’s export and import facilities, Integrating the Free State industrial strategy activities into the corridor, Establishing Durban as a hub port Building an aerotropolis around OR Tambo Airport. A separate Saldanha-Northern Cape development corridor is also expected to bolster the country’s integrated rail and port expansion and back-of-port industrial capacity.
Agriculture essential to economic recovery (SAnews)
The agricultural sector has the potential to be a key driver on South Africa’s road to economic reconstruction and recovery. This is according to President Cyril Ramaphosa who was addressing the Annual General Meeting of the Bonsmara Breeders’ Society. During the last quarter of 2021, the agriculture sector – boosted by increased production of field crops, horticulture and animal products – recorded the strongest growth, surging from at least R114 billion in 2021’s third quarter to some R127 billion in the fourth. “As we saw during the COVID-19 pandemic, agriculture is a resilient sector that was able to sustain food security during times of great uncertainty. “An important contribution to the fight against hunger was the special social relief of distress grants for unemployed people, and the input vouchers provided to small-scale farmers as part of the Presidential Employment Stimulus,” the President said.
Mantashe: SA needs to find its own oil reserves to mitigate spiking fuel costs (Eyewitness News)
Mineral Resources and Energy Minister Gwede Mantashe on Tuesday said South Africa would need to explore and find its own oil reserves if it wanted to mitigate against rising fuel costs. The minister also said the country needed to grow its fuel refinery capacity as the world struggled with rising prices. MPs also asked the department and Mantashe how government can limit its exposure to rising fuel costs.
“And there’s a question that was asked, how do we limit vulnerability? There are two things that I think we should investigate: one is exploration and that’s going to discover our own oil and gas.”
Qatar-South Africa bilateral trade increases by 37% (Doha News)
The Gulf state is keen on enhancing its bilateral trade-ties with the South African country officials stated. Qatar and South Africa’s bilateral trade has documented a 37% increase between 2020 and 2021, an increases officials attribute to the strong economic relations between both nations.
Qatar Chamber’s First Vice-Chairman Mohamed bin Towar Al Kuwari revealed that the trade numbers have jumped from 786 million QAR in 2020 to 1.2 billion QAR in 2021, highlighting the significant momentum relations gained in recent years. The hopeful numbers were announced during the ’Qatar-South Africa Business Forum’ held online Monday to strengthen trade ties of both countries.
‘Mineral leakages bleeding Zimbabwe economy’ (The Zimbabwe Mail)
SOCIO-ECONOMIC watchdog, Zimbabwe Coalition on Debt and Development (Zimcodd) has called on government to curb mineral leakages and export of raw minerals to help revive the economy. In its recent statement on mineral leakages, Zimcodd said approximately US$12 billion in potential foreign earnings was lost through export of raw minerals. “Evidence suggests that Zimbabwe continues to bleed in mineral revenue while citizens are disenfranchised, exposed to violence and health risks, and are deprived of economic gains,” read the Zimcodd statement. “In order to curb further bleeding, there is need to strengthen the country’s export earning capacity and promote socio-economic development. “The government must implement the local content strategy for broad-based socio-economic growth at national and sub-national levels. The government should put forward policies that encourage or force businesses to add value and beneficiate minerals to increase export earnings as well as employment of local people.”
Namibia export earnings drop by 24% (New Era)
For the month of January 2022, Namibia’s export earnings stood at N$7.6 billion, representing a decrease of 24% monthly, while the imports bill amounted to N$11.7 billion, down by 6% on a monthly basis. According to the Namibia Trade Statistics bulletin for January 2022 recently released by Namibia Statistics Agency, these trade figures resulted in a trade deficit of N$4.1 billion, compared to N$2.5 billion recorded in December 2021.The value of exports in January 2022 decreased by 24% to N$7.6 billion from its December 2021 level of N$10 billion. On the other hand, when compared to its level of N$6.2 billion recorded in January 2021, exports increased by 22%. Imports stood at N$11.7 billion, reflecting a decrease of 6% month-on-month and an increase of 24.9% on a yearly basis. Following these developments in both directions, NSA stated that Namibia’s total merchandise trade (exports plus imports) with the rest of the world decreased by 14% from its December 2021 level of N$22.5 billion to N$19.3 billion recorded in January 2022. On the contrary, total trade value increased by 23.8% when compared to N$16.8 billion recorded in January 2021.
We Are A Corruption Intolerant Country, Mnangagwa Says At World Expo 2022 (NewZimbabwe)
PRESIDENT Emmerson Mnangagwa on Monday took his ‘Zimbabwe is Open For Business’ mantra to Dubai where he told delegates the country has a zero tolerance to corruption. He was speaking at this year’s World Expo on Zimbabwe national day.
“Zimbabwe’s skills and human capital base, central and strategic location in Southern Africa coupled with political stability, peace and security constitute some of the major attributes that make our country an attractive investment destination for global capital,” Mnangagwa said. “Over and above this we are unwavering in entrenching the values of hard and honest work, transparency, accountability and zero tolerance to corruption.” “Zimbabwe looks forward to drawing from the world renowned UAE and other countries’ ICTs to modernise and leapfrog our industrialisation.”
Current account gap at three-year high on rising oil prices (Business Daily)
Kenya’s current account deficit in the year through January widened to a three-year high on rising petroleum products costs which pushed up import bill at a faster rate than earnings from agricultural exports and diaspora remittances. Data released by the Central Bank of Kenya Friday estimated the gap between the country’s foreign exchange outflows and inflows at 5.6 percent of gross domestic product (GDP) from 4.3 percent a year earlier. That was the highest since 5.8 percent in 2019. The deficit in January means the mismatch between the amounts Kenya spent on foreign payments for imports such as oil and industrial supplies, dividends, interest as well as services outstripped that which it received from abroad by an equivalent of 5.6 percent of the economic output. “The wider deficit reflects a higher import bill, particularly oil, which more than offset increased receipts from agricultural and services exports and remittances,” CBK wrote in its weekly bulletin.
KRA unlocks Sh10bn through out of court dispute resolutions (Business Daily)
The Kenya Revenue Authority (KRA) resolved 319 cases referred to arbitration in the first half of the current financial year ending June, as the taxman opts for out-of-court settlements. The taxman said this represents 57 percent of the cases referred to arbitration in the first half of the current financial year ending compared with 49.29 percent in the previous period.
Paul Matuku, the Commissioner for Legal Services at KRA, said 319 out 559 cases that went through the Times Tower-led Alternative Tax Dispute Resolution (ADR) process were resolved compared with 243 out of 493 cases settled last year.
“The growth in the number of applications to ADR confirms the growth in the number of taxpayers who are increasingly embracing ADR in preference to other dispute resolution mechanisms such as litigation processes,” Mr Matuku said in a statement.
Kenya readies expanded Mombasa port for operations (The East African)
Kenya Ports Authority is preparing to handle more cargo at the Mombasa port after the completion of a second container terminal (CT2) that can accommodate at least 450 twenty-foot-containers at a time. The CT2, which is part of the Mombasa port development programme, is designed to accommodate larger vessels. According to KPA, the terminal will give the port a competitive edge over neighbouring ports, mainly in Dar es Salaam and Djibouti.
By 2023, the port of Mombasa is expected to handle about 1.732 million twenty foot equivalent units up from the current 1.42 million. It is estimated the port will handle 47 million tonnes of cargo in the next 10 years from the current 30 million tonnes and up to 111 million tonnes by 2047.
The developments at the Kenya’s main seaport comes amid a shift in the global shipping industry, which is moving towards the use of large vessels for economies of scale. Mombasa port remains a key facility for the country’s international trade, and serves landlocked Uganda, South Sudan, Eastern DRC, Burundi and Rwanda. To effectively complete with other neighbouring ports, KPA has developed other peripheral infrastructures along the Northern Corridor, including the Inland Container Deport in Nairobi and the Naivasha dry port, which are key for cargo destined for both Kenya and neighbouring states via the standard gauge railway.
Tanzania, Kenya resolve 10 more trade hindrances (The Citizen)
Tanzania and Kenya have resolved ten more trade barriers in effort to grow the trade between the two member states of the East African Community (EAC).
President Samia Suluhu Hassan visited Kenya last May and met her counterpart Uhuru Kenyatta to mend the then deteriorating bilateral ties. The two leaders ordered ministers and other officials to meet and discuss the issues. Through the follow-up meetings, some 56 issues were reported to have been resolved in 2021, prompting the growth of trade between the two countries by 38 percent to $765 million in the same year, according to a communique of the latest meeting.
Gamea: Ministry keen on coordinating with all state bodies, private sector to increase exports (SIS)
Minister of Trade and Industry Neveen Gamea asserted the ministry’s keenness on coordinating with all governmental bodies concerned and the private sector to outline an integrated vision to increase the Egyptian exports to global markets to reach the target of dlrs 100 billion annually.
The minister’s remarks were made during her participation in a symposium under the title of “Industry and Exports...Duality of Growth and Development” organized by the Lebanese-Egyptian Businessmen Association (LEBA) chaired by Fathallah Fawzi.
Gamea said the recent measures adopted by the government achieved a positive outcome on the growth of Egypt’s non-petroleum exports which exceeded dlrs 32 billion in 2021 for the first time compared with dlrs 25.4 billion in 2020, recording a rise of 27 percent.
New US Investments Unlock Trade Potential for Businesses in Ghana (African Business)
U.S. Ambassador Stephanie S. Sullivan today announced new co-investments by the U.S. Agency for International Development (USAID) totaling $4.2 million with five companies operating in Ghana. These projects, leveraged with private sector funds, will help these companies scale up operations, develop export opportunities, and create jobs. Ambassador Sullivan made the announcement during the U.S. Embassy’s Providing Opportunity for Women’s Economic Rise (POWER) program for women entrepreneurs from Ghana and the North American diaspora.
“The West Africa Trade and Investment Hub was created to help entrepreneurs like those participating in the Women’s Empowerment Lab take advantage of export opportunities. Ghanaian companies can export more than 6,500 goods duty-free to the United States today, and the AfCFTA opens up a $3.4 trillion market. These co-investments will help these companies access African and U.S. markets, while creating jobs here in Ghana,” said Ambassador Sullivan.
We see investment potentials in Nigeria’s digital, creative sectors – US Prosper Africa’s COO (Business Day)
During a recent tour of the continent, a team from Prosper Africa – a US government initiative which focuses on increasing trade and investments between African nations and the United States – visited Nigeria in search of investment opportunities. In an interview during the visit, LESLIE MARBURY who serves as the Acting Chief Operating Officer, spoke of incredible opportunities, particularly in Nigeria’s digital as well as the creative space, which the US is keen to explore. She spoke to ONYINYE NWACHUKWU, BusinessDay’s Abuja Bureau Chief. Excerpts:
Since 2019, the US government has helped to close 800 Prosper Africa deals across 45 different African countries for an estimated value of $50 billion. And we look forward to building on this momentum.
We are reaching out to entrepreneurs, investors and business leaders to raise awareness about market opportunities, and about the US government tools we have available to help advance these opportunities
We are just really pleased to see all of the advancements made in implementing the AfCFTA. And we want it to be a success, we know that when it’s fully implemented, will be the size of the fifth largest economy in the world. And we know it’s not only the US interest, but also the world’s interest that African nations realize this potential. The Biden/Harris administration is ready to help harness these economic gains, and we are committed to providing technical assistance to support cross border trade and investment, whether at the country level, at the regional economic blocs or to the AfCFTA Secretariat.
Ghana, Barbados leverage ties for economic benefits (Business Ghana)
Ghana, the host country to the African Continental Free Trade Area (AfCFTA) and Barbados, the single market to the Caribbean, have initiated steps to leverage on their age long ties to increase trade and investment in their respect countries. The move is aimed at harnessing the opportunities and commercial advantages in each country for mutual economic gains. To this end, the Ghana Investment Promotion Centre (GIPC) on Monday, March 7, hosted the Barbados Prime Minister and her entourage in Accra to a business forum. Dubbed, “Ghana-Barbados Roundtable,” the forum, presented the entourage, the opportunity to interact with some private sector players on ways it could help the Island community tap into the trade and investment opportunities in Ghana. Areas that both countries are seeking to explore include agriculture, tourism, music, finance, health biotechnology, renewable energy, sports, Information and Communication Technology (ICT), and digital technology, life sciences, aviation, and logistics.
African trade
Deliver goods of high standards and on time, PSFU boss tells entrepreneurs ((Monitor)
The Chief Executive Officer (CEO) of Private Sector Foundation (PSFU), Mr Stephen Asiimwe, has encouraged businesses seeking to export goods and services under the Africa Continental Free Trade Area (AfCFTA) arrangement to embrace technology for high-quality products. “Remember we are competing with 53 other countries under one single market,” Mr Asiimwe said, adding; “technology enhances efficiency and allows you to deliver goods of high standards and on time.”
Africa accounts for just 2.9 per cent of global trade and only about 17 per cent of African exports are intra-continental, compared with 58 per cent for Asia and 65 per cent for Europe. However, limited knowledge and understanding of the free trade area remain a huge challenge to the successful uptake of trade opportunities within the newly created African market.
ECA, ITFC, IEF helping eight countries operationalise AfCFTA (Engineering News)
Multilateral partnership the Enhanced Integrated Framework (EIF), the United Nations Economic Commission for Africa (ECA) and the International Islamic Trade Finance Corporation (ITFC) have partnered on a project to help eight African countries operationalise the African Continental Free Trade Area (AfCFTA) by supporting the implementation of more than 30 activities in the AfCFTA strategies of Burkina Faso, Côte d’Ivoire, Guinea, Mauritania, Niger, Senegal, Togo and Tunisia. By assisting the implementation of priority actions formulated by the ECA, the project will help to create an environment where trade can be more efficient and inclusive in the eight beneficiary countries. By the end of the project, their capacity will have been enhanced towards tangible outcomes, such as the creation of jobs and other economic opportunities. “The ECA values the substantive work and productive collaboration undertaken since August 2021 with ITCF and EIF to support the operationalisation of the AfCFTA. This joint project can potentially push regional trade levels up from 18% to 25% within a decade,” says UN under secretary-general and ECA executive secretary Vera Songwe.
AfDB cushions indebted poor states (The East African)
The African Development Bank (AfDB) has approved a new borrowing policy to help the poorest African states survive a debt burden and vulnerabilities linked to economic shocks. The Sustainable Borrowing Policy will replace the previous Non-Concessional Debt Accumulation (NCDA) policy, with emphasis on transparency in debt management and coordination and partnership with other multilateral banks. In a statement Thursday, the AfDB said the policy targets recipients of the African Development Fund – the bank’s concessional window, which brings together 37 of the 54 regional member countries of AfDB. The new policy is meant to “address cross-subsidisation of concessional financing with non-concessional financing as well as debt limit policies.”
African airlines ready to weather storms of post-Covid prospects (The East African)
African airlines are dusting off plans for operations in a post-pandemic market even as the continent faces mixed prospects in global air traffic recovery. IATA, the International Air Transport Association, predicts a firm path to resumption of global air travel, with passenger numbers expected to surpass the 2019 peak in 2024. The bullish outlook is informed by the easing of travel restrictions in key markets as Covid-19 vaccinations reach optimal levels and infection rates recede. Across the globe, airlines posted strong performance in January 2022, with Europe leading the pack and Africa also looking up. Improvements in the major North Atlantic and intra-European markets, are the backbone for recovery with Asia-Pacific’s recovery expected to continue to lag because China, the region’s largest market, continues to cling to restrictive border controls. Meanwhile, a sudden spike in fuel prices means airlines will lose more than the $11 billion that IATA had predicted for 2022.
On the upside, many governments are removing or relaxing their Covid-19 travel protocols as a growing body of evidence suggests that airline passenger do not pose a greater than average risk of transmitting the disease. For instance, Singapore has introduced vaccinated lanes at its airports allowing vaccinated travellers to transit faster. “The past few weeks have seen a dramatic shift by many governments around the world to ease or remove Covid-19-related travel restrictions and requirements as the disease enters its endemic phase. It is vital that this process continue and even accelerate, to more quickly restore damaged global supply chains and enable people to resume their lives,” says Walsh.
Africa Food Shortages Can Be Averted With Accelerating Wheat Output Boost Plan (Bloomberg)
A $1 billion plan to boost wheat production in Africa should be accelerated to avert potential food shortages arising from Russia’s invasion of Ukraine, according to the head of the continent’s biggest multilateral lender .The African Development Bank is raising the funds to help 40 million African farmers utilize climate-resilient technologies and increase their output of heat-tolerant wheat varieties and other crops, Akinwumi Adesina, the lender’s president, said in an interview.
EA industrialists want 35 pc tariff in AfCFTA pact (IPP Media)
This is the majority position of the regional private sector consultative meeting held mid last week on Nairobi, bringing together manufacturers’ confederations from the EAC region. The current maximum CET is 25 per cent in which case the proposed 35 percent maximum CET rate seeks to reinforce protectionism in the EAC zone against current efforts to widen the free trade zone to beyond the EAC zone, in the African Continental Free Trade Area (AfCFTA). The proposals of leading industrialists are designed to “provide an adequate tariff degree of difference required to incentivize industrial development in the EAC region, by safeguarding products that are sufficiently produced in the region against similar cheap imports,” they said, in a spirit that it basically contrary to AfCFTA intentions.
The proposed 10 percent tariff difference implies maintaining EAC as a cohesive zone, instead of implicitly expanding to create a continental free trade zone, with relative ease of trading within the EAC zone less by tariff walls as proposed but market presence and supply channels.
The latest analysis on the proposed rates of the CET by the EAC Secretariat shows that under a maximum CET rate of 35 per cent, “the partner states stand to benefit most through increased revenue generation by 5.5 per cent and a boost to intra EAC trade of $18.9m,” it said, implying that trade with the outside world would actually decrease and there is no difference in that regard between cheap products from abroad and from nearby African countries..
With a 10 per cent tariff wall added to the current 25 per cent taxation of goods from outside the EAC, industrialists say employment generation would create infinitesimally by 0.03 per cent (6,781 persons) if the maximum rate of 35 per cent is adopted, while not exploring its impact on purchasing power or input to inflation in the zone.
ECOWAS single visa to boost Ghana’s economy – France Ambassador (Ghanaian Times)
A single visa for the Economic Community of West Africa States (ECOWAS) could increase tourist visits to Ghana and spur economic growth, Ms Anne Sophie- Ave, the Ambassador of France to Ghana has said. Currently, tourists coming to Ghana needed to get a Ghanaian visa before they enter Ghana, but Ms Ave said a unique ECOWAS visa would be a game changer. The Ambassador of France was speaking in an interview with the Ghanaian Times on lessons Ghana could learn from France, to develop its tourism sector and tackle climate change. Ms Ave said a tourist with the ECOWAS visa, especially citizens outside the West African sub-region, could travel to Nigeria, Burkina Faso, Togo, Liberia and other ECOWAS countries without stress. According to her, France, the world’s leader in tourism was able to achieve that feat partly because of the schengen visa which enables visitors to enter all the 26 Schengen countries.
IMF urges African countries to rev up fiscal policy reforms (BusinessLIVE)
The IMF has called on SA and the rest of the continent to prioritise public spending, strengthen social protection programmes, mobilise tax revenue and tackle debt vulnerabilities. It said this is so these economies can enhance their resilience in the aftermath of the Covid-19 pandemic, as well as tackle policy constraints they are likely to face in the coming years.
2022 U.S.-Africa Business Summit to be hosted in Morocco (CCA)
Corporate Council on Africa (CCA) will organize the next edition of the U.S -Africa Business Summit on July 19 – 22, 2022 in Marrakech, Morocco. The Summit will build on the momentum of last year’s virtual Summit, which focused on the unique opportunity for the new U.S. Administration and its African partners to reset and redefine their relationship as they work together to shape the path for economic recovery needed as a result of the COVID-19 pandemic. After 2 years, CCA will return to the continent this July for the 14th iteration of its flagship conference. “We are delighted to co-host and partner with the Government of the Kingdom of Morocco to bring the 2022 Summit to Marrakech. The 2021 Summit was a tremendous success and the caliber of engagement by U.S. and African business and government leaders was outstanding. The partnerships forged, investment opportunities identified, and deals closed are still being cited by attendees. We believe the 2022 Summit in Morocco will be even more successful and serve as a significant opportunity to expand and deepen the U.S.-Africa trade, investment, and business relationship.” said Florizelle Liser, President and CEO, Corporate Council on Africa.
The 3rd meeting of Governance Council of Arab Africa Trade Bridges Program (SIS)
Egypt chaired on Monday 14-3-2022 the third meeting of the Governance Council of the Arab Africa Trade Bridges (AATB) Program. Egypt was represented by Minister of Planning and Economic Development and Egypt’s Governor at the Islamic Development Bank Group (IsDB) Hala el Said.
Minister of Planning and Economic Development Hala el Said said during her speech that the meeting comes as an opportunity for consultation and exchange of ideas, visions and successful experiences to promote the governments’ efforts to boost trade between African and Arab countries.
Global economy news
Ground set for 5th Un Conference on LDCs In New York (Malawi Broadcasting Corporation)
The stage is set for discussions on different development areas for the 46 member grouping of the Least Developed Countries LDCs at the United Nations Headquarters in New York. This is the fifth Conference for the United Nations on the LDCs since 1981 and it takes place every 10 years. As Chair of the LDCs group, the Malawi leader Dr Lazarus Chakwera is expected to deliver a keynote address on behalf of the member countries and Malawi in particular. “The conference will launch the Doha programme of Action for LDCs which are critical for developing countries and are aligned to Malawi’s development aspirations,” reads the statement in part.
Time to empower consumers to make sustainable choices (UNCTAD)
Meeting the needs of present and future generations for goods and services in ways that are economically, socially and environmentally sustainable is ever more urgent amid the climate and COVID-19-induced economic crises. Shifting to responsible consumption and production patterns can not only lead to more efficient resource use but also lead to reduced pollution, restore ecosystems and prevent habitat loss. To mark World Consumers Rights Day on 15 March, UNCTAD brought together policymakers, businesses and consumer groups to share experiences in fostering sustainable production and consumption and promoting business and consumers responsible behaviour. “We must move away from the notion of consumers as passive receivers of goods and services towards that of a consumer that is an actor for change,” said UNCTAD Secretary-General Rebeca Grynspan while opening the event.
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Domestic, country-related news
Motor, agri industries urge govt to suspend fuel levy amid skyrocketing crude oil prices (Engineering News)
Industry organisations the Motor Industry Staff Association (Misa) and Agri SA have strongly urged that government suspend fuel levies to relieve pressure on food and fuel prices, when it reviews the pricing methodology for petrol. Particularly, Misa asked to be included in the review process and for it to be expedited.
Although Finance Minister Enoch Godongwana announced in the 2022 Budget that there would be no increase in the fuel or Road Accident Fund levies for this year, about 36% of the retail price of fuel still goes to the fiscus.
Misa is concerned about the turmoil and rapid escalation in the price of crude oil and gas after US President Joe Biden announced a ban on all imports of oil and gas from Russia. European countries are also planning to phase out imports of oil and gas from Russia.
Gauteng, US govt launch trade-investment framework (Engineering News)
Gauteng Economic Development, Agriculture, Environment and Rural Development MEC Parks Tau and US Consul General in Johannesburg Vincent Spera have pledged to deepen cooperation and coordination to promote and increase bilateral trade and investment through various engagements, events and high-level interactions. This follows the US Consulate General in Johannesburg and the Gauteng provincial government jointly launching the Gauteng provincial government – government of the US: Trade-Investment Framework on March 10. The trade-investment framework intends to foster an equitable partnership to pave the way for agency-to-agency collaboration between the two governments, in five key areas, including digital technologies and information and communications technology, and urban development/township economy, tourism and creative industries.
It also aims to increase collaboration in transportation, infrastructure and logistics; agriculture; and climate and energy.
France Beckons for South African Agro-Food Producers (the dtic)
The Department of Trade, Industry and Competition (the dtic) will set up a South African National Pavilion at the Sial Paris International Food Products Exhibition that will take place in France from 15-19 October 2022. Sial is the world’s leading exhibition network with unrivalled geographic coverage of Europe and the rest of the world.
Companies producing processed foods, non-alcoholic beverages, preserved foods, spices, soups, deep frozen products, cured meat, health and organic products, sweets, sea food and gourmet food products are invited to apply for the department’s assistance in showcasing their products and services at the exhibition. The deadline for the submission of completed application forms is 31 March 2022.
Qualifying companies will be assisted through the dtic’s 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.
SA working with countries in SADC region to ensure reliable energy supply: Ramaphosa (SABC News)
President Cyril Ramaphosa says South Africa is working with other countries to ensure reliable energy supply in the SADC region. This comes at a time when the country is facing electricity blackouts. The war in Ukraine has contributed to higher oil prices which will likely translate into higher fuel prices. Ramaphosa said this at the Presidential Imbizo in the North West on Saturday. The Imbizo aimed to look at the challenges facing South Africans and it was no surprise that the issues of electricity outages as well as expected higher fuel prices were high on the agenda. While the President called on the Minister of Energy to provide answers, Gwede Mantashe noted that Eskom fell under more than one ministry.
India, Namibia committed to partnership in pharma sector (The New Indian Express)
Trade between India and Namibia stood at approximately $80 million in the last few years. Namibia imports drugs and pharmaceuticals, chemicals and agricultural machinery from India. While as India is interested in Namibian diamonds, both countries are committed to a robust partnership in diamond and pharma sectors. The India-Africa Trade Council organised a summit on Saturday, which was attended by the business community in Telangana and Andhra Pradesh. President of Indian Economic Trade Organisation Dr Asif Iqbal and the High Commissioner of Namibia to India HE Gabriel Sinimbo pledged to strengthen trade relationship between the two nations. Trade Commissioner of Industrialists and Businessmen from Telangana, Dr Tasneem Shariff, spoke about accelerating India’s relationship with the Southern African region and its port proximity to Walvis Bay for the various other nations around the region.
“The Diamond Park project that can enable students to learn diamond trade and other related self-reliant skill sets. Very soon our students will go to Namibia to learn the intrinsic details of the Diamond sector,” said Dr Tasneem.
Uganda, Kenya end row on fish exports to DRC (The East African)
Uganda will compensate Kenyan fish exporters to the Democratic Republic of Congo whose catch officials confiscated on October 1, 2021 at Mpondwe border in Kasese district of Uganda. The decision follows a meeting last week chaired by Kenya’s Principal Secretary for East African Community and Regional Development Dr Kevit Desai, Uganda’s Agriculture PS Maj-Gen David Kasura Kyomukama, and Kenya’s Fisheries, Aquaculture and Blue Economy PS Francis Owino, at the Malaba-Busia-Kenya-Uganda border.
“Trade in fish exports to DRC has been going on for many decades though with intermittent disruptions occasioned by misunderstanding between Kenya and Uganda on the nationality of the fish with Uganda often suspecting that the fish are undersize fish sourced from Ugandan waters, specifically Lakes Victoria and Kyoga,” said Dr Kevit Desai, PS Ministry of EAC and Regional Development, who is also the chairperson of the EAC Principal Secretary/Permanent Secretaries Council.
DRC/Kenya/Rwanda: Equity Bank’s $6bn ‘Marshall Plan’ for SMEs (The Africa Report)
Through its Regional Private Sector Economic Recovery and Resilience Stimulus Plan, Equity Group intends to support SMEs in East and Central Africa’s agriculture, manufacturing and logistics, trade and investment, social and environmental sectors over the next five years. The package is substantial: 678bn shillings ($6bn or €5.5bn), which was equivalent to almost 70% of Equity’s total balance sheet in 2020. The group led by Kenya’s James Mwangi had a total balance sheet of about $9bn, according to the latest figures published on 31 December 2020.
Equity Group’s CEO explained this “ambitious plan to advance the African continent” more than a year ago, when the financial group obtained the support of a dozen financial partners.
“This recovery and resilience plan is a kind of Marshall Plan, in which we commit $6bn to support the continent’s industrialisation by helping SMEs and creating 50 million direct and indirect jobs in our countries of operation over five years,” Mwangi told The Africa Report.
On a practical level, Equity explained in a statement released on 7 March that the loans will be disbursed at an interest rate ranging from 13% to 18.5%. The bank wants to help businesses thrive and recover from the health, social, humanitarian and economic effects of the Covid-19 pandemic. The $6bn facility targets “five million businesses and 25 million individual borrowers.” It will focus in particular on youth and women.
90 scrap metal dealers to wait longer for licence (Business Daily)
Dealers will wait longer to know when a moratorium on the export or the buying or selling of any scrap material will be lifted. Industrialisation Cabinet Secretary Betty Maina told Parliament last week that there is no date set for lifting of the ban. She said a joint meeting has been set where public and private sector players will meet to scrutinise guidelines that have been developed to regulate the scrap metal sector .”There isn’t a date set for lifting of the moratorium but it will be announced at the highest level depending on the outcome of the meeting called between public institutions handling critical infrastructure and the private sector players dealing with scrap metal,” Ms Maina told the Trade committee of the National Assembly. Ms Maina revealed that out of over 700 scrap metal dealers in the country, only 20 were licensed under the Scrap Metal Act at the time of the moratorium.
She said 91 have since the ban applied to be licensed and their applications are undergoing rigorous review before a decision can be made.
War, oil and Nigeria’s endangered extractive economy (The Guardian Nigeria)
“Putin thinks he is strong because Russia is the second-largest oil exporter in the world. But he is weak because he has put himself in your hands and you are angry because he is terrorising Ukrainian civilians and threatening the world,” a traumatised Oleg Ustenko, an adviser to the Ukrainian President on economic issues, said in an article seeking global blockage of Russian oil. Reference to the article is not much about the Russian onslaught in Ukraine, but the importance crude plays in global politics, especially in wartime. Indeed, President Putin’s strongest convincing point that he can get away with what his critics have described as impunity is that “Russia is the second-largest oil exporter in the world” and that Europe, especially, cannot as much contemplate a world without Russia’s daily five-million-barrel supply.
How Nigeria Serviced World Bank, IMF, Other Debts with $13.1bn in 11 years (This Day Live)
As the federal government continue its borrowing spree and debt servicing constituting a major threat to Nigeria’s economy, it has emerged that the Central Bank of Nigeria (CBN) spent $13.1billion in 11 years to settle Nigeria’s foreign debt obligations. The international payment data released by the CBN showed that from 2011 to 2021, the amount paid to the World Bank, International Monetary Fund (IMF), Exim Bank of China, among others for debt service and payments have continued to increase. The debt repayments, it was learnt, were made on behalf of the federal government alone excluding 36 states and the Federal Capital Territory (FCT).
In 2019, the CBN withdraw $1.34 billion for debt servicing and payment, the international payment data revealed. Further analysis of the data revealed that in 2021, debt services and payment dropped by 63 per cent to $2.13 billion from $5.77 billion reported in 2020. The reported $5.77 billion is the highest debt services and payments recorded by the CBN, while a total of $242.8 million was the lowest in 2013.
Nigeria Remains Welcoming To Investors In Power Sector – Minister (Leadership)
The federal government will continue to welcome more investors to reposition the power sector, the Minister of Power, Abubakar Aliyu, has said. Aliyu said this on Friday while receiving a delegation from the European Union to Nigeria and the Economic Community of West African States (ECOWAS) lead by the EU Ambassador to Nigeria and ECOWAS, Samuela Isopi, in Abuja. The Minister said President Muhammadu Buhari was working hard towards repositioning the infrastructural development in power sector as part of efforts to give the country a stable and reliable power supply system.
Multi-billion project, a hub for the country’s business (Dailynews)
The country’s capital, Dodoma, will soon be a hub of business in East and Central Africa, thanks to the ambitious 215 million US dollars (about 497bn/) Dodoma City Outer Ring Road project which is expected to open business and investment space between Tanzania and other African countries. The project—which will see the country ripping benefits in the economy through the works and transport sectors, has drawn massive attention from economic pundits and normal Tanzanians.
AfDB is the main financier of the project after its Board approved funding for the Dodoma City Outer Ring Road project in 2019.
The Bank Group is financing 64 per cent of the total cost or 137.3 million US dollars (about 317bn/). The government of Tanzania’s contribution is 34.5 million US dollars (about 79.7bn/-), while an additional 41.8 million US dollars (about 94.8bn/-) comes from the Africa Growing Together Fund, financed by the People’s Bank of China. “By funding this project, the bank has really demonstrated that it is the bank of Africa which is really committed to African development,” said President Samia during a colorful event to lay the foundation stone to the project, an event which was also attended by AfDB’s President, Dr Akinwumi Adesina.
ECA to support Enhancing National Migration Strategy in Morocco (UNECA)
In partnership with the Moroccan Ministry of Interior, the Sub-regional Office of North Africa, Economic Commission for Africa (ECA) held on Wednesday 9 March 2022 in Rabat a workshop on “Migration statistics and recognition of migrant skills in Morocco: Perspectives and Outlook”. The meeting aimed to present two analytical reports on migration statistics and migrant skills in Morocco, introduce national capacity building plan and discuss options to share lessons learned with other African countries seeking to equip themselves with similar systems.
Morocco was previously known for being a country of origin, a country of transit, and is now becoming a country of destination for migrants. Given the sheer size of this issue and Morocco’s many years of experience, Morocco has a leading role on the policy level, said Zuzana Brixiova Schwidrowski, Director of the Sub-regional Office of North Africa, who noted the country’s positive approach to migration.
Egypt imposes export ban on green wheat, cooking oil, corn for 3 months: Ministry of Trade and Industry (Arab News)
Egypt has announced that it has imposed a three-month export ban on green wheat, cooking oil, and corn, local newspaper Ahram reported, citing the Minister of Trade and Industry Nevine Gamea. This comes as the African country attempts to secure citizens’ need for basic commodities as the month of Ramadan approaches amid concerns over global supply issues exacerbated by the Russia-Ukraine conflict. Ramadan usually sees the rate of consumption of food products steadily rise in the country. Globally there has been an increase in the price of oil and non-oil commodities as a result of the military conflicts between Russia and Ukraine, both key exporters of wheat and some types of cooking oil. Egypt imports 80 percent of its wheat from Russia.
Envoy stresses need for enhancing trade with Niger (The Express Tribune)
Africa is an emerging continent with a consumer market of over 1.2 billion and Pakistani business community should focus on Niger to widen its access to the African market for trade and exports, said Pakistan’s Ambassador to Niger Ahmed Ali Sirohey. Interacting with the business community at the Islamabad Chamber of Commerce and Industry on Monday, the envoy said that Niger was a gateway between North Africa and Sub-Saharan Africa and the country was keen to promote business relations with Pakistan. He stressed upon Pakistan’s private sector to explore Niger for business and investment avenues in order to gain better market access to African countries.
Speaking on the occasion, Islamabad Chamber of Commerce and Industry (ICCI) President Muhammad Shakeel Munir said that Africa was a massive market however Pakistan failed to tap its actual potential as the bilateral trade volume clocked in at around $4 billion in 2019-20.
Cameroon: 2021 Article IV Consultation and First Reviews Under the Extended Credit Facility (IMF)
Cameroon, the largest economy in the Central African Economic and Monetary Union (CEMAC), continues to face the repercussions of the COVID-19 pandemic. In July 2021, the IMF’s Executive Board approved three-year arrangements under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) for SDR 483 million (about US$ 689.5 million, or 175 percent of Cameroon’s quota) to support the country’s economic and financial reform program. This followed two disbursements in 2020 under the Rapid Credit Facility (RCF) totaling SDR 276 million, equivalent to about US$382 million or 100 percent of Cameroon’s quota.
African trade
How supply chain laundering hurts Africa (1) (BusinessAMLive)
Countries with economies that are predominantly commodities-based need to take this rather seriously. Africa is well endowed with commodities. Those at the lower rungs of the ladder and are at the weaker points in value chains should be worried about their future in such economic circumstances. African countries are squarely within this bracket and so much needs to be done to take the countries further up on the value chains so they could play more prominent roles and be better rewarded. Extractive industries define African economy, have been the economic mainstay of most African countries and still remain so till now. From minerals to agriculture, African countries generally depend on going back to the soil to generate the needed revenues to run their economies that remain mostly backward and underdeveloped. These do not guarantee real development within the continent in the foreseeable future.
The newly established African Continental Free Trade Area (AfCFTA) will do nothing extraordinary as long as the values of the commodities in the mostly commodities-based trade remain low. Moreover, with great questions on issues of transparency in supply chain, a lot less revenue will continue to be recorded on tradable commodities and the data generated will continue to be at variance with realities. There is yet to be a proof that Africa’s economy is about to make a transition to manufacturing or service industry-based economy. So, while the status quo lasts, a lot needs to be done to meet with globally accepted criteria in the commodities industries and trade.
The paradox of Africa’s development is encapsulated in the fact that the continent exports low-value primary commodities and import high-value finished products. Africa produces premium quality raw cocoa, coffee, tea, timber, copper, diamond, gold, cobalt, uranium, petroleum and many more primary commodities which are exported to countries that turn them into products of high values and high prices, from which the finished products are imported back into Africa.
Africa’s post-COVID-19 recovery: Assessing areas of growth, opportunities and challenges (CGTN Africa)
Africa will rebound in its post-pandemic economic recovery and rediscover its pre-pandemic growth levels as it shrugs off the slump caused by the coronavirus, according to a continental socioeconomic commentator.
Dr. Aslam Dasoo, convener of the Progressive Health Forum, however, said the rebound, though uneven, will taper off with time and the continent must take advantage of the coming windfalls and build their capacities for posterity.
“We are optimistic that governments and private sector enterprises will begin to see the merits of taking the learnings that the pandemic has given and capitalizing on them through greater collaboration, greater synergy, focus on investment on growth and social protection,” Dasoo said.
Africa experienced a sharp economic downturn and slid into recession in 2020 with several key sectors, such as agriculture, transport (particularly aviation), tourism, mining, oil and gas, and manufacturing, being adversely affected. This, in turn, resulted in financial losses worth billions of dollars, business closures and job losses in addition to millions of people being pushed into extreme poverty. Dasoo noted that while the effects of the pandemic on African economies were devastating and uneven, more developed economies, like South Africa and Kenya, that implemented tough measures, like lockdowns, early on were hardest hit.
“The pandemic represents, not only the worst health calamity in 100 years, it also represents the biggest shock to the global economy in 100 years. Africa, whose fragile economies get swayed by the global winds of trade, are buffeted and often left at a disadvantage in these ‘trade winds’, bore the brunt of that shutdown.”
“What the pandemic delivered a very acute lesson on is the need to make sure that countries have healthcare resilience, capacity and capability. It exposed the very uneven presence of robust health systems, even here in South Africa, which has, probably, the most developed healthcare system on the continent.” African governments were also urged to take advantage of the Africa Continental Free Trade Area (AfCFTA) in order to rapidly accelerate intra-African trade as the bedrock of the continent’s future economic development.
Hard economic times in East Africa as commodity prices go through the roof (The East African)
March has been a hard month for the citizens of East Africa as the cost of living soared, leaving the poor staring at destitution and businesses reeling. While the situation has been largely blamed on external factors such as Russia’s invasion of Ukraine last month and the subsequent disruption of the global supply chain, citizens have been petitioning their governments to urgently find measures to cushion them.
In Uganda, for instance, citizens are hanging on to the hope that a crisis meeting between the Prime Minister Robinah Nabbanja and manufacturers of soap, cooking oil, salt and other household items will lead to a reduction in the prices of essential commodities which have skyrocketed in recent weeks. Captains of industry warned last week that the cost of living on account of the surging prices of essential household items will get worse before it gets better as external shocks causing prices to skyrocket are not about to ease. Last week, the situation prompted a debate in Cabinet and parliament, which resulted in a meeting on Friday between the prime minister and executives of companies that manufacture household items, to persuade them to ease the prices and the cost of living.
“Cabinet directed that we meet these companies on Friday and produce another paper for Monday’s session,” Ms Nabbanja told The EastAfrican. “It is the bulk importers that are taking advantage of this situation to raise the price and distort the market. Some companies have increased the price by a small margin, but others have hiked it to exploit Ugandans.”
In Kenya, manufacturers have issued an alert over the impending decision to increase prices for finished products as the cost of crude oil soars to $130 a barrel, amid escalating war between Russia-Ukraine which has taken a toll on the global economy, pushing households to the verge of financial distress.
EAC records huge post-harvest losses in cereals and root crops (EAC)
The East African Community makes huge post-harvest losses in food products annually in the range of 30% in cereals, 50% in roots & tubers, and up to 70% in fruits and vegetables. The EAC Deputy Secretary General in charge of the Productive and Social Sectors, Hon. Christophe Bazivamo, said that Partner States could reverse this situation through deployment of better storage and processing technologies and enhanced packaging techniques can greatly contribute to the regional development objectives; ensure food security and result in higher earnings for farmers and SMEs. Hon. Bazivamo said that to counter these challenges, the EAC has developed clear policy directions to signal to the investors the Community’s strategic intent, adding the bloc has established a public private sector fruits and vegetables platform to drive faster development in the sector.
“In our recently adopted fruits and vegetables strategy and post-harvest loss management action plan we aim to unlock this potential by, among other things, pursuing best practices in contract farming, productivity, inputs; utilization of modern and new technologies, capacity building,” said the DSG.
African agriculture’s digital revolution: UN report pinpoints main obstacles and opportunities (FAO)
The digital revolution currently underway in Sub-Saharan Africa offers enormous potential for economic growth and agricultural productivity. Coastal countries benefit from fast internet, thanks to undersea cables, and 4G mobile networks are expanding rapidly across the continent. Kenya’s capital, Nairobi, is referred to as the “Silicon Savannah” of Africa because of its buzzing digital economy. In spite of such success stories, much of sub-Saharan Africa remains unconnected: About one-third of the population is still out of reach of mobile broadband signals, and only 28 percent has any access to the internet. This has implications for the local agricultural sector, where productivity could be easily boosted by new digital technologies such as e-commerce, sensors, drones and better weather forecasts. A new report co-published today by the Food and Agriculture Organization of the United Nations (FAO) and the International Telecommunication Union (ITU) offers one of the most comprehensive overviews to date on the status of digitalization in the region, focusing on digital agriculture transformation.
The report - Status of Digital Agriculture in 47 Sub-Saharan African Countries - takes a deep dive into the status quo and the challenges that countries face along their digital transformation journeys. An overview is given for each of the 47 countries on a variety of key indicators, such as access to electricity, ownership of mobile devices, number of apps in the national language, the gender gap in social media use, and regulatory frameworks.
Growth on the horizon for African e-commerce and logistics in 2022 (Logistics Update Africa)
Countries across Africa present huge opportunities in e-commerce but businesses must quickly overcome challenges around infrastructure, logistics, and financial inclusion to fully realize the potential. Since 2020, we have witnessed African markets embracing the e-commerce revolution. Thanks to rising disposable incomes, growing internet penetration, and emerging cross-border e-commerce markets, the continent is poised to become the world’s next big online retail destination. To realize this ambition, e-commerce platforms must now focus on building this momentum in the wake of increased economic and logistical pressure.
A report from 2021 conducted by global fintech business, PayU, revealed the massive potential for digital businesses across the continent, with South Africa, Nigeria and Kenya experiencing a major increase in internet and e-commerce penetration (37 percent in both Nigeria and SA, and 25 percent in Kenya).
The growth potential for these countries is overwhelming, but it is not only these economic centers that are experiencing a new digital dawn. According to analysts at Statista.com, e-commerce in Rwanda was projected to reach USD 79 million in 2021, with an annual growth of around 12.5 percent year-on-year until 2025. In only six months of operating in Rwanda, DUBUY.com has received over 500,000 website visits from sellers and buyers and has built a community of more than 4,000 active merchants on the platform.
With an additional five million users expected to begin using e-commerce services in Rwanda alone by 2025, it is up to the logistics sector to keep up with growing demand across the entire continent.
African airports offer new opportunities for investors (Logistics Update Africa)
Airport infrastructure across Africa requires a major overhaul. The pandemic exposed both the strengths and weaknesses of the aviation industry in the continent. Infusion of funds to enhance the existing infrastructure and new investments into modern passenger and cargo facilities are urgent for Africa to realize its aviation potential. The unprecedented demand for airport capacity to handle essential cargo such as temperature-sensitive pharmaceuticals and Covid-19 vaccines over the past two years of the Covid-19 pandemic exposed the massive shortage of airport infrastructure in Africa. Even among major airport hubs in various parts of Africa, passenger and cargo figures have overwhelmed available capacity or would do so in the near future. This poor capacity restricts African airports’ growth and associated revenue.
Currently, a number of African airports and airport authorities are already developing or executing future expansion plans to meet crucial current and future demand, ensure steady growth and development of their airports, and contribution to their economies.
The Kenya Airports Authority (KAA), which refers to itself as “the largest air freight service provider in Africa”, is implementing its Air Cargo Strategy 2019-2022 to drive cargo development. At Isiolo International Airport, KAA says cargo handling sheds have been completed to take care of the export of agricultural produce and Miraa. Construction of a modern transit shed is underway at Mombasa’s Moi International Airport, and a new cold storage room and specialized consolidation area will form part of the upgrade planned for the airport. Kisumu is being positioned to attract massive trade and investment in its Great Lakes region.
Partnerships are vital to reposition African airports to meet the current and future needs of airport users including airlines, tourists, and business meetings. Public-private partnership is instrumental to the development of Kenya airports, and this offers the solution to develop Africa’s remote airports where agriculture and other primary produce are generated.
Both Kenya and Ethiopian Airports expansion are significantly driven by their well-established national carriers, Kenya Airways and Ethiopian, respectively, which spearhead cargo and passenger traffic to the airports.
Aviation cannot develop in a silo. Airports development stakeholders must collaborate with especially cargo sources such as the agricultural sector and the transport and packaging value-chain to develop and facilitate acceptable products and package standards for movement by air. This would reduce
How drug companies are sidestepping the WHO’s technology transfer hub in Africa (The Conversation)
Pharmaceutical company Moderna announced on 7 March 2022 that it would develop a site in Kenya to manufacture COVID-19 vaccines. The company holds much of the key intellectual property relating to the messenger RNA (mRNA) vaccines. Due to their higher efficacy, mRNA vaccines are the preferred option in developed countries. They account for 92% of all vaccinations to date in the US and European Union. Moderna’s decision to continue making the vaccine itself, though on the Kenyan site, is a signal that the company (at least for the moment) is not considering licensing its technology to a third party for local manufacture. In this way, the company keeps closer control over who has full knowledge of, and is able to use productively, its technology. Licensing is an arrangement which has lower cost but greater vulnerabilities for licensors. The decision is significant for the mRNA Technology Transfer Hub in Cape Town, South Africa. The hub was established in June 2021 by the World Health Organization (WHO) and other parties. The idea was to develop a mRNA vaccine manufacturing technology platform. This would initially be for COVID-19, but eventually for a range of infectious diseases including TB and HIV. Once the platform has been fully developed and tested in Cape Town, it will facilitate technology transfer to at least 12 low- and middle-income countries. This will considerably expand global mRNA manufacturing capacity.
EU funding for Africa worth €150bn to boost post-pandemic growth (ESA-Africa)
Funding, in the form of European Union (EU) combined member funds, member state investments and capital from investment banks, is earmarked for Africa. The European Commission recently announced investment funding for Africa worth €150 billion (approximately $165bn) as part of the EU Global Gateway Investment Scheme. Baker McKenzie’s Global Head of Project, Trade & Export Finance and Africa Steering Committee Chair, Michael Foundethakis, explains that the scheme is seen as a way for the EU to build influence around the world, and is considered by some to be a counter to China’s Bridge and Road Initiative (BRI), which began in 2013. “It is also intended to boost post-pandemic growth in regions that were badly economically impacted by the pandemic. Although the current conflict in Ukraine could, of course, affect or change the dynamics and/or timing of these proposals,” he notes.
Foundethakis says that the Global Gateway Africa-Europe investment package will allow the EU to support projects in priority areas on the continent, with a focus on the green transition, sustainable growth and job creation. As part of this initiative, the Commission recently announced it would invest €1.6bn (roughly $1,75bn) to support Morocco’s energy and digital transition projects.
Eighth Annual U.S.-AUC High-Level Dialogue Joint Statement (United States Department of State)
The United States and African Union Commission (AUC) convened the eighth annual U.S.-AUC High-Level Dialogue on March 11 in Washington, D.C., led by Secretary of State Antony Blinken and AUC Head of Delegation Chairperson Moussa Faki Mahamat.
Secretary Blinken and Chairperson Moussa Faki discussed strengthening the U.S.-AUC partnership to focus on shared global concerns including ending the current COVID-19 pandemic and preparing for future health threats; partnering on climate change strategies addressing threats to global stability; and bolstering democracy and democratically elected governments on the continent.
Deputy Assistant Secretary Akunna Cook and AUC Commissioner for Economic Development, Tourism, Trade, Industry, and Minerals Albert Muchanga led a strategic discussion on inclusive economic growth and investment opportunities. Noting the effects of the COVID-19 pandemic on economies in the region, officials discussed the importance of spurring economic growth as a response to the pandemic. Officials reaffirmed U.S. support for the AfCFTA and other Agenda 2063 programs and projects to achieve sustainable economic development, build regional value chains, and increase both competitiveness and investment opportunities for mutual benefit. Participants discussed the importance of engaging with the private sector to increase trade and investment with Africa in pursuit of inclusive economic development, including by enhancing AGOA beyond its current framework.
Global economy news
Members updated on high-level talks aimed at finding convergence on IP COVID-19 response (WTO)
Some of the members participating since December 2021 in the high-level talks - the European Union, India, South Africa and the United States - expressed cautious optimism about a possible outcome and asked for patience from the rest of the membership. These members said that the small-group discussions continue to take place in good faith, with the objective of finding a landing zone that delivers on the common purpose of ensuring equitable access to vaccines, therapeutics, and diagnostics. They stressed that any framework that emerges from this process, under the coordination of WTO Director-General Ngozi Okonjo-Iweala and Deputy Director-General Anabel González, will be subject to consideration by the TRIPS Council and its full membership. They also underlined that achieving an effective outcome on this critical issue would serve the ultimate purpose of tackling the ongoing crisis as well as ensuring that the credibility of the WTO is restored.
UN Tech Bank calls on countries to join in helping least developed countries (Yeni Şafak English)
Launched in 2018, the UN Technology Bank serves the world’s 46 least developed countries (LDCs), of which 33 are in Africa, according to the acting managing director of the organization. In an exclusive interview, Taffere Tesfachew called on countries across the globe to join in on helping LDCs as he expressed his gratitude to Turkey for its “genuine” support. The UN Technology Bank has been “implementing, instigating activities and projects” since its establishment, Tesfachew said, adding that one of those projects was to establish academies of science.
In March 2021, the UN organization teamed up with the Network of African Science Academies and launched two such academies, one in the Southern African nation of Lesotho and the other in the Democratic Republic of Congo. “This is helping some LDCs who require some technical knowledge, capacity building, partnership with UN agencies, with other stakeholders,” he said.
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Special Economic Zones Make Good Progress in Attracting Investors - Deputy Minister Gina (The dtic)
The Deputy Minister of Trade, Industry and Competition, Ms Nomalungelo Gina says the Special Economic Zones (SEZs) Programme has now entered a full implementation phase with designated SEZs continuing to show a positive progress in terms of the growing number of investors operating in the zones. Gina was addressing the Chief Executive Officers (CEOs) of the country’s SEZs.
“Government is repositioning itself for a long-term industrial and economic development. Among other strategic interventions is the SEZs Programme, which includes specifically targeted economic activities, supported through special arrangements which include laws, regulations, incentives and systems that are different from those that apply in the rest of the country,” said Gina.
South Africa Offers Opportunities for Foreign Investors (InDepthNews)
South Africa is in frantic search of foreign investors to boost its economy exposed to turbulences caused by two years of struggle to contain the global pandemic that triggered almost complete shutdown of businesses and production under lockdowns, which threaten economic efforts since the ambitious investment plan was initiated in 2018 under President Cyril Ramaphosa. To attract foreign investors, South Africa is holding the fourth investment conference (SAIC) on March 24 in Johannesburg. It will draw participants from both the private and public sectors from the United States, Europe, Asia and inside Africa. In addition, international and regional institutions, development partners and think-tanks will come together to deepen dialogue, share experiences, and discuss business opportunities to boost investment and sustainable development in South Africa.
Many multinationals investing in South Africa also use the country as a base to serve their customers in Africa and in particular the southern region. As a relatively stable country with a technologically advanced telecommunications network and a secure banking system, South Africa provides support to these global companies so that they can take advantage of opportunities in the country and the region, adds Ms Williams.
Mining exploration is key to attracting investment (SAnews)
South Africa aims to gain at least 5% of global mining exploration expenditure in the short and medium term. This is according to Mineral Resources and Energy Deputy Minister, Dr Nobuhle Nkabane.
“Continued and enhanced mining exploration should be the cornerstone to the future of the mining industry in South Africa. Working with the industry, we have compiled an Exploration Strategy, which amongst others aims to ensure that we attain at least 5% share of global exploration expenditure within the short to medium term. “In the main, the strategy identifies barriers that inhibit exploration investment in South Africa that is commensurate with its geological endowments and proposes a coordinated approach amongst key stakeholders in resolving the existing challenges in the shortest possible time,” Nkabane said.
Cabinet approves major infrastructure plan for implementation (SAnews)
Cabinet has approved the implementation of the National Infrastructure Plan (NIP) 2050. The plan is set to provide catalytic projects that are meant to contribute towards the country’s long-term economic and social developmental goals. Speaking on behalf of Cabinet, Minister in the Presidency, Mondli Gungubele, said the plan received a number of written comments after it was published for public comment in August 2021. Inputs were also received from public consultations with various stakeholders in the infrastructure sector. “The consultation included regional and continental bodies, such as the Southern African Development Community and African Union Commission for Infrastructure. “The NIP provides for the development of the country’s infrastructure networks that are aligned to the National Spatial Development Framework and the District Development Model (DDM),” Gungubele said on Thursday.
Chinese Imports Edging Out Kenya’s Local Products (VOA)
Kenyan artisans say they are losing the market for their products to Chinese imports. According to the crafts persons, the high quality and lower prices of Chinese-made goods put them at a disadvantage.
National data show that Kenya spent nearly $4 billion on imports from China in 2021. Kenya sources a vast array of consumer and capital products from China, while exporting $1.5 billion worth of goods to the Asian market. Traders like Magdalen Vivi, who sells imported kitchenware, say customers demand modernized products like nonstick cooking pots, commonly known as sufuria in Swahili.
An African Union study on international trade finds that the African continent is the largest market for Chinese goods. Some Kenyan consumers prefer the wide variety of the cheap products. Mary Wambui is one such buyer.
“There is always variety,” Wambui said. “All the time, you get new products, and they have different types. You don’t get the same ones all the time. Every time you come, there is something new that has come up.”
Local raw material sourcing spares EABL from Russia shocks (Business Daily)
The strategic shift to local sourcing of raw materials has spared East African Breweries Plc (EABL) #ticker:EABL from supply chain disruptions following Russia’s invasion of Ukraine. The geopolitical event has led to soaring commodity prices including those of wheat and barley which are key brewing ingredients for the alcoholic beverages produced by EABL. “A few years ago we declared an intent to have 80 percent of all our input sourced locally and that kind of shields us from the heavy shocks from global impacts such as what is going on in Ukraine,” said EABL chief executive Jane Karuku. Russia and Ukraine, for instance, account for about 30 percent of the world’s barley supply and the conflict has caused a major disruption in supply of the commodity. Ukraine recently banned the export of barley, among other commodities as it hunkers down in the face of the conflict. Imports from Russia on the other hand have been made difficult because of sanctions imposed by other world powers on Moscow including its ban from SWIFT which is the platform most commonly used by banks to verify international financial transactions.
Report on mobile cash laundering risks to be released April (Business Daily)
An anti-money laundering report that will form the basis of expanding the current Sh300,000 daily cap on mobile money is ready and will be released next month. The Financial Reporting Centre says the findings of the assessment, which started in March 2019 to identify threats to the integrity of Kenya’s financial system are now ready to be made public. FRC has been coordinating a team tasked with setting standards and promoting the development of legal, regulatory and operational measures to combat money laundering and terrorist financing. “We have covered (the risks posed by mobile-money network) under the national risk assessment report and we are planning to release it next month,” FRC director-general Saitoti Ole Maika said via telephone. “The report will have all the indicators of the risks per product and per sector.”
Kenya is now the cheapest country to purchase diesel in Eastern Africa (Business Daily)
Diesel prices in Kenya are the lowest in eastern Africa in the wake of the monthly subsidy, reversing the market structure that made the country’s fuel the most costly in the region. A litre of the commodity costs Sh112.63 on average in Kenya, compared to Sh118.44, Sh139.08 and Sh149.91 in three of the six East African Community countries, Tanzania, Uganda and Burundi, respectively. This bucks a trend where Kenya has had the costliest super petrol and diesel in the region mainly due to relatively high taxes and levies, which encourage local motorists in border towns to fuel in the neighbouring countries. The shift in the market structure is linked to the introduction of monthly subsidies in Kenya, which cut the current diesel prices by Sh23.29 a litre.
“The big difference is mainly attributed to the subsidy that the government has been using,” said an official at the Energy and Petroleum Regulatory Authority (Epra).
Safaricom’s M-Pesa crosses 30 million active users in Kenya (The East African)
Mobile money transfer platform M-Pesa has crossed 30 million users in Kenya as traders accepting payments through Lipa na M-Pesa doubled, cementing Safaricom’s dominance in digital transactions in the country. The giant telco’s chief executive Peter Ndegwa announced Thursday that Kenya accounted for more than 30 million of the platform’s 51 million customers across the region.
Mr Ndegwa also said businesses operating Lipa na M-Pesa Till numbers have doubled from 173,000 in April 2020 to more than 387,000. “The growth in M-Pesa customer usage has been driven by the launch of various innovations over the years including financial services such as M-Shwari, KCB M-Pesa and Fuliza,” Mr Ndegwa said. The Central Bank of Kenya (CBK) plans to launch a national payment system that will force Safaricom to accept cash from rival firms such as Airtel on its Lipa na M-Pesa platform, enabling a seamless transfer of money through merchants. The new system, to be introduced by 2024, will remove the hurdle where Airtel subscribers, for example, cannot pay for goods and services through Safaricom’s till and pay-bill numbers.
Rwanda has reopened the border with Uganda but distrust could close it again (The Conversation)
Rwanda has now fully reopened the Gatuna border with Uganda, ending a three-year impasse on the Northern Corridor, one of East Africa’s key transport arteries that funnels goods from the Indian Ocean seaport of Mombasa to Uganda, Rwanda, Burundi and Democratic Republic of Congo. Rwanda abruptly closed the border in February 2019 after it accused Uganda of abducting its citizens and supporting rebels seeking to topple President Paul Kagame.
Gatuna is one of the most important borders in East Africa as it connects Kenya’s Mombasa port to various cities in the region. On average, 2,518 trucks pass through the Gatuna border every month (84 trucks per day) into Uganda, Rwanda, Burundi and eastern Democratic Republic of Congo. The East African Community has since upgraded it into a one-stop border post. Its closure had choked off commerce in East Africa. Its re-opening is set to spark social and economic activities and also benefit the informal cross-border traders.
GSS to quantify illicit financial flows lost to Ghana (Ghanaian Times)
The Ghana Statistical Service (GSS) has initiated a process to measure how much the country lost through Illicit Financial Flows (IFFs) in the export and import trade sector over the last 21 years (2000 -2021). IFFs involve illegal movements of money or capital from one country to another that are illegally earned, transferred, and/or utilised to, among other things, evade tax. With support from the Ministry of Finance and the Ghana Revenue Authority (GRA), the exercise would estimate the losses and the loopholes to enable the country to take specific action to block them.
Ghana has recorded balance of trade surplus despite Covid-19 challenges - Alan Kyerematen (Myjoyonline)
The Minister of Trade and Industry, Alan Kyerematen, has lauded Ghana’s participation in the ongoing Dubai Expo 2020 which has brought governments, experts as well as global business leaders under one roof to discuss matters of global economic interests.Addressing participants at the Business Forum in Dubai, the Trade Minister said such events are important as Ghana and the United Arab Emirates (UAE) seek to advance cooperation in strategic investments needed to harness the country’s vast resources for industrial transformation and to boost trade and investment among the two countries.
Agriculture Remains Backbone Of Nigeria’s Economy - CBN (The Tide)
The Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, says agriculture remains a strong pillar and saving grace for the Nigerian economy.
The CBN Governor expressed satisfaction with the level of interest shown in agriculture and the tremendous impact the sector had had in the last six years. He wondered how the country could have coped with the rising prices of food and commodity items across the world without the foresight to revamp agriculture. Emefiele said the Central Bank had assumed a pivotal role in agriculture since 2015, when President Muhammadu Buhari directed that “we produce what we eat and eat what we produce”.
AfCFTA: Nigeria’s strategic objective is to capture 10% of Africa’s import by 2035 – Achimugu (Nairametrics)
The Nigerian National Action Committee on the African Continental Free Trade Area, AfCFTA, has revealed that its strategic objective is to capture 10% of Africa’s imports by 2035, thereby doubling Nigeria’s export in the process. This was disclosed by Franca Achimugu, Coordinator Oil and Gas Workstream, Secretariat of the National Action Committee on the AfCFTA at the Implementation Plan Adoption meeting with the Oil and Gas Workstream which was held at the Nigeria National Petroleum Corporation Headquarters, Abuja, Nigeria on Thursday. She added that Nigeria’s mission is to become the preferred provider of value-added services to Africa.
Introducing the agreement and what the Oil and Gas sector stands to benefit from its full implementation, she said, “AfCFTA means Nigeria is no longer Africa’s largest economy, we need to sit up and get our house in order.” She added that Nigeria is aligning itself for agreements, which comes
SON sensitizes Kano rice millers on 3rd party milling requirement (Solacebase Online)
The Standards Organisation of Nigeria (SON) has sensitised rice millers in Kano State on its requirements for third party milling. The Director-General of SON, Malam Faruk Salim, said on Thursday in Kano that the aim was to empower the millers to make their products to be of standard. Salim expressed the readiness of the organisation to help factories to ensure they don’t loose their products by using false machine and also to protect customers.
“If you standardise a product, it will be available for local consumption and export with the Free Africa Trade, with what we have right now, it makes products easy to move across the border,” he said. The director-general further explained that if a product was up to standard and producers follow the laid down rules, they would not have any problem in their receiving country.
Afreximbank congratulates the Republic of Congo as it adopts Factoring Law (Afreximbank)
African Export-Import Bank (Afreximbank) announced that the Republic of Congo has enacted a factoring law to support business activities. The Bank congratulated the Republic of Congo saying that the move constitutes a critical milestone in its efforts to increase Africa’s share of global factoring volumes from its current level of around 1%. Factoring offers an alternative trade finance instrument to African firms especially SMEs, and therefore this enabling law will provide a major boost to the development and growth of SMEs in the Republic of Congo. By creating a legal infrastructure which supports diversification of SME financing, and provides credibility and assurance to investors, the law significantly facilitates access to finance for previously excluded small and medium sized businesses in the Republic of Congo. Moreover, the Republic of Congo’s initiative will serve as a model to Central African States in particular, and other African States who are yet to enact a law on factoring, by demonstrating the benefits of such legal reforms.
Group Harps On Necessity To Dev SMEs (The Tide)
President, Community of Reformed Youths Initiative (CRYI), River State, Engr. Gogo Wenike-Briggs has said that there is an urgent need to develop the Small and Medium Enterprises (SMEs) in the Niger Delta region. Engr. Wenike-Briggs who made this known in a release to newsmen in Port Harcourt recently, said most business sectors in Rivers State are dominated by micro and small enterprises, producing for the domestic market.
The CRYI President, however, expressed worry that they do not grow into middle-sized and ultimately large manufacturing firms, stressing that “small firms (employing between 1-9 people) are the seedbed of the manufacturing sector and have contributed successfully to the growth of the industrial sector in most western countries like East Asia, Europe and US”. He continued that “there is the need to construct a more modern mall with international branding, integrating shopping outlets for various items, and linked to transport and social facilities.
“Establish market and technological linkages to effectively link the small manufacturing enterprises to the export market to drive their growth via outsourcing.
African trade
DG Okonjo-Iweala welcomes project in support of African Continental Free Trade Area (WTO)
The project will support the implementation of more than 30 activities in the AfCFTA strategies of Burkina Faso, Côte d’Ivoire, Guinea, Mauritania, Niger, Senegal, Togo and Tunisia. By assisting the implementation of priority actions formulated by UNECA, the project will help to create an environment where trade can be more efficient and inclusive in the eight beneficiary countries. “This programme illustrates the spirit of partnership needed to support the implementation of the AfCFTA,” said Dr Ngozi Okonjo-Iweala in her opening remarks.
Landlocked Africa seeks competitive rates and sustained air cargo capacity (The Loadstar)
An increasingly competitive landscape and high airfreight costs have put pressure on air cargo in some landlocked parts of Africa. Most African shipments are perishables, but for mining economies such as Zambia, which is landlocked in southern Africa, mining-related materials, as a percentage of total imports, have declined in recent years. Generally, there has been a steady decline of imports and exports since 2018 in the country. Imports to year-end 2021 were down 25%, and exports down 15% over the same period, according to data from NAC2000 Corporation, the only ISAGO registered and certified airport ground services provider in Zambia. “We observed that due to absence of capacity and prohibitive airfreight cost we have seen mining equipment being progressively sourced and stored via sea and road through depots in South Africa, and trucked within the region, with most non-urgent mining cargo sent by sea and road, much less by airfreight,” said Jonathan Lewis, managing director at NAC2000.
African fintech growth, investment matched by increasing IP complexity, regulation (Engineering News)
Financial technology (fintech) in Africa has experienced significant investments into the sector and growth of the sector over the past few years, which is expected to continue. Regulation of and legislation governing the sector is also increasing apace and investors and fintech must monitor and manage intellectual property (IP) to protect and ensure that companies within it can trade and grow.
There were more than 800 deals in the fintech and startup sector in Africa, which raised more than $4.3-billion, in 2021. This was more than double the value of deals in 2020, which had seen similarly large growth in deals when compared with 2019, said global mobile telecommunications industry association GSMA mobile for development head Max Cuvellier.
“It is not just the private sector that is moving into fintech – so are the regulators,” said CDH director and private equity sector practice co-head John Gillmer.
Africa can lead the world by putting nature at the heart of finance (UNECA)
“We are all asset managers,” writes Professor Partha Dasgupta in his seminal study on the economics of biodiversity. “Whether as farmers or fishers, foresters or miners, households or companies, governments or communities,” we all influence the store of value held in our most precious asset—the natural world around us.
And while, rightly, our attention is focused on our warming planet, we must recognise that the climate crisis and nature-loss are inextricably linked. All paths to net zero require the large-scale removal of carbon from the atmosphere and the only affordable and immediately available methods of doing this are in nature. Nowhere is this interdependency more clear than in Africa which is among the regions of the world most vulnerable to climate change and most dependent on nature. With almost a quarter of its GDP dependent on nature, every development pathway for the continent relies on its responsible management.
Africa’s reliance on nature is a source of vulnerability, but potentially also of competitive advantage.
The Board of Directors of the African Development Bank Group has approved a new policy that aims to strengthen debt sustainability among low-income African countries. The Board approved the Sustainable Borrowing Policy on 23 February 2022. The new policy primarily targets recipients of the African Development Fund, the concessional window of the Bank Group. The Fund caters to low-income and transitional countries on the continent. The Sustainable Borrowing Policy responds to a changing debt landscape in Africa, especially among the abovementioned countries. In recent years, low-income countries have gained access to new sources of finance, including private creditors and creditors outside the Paris Club. Although this access has allowed them to finance important development needs, it has also increased their public debt.
Africa must learn to compete with dominant Chinese firms (African Business)
In 2018 the German Network for Architecture Exchange and the country’s Ministry of Foreign Affairs brought together policy and construction industry representatives at an event focused on Germany’s relationship with Africa. Part of the conversation was on resolving the question of China’s growing dominance in the African construction market.
Many European firms have lost bids to Chinese contractors, with Chinese bid submissions sometimes 20% below European ones. According to the European International Contractors, China took 62% of the African construction market in 2018. This is an incredible reversal of positions, since according to The Economist, in 1990, American and European companies scooped up more than 85% of construction contracts on the continent. This changing of the construction guard is illustrative of an important, but overlooked, aspect of the Africa-China relationship – the dominance of Chinese, and not African, firms in the continent’s construction sector. While the arrival of the Chinese has increased competition and driven down the cost of infrastructure, it has also entrenched the trend of external actors dominating an important sector. If China is serious about a qualitatively better relationship with Africa, this will have to change. China is keen to tout its “all-weather” friendship with Africa, as was stressed by foreign minister Wang Yi, in a 2020 CGTN interview noting that “China and Africa have always shared weal and woe.” But a shift from European to Chinese firms at the expense of the growth of African ones retains the character of an unequal relationship.
The onus, however, is on African nations. They would do well to learn from how China tackled this problem (growing local firm capacity) during its development phase. Knowledge transfer and building local capacity was a direct function of state policymaking.
IMF chief says Africa is “particularly vulnerable to impacts from the Ukraine war” (CNN)
International Monetary Fund Managing Director Kristalina Georgieva said the war in Ukraine comes “at a delicate time for Africa,” which is particularly vulnerable to economic aftershocks.
“Africa is particularly vulnerable to impacts from the Ukraine war through four main channels—increased food prices, higher fuel prices, lower tourism revenues, and potentially more difficulty accessing international capital markets,” Georgieva said in a statement published on Thursday.
“Redoubling efforts to advance reforms that further promote resilience is a priority for many countries. At this difficult moment, the Fund stands ready to help African countries address the repercussions of the war, and to help design and implement reforms through our policy advice, capacity development, and lending. Recent reforms to the Fund’s lending toolkit provide greater flexibility to help meet financing needs,” she said.
Global economy news
New UNCTAD publications:
Key statistics and trends in international trade 2021: The effects of the COVID-19 pandemic on international trade
Key statistics and trends in trade policy 2021: The Regional Comprehensive Economic Partnership Tariff Concessions
DDG González: Trade cooperation essential for fairer, greener and resilient economies (WTO)
During the podcast, DDG González emphasized the need to accelerate the implementation of trade-facilitating measures to help ease the continued disruptions plaguing global supply chains and to expand the participation of small businesses in international trade. While some of the drivers of current supply chain bottlenecks may be temporary, others, especially the surge in electronic commerce, may prove permanent, highlighting the need to strengthen the resilience of supply chains going forward, she said.
On the impact of trade measures during the pandemic, DDG González noted that the overall picture is better than many people feared when the pandemic first struck. She said that several governments temporarily eliminated tariffs, eased or digitized customs procedures, introduced green lanes for medical products and their inputs, or streamlined regulatory approval requirements, helping to keep markets broadly open and supply chains for essential goods moving. Nonetheless, there is significant room for more trade cooperation to help achieve global vaccine equity, which is still a long way off, she said.
EU farmers boss: War might hit our food supplies, but will hit Africa, Middle East harder (EURACTIV)
The EU is unlikely to go hungry as a consequence of the war in Ukraine, but it could have a devastating impact on areas of Africa and the Middle East, according to farming boss Pekka Pesonen, who called for an ‘enhanced’ Green Deal package to maintain both quality and quantity in the European food supply.
Pekka Pesonen is the general secretary of the EU farmers’ association, COPA-COGECA. He spoke with EURACTIV’s agrifood team about the fallout of the war in Ukraine and how the EU’s green goals should be expanded in light of the situation.
The situation is not yet fully analysed, and we haven’t seen the full impact of it yet. But I think it’s quite safe to say already at this stage, that we would expect that we would have major disruption of international trade patterns, and especially in agricultural commodities that such as maize, sunflower, oil, and we expect trade disruptions not only between us [Russia, Ukraine, and Belarus and the EU] but also third countries.
We need to put our trade relations with other partners in the global trade framework to the test. The fundamental element is that we have to find a new international trade structure in the coming weeks to supply the market with sufficient quantities, or volumes to supply certain key markets so that they won’t see any major price increases that would be politically sensitive. I think there’s a common understanding across the big players that we need to act upon this.
Russia Turns to Africa for Trade Amid US, EU Sanctions (Business Post Nigeria)
As the United States and the European Union (EU) tighten their sanctions on Russia due to special military operation, demilitarization and denazification in Ukraine, Russians are now looking to diversify both exports and imports in Africa’s direction.
Russia and Ukraine share a common border, both are former Soviet republics struggling to move onto the global stage. Russia was angered because of Ukraine’s ambition to join the North Atlantic Treaty Organization (NATO) and the EU. With the conflict that began February 24, and amid Western and European sanctions, Russia plans to expand its network of trade missions in Africa, according to Vladimir Padalko, Vice President of the Russian Chamber of Commerce and Industry.
According to official reports, the popular Russian perception is that Africa is a promising market for Russia and information data obtained from the Industry and Trade Ministry, Russia has only four trade missions in Africa – in Morocco, Algeria, Egypt and South Africa. In addition, several interviews and research indicated that the Russian expert community advocates for strengthening business relations with Africa, and for example see fruits, tea, coffee from the EU countries can be replaced with products from African countries.
State capacity both drives improved development outcomes and is accumulated as a by-product of positive progression in the development process. However, the least developed countries have experienced attrition on both fronts. Development challenges among the least developed countries in the 2020s require them to develop and strengthen State capacity. These countries need the support of development partners through the implementation of programmes that intentionally reinforce and expand State capacity.
Mainstreaming Gender in National Policies: The cases of Ethiopia, Indonesia and Sri Lanka (UNCTAD)
Globalization and the growth of international trade have offered important pathways for speeding up the industrialization process. Access to larger markets enables both economies of scale and scope, capturing gains beyond what domestic consumer incomes can support. Similarly, access to global technologies, foreign exchange, and global value chains further facilitates these processes. These mechanisms underlie the promise and prominence of export-led industrialization, and the trade in manufactures that drives it, as a development strategy. Partly because of the connection between exporting manufactures and women’s employment, particularly in the more labor-intensive early stages of export-led industrialization, gender offers a useful lens into the social inclusion of structural transformation. In this background paper, we present an analysis of the connections between gender, employment and structural transformation since the early 1990s, including a general overview of trends and then focusing on specific country studies for Ethiopia, Indonesia and Sri Lanka. Given its recent development success, particular references to China’s experience will be made throughout
Tackling illicit trade through stricter anti-money-laundering rules (EURACTIV)
As illicit trade is rising, governments and affected industries are looking to combat the trend. One possible way is to pursue money laundering crimes more strictly so that criminals have fewer options to use the proceeds from their activities.
A recent report by the OECD estimates that up to 5.8% of EU imports are counterfeits. Moreover, the recent disruptions of supply chains and global shipping and the rise of e-commerce have provided traders of illicit goods with new opportunities to exploit. “The economic impact is really, really huge,” OECD economist Morgane Gaudiau told a recent online panel organised by EURACTIV and sponsored by Japan Tobacco International (JTI).
The panel discussed both the impact illicit trade could have on the economy and what could be done about it.
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South Africa News: Current Account Surplus At Record (Bloomberg)
South Africa reported its largest current-account surplus on record last year as import demand was suppressed by the economy recovering from the impact of the coronavirus and the value of gold exports rose to the highest since at least 1960. The balance on the current account, the broadest measure of trade in goods and services, widened to a surplus of 3.7% of gross domestic product, or 227 billion rand ($15 billion), from a revised 2% in 2020, the South African Reserve Bank said in a report on Thursday. The ratio of the surplus to GDP is the highest since 1987. The current-account surplus shrank more than expected in the fourth quarter to an annualized surplus of 1.9% of GDP, or 120 billion rand, from a revised 3.5% in the previous quarter. That’s less than the 2.5% median estimate of 12 economists in a Bloomberg survey The quarterly surplus was the sixth in succession, the longest streak since 2001.
Citrus association foresees further increases in fertiliser, fuel, chemical prices (Engineering News)
With 14% of global fertiliser exports currently stuck in Russia and the price of oil and gas continuing to climb as a result of the current conflict, the Citrus Growers’ Association of Southern Africa (CGA) says South Africa can expect further increases in fertiliser, fuel and agrochemical prices. To mitigate the impact of Russia’s invasion of Ukraine and subsequent sanctions imposed on Russia by the US and Europe, on South Africa’s citrus growers and exports, the CGA has joined hands with exporters, government and other stakeholders across the value chain.
The CGA explains that the Russian market accounts for between 7% and 10% of South African citrus exports every year. About 11.2-million cartons of fruit were exported to Russia in 2021. “With no fresh produce having been shipped to the region over the past few weeks by most countries, early shipments of lemons destined for the Russian market have been impacted. “Should this situation continue, when the export season officially kicks off in April, other varietals such as grapefruit and soft citrus will also be impacted,” the association points out.
Access to energy is crucial to SA transformation (IOL)
The recent Africa Energy Indaba held in Cape Town brought together major energy players who control South Africa’s trajectory in terms of energy production and value chains in a multi-billion-rand industry.
The Department of Women, Youth and Persons with Disabilities (DWYPD) participated at the Indaba to drive the need for policy reform and development that accelerates transformation, and promotes the inclusion of all marginalized groups across the African continent including women, youth and persons with disabilities. Furthermore, the Department’s participation brings forward a clear message that we, on the margins, must inform the development and growth of our continent.
The active role of women, youth and persons with disabilities is key to driving a transformative agenda for the energy sector across the continent. In this context, women remain the primary users and producers of energy within the household, and in emerging industrial countries. Women’s organisations continue to intensify their call for environmentally benign energy sources, and advocate for the use of new technologies in the development and expansion of the energy sector.
Godongwana urges SA to be conducive for investment (SAnews)
With South Africa being at risk of losing a potential multibillion rand investment by Ford, Finance Minister Enoch Godongwana has emphasised the important role that cities and provinces play in creating an enabling environment for investment.
“We need to get the basics right. This entails reducing regulatory constraints, providing effective services, as well as coordinating and sequencing economic interventions,” Godongwana said on Wednesday. Addressing Parliament during the debate on the 2022 Fiscal Framework and Revenue Proposals, the Minister said the country could lose a potential multibillion rand investment by Ford for an electric vehicle plant.
Court puts on hold KPA eviction from Lamu port premises (Business Daily)
The Court of Appeal has temporarily stopped an order restricting the Kenya Ports Authority from accessing the Lamu Port-South Sudan-Ethiopia Transport (Lapsset) project over compensation row. Judges Stephen Kairu, Pauline Nyamweya and Jessie Lesiit noted that restricting access to the facility will be against public interest considering the billions that have been pumped into the project. “We are persuaded that in all the circumstances of this case if what is being sought to be stopped takes place, it will be irreversible,” they said. The judges also noted that the Kenya Ports Authority (KPA) has demonstrated that the developments on the suit property are enormous and a lot of time and money has gone into the project.
The judges also agreed with KPA that it stands to suffer irreparable losses, which it cannot recoup, should the court fails to grant an order stopping execution of the Environment and Land Court (ELC) decision that would have seen the government agency evicted from the facilities.
Exports fuel fast increase raises fears of dumping (Business Daily)
The Kenya Revenue Authority (KRA) has flagged a suspicious spike in the shipment of fuel meant for exports amid fears that marketers are dumping the cargo in the local market to evade taxes. KRA Commissioner for Customs and Border Joseph Kaguru raised the red flag after oil marketers increased the share of fuel targeted for sale in neigbouring countries while cutting the portion for local consumption. Fuel labelled for exports accounted for 56 percent of cargo in three ships that docked at the port of Mombasa last month, raising the alarm bells at KRA. Consumption in Kenya dominates sales of fuel imported through the port. Imported fuel destined for neigbouring countries like Uganda, Rwanda and DR Congo does not attract the 25 percent import duty. The tax difference motivates crooked dealers hungry for higher margins to sell the produce locally.
Kenya, Zimbabwe ink seven pacts to boost investments (Business Daily)
Kenya has signed seven bilateral agreements with Zimbabwe even as President Uhuru Kenyatta joined the push for the removal of Western sanctions sapping the economy of the Southern African nation.
“We affirmed the need for cooperation with bilateral commitment at global levels to deal with pandemics of this nature now and in the future. Both Zimbabwe and Kenya are committed to enhance cooperation towards mitigating the adverse effects of climate change and other environmental issues,” Zimbabwean President Emmerson Mnangagwa.
Credit to traders up 136pc as banks loosen purse strings (Business Daily)
Traders secured bank loans at the fastest pace amongst six top borrower categories, signalling a gradual recovery in consumer demand. A breakdown of the latest data from the Central Bank of Kenya (CBK) indicates that net credit to traders grew by 136 percent to Sh41.5 billion in 2021 compared with a year earlier when retail and wholesale stores cut operating hours due to nighttime curfew. The increased uptake of new bank credit by traders pushed up their stock of loans to Sh526.5 billion — making up slightly more than 17.2 percent of Sh3.05 trillion held by the private sector last December. Trade, household, manufacturing, real estate, transport and communications and loans advanced on the strength of consumer durables such as appliances, furniture and office equipment made up 78 percent of net Sh241.9 billion loans extended to the private sector last year.
Government to prioritize gender-sensitive policies to boost cross-border trade (GhanaWeb)
Deputy Minister for Trade and Industry, Nana Ama Dokua Asiamah-Adjei, has stated that government is aiming to roll out gender-sensitive policies that will give women the opportunity to leverage the benefit from cross-border trade, especially with the African Continental Free Trade Area (AfCFTA). It can be noted that part of the problems women face includes the moving of their goods across the borders. The Deputy Trade Minister, who was speaking at a sensitization workshop for women in cross border trade organized by the Ministry of Trade and Industry in partnership with GIZ Ghana, said, “It is important to note that as part AfCFTA phase two negotiations, the Council of Ministers has received and approved the terms of reference to commence negotiations on protocol on women and youth.”
“The expected benefit of the new protocol includes the following; to mainstream and amplify the gains of women and youth-led businesses who predominate the MSME ecosystem of all the state parties to the agreement, to guarantee targeted approach for the provision of capacity building, investment and advocacy to African MSMEs, and to ensure that the AfCFTA works for African women and youth. This is an indication that at both national and continental levels, issues relating to women in cross-border trade is if high priority”, she added.
Why customs suspended VIN, e-valuation policy for imported vehicles (Nairametrics)
The Federal Government through the Nigeria Customs Service (NCS) has provided the reason why it bowed to pressure and suspended the implementation of its controversial Vehicle Identification Number (VIN), an electronic valuation policy recently introduced for imported used vehicles.
The customs said that the implementation of the policy was suspended for one month to allow clearing agents to clear the backlog of vehicles held up at the ports due to the ongoing strike by the agents. The NCS warned importers and agents to ensure the uniform application of rebates for all vehicles using the correct values for their assessments.
The action by the NCS is coming some weeks after the commencement of indefinite strike embarked upon by clearing agents at Lagos ports over the implementation of the VIN valuation policy which they had alleged that the Customs had used to hike duties on imported vehicles arbitrarily among other issues.
African trade
Sea-Air Modal freight could take African trade to new heights (ESI-Africa)
Transportation of goods could become easier and faster thanks to a strategic partnership formed by Ethiopian Airlines, International Djibouti Industrial Park Operation (IDIPO) and Air Djibouti to implement sea-air multimodal transportation of goods to Africa.
Ethiopian Airline has signed an MOU with IDIPO and Air Djibouti to create multiple modes of transport, particularly sea-air, which will assist with trade and business in Africa. Based on the agreement, the cargo will be transported from China to Djibouti Free Zone by sea and then take to the skies from Djibouti International Airport. The synergy between air and sea transportation would be instrumental in facilitating trade between Africa and China through fast and easy movement of cargo.
The collaboration would save both time and energy in addition to stimulating the growth of the cargo market in Africa. The transportation deal would enable traders to order their products from China to Africa via the Djibouti port. Ethiopian Airlines would then facilitate the air movement of goods to different parts of Africa through its existing network.
Fresh Impetus Towards a Single African Air Transport Market (COMESA)
Aviation experts from the African Civil Aviation Commission (AFCAC) and the Common Market for Eastern and Southern Africa (COMESA) are meeting in a three days’ retreat in Kigali, Rwanda, from 8th –10th March 2022 to harmonize their workplans, strengthen institutional arrangement and collaboration in the operationalization and implementation of the SAATM; one of the AU Agenda 2063 Flagship Projects.
Deputy Director for Rwanda Civil Aviation Authority (RCAA), Ms. Winnie NGAMIJE, on behalf of the Director General and the President of AFCAC, Mr. Silas UDAHEMUKA stated: “Cooperation between AFCAC and the RECs is not optional, it is a must if aviation programmes on the continent are to succeed, we are therefore compelled to ensure that such cooperation is reinforced through harmonization of the work plans,” stated.
Customs favours richer firms, small traders say (The Standard)
A few companies that have the corporate and financial muscle to convince customs bodies of their ability to develop strong logistical systems are able to get favours when clearing their goods, disgruntled businesses in the import-export sector say. Interviews with some of the traders say there is no robust legal framework in any of the East African countries that guides how a company can attain Authorised Economic Operators (AEOs) status. Lack of special recognition of the AEO programme by customs laws in all the East Africa Community (EAC) member states discourages small firms from joining the scheme. Companies that have achieved AEO status are given first priority by customs officials when their goods are leaving or arriving at the port. This means their documents are checked and cleared fast without much scrutiny, and they are given access to priority service channels such as telephone lines at contact centres and special corners at release points.
Why South Sudan failed to integrate into EAC Customs Union (The New Times)
Disparities in policy, legal and regulatory frameworks are some of the issues highlighted in a report showing why there is very little progress made in integrating South Sudan into the East African Community (EAC) Customs Union ever since the country was allowed to join the six-member bloc six years ago. South Sudan applied to join the EAC in June 2011, shortly after gaining independence from Sudan. The regional Parliament’s Committee on Communication, Trade and Investment last September interacted with stakeholders in Juba, South Sudan to assess progress made in integrating the country into the EAC Customs Union, among other things.
Five Customs administrations in East Africa, namely Burundi, Kenya, Rwanda, Tanzania and Uganda, organized its Regional Joint Coordinating Committee (RJCC) meeting of the “Project on Capacity Development for Trade Facilitation and Border Control in East Africa (TF & BC Project)” virtually on 25 February 2022. This Project, whose original one started in 2007, has been implemented by the five Customs administrations with the support jointly extended by the WCO and JICA in cooperation with Japan Customs. With the aims at improving efficiency of border procedures and enhancing border control, the five Customs administrations have made continuous collaborative efforts under the Project on (1) effective One Stop Border Posts (OSBPs) operation, and (2) Customs capacity building on three areas, namely (i) risk management (RM), (ii) post clearance audit (PCA), and (iii) Program Global Shield (PGS).
Launch and First Meeting of the ECOWAS Regional Trade Facilitation Committee (ERTFC) (ECOWAS)
The ECOWAS Commission, with the support of the Trade Facilitation West Africa (TFWA) Programme, organised the launch of the ECOWAS Regional Trade Facilitation Committee (ERTFC) on 21 February 2022 in Lomé, Togo.
In his address, Minister Kodjo Adedze, on behalf of H.E. Faure Essozimna Gnassingbe, President of the Togolese Republic, welcomed participants to the historic launch and inaugural meeting of the ECOWAS RTFC. He stressed the importance of the ECOWAS RTFC in providing advice and support for the implementation of trade facilitation initiatives in the region. He concluded by launching the ECOWAS Regional Trade Facilitation Committee and urging its members to work towards simplifying exports, imports, and transit procedures within and outside the region.
CEMAC: The introduction of the central bank’s digital currency may disrupt the banking system (BEAC research) (Business in Cameroon)
In its recent Research Bulletin, the Bank of Central African States (BEAC) dedicated an article to the issue of central bank digital currencies as alternatives to cryptocurrencies. Written by Jacques Eloundou Ndeme, head of the Directorate of Payment Systems at the central bank, the article is titled “Are central bank digital currencies an answer to crypto-currencies?” According to the author, the introduction of central bank digital currencies (CBDCs) can disrupt the existing banking system if citizens decide to keep digital currencies in their wallets instead of keeping cash in banks. In that scenario, banks would not have enough cash to grant credit and offer other financial products, he explained. As a result, the said banks could raise the interest rates they offer on savings accounts to encourage customers to keep their deposits with banks, he added concluding that this will be bad for those who apply for loans. Indeed, as he illustrated, when the interest rates on savings increase, interest rates on loans follow the same suit.
In addition, the author writes, the use of digital wallets can prompt users’ distrust towards bank accounts. Unless banks are allowed to manage digital wallets, people may stop using bank payment solutions, he points out. He believes that two facts can help minimize the risk of users’ turning away from those payment solutions. First, there is usually no interest on CBDCs held by users in digital wallets by imposing transaction limits for digital wallets. Secondly, when managing digital wallets, banks can impose transaction limits.
Africa’s next wave of tech unicorns are digitizing informal trade (The Africa Report)
Fintech accounts for 60% of African venture capital investment, but a new cohort of companies such as Sabi in Nigeria, MaxAB in Egypt, and Sokowatch in Kenya are transforming how hundreds of thousands of merchants operate in Africa’s extensive informal economy. With tools to support logistics, management, and operations for micro, small, and medium-sized enterprises (MSMEs), these startups are challenging the notion that informal transactions need to be formalized, but rather just made more productive. The next wave of African billion-dollar companies are tackling the challenge of digitizing informal trade.
A staggering 60% of global employment remains in the informal economy, outside the purview of the state. This figure is even greater in sub-Saharan Africa, estimated at 89.2%, with markets such as the Democratic Republic of the Congo, Senegal, and Mozambique coming in even higher at above 95%.
This scale is not only apparent in employment but value, as sub-Saharan African economies are estimated to derive between 25 and 65% of gross domestic product from informal production, with Nigeria and South Africa at the higher and lower ends respectively. With such great reach, it should be no surprise that the informal economy permeates across classes as well, with even tertiary degree holders finding their way to the informal economy about a quarter of the time.
Africa should focus on bridging the digital infrastructure gap (IPPMedia)
The sector played a critical role by making communication easy as many countries struggled by tightening movements by introducing restrictions in a bid to protect their economies by introducing lockdowns, curfews, remote working, and school closure. The statement was made by the Commissioner for Infrastructure and Energy at The African Union Commission Amani Abou-Zeid recently during the 7th Programme for Infrastructure Development in Africa (PIDA) Week in Nairobi recently. According to him, it also exposed the wider infrastructure gaps across Africa and the urgent need to prioritize and bridge the digital infrastructure gap in Africa, which is home to 21 of the 25 least-connected countries in the world.
She added that priorities in digital area should include implementation of the 11 Information Communication Technology (ICT) PIDA PAP2 projects that require strong private-public partnerships, putting in place an enabling environment for digital single market and timely completion and implementation of digital sectorial strategies for health, education, agriculture and cybersecurity strategy.
According to African Union Commission Digital Transformation Strategy for Africa (2020-2030), Africa presents a sea of economic opportunities in virtually every sector, and the continent’s youthful population structure is an enormous opportunity in this digital era and hence the need for Africa to make digitally enabled socio-economic development a high priority.
New World Bank Report Assesses Sources of Inequality in Five Countries in Southern Africa (World Bank)
A World Bank report on Inequality in Southern Africa: An Assessment of the Southern African Customs Union, released today, examines the process of household income generation to identify the sources of inequality in the region. It finds that the Southern African Customs Union (SACU) member countries of Botswana, Eswatini, Lesotho, Namibia, and South Africa, represent the world’s most unequal region though there are differences across countries with Namibia and South Africa distinctly having higher inequality than the rest and Lesotho the least. Consumption inequality across the SACU region is found to be more than 40 percent higher than the averages for both Sub-Saharan Africa and upper-middle-income countries. South Africa, the largest country in SACU, is the most unequal country in the world, ranking first among 164 countries in the World Bank’s global poverty database. Botswana, Eswatini, and Namibia are among the 15 most unequal countries, and despite recent improvements, Lesotho still ranks among the top 20 percent, the report shows.
Africa in united affirmation to achieve sustainable development (UNECA)
African countries recommitted to achieving Sustainable Development Goals (SDGs) by building better through investing in green growth to unlock the continent’s development opportunities. Confirming Africa’s capacity to drive sustainable development, African governments have reaffirmed commitment to meeting the SDGs at the 8th Session of the African Regional Forum on Sustainable Development (ARFSD), held in Kigali, Rwanda, 3-5 March 2022.
Despite the impact of COVID-19 on the economic and health sectors in Africa, the continent can achieve sustainable development. Africa should view the pandemic not as setback but a springboard to recover and build better on its development programmes. Africa must build multilateral partnerships and strengthen capacities in the manufacturing of vaccines and pharmaceuticals, Mr Kagame implored delegates. “Africa should prioritize domestic resource mobilisation to finance its development particularly its national health care system,” said Mr Kagame, whose country has vaccinated 70 percent of its population. “Building the Africa we want is up to us,” Kagame noted, emphasizing that strong mechanisms are needed to monitor and change the implementation of the SDGs. “We have to own and lead the process and support one another. That’s why these agendas [2030 Agenda and Agenda 2063] are important because it is about achieving the stability and sustainability of our continent.”
Can China Shield Africa From Fallout of Sanctions Against Russia? (VOA)
The conflict in Ukraine and resulting sanctions on Russia are driving up global oil and food prices, which could lead to increased hunger in Africa, and even more unrest, analysts said. “We are heading for a disruption,” said Steven Gruzd, a Russia expert and foreign policy analyst at the South Africa Institute of International Affairs in Johannesburg.
“I think food insecurity will be a massive consequence of this war.” Russia is the world’s largest exporter of wheat, and Ukraine ranks fifth. Countries in North Africa, such as Egypt, Russia’s top Africa trade partner, are expected to especially feel the impact of the sanctions. Tunisia has said it is already looking elsewhere for wheat supplies. “When looking at the impact of the conflict in Ukraine on global food security, in a year of unprecedented humanitarian needs, WFP is extremely concerned as the conflict may have far-reaching consequences,” Claudio Altorio, a World Food Program spokesperson, told VOA.
Russia has engaged with chronically unstable nations like Mali and the Central African Republic, where it has mineral interests, and where private, Russia-based military contractors are stationed. China, on the other hand, is engaged across the continent through loans and infrastructure investment. In 2021, total bilateral trade between China and Africa reached $254.3 billion, Chinese authorities said. By contrast, Russia-Africa trade was worth about $20 billion, according to the African Export-Import Bank. “The magnitude of China’s trade with Africa is already 10 or more times bigger than Russia’s trade with Africa,” said Gruzd. “If supply lines go down, China would probably be best placed to pick up that slack.”
“African countries are in general trying to increase their agricultural exports to China. South Africa exports a lot to China and Russia … so South African companies may be looking to China to make up for disruptions,” he said.
But Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa, said he didn’t think sanctions on Russia would increase China-Africa trade. He said he thought the European Union, the United States and Canada would be better placed to supply Africa with grains and, to some extent, oil.
The surprising boon for Africa’s exporters from the Ukraine invasion (Quartz Africa)
Africa’s commodity-exporting countries are primed to benefit from the impact of the invasion of Ukraine by Russia, according to experts. Commodity prices including oil, gas, maize, and wheat—top global exports for the two countries in conflict—have begun rising on fears over the impact of sanctions slapped on Russia.
“African oil producers stand to benefit from higher oil prices as their fiscal positions are closely correlated to oil exports and the international oil price,” said Oxford Economics Africa analysts in their monthly highlights. Nigeria, with an oil production capacity of 1.36 million barrels per day will likely be the biggest beneficiary followed by Libya (1.17 million) and Angola (1.14 million,) barrels per day. Similar sentiments have also been echoed in the African Energy Chamber first quarter 2022 Outlook, that projects increased activities in oil and gas exploration would unlock the continent’s potential in meeting global energy demand and shore up foreign investments.
Brief Suggests Five Key Actions to Reach Africa’s Wind Energy Potential (IISD)
The Africa-EU Energy Partnership (AEEP) issued a policy brief on ways to support the growth of wind energy in Africa. The authors present findings that the region is currently using only 0.01% of its wind energy potential. They stress that Africa needs to dramatically expand generation capacity to approach full access to sustainable energy services for its citizens, part of its sustainable master plan stipulated in the African Union’s Agenda 2063.
The authors note that onshore wind power in Africa could match the region’s electricity demand 250 times over (180,000 TWh per year), and 27 African countries on their own each have sufficient wind potential to theoretically supply all of Africa with electricity. In 2020, installed wind capacity is only equivalent to 6,500 MW of electricity, which is a fraction of its technical potential.
The brief reports that the Africa Energy Transition Programme led by the Africa Energy Commission (AFREC) “anchors Africa’s energy transition” to Agenda 2063, the 2030 Agenda for Sustainable Development, and the Paris Agreement on climate change through six strategic objectives. In June 2021, AU Member States requested AFREC/AUC to mobilize resources for programmes to accelerate green energy investments for increased energy access and climate ambition.
Global economy
International trade during the COVID-19 pandemic: Big shifts and uncertainty (OECD)
International trade plunged in 2020 but recovered sharply in 2021. While total trade flows are now comfortably above pre-pandemic levels, trade impacts across specific goods, services and trade partners are highly diverse, creating pressures on specific sectors and supply chains. The changes in the trade structure caused by the COVID-19 pandemic in a single year was of a similar magnitude to changes otherwise typically seen over 4-5 years. Substantial imbalances across trade partners and products remained at the end of 2021, and not all of the accumulated losses from the earlier steep declines were recuperated. The heterogeneity of trade impacts and changes in trade flows across products, sources and destinations signifies high uncertainty and adjustment costs, and implies additional incentives for consumers, firms and governments to adopt new — or to intensify existing — risk mitigation strategies.
Integrating a gender perspective into trade facilitation reforms (UNCTAD)
Women cross-border traders face significant challenges, including time constraints, costs of burdensome procedures, discrimination and harassment at borders. Despite multilateral calls to address those issues and to make trade policies gender-responsive, notably the Revised Buenos Aires Declaration, limited progress has been made on gender equality in trade. This policy brief outlines key gender-based barriers for women traders and provides 10+1 policy recommendations to address them.
Governments Must Choose to Support or Restructure Heavily Indebted Firms (IMF Blog)
Companies entered the COVID-19 crisis with record debts they racked up after the global financial crisis when interest rates were low. Corporate debt stood at $83 trillion, or 98 percent of the world’s gross domestic product, at the end of 2020. Advanced economies and China accounted for 90 percent of the $8.9 trillion increase in 2020. Now that central banks are raising rates to check inflation, firms’ debt servicing costs will increase. Corporate vulnerabilities will be exposed as governments scale back the fiscal support that they extended to stricken firms at the height of the crisis.
Governments face difficult decisions as they manage these risks to the economic recovery. They may need to continue providing financial support to firms that can recover (but cannot raise the private financing to do so) while withdrawing support from firms that are so badly scarred that they should be restructured or liquidated. Financial support should become more focused amid shrinking fiscal space.
ICC calls on World Bank and IMF to help avoid unintended effects of crisis on SMEs (ICC)
Writing to International Monetary Fund Managing Director Kristalina Georgieva and World Bank President David Malpass, Mr Denton said that while ICC fully respected the decision of several governments to impose economic sanctions on Russia in recent days there was concern about the effects of the crisis on SME performance in sectors with a high reliance on exports to Russia, particularly in developing and emerging economies.
On behalf of ICC’s global network of over 45 million businesses in more than 100 countries, Mr Denton urged the IMF and World Bank to urgently consider making available any institutional assets that can be deployed to help national governments cushion the unintended effects of the crisis on SMEs saying ICC stood ready to support in any way to diminish the emerging risks.
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Domestic, country-related news
Inclusive growth key to address gender equality (SAnews)
The Deputy Minister of Forestry, Fisheries and the Environment Maggie Sotyu says with women recognised as the most vulnerable to the impact of climate change, inclusive economic growth is key to addressing gender inequality. Sotyu said this when she participated in the debate on International Women’s Day during a sitting of the National Assembly on Tuesday. She said women are increasingly being recognised as more vulnerable to climate change impact than men as they constitute the majority of the world’s poor as they are more dependent on natural resources which climate change threatens the most. “It is therefore important that inclusive economic growth is key to addressing unemployment, gender equality, health and other poverty-related issues,” she said.
Economic reform critical for sustainable growth path – Seifsa (Engineering News)
South Africa’s lacklustre approach to implementing the economic reform programmes necessary to turn the economy around is one of the reasons the economy has not clawed back the ground lost as a result of the Covid-19 pandemic, says metals and engineering industry body the Steel and Engineering Industries Federation of Southern Africa (Seifsa) COO Tafadzwa Chibanguza. “Gross fixed capital formation for 2021 increased by a disappointing 2.03%. The metals and engineering sector’s fortunes are linked to higher levels of economic activity, which is driven by greater investment into the economy, particularly fixed investment.
Safda warns sugar tax hike will be detrimental for sector (Vutivi Business News)
A fight is brewing between the SA Farmers Development Association (Safda) and National Treasury following its decision to increase the sugar tax. The organisation says the hike is a slap in the face for small-scale sugarcane growers and will ruin an already-crippled sector. Safda chairman Dr. Siyabonga Madlala warned that the increase undermined the Sugarcane Value Chain Masterplan in which the government undertook to put a moratorium on product tax policy changes. “The Health Promotion Levy (HPL) on sugary drinks was introduced in 2018 at a fixed rate of R2.1 per gram of the sugar content that exceeds four grams per 100ml,” he said. “The introduction of the HPL has had a devastating impact on sugar demand. It shrunk local market demand for sugar by about 20%, which contributed to a marked reduction in industry-related jobs, with many small-scale farmers exiting the industry due to the significant reduction in revenue.”
Mining, Minerals Investment Conference in diamond city (ESI-Africa)
In collaboration with the Northern Cape Provincial Government, the Department of Mineral Resources and Energy is hosting the Northern Cape Mining and Minerals Investment Conference on 10-11 March 2022 in Kimberly. The Department of Mineral Resources and Energy has the mandate to regulate, transform and promote minerals and energy sectors while ensuring that all South Africans derive sustainable benefit from the country’s resource wealth. In line with this mandate, the Department has committed to hosting Provincial Conferences in Northern Cape, Limpopo and North-West as part of its investment attraction drive.
The Provincial Mining Investment Conference will be positioned as an effective business dialogue and investment promotion and exchange platform for the direct contact of stakeholders in the extraction, development and processing of minerals, with special emphasis on junior and emerging mining enterprises.
Mthuli Ncube Claims Zimbabwe Has Lost US$42 Billion Because Of Sanctions (NewZimbabwe)
Finance and Economic Development minister Mthuli Ncube claims Zimbabwe has lost at least US$42 billion because of sanctions imposed on the country by western powers since 2003. The amount is more than double the size of Zimbabwe’s economy. The European Union and the United States have recently renewed sanctions on Zimbabwe while other countries like Britain and Canada are expected to follow suit. They mainly cite human rights violations and insufficient political and economic reforms as a pretext to extent the embargos. Speaking at a youth program in Gweru Saturday, Ncube said the country is reeling from the effects of sanctions. “The over US$42 billion which we have lost since 2002 is almost double our economy which stands at US$25 billion. That’s quite a huge margin and people need to realise the effects of such a loss,” Ncube said. “Almost US$4,5 billion of that money was intended for donor support and US$18 billion was for financial support. Banks lost over 100 corresponding resources. We experienced massive loss of jobs and we were unable to create jobs easily. We have lost foreign direct investment,” he said. “FDI has been restricted and investors would be fearing to associate with us for fear of these sanctions. If you are to look at the FDI inflows in the 80s, they were about US$8 million per year, they increased to US$95 million in the 90s but then dropped to US$20 million per annum in the 2000s,” Ncube said.
Prices of goods seen rising 6pc despite favourable weather (Business Daily)
Average prices of goods and services are seen rising by six percent this year despite projected favourable weather which will likely boost food production that has a higher weighting in cost of living measure. A consensus outlook from 14 global banks, consultancies and think-tanks shows inflation — a gauge for annual changes in the cost of living — will average 6.1 percent in 2022 on the higher cost of key imports amid weakening shilling. This is despite inflation falling to a 16-month low of 5.1 percent in February, having dropped steadily since recent peak of 6.91 percent last September on the back of slower growth in food items, flat fuel prices and a fall in electricity bills. The outlook, compiled by Barcelona-based Focus Economics, does not factor in the debilitating impact of economic sanctions imposed on Russia for its brutal invasion of Ukraine which has worsened disruptions in global supply chains and trade. That has, as a result, constrained global distribution of oil, cooking gas and wheat whose prices have touched historic highs, hitting countries such as Kenya and posing higher upward pressure on the cost of living.
New agreement to raise Uganda’s cargo volume inked in Dar (The Citizen)
Port and rail service providers in Tanzania and Uganda have signed a freight forwarding agreement with Roofings Group of Uganda in a deliberate effort to raise the volume of cargo to and from the neighbouring land-locked country that passes through the Dar es Salaam port.The agreement signed yesterday involved the Tanzania Ports Authority (TPA), the Tanzania Railways Corporation (TRC), the Uganda Railways Corporation (URC) and was facilitated under the Central Corridor Transit Transport Facilitation Agency (CCTTFA).Currently, it is only about two percent of Uganda’s cargo that passes through the Dar es Salaam port, according to TRC Director General Masanja Kadogosa.”This will mark an increase in shipping by 30 percent. It is a huge burden and as we speak here Uganda is adding to the Railways’ train heads to facilitate this trade” said Mr Kadogosa.
The TPA director general, Mr Erick Hamis said the authorities continue to promote Tanzania in the provision of port services to foreign countries by finding more traders and stakeholders in those countries, especially those located in East African Community, SADC, Comesa among others.
Rich Lamu oil prospects fuel Kenya’s economic plans dreams (The East African)
Kenya is just weeks away from announcing the discovery of new oil resources in the Lamu basin, bigger than what was found a decade ago in Turkana, in what could be a turning point for the country’s dreams of reaping petrodollars. Italian oil exploration company Eni — in partnership with France-based oil and gas company TotalEnergies and Qatar’s state-owned oil and gas firm Qatar Energy — is racing to conclude a five-kilometre exploratory drilling deep water well that will establish the potential oil resources in the Lamu basin.
The large fiscal windfall associated with new oil resource revenue could help Kenya boost development and improve the standards of living for citizens through access to key services and amenities such as roads, health, food security and education.
Inside Rwanda’s $5 million climate action initiative (The New Times)
Rwanda is among 12 countries that are set to benefit from a three-year project “GUARD AFRICA” to ensure just climate financing, just recovery from the impacts of climate change and Covid-19, promotion of green energy and accelerate the implementation of Nationally Determined Contributions (NDCs) — the pledges to combat climate change from 2021 to 2030. Rwanda submitted its revised Nationally Determined Contributions (NDCs) to the United Nations Framework Convention on Climate Change (UNFCCC) in 2020 and its implementation started last year. The country needs over $11 billion to implement the measures to mitigate and adapt to climate change and reduce greenhouse gas emissions by 38 per cent by 2030. At least $5.677 billion will be spent on mitigation measures to reduce causes of climate change while $5.364 billion will be spent on adapting to the effects of climate change.
Ghana is a nation of attractive opportunities and is ready for business - Akufo-Addo (Myjoyonline)
The President of the Republic, Nana Akufo-Addo, says Ghana has moved away from the earlier uncertainties that clouded her path towards progress and prosperity, and the last 29 years of democratic governance in the 4th Republic have generally been the period of the greatest economic growth in our history. Delivering a statement on “Ghana Day” at the ongoing Dubai Expo 2020, on Tuesday, 8th March 2022, President Akufo-Addo noted that “Our engagement at the Expo is themed on Opportunity, because we are a nation of unquestionably attractive opportunities.” According to President Akufo-Addo, Ghana is, today, the safest country in West Africa, it is the largest recipient of foreign direct investment in West Africa, and is ranked 3rd in the Ease of Doing Business Index in West Africa.
“We are the new commercial capital of Africa by virtue of our hosting of the Secretariat of the African Continental Free Trade Area (AfCFTA), we are the 2nd largest cocoa producer in the world, we are the largest producer of gold in Africa, we are endowed with considerable deposits of bauxite, iron ore, manganese, lithium, oil and gas, diamonds, and timber, and we are geographically closer than any other country to the centre of the planet,” the President added
Ethiopia Airlines to buy five Boeing cargo planes (Business Daily)
Ethiopian Airlines will purchase five 777-8 freighters after reaching a deal with the US plane maker Boeing as it seeks to ramp up its cargo services. The move is expected to tighten freight competition between the Addis-based carrier and Kenya Airways
The Ethiopian carrier has reached a preliminary deal with the Boeing for the purchase of the high-capacity aircraft, making it the second airline in the world to have made plans of buying the cargo version of the next generation 777 aircraft. Expanding the freighter fleet is part of Ethiopian Airlines’ long-term strategy for growing its cargo and logistics business at a time when the carriers are grappling with low demand for passengers on the back of Covid-19 restrictions.
Ojaamong welcomes plans to set up an EPZ in Busia (Capital Business)
Busia Governor Sospeter Ojaamong has welcomed the move by the Export Processing Zone (EPZ) to establish an industrial park at the 843 acres piece of land in Nasewa, in Matayos sub-county. The project to be undertaken in three phases is expected to be one of Africa’s tech and business hubs offering employment and propelling economic growth and development of Busia County and the country at large. “The establishment of the Industrial Park at the Nasewa Nucleus Estate will be in line with two of the Big Four Agenda of manufacturing and food security; it will also create employment for unemployed youths in the county,” said Ojaamong.
Nigeria to Supply Equatorial Guinea With Natural Gas (VOA)
Nigeria has agreed to supply natural gas to Equatorial Guinea at Nigeria’s International Energy Summit in Abuja. African energy experts are urging quick implementation of the gas deal amid high demand and supply disruptions caused by Russia’s invasion of Ukraine. This week’s signing of a gas deal by Nigeria’s minister of state for petroleum, Timipre Sylva, and his Guinean counterpart, Gabriel Lima, is a testament to Africa’s untapped gas market. The deal seeks to supply Nigerian gas to Guinea’s processing site in Punta Europa.
Nigeria ranks among nine countries with the highest gas reserves in the world. In January, Nigeria’s gas reserves rose by 1.4% from the previous year. But the market remains largely untapped and previous attempts by authorities to initiate gas deals fell apart. Nigerian authorities last week said they were willing to invest more and focus on natural gas exploration.
African trade
AFCTA urges women to take advantage of its trade and economic opportunities (Capital FM Kenya)
As the world marks International Women’s Day, it has emerged that fewer women than men are taking advantage of the trade and economic opportunities presented by the African Continental Free Trade Area (AfCFTA), an African Union Agenda 2063 initiative that is expected to be a key driver for Africa’s continental structural transformation and industrialization. As a result, there is a need to consider implementation in a way that increases women’s economic participation and assists them in integrating more fully into high-paying sectors of the economy. “In this regard, to advance the objective of gender equality under the AfCFTA Agreement as a potential force for inclusive economic growth and transformative change, there needs to be a concerted effort by member States to mainstream gender into AfCFTA,” said Pamela Anyango, the Principal trade development officer, state department for trade during a workshop in Nairobi aimed at looking for ways to make the AfCTA work for women.
Furthermore, despite significant integration developments in the EAC and the potential of the AfCFTA agreement to transform lives on the African continent, awareness levels and knowledge on how to take advantage of the agreement have been very low amongst private sector players who are its primary beneficiaries. According to the forum, the level of awareness and knowledge among women in the EAC is even lower.
African Countries adopt Common African Position to Integrate Gender Equality in Climate Action Agenda (African Union)
The African continent’s dependence on natural resources and rain-fed agriculture calls for urgency in meeting commitments to climate action and disaster risk reduction. The agricultural sector, which is highly susceptible to climate change and variability, provides a livelihood for 70% of Africans and contributes about 30% of the continent’s GDP. The heavy reliance on agriculture also means that women are highly exposed and vulnerable to the impacts of climate change and disasters, as they account for 90% of employment in the agricultural sector in many African countries.
As climate change impacts surge, women have been forced to invest more time in meeting family needs. For example, due to droughts, women are sometimes forced to travel longer distances to collect water, which not only exposes them to additional time losses, but also to increased risks of gender-based violence. Women’s reliance on agriculture and natural resources for their unpaid production and care activities makes them particularly vulnerable to climate fluctuations. Climate change shocks are superimposed on political, economic, social and health shocks in some sub-regions such as the Sahel, the Lake Chad Basin and the Horn of Africa, straining the resilience of communities in general, and women and girls in particular. However, despite women being disproportionately affected by climate change, they play a crucial role in climate change adaptation and mitigation. Women have the knowledge and understanding of what is needed to adapt to changing environmental conditions and to come up with practical solutions. Women and girls are essential, effective and powerful leaders and change-makers to address climate adaptation, mitigation and solutions. But they are still a largely untapped resource.
Women must be at the centre of Africa’s transformative free trade area (Africa Renewal)
IWD: Gender equality highlighted in tackling climate change (The New Times)
The role of gender equality in the mitigation of climate change took centre stage as Rwanda joined the world in the marking of this year’s International Women’s Day on Tuesday March 8. At the national level, the celebration took place in Gakenke District, with the theme: “Gender Equality to Address Climate Change.” “There’s an important link between gender equality and climate change because we cannot hope to realise the future we want unless we focus on gender equality,” Jeanne d’Arc Mujawamariya, the Minister of Environment, said on Tuesday. She added: “Research states that women are more affected by the impacts of climate change compared to men. This is because the majority of vulnerable people living in modest conditions are women; and their livelihoods depend on natural resources which are most affected by climate change.”
International Womens Day #breakthebias time to mainstream gender in climate change resilience (sardc.net)
Climate change is impacting southern Africa in many ways, with hazards such as flooding and droughts causing serious harm to people, including death. However, the impacts of climate change affect men and women differently.
The impacts of climate change are gendered, and women in most countries in the Southern African Development Community (SADC) are disproportionately affected and experience the effects more severely than their male counterparts.
The SADC Executive Secretary, Elias Magosi said in his statement on International Women’s Day, that there is need to mainstream gender in all climate change initiatives to cushion the burden that most women face in their daily lives, while removing the barriers that hinder acceleration of gender equality.
Strengthening women-led organisations in trade facilitation in Africa (Businessday)
Governments in Africa have shown commitment to the promotion of women empowerment by the ratification of the convention on the elimination of all forms of discrimination against women. Many have also ratified the African Union’s Protocol on the Rights of Women in Africa. The role of women in Africa has been largely that of keeping the home i.e. house managers. The AfCFTA in 2021 promised to unlock the potential for African women to move from micro to macro businesses and the Declaration 2020 – 2030 as the new decade of women’s Financial and Economic inclusion. African leaders are committed to scaling up actions for progressive gender inclusion towards sustainable development. It must be noted that though the AfCFTA is a continental agreement, the implementation is primarily at the national level and based on domestic context and realities. Therefore, this domestication must have women leading in the negotiation in fulfilment of gender equality and inclusion.
Discrimination of women in agriculture remains a challenge (SAnews)
Despite their overwhelming participation in agriculture, women are still subjected to discriminatory practices. These were the remarks of Minister in the Presidency for Women, Youth and Persons with Disabilities, Maite Nkoana-Mashabane during a dialogue session with women farmers in Limpopo. “Historically, women farmers experience socioeconomic barriers including a lack of access to financial services that assist in sustaining their farm expenses. This is despite women farmers using environmentally conscious practices in comparison to their counterparts,” the Minister said on Tuesday. Nkoana-Mashabane noted that women, who end up in the agricultural business, often do so through the support of other women farmers. “They create and are part of organisations and communities that assist women in all things farming [and] this allows them to network, seek advice and make friendships. Unlike their male counterparts, women are more focused on stewardship and tend to prefer smaller organic and sustainable farms. “As such, they push for advocacy and stand behind eco-friendly ideals. They are also looking for ways to improve farming and make it accessible. Women are making great strides in the world of agriculture,” the Minister said.
$60b lost to gender inequality every year (The Guardian Nigeria)
The United Nation’s Women Representative to Nigeria and ECOWAS, Comfort Lamptey, lamented the fact that $60 billion is lost to gender inequality every year and might degenerate further if the situation is not corrected. Speaking at the inaugural International Women’s Day (IWD) Awards Gala held in partnership with UN Women and the United Nations Development Programme (UNDP) over the weekend to mark this year’s women’s day and month, Lamptey reiterated that when women are given unfettered access to participate actively in the economy of the country, the entire nation benefits immensely. “Those that hold the key must unlock the door to welcome women and also unlock their potentials so they can participate in rebuilding Nigeria. Elections are coming up next year and women are already facing so many stumbling blocks even before it commences.”
Kigali forum marks a new development era for Africa (Africa Renewal)
Despite these successes, the continued economic impact of the pandemic is spurring African leaders to also reflect on strategies to revamp the development model that can help African countries collectively achieve the Sustainable Development Goals (SDGs). These collective experiences shared across the continent make up the backdrop of the 8th African Regional Forum for Sustainable Development (ARFSD) scheduled for the Rwandan capital, Kigali from March 3-5.
ARFSD is clued-up to reflect African-centric perspectives and adopts two main outcomes. The first, “Summary and Key messages” is the collective input and deliberations of the forum. The second is the “Declaration of the Forum”, which is christened in the name of the host city, distills the deliberations of the forum to come up with Africa’s collective position on issues of concern.
2020 Africa Sustainable Development Report (AfDB)
Over the past two decades, Africa has made remarkable progress in a range of key development areas: there have been substantial declines in maternal and child deaths as well as steady decreases in the incidence rates of HIV, malaria and tuberculosis (Min, 2021), and considerable progress has been made in primary school enrolment and youth literacy (Min, 2021). Women’s representation is key to accelerating progress on gender equality and empowerment. Between 2013 and 2019, the proportion of seats held by women in national parliaments in Africa (excluding Northern Africa) increased by three percentage points. The report also highlights how the majority of governments in Africa have made significant efforts to incorporate the SDGs and Agenda 2063 into their national development plans. However, the economic downturn and social disruption caused by the pandemic is reversing decades of hard-won development gains.
Countries across Africa need tailored support so that they can be part of a growing green recovery. To this end, it is critical that all partners continue to work to ensure that people across the continent gain access to vaccines. In many ways, delayed access to the COVID-19 vaccine is development denied for Africa. Crucially, countries across Africa need new access to finance and debt relief measures as well as innovative financing solutions, to achieve the SDGs and invest in key areas such as social protection. Governments and businesses also need support to make strategic investments in the burgeoning African Continental Free Trade Area, an immense market of 1.2 billion people.
Debt raised in Africa in 2021 points to possible economic turnaround, says PwC (Engineering News)
Assurance, advisory and tax services multinational PwC’s yearly ‘Africa Capital Markets Watch’ report shows that African markets have continued with a modest recovery through 2021, reflected in higher values of non-local corporate, sovereign and supranational debt raised during the year. Average issuances were larger than in the prior year, with 94 issuances valued at $47.5-billion in 2021, compared with 81 issuances worth $28.5-billion in 2020.
How Can African Countries Avoid the Middle-Income Trap? (Institute for Global Change)
The middle-income trap is a critical development challenge affecting more than 100 countries, home to over 60 per cent of the world’s poor. Poverty traps are evident in low-income countries, and the middle-income trap is a phenomenon associated with middle-income economies, measured by the growth of gross national income (GNI) per capita.
While the notion of the trap is a point of debate among scholars, as GNI per capita may not capture the quality of growth, most would agree that it is a critical development challenge of our time. It assists in raising fundamental issues that require long-term perspective and building path dependency, reinforcing a positive, sustained-growth trajectory. Hence, the timing is right to make this challenge a focus of African policymakers and researchers.
East Africa should heed warnings on ballooning debt (The East African)
In a region that is more often at war than in tandem over trade, the news that the East African Community Secretariat had, without breaking ranks, agreed on a 35 percent Common External Tariff, on a range of imported products is bittersweet. But, following almost immediately, were the twin revelations that Kenya had flexed its debt ceiling to accommodate additional borrowing and the World Bank was warning Tanzania of rising debt. Even after rapidly piling up debt over the past two years as concessional lenders, spurred by the Covid-19 crisis, relaxed their guard, East Africa’s appetite for debt continues unabated. In 2021, the average government debt in the region shot up 10 percent to 72.5 percent of the regional GDP. That is 22.5 percent higher than the agreed monetary convergence criteria ceiling of 50 percent of GDP.
Take advantage of AfCFTA - local manufacturers of cosmetics urged (Myjoyonline)
Local manufacturers of cosmetics have been urged to take advantage of the African Continental Free Trade Area to expand their horizon to African markets to rope in more revenue and grow their bottom-line. Speaking at the launch of the maiden Made-in-Ghana fragrances, Eternal Legends, Chief Executive of Ghandour Cosmetics, Tanal Ghandou, said his outfit is setting a precedent for local cosmetic manufacturers to take advantage of AfCFTA. “The perfume market is quite big here, but I think we shouldn’t underestimate the mass market which needs affordable perfumes. Scent of Africa is the first perfume brand to target the Africa market exclusively in 2016. Other perfumers upon knowing this, started making perfumes targeted at the continent and the market keeps growing.” “However, I do not want this perfume to be successful in Europe for Europeans. Our aim is to make this perfume an example for people here who can develop perfumes locally,” he said.
How EAC can maximise AfCFTA trade opportunities (Independent)
Before COVID-19 hit world economies two years ago, there was optimism that Africa’s flagship project of the African Union’s Agenda 2063, the African Continental Free Trade Area (AfCFTA) would quickly reshape markets across the region. One year down the road, trading under this bloc has largely been insignificant and there are no concrete figures to determine the journey made so far. But some experts believe it is not too late now that most economies have reopened fully to conduct trade after lockdown disruptions. Experts gathering at a meeting in Kampala on Feb.28 organised by Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) Uganda, shared ideas on how East African Community member states can prepare to benefit from this arrangement.
Higher food prices and slumping trade. How the war in Ukraine could hit Africa (CNN)
African economists sound the alarm over a looming and likely catastrophic lowering of trade volumes between the continent and its warring partners if Russia’s widely condemned incursion into Ukraine isn’t short-lived. Russia and Ukraine are key players in the global agricultural trade, with both nations accounting for a quarter of the world’s wheat exports, including at least 14 percent of corn exports in 2020, and a joint 58 percent of global sunflower oil exports in the same year, analysis show. Trade between African countries and the former Soviet neighbors, especially Russia, has flourished in recent years with Russian exports to the continent valued at $14 billion annually, and imports from Africa pegged at around $5 billion per year. But these gains are on the verge of eroding quickly, analysts worry, signaling a severe disruption in Africa’s food conditions if Russia’s military operation in Ukraine persists.
Transporters call for easing of Covid curbs to boost trade (Business Daily)
Logistics players in East Africa want governments to ease Covid test protocols in the wake of a decline in positivity rate and vaccination rollout across the region. The stakeholders urged health officials across East Africa states to allow fully vaccinated drivers to only present 14 days negative PCR tests when crossing borders as a means of reducing Non-Tariff Barriers (NTBs).”Many countries in the world have adopted this system and we view it as the best way forward under the prevailing circumstances. We should allow drivers tested within 14 days to cross the borders to reduce congestion,” said the Kenya Transporters Association (KTA) chairman Newton Wang’oo. The transporters’ association with more than 5,000 members in a statement addressed to Uganda, Kenya, Tanzania, Rwanda, Burundi and South Sudan authorities said Covid-19 protocols ought to be eased to boost cross-border trade. The Federation of East African Freight Forwarders Associations (EAFFA) president Fred Seka had earlier asked EAC partner states to slacken Covid-9 protocols to ease congestion at border points.
SADC strengthening value chains in COVID-19 pharmaceutical products sector (SADC)
The Southern African Development Community (SADC) is strengthening the COVID-19 related Pharmaceutical Products (CMPPs) value chains, given their significant potential for job creation. Targeting the CMPPs, along with the leather and agro-processing sectors, under the Support towards Industrialisation and the Productive Sectors (SIPS) in the SADC Region, will encourage SADC Member States to address obstacles to regional integration, as well as assist the private sector to upgrade their production processes and capacity. SIPS is a Joint Action supported by the European Union (EU) and the German Federal Government. It aims to assist the SADC industrialisation and regional integration agenda. A total amount of €20,83 million has been provided for the programme for the period 2019-2023, out of which €2,83 million is from the Federal Ministry for Economic Cooperation and Development (BMZ); and €18 million is from the EU.
New African medicines agency a timely venture (Business Daily)
Healthcare often follows the pathway of complex adaptive systems. This means that the building blocks of a healthcare system can influence each other differently in different settings resulting into varied outcomes. Therefore, a key focus of savvy policymakers is to endeavor to positively influence these components so as to cause an overall positive impact. One pursuit that highlights such progressive thinking is the recent creation of the African Medicines Agency (AMA). The agency was launched in September 2021 and is tasked with enhancing regulatory oversight across the 55 countries of Africa and availing access to quality, safe, and efficacious medicines.
Africa has salient deficits in ensuring good access to vital life-saving drugs, vaccines, and health technologies. Further, it has the highest prevalence of substandard and falsified medicines resulting in poor healthcare quality. Such longstanding challenges can be addressed by AMA’s mandate of monitoring and mitigating the risk of shortages of critical medicines and providing scientific advice on medicines.
Digitisation and frictionless commerce will transform Africa (CapeTalk)
The African Continental Free Trade Area (AfCFTA) agreement is expected to be transformative for the African economy, but only if African countries can produce a financial eco-system that allows African entities to trade with one another. This might sound obvious but as the leading Pan-African banking group, we get to see a lot of financial technology systems being developed and rolled out and many of the solutions are not built with emerging markets such as Africa in mind. It is estimated that the trade finance gap in Africa is between $80bn and $100bn at any point in time and this creates a bottleneck that is stifling growth and the creation of jobs. We are told: “Technology and digitisation are the answer” but whenever this statement is made in our cluster or in presentations we have to stop and ask ourselves: “What does digitising actually mean?” Intra-African trade is held back due to very low levels of financial integration across systems and regulators.
It is estimated that only 17% of the various financial technology solutions can share data with one another. Now add in the complication of cross border trade for things like Foreign Exchange payments and one starts to realise that we have a lot of work to do to make AfCFTA work.
Can blockchain technology give African business a huge leg up? (Moneyweb)
Blockchain technology is hacking down the forest of fees that has made remittances such a lucrative business for banks and transferring agents.
“For years we’ve heard talk of how blockchain technology will revolutionise business, but now we are seeing the evidence,” says Sonya Kuhnel, director of Bitcoin Events. “The big use case for blockchain in Africa is remittances, and in some countries these inflows account for 4% to 5% of GDP. So to have 12% of that swallowed in costs is massive. Here is an excellent example of the kind of disruption blockchain technology is bringing to Africa.” The Blockchain Africa Conference 2022, a virtual conference that take place on March 17-18, features some astonishing African blockchain entrepreneurs, such as Uche Elendu, founder and CEO of AppZone Switch, which is a blockchain-based platform designed to facilitate both local and intra-African payments in fiat and digital currencies such as stablecoins
Africa: Examining Africa’s Policy Towards the United States in the Biden Era (allAfrica)
President Joe Biden declares that “America is back” in terms of global standing, but the global economic landscape has changed, and other players are concerned, owing to former President Donald Trump’s “America First” campaign. African actors in the international arena, for example, are calling for an Afrocentric policy framework and approach to a wide variety of issues in international relations, including peace and security, conflict resolution, bilateral and multilateral engagements, financial aid and development mechanisms, trade relations, and democracy, highlighting the significance of African agency in the discussion. African countries should base their approaches to the United States on pragmatic analysis
The UK has an Opportunity to Boost Trade with Africa (International Policy Digest)
In August 2018, the British government revealed its goal to become the largest G7 investor in Africa by 2022, as British companies started to show a strong interest in Africa’s consumer markets. However, the pandemic negatively affected British international investments – with earnings falling by £82 billion, according to the Office for National Statistics. While on the other hand, recipient African countries experienced a 16% decrease in overall foreign direct investments in the first half of 2020. Although the Johnson government was clear that the aim of the January 2020 UK-Africa Investment Summit is to position the UK as “Africa’s partner of choice for trade and investment,” the UK hosted a second summit in January to discuss sustainable investment as a means to assure long-term mutual gains and support the continent’s green economic transition.
Addressing trade barriers between the UK and Africa was one of the key points of the recent summit, particularly for African leaders, as the continent tries to recover from the pandemic. Since sustainable British foreign investments have the potential to stimulate lasting economic growth in African countries, particularly in terms of industrial capacity and import-export rates, the UK has a responsibility to question its implication in trade facilitation with and within Africa.
Global economy
DG Okonjo-Iweala: Women must be at the centre of trade for a more prosperous future (WTO)
Trade must be used as a vehicle for ending the marginalization of women in the global economy amid widening gender inequalities stemming from the COVID-19 crisis, Director-General Ngozi Okonjo-Iweala said in a video message released on 8 March to mark International Women’s Day. Work in the WTO can help reduce trade-related costs for all businesses, including women-owned companies, and also put in place targeted policies to make the multilateral trading system more gender-responsive, the Director-General said.
Women play a key role in fighting climate change (Trade for Development News)
Women are 14 times more likely to die from a climate disaster than men. That finding, by UN Women, reflects growing acknowledgment that the adverse effects of natural disasters affect marginalized groups, including women and children, more disproportionally.
women are poorer because they earn less, have less-secure jobs, and are more dependent on the natural resources which climate change threatens the most, according to a report by Care, an international charity. Similarly, the World Bank notes that micro, small and medium enterprises, in which many women work, are less able to bear the costs of climate change than larger firms. Despite being face-to-face with the problem, women are often not part of the solution. The UN’s Gender Action Plan notes that sustainable development can only be achieved if women are involved in developing and implementing all aspects of climate change mitigation and adaptation. This requires making women’s economic empowerment a central pillar in climate policy and action.
For instance, trade-driven growth is vital to eliminating extreme poverty but can increase the emissions that cause global warming. One pathway to sustainable development is to ensure that this growth is low-carbon and climate-resilient. Enhancing the place of women in trade allows them to play a key role in addressing climate change while raising their incomes and driving overall growth.
India suggests holding talks at WTO on role of e-commerce during pandemic (Business Today)
India has suggested to convene a meeting under the aegis of the World Trade Organization (WTO) to discuss the role of e-commerce during the time of the COVID-19 pandemic. According to a statement delivered by Ambassador of India to the WTO Brajendra Navnit at the General Council meeting held on February 23 to 24, many members have spoken about how e-commerce helped their economies during pandemic-led lockdowns. “India suggests holding a discussion on the role of e-commerce during the time of the pandemic… Within the boundaries of every country, there may have been positive examples. But, did international e-commerce play a big role? It will be good to hear member experiences specifically linked to cross-border trade,” he has said. He has suggested that this agenda item should be adopted by the General Council as a standing agenda item for every meeting. India has been a votary of rejuvenation of the work programme on e-commerce.
The BRICS bank set up to dilute Western influence has stopped doing business with Russia (Business Insider)
The New Development Bank (NDB), set up by BRICS countries to reduce the influence of what they consider Western-dominated finance institutions, has stopped doing business with Russia. The bank announced the move in a statement that made no mention of sanctions, invasion, or Ukraine – and which used 101 characters, (including a full stop) to announce its decision: “In light of unfolding uncertainties and restrictions, NDB has put new transactions in Russia on hold. “That was sandwiched between a generic statement on its application of ”sound banking principles” and a commitment to continuing to be “in full conformity with the highest compliance standards”, which required a further 254 characters. South Africa has put R25.5 billion into the bank to date.
How To Develop A Global Partnership For Development? (ICTSD Bridges News)
Establish further measures that are consistent with established rules and based on predictable results. Provide special treatment to all countries in need. Atmosalicos should be recognized as especially vulnerable groups. Put in place a comprehensive debt settlement program for developing countries. Provide pharmaceutical companies with affordable products with the help of these companies.
Related News
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Domestic, country-related news
SA economy grows by 1.2% in fourth quarter of 2021 (SAnews)
Trade grew by at least 2.9%, manufacturing recorded an increase of about 2.8%, personal services added at least 2.7% growth and transport and communications grew by some 2.2%.
South Africa’s Gross Domestic Product (GDP) grew by 1.2% in the fourth quarter of 2021, Statistics South Africa (Stats SA) announced on Tuesday. “The fourth quarter was upbeat, with personal services, trade, manufacturing and agriculture the key drivers of growth. An increase in demand for goods and services drove up the expenditure side of the economy, with exports and household expenditure the most significant contributors to growth,” said Stats SA. The growth seen in the fourth quarter follows an upward revision 1.7% decrease in the third quarter.
Stats SA said the fourth quarter growth spurred the GDP annual growth rate to about 4.9% after a “dismal” 6.4% contraction during 2020 when the country was hampered by the onset of the COVID-19 pandemic.
Maize imports reach N$100 million in January (Namibian)
NAMIBIA imported over N$100 million worth of maize in January this year. Some 96% of the maize imported came from South Africa, and 4% from Zambia. This was reported by the Namibia Statistics Agency (NSA) in its recently released national trading account data for the month. It is argued that the balance could have been less if Namibian maize companies did not source from their parent and related companies in South Africa only.
According to the report, Namibia is a net importer of maize, with monthly imports averaging N$55,6 million. Overall trading in the country during the first month of the year was at N$19,3 billion, exports at N$7,6 billion, and imports at N$11,7 billion, leaving a deficit of N$4,1 billion.
Farming, textiles hold key to Kenya’s exports (The East African)
Agriculture, textiles and minerals could spur Kenya’s export output in the next decade, Standard Chartered Bank says. In a report titled Future of Trade 2030: Trends and Markets to Watch, the bank identifies major corridors and five trends shaping the future of global trade. Kenya is the only East African country in the top 13 countries that will experience major export growth in the next 10 years. The research also found that 10 percent of global companies currently are or plan to manufacture in Kenya within the next five to 10 years. Kenya is projected to grow its exports annually at more than seven percent to cross $10.2 billion by 2030, with Pakistan, Uganda and the US the fastest growing export corridors for Nairobi.
Car importers caught in KPA, private port fight (Business Daily)
Car importers who had selected Unifreight cargo handlers have been caught in a fight between the private port owner and Kenya Ports Authority (KPA) which has blocked clearance of their vehicles for almost a month. A car dealer who requested anonymity said KPA blocked all vehicles imported through the container freight station (CFS) over a longstanding debt dispute with Unifreight. KPA confirmed the ongoing dispute but said talks are ongoing to unlock the stalemate over the next couple of days. The agency did not disclose how much it is owed and Unifreight had not responded to our queries by the time of going to press. “KPA are working with Unifreight CFS to resolve this long outstanding matter. And we expect to conclude in the coming days,” KPA acting managing director John Mwangemi said.
Biden signals resumption of free trade talks with Kenya (Business Daily)
The US government has signalled the resumption of stalled negotiations for a free trade agreement (FTA) between Nairobi and Washington, amidst growing unease in Kenya about the delay to conclude the deal. In a new report submitted to the US Congress by Joe Biden’s top trade diplomat Ambassador Katherine Tai, the Biden Administration said it “will hold further conversations with the Kenyan Government to establish a shared vision and partnership for economic resilience and to promote investment.” “The United States is committed to continue working with Kenya to deepen our trade and investment relationship, including by advancing worker-centred trade policies and promoting regional and continental economic integration in Africa,” said the US Trade Representative’s office (USTR) in the report published on March 1. “The Biden Administration will hold further conversations with the Kenyan Government to establish a shared vision and partnership for economic resilience and to promote investment, equitable and inclusive development, sustainable trade, and African Continental Free Trade Area (AfCFTA) implementation.”
Kenyans face expensive breakfast on Russia invasion, export cuts (Business Daily)
Kenyan households are set to for an expensive breakfast as the ongoing war in Eastern Europe forces Ukraine to introduce export quotas on wheat days after Russia temporarily banned shipping out of the commodity. Ukraine, which is one of the world’s top wheat producers, has set export restrictions on the crop and other agricultural products. Kenya relies on wheat imports from Ukraine and Russia and the two countries are currently at war following Moscow’s invasion of their western neighbour. A government decree published Sunday said a license issued by the authorities is now required in order to export wheat, poultry meat, eggs and sunflower oil, a move aimed at checking the volumes being shipped out in order to protect local stocks for consumption. Locally, millers have warned that the prices will be going up in the next couple of months on the account of the high international price.
Small-Scale Trade Set to Rise at Kenya-Ethiopia Border (COMESA)
Small scale trade along the Kenya-Ethiopia border is poised to thrive following bilateral negotiations between the two parties to agree on a Common List of products to be traded under the COMESA Simplified Trade Regime (STR). The negotiations took place on 1st March 2022 at the Moyale border post and addressed the implementation of the STR between two countries. The STR was launched in 2010, to enable small-scale traders’ benefit from COMESA’s trade liberalization programme by simplifying and formalizing the trade.
According to experts, effective implementation of the STR spurs growth, enhances production and productivity of the agricultural sectors through value addition and processing thereby creating jobs and increasing household incomes.
Uganda, USA discuss strengthening bilateral business relations (New Vision)
The Embassy of Uganda in Washington, DC, has hosted a Uganda-USA Business Breakfast Meeting in a drive to revitalize its Commercial Diplomacy and enhance Uganda-USA relations. Hosted at the Ronald Reagan International Trade Center, delegates at the meeting Thursday meeting included: US Trade Stakeholders, representatives of the U.S State Department, the IMF and the World Bank and diplomats of the East African Community.
The meeting themed, “Forging Towards Economic Recovery: We are Open For Business”, aimed towards economic recovery of Uganda and the U.S as the two countries gradually emerge from the Covid-19 pandemic that resulted in the slowdown of the global economy over the last two years.
The objectives of the event were to reinvigorate efforts on boosting bilateral trade and investment flow between Uganda and USA; to share information about the current economic situation in Uganda and USA; to raise awareness about investment and business opportunities that exist in Uganda and USA; to create a platform for interaction between Uganda and USA businesses and private sectors as well as to identify areas that may need fast-tracking for economic recovery.
Can introduction of eNaira increase Nigeria’s GDP by $29bn? (Businessday)
Over the last few years, the fintech industry has taken the world by storm, with people constantly moving away from conventional payment and remittance methods. This has been clear to see with the growth of internet banking, cryptocurrency, and the introduction of new digital payment methods. At the end of October last year, the Federal Government of Nigeria (FGN) and the Central Bank of Nigeria (CBN) officially introduced the blockchain-based eNaira as a means of payment, making Nigeria the first African country with an official digital currency.
It is issued by the CBN and distributed to financial institutions. Transactions are recorded using blockchain technology, more specifically a permissioned (private) blockchain. This technology allows the CBN to control who can join the eNaira network and regulate all eNaira transactions.
CBN believes these 6 policies will save the Naira from the threat of collapse (Nairametrics)
Nigeria, Africa’s largest economy, has had to battle continuous threats from multiple headwinds to value of the Naira. Specifically, numerous headwinds which exert pressure on the Naira exchange rate include Inflationary pressures, Inflation Rate Differential, Balance of Trade challenges, Foreign reserves balances, Interest rate differentials et al.
Regardless of the debate, Nigeria’s import bill continually outpaces its export bill. Thus, the country’s demand for foreign currencies appears insatiable despite underwhelming productivity rates (i.e., underwhelming GDP growth rates) which results in persistent pressure on Naira’s exchange rate. Consequently, from a monetary policy perspective, the Central Bank of Nigeria has deployed a plethora of initiatives intended to attract more dollar inflows to the country through official channels.
The underlying premise (at least from the CBN’s perspective) is to support Nigeria’s outsized import bill whilst combating multiple sources of exchange rate pressures.
Nigeria needs more trade negotiators to beat poverty – Ex WTO official (Businessday)
Prof. Dickson Yeboah, former head, Course on Intensive Trade Negotiations Skills, World Trade Organisation (WTO), said that Nigeria needs more skilled negotiators to lift the country out of poverty. Yeboah told the News Agency of Nigeria (NAN) on Saturday in Abuja that training more trade negotiators would boost the strength of Nigeria’s negotiating team. “Nigeria is a big country, we need to train 1,000 people who are skillful in negotiations and can negotiate better investment deals for the country. “Trade negotiation skills are a way out of poverty, recession or economic slowdown,’’ Yeboah said. He added that a country could not attract better deals if it lacks skilled negotiators.
Burkina Faso is leading importer of NTEs from Ghana – GEPA (Myjoyonline)
Burkina Faso came up top in ECOWAS and Africa as the lead importing country of Non-Traditional Exports (NTES) from Ghana in 2020. According to the Ghana Export Promotion Center, it maintained its position as the top importer in 2020 from 2016, 2017, 2018 and 2019. In 2020, it imported NTEs worth $242.7m from Ghana, representing 31.68% of total top 10 ECOWAS markets, showing a growth of 11.57% over its previous year’s contribution. Togo ($149.8m) and Senegal ($100m) were the second and third lead importing countries of NTEs from Ghana in ECOWAS, respectively.
Meanwhile, average export value for the 10 top ECOWAS States in 2020 stood at $76.62 million relative to US$82.86 million in 2019. This shows a fall of 5.70% in average exports value.
Morocco braces for deepening budget, trade deficits on back of global economic uncertainties (The North Africa Post)
The surge of commodities prices and its impact on subsidized products augurs ill for the Moroccan economy which has to prepare for a deepening budget and trade deficits. The price of oil has increased from an average of $70 per barrel to $120 while wheat prices tripled, smashing a record high of $375/t as the war in Ukraine chokes trade. Morocco, a major African wheat and oil importer, expects its trade deficit to widen eating into its foreign currency reserves which cover near 7 months of imports. The subsidies cost is set to implode as the country continues to control soft wheat and cooking gas oil.
Djibouti Economic Monitor, Winter 2021: Navigating through the Pandemic and Regional Tensions (World Bank)
Titled “Navigating through the Pandemic and Regional Tensions”, the Winter 2021 edition of the World Bank’s Djibouti Economic Monitor is the first in a series of semi-annual reports aimed at analyzing development trends and constraints in Djibouti. Severely impacted by the pandemic in 2020, Djibouti’s economic activity has shown signs of recovery in 2021. GDP growth rate in 2020 dropped to a decade low of about 0.5% but rebounded in 2021 to a projected 5.1%. The recovery is mostly driven by a withdrawal of COVID-19 related lockdown measures in late 2020, which has facilitated a rebound in investment and construction. Broad containment of the virus and continued government support has also bolstered household consumption. However, the economic rebound was dampened by a fall in the Ethiopian demand for logistics services during the second half of 2021.
African trade
AfCFTA: Negotiations on rules of origin, Customs cooperation gradual to dissuade dumping (ICIR)
THE Director-General of the Nigerian Office for Trade Negotiations (NOTN) Yonov Fred Agah has said that the ongoing African Continental Free Trade Area (AfCFTA) negotiations on rules of origin and Customs cooperation are slow and gradual in order to ensure that Nigeria is not a dumping ground. Yonov, who spoke at the closing ceremony of the National Simulation Skills Course organised by the (NOTN) held on Friday in Abuja, said the trade negotiation office was taking steps in engagement with stakeholders to enable Nigeria got a better deal from AfCFTA. “It’s not a matter of being in a hurry; it’s a matter of getting it right in our negotiation deals. We are doing this so that the continent and our country do not become a market for third parties, but truly a market for African companies for value additions and better value chains that creates wealth.”
Intra-Africa trade in need of more investment to move cargo (The East African)
Lack of infrastructure is a bigger hurdle to trade within Africa than uncertain non-tariff barriers, eating up close to 40 percent of logistics expenses and affecting free movement of goods, officials have warned. Amani Abou-Zeid, the commissioner for Infrastructure and Energy at the African Union Commission, has urged countries to embrace transnational projects to facilitate the movement of cargo, noting that no meaningful development can take place without significant investment in infrastructure. “We need to invest in infrastructure to boost our intra-trade on the continent. This can only be achieved by increasing budgetary allocation toward infrastructure projects,” said Ms Zeid in a speech during the official launch of the Programme For Infrastructure Development in Africa (Pida) Week in Nairobi, organised by the African Union Development Agency (Auda)-Nepad.
How will the Russia-Ukraine war affect Africa? (African Business)
Eight days into Russia’s full-scale invasion of Ukraine, the fallout of the war and unprecedented sanctions on Moscow are shaking global supply chains and financial markets. With Russia a major producer of commodities such as oil, gas, aluminium, palladium, nickel, wheat and corn, sanctions and market concerns about the war’s disruption on supply chains have caused commodity prices to soar. Surging commodity prices will create winners and losers across Africa and the world.
On the continent, the countries most vulnerable to the conflict are those which import a large share of the wheat they consume, like Egypt. Meanwhile, African oil importers like Kenya will also feel the heat of surging oil prices as Russia, one of the world’s largest exporters of crude, is hit by sanctions, disruptions to energy exports and a potential embargo. Commodity exporters, like Nigeria and Angola, are likely to be the biggest winners of the war as the supply constraint-induced commodity price boom that began in 2021 will be prolonged, says Renaissance Capital, a Moscow-headquartered bank.
With Russia just a small African trading partner, the impact on trade will be marginal, Mhango says. Yet a few countries, such as Uganda, will be more exposed. Russia only accounts for 2-3% of Africa’s trade with the world, according to UNCTAD data, which is mostly made up of exports. Russia also accounts for 2% of the world’s exports to Africa, and only 0.5% of imports from the continent. But there are outliers on the continent. In 2020, 8.1% of Malawi’s total trade was with Russia, followed by Uganda with 7.2%, Senegal 4.4%, Niger 4.1% and Republic of Congo 4%, according to Renaissance Capital.
Russia is now looking beyond SA, as it tries to replace European imports with African (Business Insider South Africa)
Russia wants to expand its trade presence in Africa, as its invasion of Ukraine – and subsequent sanctions – strangles trade with its European neighbours. And that could see it effectively de-focus from South Africa. A meeting on support for Russian organisations entering African markets saw “a proposal to expand the network of trade missions in Africa in the countries, which are priority for trade,” the vice president of the Russian Chamber of Commerce and Industry, Vladimir Padalko, told Russian state-owned media agency TASS. That plan is now to be put into action by the various Russian ministries, including those for trade and for foreign affairs.
Central banks raise doubts on East Africa single currency by 2024 (The East African)
East African central banks have cast a shadow of doubt over the proposed implementation of a single currency regime by the year 2024, citing delays by member countries in realising targets set out in the Monetary Union roadmap. The single currency regime is expected to eliminate transaction costs of exchanging currencies and remove exchange rate volatility in cross-border trading activities. The banking regulators, through the East African Community Monetary Affairs Committee (MAC), noted that while significant progress has been made towards the realisation of a monetary union there are several challenges which could still impede the timely implementation of its protocol.
“The Committee noted that there have been delays in realising targets set out in the EAMU roadmap and that there are several challenges that could further impede the timely implementation of EAMU protocol,” according to a communique released on Monday. “Therefore, the Committee pledged to work with the EAC Secretariat and other stakeholders in the EAC integration process to fast-track pending activities of the EAMU roadmap.”
Communiqué: 25th Ordinary Meeting of the EAC Monetary Affairs Committee (EAC)
Women hold key to region’s economic success, says EAC Secretary General (EAC)
The Secretary General of the East African Community (EAC), Hon. (Dr) Peter Mathuki said women constitute more than 50 percent of the population of the EAC and therefore hold the key to the region’s economic success.
“We need to include women as active participants in decision-making at both the national and regional levels. The purpose of this is to ensure that decisions are inclusive and reflect the desires of the entire population,” said Dr. Mathuki. The EAC boss informed the conference that at the national level, the Constitutions of the respective Partner States guarantee one-third majority for women in elective positions and this has considerably increased the number of women legislators in elective positions across the region. Dr. Mathuki further said that Partner States have also institutionalized Gender Equality with each having autonomous Ministries responsible for Gender with their respective policies, strategies, action plans and gender focal persons to promote, coordinate, implement, and monitor gender equality and equity.
SADC’s draft model law on public financial management ‘will bolster existing checks and balances’ (Daily Maverick)
Many countries, including those in the Southern African Development Community (SADC) region, have signed up to a plethora of regional and international instruments that seek to improve the living standards of their citizens.
National parliaments all over the world are mandated to hold their governments to account with respect to the use of state resources in the realisation of the rights encapsulated in these instruments. For many years, some national parliaments have struggled to play this role due to a range of challenges, including the lack of an effective public financial management architecture and inadequate support of parliamentary committees. To fill this gap, the SADC Parliamentary Forum, which brings together 15 SADC national parliaments, is developing the SADC model law on public financial management to – among other objectives – promote good governance, accountability and transparency in the use of public resources.
Namibia commends and recognises SACU, as one of its key strategic partners working, among others, towards a post-COVID economic recovery. As you are all aware, post-COVID-19 recovery requires a committed focus on economic transformation, competitiveness, collaboration and diversification. These are all achievable through strategic partnership and enhanced cooperation going forward.
In these times of global economic instability, framed by fragile world economic recovery and outlook; effective regional integration is now of paramount significance.
Embracing regional integration was seen, as a vehicle for overcoming the constraints of a small domestic market, integrating into the global economy, and, as a means to facilitate the structural transformation of our national economy. 11. In this context, Namibia recognises that its continued involvement in regional integration efforts by virtue of being a member of SACU, is thus a strategic response to the growing demand for market enlargement within the context of globalisation. We prioritize regional integration efforts, as a credible strategy for tackling our development challenges. It is an ideal platform for promoting large scale investment and economic efficiency required for economic growth and employment creation.
Strengthening the WAEMU Regional Fiscal Framework (IMF)
This paper assesses the adequacy and effectiveness of the WAEMU fiscal framework along three pillars that have proven to effectively support fiscal discipline in monetary unions—common fiscal rules (including adequacy of numerical ceilings as well as elements of design and enforcement), shared public financial management systems, and coordination mechanisms for decentralized fiscal policies. We undertake a calibration of regional debt and fiscal deficit ceilings taking into account different macroeconomic tradeoffs and risks and conclude that numerical ceilings that prevailed before the suspension of the fiscal rules remain adequate and strike the right balance between growth and fiscal sustainability. The paper also proposes reform options to strengthen the WAEMU regional fiscal surveillance framework, with a view to more effectively supporting fiscal discipline.
African nations reiterate commitment to accelerate the achievement of SDGs (UNECA)
The Eight Regional Forum on Sustainable Development (ARFSD 2022) ended on 05 March 2022, with the adoption of the Kigali Declaration on good practices and solutions to enhance implementation of the sustainable development goals in Africa. Adopted by all 54 member states in attendance, the Kigali Declaration urges African countries to link mutually reinforcing policies for sustainable development and COVID-19 recovery to ensure inclusive emergence from the pandemic. The document calls on African countries to leverage new tools, innovative solutions, and technology, including through enhanced partnerships with the private sector, academia, non-governmental, civil-society, and other stakeholders to build strong, agile, sustainable, and resilient national statistical systems. It also highlighted the need for countries to leverage the potential of the African Continental Free Trade Area Agreement (AfCFTA) to support the development of regional value chains, citing the case of minerals used in the production of batteries and electric vehicles as an example.
Eighth session of the Africa Regional Forum on Sustainable Development (ARFSD 2022) (UNECA)
Women and e-commerce in Africa: The $15 billion opportunity (Brookings)
Given that Africa’s internet economy could reach $180 billion by 2025 alone, we at International Finance Corporation (IFC) were keen to examine whether e-commerce platforms support women entrepreneurs, or whether such tools remain stymied by women’s low access to the internet, mobile phone, and other fundamental tools of the digital economy. Combining vendor surveys and performance data from one of Africa’s largest e-commerce platforms, Jumia, we produced the first regional view into women’s challenges and successes in e-commerce and found that closing gender gaps in this arena could add nearly $15 billion to the value of Africa’s e-commerce industry between 2025-2030 alone—putting billions in the hands of women entrepreneurs.
Recovery for Africa pegged on preparation (The East African)
Africa’s path to economic recovery from the Covid-19 disruption may lie in addressing income inequalities and expanding digitisation. A study focusing on the economic pains of Covid-19 says job losses, poor vaccination rates and, in some cases, illiteracy, must be reversed for Africa’s quicker recovery. According to “The economic impact of Covid-19 and prospects for a post-pandemic economic recovery in Africa”, economies contracted in 2020, leading to mass job losses, a drop in manufacturing, and a decline in foreign direct investment. The study carried out in Kenya, South Africa, Nigeria, Egypt, and Ethiopia cites African governments’ poor preparedness for the pandemic or any crisis for that matter as the main reason economic recovery has been slow, and might continue to hamper growth if no serious intervention is made.
African airlines struggle to recover in the near term (The East African)
African airlines face a difficult comeback as projections point to a slow recovery in international traffic. Passenger traffic is projected to remain low subdued in the near term, compounded by the slow progress in vaccination against Covid-19 and the overall impact of the crisis on developing countries. The International Air Transport Association (IATA) now predicts that passenger numbers within the continent, will recover over a shallower gradient, achieving 76 percent of 2019 levels this year, 85 percent next year and 93 percent in 2024, before surging to 101 percent in 2025, a year later than the global industry average. IATA is now asking governments to lift all barriers to travel, including quarantine and testing for passengers that are fully vaccinated and to replace PCR tests with pre-departure antigen testing for non-vaccinated travellers to ease movement. The industry lobby also wants all travel bans removed and faster easing of movement restrictions given the general acceptance that travellers do not pose a greater risk for Covid-19 spread than already exists in the general population.
African airlines’ performance updates by AFRAA - February 2022 (African Airlines Associations)
Oil and Gas Exploration is on The Rise In Africa - African Business (African Business)
Increasing exploration activities in 2022 and onwards is a top priority for African hydrocarbon producers as they seek to expand production and establish the continent as an energy hub. According to the African Energy Chamber (AEC) Q1 2022 Outlook, “The State of African Energy,” supply from legacy oil and gas fields across Africa is diminishing, resulting in a decline in production by African hydrocarbon producing countries, and creating a dire need for the increase in exploration activities. Enhancing exploration will be critical for Africa to address energy poverty and establish itself as a global energy hub.
Discoveries made in Angola, South Africa, Ghana, Gabon and Egypt improved Africa’s oil and gas portfolio in 2019 whilst the Luiperd gas-condensate discovery offshore South Africa supported the 2020 portfolio of discoveries made. In 2021, Africa recorded a further 30% drop in discovered reserves volume, a state which could have been made worse without the Baleine discovery in Cote d’Ivoire.
Six African countries will soon benefit from a grant from the Transitional Support Facility (TSF) of the African Development Fund, through a project designed to strengthen national capacity for governing natural resource outflows in Africa. The African Development Fund is the concessional lending arm of the African Development Bank Group. The Transitional Support Facility has awarded a $2.8 million grant for the Governing Natural Resource Outflows for Enhanced Economic Resilience in Fragile and Transitional Countries (GONAT) project in the selected fragile and transitional countries: the Central African Republic, Chad, Democratic Republic of Congo, Mozambique, Sierra Leone and Zimbabwe. The project was approved in February this year and is expected to be completed by the end-2023.
The project will be implemented by the African Development Bank’s African Natural Resources Centre, building on its ongoing work around illicit trade in Africa’s natural resources and resource-backed loans. It will strengthen the capacity to analyse, monitor, and govern natural resource outflows. In addition, the project will provide policymakers with technical assistance and policy advice.
“Natural resources have the potential to catalyse growth and development in transitional countries. Improved governance of natural resource outflows will support countries’ efforts to achieve sustained recovery from the COVID-19 pandemic, help them to better manage their debts, and reposition their economies for the future,” said Vanessa Ushie, the Acting Director of the African Natural Resources Centre.
Energy Experts Validate Market Monitoring and Enforcement Mechanism Guidelines (COMESA)
Regional energy experts have approved a set of tools to promote renewable energy and efficiency. Among them is the grid capacity guideline report for integrating renewable energy, monitoring tool for the Renewable Energy and Energy Efficiency Strategy and Action Plan (REEESAP) for the Eastern Africa, Southern Africa and the Indian Ocean (EA-SA-IO) region.
Nine guidelines on renewable energy and energy efficiency and a monitoring tool to assess progress made by Member States towards achieving renewable energy and energy efficiency targets have since been developed. These are expected to take the region to the next level of green and clean economy and an enhanced sustainable energy security and accessibility.
The COMESA Regional Association of Energy Regulators for Eastern and Southern Africa (RAERESA) coordinates the implementation of the programme. The programme has three results areas namely; a regionally harmonized energy regulatory and policy framework that integrates gender perspectives; enhancement of regulatory capacity of the National Regulatory Authorities and Power Pools to proactively influence developments in the energy sector; and lastly, enhancement of renewable energy and energy efficiency to attract investments in clean energy and build capacity in clean energy in the region as well as the domestication on a demand driven basis.
The African Development Institute of the African Development Bank Group and its partners hosted the 8th Global Community of Practice policy dialogue on managing public finances in times of crisis in Africa on 28 February and 1 March 2022.
Opening the meetings, the Bank Group’s Senior Vice President, Bajabulile Swazi Tshabalala, warned that the continent would not achieve the 2030 global Sustainable Development Goals without affordable financing and prudent public finance management systems. Tshabalala lauded the partners for working together to convene the dialogue on such an important subject. “There is an urgent need for better-focused policy support to African countries, structured within a framework that incorporates both crisis management and post-pandemic resilience and green recovery,” she said.
Global economy
How to close the digital gender divide and empower women (WEF)
Our world has undergone a historical moment of change. Since the beginning of the pandemic, our lives and societies are more digital than ever before, shifting the paradigm of our economies from the physical to the digital space. On the one hand, COVID-19 increased the existing digital gender divide, setting equality between men and women back a generation. On the other hand, the digital acceleration fueled by the current sanitary and economic crisis, represents a historic opportunity we must seize for radical change.
Globally, men are 21% more likely to have access to the internet than women. In the world’s least developed countries, this likelihood rises to 52%. Women facing intersectional discrimination, living in communities with lower socioeconomic status, have even lower access to connectivity or any digital device, leading to a string of tremendous consequences, sometimes even vital ones.
Members exchange views, challenges and lessons learnt on trade in COVID-19 related goods (WTO)
Geneva and capital-based delegates offered a diverse range of perspectives on the definition and updating of what they consider essential or critical goods to fight the pandemic. Canada, China, Ecuador, the European Union, Singapore and the United Kingdom took the floor to report on the way they established the definition of “essential goods”. They also addressed the issues faced when addressing tariff classification of these products within the Harmonized System (HS) and for national tariff lines in order to better target trade policy.
While many of the products were already duty-free, certain imports of essential goods were still subject to customs duties and benefited from various forms of relief mechanisms during the COVID-19 crisis, members said. Internal coordination by many government agencies and the involvement of traders and other stakeholders also played a key role in identifying critical goods and providing additional classification guidance.
“In the past few months, we have seen unprecedented levels of disease transmission across the world due to the Omicron variant. Still, unequal access to COVID-19 vaccines, tests and treatments is rampant, prolonging the pandemic. 23 countries are yet to fully vaccinate 10% of their populations, 73 countries are yet to achieve 40% coverage and many more are projected to miss the 70% target by middle of this year. The biggest challenges are in low-income countries (LICs), which are concentrated in Africa. Only 7% of people in LICs have been fully vaccinated, compared with 73% in high-income countries. Safeguarding the health of people living in the world’s poorest countries in the face of a changing pandemic is a key priority. We must and can ensure that these countries have the access, the means, and the capacity to vaccinate their populations, especially those who are most at risk.
A top priority to end the pandemic is deploying financing quickly to accelerate the development, production, and equitable access to COVID-19 tests, treatments and vaccines in low- and middle-income countries. Fully funding the Access to COVID-19 Tools (ACT) Accelerator is critical.
DDG González: We need a plan, not just a promise, to revitalize trade cooperation (WTO)
DDG González observed that trade was changing rapidly and profoundly, yet trade cooperation was lagging behind. The risk is that trade tensions and power-based trade relations increasingly fill the void left by reduced trade cooperation, she said. DDG González added that global value chains are being organized more and more around intangibles such as data-driven services and intellectual property, and less and less around manufacturing. But trade policies have not adapted to this new reality, she said, as barriers to services trade remain high, digital protectionism is on the rise and many legal, regulatory and procedural barriers continue to affect investment. She emphasized that strengthening resilience of global value chains is essential but that policy decisions in this area should be firmly based on hard evidence. To think that reshoring, promoting self-sufficiency or unwinding trade integration would magically improve resilience is both wrong-headed and dangerous, she said.
Related News
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Country-related news
Poultry industry winning battle against unfair trade (Farmer’s Weekly)
The fight against unfair competition and illegal imports is starting to reap benefits for the broiler industry. Izaak Breitenbach, general manager of the South African Poultry Association’s Broiler Organisation, said at the recent online Poultry Market Information Day that the industry had been in distress for at least 10 years because of low profitability.
This had resulted in poor re-investment and South Africa losing 30% of its market to imports. Over the past three years, however, steps taken in accordance with the Poultry Sector Master Plan to grow the industry and address illegal and unfair trade practices, in particular, had resulted in 9,8% growth in production capacity, and a 22,2% decline in poultry imports in general and a 51% decline in bone-in chicken imports.
Agbiz says exports, imports will suffer knock-on impacts from Ukraine war (Engineering News)
Industry body the Agricultural Business Chamber (Agbiz) has voiced concern about the human loss and disruptions being experienced in the global supply chain, owing to the conflict prevailing in Ukraine. Both Russia and Ukraine are notable players in the global agricultural product and agricultural input markets.
If SA is taking sides in an economic war, it has chosen R16 billion over R1.131 trillion in trade (Business Insider South Africa)
France came out and called it an “economic and financial war”, and sanctions against Russia’s central bank seem, if not designed to then still destined to collapse the ruble, taking with it Russia’s ability to wage war as a byproduct of collapsing its economy.
South Africa’s formal position has gone from demanding the withdrawal of Russian troops to calling for mediation, while pre-empting anything that could be seen as criticism of Russia from even government-adjacent organisations. If that signals the way SA is leaning in the economic war, then its choice is not grounded in economic self-interest.
In 2021, South Africa’s exports totalled R1.819 trillion, and imports were R1.380 trillion, trade statistics maintained by the SA Revenue Service show. Ukraine represents a fraction of a percent of that, 0.2% of total exports (mostly machinery, vegetables, and steel products) and 0.05% of total imports (mostly machinery and vegetables). Russia is the far more important trade partner, with trade better measured in billions rather than in the hundreds of millions for Ukraine. South Africa’s exports to Russia were about 14 times bigger than those to Ukraine, and imports from Russia were about 13 times bigger. SA’s exports of vegetables to Russia alone were worth R3.3 billion – or about three years of total trade with Ukraine. But trade with Russia, and its allies as reflected in the UN vote, is all but meaningless compared to the business South Africa does with NATO countries.
South Africa’s stance on Ukraine unlikely to affect trade with USA (The Citizen)
Trade relations between the US and South Africa is unlikely to be affected despite the country’s decision to abstain from the UN General Assembly vote to denounce Russia’s invasion of Ukraine. More than 140 countries of the 193-member body of the UN General Assembly including the US voted to rebuke Russia for its invasion of Ukraine, in a historic vote aimed at isolating Russia politically. Thirty-five members, including SA and China, abstained and five countries – including Russia, Syria and Belarus – voted against the resolution. Despite the decision to abstain from the vote, the International Relations Department (Dirco) said South Africa remains deeply concerned by the escalation of the conflict in Ukraine and the regional and international socio-economic implications.
“Unfortunately, the text before us does not do that. South Africa would have also preferred an open and transparent process to negotiate the resolution.” Business Day reports that despite South Africa’s abstention, a US top diplomat said trade relations will continue as ultimately both countries want peace in the Ukraine. South Africa’s abstention will also not affect the African Growth and Opportunity Act also known as the Agoa agreement, a trade program meant to establish stronger commercial ties between the United States and sub-Saharan Africa.
US official says South Africa aid aimed at coal plants, not electric vehicles (BusinessTech)
A group of the world’s richest nations that pledged $8.5 billion in climate finance to South Africa wants the money to be used to retire coal-fired power plants, according to a senior US official involved in the talks, damping suggestions some could be channeled to producing electric vehicles and green hydrogen. The funds pledged by the US, UK, France, Germany and the European Union and announced at the COP26 climate summit in Glasgow in November, can also be utilized to construct renewable energy facilities, the official said, asking not to be identified as the talks are private.
The aim is to conclude a deal, complete with investment plans, by the COP27 climate summit in Egypt in November at the latest, the official said.
Next Africa: Namibia’s Oil Elephants May Have Arrived Too Late (Bloomberg)
Oil discoveries made by TotalEnergies and Shell off the arid coastline of Namibia could be among the biggest in Africa. But the companies may have to hurry to develop the giant deposits, known in the industry as “elephants.” As the global climate warms and opposition to greenhouse gas-emitting fossil fuels grows, activists are increasingly targeting oil and gas exploration with campaigns and litigation. In neighboring South Africa, lawsuits blocked recent plans to conduct seismic searches for hydrocarbons.
Yet from Senegal in the west to Uganda and Mozambique in the east, African nations are pressing their case to develop their reserves. They say the world’s richest countries are responsible for global warming, meaning Africa should be allowed to exploit its natural resources. Namibia’s government is enthusiastic over the potential budget boost after such a long wait — explorers have been studying data and drilling failed wells for more than a decade. The deposits could hold over 3 billion barrels of recoverable oil, worth more than $300 billion at current prices. If the nation and other African countries want to benefit, they need to move fast. Some are, with ENI fast-tracking a well off Ivory Coast. It’s a race against time. Export markets will gradually dry up as the world switches to renewables and clean fuels such as hydrogen. Already some international oil companies are exiting African fields.
Increase local cargo capacity to widen market access (The Standard)
There is a saying that goes, “the past is where you learned the lesson. The future is where you apply the lesson”. Kenya has been lauded as one of the best-performing economies in sub-Saharan Africa. Horticulture has taken the lead as a top GDP contributor to the country’s economy. Some of the top exports from Kenya include, cut flowers, tea and coffee to countries like Uganda, US, the Netherlands, Pakistan and the UK. Kenya is one of the only five African countries that handles 60 per cent of the intercontinental air cargo traffic to and from the continent, thanks to Jomo Kenyatta International Airport (JKIA). The strong horticultural exports from Kenya are key drivers to the growth of JKIA as Africa’s “Giant Hub”. In 2020, the airport was ranked as one of the top in handling more than 330 thousand tonnes of freight. Kenya is therefore the commercial hub for East African.
A 2020 valuation report by the Ministry of Lands showed that the airport’s market value stands at Sh1.1 trillion, which accounts for close to 10 per cent of Kenya’s GDP. The government, in its Vision 2030, recognises that an improved and expanded airport infrastructure is critical towards enhancing economic efficiency, regional integration, and facilitating international trade.
US flags Kenya for relaxing dirty cash reporting rule (Business Daily)
Kenyan officials handling money-laundering investigation files are tipping account holders of suspicious transactions to move their assets before raids, hampering the fight against money launderers. A new US report tracking the global money-laundering hotspots also says Kenya appears to have taken a step back in the fight after last year it lifted the threshold of reporting cash transactions above Sh1 million. Before 2021, the Central Bank of Kenya (CBK) required commercial banks to record and report all transactions above Sh1 million (approximately $10,000).However, in October 2021, President Uhuru Kenyatta ordered the lifting of the reporting requirement. He noted that a higher cash transaction limit “will facilitate easy transactions for micro, small and medium enterprises and help the economy respond to Covid shocks”.
Sanctions block Sh10bn Kenya exports to Russia (Business Daily)
Kenya’s exports of tea, flowers, coffee and fruits to Russia have been derailed in the wake of sanctions imposed on Moscow by Western nations after its invasion of Ukraine, hurting local smallholder farmers. The blockade of the exports, estimated at nearly Sh10 billion annually, came after major container and shipping lines temporarily suspended cargo shipments to and from Russia in response to the sanctions. Excluding Russian banks from SWIFT, the international payment system, and its central bank from international operations has made it harder for the country to pay for imports and receive cash for exports.
Russia is largely seen as a growth market for Kenya’s sluggishly growing exports. Tea is the leading export while Kenya’s coffee enters the country as re-exports from other countries.
Nigeria Customs Pledges to Generate N3.019trn in 2022 (This Day)
The Nigeria Customs Service (NCS) yesterday assured members of the Senate that it would generate N3.019trn into the Federation Account this year. This is just as the House of Representatives yesterday directed the Central Bank of Nigeria (CBN) and the NCS to harmonise their positions on the electronic invoice policy and report back to it on March 17, 2022, for further action.
Comptroller General of the NCS, Colonel Hameed Ali said the NCS targets included N2.019 trillion from the Federation; N253.23 billion from non- federation and N746.96 billion from import Value Added Tax (VAT). The National Assembly had this year set a revenue target of N1.465 trillion for the revenue generating agencies of the federal government.
TradeDepot acquires Accra-based Green Lion to accelerate expansion across Ghana (Ventures Africa)
TradeDepot, the leading B2B eCommerce and embedded finance platform in Africa, has announced the acquisition of Green Lion, the biggest and fastest-growing B2B eCommerce platform in Ghana, to accelerate the delivery of its services across the country. Founded in 2018, Green Lion has been committed to revolutionising access to essential goods and services and enabling digital commerce for neighbourhood retailers in Ghana. Building on this work, TradeDepot will leverage its data, technology and robust logistics operations to connect more neighbourhood retailers in more Ghanaian cities to suppliers and make financing more accessible and affordable. Ghana’s retail sector is valued at $24.4 billion and is expected to reach $33.16 billion by 2024, with SME retailers accounting for about 90 percent of the market. TradeDepot already has active operations in Ghana, as well as its operations in Nigeria and South Africa, and this acquisition will expedite the delivery of its game-changing services to more cities to enable increased sales, higher margins and other value-added services for all parties across the retail value chain.
Commenting on the acquisition, Onyekachi Izukanne, CEO and co-founder of TradeDepot, said “Ghana represents a significant market for consumer goods in Africa and we are excited to bring the Green Lion team onboard to drive growth and prosperity for more retailers and distributors in the country. We look forward to deepening our relationship with the market and working with more partners to maximise the opportunities that abound in Ghana and beyond.”
Downgrade of Ghana’s economy brought panic into the system – Quartey (3NEWS)
The Director of the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana, Professor Peter Quartey, has noted that the downgrade of Ghana’s economy by credit rating agencies brought panic into the system. This, he said, led to speculations and also the refusal of investors to buy bonds, a situation that affected the strength of the cedi.
As a remedy, the government has proposed sharp fiscal consolidation and a switch to borrowings from external partners on more favourable terms. However, the strategy comes with sizeable implementation risks, especially in a still-fragile post-pandemic environment and while international market creditors price in very wide risk premia. While Ghana’s external buffers and moderate external debt amortization schedule in the next few years afford the government a window of opportunity to deliver on its strategy, balance of payments pressures will build up the longer government’s large financing requirements have to rely on domestic sources.
Ghana to lose over GH¢800m from second-hand cars ban (GhanaWeb)
An amendment of the Customs Bill 2020 will result in a huge loss of revenue of approximately GH¢802, 251,785 for the first three years of implementation. This was revealed after a Joint Committee on Finance and Trade, Industry and Tourism met to deliberate on the Customs (Amendment) Bill 2020 proposal presented before Parliament by Deputy Finance Minister, Abena Osei Asare. According to stakeholders, the Bill seeks to amend the Customs Act, 2015 (Act 891) to provide incentives for automotive manufacturers and assemblers registered under the Ghana Automotive Development Policy (GADP), prohibit the importation of salvaged motor vehicles and specified motor vehicles over ten years of age into the country, increase the import duty on specific motor vehicles and provide import duty exemptions for the security agencies and officers of the security agencies.
“As to how much revenue will be impacted by the passage of the Bill, the Committee was informed that the review in policy as contained in the Bill would lead to an estimated loss of approximately Eight Hundred and Two Million, Two Hundred and Fifty-One Thousand, Seven Hundred and Eighty-Five Ghana Cedis (GH¢802, 251,785) for the first three years,” the statement by the Committee read. “This is, however, expected to be partially offset by the additional revenue from customs duties on vehicles not covered by the programme.”
GITFiC backs new benchmark values (3NEWS)
The Ghana International Trade and Conference (GITFiC) has called for sanity within Ghana’s trading space and urged the business community to be accommodative and adjust to government’s policies in the face of the effects of the coronavirus pandemic. “Considering the current global economic downturn as a result of the pandemic, economies around the world are critically revising and adjusting policies to keep governance afloat,” GITFiC said in a statement issued by Chief Executive Officer Selasi Koffi Ackom on Thursday, March 3. “Any proper, prudent, and competent manager of any economy will now appear to be uncaring and insensitive to its citizens.”
Ghana’s economy is heavily import-driven. This is a known fact. Until recent times, Ghana had always recorded a trade deficit. A 30% reduction for all goods and a 10% reduction on vehicles is a decisive and satisfactory move to please all stakeholders. Such a pivotal decision by the Government should be considered by the General Trading Community (GTC) as an interim measure and subject to review in the soon future, depending on Economic-Trade Indicators within the Import and Logistics Sectors of Ghana’s Economy.
African trade
Preparations under way for AfCFTA’s long implementation voyage (Engineering News)
The processes meant to facilitate the implementation of the African Continental Free Trade Area (AfCFTA) Agreement are gaining momentum, with African countries hoping to leverage the opportunities created by the emerging single market to drive their pandemic recoveries and enhance their growth. Fifty-four of the 55 African countries have signed the agreement, with 41 countries having ratified the agreement. Nonprofit company Trade Law Centre executive director Trudi Hartzenberg notes that progress has been made on negotiations for the Rules of Origin (RoO) as agreement on 87.7% of tariff lines has been achieved.
This could open the door for “commercially meaningful trade” to begin, in terms of a decision by the African Union (AU) Summit last month. However, full details of the summit decisions are not yet available to the public domain. She explains that, while the Heads of State at the AU’s thirteenth Extraordinary Summit on December 5, 2020, decided to start trade on January 1, 2021, “this did not happen”. Hartzenberg tells Engineering News & Mining Weekly that, by January 1, 2021, RoO for 90% of tariff lines had not been agreed to, and as a result, member States were reluctant to make tariff offers for tariff lines without agreed RoO. Consequently “there hasn’t been any trade under the AfCFTA, but intra-Africa trade continues under existing tariff regimes”. However, during their January meeting, AfCFTA’s Council of Ministers agreed that trade should begin on the basis of the 87.7% agreed tariff lines. The expectation is that last month’s summit confirmed this decision.
Hartzenberg cautions that, as lengthy as the process has been, full implementation is still some ways away. “Progress will be incremental; liberalisation will take place over time. Implementing the Annexes that deal with, for example, customs and border management and eliminating nontariff barriers, will take time since this requires domestic governance improvements.”
Africa to build on progress towards SDGs and Agenda 2063 (UNECA)
The 8th African Regional Forum for Sustainable Development (ARFSD) opened with a reminder for Africa to acknowledge the progress the continent has made towards targets in 2030 and 2063 and to improve upon them. The forum is an annual event to review and catalyze actions to achieve the Sustainable Development Goals (SDGs) by 2030 and goals of the African Union Agenda 2063. President Paul Kagame of Rwanda shared his hope that Africa will use the pandemic as a “springboard to speed up progress and innovate smarter ways to invest in human capital development.” He also commended the ECA on its advocacy on the AfCFTA as “a mutually beneficial partnership to strengthen Africa’s capacity to manufacture vaccines and pharmaceuticals” during this pandemic.
UN Under-Secretary-General and Executive Secretary of the ECA, Vera Songwe, explained that “progress achieved by Africa in the areas of climate change, the African Continental Free Trade Area (AfCFTA), the management of COVID-19, and education must be applauded.” She added, “We are in Rwanda where more than 70% of the population has been vaccinated.” Ms. Songwe said despite the tendency for the AfCFTA to be perceived as far-fetched, the fact that African countries have traded more among themselves during the pandemic than the five years before that period is a testament to the potential of the partnership. In other instances, Africa has led the way on the global stage, such as Rwanda’s decision to ban plastic, which is now a commitment made by some 200 countries despite the objections of the petrochemical industry.
Ahead of International Women’s Day, FAO calls for women traders to be included in AfCFTA (Vanguard)
March 8 is marked around the world as International Women’s Day. For many women in Africa, including those in the agriculture sector, it will be just another day where invisible barriers hold them back from their true potential.
At the United Nations Food and Agriculture Organization, we believe that inclusivity and fairness are key to achieving sustainable development in agriculture, and that this objective cannot be obtained without accounting for the central role played by women in the sector, including in agriculture markets, trade and value-chain development.
The agricultural and agribusiness market in Africa is undergoing rapid expansion, with its value estimated to reach USD 1 trillion by 2030, according to the World Bank. This represents an immense potential for Africa to boost food and non-food trade within the continent and enhance food security and resilience for all.
Africa needs climate action for effective free trade (TheCable)
According to the director-general of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, the removal of trade barriers worldwide will help tackle the climate crisis. She said developing countries need assistance from developed countries in the form of climate finance to cope with the effects of extreme weather. Okonjo-Iweala’s stance shows that removing trade barriers would help tame climate change. However, tackling the adverse effects of climate change and ensuring Africa has food security should come first instead of trade policies. Food security would position Africa for the effective implementation of free trade. Many African nations have witnessed extreme weather effects such as drought and flooding, which affect food security. Climate disasters cause reduced crop yield and also raise the cost of trading.
African countries need to partner with developed nations to combat the adverse effects of climate change.
The starting point should be for governments to commit to the Paris Agreement, a binding international treaty on climate change. Countries party to this agreement agreed to put in measures to limit global warming to below 2 degrees Celsius above pre-industrial levels. Each country should adhere to its submitted plans. Developed nations should honour their pledge as outlined in the Paris Agreement to support developing nations to mitigate and adapt to adverse effects of climate change.
Annual Conference of the High-Level Panel on Illicit Financial Flows (IFFs) from Africa convenes (BusinessGhana)
The High-Level Panel (HLP) on IFFs from Africa held its first meeting since the pandemic began in 2019 in Johannesburg, South Africa, from 21-25 February 2022. H.E. Mr Thabo Mbeki, Former President of the Republic of South Africa and Chair of HLP presided over the meeting.
The meeting discussed the outcomes of the 4th meeting of the Consortium to Stem IFFs from Africa, the progress on national level responses to illicit flows in response to the 2015 AU Assembly Declaration, and the outcome of the 1st African Fiscal Policy Forum on inequalities in taxing rights, jointly organized by CoDA and South Centre. The meeting underscored the importance of the work of the HLP, welcomed the coherent African response to the challenges of IFFs, and the need for AU Member States to actively participate in the ongoing national assessment processes. Regarding the 1st African Fiscal Policy Forum, the Panel shared the concerns of African and other developing countries with respect to the challenges of the international tax reform processes. Accordingly, the HLP encouraged the CoDA Technical Committee on Domestic Resource Mobilization to continue the dialogue series to enable African Countries to make informed decisions.
The ECOWAS Commission, in collaboration with the United Nations Conference on Trade and Development (UNCTAD), organized seven (7) virtual national workshops within the context of the ongoing regional eTrade readiness assessment for ECOWAS from 8 – 24 February 2022. The regional eTrade readiness assessment is conducted by UNCTAD in close collaboration with the ECOWAS Commission and Member State Ministries responsible for Trade and Information Communication Technology. This is the first step towards the development of an ECOWAS E-commerce Strategy.
Digital Tools for Fiscal Governance in Africa (Bloomberg Tax)
Africa is becoming more and more connected through globalization. Ports and highways are being built and capitals are slowly industrializing their suburbs. Trade in Africa was booming until Covid-19, with North Africa reaching 78% of GDP volume, South Africa 55% and Sub-Saharan Africa 48%. At the same time, transactions are more complex, business more structured and information increasingly detailed. To contend with the coming wave of investors, African tax and customs authorities have to improve their operational performance—this is a fact.
Multinational companies have reimagined their operating models and digital tools have allowed an unprecedented wave of profits that governments could capture, but tax and customs authorities still need to achieve optimal taxpayer service and operational excellence.
The fourth industrial revolution, “Industry 4.0”, is centered around the manufacturing industry with connected machines, optimized supply chains, autonomous equipment and connected devices, known as the Internet of Things or IoT. Whenever Industry 4.0 is applied to manufactured goods in cross-border trade exchanged through the connected supply chain, it transforms into Trade 4.0. Trade 4.0 brings an additional challenge to governmental institutions, namely the customs administration, in charge of securing and facilitating trade. The role of the customs administration is to manage the movement of merchandise with the objective of securing the flow from terrorist attacks and guaranteeing the safety of the population, supporting socioeconomic development through revenue collection and eliminating the risks of tax and duty evasion. The core system used by customs to collaborate with other governmental institutions, including the tax administration authority, is the electronic single window.
The objective of the new model is to move from the siloed and paper-based approach towards a more effective and efficient tax administration to eliminate “persistent tax gaps, large amounts of uncollected tax debt and continuing, and in some areas growing compliance burdens.”
COOK: US seeks two-way trade with Africa (The East African)
We are rolling out the Prosper Africa initiative and talking to entrepreneurs, investors and policy makers to understand how we can better engage with African businesses to draw US investments into the continent. We also want to make sure that our companies in the private sector are able to take full advantage of the opportunities that the African market offers and also with the introduction of the AfCFTA, this is going to be one of the largest trading blocs in the world with 1.3 billion consumers.
Global economy news
DDG Ellard discusses WTO reform, challenges facing global trade (WTO)
DDG Ellard briefed participants on the WTO’s efforts to support the global recovery from COVID-19 and to address vaccine inequity. She also outlined the progress the WTO has made on environmental issues, including fisheries subsidies. In addition, she highlighted ongoing efforts to reform the organization, including the dispute settlement system, and outlined possible elements of a reform agenda.
Effective cooperation between countries in the Global South and other development partners is critical in reversing the impact of the global COVID-19 pandemic which is pushing more people into poverty and hunger. This was one of the main messages that resonated today from an international high-level event on South-South and Triangular Cooperation co-organized by the Food and Agriculture Organization of the United Nations (FAO) and the Ministry of Agriculture and Rural Affairs of the People’s Republic of China. Titled “Strengthening South-South and Triangular Cooperation for Global Agricultural Development”, the hybrid high-level event was held in the context of the recent launch of Phase III of the FAO-China South-South Cooperation Programme, which supports countries’ national development goals, including by helping to solve constraints that farmers face. It achieves this by providing technical cooperation among countries in the Global South, including the sharing of knowledge, skills and successful initiatives in specific areas, such as agricultural development and addressing the impacts of the climate crisis, that contribute to food security, poverty reduction and the sustainable management of natural resources.
BRICS bank put on hold all new transactions in Russia due to Ukraine crisis (Economic Times)
The New Development Bank (NDB) of the BRICS bloc has put all new transactions in Russia on hold citing the “unfolding uncertainties and restrictions”, amidst the Ukraine crisis. The NDB’s move came a day after the Asian Infrastructure Investment Bank (AIIB) put on hold all its projects in Russia and its ally Belarus. “The New Development Bank (NDB) applies sound banking principles in all its operations, as stated in its Articles of Agreement”, a statement by the bank posted on its website on Thursday said.
“NDB will continue to conduct business in full conformity with the highest compliance standards as an international institution”, it said.
Explaining its decision to put the projects in Russia on hold, the AIIB said it is a multilateral organisation created by an international treaty, and adherence to international law lies at the very core of our institution”.
Digital inclusion unlocks a more resilient recovery for all (World Bank Blog)
The COVID-19 pandemic has hit developing countries the hardest and recovery is continuing to accentuate this growing divide. As advanced economies are expected to bounce back by 2023, developing economies could lag for years. Digital usage during the pandemic reflected a similar divide with a surge to 5 billion users worldwide, while 3 billion still remain offline, 96 per cent of whom live in developing countries. We must urgently counteract this growing global inequality. When populations have affordable access to the internet and the skills to use it, digital adoption opens endless possibilities for a more resilient recovery.
Digital technologies have helped bridge divides that were insurmountable with brick-and-mortar development solutions and reach vulnerable populations that are often excluded.
Digital inclusion opens endless opportunities, but the divides are still stark as the poor, rural populations and women fall behind. Even when vulnerable populations achieve connectivity, lack of digital literacy and affordability still can pose insurmountable challenges to use the technologies. Digital technologies can supercharge inclusive growth but we must accelerate investment, so they reach their full potential.
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Country-related news
SA automotive industry developments boost optimism for manufacturing sector (Bizcommunity)
The amended Automotive Production Development Programme (APDP) regulations, legislated in Schedule No.3 of the Customs and Excise Act, were released by the South African Revenue Service (Sars) just over a year ago, on 5 February 2021. The APDP is essentially South Africa’s long-term masterplan to grow the automotive industry. The production incentive scheme is aimed at creating an environment that enables registered light motor vehicle manufacturers to significantly grow production volumes and component manufacturers to substantially grow value addition in South Africa.
Over the course of the last year, automotive manufacturers in South Africa have adopted a proactive approach to the new APDP regulations by investing in production facilities and local plants, and developing efficient technology expertise. According to South Africa’s automotive business council, Naamsa, major vehicle manufacturers invested R8.8bn in the sector in 2021 and R9.23bn in the sector in 2020. Multinational original equipment manufacturers were the biggest investors in the automotive sector last year.
WCO and South African Institute of Taxation untangle complexities of tariff classification (WCO)
On 24 February 2022, the South African Institute of Taxation (SAIT) delivered a webinar on issues related to commodity classification and taxation of international trade transactions. The webinar gathered a wide audience of participants from the private sector, including SAIT members and the South African Freight Forwarders Association. Upon the invitation of the SAIT, the webinar panel of experts was joined by a representative of the EU-WCO Programme for Harmonized System in Africa (HS-Africa Programme), funded by the European Union.
The webinar offered an opportunity to discuss the latest developments related to Customs and tax policies, with a specific focus on the new version of the Harmonized System. In his interventions, the representative of the HS-Africa Programme briefly introduced the HS emphasizing its role of a common language of international commerce and its importance for trade facilitation. He called attention of participants to some of the most significant changes made in the HS as a result of the HS 2022 amendments, to some aspects of the maintenance of the HS by the WCO, and to the importance of the uniform use of the latest edition of the HS by Customs and trade.
Streamline SACU trade policies with national policies says VP (Namibia Economist)
The Vice President, Nangolo Mbumba has urged the SACU Secretariat to ensure that the body’s trade policies are entrenched and streamlined with Namibia’s national policies with a clear strategy that promotes coherence across all sectors to ensure that the country maximises its benefits from such arrangements. Mbumba, who paid a courtesy visit to the SACU Head Office in Windhoek this week said, the government prioritizes regional integration efforts, as a credible strategy for tackling the country’s development challenges. “It (regional integration) is an ideal platform for promoting large scale investment and economic efficiency required for economic growth and employment creation,” Mbumba said. He said Namibia recognises that its continued involvement in regional integration efforts by being a member of SACU, is a strategic response to the growing demand for market enlargement within the context of globalisation.
According to the Executive Secretariat of SACU, Paulina Elago, In the area of Trade Facilitation and Logistics, SACU seeks to create a seamless trade environment for cross-border movements. She said this will be done through the application of innovative and emerging technologies to streamline processes, enhance collaboration, while also detecting and deterring illicit trade in goods within the Common Customs Area. “It will also address obstacles and hindrances facing businesses that are moving goods across the borders in the Common Customs Area and beyond. The goal is to develop trade facilitation solutions that are practical, transformational, measurable, and geared towards enhanced efficiency and reduced transaction costs,” Elago said.
China emerges as Namibia’s main export market in January (Xinhua)
Namibia’s trade balance with Asian countries decreased from a surplus of 1.7 billion Namibia dollars recorded in December 2021 to 1.3 billion Namibia dollars obtained in January 2022, according to the country’s statistics agency (NSA) on Thursday. Exports declined by 318 million to 3.2 billion Namibia dollars whereas imports increased by 156 million to 1.9 billion Namibia dollars, NSA statistician general Alex Shimuafeni said in the latest NSA trade statistics. Despite the trade balance decrease, Shimuafeni said China emerged as the main export market for Namibia, absorbing 32.3 percent of all goods exported, ahead of South Africa in the second position with a market share of 18.3 percent of total exports.
Govt might roll over debt this year (The Namibian)
Namibia has debt to the tune of N$3,5 billion maturing this year, but the money in the reserves is not enough to redeem it, as the sinking fund only has N$1,8 billion. The government might either have to roll over part of the debt or borrow from Peter to pay Paul. The N$3,5 billion is made up of the GI22 and Nam01 bonds, valued at N$2 billion and N$1,5 billion, respectively.
Although the state was prepared for the redemption of these bonds, the use of the reserved funds during the heat of Covid-19, and the redemption of some bonds last year led to the thinning of the reserves balance.
In 2005, the state introduced a sinking fund approach to accumulate savings to ensure successful redemption for upcoming bond maturities.
Opportunities await Zim leather in AfCFTA (The Herald)
Africa’s leather industry presents huge opportunities for Zimbabwean firms, with the sector expected to expand to US$2,5 billion by 2030 from the current US$450 million 2030. Zimbabwe’s leather industry, already on a recovery path, could use the African Continental Free Trade Area to unlock the potential, Industry and Commerce Minister Dr Sekai Nzenza told The Herald Finance & Business. Zimbabwe enjoys a competitive advantage of the leather value chain given its solid livestock and wildlife base
In 2021, the Government launched the Zimbabwe Leather Sector Strategy (2021-2030) in Bulawayo, which seeks to bring together all the value chain players in the industry with the long term objective of promoting export of value-added products such as finished footwear, garments and other leather related goods.
“The strategy will go a long way in ensuring that the leather industry, which is already on a recovery path, undergoes structural transformation along the value chain, and becomes one of the biggest employers in the country bolstered by the country’s competitive livestock and crop production,” said Dr Nzenza.
The strategy would encourage more domestic production of leather goods and hence increased exports and generation of foreign currency, with Comesa estimating that the industry would balloon to US$2,5 billion from US$450 million.
Top Four Sectors for FDI in Angola (African Business)
Over the course of 2022-2023 Angola aims to consolidate its post COVID-19 economic recovery agenda on the back of stronger oil and gas prices. Given the landmark USD$100 per barrel price threshold being exceeded, analysts are projecting an upbeat economic outlook for the country with real GDP growth expected at an average of 5.1% for 2022-2025.
Angola’s economy, similar to that of other major hydrocarbon producers in Africa, remains vulnerable to volatile oil prices. The crude oil sector currently accounts for over one-third of GDP and for 90% of total exports. In order to mitigate against the risk of external oil price shocks, as well as reduce the country’s dependence on imports, the administration of H.E. President Joao Lourenço is strengthening efforts to diversify the economy beyond oil and gas. Not only does the government seek to broaden its industrial base by offering tax incentives, special programs to promote agriculture, attract foreign investors and the creation of free trade zones, a key objective is to create more employment opportunities for the country’s young and rapidly growing population. Four key sectors expected to witness investments and rapid growth from the ongoing diversification efforts include agriculture, logistics infrastructure, Telecommunication and the finance sector
Nigeria records foreign direct investment of $698.8 million in 2021, worst on record (Nairametrics)
Nigeria attracted a sum of $698.78 million as foreign direct investments (FDIs) in 2021, representing its lowest level on record. This is according to data compiled by Nairalytics from the Central Bank of Nigeria (CBN). A year-on-year comparison shows that FDIs into Nigeria dipped by 32% in 2021 to $698.8 million compared to the $1.03 billion recorded in the previous year. This also represented the fourth time Nigeria has recorded foreign direct investment below $1 billion in the past 15 years. The first time was in 2010, following the backdrop of the 2008 global financial crisis, which saw Nigeria’s direct investment inflow drop from $3.33 billion recorded in 2009 to $728.9 million in 2010. It also fell below the $1 billion mark in 2017, 2019, and now 2021. The recent drop in FDIs could be attributed to the ripple effect of the covid-19 pandemic on the Nigerian economy, which resulted in a contraction of the economy and contingents of downturns on the macro level.
A major factor contributing to the constant decline in Nigeria’s ability to attract direct investments from foreign soil is the level of insecurity, ravaging most parts of the country, from the insurgency in the north, herdsmen and bandit attack, kidnapping, armed robbery amongst others.
Policy inconsistency hindering productive sector – MAN (Daily Sun)
The Manufacturers Association of Nigeria (MAN) has disclosed that hindrances experienced in the productive sector are largely caused by policy inconsistency and somersaults which have , led to improper planning and projections. The association noted that this has led many manufacturers to close shop and discouraged prospective investors who are unsure what the next move of government would be.
Noting that the manufacturing sector deserves more critical attention, given the plethora of challenges that members face in the course of production, the MAN boss Mansur Ahmed said he was expectant that with consistent push, there would be improvement in the manufacturing landscape.
Ursula marks Ghana high in digitalization drive policy at Global Standards Symposium (GhanaWeb)
The Government of Ghana is employing the application of digital technology to stimulate the growth and transformation of the Ghanaian economy, and, thereby, help ensure that every Ghanaian derives maximum benefit from this process, Communication, and Digitalization Minister, Ursula Owusu-Ekuful has said. According to her, the Akufo-Addo led government for the past five years has taken the necessary digital decisions that have provided the necessary results to stimulate the economy on several levels adding that, the future outcome would be to enhance coordination and provide significant benefits to citizens. “For Ghana, we are intensifying our digital transformation drive with the ultimate goal of improving lives pursuant to the Sustainable Development Goals and we can only do this by ensuring that the required frameworks are in place. The Government of Ghana through the Ministry of Communications and Digitalization is playing a pivotal role in the development of a robust framework to support the digitalization of the economy in a manner that benefits every citizen.
“But we are mindful of the fact that we cannot do it alone and have to build systems that are capable of being linked up to those developed by our neighbors. We are building fiber to our borders and are active in continental initiatives such as the Smart Africa Alliance.
She further explained government is working tirelessly to ensure that Ghana and its neighboring countries successfully ensure the establishment of the Environmental, Social, and Governance (ESG) digital platform. This she says would help to serve as standards that are incorporated by socially-conscious investors to evaluate the sustainability and societal impacts of investments in companies across the African continent.
World Bank Forecasts Mild Economic Recovery for South Sudan in FY2021/2022 (World Bank)
Driven by improving macroeconomic conditions and relative peace that have supported a rebound of growth in services and trade, South Sudan’s economy is projected to grow by 1.2% in FY2021/22 after contracting by an estimated 5.4% in FY2020/21, according to the World Bank’s latest South Sudan Economic Monitor (SSEM). The report finds that the unrelenting floods in 2021 affected both oil production and agricultural sector performance and constrained the country’s ability to achieve higher growth. The fifth edition of the South Sudan Economic Monitor (SSEM), Towards a Jobs Agenda, projects that South Sudan’s economy could grow by 3.5-5.0% over the medium-term if the peace process holds, the economic management reform program succeeds, and global and regional economic recovery does not falter. The economy would also have to navigate additional challenges arising out of the COVID-19 pandemic and climatic shocks.
“As the South Sudanese economy recovers and stability takes holds, there is an opportunity now to promote macroeconomic conditions that create better job opportunities for the poor,” said Firas Raad, World Bank Country Manager for South Sudan. “As oil continues to provide a large income stream, effective management of this revenue is vital for the transition to a more development-oriented policy towards job creation in the country.”
Morocco’s Diverse Energy Mix an “Example” for Gulf States (African Business)
Speaking at next month’s Middle East Energy Dubai (MEE) (www.MiddleEast-Energy.com), the most reputable and comprehensive energy event in the MENA region, Ali Zerouali, one of Morocco’s leading industry experts is set to outline why Morocco’s diverse energy mix and mission to decarbonise make it the perfect role model for petroleum and gas reliant Gulf states.
The event is expected to attract over 18,000 energy professionals for a three-day conference featuring five key product sections: Smart Solutions, Renewable & Clean Energy, Critical and Backup Power, Transmission and Distribution, and Energy Consumption and Management. Ali Zerouali, Head of Cooperation & International Development at the Moroccan Agency for Sustainable Energy (Masen), will take to the stage at the industry-shaping Global Energy & Utilities Forum to outline why Morocco, with its abundant renewable energy resources, is the rising star of the MENA energy landscape.
“Middle East Energy provides MASEN and Morocco’s diverse assortment of energy sector pioneers with the perfect venue to see how we are transforming the nation’s energy sector – and why our unique energy mix is a sustainable solution for Gulf states and the wider world,” said Azzan Mohammed, Exhibition Director, MEE. “Europe’s well-known investment in Morocco’s burgeoning hydrogen sector is building on the country’s remarkable achievements in the solar sector. This burgeoning energy renaissance will allow Morocco to meet the significant challenge of lowering its fossil energy imports even while its economy continues to grow.”
Ghana’s Digitalization Agenda Scores High Marks (PeaceFM Online)
The Government of Ghana is employing the application of digital technology to stimulate the growth and transformation of the Ghanaian economy, and, thereby, help ensure that every Ghanaian derives maximum benefit from this process, Communication and Digitalization Minister, Mrs. Ursula Owusu-Ekuful has said. According to her, the Akufo-Addo led government for the past five years has taken the necessary digital decisions that have provided the necessary results to stimulate the economy on several levels adding that, the future outcome would be to enhance coordination, and provide significant benefits to citizens. ”For Ghana, we are intensifying our digital transformation drive with the ultimate goal of improving lives pursuant to the Sustainable Development Goals and we can only do this by ensuring that the required frameworks are in place. The Government of Ghana through the Ministry of Communications and Digitalization is playing a pivotal role in the development of a robust framework to support the digitalization of the economy in a manner that benefits every citizen. ”But we are mindful of the fact that we cannot do it alone and have to build systems that are capable of being linked up to those developed by our neighbors. We are building fiber to our borders and are active in continental initiatives such as the Smart Africa Alliance.
African trade
The AfCFTA Provides Opportunities for Gender Equality (UNECA)
A promising connection has been made between the African Continental Free Trade Area (AfCFTA) and the quest for gender equality and women’s empowerment by the Acting Director of the ECA’s Gender, Poverty and Social Policy Division, Ms. Edlam Yemeru. Ms. Yemeru made this analysis during discussions on Gender Equality and Empowerment of Women and Girls in Africa. The virtual event, organized by the ECA, UN Women and UNFPA on the margins of the 8th African Regional Forum on Sustainable Development (ARFSD).
Acknowledging that some of the gains made in gender equality were eroded by the pandemic. Ms. Yemeru highlighted the opportunity presented by the AfCFTA to enhance the capacity of African women for self-determination. “The AfCFTA creates a huge market and it is expected to bring together the continent in ways that will increase productivity and job creation.” She added. The growth and expansion of technologies promised by intra-African trade will also be of considerable benefit, particularly in enhancing the financial inclusion of women.
LAPSSET Gets a Boost at 7th PIDA Week (UNECA)
The Economic Commission for Africa (ECA) today convened a meeting in Nairobi, Kenya and on the sidelines of the 7th PIDA Week, to discuss on how to address the financing needs of the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) corridor programme. Held under the theme “The investment potentials of the LAPSSET Land Bridge to Central Africa and beyond”, the session, moderated by Mr. Adeyinka Adeyemi, Senior Advisor at the United Nations of Economic Commission for Africa (UNECA), focused on how to strengthen partnership, promote cooperation and coordination amongst the three countries on the LAPSSET project. Speaking on the issue of how to crowd-in investment for LAPSSET, Mr. Silvester Kasuku, CEO of the African Center for Transport, Infrastructure and Regional Integration (ACTIRI) and former CEO of LAPSSET Authority, said that Africa needs to translate its population to be a business population that can support growth in Africa. “The private sector is a key partner to governments and RECs in the successful implementation of the LAPSSET,” Mr. Kasuku stated.
Africa’s digital economy projected to hit Sh20trn (Business Daily)
The value of Africa’s internet economy is projected to more than double to over $200 billion next three years from the current estimated $115 billion, according to a new report. The research commissioned by blockchain-based mobile network operator, World Mobile shows professional investors are forecasting strong growth in the value of Africa’s internet economy with mobile phones central to the expansion. The study by independent research company PureProfile surveyed investors responsible for around $700 billion assets under management. It found that one in four (25pc) investor managers expect Africa’s internet industry to increase by 51 percent in three years. Increased use of mobile phones will be central to the growth which will be further enhanced by improved affordability, says the study which interviewed investors in the US, Germany, the UK, Hong Kong, India, Japan, Nigeria, and Switzerland found.
Are Central Bank Digital Currencies the Key to Unlocking Financial Inclusion in Africa? (CNBC Africa)
Technology is changing money as we know it. Financial technology or fintech as a form of financial innovation has reshaped the financial services industry, particularly in Sub-Saharan Africa. More recently, the advent of central bank digital currencies (hereafter CBDC), presents a transformative opportunity for the global financial sector. New analysis shows over 90 percent of global economy exploring a CBDC. According to The Atlantic Council’s CBDC Tracker, nine countries have now fully launched a digital currency. Nigeria is the latest country to launch a CBDC, the e-Naira, the first outside the Caribbean. The e-Naira is expected to boost cross-border trade and financial inclusion, make transactions more efficient as well as improve monetary policy, according to the Central Bank of Nigeria.
The idea of digital money is not new, many of us use debit and credit cards or payment apps for transactions. Africa’s reputation for innovation as the global leader in mobile money is a key driver behind the continent’s burgeoning fintech investment scene. The continent is already the largest adopter of mobile money transfer systems, comprising nearly half of the globe’s registered mobile money customers, approximately 70 percent of global mobile money transactions, and two-thirds of the transaction volume by value. But what would make a CBDC different?
Fourth Africa STI Forum ends with call to bridge gap between academia and private sector (UNECA)
The 4th Africa Science, Technology and Innovation (STI) Forum closed with a commitment from stakeholders to bridge the gap between research in academia and the private sector businesses in need of the knowledge. The two-day event under the theme, “Strengthening STI Institutional Arrangements to Advance Full Implementation of the 2030 Agenda for Sustainable Development in Africa”, was held on the sidelines of the 8th Africa Regional Forum on Sustainable Development (ARFSD) in Kigali, Rwanda. Drawing participants from public and private institutions across Africa.
“We launched the Alliance of Entrepreneurial Universities and the Science and Technology Development and Transfer Network which are institutional arrangements that can improve the African STI landscape,” Climate Change, Natural Resource Management and Technology Director, at the ECA, Mr. Jean-Paul Adam said.
IMF Executive Board Concludes Regional Consultation with West African Economic and Monetary Union (IMF)
The WAEMU has so far demonstrated strong resilience to the Covid crisis. Nonetheless, the region has been hard hit by the Omicron variant and security risks continue to increase in some countries. Despite these headwinds, the economic rebound that started in the second half of 2020 firmed up in 2021, while fiscal and monetary policies remained supportive. External reserves have risen to comfortable levels and the financial system appears to be broadly sound. Inflation has exceeded the 3 percent ceiling of the BCEAO’s target band since April 2021, mainly on account of higher domestic and imported food prices.
Growth is expected to further accelerate to about 6 percent in 2022, primarily driven by a rebound in net exports and inflation is projected to return to the BCEAO’s target band by the end of the year. A gradual fiscal consolidation is expected to start this year and bring the aggregate fiscal deficit to 3 percent of GDP by 2024. There are however significant downside risks to the outlook, particularly given slow and uneven progress with vaccination, the possibility of further deterioration of security risks and political uncertainty, and the likely tightening of global financial conditions.
Another ‘scramble for Africa’ (IT-Online)
There is another scramble for Africa according to international media, but this time it is about who can best profit from the continent’s business opportunities. And the charge is being led by foreign powers, with 70% of coverage about business in Africa referencing China, the US, Russia, France, and the UK, according to the newly launched The Business in Africa Narrative Report, by Africa No Filter and AKAS. The report shows that the keywords, stories, frames, and narratives associated with business on the continent are dangerously distorted. There is an overemphasis on the role of governments, foreign powers, and larger African states alongside an underappreciation of the role of young people, women, entrepreneurs, creative businesses, smaller successful African states, and Africa’s future potential.
In addition to the dominance of foreign powers in business stories featured in international media, the report highlighted a number of other key frames dominating dangerous distortions played out in stories, and the underrepresentation of businesses across the continent
The report comes at a crucial time for the continent as it recovers from the economic impact of Covid-19. Experts predict that Africa needs an estimated $175 billion per year for 20 years to end extreme poverty, and business will play a critical role.
EU’s summit pledges to Africa fall short, but all is not lost (African Business)
Last month, a much-publicised summit took place between the EU and AU, ostensibly to chart the two regions’ relationship for the next few years. Postponed for a year, the summit was the sixth in a series that has been ongoing since 2000, the same year that China-Africa summits began as well. The unusual feature of this summit, however, was the first ever commitment from the EU to spend a specific sum of money in African countries – €150bn ($168bn) – over the next seven years – that’s close to $25bn a year.
Exciting times perhaps, especially after headlines on the China-Africa summit, held two months prior, which focused on an “underwhelming” $40bn financial commitment from China over three years.
Global economy news
Russia-Ukraine crisis: Okonjo-Iweala says WTO concerned about rise in food products and energy prices (Nairametrics)
The World Trade Organisation has warned that the conflict between Russia-Ukraine will have severe trade implications on agriculture and energy prices. This was disclosed by the Director-General of the World Trade Organisation and former Nigerian Finance Minister, Dr. Ngozi Okonjo-Iweala
Okonjo-Iweala said, “At the WTO, we have watched this tragedy in Ukraine unfold with disbelief and the hope that it would have been peacefully resolved. “However, this is now the 7th day and we are deeply saddened by the continued suffering and loss of life.” She added that WTO hopes there will be a peaceful and quick resolution. “We are also concerned about the trade implications of the conflict, especially trade in agriculture and food products and the rise in energy prices and their effects on the impacted population,” she added.
Joint IMF-World Bank Group Statement on the War in Ukraine
International Monetary Fund (IMF) Managing Director Kristalina Georgieva and World Bank Group President David Malpass today issued the following statement on the war in Ukraine.
Commodity prices are being driven higher and risk further fueling inflation, which hits the poor the hardest. Disruptions in financial markets will continue to worsen should the conflict persist. The sanctions announced over the last few days will also have a significant economic impact. We are assessing the situation and discussing appropriate policy responses with our international partners.
“The World Bank and the IMF are also working together to assess the economic and financial impact of the conflict and refugees on other countries in the region and the world. We stand ready to provide enhanced policy, technical, and financial support to neighboring countries as needed. Coordinated international action will be crucial to mitigate risks and navigate the treacherous period ahead. This crisis affects the lives and livelihoods of people around the world, and we offer them our full support.”
Services, value chains and the global south – Karin Fischer and Christian Reiner (Social Europe)
Many consumption and investment goods are ‘made in the world’. Different stages of production are distributed to suppliers in various countries which can perform the task at lowest cost. These global value chains (GVCs) account for about half of world trade and powerful transnational corporations (TNCs) from the global north decide their geography, conditions and remuneration.
Institutions such as the World Bank and the World Trade Organization (WTO) have been very optimistic about the development potential of GVCs. This sanguine view of globalisation is predicated on the idea that countries of the global south can specialise in a limited number of simple tasks, instead of building up national industries from scratch. The advice for catching up is upgrading—improving products and processes to enable firms and workers to capture more value from participating in GVCs.
This upbeat narrative, drawn from the neoliberal ‘Washington consensus’, has however not come true for most least-developed countries (LDCs), let alone their workforces. It turns out to be mainly upper-middle- and high-income countries which benefit from GVCs. Upgrading is neither automatic nor frequent, leaving most countries stuck in low-technology and low-wage segments. Highly unequal bargaining power between firms is key, as markups by firms in the global south diverge—rather than converge—with those in the global north.
LDCs are thus in need of a new development strategy. And, once again, the WTO and World Bank believe they have found one. The new magic bullet is services, traded in GVCs just like manufactured goods. Justifying its optimism, the WTO presents India and the Philippines as role models.
Morocco to Host Parliamentary Forum to Boost South-South Cooperation (Morocco World News)
Morocco’s House of Councilors is set to host the Parliamentary Dialogue Forum of the Senates and Equivalent Councils of Africa, the Arab World, Latin America, and the Caribbean on March 4-5. The forum seeks to advocate for peace, sustainable development, democratic governance, and human rights, as well as social, environmental, and climate justice.
The event aims to create a space for dialogue between the participating parties and boost interactive exchange to facilitate regional integration and south-south cooperation.
The forum will also focus on strengthening the action of the senates in the field of economic diplomacy and develop south-south parliamentary dialogue on issues of common interest. The forum intends to do so while improving the role of the legislative institution as the authority responsible for strengthening democratic and territorial governance.
DDG Ellard highlights WTO-ILO collaboration on inclusive trade, opportunities for women (WTO)
ILO data shows the world has lost the equivalent of 137 million full-time jobs since late 2019, with low- and lower-middle-income countries hit particularly hard.
Many women work in sectors that require face-to-face communication and are not adaptable to telecommuting. That is one reason why they were hurt more by lockdowns and other health measures. In addition, many women have significant family responsibilities that have made it difficult to work during the pandemic. For all of these reasons, employment and income losses have been more severe for women than for men.
Our challenge is to make sure that the recovery compensates for this expansion of gender inequality. Trade can be an important tool in achieving our goals of decent jobs, and greener, more prosperous economies that offer equal opportunities to all, and in particular to young people and to women.
Nearly 2.4 Billion Women Globally Don’t Have Same Economic Rights as Men (World Bank)
Around 2.4 billion women of working age are not afforded equal economic opportunity and 178 countries maintain legal barriers that prevent their full economic participation, according to the World Bank’s Women, Business and the Law 2022 report. In 86 countries, women face some form of job restriction and 95 countries do not guarantee equal pay for equal work. Globally, women still have only three quarters of the legal rights afforded to men -- an aggregate score of 76.5 out of a possible 100, which denotes complete legal parity. However, despite the disproportionate effect on women’s lives and livelihood from the global pandemic, 23 countries reformed their laws in 2021 to take much-needed steps towards advancing women’s economic inclusion, according to the report. “While progress has been made, the gap between men’s and women’s expected lifetime earnings globally is US$172 trillion - nearly two times the world’s annual GDP,” said Mari Pangestu, World Bank Managing Director of Development Policy and Partnerships. “As we move forward to achieve green, resilient and inclusive development, governments need to accelerate the pace of legal reforms so that women can realize their full potential and benefit fully and equally.”
UN Environment Assembly concludes with 14 resolutions to curb pollution, protect and restore nature worldwide (UN Environment)
The 5th UN Environment Assembly concluded today in Nairobi with 14 resolutions to strengthen actions for nature to achieve the Sustainable Development Goals. The Assembly is made up of the 193 UN Member States and convenes every two years to advance global environmental governance
“Against the backdrop of geopolitical turmoil, the UN Environment Assembly shows multilateral cooperation at its best,” said Espen Barth Eide, the President of UNEA-5 and Norway’s Minister for Climate and the Environment. “Plastic pollution has grown into an epidemic. With today’s resolution we are officially on track for a cure.”
Amina J. Mohammed, Deputy Secretary-General of the UN, added: “Today, no area on the planet is left untouched by plastic pollution, from deep-sea sediment to Mount Everest. The planet deserves a multilateral solution that speaks from source to sea. A legally binding global agreement on plastic pollution will be a truly welcome first step.”
Financial Flows Toolkit to tackle Illegal Wildlife Trade (TRAFFIC)
Illegal wildlife trade (IWT) is the 4th-largest organised crime after drugs, people and counterfeiting, costing $23bn annually. Financial crime is at the heart of it. Wildlife trafficking is not only extinguishing species and destabilising ecosystems, it’s also fuelling corruption and undermining livelihoods in our communities. According to the World Wildlife Fund (WWF), the numbers are horrific: around 20,000 African elephants are killed by poachers each year; and rhino poaching has soared since 2007 with an average death rate of around 100 rhinos per month. Data from TRAFFIC confirms that at least 23.5 tonnes of pangolins and their parts were trafficked in 2021 alone.
Nick Ahlers, TRAFFIC’s Africa Programme Director: “We are witnessing dramatic losses in species globally because of this for-profit crime, so effective strategies to address this require the financial underbelly to be targeted and disrupted. This toolkit will enable financial institutions and governments with the information they need to target and tackle illicit money flows associated with wildlife trafficking; making it harder for criminal syndicates to continue this detrimental practice.”
UK Minister Lord Tariq Ahmad of Wimbledon in collaboration with His Excellency Ahmed Ali Al Sayegh launched a practical and freely accessible IWT Financial Flows Toolkit aimed at supporting governments and financial institutions to raise awareness of IWT and help them identify and mitigate suspicious transactions associated with illegal wildlife trade.
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Country-related news
Impact on SA trade with Russia minimal: BUSA (East Coast Radio)
In a statement released on Tuesday, Busa said it is “gravely concerned” about the situation and stands in solidarity with the people of Ukraine. “According to the Bureau for Economic Research, for now, the direct economic impact on SA is minimal. Our trade with Russia is negligible, making up less than 0.4% of total merchandise exports in 2021.
“South Africa imported goods worth R9.2 billion from Russia in 2021, less than 1% (0.7%) of total imports. Our trade linkages with Ukraine are also negligible.
“In 2020, we exported over (R3,7 billion) worth of agricultural products, with citrus and apples & pears making up nearly 90% of those exports. In total, SA exports more than 7% of its total citrus crop to Russia, and more than 12% of its apples and pears exports.”
Positioning South Africa’s renewable energy manufacturing (Engineering News)
As fossil fuel industries and infrastructure reach the end of their historical cycle, renewable energy should become a pivot for South Africa’s industrial development. At present, roughly 85 per cent of electricity is generated by coal-fired power plants. What is clear is that there is serious strain on South Africa’s energy security and the ongoing electrification crisis reinforces the need for a low carbon pathway that delivers jobs, economic growth, and social benefits. While the government’s Renewable Energy Independent Power Producer Programme (REIPPPP) and other policies have catalysed a shift in the energy market, the transition to renewable energy is not happening at the speed and with the urgency required. Unlocking the country’s untapped renewable energy potential reveals the often-intense debates that characterise a larger, more fundamental aspect of South Africa’s entrenched industrial structure.
South Africa, underpinned by uneven and exclusionary growth, has largely failed to deliver meaningful structural change, certainly by comparison to countries such as Malaysia and Brazil. The post-apartheid state has set the country on a path of ‘premature deindustrialisation.’ Navigating the complex politics of South Africa’s energy transition requires a proactive and coordinated approach that locates the renewable energy transition within a broad-based industrialisation agenda.
Expo 2020 Dubai to rake in US$10m (The Herald)
Zimbabwe expects to rake in US$10 million through horticultural exports to the United Arab Emirates from deals struck during the ongoing Expo 2020 Dubai. This was said by ZimTrade chief executive officer, Mr Allan Majuru when he appeared before the Portfolio Committee on Lands Agriculture, Fisheries, Water and Rural Resettlement. Mr Majuru said they had sealed deals approximately worth US$2 million during the Expo. “From the Expo we managed to get deals worth over US$2 million and by the end of the year we expect to make in excess of US$10 million through follow up deals,” he said.
He added that apart from exporting horticultural products, ZimTrade was also engaging potential investors from UAE to invest in production of horticultural products locally to secure supply.
Truckers blame KRA tracking system for costly port delays (Business Daily)
Transporters hauling cargo from the Port of Mombasa have raised concern over the shortage of Regional Electronic Cargo Tracking Seals (RECTS) that are exclusively owned and operated by the Kenya Revenue Authority (KRA). The lack of the seals has forced trucks to wait for long hours before leaving the port, incurring more costs. The Kenya Transporters Association (KTA) said they are paying delay charges levied by the Kenya Ports Authority (KPA) for any truck staying at the port past midnight, attracting charges. KTA chairman Newton Wang’oo urged the government to intervene and remove the charges to allow more transporters and traders use the port. “KRA has insisted that all cargo under customs control must be tagged with RECTS that are exclusively owned and operated by KRA. These seals are not enough as a result crippling business due to delay in loading of cargo at border points. Due to the shortage, loaded trucks have to wait for these seals for a period ranging from six hours to 24 hours to be available before tagging to exit,” said Mr Wang’oo.
Russia, Ukraine conflict set to exert toll on local exporters (Business Daily)
The ongoing war between Russia and Ukraine will adversely impact exporters starting this March as freighters have adjusted the shipping charges by 10 percent in response to the rising cost of fuel. The rising cost of fuel will also have an impact on imports with Kenyans expected to pay more in shipping goods to the country. The price for a barrel of oil jumped to $100 last month, a rate that was last witnessed in 2014. “Cost of freight will go up because of this war between Russia and Ukraine as a result of high cost of fuel,” said Astral Aviation chief executive officer Sanjeev Gadhia.
“Kenyans should embrace expensive exports and imports in the coming days because of the expensive fuel currently,” he said. The move will hit hard exporters of fresh produce, especially coming at a time when the horticulture industry is expecting to export more flowers to Europe ahead of the Mother’s Day celebration in May. The orders are normally ferried in advance. Chief executive officer of the Fresh Produce Consortium of Kenya Ojepat Okisegere said they are waiting to see how the industry will react to the current disruptions in the coming days.
Tax evasion? Mystery of missing Sh300 billion worth of China exports to Kenya (The Standard)
Kenya might have lost huge tax revenues, with an analysis of official data showing imports valued at close to Sh300 billion from China were either under-declared or diverted. Data from China’s General Administration of Customs, which handles international trade shows that the Asian country exported to Kenya goods valued at Sh738.9 billion ($6.73 billion using an average exchange rate of 109.7), in the 12 months to December last year. However, this is a substantial variance compared to the goods worth Sh441.5 billion published by the Kenya National Bureau of Statistics (KNBS) for the same period. KNBS, the national statistician, gets its data on exports and imports from the Kenya Revenue Authority (KRA).
The taxman has since launched non-intrusive scanners at key border points to help detect suspicious items. An electronic cargo tracking system that monitors transit cargo from the point of entry to the exit is also expected to cut offloading of undeclared goods in the local market. Recently, the government, in a bid to facilitate easy and faster clearance of Cargo, gazetted various facilities to be used for deconsolidation and clearance of cargo by small-scale traders. “All cargo consolidated at the countries of export will, upon importation, be deconsolidated at facilities designated for that purpose,” said KRA. This took effect early last month, with all consolidated cargo imported by sea and transported to Nairobi through rail being opened and cleared. It is then collected by the owners at the Kenya Railways Corporation (Boma Line) Transit Shed, in Nairobi. However, there is almost no solution for under-declaration with KRA officials sometimes resorting to estimating the cost of the products, a move that has hurt a lot of traders.
Central bank to pronounce itself on digital currency by December (The New Times)
People will know Rwanda’s stand on the use of digital currency by the end of December 2022, according to central bank Deputy Governor, Soraya Hakuziyaremye. Digital currency represents any currency or money that is managed or exchanged on digital computer systems, especially over the internet, and never converted into physical form at any point. In this case, the central bank digital currency (CBDC) is the one that would be issued and overseen by a country’s central bank. In June 2021, the central bank announced the commencement of a study that would look at the economic, financial and technology aspects related to CBDC as well as the operationalisation model, taking into account the local context.
Use of cheques falls as digital payments rise (Business Daily)
Growth in usage of cheques has slowed down in the last decade, losing out to digital payments channels which are more efficient for businesses and individuals. The Central Bank of Kenya (CBK) said in its 2022-2025 national payments strategy that the paper-based payment channel will need reforms as part of the alignment of the automated clearing house (ACH) with emerging global practise that is marking a shift away from cheques. While the value of cheques went up from Sh2.05 trillion in 2011 to Sh2.54 trillion in 2021, the number issued in the payments fell from 18.2 million to 16.4 million in the period. Meanwhile, the volume of cash transacted through mobile money agents rose by nearly six times to hit Sh6.87 trillion in 2021, from Sh1.17 trillion in 2011. Bulk payments made through real-time bank transfers have also gone up by a significant margin, from Sh21.9 trillion in 2011 to Sh34.55 trillion last year. “At a broader level, cheque volumes and values continue to fall, as individuals and businesses make greater use of electronic payment instruments, particularly during the Covid-19 pandemic,” said the CBK.
Rwanda secures €56 million for climate change action (The New Times)
Rwanda has received €56 million to kick off the implementation of priority projects that address the issues raising climate change as well as development. In the agreement signed with the KFW Development Bank of Germany, €30 million will be allocated to urban development project, Green City Kigali and €26 million for the implementation of the Rwandan National Determined Contributions (NCDs) through the NDC Facility at the Rwanda Green Fund. Under its NDCs to Paris Agreement, Rwanda has committed to reducing its greenhouse gas emissions by 38 per cent by 2030 compared to a business-as-usual scenario on condition of international support and funding which complements domestic resources. The commitment is estimated at $11 billion investment cost and it revolves around matters such as water security, agriculture, land and forestry, settlements and health.
“It is encouraging for my government and party, the New Patriotic Party, to recall that the rate of growth of the economy, 5.6%, against the background of the exceptionally difficult circumstances of the COVID-era, is still considerably better than the 3.4% we inherited (in 2016) in calmer times from our predecessor administration.” These were the words of the President of the Republic, Nana Addo Dankwa Akufo-Addo, when he delivered the keynote address at the National Labour Conference, held in Kwahu Nkwatia, in the Eastern Region, on Monday 28th February 2022. According to President Akufo-Addo, Ghanaians “should not forget that, prior to the outbreak of the pandemic, we witnessed average annual GDP growth rates of seven percent (7%) in 2017, 2018, 2019 and part of 2020, when our economy was then, generally, acknowledged as one of the fastest growing in the world.”
‘$42b deals sealed at IATF2021’ (The Nation)
Deals and commitments amounting to over $42 billion were concluded within the two weeks that the second Intra-African Trade Fair (IITF2021) took place in Durban, South Africa, the President, Manufacturers Association of Nigeria (MAN), Mansur Ahmed, has said.
Noting that some of the deals were concluded by Nigerians, Mansur said others were in form of negotiations for investments and trade. “Some of our members who were in Durban confirmed that they were able to agree to some relationships, whether it was a deal in terms of supply of materials or supply of goods,” he said.
Ethiopia reaffirms commitment to Lamu Port project (New Business Ethiopia)
Ethiopia reaffirmed its continued commitment to the realization of the under-construction Lamu Port-South Sudan-Ethiopia (LAPSSET) Corridor Project, geared towards the development, integration and prosperity aspirations of our respective people. This is indicated by Ethiopia’s Ambassador to Kenya Meles Alem, at the 7th Program for Infrastructure Development for Africa (PIDA) Week. He reiterated the fact that the LAPSSET is a game changer regional integration and economic development project, according to the statement from the Ministry of Foreign Affairs of Ethiopia.
He further noted, the project seeks to unlock the potential of the untapped regional trade through seamless connectivity, driven by a multi-faceted transport and logistics corridor. The project also seeks to promote regional integration through trans-border trade and investments, he added.
Cameroon to import 143 kilotons of palm oil this year (Business in Cameroon)
The Oilseeds Refiners Association (ASROC) requested authorization to import 100,000 tons of palm oil to complement the local supply for 2022. It finally increased that volume to 143,000 tons of palm oil, which will be imported duty-free. The authorization was given on January 31, 2022, by the Minister of Finance Louis Paul Motazé, as announced by the ASROC during a press conference held in Yaoundé on February 23, 2022. This is the highest volume authorized since 2017. Indeed in 2017, the country imported 96,000 tons of palm oil, 100,000 tons in 2018 against 90,000 tons in 2019 and 70,000 tons in 2020. In 2021, the country imported 100,000 tons of the raw material, the ASROC reveals. The increase in the volume of palm oil to be imported by Cameroon this year is due to the rise in sourcing challenges experienced by refiners, indicates Jacquis Kemleu, secretary-general (SG) of ASROC.
Cameroon to keep 2022 public debt below 50% of GDP (Business in Cameroon)
Cameroon plans to keep its public debt below 50% of GDP during the current 2022 fiscal year. The information was disclosed on February 25, 2022, in Yaoundé, by Finance Minister Louis Paul Motaze, during the annual conference of heads of central, decentralized, and external services of the Ministry of Finance. According to the government official, to help the country succeed in that plan, the 2022 finance law provides that measures will be taken for non-oil revenues to contribute an additional 0.8% to GDP. For the time being, public debt is still under control although it slightly increased in 2021, Minister Louis Paul Motaze announced. As of end-October 2021, it was 44.% of GDP, representing a 0.8% increase compared to its level in late 2020. As of end-December 2021, it was at 45.4% of GDP.
Benin Country Economic Memorandum: Accelerating the Growth Momentum and Creating Better Jobs (World Bank)
Benin economic growth has risen over the past decade, averaging 5.1% per year and positioning the country as one of the region’s rising economies. But the country’s positive economic growth remains volatile, due to limited economic diversity and structural change.
Most of the GDP per capita growth difference between Benin and its peers is explained by its significantly lower rate of labor productivity growth. Between 2001 and 2018, the output of an average Beninese worker increased 16.2% compared with 50.4% for a worker in Rwanda, and 56.5% in Sri Lanka.
To move up the ladder to a strong middle-income economy, Benin needs to accelerate the structural transformation of its economy through new growth engines that can sustain economic acceleration, increase labor productivity, and create quality jobs, especially for youth and women.
The Benin Country Economic Memorandum proposes three ways for accelerating growth and creating better jobs: Enhancing human capital and the quality of the labor market for greater productivity; improving infrastructure and transportation services; diversifying exports, and strengthening regional trade.
African trade
Adeyemi Dipeolu, Oyebanji appointed as AfCFTA inaugurates 14-member advisory council (TheCable)
Adeyemi Dipeolu and Oyebanji Oyelaran-Oyeyinka have been appointed among the 14-member trade and industrial development advisory council of the African Continental Free Trade Area (AfCFTA). AfCFTA secretariat disclosed this in a recent statement announcing the inauguration of the council. Wamkele Mene, secretary-general of the AfCFTA secretariat, said the establishment of an advisory council is to provide counsel on trade integration and transformative industrialisation. “It is against this background that Wamkele Mene convened a brainstorming workshop to discuss the matters of trade and industrial development, which led to his proposal to constitute an Advisory Council to provide advice on trade integration and transformative industrialisation as part of the implementation of the AfCFTA,” the statement reads. “The recent Summit of Heads of State and Government in February 2022 endorsed this proposal.”
The statement added that Adeyemi Dipeolu, special adviser to President Muhammadu Buhari on economic matters and Oyebanji Oyelaran-Oyeyinka, special advisor to the president of African Development Bank (AfDB) on industrialisation, are members of the advisory council. Others are Jane Ezirigwe, Arkebe Oqubay, Rob Davies, Taffere Tesfachew, Celestin Monga, Carlos Lopes, Magda Shahin, Caroline Ncube, Fiona Tregenna, Stephen Karingi, Gainmore Zanamwe and Faizel Ismail.
Rules of origin restrictive to AfCFTA, EABC warns (Dailynews)
The East African Business Council (EABC) has singled out compliance to rules of origin as a restrictive aspect to trading. The regional business council said here recently that small-scale women cross-border traders bore the most brunt, as far as rules of origin was concerned.
EABC Chief Executive Officer John Bosco Kalisa underscored the need for a “flexible, clear predictable rules of origin for business to benefit from the agreement which advocates the elimination and reduction of tariff and non-tariff barriers amongst the 54 countries that agreed to be members of the bloc by providing a single market for goods and services.
The current structure on the rules of origin is restrictive in nature” he said when speaking at a Webinar on for the African Continental Free Trade Area (AfCFTA) Country Business Index Report organized by Economic Commission for Africa (ECA). Mr Kalisa further warned that intra-regional trade is sliding back below 20 per cent due to persistent tariff and Non-Tariff Barriers imposed on both large and micro small medium enterprises.
The EABC boss recommended for sensitization campaigns on the AfCFTA, harmonization of standards on sanitary and phytosanitary (SPS) measures and improving transport and logistics on the continent. The ACBI focuses on business perceptions of trading under the Free Trade Area by looking into constraints and challenges. It calls for more support to equip enterprises to identify strategic interest and market opportunities in light of the AfCFTA.
ECA Deputy Executive Secretary and Chief Economist, Hanan Morsy on her part noted that intra African trade was a key driver in building forward for a green, inclusive and resilient Africa. According to her, AfCFTA had huge potential to drive sustainable development.
Africa’s economies need global solidarity and economic restructuring to recover from Covid – Stiglitz (Daily Maverick)
Rich countries will have to do far more to ensure all Africans are vaccinated and that all African economies recover. “We heard the refrain….that no one is safe until all of us are safe. Similarly….we won’t have a robust global economy until every country is in the process of economic recovery,” the Columbia University economics professor said. He was speaking at a webinar about a new report produced by South African scholars – The Economic Impact of Covid-19 and Prospects for a Post-Pandemic Economic Recovery in Africa.
The report found that African governments had not been prepared to effectively manage the pandemic which had accentuated challenges that had existed in Africa for decades. These included poor governance, a lack of growth-friendly policies, weak institutions, poor health and education systems, widespread poverty and inequality, poor statistical data and digital access and predominantly informal economies.
The report noted Africa’s economy had shrunk by 2.1% in 2020 – though some estimates have put it higher. This was in any case less than predicted, though anti-Covid-19 measures had nonetheless precipitated Africa’s first recession in 25 years pushed a further 25 million Africans into extreme poverty in 2020.
Nonetheless South Africa’s Wilmot James, chair of ISERP’s Center for Pandemic Research, who, with ISERP president Robert Shapiro, was one of the architects of the report, said: “While the pandemic exposed a range of problems from poor data and high levels of informality in the private sector to comparatively low digital connectedness, inequality, and poor health and education systems, it has also provided a catalyst for change.”
7th PIDA Week kicks off in Nairobi with a call to action to invest in Africa’s infrastructure (NEPAD)
A high-level international conference of African leaders, representatives of international development organizations and the private sector, has begun in earnest in the Kenya capital Nairobi, aimed at assessing and tracking the status of financial investments in Infrastructure development in Africa
“As African countries, we need to focus on policies and strategies that will promote and increase domestic resource mobilization, attract private investment and create an environment that attracts the growth of quality infrastructure projects. I, therefore, urge for deeper engagement between PIDA, the private sector, and development partners”, said the President of the Republic of Kenya H.E. Uhuru Kenyatta.
Despite the African continent having investment-worthy infrastructure projects, there is still a big funding gap related to various risks such as project bankability and preparation and in this regard, the AUC Commissioner for Infrastructure and Energy, Dr. Amani Abou-Zeid during her opening remarks affirmed that the second Priority Action Plan of PIDA(PAP2), was carefully curated to address the challenges relating to bankability. “Africa has infrastructure projects that meet investment criteria. The projects are inclusive, sustainable, and gender smart and will certainly better the lives of fellow Africans. So, this is a call for action and implementation, for the private sector financiers, donors, and partners to invest in these projects that produce a win-win outcome. This continent has many opportunities, and we urge investors to invest in Africa’s infrastructure!”, she said.
ECA workshop assists countries reviewing their sustainable development progress (UNECA)
African countries reviewing their sustainable development progress met to share stories, best practices and lessons learned at the annual ECA Regional Workshop on Voluntary National (VNRs) and Local Reviews. This year, a record 21 African countries will undertake reviews of the alignment of their policies with the Sustainable Development Goals and Agenda 2063 of the African Union. In her opening remarks, Hanan Morsy, Deputy Executive Secretary of the ECA, commended these countries, noting that this represents “continuing follow-through by Africa on its global commitments to sustainable development”.
Participants stressed the urgency of moving from plans to action and implementation, while ensuring that the frameworks in place foster inclusive growth.
Science, technology, and innovation are Africa’s blueprint for accelerated development (UNECA)
The Executive Secretary of the Economic Commission for Africa (ECA), Vera Songwe, has called for the establishment of an African Technology Development and Transfer Network to spur innovation and accelerate development on the continent. She made the call during the opening of the 4th Africa Science, Technology, and Innovation (STI) Forum in Kigali, Rwanda, on 1 March 2022. An African Technology Development and Transfer Network could “identify emerging technologies, anticipate needs and encourage the sharing of knowledge” across the continent, said Ms Songwe, noting that such a network would lie at the heart of diffusing technologies to the continent’s SMEs. “We need to build sound scientific, technological and innovation foundations to enable STI to deliver. As we have witnessed recently, many of our countries needed support to build capacities to test for COVID-19. As global supply chains collapsed, Africa’s over-reliance on imported medical supplies left the continent vulnerable in many aspects, and Africa was forced to innovate,” she added.
UN official proposes technology development and transfer network for Africa (Engineering News)
To stimulate development and innovation across Africa, an ‘African Technology Development and Transfer Network’ should be created. This was the proposal of Economic Commission for Africa (ECA) executive secretary Vera Songwe, in her opening address on Tuesday, at the 4th Africa Science, Technology and Innovation (STI) Forum, being held in Kigali, Rwanda. The ECA is an agency of the United Nations (UN). “We need to build sound scientific, technological and innovation foundations to enable STI to deliver,” she affirmed. “As we have witnessed recently, many of our countries needed support to build capacities to test for Covid-19. As global supply chains collapsed, Africa’s over-reliance on imported medical supplies left the continent vulnerable in many aspects, and Africa was forced to innovate.”
New whitepaper aims to accelerate discussions around Africa’s digital trade (Engineering News)
A new whitepaper has been published to start discussions about the opportunities and challenges around digital trade in Africa and examine how the mobile industry and its partners are working to open up a $180-billion market opportunity by 2025. The report, “Towards A Flourishing Digital Economy for All – A Spotlight On Africa“, which was commissioned by the UK’s Department for International Trade (DIT) and conducted by GSMA Mobile World Live analysts, shows that, increasingly, digital trade is a driver of business growth globally.
Digitisation enables African SMEs to scale to int’l standards (3NEWS)
African SMEs will be able to rapidly achieve international standards with digitisation, enabling them to compete on and access international markets. This message was the key plank of the presentation by Nana Dwemoh Benneh, CEO of the Universal Merchant Bank (UMB), during the 4th Strategic Leaders’ Summit 2022 held in Kampala, Uganda.
According to the World Bank and other think-tanks, SMEs account for over 70% of economic activity in sub-Saharan Africa (SSA). A key trend in the development of SMEs worldwide is the increasing trend to enterprises operating in or powered by what the World Economic Forum has termed the 4th Industrial Revolution largely driven by four specific technological developments that are, big data analytics, AI and automation, cloud technology and high-speed mobile Internet.
Nana Dwemoh Benneh, presenting for the Bank, noted “digitisation represents perhaps the biggest all-encompassing game-changer for African SMEs in a generation”. “We know harnessing technology allows SMEs to leapfrog, leading to economic development. We saw this happen with the Asian economies in the last century. We estimate that a similar effect can be achieved with digitisation. Digitisation is allowing African SMEs to accelerate their adoption of quality-control standards and speed up their routes-to-market.
EALA receives key bills paving way for regional Monetary Union (The New Times)
The East African Community (EAC) Council of Ministers on Tuesday, March 1, eventually tabled before the regional Parliament three draft laws which will pave way for the establishment of the long-overdue East African Monetary Institute (EAMI). The legislations are; the EAC Financial Services Commission Bill, the EAC Surveillance Compliance and Enforcement Bill, and the EAC Standardisation, Accreditation and Conformity Assessment Bill. Two other pertinent bills – the EAC Monetary Institute Bill, 2017 and the EAC Statistics Bureau Bill, 2017, were tabled in the Assembly in 2018. The EAMI is a transitional mechanism to the East African Central Bank that will issue the single currency that is expected to be in place by the year 2024, if all goes according to plan. This regional monetary institute, a precursor to a regional central bank, is one of the four institutions expected to carry out much of the preparatory work for the creation of the East African Monetary Union (EAMU), an important stage in the regional integration agenda.
The EALA Speaker, Martin Ngoga (Rwanda) said it was a “big positive development” since it was the first time the Council of Ministers was tabling three bills at once in the House. “They are bills that are taking us to another level of integration. We will work together with the Council to make sure that we process these bills as soon as possible,” Ngoga said.
ECOWAS Committee of Directors concludes retreat on ECOWAS Vision 2050, proposes June 2022 launch date (TDPel Media)
The ECOWAS Commission Committee of Directors (COD) has concluded a five-day retreat on the community strategic framework, communication strategy and resource mobilization strategy towards achieving the implementation roadmap for ECOWAS Vision 2050. The retreat featured discussion sessions, step challenge exercise game and a tour visit across the city of Assinie.
The focus of the discussion sessions focused on the presentation and deliberation on the community strategic framework (CSF), the Vision Communication Strategy and the Resource Mobilization Strategy. On the community strategic framework, it was agreed that thematic working groups be created to fast-track the key components of the framework. The communication strategy which was a key to the Vision was thoroughly deliberated upon and it was agreed that both traditional and new media sources should be utilized while efforts must be concentrated on captivating messages for different groups in the region.
Energy sector can catapult Africa’s development (SAnews)
The African energy sector has the potential to catapult African economies towards sustainable growth and recovery. This is according to Mineral Resources and Energy Minister, Gwede Mantashe, who was addressing the Africa Energy Indaba held at the Cape Town International Convention Centre on Tuesday. “Energy must drive regional and continental economic development, as is the case with the advanced economies. “We need to continuously share ideas on how we can collectively accelerate Africa’s energy sector development to be at the core of all socio-economic development, and of continental growth and development,” he said. Mantashe said the continent has the resources needed to catapult it into the forefront of global renewable energy.
Energy and climate should be at the heart of EU–Africa relationship (EURACTIV)
Africa has contributed the least to climate change, yet it is the continent that suffers the most severe impacts, according to the recent ‘State of the Climate in Africa 2021’ report. Europe, through its historical, social, cultural and economic ties with Africa, has a role to play in building greater climate resilience in Africa. And in Europe, we can also learn from experience across Africa with community-based adaptation to climate change. A strong AU-EU partnership on environmental issues and resilient infrastructure could best meet the challenges facing both continents, and draw upon increased technical and financial support from public development banks, international donors, and investors from both Europe and Africa. Mobilising a diverse set of actors and resources would make it possible to finance and support the transformation of African industrial and economic capacities while contributing to European green aspirations and addressing the global climate challenge
African Governments Urged to Support Plastic Pollution Solutions (Inter Press Service)
Environmental experts gathered in Nairobi, Kenya, have urged African governments to take advantage of ‘circular plastic opportunities’ to lower greenhouse gas emissions and stop environmental degradation. They were speaking to IPS on the sidelines of the fifth session of the United Nations Environment Assembly (UNEA). The key approach to a circular economy for developing countries in Africa and elsewhere, according to experts, should focus on addressing plastic pollution by reducing the discharge of plastics into the environment by covering all stages of the plastic life cycle. Plastic waste would be reduced through restorative and regenerative projects using the material without allowing leakage into the natural environment.
“Ambitious action to beat plastic pollution should track the lifespan of plastic products – from source to sea – should be legally binding, accompanied by support to developing countries, backed by financing mechanisms, tracked by strong monitoring mechanisms, and incentivizing all stakeholders – including the private sector,” Andersen said.
US seeks to up its game in scramble for Africa (The East African)
The US government is working towards deepening its engagement with African governments. The world’s largest economy seeks to explore and expand its trade and investment opportunities in the continent, amid a scramble for the control of Africa’s abundant natural resources by the world’s powerful nations such as China and Russia.US Deputy Assistant Secretary of State Akunna Cook said the country has not done enough in deepening its presence in a continent with 1.3 billion people. “If I were to take away one challenge, it is really a challenge to us in the US Government to really step our game up,” Ms Cook told reporters in Johannesburg, South Africa, last week.
“We have been behind the curve for quite some time in terms of really taking advantage of the opportunities on the continent, and so this effort to modernise our tools, to get better at telling our stories, to ensure that we are creating awareness among our own investors and among our own companies about just what kind of opportunity exists here on the continent, I think that’s the challenge that I walk away with as I go back to Washington after Namibia.”
EU-Africa summit and its implications for China-Africa relations (BusinessLIVE)
The EU and African leaders met at the 6th EU-Africa Summit in Brussels, Belgium, between February 17 and 18. The summit, initially scheduled to be held in 2020, was postponed due to the Covid-19 pandemic. It marks 22 years since the inaugural EU-Africa Summit in 2000 in Cairo. The EU is one of Africa’s major trading partners, with trade between the two parties reaching over $327bn in 2021, rising from $255bn in 2020. The EU also serves as a vital source of foreign direct investment for Africa, with its capital stock reaching almost $250bn in 2017, way above the $47bn from the US and $43bn from China. As such, the EU is an important strategic economic partner for Africa. The parties used the latest summit to cement their economic and geopolitical ties even further. The summit produced a document titled “A Joint Vision for 2030”, which maps out the key areas of strategic co-operation between Africa and the EU for the next eight years.
Africa has been at the forefront of calling for the waiver of the Covid-19 vaccines’ intellectual property rights at the World Trade Organization to enable it to produce the vaccines on its own. However, the EU and US have voted against this proposition, saying it would stifle innovation while its effectiveness remains questionable. Clearly, the two parties are not on the same wavelength in terms of their strategic approaches to tackling the Covid-19 pandemic. This casts doubt on the prospects of their continued partnership in combating the pandemic.
In a major announcement the EU committed to availing an Africa-Europe Investment Package of €150bn ( $170bn) in investments in Africa in the next seven years. If successful the investment will have a huge impact on Africa’s economy. The package will be directed towards key areas such as infrastructure development, the transition to a green economy, digital transformation and human development initiatives.
The EU-Africa Summit came barely three months after the Forum for China-Africa Co-operation (Focac) held in Dakar in November 2021. It certainly looks like China and the EU are competing for the African sphere of influence to boost their global geopolitical standing. While the previous two Focac summits had seen China pledge up to $60bn in financial packages for Africa, the 2021 event was a major climbdown to $40bn in packages up to 2024, when the next Focac gathering is due. Instead, China committed to ramping up its imports from Africa to a staggering $300bn in the next three years. The 2021 Focac Action Plan and the Joint Vision for 2030 address broadly similar issues, including the Covid-19 pandemic, infrastructure, climate change, education, investment, and governance. However, the two giants bring different qualities to the table.
Global economy news
Global Trade Disruptions Are About to Get Worse (Bloomberg)
Disruptions in global trade are about to go from bad to worse.
With Russia’s invasion of Ukraine early Thursday, energy costs are soaring, stocks are plunging, Western sanctions are being sharpened, and central bankers already worried about inflation face additional drags from weaker consumer confidence and bigger potential shocks to fragile European economies.
“This will not be good for energy prices, production, or trade,” said Joseph Francois, managing director at the World Trade Institute. “Certainly we will have, and are already seeing, a spike in energy prices. This will have knock on affects on production, especially in Europe, which will dent the recovery of trade from the Covid recession.”
World’s Biggest Shipping Groups Suspend Russian Deliveries (The Moscow Times)
The three biggest container shipping groups in the world announced Tuesday that they were suspending non-essential deliveries to Russia, adding to the country’s economic isolation following a raft of sanctions by the West.
Danish shipping giant Maersk, Switzerland-based MSC and France’s CMA CGM all announced that they would no longer take bookings for goods from Russia and were suspending most deliveries in the wake of Moscow’s invasion of Ukraine. Citing the impact of sanctions, “bookings to and from Russiawill be temporarily suspended, with exception of foodstuffs, medical and humanitarian supplies,” Maersk said in a statement.
MSC announced similar measures, saying it would “continue to accept and screen bookings for delivery of essential goods.”
CMA CGM said its “utmost priorities remain to protect our employees and ensure as much as possible the continuity of your supply chain.”
Future International Trade Alliance launched (ICC)
ICC, DCSA, BIMCO, FIATA and SWIFT have launched the Future International Trade Alliance and signed a memorandum of understanding to standardise digitalisation of international trade. Together, the industry associations will collaborate on the development and adoption of relevant standards to facilitate the use of electronic bills of lading.
Established to further digitalisation of container shipping technology standards, Digital Container Shipping Association (DCSA) – a neutral, non-profit group – in conjunction with its nine member carriers, today announced the formation of the Future International Trade (FIT) Alliance with the signing of a memorandum of understanding (MOU) between DCSA, ICC, BIMCO, FIATA and SWIFT in which the organisations commit to collaborating to standardise the digitalisation of international trade.
Successful Organizations in the “New Normal” – the 13th Session of the Capacity Building Committee (WCO)
The 13th session of the WCO Capacity Building Committee (CBC), under the theme “Towards a Thoughtful Adaptation in Customs: Building Successful Organizations in the “New Normal,” was held in hybrid format from 21 to 23 February 2022. The meeting was attended by over 350 representatives of Member administrations, development partners, academia and other stakeholders. In his opening address, the WCO Secretary General Dr. Kunio Mikuriya, outlined that such meeting process has become the ‘new normal’ under the current circumstances. He underscored that the active participation of Member administrations, partners, academia and other stakeholders had been the key to the successful preparation for this hybrid session.
Report: Climate change ‘creating shocks to global trade’ (America Shipper)
As companies and countries strive to reduce greenhouse gas emissions, the Intergovernmental Panel on Climate Change (IPCC) released an alarming report on climate impacts, adaptation and vulnerability on Monday.
The report explored business as usual and other potential pathways forward with varying levels of climate action and concluded that climate change will continue to impact the freight and supply chain industry drastically.
“Weather-related extremes are creating shocks to global trade,” Debora Roberts, IPCC Working Group II co-chair, said during a press conference about the report, which focused on impacts of climate change in all industry sectors worldwide, as well as potential adaptation strategies.
ICC launches new report reflecting how tech is changing the face of arbitration (ICC)
ICC has launched a new report to aid tribunals, arbitrators, counsel, and parties in leveraging technology for fair, effective, and efficient international arbitration proceedings.
As a response to COVID-19, today’s business landscape is being reshaped by technological acceleration, making it essential that the arbitration community assess how they can best utilize digital tools and solutions to meet today’s challenges and future demands on dispute resolution. Seeing this need, ICC’s Arbitration and ADR Commission set out to update the 2017 edition of their report on information technology (IT) in international arbitration; however, ultimately produced an entirely new resource due to the sudden uptick in technology usage.
W20 to advocate for women’s empowerment, issues for G20 Declaration (ANTARA)
W20 will collaborate with engagement and working groups at the G20 to ensure that women’s empowerment and gender issues are included in the G20 Declaration. “W20 will work with engagement groups and working groups, in this case the government, to ensure women’s empowerment and gender issues will be included in the G20 Declaration,” Chair of Women W20 Hadriani Uli Silalahi stated during a webinar as seen from here on Wednesday.
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Country-related news
SA gears up for 4th Investment Conference (SAnews)
As South Africa prepares to host its 4th Investment Conference later this month, Minister Ebrahim Patel has hailed this key event as a boon to the country’s target of netting R1.2 trillion in investment. “President Cyril Ramaphosa in 2018 committed to raising over R1.2 trillion worth of investments over a five-year period, and hosted three annual Investment Conferences, at which he set out the policy context and reforms, and the private sector provided feedback and made pledges to invest. “Pledges received in the first three Investment Conferences amounted to roughly 64% of the five-year Investment Mobilisation Drive target of R1.2 trillion,” said the Trade, Industry and Competition Minister at a briefing on Monday. Patel said at the third Investment Conference, pledges of about R774 billion had been made.
‘Increase beneficiation to reduce trade deficit’ (The Herald)
Zimbabwe needs to step up measures aimed at increasing the proportion of minerals that are beneficiated in the country to get better returns and address trade deficit issues.
This comes after the southern African country’s registered a significant increase in trade deficit from US$30 million in November 2021 to US$180 million in December 2021. Zimbabwe’s mining sector is highly diversified, with close to 40 different minerals. The sector accounts for about 12 percent of the country’s gross domestic product (GDP). The southern African country has the world’s second-largest platinum group metal (PGMs) reserves as well as billions of US dollars’ worth of copper, lithium, gold, diamond and nickel. Broadly, an estimated 30 percent of the global mineral resource is found on the African continent yet the continent continues to lag behind in terms of global economic development and poverty eradication.
Economist Dr Prosper Chitambara said, “Beneficiation and value addition of minerals before exporting is one of the key pillars of accelerating economic development. “The major challenge to value addition has been limited incentives to lure potential investors and incentives that can encourage miners to add value to their produce locally.”
Kenya’s exports to hit over Sh1trillion by 2030 (Capital Business)
Kenya’s exports are projected to grow by USD10.2 billion (over Sh1.1 trillion) by 2030, new research by Standard Chartered has revealed. According to the research, this will be driven by among others, output from the manufacturing sector, agriculture and food, textile and apparel, and metal and minerals. The research further projects that global exports will grow by 70 per cent from USD17.4 trillion to USD29.7 trillion over the next decade. The report reveals 13 markets that will drive much of this growth, identifies major corridors, and five trends shaping the future of global trade.
What national payment strategy seeks to achieve (Business Daily)
From the starting point of a simple money transfer innovation, an elaborate financial services ecosystem has emerged. More importantly, the payments system has provided the rails for Kenya’s financial inclusion journey. Over the last 15 years, access to financial services has tripled from 26 percent of adults in 2006 to 83 percent in 2021. Some of the key milestones in this journey have included, the rollout of mobile money, the implementation and continued strengthening of the Real-Time Gross Settlement System, and the establishment of regional payments systems in both the East African Community (EAC) and the Common Market for Eastern and Southern Africa (Comesa) regional blocs.
Undoubtedly, we have achieved a lot, but much more remains to be done. Whereas the Covid-19 pandemic on one hand accelerated the pace of digitisation, on the other, it had a scarring effect on lives and livelihoods globally.
we are launching the National Payments Strategy. It seeks to consolidate the gains we have made so far while illuminating the path towards a new chapter in Kenya’s payments journey. Accordingly, the strategy seeks to realise the vision of a secure, fast, efficient and collaborative payments system that supports financial inclusion and innovations that benefit Kenyans. This vision will be anchored on five core principles: trust, security, usefulness, choice, and innovation.
Costly imports as shilling hits new all-time low (Business Daily)
The Kenyan shilling is under fresh pressure against the dollar after it hit a new record low on Monday, setting up the country for more expensive imports and debt servicing distress. Central Bank of Kenya (CBK) data shows the Kenya shilling hit a record low to exchange at an average of 113.94 on Monday. Bloomberg quoted the shilling trading at 114 against the dollar at some point in the day.A spot check by Business Daily, also revealed a weakening of the shilling amid escalating sanctions between Russia and the US that promise to cause a further rise in the cost of goods in the country.
“The depreciation of the shilling is likely to reverse the six-month products for processing and capital goods for investment,” KAM CEO Phyllis Wakiaga told the Business Daily. “This, therefore, implies that as the Kenyan Shilling depreciates, importers have to pay more for raw materials and intermediate goods.”
Kenya to host one of Africa’s two giant data hubs (Business Daily)
Kenya will host one of the two mega data centres in Africa that will increase Internet speeds and make it harder for hackers to bring down websites. The new data centres, which will have multiple servers with a high bandwidth to deal with spikes in traffic, will offer the continent faster access and better protection from cyberattacks. The Internet Corporation for Assigned Names and Numbers (ICANN), the non-profit corporation that coordinates the domain name systems, announced on Monday that it will set up two Root Server (IMRS) clusters, one of which will be in Kenya. “The clusters ensure that Internet queries from Africa can be answered within the region, and not be dependent on networks and servers in other parts of the world, thus reducing latency and improving Internet user experience in the entire region,” the organisation entrusted with stewarding the Internet’s unique identifier systems in the world said.
Kenya commits to strengthening regional infrastructure to boost intra-Africa trade (CGTN Africa)
Kenyan president, Uhuru Kenyatta on Monday committed to strengthening regional infrastructure in order to boost intra-Africa trade. Kenyatta, in a speech read on his behalf by James Macharia, the cabinet secretary in the Ministry of Transport, Infrastructure, Housing, Urban Development and Public Works, told a continental forum in Nairobi, the Kenyan capital, that his government will continue to build road networks to link the northern transport corridor that connects landlocked countries in East Africa to Kenya’s port of Mombasa.
Kenya and Uganda revive talks on milk (The East African)
Trade talks aimed at resolving the outstanding issues on milk importation between Uganda and Kenya are set to start in March after many false starts. Kenya’s Principal Secretary for Livestock Harry Kimtai said Nairobi has already communicated to Kampala, through its foreign affairs office. Mr Kimtai, who is the head of the Kenyan delegation, said they are reviewing guidelines issued by Uganda. “We have agreed with Uganda that we will visit the country next month for a verification mission that will help us resolve the outstanding issues on milk once and for all,” said Mr Kimtai. Kenya wants to ascertain that the milk that comes from Uganda is produced by local farmers, following allegations that the product is imported from third-party countries as powder and reconstituted before it is exported as fresh. The meeting by the Kenya delegation to Uganda has been postponed four times in the past year, delaying the resumption of normal trade on dairy products between the two countries.
Kenya averted the ban on the export of its agricultural produce to Uganda after Nairobi agreed to lift restrictions on imports of poultry products from the neighbouring country at the end of last year.
Kenya Railways gets Sh300m to complete Kisumu-Butere line (Business Daily)
Parliament has allocated Kenya Railways Corporation (KRC) Sh300 million to complete rehabilitation works on the Kisumu-Butere line. The Finance and National Planning Committee reallocated the Treasury’s vote as contained in the Supplementary Budget to secure the money for the completion of works on the metre-gauge railway line (MGR).”The committee recommends the following reallocations - National Treasury: rehabilitation of the Kisumu-Butere rail: addition of Sh300 million,” the committee said in a report on the scrutiny of the Supplementary Budget I for the financial year 2021/22.
The corporation early this month announced that rehabilitation works that began in September 2021 are 90 percent complete. KRC plans to have the first train carrying both passengers and cargo on the line in June.
The Nakuru-Kisumu line was refurbished to ensure seamless cargo and passenger transport from the Mombasa-Nairobi-Naivasha standard gauge railway (SGR).The refurbished line once complete is expected to ease the movement of passengers and cargo from Mombasa to Butere.
Tanzania Has Much to Gain by Expanding Women’s Access to Opportunities (World Bank)
Tanzania stands to benefit enormously from expanding women’s economic opportunities, especially in terms of access to land and productive assets, according to the latest World Bank economic analysis for the country. The 17th Tanzania Economic Update, “Empowering Women: Expanding Access to Assets and Economic Opportunities,” shows that bridging the gender gap in agricultural productivity in Tanzania could lift approximately 80,000 citizens out of poverty every year while increasing annual agricultural output by 2.7 percent and boosting annual gross domestic product growth by 0.86 percent. Eliminating the gender wage gap could have significant effects on household welfare. “The expansion of women’s economic opportunities has contributed to Tanzania’s sustained growth over the past 20 years, which recently culminated in its transition from low-income to lower-middle-income status,” said Mara Warwick, World Bank Country Director. “However, more can be done to enhance women’s ability to realize their full economic potential and play a pivotal role in supporting an inclusive and resilient post-crisis recovery.”
Uganda Reassures Unhappy Coffee Farmers After ICO Exit (allAfrica)
Uganda has assured its coffee farmers and exporters that their prized cash crop will still be in high demand in the international market despite the country pulling out from an important coffee pact. Coffee farmers in Uganda are protesting the decision by authorities not to renew their membership to the International Coffee Organisation (ICO). They fear that they could lose premium markets - especially in Europe - to which the country exports about 80% of its total coffee produced, annually. The government maintains it is negotiating better terms. On February 17, 2022 the state-run Uganda Coffee Development Authority (UCDA), a national regulator of the coffee industry, announced that it had withdrawn from the International Coffee Agreement 2007, to protest what it called an unfair trading system in the international coffee market.
The coffee regulator protested the agreement, saying it had become incapable of addressing the challenges facing Uganda’s coffee producers. Now it is pushing for Uganda’s unconditional market access for exporting not only green beans but also processed coffee since selling value-added products can increase farmers’ incomes. But some importing countries have imposed additional tariffs and restrictions on the import of value-added coffee which has led to the authority calling for the removal of these barriers in their withdrawal statement. “Uganda needs unconditional market access that allows for export of value-added coffee, not only green coffee,” the UCDA said in a statement.
Ghana’s Food Systems Dialogues: Stakeholders committed to reduce food losses from 20% to 10% (GhanaWeb)
The Alliance for a Green Revolution in Africa (AGRA) has assured that it will play a key role to have Ghana’s Food Systems Dialogues document disseminated to all relevant stakeholders to ensure its intended purpose is achieved by 2030. Ghana is one of three African countries including Malawi and Rwanda selected after the United Nations (UN) Food System Summit Dialogues to pilot the Food System Transformative Integrated Policy (FS-TIP) programme after demonstrating courageous leadership in the development and implementation of an ambitious food system policy agenda. Ghana’s national FSSD process began with the establishment of a national FSSD secretariat which instituted coordinating mechanisms to steer the dialogue process; after months of engagement between the various agencies and stakeholders, AGRA on Thursday held a workshop for stakeholders to disseminate findings from Ghana’s Food Systems Dialogues by consultants.
PIA: Rising oil price a great opportunity for Nigeria, says Buhari (Daily Trust)
As crude oil prices continue to rise above $100 per barrel, President Muhammadu Buhari has said there is no excuse for Nigeria not to reap the gains, especially with the current Petroleum Industry Act (PIA). Buhari stated this on Monday at the opening ceremony of the 5th edition of the Nigeria International Energy Summit (NIES 2022) at the State House Abuja. He said, “Crude oil prices are on the rise again after turning negative in April 2020. It is a great opportunity for us as a country. With the Petroleum Industry Act (PIA) in place, there should be no excuses. The enabling investment environment which has been the bane of the industry has been taken care of by provisions in the PIA. “There is now a level of certainty for the regulatory, administrative and fiscal framework and the legitimate grievances of host communities most impacted by activities of the industry has been addressed by the Act,” said Buhari.”
‘Nigeria’s oil and gas industry facing liquidity crisis’ (New Telegraph)
Nigerian oil and gas sector is currently facing liquidity squeeze as global financial institutions are reluctant in providing funds for hydrocarbon and related projects, the Executive Secretary, Nigerian Content Development Monitoring Board (NCDMB), Simbi Wabote, an engineer, has said. He said the development was affecting production and exploration of oil and gas projects initiated by private companies and the Federal Government. This happens as many countries are soliciting for funds to finance their economies and also transit seamlessly from fossil fuels to zero-carbon based nations.
According to him, funds realised from the above-mentioned institutions, will help in financing activities in the oil and gas industry, especially local content programmes introduced by various governments in Africa. Still on funding, Wabote said that the agency had, in recent times, spent over $500 million on local contents programmes in Nigeria.
Helping Chad strengthen public debt management (UNCTAD)
Although Chad recorded relatively few COVID-19 cases, its economy was hit by the effects of the pandemic – especially when the price of oil, its major export, crashed at the beginning of the crisis. Some estimates show that, following years of growth, the country’s real gross domestic product (GDP) contracted by 0.6% in 2020 and 1.1% in 2021. The central African nation’s prospects for recovery are hindered by unsustainable external debt stocks, which reached $3.6 billion in 2020 – an amount equivalent to more than one third of its gross national income (GNI), according to World Bank data. “High levels of public debt can undermine the government’s ability to deliver essential services, such as health care and education,” said Gerry Teeling, chief of UNCTAD’s debt management programme. In a country where about 42% of the population lives in poverty – according to the latest data – using scarce public finances to service unsustainable debt will have dire consequences for years. An UNCTAD project financed by the European Union will help Chad’s finance and budget ministry manage the country’s public debt.
In January 2022, Chad became the first country to officially request debt restructuring under the debt reduction programme established by the Group of 20 major economies (G20) known as the Common Framework. During the pandemic, Chad had benefited from the G20’s Debt Service Suspension Initiative (DSSI), which froze debt repayments until December 2021.
African trade
ECA Unveils AfCFTA Country Business Index (ACBI) Report (UNECA)
The Economic Commission for Africa (ECA) unveiled today the African Continental Free Trade Area (AfCFTA) Country Business Index (ACBI) Report, which is a key instrument through which businesses in Africa can articulate to policy makers their main trade challenges under the free trade agreement in force across African countries.
In her opening remarks, the Deputy Executive Secretary and Chief Economist of ECA, Ms. Hanan Morsy stated that the AfCFTA Country Business Index (ACBI) should be duly considered as a means to uphold, encourage, and inform sound trade policy in support of pertinent activities of the private sector to develop market opportunities, drive job creation and strengthen resilient recovery.
Mr. Karingi summarized the recommendations of the ACBI survey results, which conclude that although scores vary across countries, in general, female-owned firms are disproportionately impeded by several aspects of the trading regime as compared to their male counterparts when investing and trading goods across African borders. “Therefore, it is critical to accompany women using specific policy measures to ensure their active participation in intra-African trade and investment,” Mr. Karingi stated.
Call for greater synergies and complementarities for effective implementation of the AfCFTA (UNECA)
An integrated support of the United Nations (UN) and non-UN agencies towards the implementation of an inclusive African Continental Free Trade Area (AfCFTA) that ensures economic opportunities and resources accessible to all, especially women is vital to the success of the AfCFTA. This has been highlighted during the virtual event under the theme: Towards enhanced partnerships to support an inclusive AfCFTA organized by the Economic Commission for Africa (ECA), United Nations Development Programme (UNDP) and the United Nations Conference on Trade and Development (UNCTAD) on the sidelines of the 8th session of the Africa Regional Forum on Sustainable Development (ARFSD) in Kigali, Rwanda. “AfCFTA is the people! AfCFTA will not succeed through UN bodies, Governments, African Union Commission (AUC) or AfCFTA Secretariat but can succeed through the private sector/people who need to understand and commit to its implementation “ said Stephen Karingi, Director of the Regional Integration and Trade Division of ECA emphasizing the work of ECA in advocacy and sensitisation efforts on the AfCFTA.
Invest in transport infrastructure and manufacturing - AfCFTA members urged (GhanaWeb)
Various heads of states under the African Continental Free Trade Agreement (AfCFTA) have been advised to invest in transport infrastructure in their countries. This is to allow free flow of movement among member countries, as well as, promote free trade. Investment in the manufacturing of products through the identification and value addition to raw materials will create access to credit for private businesses.
They were speaking on the theme ‘a year into the implementation of trade under AfCFTA, the way forward’. Mr Doni-Kwame indicated that the most important action for African countries to take is to develop transport infrastructure in their countries. “There is intra country connectivity; be it rail, airlines, shipping lines, and once you have that, people know they can move their goods from one country to the other,” he said. He stated that: “Once you do this, apart from your indigenes manufacturing, you can also attract the necessary investment.” He also lauded the establishment of the Secretariat for the Pan-African Payment and Settlement System (PAPSS). However, Dr Obeng, President of the Ghana Union of Traders (GUTA) said “We’re better with intra-Africa trade, but the means of transportation is a difficult challenge that should be dealt with.”
EAC Secretary General Dr. Peter Mathuki is urging African leaders to urgently implement the Single African Air Transport Market (SAATM) agreement, in order to lower the costs of air transport in Africa and in turn boost development. Speaking in Nairobi, Kenya, at the 7th Programme for Infrastructure Development in Africa (PIDA) week, Dr. Mathuki stated that air cargo currently accounts for only 2% of the global air cargo adding that air transport remains out of reach for both passenger and cargo haulage due to high associated costs. “These costs can be brought down if we have political commitment to implement the Single African Air Transport Market (SAATM) agreement,” he noted. The Secretary General noted that the region continues to ramp up investments in infrastructure to narrow the infrastructure gap and enhance intermodal connectivity.
The Secretary General hailed African leaders for prioritizing investment in One-Stop Border Posts (OSBPs), which have facilitated transboundary trade by enhancing border crossing efficiency.
TTTFP progress in the Eastern and Southern Africa regions (SADC)
The Tripartite Transport and Trade Facilitation Programme (TTTFP) has recorded successes in the initiation and progress towards the domestication of some of the provisions of the Tripartite Multilateral Cross Border Road Transport Agreement (MCBRTA) and Vehicle Load Management Agreement (VLMA),model laws and regulations by Angola, Eswatini, Ethiopia, Kenya, Lesotho, Namibia, Rwanda, United Republic of Tanzania, Uganda, Zambia and Zimbabwe.
The TTTFP is a €21,6 million programme funded by the European Union to develop and implement harmonised road transport policies, laws, regulations and standards for efficient cross border road transport, transit and logistics services, systems and procedures with a view to reduce transport costs across the SADC-COMESA-EAC tripartite region and facilitate trade. The programme was launched after a realisation that lack of an integrated and liberalised road transport market in the Eastern and Southern African region poses numerous obstacles to trade by causing severe delays and increased transport costs, as well as challenges to road safety and durability, the latter caused by excessive loading of vehicles. The TTTFP addresses these challenges through the implementation of harmonised road transport policies, laws, regulations, systems and standards that affect the cross-border operations of drivers, loads, vehicles and protects road infrastructure in the countries of Eastern and Southern Africa.
Kenya drops in ranking of Africa visa friendly States (Business Daily)
The government’s efforts to curb the spread of Covid-19 by restricting international travel saw Kenya lose its position as one of the most welcoming countries in Africa. Kenya slid 17 places to rank at 28 last year in the Africa Visa Openness Index (AVOI) which measures how easy it is for Africans to enter one of the 54 countries on the continent covered in the study. This is the lowest score for Kenya since the index, published by the African Development Bank (AfDB) and the African Union Commission (AUC) started in 2016.
The spread of the Covid-19 pandemic to Africa in early 2020 saw Kenya and other countries introduce travel restrictions in a bid to slow down the importation of the respiratory illness from countries deemed to have relatively greater infections.
ECA Affirms Commitment to Implementation of PIDA PAP 2 at 7th PIDA Week (UNECA)
The 7th Programme for Infrastructure Development in Africa (PIDA) Week kicked off today in Nairobi, Kenya under the theme “Putting Africa on a Firm Footing for Recovery, Growth, and Resilience through Infrastructure”. The 7th PIDA Week, which will be held from 28th February to 3rd March 2022, aims to mobilise project preparation resources and market priority projects to fast-track implementation of PIDA projects. PIDA provides a framework of engagement with investors and partners to develop regional and continental infrastructure. It combines continental infrastructure initiatives and regional master plans into a coherent infrastructure investment programme with an implementation strategy and portfolio of priority projects. The second phase of PIDA Priority Action Plan (PIDA-PAP II) covers infrastructure development in transport, energy, ICT, and Transboundary Water Resources (TWR) sectors.
How can EAC countries reduce intra-regional air transport cost? (The New Times)
The Secretary General of the East African Community (EAC), Peter Mathuki, has urged African leaders to urgently implement the Single African Air Transport Market (SAATM) agreement, which will lower the cost of air transport in Africa and in turn boost development. He said this on Monday, February 28, at the beginning of the Programme for Infrastructure Development in Africa (PIDA) week in the Kenyan capital Nairobi.
Mathuki stated that air cargo currently accounts for only 2% of the global air cargo and air transport remains out of reach for both passenger and cargo haulage due to high associated costs. “These costs can be brought down if we have political commitment to implement the Single African Air Transport Market (SAATM) agreement,” Mathuki said. The PIDA Week aims at bringing together international and regional expertise from multiple stakeholders to deliberate on the issues around infrastructure delivery in Africa, and those related to PIDA.
African experts call for adaptation financing to tame climate crisis (China.org.cn)
The next phase of climate change fight in Africa should focus on robust financing toward grassroots-led adaptation initiatives in order to boost the continent’s ability to withstand shocks like droughts, heatwaves, wildfires and the spread of vector-borne diseases, experts said Monday. Speaking during the launch of the sixth assessment report of Intergovernmental Panel on Climate Change (IPCC) report on the sidelines of the resumed fifth session of UN Environment Assembly (UNEA-5) underway in Nairobi, the Kenyan capital, the experts said that securing a resilient and green future for the continent hinged on scaling up adaptation financing. “Access to adaptation funds is one of the most effective ways to ensure climate resilience in Africa remains on track,” said Youba Sokona, the IPCC vice-chair and a Malian climate scientist.
UK Gov, GSMA Unveil Analysis into Digital Trade in Africa (TechEconomy)
Today at the Mobile World Congress in Barcelona, a new white paper titled ”Towards A Flourishing Digital Economy for All – A Spotlight On Africa” was published – and discussed for the first time by a panel including senior executives from Vodacom, SafariCom, Smart Africa and the World Bank. The paper was commissioned by the UK’s Department for International Trade and conducted by GSMA’s Mobile World Live team of analysts.
The report examines how the mobile industry and its partners are working to open up a $180bn market opportunity by 2025. “Towards A Flourishing Digital Economy for All – A Spotlight on Africa” explores the progress made in building Africa’s mobile driven digital economy and discusses how mobile commerce is booming across the continent with four nations that are leading the way – Nigeria, Egypt, Kenya and South Africa. It examines how a growing cohort of dynamic businesses are adapting their services to address the specific challenges of the African mobile commerce market including unbanked customers, the lack of reliable identity credentials and last mile delivery issues.
African states need a vision for relations with the Indo-Pacific (The Conversation Africa)
This year sees the 25th anniversary of the Indian Ocean Rim Association. Nine of the organisation’s member states are African, ranging from Somalia in the north west to South Africa in the south. It also includes islands, such as Mauritius, off the western seaboard. It brings together governments, business and academics and researchers across the Indian Ocean Region. Set up to strengthen regional cooperation and sustainable development, the association has grown from 14 member states initially in 1997 to 23 in 2022. It has adopted the ‘Blue Economy’ as a focus area. It is also increasingly paying attention to climate change and environmental issues as well as the regulation of fishing and other threats of growing importance to the maritime realm. In recent years the organisation’s member states have increasingly been confronted by the geopolitical rivalry between China and the US in the mega-region, referred to as the Indo-Pacific.
For the US and its allies, who have largely appropriated the Indo-Pacific concept, the region is first and foremost of geo-economic concern. The economic interaction is crucial, as seen by the Build Back Better World initiative, although it remains vague on practicalities.
A developmental agenda remains important, yet there is an increasing realisation that there is no escaping the reality of an increasingly politicised and militarised region.
Modernizing Monetary Policy in Sub-Saharan Africa High-Level Conference (IMF)
Opening Remarks by Abebe Aemro Selassie, Director, African Department, IMF
This is an important and timely conference to take stock of the progress made by central banks in Sub-Saharan Africa. And this progress is impressive! Over the last three decades preceding the COVID-19 pandemic, the region’s average inflation declined by about 30 percentage points. In the mid-90s, up to 30 countries in the region had double digit inflation. In 2019, the region counted only 6 such countries, and most of them were grappling with conflict or a natural disaster. This improvement in price stability contributed to less volatile economic outcomes, higher growth, and better living conditions for the region’s populations. It is also an important factor behind the foreign direct investment flowing to the region to develop its potential.
The commitment of sub-Saharan African policymakers showed in the courageous reforms they undertook. These reforms aimed for more price-based monetary policy frameworks and more flexibility in exchange rate regimes. They were combined with bold moves on governance to make central banks more independent and accountable. The result was a drastic reduction in monetary financing of deficits and in most countries in the region. The governance reforms enabled more transparency and improved communication of central banks’ assessments of the economic outlook and the rationale of their policy choices. These reforms helped bolster the credibility of the region’s monetary institutions and explain a great deal of the achievements on price stability
Sustaining this reform momentum is critical for the region’s future. First, the projected modest recovery from the COVID-19 pandemic will be put further at risk if policy frameworks are not further bolstered to ensure an appropriate response to the tightening of monetary and financing conditions in advanced countries. Second, and more importantly, achieving the long-term potential of the region will require staying the course on nimbleness, accountability, and integrity of monetary policy frameworks and central banks. This is a big challenge, considering the flurry of innovations, such as digital money and big data, which are bringing to the fore new stakeholders. The challenge is more daunting when you think of the ever-larger shocks we will face, including through pandemics, climate change, and armed conflicts.
Sub-Saharan Africa: Building Resilience to Climate-Related Disasters (IMF)
This paper assesses the impact of climate-related disasters on medium-term growth and analyzes key structural areas that could substantially improve disaster-resilience. Results show that (i) climate-related disasters have a significant negative impact on medium-term growth, especially for sub-Saharan Africa; and (ii) a disaster’s intensity matters much more than its frequency, given the non-linear cumulative effects of disasters. In sub-Saharan Africa, electrification (facilitating irrigation) is found to be most effective for reducing damage from droughts while improved health care and education outcomes are critical for raising resilience to floods and storms. Better access to finance, telecommunications, and use of machines in agriculture also have a significant impact.
Global economy news
DP World’s offer to acquire 100% stake in Imperial successfully concluded (DP World)
Imperial Logistics Limited (‘Imperial’) and DP World Logistics FZE (‘DP World’) are pleased to advise that all conditions precedent regarding DP World’s offer to acquire a 100% stake in Imperial, including regulatory approvals, have been fulfilled. The transaction is now unconditional and will be implemented on 14 March 2022. “We are excited about concluding this transaction, which will be value-enhancing for our people, clients and principals, for our service offering across the markets we serve, and for our other key stakeholders who will benefit from DP World’s leading technology, capabilities, global networks, scale and key trade-lane volumes, while enabling us to build on our ‘Gateway to Africa’ strategy and growth ambitions,” says Imperial’s Group CEO, Mohammed Akoojee.”Combining DP World’s world-class infrastructure, specifically its investment and expertise in ports on the African continent, with Imperial’s logistics and market access platforms will enable us to offer integrated end-to-end solutions along key trade lanes into and out of Africa, also driving greater supply chain efficiencies, and ultimately enhancing value for all stakeholders.”
Suez Canal toll hike: ‘Global trade just got more expensive’ (FreightWaves)
The Suez Canal Authority has released a new set of canal tolls on all vessels traveling both north and south. The increase for both full and empty vessels will be either 5%, 7% or 10%, depending on carrier type, and become effective Tuesday.
This is the second toll increase on all vessels, with the exception of LNG and cruise ships, in the last month. Those two vessel classes were spared when the Suez Canal Authority (SCA) announced in early November that it would increase transit tolls through the canal by 6% beginning in February. Xeneta Chief Analyst Peter Sand told American Shipper, “This new toll announcement is substantial for a container ship that already pays $500,000 to $600,000 per transit.”
The SCA makes its money on container shipping and continues to see record volumes. According to Sand, for a large container ship, this hike means a one-way transit goes from $625,000 to $675,000. “Global trade just got more expensive,” he said.
Sustainable Finance in Emerging Markets is Enjoying Rapid Growth, But May Bring Risks (IMF Blog)
Most of the activity in the rapidly growing world of sustainable finance has been previously concentrated in advanced economies, but emerging markets, while still a small share of the total, saw a surge last year. As a result, their market share has increased for the first time since 2016, underscoring the growing investor appetite for environmental, social, and governance (ESG) products, but this growing opportunity also poses new risks.
Sustainable finance incorporates ESG principles into business decisions and investment strategies, covering issues from climate change to labor practices. It has become more mainstream in emerging markets in part because of pandemic-related financing needs, such as healthcare, as well as Latin America’s surge in climate-related borrowing.
Recent gains in ESG markets may be an important opportunity for emerging markets to access more stable funding sources and develop a broader and more mature sustainable finance ecosystem. With many of these nations highly exposed to climate hazards and already facing related transition challenges, private finance will play a crucial role in mitigating these risks and strengthening the financial sector.
UN Environment Assembly opens, sets sites on ending plastic pollution (UN News)
Ministers of environment and other representatives from over 170 nations will take part in the three-day hybrid Assembly (UNEA-5), which is meeting under the theme Strengthening Actions for Nature to Achieve the Sustainable Development Goals, which highlights the pivotal role nature plays in our lives and in social, economic, and environmental sustainable development. With action on a globally binding agreement on plastic pollution at the top of the agenda, UNEA-5 participants are also set to take up a host of other pressing issues dealing with the planet and its inhabitants, including the thematic areas: nature for climate; nature for human and ecosystem health; nature for poverty eradication, jobs and economic prosperity; and nature for sustainable food systems.
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Country-related news
TFR to release tender in April for take-or-pay access to container corridors (Engineering News)
Transnet Freight Rail (TFR) will release a request for proposals (RFP) on April 1 for the sale of slots to private operators on the key container corridor linking Gauteng and Durban, as well as parts of the Cape corridor. The State-owned utility tells Engineering News that it is in the process of finalising the number of slots to be made available during the first phase of the initiative, which is designed to arrest what has been a steady decline over several years, but which worsened considerably during the Covid lockdowns.
The corridor is currently running at a loss, while on-time arrival of trains averages 20% and train running time averages 36 hours against an 18-hour design. The unpredictability of service is undercutting TFR’s revenue and also negatively affecting the port system with containers arriving outside of the three-day stack window.
“The overall competitiveness remains a challenge hence we believe that the introduction of private operators will strengthen and densify the corridor, enhance efficiencies and contribute to growth in key sectors of the economy,” TFR explains.
Patel highlights success of past events as govt readies for this year’s investment conference (Engineering News)
It is once again time for the South African Investment Conference (SAIC), which is scheduled to be held at the Sandton Convention Centre, in Johannesburg, on March 24. Trade, Industry and Competition Minister Ebrahim Patel on February 28 outlined the preparations under way for the conference, highlighting that the conference serves as a platform for the private sector to make pledges of investment in productive enterprises, which will end up as fixed investment in the economy.
Special economic adviser to the Presidency Trudi Makhaya shared the theme for the fourth instalment of the SAIC as being “unlocking investment for growth and job creation” with objectives including taking stock of government’s actions to support these investments, including on the policy front.
Promising future of Namibian diamonds (The Namibian)
The Namibian diamonds sector has been described as a sunrise industry whose future lies in the sea. This was said by Veston Malango, the chief executive officer of the Chamber of Mines of Namibia, when he gave various stakeholders and potential investors a virtual overview of the sector at the Dubai Expo 2020 during the official launch of the Namibia Diamond Week on Wednesday.
Since diamonds occur not only onshore, but also in submarine deposits, a unique high-tech offshore diamond mining industry has developed in Namibia and Malango said diamonds are a major contributor to the Namibian economy, contributing on average 6,4% to the gross domestic product in the last 30 years.
Exports to Asia continue to dominate Botswana’s trade (News Ghana)
Statistics Botswana (SB) on Thursday indicated that exports destined to Asia, the European Union (EU) and Southern African Customs Union (SACU) in December accounted for 62.9 percent, 21.6 percent and 8.7 percent of the total exports, respectively. Imports from SACU, however, made a contribution of 67 percent, while those from the EU and Asia accounted for 17.4 and 6.7 percent of total imports, respectively, during the month under review. “Imports from South Africa accounted for 63.5 percent of total imports. Belgium and Canada provided imports representing 16.0 and 4.1 percent, respectively,” said Statistician-General Burton Mguni in the International Merchandise Trade Statistics monthly digest for December.
Shortage of raw materials to see food prices rally (Business Daily)
Prices of animal and human feed are set to rise further in the coming months as shortages of raw materials continue to bite.
Millers are struggling with low supplies of the staple maize, in particular, a move that has seen the price of a two-kilo packet of flour jump to a high of Sh126 from Sh108 in December. “Raw material prices are expected to remain high for the rest of the financial year (ending June 2022),” Unga said. “This may worsen the already soaring human food and animal feeds price situation.” Kenya households are set to feel the impact of rising cost of flour as maize stocks from Tanzania and Uganda, which play a significant role in checking high prices in the local market, are dwindling.
Eight firms in race to build gas import terminals (Business Daily)
Kenya is reviewing applications of companies seeking to build eight privately-owned import terminals for cooking gas in another attempt to lower prices in the absence of government price controls on the commodity. Energy and Petroleum Regulatory Authority (Epra) director-general Daniel Kiptoo told the Business Daily that the State has approved Lake Oil to start constructing its terminal at Kwale while the other seven are at various stages of evaluation. Kenya currently imports Liquefied Petroleum Gas (LPG) through a privately-owned facility at the Port of Mombasa and the Port of Dar-es-Salaam, locking out competition that is key to lowering the cost of cooking gas. The absence of competition, the 16 percent Value Added Tax (VAT) and a lack of common-user government-owned facility at the Port of Mombasa have been blamed for the high prices.
“We have eight privately-owned import terminals for LPG that are at various stages of approval. Some are already doing their Environmental Impact Assessment and two weeks ago we approved Lake Oil to do their plant in Kwale,” Mr Kiptoo said on Thursday.
Uganda coffee farmers unhappy over withdrawal from ICO (The East African)
Coffee farmers in Uganda are protesting the decision by authorities not to renew the country’s membership to the International Coffee Organisation (ICO) fearing they could lose premium markets for their beans but the government maintains it is negotiating better terms. Uganda, which is currently Africa’s biggest coffee exporter, said recently that it will not renew its ICO membership over a series of “unreasonable articles” in the new two-year International Coffee Agreement issued to ICO member states. The ICO is the main intergovernmental organisation that brings together coffee exporting and importing governments to tackle the challenges facing the world coffee sector through international cooperation.
Uganda’s decision has left local farmers worried of the consequences which may include loss of premium markets especially in Europe to where the country exports about 80 percent of its total coffee produced annually.
Tanzania bags Sh17.3 trillion deals at Expo Dubai (The Citizen)
Tanzania’s public and private institutions have signed a total of 36 memorandums of understanding (MoUs) valued at $7.49 billion (nearly to Sh17.3 trillion) with their United Arab Emirates (UAE) counterparts. That was revealed yesterday by Investment, Industry and Trade minister, Dr Ashatu Kijaji when addressing the business and investment forum held alongside the Dubai Expo 2020.
“This forum provides opportunities for both countries to consolidate and strengthen economic relations through investment and trade which align with Tanzania government’s efforts to drive economic growth and sustainable development through industrialization,” she said.
MAN urges FG to promote incentives in driving manufacturing growth (BusinessDay)
The Manufacturers Association of Nigeria (MAN) has called on the federal government to help drive growth in the manufacturing sector by ensuring that incentives, intervention programs and policies are broad enough to cover all sector payers, particularly those with linking activities. Mansur Ahmed, president, MAN said this at the 6th edition of the MAN reporter of the year award and presidential media luncheon, where he noted that although the government and its agencies are making efforts to improve economic and commercial activities for businesses through the provision of intervention funds, enabling policies, etc. This, he said, will have minimal impact if such efforts are restricted to specific sub-sectors or businesses. “Sometimes incentives don’t work if they are not all-encompassing for example, the CBN introduced the Cotton, Textile and Garment (CTG) intervention for cotton growers but this has limited impact because that intervention was not really extended to manufacturers, hence the cotton was grown but there is little or no value for it,” he said.
African trade
Three ways countries can extract AfCFTA benefits for economic rebound (BusinessDay)
The African Continental Free Trade Area (AfCFTA) since its commencement in January 2021, has recorded very little impact in boosting trade activities across the continent. According to experts, the sub-optimal impact of AfCFTA despite its potential rides on the back of a number of things including slow documentation, challenging payment systems, logistics challenges, among other things. Speaking at the Africa Business Convention 2022 recently organized by BusinessDay themed, ‘Africa recovery’, economic experts unanimously agreed that the trade agreement provides an opportunity for Africa to accelerate its economic recovery leveraging trade. A caveat to this however was that the provisions of the trade agreement be effectively and efficiently implemented optimizing three key tools which are industrialization, value addition and technology.
AfCFTA Implementation: African governments urged to invest in infrastructure and manufacturing (Modern Ghana)
Heads of States in Africa have been urged to work at providing the needed transport infrastructure to engender connectivity to fast-track the implementation of the free trade agreement. They have also been asked to expedite investment into manufacturing of products through the identification and value addition to raw materials and create access to credit to private businesses.
Mr Doni-Kwame indicated that the most important thing was for States to create an enabling environment for the private sector to have access to affordable credit so they could produce more manufactured products. He noted that while AfCFTA guaranteed access to market, affordable credit to the private sector was critical to aid them enhance production and expansion.
Dr Doni-Kwame called for investment in infrastructural development and urged the Heads of States to ensure that: “There is intra country connectivity; be it rail, airlines, shipping lines, and once you have that, people know they can move their goods from one country to the other.” He stated that: “Once you do this, apart from your indigenes manufacturing, you can also attract the necessary investment.”
African women identified as the core of the AfCFTA agenda (UNECA)
Women are key players in the realisation of the African Continental Free Trade Area (AfCFTA) according to discussions on the sidelines of the 8th session of the Africa Regional Forum on Sustainable Development (ARFSD) in Kigali, Rwanda. The session entitled: ‘AfCFTA as a vehicle for gender equality towards agendas 2030 and 2063’ shed light on the significance of the AfCFTA in achieving gender equality towards achieving SDG 5 and Agenda 2063 in Africa; discussed the challenges and prospects for utilizing the opportunities presented by trade and AfCFTA towards gender equality in the realisation of SDG 5 and Agenda 2063.
Mama Keita, Director of ECA’s Sub-Regional Office for East Africa, noted that “African women-owned businesses contribute to 60% of gross domestic product. Women can only fully engage in trade if they live lives of self-determination. It is up to us to remove barriers in the development of the continent and offer opportunities and measure success through the eyes of women and youth.”
MSMEs, Key divers to inclusive and sustainable development for emerging markets in Africa (Virtual PIDA Information Centre)
Micro, Small, and Medium-sized Enterprises (MSMEs) play outsized roles in African economies, contributing an estimated 80% of the continent’s workforce in both formal and informal sectors. The economic growth and long-term sustainability for emerging markets lie in the development of MSMEs. The onset of the COVID-19 pandemic and ensuing containment measures not only affected large corporate entities but also MSMEs which experienced even greater challenges accessing finance. The African Union Development Agency (AUDA-NEPAD) with GIZ technical advisory support to the Continental Business Network (CBN) responded to the needs of MSMEs. AUDA-NEPAD collaborated with GIZ to launch the Call for Proposals – COVID-19: Economic Recovery Through Infrastructure Service Delivery. The intended objective of the initiative was to support small-scale infrastructure projects by providing technical advisory support to MSMEs through CBN.
AUDA-NEPAD called upon MSMEs and Non-Governmental Organizations (NGOs) from the AU Members States to submit infrastructure project proposals for further technical advisory and market packaging to facilitate access to finance. Sixty-one MSMEs project applications were received through the call for proposal.
The support to MSMEs continues with AUDA-NEPAD and GIZ Green Infrastructure Corridors for the Intra-Africa Trade (support to PIDA) program. The focus is on assisting MSMEs to access capital through sound technical advice with a focus on commercial viability, regulatory, procurement compliance, and trade readiness. GIZ support to AUDA-NEPAD will focus on digital solutions within the green infrastructure and trade domains. The second call for proposals will be opened by mid-2022 to early-stage and established MSME where the aim is to develop viable business models to attract financing to pilot projects and later stage MSMEs for expansion. Error: request timed out
Five SADC Member States pilot the Corridor Trip Monitoring System (SADC)
Five Southern African Development Community (SADC) Member States, namely Botswana, Namibia, Zambia, Zimbabwe and Malawi are voluntarily participating in the Corridor Trip Monitoring System (CTMS) pilot being implemented on sections of the Trans Kalahari, Walvis Bay-Ndola-Lubumbashi, Beira, Nacala and North-South Corridors. The pilot is to test the CTMS feasibility and functionalities with a view to improving it for full implementation in Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and the Southern African Development Community (SADC). The current extent of the pilot is reflected in the map accompanying this article which reflects CTMS deployment across sections of major regional trade corridors. The CTMS is an initiative of the three Regional Economic Communities - COMESA, EAC and the SADC - under the Tripartite Arrangement/Framework and is aimed at facilitating safe regional trade and transport facilitation, tourism and the reopening of economies following disruptions caused by the COVID-19 pandemic.
Euros 6.8 million Project to Upgrade Zambian Border Posts Launched (COMESA)
he Government of Zambia in partnership with the European Union (EU) and the Common Market for Eastern and Southern Africa (COMESA) have conducted the official launch of the 6.8 million Euros project to upgrade Zambian border posts. The project, Zambia Border Posts Upgrade Project (ZBPUP), whose implementation has been underway since the signing of the financing agreement in November 2020, aims at improving intra-regional trade flows of goods, persons and services. It focuses on interventions identified as key to improving the trade and trade facilitation profile of Zambia. So far, considerable progress has been made in capacity building and sensitization at the three border posts namely Mwami (Zambia/ Malawi), Chirundu (Zambia /Zimbabwe) and Nakonde (Zambia/Tanzania). “This project will assist to improve, import and export procedures, transit requirements, customs and reduce time spent at the border,” Zambia’s Minister of Commerce, Trade and Industry Hon. Chipoka Mulenga said during the launch ceremony in Lusaka on Thursday 24 February 2022. “The removal of incentives that contribute to corrupt practices will contribute to enhanced revenue collection and improve business competitiveness in Zambia.”
Studies to Address Impediments to Small Cross Border Trade Complete (COMESA)
COMESA has conducted two studies to address bottlenecks that impede small scale trade flows within the region. The first study aims at determining the best approach towards smooth implementation of the Simplified Trade Regime (STR). The second relates to the sustainability of trade information desks currently established at border points. The studies were inspired by the need to increase formal small-scale cross-border trade, to enhance revenue collection for governments at the borders, generate higher incomes for small-scale cross-border traders and increase security, among others. The STR is a COMESA initiative whose implementation started in 2010 and has since been adopted in other regions. The STR formalizes cross-border transactions enabling small scale cross border traders to benefit from the tariff preferences available under regional integration. It makes it easier to collect information and data and ultimately improve domestic and regional policy making on trade and trade-related activities in the region. Small scale traders also have ease of access across borders if their goods fall within the Common List of products agreed upon between neighbouring States.
SADC-EU Cooperation Programme: Briefs for Dialogue Facility, GCCA+, IICB, SIBE, SIPS, SPSS and TFP (SADC)
The Southern African Development Community (SADC) and the European Union (EU) have a long standing development partnership on priority areas of regional economic integration, peace and security, regional natural resources management, and institutional capacity building. These priority areas are aligned with SADC’s Regional Indicative Strategic Development Plan 2020-2030 and Vision 2050. The priority areas are an all-encompassing approach to regional integration for the peace and prosperity of citizens of Southern Africa. In support of the SADC’s integration agenda, objectives and strategies, the EU is supporting a number of programmes which include, SADC Dialogue Facility, Integrated Institutional Capacity Building (IICB), Intra-ACP Global Climate Change Action + Programme in SADC Region (GCCA+), Support to Peace and Security in the SADC Region (SPSS), Support to Improving the Investment and Business Environment (SIBE): Trade Facilitation Programme (TFP) and Support Programme towards Industrialisation and the Productive Sectors (SIPS).
Trade Facilitation Programme (TFP): TFP aims to increase intra-regional trade by strengthening capacities for streamlining border processes and monitoring and resolving non-tariff and technical barriers to trade; and by promoting implementation of the EU-SADC Economic Partnership agreement by developing a more favourable trading environment, SADC Member States will be able to better integrate in global value chains, creating wealth, jobs and additional government revenues.
Mobile drives Africa’s booming digital economy (IT-Online)
Kathy Gibson is at Mobile World Congress 2022 – Africa’s digital economy, driven by mobile commerce, could be worth as much as $180-billion by 2025. This is one of the conclusions from a new white paper, “Towards a Flourishing Digital Economy for all – a Spotlight on Africa”, commissioned by the UK’s Department for International Trade and conducted by GSMA’s Mobile World Live team of analysts and presented today on the sidelines of Mobile World Congress 2022.
Digital commerce is growing fast all over the world, removing physical barriers to trade and increasing choice for millions of people. It also frees up time to pursue other activities. This is especially the case in developing economies, with the United Nations estimating that Internet business in Africa could add $180-billion to the continent’s GDP by 2025. However, Africa is a mobile-first continent, with leading digital vendors estimating that 75% of their transactions are made via smartphone.
7th PIDA Week kicks off in Nairobi (KBC)
The 7th Programme for Infrastructure Development in Africa (PIDA) Week 2021 has kicked off in Kenyatta International Conference Center (KICC) Nairobi, through a hybrid format and will take place from 28th February to 4th March 2022.
Speaking during a pre-opening session, Trade Cabinet Secretary Betty Maina, said governments are responsible for creation of conducive environment for business. She underscored the role of SMEs in the growth of the economy noting that in Africa, the SMEs make up 90 percent of the private sector and provide an estimated 80 percent of jobs across the continent.
This years event will focus on how Africa can lead the way in the delivery of infrastructure in a post-COVID era, supporting the economic and social imperatives of the continent in the digital age.
African airlines revenue loss to be $4.9 billion in 2022: AFRAA (Logistics Update Africa)
The African Airlines Association (AFRAA) noted that airline revenues remained low with many operators battling with cash-flow issues. “Full year revenue loss for 2022 is estimated at US$4.9 billion, equivalent to 28 percent of the 2019 revenues. In 2021, African airlines cumulatively lost $8.6b in revenues due to the impact of the pandemic, representing 49 percent of 2019 revenues,” reads the release. In the month of February 2022, AFRAA estimates that African airlines’ capacity reached 64 percent compared to same month in 2019. Similarly, traffic is estimated at 49 percent.
Green infrastructure projects in the works for Africa (ESI Africa)
With a growing number of African leaders taking steps to drive Africa’s clean energy transition, the African Investment Forum (AIF) has announced plans to showcase the $50 billion worth of bankable projects in the works. The multi-stakeholder, multi-disciplinary platform announced its plans to hold virtual boardroom sessions, discussing the 45 advance deals in the pipeline. Some of these included an investment to develop over 220km of electric transmission lines under a long term public-private partnership agreement (PPA). The investment also outlines a project with a ten-year goal to roll out broadband infrastructure to over 800,000 residential and small business customers. The projects promise not only to progress Africa’s clean energy standards but to provide employment and social development opportunities across Africa.
AfDB Group approves quality health infrastructure strategy in Africa 2022-2030 (Devdiscourse)
The Board of Directors of the African Development Bank Group (www.AfDB.org) has approved its Strategy for Quality Health Infrastructure in Africa 2022-2030, a historic first for the Bank. The strategy was developed in response to a call by the Bank’s Governors for the institution to define its role in addressing Africa’s health infrastructure deficits, highlighted by the ongoing pandemic. The strategy focuses on three categories of health infrastructure that match the African Development Bank’s comparative advantage, providing the flexibility to respond to the diverse needs of the Bank’s African member countries. It will be anchored in national health systems and sets out three cross-cutting themes: improved internet and communications technology connectivity, to strengthen health information systems and support innovation; promoting regional collaboration and harmonizing health policies and regulation; and policy dialogue and technical assistance.
China-Africa trade reaches all-time high in 2021, showing resilience amid pandemic (Xinhua)
China-Africa trade has bucked the global economic downward trend, and analysts believe it has contributed to the African economy’s resilience in the face of COVID-19 challenges.
China has remained Africa’s largest trading partner for 12 consecutive years. According to the latest data released by the General Administration of Customs of China, the total bilateral trade between China and Africa in 2021 reached 254.3 billion U.S. dollars, up 35.3 percent year on year, among which, Africa exported 105.9 billion dollars of goods to China, up 43.7 percent year on year. China has maintained its position as the largest investor in Africa over the last 10 years, according to a new report by Swiss-African Business Circle released in February.
The United States is the second-largest investor in Africa, followed by France and Turkey, in third and fourth positions, respectively. Globally, Africa’s external trade performance in 2021 was very strong. According to the United Nations Conference on Trade and Development (UNCTAD) data in November, Africa’s import and export of goods increased by 31 percent and 40 percent respectively in the third quarter of 2021.
South Africa is an important trading partner of China, with bilateral trade accounting for more than one-fifth of the total China-Africa trade. In 2021, the total trade volume between China and South Africa reached 54.35 billion dollars, with a year-on-year growth of 50.7 percent. In the same year, Chinese investment in South Africa reached 280 million dollars, including 130 million dollars in non-financial investment and 150 million dollars in financial investment.
United States Congressman Gregory Meeks has warned that the United States will only be part of the future if it invests in Africa now. The congressman from New York and Chairman of the US House Foreign Affairs Committee was speaking during a visit to the African Development Bank Group on Saturday, as he and a team of congressional colleagues concluded a tour of three West African countries. African Development Bank Group President Dr. Akinwumi A. Adesina and several senior Bank officials welcomed the group to the Bank’s headquarters in Abidjan. “If the United States is not investing in Africa today – especially when we look at the size of Africa’s youth population, which is larger than America’s entire population– then we are not going to be a part of the future,” Meeks said.
Adesina and the visiting members of Congress agreed on the need for closer cooperation between the African Development Bank and US investors. Adesina said the Bank would open an office in Washington, D.C., once Board approval was secured. He explained that the office would provide guidance about how to structure substantive US private sector investment in Africa. “We’d like to see a lot more US direct investment in infrastructure,” Adesina said. “We look forward to working with the United States Trade and Development Agency and others on this.”
Adesina said African economies were rebounding, but the continent faced mounting commercial debt, the adverse impacts of climate change, lack of opportunities for youth, and poor access to Covid-19 vaccines.
Global economy
Here are 5 ways to make trade more sustainable this year (WEF)
Trade accounts for 50% of global GDP, making it a significant economic driver. That means trade – around two-thirds of which is conducted across value chains – plays a big role in shaping how we consume resources and our impact on the planet. Trade is also an important means of technology and new services diffusion that will be vital to tackling climate change and ensuring material circularity.
Debates on the sustainability of trade are not new – longstanding concerns exist around transport emissions, emissions outsourcing, traded-commodity driven deforestation and supply chain linked environmental destruction, pollution and waste dumping abroad, among others. Yet, trade has also been an enormous source of growth and prosperity, and contributed to lifting millions out of poverty over the past decades.
Looking ahead, 2022 will be an important year for the sustainable trade agenda, with new initiatives and debates emerging. Here’s five to follow:
United Nations bodies call for further action to end seafarer crisis (UNCTAD)
Four United Nations organizations issued a joint statement on 28 February calling for continued global collaboration to address the crew change crisis that at times during the COVID-19 pandemic has left more than 400,000 seafarers stranded at sea. The International Labour Organization (ILO), the International Maritime Organization (IMO), UNCTAD and the World Health Organization (WHO) urge governments, the shipping industry and other stakeholders to scale up efforts to safeguard seafarer health and safety and avoid supply chain disruptions during the ongoing pandemic. The organizations note that as COVID-19 travel restrictions eased and vaccination rates increased among maritime personnel, the humanitarian crisis at sea showed signs of improvement before the Omicron variant appeared.
Over 80% of the volume of global trade in goods is carried by sea. And throughout the pandemic, the world’s 1.9 million seafarers have played a vital role in keeping ships moving and ensuring critical goods such as food, medical equipment and vaccines are delivered. But restrictions to fight the spread of the pandemic have meant many seafarers couldn’t leave ships. They remained stranded at sea far beyond the expiration of their work contracts and often beyond the default 11-month maximum period of continuous service on board, as required by the Maritime Labour Convention of 2006, as amended.
The Effect of Tariffs in Global Value Chains (IMF)
This paper empirically investigates the impact of tariffs when production is organized in global value chains. Using global input-output matrices, the researchers construct four different tariff measures that capture the direct and indirect exposure to tariffs at different stages of the production chain for a broad set of countries and industries. The results suggest that tariffs have significant effects on economic outcomes, including on countries and sectors not directly targeted. The authors find that tariffs higher up and further down in the value chain depress value added, employment, labor productivity and total factor productivity to varying degrees. They find no benefits for the sector that enjoys additional protection, yet there is some evidence of economic activity being diverted, i.e. positive effects on value added and employment from tariffs imposed on competitors. The paper relates to recent innovations in theoretical gravity models and provides an empirical assessment of possible long-term effects of recent trade tensions.
‘Our vulnerabilities laid bare’: Least developed countries react to IPCC’s Working Group II report (Down to Earth Magazine)
The group of Least Developed Countries (LDCs) reacted to the Working Group II report from the Intergovernmental Panel on Climate Change (IPCC) February 28, 2022, stating that their vulnerabilities had been laid bare by it. Madeleine Diouf Sarr, chair of the LDC group, representing 46 of the world’s poorest countries that are most vulnerable to climate change, also urged rich countries to deliver their promises made to poor ones regarding climate finance, loss and damage and reducing emissions. “Our vulnerabilities are laid bare in this report. The science is telling us we are already reaching the limits of what we can adapt to at 1.1 degrees Celsius (°C). At 1.5°C, we know we will lose more still. The world must pursue both mitigation and adaptation at speeds and scales beyond what we have seen,” Diouff Sarr said in a statement. She said it was confirmed last year that developed countries had failed in their commitment to deliver $100 billion in climate finance by 2020. “The short fall must be made up urgently, to support our people to adapt to the worsening impacts the report confirms are coming,” she added.
Plastic treaty would be historic for planet: UNEP chief (Phys.org)
The world has a rare opportunity to clean up the planet for future generations by uniting behind an ambitious treaty to tackle plastic trash, the UN environment chief told AFP. Inger Andersen said a global plastics treaty being negotiated in Nairobi “holds the potential and the promise of being the biggest multilateral environmental breakthrough” since the Paris climate accords signed in 2015. “This is a big moment. This is one for the history books,” the executive director of the UN Environment Programme (UNEP) told AFP in an interview. The framework for a legally binding plastics agreement is still being hammered out ahead of a UN environment summit starting on Monday in Nairobi, where UNEP is headquartered.
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Country-related news
Smuggling of Illegal Consignments of Clothing into South Africa Presents Ongoing Threat to the Viability of South Africa’s Clothing Industry (GlobeNewswire)
The “Clothing Industry in South Africa 2021” report has been added to ResearchAndMarkets.com’s offering. South Africa’s clothing industry has been materially affected by the COVID-19 pandemic. Although lockdown restrictions and supply chain disruptions dealt a massive blow to companies across the industry value chain, the closure of borders prompted companies to reduce their reliance on imported goods and increase local sourcing. In terms of a recently implemented industry masterplan, major retailers have committed to increasing locally-made clothing ranges in their stores from around 50% currently to 65% by 2030.
The smuggling of illegal consignments of clothing into South Africa, much of which is counterfeit or knock-offs of other brands, presents an ongoing threat to the viability of South Africa’s clothing industry. Added to this is tax evasion, which takes the form of under-invoicing and roundtripping. Illicit practices have been facilitated by corrupt officials in customs administration.
This report focuses on the clothing industry in South Africa, including manufacturing and retail. It includes comprehensive information on the state and size of the sector, notable players and their performance, developments and corporate actions, and factors influencing the sector including the effect of the pandemic on sales and the increase in online sales.
Value chains key to industrial development (NewsDay)
Secretary in the Ministry of Industry and Commerce Mavis Sibanda on Thursday said the country’s industrial sector needs resuscitation; hence the need for more coordinated value chains to enable efficiency in production and distribution of goods. Sibanda said this in Harare during her opening remarks at the value chain strengthening workshop. “It is common knowledge that the manufacturing sector went through a phase of de-industrialisation. Now is the time to resuscitate, re-strategise and move forward. “In this endeavour, the government has identified the strengthening of our already existing value chains as a key strategy to reclaim our place as a strong and growing manufacturing base in Southern Africa.” She said Zimbabwe has prioritised 10 value chains which are dairy, sugar, bus and truck, fertiliser, plastic waste, pharmaceutical, clothing, leather, soya and steel value chains. She said the workshop will analyse progress made in five value chains; namely the dairy, sugar, bus and truck, fertiliser and plastic waste value chains.
Cross border traders seek space in economic recovery (The Herald)
The Zimbabwe Cross Border Traders Association has called on the Government to give them space to make meaningful contributions to the national vision by addressing issues of price distortions and exchange volatility, promoting exports in the region, gender empowerment and creation of employment. In a statement, the association’s general secretary Mr Augustine Tawanda, said it was important for the Government to recognise cross border traders as strategic economic players. “Despite the absence of official data and statistics about the sector’s contribution to the country’s Gross Domestic Product (GDP) and misrepresentations from some quarters, cross border traders can make a huge difference in restoring livelihoods. They have the capacity to contribute to the national vision,” he said.
“Given operating space, cross border traders can bring sanity in this area, if the government temporarily lifts import restrictions on some basic commodities which are being overcharged and allow cross border traders to freely import these goods. This will force local producers to reduce the prices to regional parity levels. Cross border traders can also increase exports into the region if supportive mechanisms are put in place,” said Mr Tawanda.
China allows exports of fresh Kenyan avocados (Business Daily)
The Chinese government has allowed Kenya to export fresh avocado after four years of lobbying as Beijing reverses an initial requirement that only allowed frozen produce, coming as a major boost to farmers. China had locked out the fresh produce in 2019 due to prevalence of fruit flies locally.
“Kenya has been granted market access by the Peoples’ Republic of China for export of fresh avocado fruits,” said Prof Mutui. The deal to export avocado to China was agreed in April 2019 between President Uhuru Kenyatta and his Chinese counterpart Xi Jinping but Beijing required Kenya to export only frozen avocado, which majority of exporters could not manage owing to the high cost involved.
Producers and exporters wanting to export fresh avocado to china will have to ensure that all their production farms, pack houses and fumigation treatment facilities are registered by Kephis.
CBK seeks digital and mobile payment platforms fees cut (Business Daily)
The Central Bank of Kenya (CBK) has asked digital payment service providers including mobile money firms to cut their prices, arguing that they have the headroom to charge customers less. The mobile and internet-based payment platforms charge relatively higher fees for cash transfer and payments compared to banks. The regulator says in the National Payments Strategy 2022-2025 paper that the recent reduction in the fees charged by the digital platforms mandated in the wake of the Covid-19 pandemic has not gone far enough.
“Prices and tariffs of some payment services can be high in relative terms, while others are not easily understood by the average customer,” the regulator says in the strategy paper. “CBK is determined, working with the industry, to change this reality and ensure that benefits of digitalisation translate to affordable, transparent and customer-centric payment services.”
Rwanda on course to wean herself off poultry imports (The New Times)
The government has sustained its halts on the importation of poultry products, especially chicks, as it looks to prevent the spread of bird flu in the country. Rwanda Agriculture and Animal Resources Development Board (RAB) told The New Times that the country was now concentrating on bolstering the domestic industry in order to wean herself off foreign supplies. The government imposed a ban on poultry imports in November last year following an outbreak of bird flu in Europe—the leading supplier of chicks to Rwanda. The ban, RAB said, was meant to prevent the highly contagious Avian Influenza (AI) or bird flu from spreading in Rwanda. It affects both domestic and wild birds. Occasionally, mammals, including humans, may contract this virus, according to the World Organisation for Animal Health (OIE). As things stand now, there is no end in sight to the lifting of the ban.
“Local supply is increasing, and we are even exporting,” Fabrice Ndayisenga, the Head of Animal Resource Research and Technology Transfer Department at Rwanda Agriculture Board (RAB) told The New Times, stressing that locally produced chicks were also more affordable compared to imported ones. Our priority is to develop our industry.”
Tanzania to establish bank for small-scale miners (The East African)
The Tanzanian government plans to establish a bank designed for artisans and small-scale miners, in a bid to boost their investments by channelling a dedicated line of credit. Dr Philip Mpango, the country’s Vice President, told a mining forum on Tuesday that the idea is to establish a financial institution that is specialised in providing loans and other funding services to groups of small-scale miners. “While the government is working to bring in Mineral Bank, all the industry players, including banks, artisans and small-scale miners, should work hand in hand with the State Mining Corporation (STAMICO) to facilitate loans for miners,” he told participants at the 4th International Mineral and Mining Investment conference 2020, at Julius Nyerere International Convention Centre (JNICC) in Dar es Salaam.
Export Oriented Enterprises sector: Mauritius still a reliable source market (African Business)
“Despite the difficulties faced since the worldwide outbreak of the COVID-19 pandemic, figures for the Export Oriented Enterprises sector for calendar year 2021 show that Mauritius still remains a reliable source market for several countries.” The Minister of Industrial Development, SMEs and Cooperatives, Mr Soomilduth Bholah, made this statement, today, during a press conference in Port Louis on the performance of the Export Oriented Enterprises (EOE) sector. He highlighted that in 2021, the EOE sector contributed about 4.4% to Gross Value Added and it accounted for around 70% of total exports, excluding sugar.
He underlined that this rise was mainly attributed to: a relative upturn in export orders from the country’s traditional markets as compared to the previous corresponding period; the gradual economic recovery in the country’s main markets (United Kingdom, France and South Africa); the positive impact of support schemes such as the Freight Rebate Scheme and the Support for Trade Promotion and Marketing Scheme, which had enhanced export competitiveness; and the extensive use of export promotional activities such as participation in the Intra-Africa Trade Fair and virtual trade shows in the fashion field with USA and South Africa, among others.
African trade
Groundwork for AfCFTA laid by governments, but private sector will drive its success (Mail & Guardian)
Trade agreements do not guarantee trade; they are not self-executing and require enormous energy, reform and governance. This, according to Gerhard Erasmus, a Trade Law Centre (tralac) founder and associate, is why the groundwork surrounding the African Continental Fair Trade Area (AfCFTA) is vital for its implementation and future success. Erasmus was in conversation with tralac’s executive director Trudi Hartzenberg during a webinar on “The start of ‘commercially meaningful trade’ under the AfCFTA – what businesses should know”, hosted in partnership with the Mail & Guardian.
Signed in 2018, the AfCFTA was officially – but largely symbolically – launched in January 2021 after a number of delays. “The reality, however, is that trade has not yet begun,” said Hartzenberg. “What we see now is an interim arrangement, taking into account that even though we may not have reached the 90% [tariff line] threshold, we will make a start for ‘commercially meaningful trade’ – a term coined by the Council of Ministers Meeting, which took place on the 28th and 29th of January.”
Trudi Hartzenberg said that the most difficult negotiations have proven to be on the two foundational requirements – the minimum requirements – for a free trade area, namely tariff concessions and rules of origin: “The rules of origin are in fact those rules which determine eligibility for the tariff concessions and the tariff preferences that are negotiated in a free trade area. They play a gatekeeper role. If your products comply with the applicable rules of origin, then you will trade under the preferential tariff regime. If not, then by default, you would attract the higher duty under the World Trade Organisation rates that are applicable for the export destination.”
Gerhard Erasmus said trading services are vital for the success of the agreement and the bigger picture achievements: “Only about 16% of the goods that we produce in Africa are destined for other African markets, and that has obvious implications and shows that there is a large opportunity for boosting intra-African trade in goods. Many of the commentators and politicians have started to emphasise that the AfCFTA is actually a framework for industrialisation and development of value chains. Trade in services is so obviously at the centre of this strategy, as 90% of our goods are being transported by road.”
WCO shares good practices for drafting a rules of origin tool with the AfCFTA (WCO)
At the invitation of the African Continental Free Trade Area (AfCFTA) Secretariat, the World Customs Organization (WCO) gave a presentation on international standards for the drafting of tools and instruments on rules of origin at a virtual workshop on the drafting of the AfCFTA Rules of Origin Handbook held on Monday 21 February 2022.
In her welcoming address, the Chairperson of the Sub-Committee on Rules of Origin reminded those taking part that Article 8.3 of the Agreement establishing the African Continental Free Trade Area laid down that any additional instruments, within the scope of that Agreement, deemed necessary, are to be concluded in furtherance of the objectives of the AfCFTA and will, upon adoption, form an integral part of the Agreement. In accordance with Article 13 of the Protocol on Trade in Goods, discussions among the negotiating bodies had led to the adoption of Annex 2 on Rules of Origin and of close to 88% of the tariff lines constituting Annex IV. She also emphasized that both of those legal documents on rules of origin had to be made operational through the use of the Rules of Origin Handbook.
AfCFTA takes centerstage at 35th AU heads of states meeting (GhanaWeb)
The Assembly of African Union Heads of State and Government held its 35th Ordinary session and was the first to be held in person since the Covid-19 pandemic at the AU Headquarters in Addis Ababa Ethiopia. The opening session was marked with calls for continued African solidarity in addressing the impact of covid-19 on the continent and the urgent need to address the emerging scourge of coup d’états and the threat of terrorism. The Ethiopian Prime Minister Dr. Abiy Ahmed, whose country hosts the AU Headquarters called on the leaders to collectively make the effort to boost Intra-Africa Trade on the Continent. “Our continental free trade agreement holds the greatest promise of effectively realizing continental integration and development, importation of increase intra-Africa trade, free movement of people and investment and self-reliance is a beacon for Africa’s renaissance. In the state of depending solely on trade out of Africa our collective effort to boost intra-Africa trade will protect us from the fluctuations of global economy, economic and political change,” he said.
Secretary-General of the AfCFTA Secretariat, Wamkele Mene, has met with the Egyptian Minister of Trade and Industry to reveal that African heads of states have agreed at the AU Summit that the continent commences trading at the 87.7% currently negotiated rules of origin.
Africa’s 2021 FDI up 147 percent smaller nations not left out (The Citizen)
Against the backdrop of a 147 percent increase in foreign direct investments into Africa in 2021, smaller African nations are racing to develop business-friendly policies and economic reforms to bolster their investor attractiveness. Just as the UN released a report showing that foreign direct investment (FDI) into Africa grew by 147 percent, so another report shows that smaller African economies, too, have begun flaunting their colours, particularly in the form of economic reforms and business-friendly policies as they vie for a greater share of inbound investment.
A new global index, shows seven low and lower-middle-income countries in the continent are among 10 with the most improved investment climates in the world - climbing the index by as much as 21 positions. “The 10 countries that gained the most positions are all low-income and lower-middle-income countries from sub-Saharan Africa and Latin America,” according to the index. Among the seven African countries, Burkina Faso, improved the most in the rankings, from position 143 in 2021 to its current 122, according to Milken Institute’s Global Opportunity Index 2022: White Paper.
Proposed 35 percent CET aims to boost East Africa trade to $6.8 billion (The Citizen)
The proposed 35 percent common external tariff (CET) for imported goods, will boost intra-East African Community (EAC) trade to $6.8 billion. In 2020, the total trade within the six nation bloc stood at 11.8 percent, amounting to $6.39 billion. This means the trade among the six partner states - Tanzania, Uganda, Kenya, Burundi, Rwanda and South Sudan, will increase by $18.9 million. Enforcement of the proposed maximum CET for goods entering the region is, however, subject to adoption by the EAC member countries. The expected trade gains are revealed in an analysis done by the Arusha-based EAC secretariat.
EAC working with EU Technical Groups on Economic Partnership Agreements (EAPs) (EAC)
The EAC Partner States are currently engaging in internal consultations with a view to ensuring that they are involved in the EAC-EU Economic Partnership Agreements (EPA). EPAs are trade and development agreements negotiated between the EU and African, Caribbean and Pacific Partners engaged in regional economic integration processes. The EAC Heads of State, during the 21st Extra-Ordinary Summit in February 2021 noted that not all Partner States are in a position to sign, ratify and implement the agreement. “The Summit recognized the importance of some Partner States to move forward and concluded that Partner States who wish to do so should be able to commence engagements with the EU with a view to starting the EU-EAC-EPA implementation under the principle of variable geometry,” noted. EAC Secretary General Dr. Peter Mathuki.
Dr Mathuki added that the EU-EAC EPA covers trade in goods, fisheries, agriculture, Institutional provisions, dispute settlement as well as economic and development cooperation. The Agreement contains a clause for future negotiations to be undertaken on Trade in Services and Trade Related Issues (competition policy, investment and private sector development, intellectual property rights, trade and sustainable development, and transparency in public procurement).
EABC calls for non-state actors involvement in EAC trade talks (The Star, Kenya)
The East African Business Council (EABC) has called for Private Sector involvement in the negotiation under the African Continental Free Trade. EABC CEO John Bosco Kalisa, said services account for 54 percent of African Gross Domestic Product (GDP) and 75 percent of Greenfield Foreign Direct Investment (FDI) hence salient to involve non-state actors.
Kalisa expounded that Trade-in services (TiS) on the continent remain far below its potential. He elaborated that stakeholders such as private services providers are crucial to informing the AfCFTA services negotiations with practical experience on the ground. “It is imperative that non-state actors, such as firms in services sectors, be actively engaged in the preparations for the EAC schedule of commitment and regulatory framework negotiations of services under the AfCFTA,” Kalisa said.
The rapid decline in Africa’s GDP (Tribune Online)
Recently, the president of the African Development Bank (AfDB), Dr. Akinwunmi Adesina, painted a gloomy picture of governance and life on the African continent when he revealed its dwindling economic fortunes resulted in a $165 billion Gross Domestic Product (GDP) decline in 2020. In the same year, over 30 million jobs were lost while 26 million Africans joined the extreme poverty bracket.
According to the AfDB boss, Africa needs between $600 million and $1.3 billion to meet its goal of attaining 60 per cent vaccine production by 2040, and investing in health is investing in national security. Therefore, he said, the bank would invest $3 billion to support pharmaceutical and vaccines manufacturing capacity for Africa. He said: “To address the socio-economic impacts of the pandemic and support economic recovery, Africa will need some $484 billion over the next three years. To eliminate extreme poverty by 2030, the continent will need $414 – $784 billion per year. Africa will need $7-$15 billion a year to deal with climate change. The continent will also need between $68 and $108 billion per year to fix the infrastructure financing gap.” To this end, he said, Africa must drastically increase its resource base, adding that with the help of the continent’s leaders, AfDB’s general capital had increased in 2019 by 125 per cent, rising from $93 billion to $208 billion, the highest since its establishment in 1964.
How does infrastructure investment promote economic development in fragile regions of Africa? (World Bank Blog)
What are the expected impacts of future regional transport investments in the Horn of Africa and Lake Chad Region? Simulations based on a general-equilibrium model quantify the subnational and aggregate gains from future major transport investments of interest for the World Bank: a series of regional corridors in the Horn of Africa and the road and rail corridors in Chad and Cameroon.
In the Horn of Africa, Somalia will benefit the most from the transport as well as combined energy and transport investments, as the new road corridors will largely increase its access to bigger regional markets and lead to important price reductions for goods exchanged in the region. Somalia’s annual real income is predicted to increase by 1.4% from the transport investments, by 6.2% when combined with major electricity improvements, and by 10% when border delays are additionally reduced. However, the effects differ across locations within the country. The road investments will primarily benefit the border locations that gain the most in terms of market access. While some regions do not benefit from road investments alone, all regions gain when infrastructure investments are combined with trade facilitation measures, as these help to amplify the affected area.
Electrifying Africa: The Procurement Of Renewable Energy Is Critical To Close The Widening Power Gap (Africa.com)
Throughout sub-Saharan Africa, over 320 million people do not have reliable access to electricity because of a lack of appropriate energy supply legislation and policy. These people cannot keep their food or crucially medicines and vaccines cold in fridges or simply cannot turn lights on at night. But most critically, without access to electricity, there is no access to clean water. It is an energy crisis for a continent with a population full of potential. If the procurement and rollout of energy is properly managed, many people will gain access to what is actually a basic human right. Africa needs to be powered just like every other continent on Earth. This is why Innovation: Africa, an efficient non-governmental organisation (NGO), is focused on the rollout of solar, water and agricultural technologies in Africa.
Having access to electricity on a regular basis enables entrepreneurs and business owners to run operations more easily, at a lower cost. This unlocks economic potential and fosters job creation. Insufficient energy access can manifest itself in hundreds of thousands of deaths each year as desperate people try to live functional lives. Energy access for all Africans is one of the key drivers of inclusive growth as it creates opportunities for women, the youth and children both in urban and rural areas.
Africa needs to beat plastic pollution, says WWF (The Mail & Guardian)
New findings on plastic pollution in Africa indicate that the problem could be addressed more efficiently if policymakers tackled the entire lifecycle of plastic as opposed to just its end cycle, waste. The report by the World Wildlife Fund (WWF) titled, Plastic Pollution in Africa: Policy Gaps and Opportunities, has been published ahead of a key meeting in Kenya, Nairobi, when the fifth United Nations Environment Assembly conference takes place from 28 February 2022. Among the items on the agenda is the adoption of a resolution which, if passed, will give the mandate to start negotiations on a global, legally binding treaty on plastics pollution. It encourages African governments to actively participate and provide African perspectives and priorities in the negotiations.
Conference explores game-changing potential of the circular economy for Africa (AfDB)
African countries have been urged to scale up circular value chains to accelerate industrialization and job creation in the green economy. The call was made last week during a virtual panel discussion on the circular economy at the 7th Europe-Africa Business Forum. The circular economy refers to a model of sustainable production and consumption that aims to decouple economic growth from resource consumption. This includes designing products for longer use and ease of repair. “Finance is a key enabler for the deployment of innovative solutions, so it is critical for the African Development Bank to anchor and nurture the circular economy as a bankable business model for Africa,” said Al-Hamndou Dorsouma, Officer-in-Charge for the African Development Bank’s climate change and green growth department.
Dorsouma said the circular economy offered a low-carbon and climate-compatible development strategy with strong adaptation benefits for the continent. He noted that accelerating the circular economy transition required increased access to finance and stronger partnerships.
Eurochambres: Trade, investment, and Africa are key to Europe’s future (EURACTIV)
International trade from the European Union and developing a solid partnership with Africa are key parts of Europe’s future, according to the President of Eurochambres and former Minister of Finance of Luxembourg, Luc Frieden.
He stressed the importance of making companies aware of what the EU is doing and defined his agenda for this term to be focused on two main areas “one is a further deepening of the single market, where there are still a lot of hurdles, and secondly, international trade because I think a lot of European companies produce excellent goods and services”.
Speaking about the EU-Africa Summit that took place in Brussels, Frieden said, “I consider Africa to be a natural partner for the European Union. I think that Africa has a huge potential”. Finally, he spoke about the possibility of Africa increasing Europe’s supply chains and shifting the relationship with Africa “in different ways than just development as has been done very much in the past”, adding that to start, there is a need “to work on the general framework conditions in terms of the rule of law, investment protection”.
Before the highly anticipated 6th Summit between the European Union (EU) and the African Union (AU) concluded on 18 February, the two sides had one common goal: to press the reset button on the European Union’s relations with Africa after a few years dominated by mistrust, a mismatch of expectations, and lots of anxiety.
The EU had a fairly coherent strategy towards Africa beyond its sheer material power – making use of its a large market, wealth, and status within the international system. In contrast, efforts at regional integration through the AU still relied on external actors’ largesse – including the EU’s. However, in the lead up to the summit, this strategy was being challenged as African countries increasingly have more options beyond Brussels and other European capitals. In recent years, African partnerships with China, Russia, Turkey, Japan, among others, have grown. In fact, both a Turkey-Africa Summit and a China-Africa Summit preceded the meeting with the Europeans. These new actors in Africa provide viable alternatives to the EU’s historical influence on the continent. Importantly, they allow African decision makers to exercise more agency – by asserting African interests, norms, and values – in African affairs, something which the EU consistently promised in negotiations, but failed to deliver on.
How Russia-Ukraine conflict could influence Africa’s food supplies (The Conversation)
Wheat and other grains are back at the heart of geopolitics following Russia’s invasion of Ukraine. Both countries play a major role in the global agricultural market. African leaders must pay attention. There is significant agricultural trade between countries on the continent and Russia and Ukraine. African countries imported agricultural products worth US$4 billion from Russia in 2020. About 90% of this was wheat, and 6% was sunflower oil. Major importing countries were Egypt, which accounted for nearly half of the imports, followed by Sudan, Nigeria, Tanzania, Algeria, Kenya and South Africa. Similarly, Ukraine exported US$2.9 billion worth of agricultural products to the African continent in 2020. About 48% of this was wheat, 31% maize, and the rest included sunflower oil, barley, and soybeans.
Disruption in trade, because of the invasion, in the significant producing region of the Black Sea would add to elevated global agricultural commodity prices – with potential knock on effects for global food prices. A rise in commodities prices was already evident just days into the conflict. This is a concern for the African continent, which is a net importer of wheat and sunflower oil. On top of this there are worries about drought in some regions of the continent. Disruption to shipments of commodities would add to the general worries of food price inflation in a region that’s an importer of wheat.
Africa: UK Reiterates Commitment to Green Manufacturing Africa (AllAfrica)
The UK Minister for Africa, Vicky Ford gave the assurance on Wednesday when she visited Nigerian e-mobility platform and an electric vehicle assembler, MAX, to highlight the UK’s commitment to the transition to green manufacturing in Africa and the strong economic links between the British and Nigerian economies in Lagos. UK Minister for Africa, Vicky Ford, said: “It was a pleasure to meet the team at MAX and to see first-hand how the UK is helping these dynamic entrepreneurs attract investment, create jobs and produce the innovative electric vehicles the world needs to meet our climate challenge.”
US seeks more investment opportunities in Africa (The East African)
The US government is exploring ways to expand trade and investment opportunities in Africa, in a bid to scramble for the control of the continent’s raw materials with other world’s powerful nations such as China and Russia. The US Deputy Assistant Secretary of State Akunna Cook said the country has yet to deepen its presence in Africa, which has a population of about 1.3 billion people. “We have been behind the curve for quite some time in terms of really taking advantage of the opportunities on the continent… the great challenge is to inform our companies and investors the opportunities that exist on the continent after I leave for Washington,” she said while on a visit in Namibia.
She said the Biden-Harris administration has made trade and investment with Africa a huge priority, with a focus to connecting with African entrepreneurs, investors, and policymakers to talk about how the US government can improve its commercial and economic diplomacy initiatives.
Global economy
International trade statistics: trends in fourth quarter 2021 (OECD)
Following a slow third quarter, G20 international merchandise trade accelerated in value terms in Q4 2021, partly due to high commodity prices, in particular for energy. While shipping costs kept the value of trade in transport services at record highs, trade in other services showed a slowdown notably in Europe, possibly reflecting a tightening of Covid-19 related restrictions towards the end of the year.
Growth in G20 international merchandise picked up in Q4 2021, with exports up 3.4% and imports up 5.0%, with respect to the previous quarter and measured in seasonally-adjusted current US dollars. This compares to the slower growth (1.5% for exports and 0.9% for imports) recorded in Q3 2021. Energy price increases continued to fuel merchandise trade growth in value terms, while pressure on supply chains, including for semiconductors, appears to have eased towards the end of the year.
Growth in exports and imports of services for the G20 is estimated at around 2.5% and 2.4% in Q4 2021, respectively, compared with the previous quarter and measured in seasonally-adjusted US dollars.
Investment facilitation negotiators take steps to assess needs of developing countries (WTO)
Participants in the investment facilitation negotiations agreed at a meeting on 14-15 February to establish a Working Group of international organizations working on investment facilitation, coordinated by the WTO Secretariat, to develop a Self-Assessment Guide to help developing and least developed countries assess their needs in terms of implementing the future agreement. They also discussed key issues, with a view to concluding the text negotiations by the end of 2022.
The global economic system is in dire need of an overhaul (UNCTAD)
The system of global economic governance appears increasingly bewildered and hamstrung by the challenges of the 21st century. A renewed multilateral order must prioritize the role of global public goods that are needed to deliver shared prosperity and a healthy planet, promote cooperation and collective actions to bring fairness and balance to market outcomes, coordinate policy initiatives to mitigate common risks, and ensure that no nation’s pursuit of these broader goals infringes on the ability of other nations to pursue them.
Trade ministers should work to introduce complementary reforms at the World Trade Organization and the myriad treaties to accelerate trade and investment in low-carbon economic activity, to eliminate incentives for trade and investment in sectors that need to be phased out, and to encourage green industrial policies for full employment in decent, well-paid work. And they should do so in full knowledge that developing countries face specific challenges that will need differential support and sufficient policy space.
Rising incomes more harmful to environment than population growth (UN News)
The Global Population Growth and Sustainable Development report, launched on Wednesday, is the latest in a series on major demographic trends. The number of people on the planet more than tripled since 1950 and could reach nearly 11 billion by the end of the century, according to the study, which examines the links between population growth and the social, economic and environmental dimensions of sustainable development.
“Whereas population growth magnifies the harmful impact of economic processes on the environment, the rise in per capita income has been more important than population growth in driving increased production and consumption and emissions of greenhouse gases,” the authors said. “More affluent countries bear the greatest responsibility for moving rapidly to achieve net-zero emissions of greenhouse gases and for implementing strategies to decouple human economic activity from environmental degradation.”
Other key findings include that most of the world’s future population growth will take place in developing countries.
Least developed countries still lag behind in cyberlaw reforms (UNCTAD)
Despite some progress, many least developed countries (LDCs) still lag behind in cyberlaw reforms, according to the UNCTAD Cyberlaw Tracker released on 24 February. This has negative implications for cross-border data flows, trade and digitalization. The tracker shows that LDCs that have adopted privacy and data protection laws rose from 43% in 2020 to 48% in 2021, while those with laws on consumer protection online increased from 40% to 41%. While many developing countries (79%), including LDCs (70%), have adopted laws on cybercrime, fewer than half of the LDCs have legislation on privacy. “The years 2020 and 2021 were exceptional, with industries being severely impacted in every corner of the globe,” said Shamika N. Sirimanne, UNCTAD’s director of technology and logistics. “The escalation of cybercrime and online fraud during the COVID-19 pandemic makes the adoption of sound laws, coupled with efficient enforcement mechanisms, ever more urgent,” she said.
For e-commerce to continue to grow, Ms. Sirimanne said, consumers and businesses must be protected when they shop online in the same way as when they buy goods in a store.
ILO Global Forum concludes with renewed commitments to a recovery that puts people first (ILO)
The Global Forum for a Human-centred Recovery, organized by the International Labour Organization (ILO), concluded with renewed commitments to push for a recovery that puts people first and tackles the dangerous inequalities exacerbated by the COVID-19 crisis. The three-day Forum (22-24 February) brought together heads of State and Government, heads of international organizations and multilateral development banks, and employers’ and workers’ leaders from around the world to propose concrete actions to build back better and strengthen the level and coherence of the international community’s response to the social and economic fall-out of the pandemic.
“Wealthy countries are investing a much higher percentage of their GDPs into recovery. While many low-income countries are trapped by spiralling debt and starved of resources – victims of a global financial system that puts profits before people – developing countries face a massive and enduring jobs deficit,” Guterres said.
Related News
tralac Daily News
Country-related news
SA’s agricultural exports hit a new record high (Cape Business News)
The need to improve logistics efficiency and curb the deterioration of infrastructure remains a topical issue in South Africa’s agriculture. Farming communities and agribusinesses might work to improve productivity on the farms, but the ultimate goal for some agricultural commodities producers is to reach export markets. However, achieving this is not only a function of output, but also the various trade agreements that South Africa has with other countries and the efficiency of logistical infrastructure locally. In 2021, the cyberattacks at Transnet, vandalism of rail infrastructure, poor road networks across the country, which the heavy rains have now exacerbated, and inefficiencies at the ports at various periods were the key risks to South Africa’s agricultural export drive. The agriculture and agribusiness industry has since firmed its relationship with Transnet to focus on the short-term challenges of ensuring that the perishable products already harvested are exported efficiently while also not forgetting the long-term collaboration for improving the port efficiencies. The latter aligns well with the agriculture expansion strategies, aimed at boosting production, destined for the export market as the sector is already export-oriented.
Fruit industry adopts socio-economic accord (SAnews)
Stakeholders in the South African fruit industry have adopted the Fruit Industry Social Accord, which commits them to work together to achieve socio-economic growth to best position the fruit industry as a world leader.
Poultry industry improvements should alleviate challenges (Engineering News)
The South African Poultry Association (Sapa) has made some “decisive improvements” to the poultry sector after a difficult year, it said on February 22. The effects of these improvements were aimed at alleviating problems experienced throughout the entire poultry value chain by the industry over the last couple of years, such as chicken dumping, illegal imports, avian influenza and Covid-19 lockdowns.
South Africa sees lower debt peak as mining lifts revenue (PMN News/Reuters)
South Africa forecast public debt would peak sooner and at a lower level than earlier thought when it unveiled its annual budget on Wednesday, with mining tax receipts expected to keep supporting revenues and spending seen growing only modestly. President Cyril Ramaphosa’s government is trying to stabilise the public finances of Africa’s most industralised economy after years of rapid debt accumulation under his predecessor Jacob Zuma. The COVID-19 pandemic initially disrupted those efforts, widening the budget deficit and driving unemployment to a record above 30%. Last year, however, the economy rebounded quicker than expected as the mining sector capitalised on strong prices of key exports like metals and coal. The National Treasury said in its budget review that while the boost from commodities would fade somewhat, it would still produce “significant additional revenue over the next three years”. This year’s tax collections are seen 182 billion rand ($12.10 billion) above the 2021 estimate largely due to mining.
S. African experts call for BRICS to expand scope after COVID-19 (CGTN)
After COVID-19 exposed some challenges bedeviling the BRICS countries, there is a need to re-examine its strategies and integrate and expand its scope, said South African experts on Wednesday at the webinar “South Africa and the BRICS: Revisiting developmental priorities. “The Witwatersrand University School of Governance lecturer Lihle Ngcobozi said COVID-19 showed the problems of patents and vaccine nationalism that BRICS should address. “BRICS should lead and be trend or policy setters. They should lead in vaccine democratization,” she said.
She pointed out that BRICS countries have a potential influence on global decisions such as climate change and COVID-19. It should have a blueprint on infrastructure development, economic reforms, fiscal prudence, and post-economic recovery while respecting the sovereignty of the countries.
Tools, fuel imports link in Kenya’s trade deficit (Nation)
Kenya’s trade deficit grew by a third in December driven by higher fuel and machinery imports even as earnings from exports rose marginally. This has pushed the country’s total trade loss for the year, which had hit Sh1.2 trillion in the 11 months to November, up to Sh1.36 trillion in 2021—a record high. Data from the Kenya National Bureau of Statistics (KNBS) shows Kenya’s trade deficit increased 32 per cent as imports shot up to Sh235.23 billion in December while exports increased slightly to Sh66.35 billion. The Sh168.88 billion trade deficit in the month is a significant jump from the Sh127.6 billion deficit in November when imports hit Sh191.81 billion as exports stood at a modest Sh64.21 billion. “Domestic exports by Broad Economic Category (BEC) indicated that food and beverages were the main export category in December 2021 accounting for 43.79 per cent of the domestic exports, while non-food industrial supplies accounted for 26.74 per cent of the domestic exports,” KNBS said.
Weak logistics systems deny Kenyan firms trade favours (The Standard)
Few Kenyan companies have qualified for a regional trade programme that gives firms preferential treatment on clearing cargo at border points due to their weak logistical systems. The programme called Authorised Economic Operators (AEOs), identifies companies whose systems of importing or exporting goods are very robust — having sound logistics systems and sourcing their goods from trusted international markets. These systems must also be well protected and cannot be infiltrated by corrupt cartels to allow counterfeits or tax evasion. These companies, therefore, are put together under the wing of the East African Community (EAC) and are treated favourably by tax bodies of the partner states whenever they want their goods cleared.
A study by the Federation of East African Freight Forwarders Associations (FEAFFA) reveals that only 99 cargo agents are registered in the programme. This number is low considering Kenya has over 1,000 clearing agents registered with the Kenya International Freight and Warehousing Association.
Kenya to spend $1 billion more on Covid vaccination, draft budget shows (The East African)
Kenya is expected to spend Ksh121 billion ($1.06 billion) more on enhanced Covid-19 vaccination in the next financial year as it gears up to set the trend in the post-pandemic recovery within the East African region. The details are contained in a draft budget statement which will this year come early in March to free other funds for the General Election due in August. Besides the vaccination funds, the country had already set plans to operationalise the Kenya Biovax Limited to ‘form and fill’ and eventually manufacture her own Covid-19 vaccine by the Easter of 2022. The allocation is meant to facilitate 100 percent Covid-19 vaccination rollout among Kenyans in a bid to attain the macroeconomic objectives. The vaccination campaign is a gradual step in the war against the pandemic – moving from the purchase of the Personal Protective Equipment (PPEs) that was employed at the initial stages of the pandemic. The 2022-2023 Budget Policy Statement (BPS) document is currently before parliament.
The East Africa Community (EAC) treaty requires all its member states to read their budgets simultaneously. Harmonisation of the budget presentation helps the member states in the timely implementation of EAC projects such as infrastructure and energy. It also takes away the possibility of governments applying punitive tax measures against other member states.
Dar Port to handle South Sudan cargo (Dailynews)
TANZANIA Ports Authority (TPA) is looking forward to start receiving South Sudan consignments through the Dar es Salaam Port. TPA expressed its readiness to start handling freight destined to Africa’s youngest nation subject to relevant institutions holding a grip in assuring that all other supporting infrastructures are working properly. The freight to South Sudan will be transported through the central line railway to the shores of Lake Victoria, then through a cargo ship to Port Bell in Uganda where it would continue by road to the final destinations.
Road projects commence in Tanzania (World Highways)
New road works are getting underway in Tanzania and will help boost transport in the country. Work is underway on the 112km road project that will improve transport in and around the capital city of Dodoma. The project is costing a total of US$213.6 million and will help deliver the necessary transport upgrades for the city. The Tanzanian Government is supplying $34.5 million for the work. Meanwhile, the African Development Bank Group (AfDB) is supplying $137.3 million and the People’s Bank of China (PBOC) is supplying $41.8 million via the Africa Growing Together Fund.
Digitalization of customs processes has increased compliance (Ghanaweb)
A Principal Revenue Officer at the Customs Policy and Programmes Unit, Smile Agbemenu has disclosed that the digitalization of customs clearance processes at the Ports has brought about a high level of compliance from importers. He said customs has been able to obtain data which has enabled them profile importers into different categories depending on their compliance levels. He was optimistic that the data obtained will aid in the planning of the division.
President of the Association of Customs House Agents Ghana (ACHAG), Yaw Kyei indicated that the digitalization of customs processes at the ports has reduced challenges that hitherto affected the clearance of goods at the Ports. Yaw Kyei stated that the agitations that characterized the digitalization drive of port processes are a result of the fact that people were apprehensive about job losses and because stakeholders were not duly consulted. However, he said stakeholders are now satisfied and happy with the level of digitalization at the Ports after the rollout. He said one doesn’t need to be in the port physically to get his or her goods out. “Because we have understood the system now, everybody is happy about what is going on now. It is even possible to take delivery of a consignment without seeing a customs officer or terminal operator,” he said.
Stakeholders in agriculture brainstorm to tap benefits of AfCFTA (BusinessGhana)
The discussions formed part of the “Strengthening structures and framework for the agriculture sector to participate competitively in the AfCFTA” project being implemented. It was jointly organsied by the Ministry of Food and Agriculture (MOFA), the Food and Agriculture Organisation and the AfCFTA secretariat.
Richard Twumasi-Ankrah, the Director of Policy Planning, Monitoring and Evaluation of MOFA and national coordinator for the project, said Ghana’s food system which relied on the export of most food in raw forms required drastic interventions. “The introduction of the AfCFTA as envisaged will boost intra-Africa trade, improve value chain development as well as create and improve SME development,” he said. He added that the AfCFTA had come at the good time, as Ghana had taken giant strides to improve its industrial drive backed by strong export-diversification intervention.
Funding constraints put national export strategy in limbo (News Ghana)
The arduous task of raising US$60.9 million annually for interventions under the National Export Development Strategy (NEDS) is raising uncertainty over the country’s ability to increase Non-Traditional Export revenue from US$2.8 billion in 2020 to US$25.3 billion in 2029. The strategy, which was launched in 2020 has a 10-year funding component of US$30 million annually from the Ghana Exim Bank (GXIM) and a US$20.9 million from the Petroleum Heritage Fund. A financing gap of US$10 million is to be filled annually from multiple sources such as soft loans and grants from development partners, budget allocations to Metropolitan, Municipal and District Assemblies (MMDA), leveraging venture capital funding to support startup companies as well as stimulus fund provided by GEXIM bank and government.
Zambia: The African Development Bank’s 2017-2021 Country Strategy Paper Extended to 2023 (AfDB)
The Board of Directors of the African Development Bank has approved a two-year update and extension of Zambia’s 2017-2021 Country Strategy Paper through to 2023, according to a report released on 14 January 2022. According to the report, “an update of the CSP and its extension is necessary as Zambia’s new medium-term development plan, the 8th National Development Plan, is still under preparation and could be completed in the first quarter of 2022. It is also important to await possible policy changes that may occur after the country’s general elections held on 12 August 2021.”
The document’s main objective is to reduce poverty and vulnerability through a dynamic and sustainable private sector that creates jobs. The paper has two priorities: support for infrastructure development and private sector development.
Ethiopia: PM Abiy Says Nation Saves One Billion USD by Import Substitution (ENA)
Prime Minister Abiy Ahmed said the country has been able to save 1 billion USD by substituting import goods during the first six months of the budget year. Prime Minister Abiy Ahmed appeared at the 3rd Extraordinary Session of the House of People’s Representatives today to present his government performance over the last six month and answer questions raised to him by Members of the parliament (MPs) regarding the current situations in the country. During the session members of the House have asked explanations on several issues including the current situation of the country, the existing economic challenges, ongoing drought in some parts of the country among other things. In his briefing about the economic performance of his government, Prime Minister Abiy Ahmed said the economic progress in the last six months should be weighed in light of the war in the North, droughts and floods, as well as the impacts of COVID.
African trade
AfCFTA: Nigeria, others to get standard labels for Made-in-Africa goods (New Telegraph)
The African Economic Commission Development (AECD) has disclosed that the continent was planning to roll out Made-in- Africa goods standards for Africans to improve intra-trade market and boost the continent’s Gross Domestic Product (GDP). The Commissioner of Economic Commission Development (ECD), Industry, Trade and Mining, His Excellency, Albert Muchanga, disclosed this during an AfCFTA webinar in Cairo, Egypt, where he stated that ministers of industry, trade and investment on the continent have approved to present a draft on African private sector policy that will see the birth for the criteria on Made-in-Africa goods, in line with the continental trade agreement. Muchanga said the Made-In- Africa goods standard is also going to remove the abnormalities and barriers to trade in the continent that have been an impediment to trade growth and GDP.
The African ECD commissioner noted that the continent’s ministers of industry, trade and investment have approved that each country in the continent will be given the liberty to be able to meet the criteria and standardisation to use the labels ‘Made-in-Africa’ for its manufactured goods that are expected to be traded in the continent. According to him, the proposed Made-in-Africa standards will mean that the goods and services each country is producing and trading will find it much easier to move within African countries seamlessly to boost trade facilitation in the continent. He explained that the Made-in- Africa goods will make the continent’s market competitive and attractive.
Global supply-chain turmoil to persist into 2023 – SAAFF (Engineering News)
Global pandemic-induced supply-chain woes are set to continue for much of the year, including elevated demand, staffing shortages and global port congestion, says South African Association of Freight Forwarders (SAAFF) CEO Dr Juanita Maree. Indeed, moderation, or a return to normal – albeit a new, adjusted normal – will only occur around the Chinese New Year in 2023 (late January).
Africa’s Unfinished Trade Agenda by Hippolyte Fofack (Project Syndicate)
The African Continental Free Trade Area (AfCFTA), which entered into force on January 1 last year, promises to accelerate the diversification of the region’s economies and reduce the impact of commodity-price cycles on growth. Whereas Africa’s external trade is dominated by primary commodities and natural resources, the first shipment under the AfCFTA – from Ghana to South Africa – comprised manufactured goods of the sort that largely drive intra-African trade. Many therefore hope that the AfCFTA – by creating a single market of 55 countries with a total population of more than 1.3 billion and a combined GDP of $3.4 trillion – will catalyze industrialization as firms take advantage of economies of scale to spread the risk of investing in smaller markets. To that end, the trade agreement will eliminate tariffs on 90% of goods (the ultimate goal is 97% liberalization). The AfCFTA will likely boost foreign direct investment across Africa – empirical evidence elsewhere shows that joining a free-trade area could increase it by around a quarter – and shift its emphasis from natural resources toward labor-intensive manufacturing industries. Moreover, the pact has the potential to transform African economies, significantly increase the continent’s share of global trade, and strengthen its bargaining power in international trade negotiations.
Africa-focused agribusiness firm AgDevCo raises $90m (Engineering News)
AgDevCo, an investor in early-stage African agriculture businesses, said on Thursday it has raised $90-million from British, US and Norwegian funds to shore up investments that will help small farmers raise yields and reduce waste. Small scale farmers in sub-Saharan Africa lack credit for seed and fertiliser, keep losing parts of their harvests because of a lack of proper storage and ready access to markets while they also grapple with droughts and floods.
7th PIDA Week roots for recovery, & resilience through Infrastructure (IPPmedia)
PIDA is the strategic framework for infrastructure development, guiding the African Union’s infrastructure development agenda, policies, and investment priorities. It provides a framework for engagement with Africa’s development partners on the provision of regional and continental infrastructure, and facilitates the physical, economic and social integration of the continent in support of the African Continental Free Trade Area (AfCFTA). The 7th PIDA Week takes place amidst the backdrop of continued global economic and social uncertainty occasioned by COVID 19 pandemic. According to a statement from the event organizers, the prolonged COVID 19 pandemic has had devastating multifaceted economic and social consequences that have disproportionately affected Africa on human development indicators, economic interdependence, growth and resilience patterns.
It noted that African Governments in response have prioritized their spending commitment mainly focusing on vaccinating their population and building resilience considering the pandemic, therefore increasing their recurrent expenditure. “This could impact the annual gap in infrastructure investment in the short to medium term. The pandemic has also had a negative impact on cross-border trade. The African Union has also been affected with member states forced to shut down borders and, in some cases, applying trade restrictions that have affected supply chains inbound and outbound within the regions and as a result recording trade deficit in volumes, exposing Africa’s over-dependence on external supply chains,” the statement said.
76% of global investors look set to grow their African investments – New study (The Business & Financial Times)
Global investors are set to see a significant increase in their African investments, with 76% either studying the markets, preparing for entry or readying to deploy additional investments into the continent. This is according to the ‘World to Africa’ report – an industry-wide study conducted by Standard Bank Group and the ValueExchange in cooperation with the Bank of New York Mellon, Africa Venture Capital Association (AVCA), South African Venture Capital Association (SAVCA), Global Custodian and MiDA.
Investing in Africa is already a core activity for almost half of all global investors, particularly those in Europe. A further 36% of global investors are readying themselves to enter African markets – either through planned market entries or account activation in the region – highlighting the growing appeal of African markets to overseas investors. The fact that this development is driven mostly by long-term, institutional investors is evidence that this growth is strategic more than opportunistic.
Regional Integration will spread technical innovation – GITFIC Survey (News Ghana)
Regional integration will encourage the spread of technical innovation and allow nations to compete on the global market with more sophisticated economies. It also has the potential to drive more strong and fair economic growth, as well as reduce poverty and unemployment in Africa. These were part of the findings of a monthly survey carried out by the Ghana International Trade and Finance Conference (GITFIC) and copied to the Ghana News Agency in Accra on Wednesday.
“Giving African manufacturers access to regional markets and connecting them to more complex regional value chains would boost their competitiveness and capability for advancement into more competitive global niches. When seen in this light, regional integration is critical to increasing productivity and creating long-term gains in living standards,” Mr Gerald Ekow Woode Lead-Research Fellow (Policy and Advocate) of GITFIC. said.
Demand for African developers at an all-time high, Google says (CGTN Africa)
Google on Tuesday launched the “Africa Developer Ecosystem Report 2021” saying that, despite the challenges associated with the pandemic, the continent’s developer ecosystem is on the rise. The report was based on findings of a study conducted across 16 Sub-Saharan African countries. According to the report, demand for African developers reached a record high in 2021 against the backdrop of a global economic crisis and the impact of the COVID-19 pandemic.
“While Africa’s tech innovation sector is making great strides, global tech companies, educators and governments can do more to ensure that the industry becomes a strategic economic pillar, Nitin Gajria, Managing Director, Google in Africa said. “At Google, we are intent on further igniting training and support for this community by bridging the existing developer skills gap and concentrating our efforts in upskilling female developers who face pointed challenges,”
How economic disparities undermine East Africa’s growth (The East African)
East Africa remains among the most unequal places on the continent, with the richest 10 percent of the population earning more than half the population of 415 million citizens, says a new report. According to The inequality crisis in East Africa: Fighting austerity and the pandemic by Oxfam and Development Finance International (DFI), the huge economic inequalities have undermined the region’s growth. While income is increasingly concentrated in the hands of a few in Kenya, Uganda, Tanzania, Rwanda, Burundi, South Sudan, Somalia, Ethiopia and the Democratic Republic of Congo, more than 200 million people are struggling to meet basic needs such as education and healthcare. “South Sudan, Rwanda and Uganda are the most unequal, ranking among the world’s 40 most unequal countries. Kenya, Tanzania, Burundi and Somalia are in the most unequal third of countries. Only Ethiopia has below-average inequality,” the report states. The inequality has made it impossible for the region to eradicate poverty by 2030.
DRC: Why Kenya is so keen on Kinshasa joining the East African Community (The Africa Report)
As the DRC moves closer to formal admission to the East African Community (EAC), Kenya organised a 200-member trade mission to the central African country in November 2021. According to Equity Group, the 15-day trade mission to the DRC (between November and December 2021) was aimed at deepening trade relations between Nairobi and Kinshasa. The idea for the Kenyan banking giant was to “highlight trade and investment opportunities in the DRC” and this “as part of a government programme to foster regional trade and stimulate business growth by unlocking investment opportunities in East and Central Africa”.
Buhari says agriculture subsidies to EU farmers make Africa’s export uncompetitive (Nairametrics)
President Buhari has called for balanced trade between the European Union and Africa, citing that agriculture exports to EU farmers has made African food exports uncompetitive. This was disclosed in a statement by the Presidency after the just-concluded EU Africa summit.
The President said the relationship between Africa and the EU must be balanced to power job creation and alleviate poverty. According to Buhari, “Unfortunately today’s arrangements do just the opposite, where some claim preferential trade policies with the EU lend a helping hand to Africa the real picture is different.” He added that the Everything but Arms Scheme grants 32 African countries tariff-free access to European markets, but it still excludes many of Africa’s 54 nations, as there remains barriers to Europe’s markets even for countries that qualify. He warned that Agricultural subsidies to EU farmers make Africa’s exports uncompetitive as European farmers have access to huge loan investments.
Museveni pushes for access to European Union market (New Vision)
President Yoweri Museveni has called on the European Union (EU) to open up its market to Africa’s food products and improve farmers’ incomes for sustained food security on the continent. “If you can help us with the European market; remove the distortion that was introduced by the European Union when they introduced European Agriculture Policy where you maintain artificial farmers in Europe with subsidies. Here, we don’t need subsidies. I am a farmer, I have never got any subsidies from anybody and I produce food cheaply for Ugandans. You wonder why the Europeans could not get cheap food from here instead of having that distortion,” he said.
How Chinese-built railway is shaping integration in the Horn of Africa (Garowe Online)
The recently concluded Addis Ababa-Djibouti Standard Gauge Railway has been linked to the booming of trade and regional integration across the Horn of Africa, further promoting cooperation among nations. Participants including officials and independent experts who attended a seminar earlier this week discussed how Africa’s first fully electrified transboundary railway contributed to regional integration and the betterment of communities along the way. Dagmawit Moges, Ethiopia’s minister of transport and logistics, said the 752-km railway which was a flagship project of Belt and Road demonstrated that African countries can make tremendous progress by improving infrastructure.
“The Addis Ababa-Djibouti Railway, as a flagship project of China-Ethiopia cooperation under the Belt and Road Initiative (BRI), has made important strides in all aspects since starting operation more than four years ago,” the Chinese ambassador said.
The electrified railway has cut the transportation time for freight goods from more than three days to less than 20 hours and reduced the cost by at least one-third. Zhao said the railway has been a way of development, driving economic growth and industrialization, and serving as a lifeline of transportation for essential goods such as fertilizers, grain, cement, steel, and anti-pandemic materials.
Digital Press Briefing on U.S. Commitment to Economic Trade in Africa (US Department of State)
Global economy
One year of exporting COVID-19 vaccines: what does the evidence show? (WTO)
While still unfolding, the COVID-19 vaccine experience is a story of light in terms of speed and reach. Just over two years after the first cases of SARS-CoV-2 were detected, around 10.5 billion vaccine doses have been administered globally. But it is also a story of shadows. Profound vaccine inequity continues to limit access in low-income countries (LICs) where, even today, only 11.4 percent of people have received at least one shot. With 4.4 billion doses having crossed borders as of December 2021, trade has proven instrumental to the manufacturing and distribution of vaccines across the world. The global trading system, underpinned by World Trade Organization (WTO) rules, has helped keep markets broadly open and supplies moving. Yet, greater trade cooperation in tackling geographic concentration, supply chain bottlenecks and regulatory divergences can strengthen preparedness for future pandemics. A recent study on the historical record in the development and deployment of vaccines finds that never has the world seen such a rapid development of a viable vaccine, a massive ramp up of production and a fast and effective rollout of vaccination (Figure 1). Significant investments and public-private collaboration bolstered the emergence of the COVID-19 supply chain in the middle of the pandemic. While insufficient jabs significantly hampered vaccine access in 2021, supply-side constraints have begun to recede, and 24 billion doses are now forecast to be produced by mid-2022.
Trade has been a force for good in fighting COVID-19. After a slow start, exacerbated by some trade policies, vaccine exports ramped up in the third quarter of 2021 to reach 4.4 billion doses by the end of the year (Figure 3). Such an outcome would not have been possible without the cross-border movement of dozens of specialized vaccine inputs along tightly knit supply chains. From vaccine core ingredients to vials and rubber stoppers to cold boxes, to consumables (such as specialized plastic bags), specialized machinery (such as bioreactors and cold chain equipment) and other products (such as dry ice and more), there is a high degree of trade interdependence between the ingredients and goods needed to produce, distribute, and administer vaccines. A stark lesson from 2021 is that trade is an indispensable conduit to vaccine access.
WTO members agree on mid-June dates for reconvening MC12 (WTO)
MC12 was due to take place from 30 November to 3 December 2021 but was postponed due to the outbreak of the Omicron variant of COVID-19, which led to the imposition of travel restrictions and quarantine requirements in Switzerland and many other European countries.
Ambassador Dacio Castillo of Honduras, the chair of the General Council, noted that fixing the dates for the eagerly awaited meeting should provide impetus to the WTO’s work and focus for the discussion on ministerial outcomes. The exact dates of the meeting will be defined later, he noted.
“Let us work together, with the primary objective in mind, that the Conference will provide the WTO, and us here in Geneva, with an opportunity to demonstrate that the WTO can deliver,” Ambassador Castillo declared. “Let us make this count.”
E-commerce negotiators seek to find common ground, revisit text proposals (WTO)
Ambassador Kazuyuki Yamazaki (Japan), co-convenor of the initiative and chair of the plenary meetings this year, said WTO members need to devote as many resources as possible to the topics they “show willingness to discuss”. This will help members achieve the goal set by ministers in December 2021 of securing convergence on the majority of issues by the end of 2022, he said. Ambassador Yamazaki urged proponents to ensure their proposals have broad support from members. He encouraged proponents to exercise flexibility on issues that do not gain a reasonable degree of support at meetings in the first half of this year.
The least developed countries find themselves at a crossroad. Beset by long-standing structural weaknesses, shortcomings in international support and widening inequalities within and among all countries, they have to confront new or intensifying problems worsened by the coronavirus disease (COVID-19) crisis, climate change, the rapidly evolving character of globalization and the new technological realities of the digital age. Developing productive capacities is the key to unlocking the potential of the least developed countries achieving structural transformation to face these new realities. To be able to rise to both old and new challenges, the least developed countries need a new generation of international support measures that are fit for purpose in a fast-changing global environment. These new international support measures need to be effective, relevant and closely tailored to least developed country aspirations if international support measures are to change the course of the development trajectories of these countries.
From BRICS to OASES: a global platform for small economies (WEF)
The reigning paradigm of the past decades, if not centuries, has been the dominance of the largest countries/economies in shaping the course of history and global economic development. In recent decades this was reflected in the emergence of such projects as the BRICS (the largest emerging markets), the G20 (the 20 largest economies in the global economy) and the G7. But what if we were to entertain a different paradigm, in which rather than the largest economies exclusively forming the vanguard of global governance, a special role could be assigned to some of the smallest economies that demonstrate success in economic modernization and are active on the international arena in mediation efforts? What if we were to replace the standard quantitative approach towards country platforms with a qualitative approach that takes into account factors such as digital development and sustainability? And what would a grouping look like if it were almost the direct opposite of BRICS or the G20?
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Country-related news
Imbalanced playing field trips up SA’s trade ambitions, Parliament hears (News24)
The Department of Trade and Industry blamed capacity challenges at the World Trade Organisation and “imbalanced” international trade law enforcement for a range of consistent challenges South Africa continues to experience with major trade partners. The department briefed Parliament’s Portfolio Committee on Trade Industry and Economic Development on Tuesday morning, providing MPs with an update on the state of trade between South Africa and other regions of the world.
Front and centre are the challenges South Africa has experienced with the US, which imposed a 25% duty on steel imports and a 10% duty on aluminium imports from South Africa in 2018 as the world’s largest economy entered into a trade war with China. As South Africa continues coming to grips with the dumping of cheap imports such as poultry from other markets, government has also highlighted the importance of intra-Africa trade and support for local manufacturers.
Tips to get your poultry farming operation off the ground (Eyewitness News)
The poultry industry has been identified by the Agriculture, Land Reform and Rural Development as an industry with growth opportunities for new entrepreneurs and small-scale farmers. Poultry farming in South Africa is becoming increasingly popular, with many people flocking to start their own operations. However, most of them do not know how to get their business off the ground and ensure its sustainability. Vutivi News spoke with poultry farmer and poultry expert, Sifiso Tshonaphi, on the first steps one should take if they are interested in chicken farming.
“The first thing prospective farmers should do is do some research,” he explained. “If they have internet access, they can always read articles and watch YouTube videos that teach people how to raise chickens. “If they don’t have internet access, they can download a document called the Broiler Manual, which gives them step-by-step instructions on how to grow a chicken from day one to the slaughter,” he said.
More needs to be done to boost trade and investment between SA-Ireland (Devdiscourse)
More needs to be done to strengthen trade and investment between South Africa and Ireland, says the Deputy Minister of International Relations and Cooperation (DIRCO), Alvin Botes. Botes said this in his concluding remarks at the second South Africa-Ireland Joint Commission for Cooperation (JCC) in Pretoria on Tuesday. “The positive outcomes of the 2nd JCC meeting is evidence of our joint commitment to work as equal partners in enhancing our good relations and by further identifying and moving into new areas of opportunity, such as tourism, energy, sport, arts and culture, as well as working together to end gender-based violence in South Africa and elsewhere in the world. “Also, more work needs to be done in strengthening efforts for increased trade and investment,” he said.
Botswana, Zimbabwe finalise plans for one-stop border (Caj News Africa)
Neighbours Botswana and Zimbabwe have intensified efforts to establish a one-stop-border post (OSBP) between the two countries. Such a facility to be set up at the Plumtree/Ramokgwebana port of entry will bring a lot of benefits, including enhanced movement of people and goods between the two nations, tackle border jumping and human trafficking as well as boost tourism. Botswana and Zimbabwe seek to sign Memoranda of Understanding (MoUs) that will lead to agreements towards setting up of the OSBP. A similar project is underway on Beitbridge, in the Zimbabwean boundary with South Africa.
Why Kenya could do with a central bank digital currency (Business Daily)
Last week, the Central Bank of Kenya invited the public for comments on a very interesting subject; central bank digital currencies (CBDCs). The assessment will be on whether there’s a potential for their use in the country.
Central banks exploring CBDC issuance are citing various potential advantages such as lower costs of handling cash (especially cross-border), improving financial inclusion and stability among other reasons. aAround 100 countries are exploring CBDCs at one level or another. Some researching, some testing, and a few already distributing CBDC to the public. A key example is the Bahamas where the Sand Dollar—the local CBDC—has been in circulation for more than a year.The big question is; Is Kenya ready for such a digital evolution? Will the potential upside outweigh the risks?
Industries want import duty on raw materials scrapped (Business Daily)
Manufacturers are pushing for the removal of import duty on raw materials and a reduction in the number of levies in a bid to lower production costs and increase competitiveness of locally-made goods. The Kenya Association of Manufacturers (KAM) said the government should tax the final product and harmonise taxes to avoid double taxes by national and county governments. KAM said the proposal will lower production costs of local goods and improve their competitiveness in the global market, boosting job creation and contribution of the sector to the gross domestic product (GDP). Imported raw materials and semi-processed goods attract a duty of ten percent which KAM says has been a major contributor to the high prices of locally-made goods, making them less competitive in the global market.
“Kenya is increasingly subjecting many raw materials and intermediate goods to taxation thereby harming export competitiveness of our manufacturing firms,” KAM chief executive Officer Phyllis Wakiaga said while launching the second manifesto for the sector to guide debate on key issues facing manufacturers into the election.
60pc of Kenya’s exports used to buy China goods (Business Daily)
Kenya spent 60 percent of its export earnings on China-made goods, cementing Beijing’s dominant position in the country’s economy. Imports from China hit a new high of Sh441 billion in 2021, a 22 percent jump from the previous year, while Kenya’s total export earnings stood at Sh739 billion. This means that Kenya paid China Sh60 for every Sh100 it earned from selling items like flowers, tea and coffee in Europe to buy Chinese products such as electronics, textiles and household goods. Kenya spent an additional Sh107.5 billion in debt repayments to China in the period, effectively raising the total forex outflows to Beijing to 74 percent of total export earnings. These loans are, however, serviced from the official forex reserves held at the Central Bank of Kenya, while imports are financed from commercial dollar deposits. Cheaper imports from China have edged out local products and costlier imports from other countries in recent years, dimming the growth of Kenya’s industrial sector whose share of jobs in the economy has fallen.
Kenya sources a wide array of consumer and capital products from China while exporting just Sh15 billion worth of goods to the Asian economy. The trade deficit with China is the largest among Kenya’s major trading partners.
Kenya, Ethiopia in talks over electricity imports (The East African)
Kenya and Ethiopia have started talks on Nairobi’s plans to buy electricity from the $ 4.5 billion Grand Ethiopian Renaissance Dam (GERD) that began generating power on Sunday. This is according to Ethiopia’s ambassador to Kenya, Meles Alem.
The Nairobi meeting came a day after the Horn of Africa nation announced that its controversial dam on the Blue Nile river had begun generating electricity. Earlier this month, Kenya reached a new agreement with Ethiopia to import hydro-processed cheap power.
A statement from Ethiopia’s ministry of foreign affairs said the new deal made in Nairobi intends to “realise the aspirations of both countries’ respective people for regional economic integration and sustainable development”.
Afreximbank to advance Zanzibar’s development agenda (Afreximbank)
African Export-Import Bank (Afreximbank) and the Revolutionary Government of Zanzibar have agreed to collaborate to industrialize and diversify Zanzibar’s economy by pursuing a sustainable and inclusive economic growth underpinned by a robust blue economy with cross linkages to priority sectors, such as, agro-processing, fisheries and aquaculture, marine trade, marine tourism and energy The overarching objective being to assimilate the country’s manufactured value-added goods and services into regional and global value chains.
ITC shares Rwanda coffee (ITC)
A new ITC pilot uses blockchain technology and digitized traceability systems to support women coffee farmers in Rwanda.
Coffee is central to Rwanda. It is a key driver of economic growth, stability, and improved income for over 450,000 coffee farmers. As the country’s leading export crop, it has contributed an average of 24% to total agricultural exports over the last decade. Agriculture contributes 26% to GDP, with 79.5% of the population reliant on mostly subsistence agriculture.
Since the COVID-19 pandemic, a strong digital presence has, more than ever, become a key element for small businesses in the coffee sector to access new buyers and benefit from international markets. However, as consumers increasingly lose trust in food supply chains, buyers are also under pressure to increase traceability and provide full transparency to consumers on where their goods are sourced.
Traceability along the coffee value chain is indeed crucial for inclusiveness and the lives of coffee producers. Moreover, they encourage better risk management in terms of climate change, poverty, and environmental degradation.
How NACCIMA is strengthening public, private ties (The National Newspaper)
Nigeria now lays emphasis on private sector led development to drive government economic programs. The private sector in the country plays a huge role in helping to fight the problem of extreme poverty by taking responsibility for tasks performed by the state, thereby relieving the pressure on public expenditure and allowing the federal government to focus its resources on key social and physical infrastructure. However, the sector’s growth over the past 30 years has not been encouraging despite an increase in the number and brands of financial institutions because of various reasons.
Let’s harness $130-billion global cocoa market – Deputy Finance Minister (BusinessGhana)
The Deputy Minister of Finance, Mr John Ampontuah Kumah, has called for value addition of the country’s cocoa beans to fully benefit from the $130-billion global market. According to him, the current earnings on cocoa which was just around $2 billion was paltry and there was the need to focus on value addition to boost the economy.
The Chief Executive Officer (CEO) of the Ghana Investment Promotion Centre (GIPC), MrYofi Grant, said despite being one of the world’s largest cocoa producers in the world, Ghana did not earn much from cocoa due to the inability of the country to add value to cocoa.
Let’s drive AfCFTA with agriculture – FAO (Graphic Online)
The Food and Agriculture Organisation (FAO) representative to Ghana, Mr Ndiaga Gueye, has indicated that several opportunities abound in agriculture as a driver of the African Continental Free Trade Area (AfCFTA) for businesses in Ghana to take advantage of.
He noted that agriculture contributed slightly 30 per cent of the labour force in Ghana and through the AfCFTA, it could lead the growth and structural transformation of the economy. He, however, said in spite of the emerging opportunities of agriculture in the AfCFTA, there were still some gaps in the country’s preparedness to participate competitively and benefit from the increased envisaged trade prospects in the agreement.
World Bank Deepens Commitment to Building Human Capital and Inclusive Development in the Democratic Republic of Congo (World Bank)
The World Bank Group Board of Executive Directors endorsed a new Country Partnership Framework (CPF) for the period of 2022-2026 in support of stabilization and development in the Democratic Republic of Congo (DRC). This CPF will guide the Bank Group’s work for the next five years, supporting the DRC government’s strategic priorities and critical governance reforms. The new CPF places strong emphasis on human development, with a commitment to strengthening systems for improved access and quality of basic services, protecting DRC’s large rainforest—the second largest in the world, strengthening governance, and supporting ongoing stabilization efforts.
The government’s stabilization efforts are a key pillar of this CPF. Investments will aim to reduce fragility and conflict through improved connectivity and access to basic services such as water and electricity and scaling up targeted social protection mechanisms. Stabilization work will be undertaken with provincial authorities and focus on the most vulnerable, including refugees. The World Bank will also support the government’s efforts to establish a countrywide social safety net system that targets poor, vulnerable, and conflict-affected people. The new approach will bring investments of close to $1 billion in social protection activities, benefiting about 1.2 million people.
Liberia: Global Development Initiative Injects New Impetus into China-Africa Joint Development (Liberian Daily Observer)
Today, with major changes and a global pandemic unseen in a century, the United Nations 2030 Agenda for Sustainable Development is facing a serious impact. In order to meet the challenges of global development, President Xi Jinping solemnly proposed the “Global Development Initiative” (GDI) when attending the General Debate of the 76th United Nations General Assembly in September 2021, calling on the international community to form a joint force to accelerate the implementation of the 2030 Agenda for Sustainable Development, and to achieve a stronger, greener and healthier global development.
At the recently concluded 8th Ministerial Conference of the FOCAC, President Xi Jinping put forward a four-point proposal for building a China-Africa community with a shared future in the new era, and announced the implementation of the “Nine Programs”. It not only focuses on the practical needs of African countries’ development, but also echoes the eight cooperation areas that are being promoted by the GDI, which fully demonstrates China’s sincere desire to support Africa’s development and revitalization.
Liberia is a participant and contributor to such cooperation mechanisms as the FOCAC and the “Belt and Road” Initiative (BRI), and participated in the launching meeting of the Group of Friends of the GDI. In recent years, under the strategic guidance of the two heads of state, China and Liberia have achieved fruitful results in pragmatic cooperation in infrastructure
African trade
MFS Africa sees PAPSS, African payments system, as key to lifting continental trade (The Africa Report)
“We see PAPSS as both an enabler and facilitator of intra-African trade,” says MFS Africa’s founder and chief executive Dare Okoudjou. “Its ability to allow both the buyer and seller of the trade transaction to pay and receive in their national currencies is a game-changer.” Africa’s payments architecture is highly fragmented, with dispersed systems, regulations and infrastructure. That makes it harder to send and receive digital payments. PAPSS, backed by Afreximbank and the African Union, aims to harmonize inter-Africa payments and lower the cost of transactions, with a potential saving for Africa of $5bn per year.
Deal to boost aviation safety, efficiency in African skies (Business Daily)
The African Airlines Association (AFRAA) and the African Civil Aviation Commission (AFCAC) have joined hands to boost aviation safety and efficiency on the continent. The MoU, between the two entities was signed by AFRAA’s Secretary General Abdérahmane Berthé, and AFCAC’s acting Secretary-General Angeline Simana. It will ensure the two associations reinforce the collaboration by aligning their actions and working jointly on various areas including aviation safety, air transport liberalisation such as the adoption and implementation of the Single African Air Transport Market (SAATM), and improving efficiency of air navigation systems through adoption of latest technology.
Under the partnership, AFRAA and AFCAC will also work together on developing human capital, building infrastructure and regional integration, research, exchange of statistical data, information and best practices.
Global development finance coalition commits over $5,5bn for African MSME financing (IT-Online)
The coalition for a sustainable and inclusive recovery of the private sector, an international group of 20 development finance institutions that came together in 2020, today announced commitments of over $5,55-billion of financing to micro, small and medium enterprises (MSMEs) in Africa between mid-2020 and end of 2021, beating their set target of $4-billion over the period.
The coalition said it had exceeded its initial target by 40%, while development finance institutions jointly committed over $5,55-billion of financing of micro, small and medium enterprises in Africa over the period.
Sub-Saharan Africa ICT regulatory landscape evolves (Engineering News)
Sub-Saharan Africa’s information and communication technology (ICT) sector’s regulatory landscape is constantly in a flux as regulations are re-examined to address ever-emerging new technological and economic realities. The IDC Market Perspective report, analysing the current ICT regulatory landscape across the region and the ongoing developments that influence digital regulations and emerging technologies, reveals a shift away from “rigid and overly complex” policies that limits ICT growth toward more collaborative approaches that attract more players into the market.
Drop in shipping costs from China to benefit East African consumers (CGTN Africa)
Data from the Kenya Ports Authority (KPA) shows the Mombasa port’s overall throughput was 34.44 million tonnes in 2019 compared to 30.92 million the previous year.
Declining shipping costs between China and the Kenyan port of Mombasa is set to benefit east African consumers, the Kenyan industry said on Tuesday.
“We expect the cost of shipping between China and Mombasa to come down by as much as 35 percent from March as there is now much more available shipping capacity,” Gilbert Langat, CEO of the Shippers Council of Eastern Africa, said on the sidelines of the launch of Manufacturing Manifesto 2022-2027 by the Kenya Association of Manufacturers.
Money for Africa: How the EU and China are trying to win affection on the continent (Daily Maverick)
Relations between Africa and Europe were severely tested in recent times owing to ongoing instability in parts of Africa and the growing threat of a Russia-Ukraine war, which has occupied EU leaders in recent weeks. Covid-19 has also continued to wreak havoc on diplomatic relations, after the identification of the Omicron variant in South Africa. This led a number of countries, including those in the EU, to close their borders to travel from parts of Africa. The move was considered premature and discriminatory by African governments and scientists, because the variant was subsequently also identified in other parts of the world.
Ironically, China has maintained a strict lockdown since the start of the pandemic in early 2020 and, although travel to and from the country is severely restricted, it doesn’t discriminate against African countries. There is also the refusal of the EU to budge on an intellectual property rights waiver – known in full as the The Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS – that would enable African countries to manufacture their own vaccines.
Money – investments, aid and trade – will possibly speak more loudly. The EU’s recent pledge of €150-billion in investments and loans to the continent at first glance seems to dwarf that of China, which has scaled down its investment pledges to the continent to $40-billion, from $60-billion at the 2018 Focac meeting. It is important, because one of the first questions African journalists ask at summits of this nature usually revolves around money. On the ground it is a different issue, as Chinese infrastructure development has taken place at such a speed that it now dominates the African continent.
What could a non-China centric US-Africa policy look like (African Arguments)
If speeches by senior politicians are a reliable indicator, then the US’ approach to Africa has undergone a significant shift since Joe Biden took office in January 2021. In his message to the African Union Summit last year, for instance, President Biden committed to working with the AU on a wide range of issues from pandemic recovery and security to climate change and human rights “as a partner, in solidarity, support, and mutual respect”. In Nigeria last November, Secretary of State Antony Blinken insisted that the US wants to give African countries more choices and said explicitly that its “Africa policy is about Africa, not about China”.
If this reflects a genuine change, it would be a significant development that merits a closer examination. It would certainly stand in stark contrast to when former National Security Advisor John Bolton presented “A New Africa Strategy” in 2019. In that speech, he mentioned China over twenty times and declared that “China uses bribes, opaque agreements, and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands”. It would also mark a shift from when then Secretary of State Hilary Clinton gave a speech in Lusaka in 2011 in which she presented the US as an alternative to China’s “new colonialism”.
Pipeline to POWER WAGP Gas-to-Power Policy Recommendations (US Chamber)
The steady economic growth West Africa has experienced over the last decade is slowly subsiding. In particular, low commodity prices and China’s economic slowdown have stunted growth in oil-rich countries. To overcome these challenges and sustain high growth rates, West African countries need to think innovatively and creatively about how to harness the potential of existing untapped and underutilized resources. A sector of tremendous promise is natural gas.
Nigeria is the eighth-largest natural gas reserve holder in the world and the largest in Africa. The country has proven reserves of 180 trillion cubic feet (Tcf) that are projected to supply gas for 100 years. In addition, Ghana has proven reserves of 800 billion cubic feet (Bcf), and Côte d’Ivoire has proven reserves of 1 Tcf. Unlike oil, gas reserves are largely unexplored, leaving a strong possibility of significant discoveries in member countries of the Economic Community of West African States (ECOWAS). In Nigeria, experts estimate that unexplored reserves could amount to 600 Tcf.
If harnessed, West Africa’s extensive gas reserves could help meet the region’s existing and future energy demands. An indicator projecting the increase in energy demand is the population growth rate. Sub-Saharan Africa is expected to see a population increase of 1 billion by 2050; but the region produces the same amount of energy as Belgium for approximately 960 million more people. These numbers suggest that energy demand will increase significantly as populations expand and move higher in the economic ladder. Some experts posit that electricity demand could increase as much as fourteen fold by 2050.
Vaccine patent standoff mars EU-Africa summit (Science Business)
The dispute over COVID-19 vaccine patents continues to overshadow the EU’s efforts to broker closer research links with Africa, with campaigners for health equity arguing Brussels is stymying Africa’s attempt to build its own independent manufacturing capacity. At the EU-Africa summit in Brussels last week, South African president Cyril Ramaphosa demanded that the EU stop blocking a proposed waiver on vaccine patents, so that African researchers will have the legal certainty to develop home-grown versions of COVID-19 vaccines.
In response, Commission president Ursula von der Leyen said she supported African “strategic sovereignty” for vaccines, and reaffirmed €40 million of support for the World Health Organisation (WHO) backed technology transfer hub in Cape Town run by Afrigen Biologics and Vaccines.
Airlines see revival signs as Covid restrictions ease (Business Daily)
Airlines are staring at good times ahead as more countries are now relaxing the Covid-19 containment measures that nearly crippled the aviation sector in the last two years. A number of countries including the major economies such as the US and UK are relaxing their restriction measures, coming as a major boost to the aviation industry that is now recording an increase in the number of bookings. The sector through their lobby-International Air Travel Association (IATA) has been calling on governments to ease the restriction measure to allow for recovery of the industry.
Global economy
Supply chain resilience highlighted at fifth anniversary of Trade Facilitation Agreement (WTO)
Five years since the Trade Facilitation Agreement (TFA) entered into force on 22 February 2017, global trade flows are well positioned for a COVID-19 recovery on the back of WTO members’ steady progress in implementing the landmark Agreement. Director-General Ngozi Okonjo-Iweala said the TFA has helped support global supply chain resilience and called for further work to help economies withstand future challenges.
Global Trade Outlook 2022. High global trade volume growth in 2021 and significant moderation in 2022. Supply chains disruption is likely to continue in the first half of 2022 (Hellenic Shipping News)
2021 was the second year of the ongoing COVID-19 pandemic, marked by rapid recovery from the dramatic 2020 resulting from the initial outbreak in Q1 2020. Q2 of 2020 proved to be the worst quarter for global trade on record, but the situation started to improve relatively fast. Global trade is already at levels seen before the pandemic, but the growth rates peaked in Q2 2021 and then moderated. The recovery brought nonetheless several problems which proved to be persistent and will still affect global economic activity, at least in H1 2022.
IHS Markit GTAS Forecasting team now estimates the contraction of global merchandise trade in 2020 to USD 17,921 billion or -5.5% year-on-year. In terms of volumes, GTAS Forecasting estimates a contraction of global trade in 2020 to 13.94 billion metric tons or by -4.2% year-on-year.
In comparison, the WTO estimated the fall in volume to be -5.3%, IMF estimated it to be -8.3% (for the volume of trade in goods and services), and WTO (June 2021 Outlook) at -8.3% for the volume of trade in goods and nonfactor services.
Global shipping crisis: no quick fix (Global Trade Magazine)
While recent data from the Federal Reserve Economic Data (FRED) and Descartes Datamyne point to a slight softening of economic indicators (although not enough to suggest a change in the levels of disruption), U.S. import volumes continued to break records in January and amplify supply chain and logistics challenges. The big picture reveals ports are still struggling to handle the increased import volumes, as the pandemic continues to limit consumers’ service-based expenditures in favor of durable and non-durable goods purchases. Factors such as lengthy port wait times, labor and container shortages, the backlog of containers waiting to be emptied or transported, and the uncertainty of the impending International Longshore and Warehouse Union (ILWU) contract negotiations continue to disrupt the supply chain. With no clear indicator of when the pressure on supply chains and logistics operations will begin to lift, importers and logistics service providers (LSPs) must hold the line as they contend with ongoing supply chain challenges.
Democratising trade finance access to drive sustainable development (Global Trade Review)
Global trade is about more than moving goods; it can serve as a conduit through which the ambitious agenda of the United Nations Sustainable Development Goals (SDGs) can be achieved. From climate action to poverty reduction, reduced inequalities and economic growth, trade can be leveraged to transform lives and uplift entire communities – as long as everyone can participate.
The pandemic-related disruptions of the last two years brought the interconnected nature of supply chains around the world into sharp focus – for all the wrong reasons. But, as numerous participants in global trade are fast realising, this very same interconnectedness can serve as a means to achieve broader economic and sustainability objectives.
”Trade accounts for approximately 52% of world GDP, which gives it an outsized influence,” says Natasha Condon, global head of core trade at J.P. Morgan. “If we can solve for an issue in trade, the multiplier effects across the global economy are enormous.”
LNG global trade rises 6% in 2021 amid higher demand from Asia (The National)
Global trade in liquefied natural gas rose 6 per cent to 380 million tonnes in 2021 on the back of higher demand as economies recovered from the coronavirus-induced slowdown and countries focused on cutting emissions. China, the world’s second-largest economy, and South Korea led the growth in LNG demand in 2021. China surpassed Japan to become the world’s largest importer amid a strong rebound from the pandemic, with its imports growing by 12 million tonnes to 79 million tonnes, according to Shell’s latest annual LNG Outlook report. “Last year showed just how crucial gas and LNG are in providing communities around the world with the energy they need as they strive to get back on track following the difficulties caused by the Covid-19 pandemic,” said Wael Sawan, director of integrated gas, renewables and energy solutions at Shell. “As countries develop lower-carbon energy systems and pursue net-zero emissions goals, focusing on cleaner forms of gas and decarbonisation measures will help LNG to remain a reliable and flexible energy source for decades to come.”
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Country-related news
How South Africa can advance reforms to achieve its climate goals (IMF)
In our recent review of South Africa’s economy we explore how to raise growth, reduce inequality and unemployment, and bolster the economy’s green credentials and climate resilience. These challenges have been deepened by the pandemic, which exacerbated South Africa’s economic problems, including a decade-long stagnation of per-capita income, high unemployment, and vast income inequality. But the challenges can be met in a complementary manner.
The rebound from the crisis presents an opportunity. To seize on this, the government will need to address deep structural constraints that limit the durability of the economic recovery. South Africa’s ambition of achieving carbon-neutrality by midcentury requires a profound economic transformation built on significant green investments, in turn supported by a business-friendly environment, a labor market that makes it easier to create jobs, and improved governance and transparency.
Collaboration between public, private sectors contribute to record agricultural exports (Engineering News)
While the civil unrest of July last year, Covid-19, heavy rains and cyberattacks have contributed to backlogs at South Africa’s ports over the last two years, it has also brought about more collaboration between the public and private sectors and resulted in record exports. South Africa’s agricultural exports hit a record high of $12.4-billion in 2021. In the last quarter of the year alone, agriculture, food and beverage exports increased by 18% year-on-year to $2.8-billion.
Kenya to Export Cars Under AfCFTA (Taarifa Rwanda)
Kenya will soon export cars to the rest of the continent after the East African Community met the minimum requirement to allow it to trade under the African Continental Free Trade (AfCFTA). The move will see countries like Kenya start selling products out of the bloc.
The partner states have adopted the EAC Tariff Offer for Category A products to reach a minimum of 90.2 percent or 5,129 tariff lines out of the total 5,688, which is a minimum threshold required before a region can be allowed to trade under AfCFTA. The goods under category A include agricultural produce, automobile and textile among other items. “The expanded opportunities include manufactured products, value addition, regional value chains, agro-processing, motor vehicle assembly, pharmaceuticals, auto spares industries and mineral processing among other areas,” said EAC Principal Secretary Kevit Desai.
Digital shilling risks harming price stability goal, says CBK (Business Daily)
The Central Bank of Kenya (CBK) has raised concerns that running a digital currency will interfere with its core mandates including stabilising prices, raising the possibility that it might allow banks to execute retail payments on its behalf. The regulator said in a discussion paper on the digital currency that its issuance will therefore require national and international consultations.”…a CBDC could potentially lead to major disruptions affecting monetary policy transmission, financial stability, financial sector intermediation, the exchange rate channel, and the operation of the payment system,” said the CBK. It added that while there will be minimal monetary policy impact of the actual issuance – which would mirror that of existing hard cash— the changes in behaviour of the public holding the digital coins might be significant, triggering a review of the monetary policy framework. The regulator is thus proposing alternative means of managing the digital currency which would involve banks as intermediaries to handle retail payments done using the virtual currency.
Horticulture earnings rise to record Sh158bn (Business Daily)
Earnings from horticulture exports hit a historic high last year at Sh158 billion to remain the leading foreign exchanger earner in the last two years by staying ahead of tea and tourism. Data from the Kenya National Bureau of Statistics indicate that earnings from fresh produce grew seven percent from Sh150 billion that it recorded a year earlier. Whereas tea and tourism were impacted negatively since the outbreak of Covid-19 in 2020, horticulture has been recording impressive earnings in the last two years. Tourism recorded Sh146 billion last year with tea earning the country Sh136 billion. “The good results were boosted by high demand of the Kenyan produce in the world market last year,” said the Directorate of Horticulture in an interview with the Business Daily on Monday.
The horticulture sector has been enjoying good earnings during the Covid-19 period. For instance, in 2019, income from the export of fresh produce declined to Sh144 but picked up during the first year of the coronavirus outbreak to Sh150 billion.
Munya triples import permit fees for livestock products (Business Daily)
Traders of livestock products are set to face higher charges following proposals to triple permit fees for import and exports. Agriculture Cabinet Secretary Peter Munya has, through a legal notice, asked Parliament to approve reviews to the charges that were last changed over 20 years ago. The ministry has proposed that Sh3,000 be charged per consignment (truckloads) of animal feeds, apiary products, egg products, meat and milk products against the current Sh1,000.” Adjusting the charges will improve the effectiveness and efficiency of delivery of veterinary services with the resultant improvement of livelihood and poverty,” said Mr Munya. Traders that will be affected by the reviews include livestock keepers, livestock importers, slaughterhouse proprietors, milk and meat exporters.
Court rescues KRA in Sh569m sugar import compensation claim (Business Daily)
The taxman has been spared from paying a sugar importer more than Sh569 million for damages after changing dates for the importation of duty-free sugar in 2007, pending the hearing of its appeal.
In 2003, the Minister of Finance published a Gazette Notice domesticating the arrangements made between Kenya and Common Market for Eastern and Southern Africa (Comesa) in 2003, which provided for duty-free importation of sugar. The sugar importer accused KRA of pushing the dates from February 1, 2007, as earlier published by Kenya Sugar Board (KSB) to March 2007. “Firstly, the respondent has not rebutted the applicant’s contention that it may not be in a position to refund the Judgment sum if the appeal succeeded. Secondly, the Judgment sum is in no sense a small sum, it is a huge amount,” said justices Kathurima M’Inoti, Jamila Mohammed and Sankale ole Kantai. KRA appealed against the decision arguing that there is a real danger of the company enforcing the judgment, yet its appeal has high chances of success. The taxman says the importation was not within the period published for duty-free sugar.
EU extends sanctions against Zimbabwe over rights violations (The East African)
The European Union (EU) has renewed its two-decades-old sanctions against Zimbabwe, citing continued human rights violations and closure of the democratic space. Zimbabwe has been under EU targeted sanctions since 2002 after the late Robert Mugabe won a controversial presidential election. The EU recalls the purpose of its restrictive measures, which is to encourage a demonstrable, genuine and long-term commitment by the Zimbabwean authorities to respect and uphold human rights and the rule of law.”
Zimbabwe attributes its long running economic crisis to the sanctions by Western countries, but the EU said the measures “are targeted and very limited.” “They do not affect the people of Zimbabwe, its economy, foreign direct investments or trade,” it added. “Zimbabwe continues to benefit from duty free and quota access of its exports to the EU, while negotiations are ongoing to deepen the Eastern and Southern African (ESA) Economic Partnership Agreement.”
Kenyans brace for higher cost of living over Russia-Ukraine conflict (The East African)
Kenyan households are braced for higher energy and food costs as a result of the ongoing threat of war between Russia and Ukraine, which has sent global oil prices soaring and restricted wheat exports. A major risk event usually sees investors rushing back to bonds and the safest assets in what could hurt the flow of foreign investors to the Nairobi Securities Exchange (NSE) given the foreigners account for 58 percent of trading at the bourse. The Russian invasion of Ukraine risks further fanning oil prices – and therefore inflation through costly transport, electricity and other manufactured goods. Russia is the fourth-biggest buyer of Kenyan tea, having taken up produce worth Sh6.2 billion in the 11 months to November 2021.
Tanzania, Kenya, EAC integration to ease regional trade (The Exchange)
It is only through economic growth that the East African Community (EAC) can successfully realize its much-coveted regional integration. For this to happen, a delicate balance must be achieved between competition and cooperation; therein lies the dilemma, a race or partnership? As far back as two decades, in 2004, Kenya Uganda, and Tanzania, the founding partners of the East African Community, signed the Protocol for the Establishment of the East African Community (EAC) Customs Union that is known as the Customs Protocol yet to date bottlenecks remain.
Three years after the founders inked the Customs Protocol, the next parties followed suit, Burundi and Rwanda adopted the Customs Protocol in 2007. Yet they joined a protocol that is very much alive on paper but needs life support on the ground. As matters stand, numerous non-tariff barriers still remain even after the adoption of the Customs Protocol. The non-tariff barriers undoubtedly increase the cost of doing business and affect the growth potential of trade and cooperation. Again, the reason behind the persisting non-tariff barriers, despite the supposed political will, is the dilemma of competition vs cooperation.
How Tanzania’s economy faired in the 2021/22 second half (The Exchange)
Tanzania economy is recovering from the gruesome impacts of the pandemic. According to the recent Monetary Policy Statement, Mid-Year Review for 2021/2022 analyzes global and domestic economic performance. The review took a profound take on the performance of the exports sector. Whereby, exports of goods and services amounted to $5.735 billion in July to December 2021 compared with $4.598 billion in the corresponding period in 2020 – service receipts and non-traditional goods accounting for the largest share of 87.5 per cent. “Services receipt increased by 78.5 per cent, owing to a significant rebound in tourist arrivals to 543,644 from 262,093. Exports of goods amounted to $3.85 million, dominated by non-traditional goods at 81.4 per cent.” However, the review noted that good performance was recorded in exports of manufactured goods, horticulture, fish and fish products. Meanwhile, exports of gold amounted to more than $1.3 billion compared with around $1.6 billion.
However, the review noted that the imports of goods and services were around $6.5 billion from July to December 2021, compared with $4.699 billion in the corresponding period in 2020. The rise in price and volume effects of oil affected oil imports (increased by 76.7 per cent, which is more than $1.1 billion) which accounted for about 21.4 per cent of goods imports. “Furthermore, imports of machinery and building and construction rose by 16.3 per cent, and 41.5 per cent, respectively and altogether accounted for 28 per cent of goods imports. Services payment amounted to $1.035 billion.”
Tanzania railway lowers freight costs while increasing export in the EAC (The Exchange)
Tanzania is growing its network infrastructure and effectively lowering freight costs, increasing exports and growing investment all along the railway line. In the most recent development, an additional 282km of the railway are being constructed to connect Tanzania and Burundi giving the latter access to East Africa biggest and busiest port. The construction is an extension of the already laid down Standard Gauge Railway (SGR) in Tanzania. The two governments have signed an agreement that paves way for new rail to be laid at a sum of US$900 million. What does this extension mean for Burundi and how will it benefit Tanzania?
Rwanda’s agriculture exports rose by 39% to Rwf543bn in 2021 (The New Times)
Rwanda earned over $543 million (about Rwf543 billion) in agricultural export revenues from January to December 2021 against over $390 million of the same period in 2020, representing an increase of 39 percent. These export statistics are contained in the National Agricultural Export Development Board (NAEB)’s December 2021 and Quarter Two Report 2021-2022, which was published early February this year.
According to the report, both export and re-export increments were related to the economic recovery from the Covid-19 pandemic, where most of the economic activities resumed with more movement of people and goods in the region and abroad. The report indicated that tea, coffee, flowers, fruits and vegetable unit prices were also showing positive trends, thus contributing to the realized good export performance compared to the same period of 2020.
We’re ready to export locally manufactured goods – GUTA (Ghanaweb)
The Ghana Union of Traders Association (GUTA) has said it is poised to support local manufacturing companies by exporting their goods to other countries. According to the Chief Executive Officer of the Association, Dr Joseph Obeng, their move is to support government’s One District-One Factory (1D1F) initiative. This, he said, will help stabilize the local currency - Cedi - which has in recent times witnessed a free fall. In an interview with the Ghana News Agency on Friday, Dr Joseph Obeng said, “We want to do what we call the income in-income out programme to export goods from Ghana to the destinations that we go and import the goods.”
Manufacturing trade sectors inspire hope in economy’s recovery (The Business & Financial Times)
The Business Tracker survey has revealed that the country’s manufacturing and trade sectors, which were hit hard by the pandemic, have almost fully recovered as both saw an appreciable increase in activities during the third wave of the pandemic (from January to September), thereby inspiring hope that the economy is getting back on track.
According to data published by the Ghana Statistical Services (GSS), the manufacturing sector’s recovery during the third wave of coronavirus disease that swept the country has hit 96.9 percent; the highest recovery in all sectors of the economy. This is higher than the 80.2 percent and 88.9 percent recovery recorded in the first and second waves of the pandemic respectively. The same trend is also observed in the trade sector, as it saw 96.3 percent of firms fully recovered; up from the 79.9 percent and 90.4 percent recorded in the previous two waves.
Oquaye woos Ghana’s rich to show interest in Free Zones Scheme, AfCFTA (Class FM Online)
The Chief Executive Officer of the Ghana Free Zones Authority (GFZA) Mike Oquaye Jnr has said “the business of Ghana Must be driven and led by Ghanaians”. An informal business interaction saw Mr Oquaye talking through the need for Ghanaian investors and entrepreneurs like the members of the East Legon Executive club to take advantage of the scheme, in line with the Authority’s vision to assist Ghanaian businesses to “achieve more exports, beyond the horizon – into Africa and the rest of the world”.
Mr Oquaye informed the group that contrary to the perception that the Free Zones Scheme is an area fully dominated by foreign companies, available figures show; 31 per cent of businesses are wholly owned by Ghanaians, 33 per cent jointly owned by Ghanaian and foreign interest, and 36 per cent wholly foreign owned. The interaction formed part of the “Ghanaian Entrepreneurs for Export” programme.
‘Ghana in economic crisis but not broke’ – Adei (Class FM Online)
Ghana is in a short-term economic crisis but the country is not broke, former Rector of the Ghana Institute of Management and Public Administration (GIMPA), Prof Stephen Adei, has said.
“I think that Ghana, we have a good country with a good future but we have a short-term challenge; it is quite obvious. We know that at the end of last year, the fiscal deficit was 12.1 per cent, inflation has started climbing up to 12.6 per cent; the currency, which was quite stable – in fact, two years ago, we were the best-performing currency in Africa,” Prof Adei told Kofi Oppong Asamoah. “It is a short-term economic crisis... Nobody should deny that one. It is a fact”. He warned: “If we don’t manage it well, it can lead us into trouble but I don’t think that we can say that the country is broke”. In his view, “It is a matter of economic crisis which has to be managed”.
Boosting the non-oil exports (Daily Sun)
Neglected for decades in favour of crude oil as the major revenue earner for the country, hope is now rising as the non-oil sector is receiving new impetus to drive economic growth and make the country less dependent on oil. Undoubtedly, this is the path to go, with the Central Bank of Nigeria (CBN) charting the way forward for non-export revenue with the recent unveiling of “RT200FX Programme.”
With a capital outlay of $200billion, the aim of the new imitative is to drive non-oil revenue for the next five years. The policy is hinged on five major planks: Value-adding export facility, non-oil commodities export facility, non-oil foreign exchange rebate scheme, dedicated non-oil export terminal and biannual non-oil export summit. Each of the components is designed to boost local production that will add value to non-oil natural resources that abound in many states of the country. These include gold, zinc, bauxite, copper, cocoa, cashew, sesame seed, lead, palm oil, sorghum, peanuts, cassava, millet, among others.
Digital Senegal for Inclusive Growth: Technological Transformation for Better and More Jobs (World Bank)
This book explores possible solutions for a more intensive use of digital technologies, especially by small and medium enterprises, to increase their productivity and create more quality jobs. The report will contribute to helping women and young people in particular to gain access to decent work and therefore reduce their exposure to poverty. Appropriate use of this report will make it possible to succeed in the challenges of digital transformation, especially in the context of a relatively young population that is more open to innovation and change.
African trade news
EABC urges South Sudan to fully implement the EAC single customs territory (EABC)
The East African Business Council is urging the Republic of South Sudan to fully implement the EAC Single Customs Territory to spur intra-EAC trade. Speaking at the EABC -TMEA Public-Private Dialogue at the Elegu/ Nimule One-Stop Border Post, transporters, clearing and forwarding agents and traders explained that delayed implementation of the EAC Single Customs Territory by South Sudan causes delays in the clearance of cargo at the border. The transporters reported that occasionally trucks await clearance for 2 days in the parking yard. South Sudan join the East African Community in April 2016. In 2020 South Sudan’s export to the EAC Partner States amounted to USD 87million while imports USD 573 million. In 2016 South Sudan export and imports to the EAC Partner States were USD 2.6million and USD 400 million respectively. Uganda imports from South Sudan amounted to USD.86 million in 2020 while exports USD 357 million (International Trade Centre).
The EABC urged the EAC Secretariat to mobilize more resources to support South Sudan to finalize the construction of the One-Stop Border Post (OSBP) and implementation of EAC protocols and commitments in order to facilitate trade. The One-Stop Border Post (OSBP) concept is not operational due to the delays in the construction of the OSBP facility on the South Sudan side.
Effective implementation of PPPs is critical to address infrastructure deficit in Africa (Engineering News)
The African Union (AU) has noted the clear impact of infrastructure deficits on African competitiveness, recognising this as “a continental problem that requires a continental solution”. Regional integration through infrastructure programmes is expected to overcome constraints imposed by scale and location, and improve the competitiveness of African producers, connecting consumers and enhancing intra- and inter-regional trade. African leaders have consistently expressed their desire to support Africa’s economic development through a common market for goods and services. A 2016 report by McKinsey projects that Africa’s manufacturing “output could expand to nearly $1 trillion” by 2025 if Africa’s manufacturers upscaled to meet domestic consumer and business demands. This will require inter-sectoral collaboration between business and governments to address obstacles to production and exporting of goods.
Recognising these and other market opportunities, aspirations for Africa’s development have begun to translate into policy-making: The African Free Trade Agreement underscores regional policy efforts towards this goal; the AU’s Programme for Infrastructure Development (PIDA) is an outcome of a coordinated policy effort to unlock competitive opportunities; and, in South Africa, the recent adoption of the District Development Model shows a localised shift, mirroring intra-regional policy trends.
Improving Africa’s Service Delivery Through E-Governance (AUDA-NEPAD)
Governments around the world are mandated to provide basic services such as clean water, sanitation, housing, immigration documents (passports), security, and health services, among others, for their citizenry. It remains crucial for governments to efficiently provide these services sufficiently and cost-effectively. These basic services should also closely correlate with the socio-economic activities of the population to accomplish the aspirations of the African Union’s Agenda 2063 and the United Nations’ Sustainable Development Goals (SDGs). The AU aspirations are to ensure a better and more sustainable future for all Africans.
There are efforts among African countries to utilise Information and Communication Technologies (ICT) tools to enable and improve governments’ service delivery across the continent. In this way, African governments are progressively adopting digital and electronic government operational mechanisms in the form of e-government service delivery. Notably, e-government systems are utilising ICT tools such as digital technologies and internet-based applications to enhance access and delivery of basic services to citizens and businesses across all governmental departments.
Establishment of Regional Pooled Procurement Platform and Regulatory Affairs Database (UNECA)
As part of its mandate to deliver on Agenda 2063 and SDGs and operationalizing of the African Continental Free Area (AfCFTA) by translating ideas into action and in line with its commitment that private sector and public sector dialogue yields tangible outcomes, the United Nations Economic Commission for Africa (ECA) and its partners (IGAD, AUC, AUDA-NEPAD, UN Family) are facilitating the establishment and operationalization of the AfCFTA-anchored Pharmaceutical Initiative (Pharma Initiative)’s Centralized Pooled Procurement Mechanism (CPPM) on the Africa Medical Suppliers Platform (AMSP). Further, the high-level Stakeholders Meeting to deliberate on regional database and regulatory affairs for select maternal, neonatal and child health medicines will be held on 24-25 February 2022, Nairobi, Kenya.
African experts call for innovative financing to hasten green transition (Xinhua)
African countries should leverage domestic financing options in order to hasten their transition to green and resilient economic development in the face of dwindling external support, experts said at a virtual forum in Nairobi, the Kenyan capital, Monday. Jean-Paul Adam, the director for Technology, Climate Change and Natural Resources Management at the UN Economic Commission for Africa (UNECA), stressed the need for the continent to mobilize resources internally in its quest for green growth. “Climate financing which is a critical pillar of Africa’s resilient growth should be pegged on resources that are mobilized internally as pledges made by major economies take longer to come through,” said Adam.
Fintech entrepreneurs aim to spur green bond issuance in Africa (Moneyweb)
The need to finance more environmental projects in Africa is driving two entrepreneurs to start the first exchange dedicated to green bonds. The Green Exchange, to be based in Ghana’s capital Accra, aims to enable companies to issue billions in green bonds and for investors to trade the debt in a secondary market, said Orla Enright, its chief executive officer. So far Africa has missed out on a global boom in borrowing to fund projects that help mitigate climate change. “The reaction from companies in the region to the opportunity to issue a corporate green bond has been highly positive,” Enright said in an interview in Accra. “They’ve seen the potential of green bonds and that the time is now.” Sub-Saharan Africa urgently needs to mobilise $50 billion annually to address climate adaptation in agriculture, power and urban infrastructure, and green bonds offer part of the solution, the Overseas Development Institute said in a research note. The continent is among the most at risk from climate change yet suffers from a high cost of finance.
Panelists at the European Union-Africa Business Forum 2022 in Brussels called for more strategic cooperation between Europe and Africa to address trade and economic imbalances between the two continents. Recent statistics show that Africa’s participation in global value chains remains low at 3%.
Albert Muchanga, Commissioner for Trade and Industry at the African Union Commission, said Africa can improve its stake in the global value chain with the help of a strong EU partnership in a win-win formula. “Rather than relying just on exporting raw materials, integrating EU-Africa value chains should aim to process goods within Africa. This is where jobs are created and poverty reduced.”
Thierry Breton, EU Commissioner for the Internal Market, called for a more robust economic integration between the two continents. “It is extremely important that we continue, from both sides, to break the barriers to integrating our markets as a very strong booster for our economies,” he said. “We are trying to put the tools together from our side with our new global strategy. We will dedicate €150 billion to Africa. We will, of course, support massive infrastructure in Africa, which we know is extremely important and we will help improve the investment climate and support sustainable development.”
AU-EU Summit: private sector partnerships are where real change can happen (The Conversation)
Five years since the African Union (AU) leaders and their European Union (EU) counterparts held their 5th meeting in 2017, the two regional organisations have met again. The February 2022 meeting – 16 months overdue because of COVID – was significant given the actual and potential size of the two blocs. The relationship between the two continents has been tested in recent months. The current dialogue between the two blocs is about priority areas of economic cooperation, job creation and climate change. Others are migration management, investment in youth, and peace and security.
Europe remains Africa’s largest foreign aid provider. The flow of trade and investments between the two continents is high. Africa’s exports to the European Union, for instance, totalled US$146 billion in 2021 compared to its imports of US$142 billion.
Strengthening of intercontinental value chains (step-by-step activities that transform raw material or ideas into products) is a priority area for the partnership between Africa and Europe. Functioning value chains could have spillover effects on the domestic industrial sector, and help boost national self-sufficiency. This is particularly critical for sectors such as pharmaceuticals where the COVID pandemic has exposed weakness.
The continental project for free trade is an essential component for the growth and industrial transformation of Africa. Its building blocks are the various regional economic communities that currently exist across Africa. The cooperation between Africa and Europe needs to strengthen these groupings.
In a strong endorsement of the work of the African Union Development Agency-NEPAD (AUDA-NEPAD) to strengthen medicines regulators and improve health security on the African continent, the European Union (EU) – including the European Commission, the European Medicines Agency (EMA), and EU Member States Belgium, France and Germany – and the Bill & Melinda Gates Foundation (BMGF) will mobilise more than 100 million euros over the next five years to support the recently established African Medicines Agency (AMA) and other African medicines regulatory initiatives at regional and national levels. This support to strengthening regulatory capacity will improve health security in Africa, including through the expansion of local manufacturing of quality, safe, efficacious, and affordable medicines, vaccines, and other health tools.
The commitments announced today will support the first stages of the continent-wide African Medicines Agency and the further development of African medicines regulatory capacity at regional and national levels. This funding intends to foster collaboration and sharing of technical expertise between the EMA and the AMA and support several African national regulatory authorities (NRAs) to achieve the minimum WHO requirements for effective regulatory oversight for quality local vaccine production.
Europe & Africa Leaders Just Met for the First Time Since the Pandemic. Here’s What to Know (Global Citizen)
Oxfam reaction to AU-EU Summit outcome on Special Drawing Rights (Oxfam)
Marbury: Nigeria’s Creative Industry Has Tremendous Opportunities (This Day)
AfCFTA offers terrific opportunities, both for Africa and the United States and we look forward to engaging the African Union Secretariat and countries in Africa, on how we can make US companies come in an engage Nigerian companies. The Biden-Harris administration is ready to held harness economic gains that we see from the AfCFTA and we are committed to providing technical assistance to support cross-border trade and investments, whether at the country level, at the regional, economic or communities level, working with the AfCFTA secretariat.
The Prosper Africa is a commitment to strengthening mutually beneficial relationship towards trade and investment. This includes trade and investment flows from the United States to Africa and also includes from Africa to the United States. So, we are trying to provide more competitive and comprehensive packages and support to both US and African companies. Particularly, we are helping African companies to attract investments.
The Prosper Africa Initiative brings together the full suit of the US government trade and investment support services and it has added new and improved areas. So, the Prosper Africa Initiative is private sector led and it is to respond to the needs of the private sector by providing things like market insights, technical assistance, financing and more. So, it is different from previous initiatives in that we are taking a continent-wide approach, so that we can engage with companies and investors who are looking for viable sectors across countries.
Export oriented policies toward Asia could support faster economic growth – Albert Zeufack (The Business & Financial Times)
The World Bank Chief Economist for Africa region, Albert G. Zeufack, has called on policymakers to develop policies that are export-oriented toward Asia to support faster economic growth and transformation. This call comes amid the turbulent times of the coronavirus pandemic; as global competition has seen the gradual restructuring of international trade policy.
Available data point to an increase in trade between sub-Saharan Africa and Asia – from 13 percent in 1997 to 26 percent in 2016 for exports, and from 20 percent to 36 percent for imports. This has largely been on the back of intensified trade relationships with China and India. The composition of Africa’s exports to Asia is primary commodities related to energy, metals and minerals, and agricultural raw materials. Africa has also diversified its sources of imports over the past decade.
Presenting on the prospects of trading with East Asia during the launch of the World Bank book dubbed ’Africa in the New Trade Environment’, the Chief Economist indicated that assessment of the changing demand patterns of Asia’s growing middle-class informs of export diversification options for sub-Saharan African countries.
‘Working Relations Key to Continued Africa-Latin-America Ties’ (African Union)
The African Union (AU) Pavilion in collaboration with the Argentine and Mexican Pavilion at Expo 2020 Dubai rubberstamped the South-South strong influence on the Agriculture, Food security and Climate change sphere, as experts from both the African continent and Latin America (LATAM) convoked to share and report on projects currently employed in the field.
The event rounded off Expo’s ‘Food, Agriculture and Livelihoods’ week. A period that was dedicated to exploring how the global community can sustainably grow foods to meet future demand whilst ensuring agriculture works in harmony with ecosystems, promoting responsible consumption habits to reduce food waste.
“We have Agenda 2063 as our united common cause for the African people and to have our Latin-American sisters and brothers, commit to continue the exchange of not only resources but the scientific IP (intellectual properties) will help safeguard the Africa and Latin-America we want,” concluded Dr. Bissoonauth.
Global economy
Goods barometer signals possible turning point for trade as supply pressures ease (WTO)
The current reading of 98.7 is below the barometer’s baseline value of 100 and down slightly from last November’s reading of 99.5, indicating a loss of momentum in trade at the start of 2022 following last year’s strong rebound in trade volumes. However, the index also shows signs of bottoming out, suggesting that merchandise trade may turn up soon even if it remains below trend in the near term. In addition to ongoing supply chain disruptions, the barometer’s weakness is partly explained by the introduction of health restrictions to combat the Omicron wave of COVID-19, which some countries are now scrapping since the new variant’s health impact has turned out to be relatively mild. Relaxing these measures could boost trade in the coming months, though future variants of COVID-19 continue to present risks to economic activity and trade
Why the least developed countries of the Commonwealth are doing better at trade (The Commonwealth)
In 2020, the share of Least Developed Countries (LDCs) in world trade remained at just 1%. Although the Istanbul Programme of Action (IPoA) for LDCs and SDG target 17.11 both sought to double LDCs’ share of global exports by 2020, the world’s 47 LDCs missed the target. While this could be regarded as a “lost decade” for gains from trade, the performance of the Commonwealth’s 14 LDCs tells a more promising story: their collective share in global exports was 1.27 times higher in 2020 than in 2011 and two LDCs – Rwanda and Tuvalu – almost doubled their share of world exports.
Before the COVID-19 pandemic outbreak, Commonwealth LDCs’ GDP grew at an average annual rate of 5.5% between 2011 and 2019, compared to an average global growth rate of just 2.2% and 4.2% for all 47 LDCs combined. Commonwealth LDCs relied heavily on intra-Commonwealth trade during this period, which grew significantly despite the 54-member body not being a trading bloc. In 2019, the Commonwealth absorbed one quarter (USD 19 billion) of their total goods and services exports (USD 79 billion). During the pre-pandemic years (2011-2019), the share of Commonwealth LDCs in intra-Commonwealth goods exports climbed from 2.18% to 3.4%. Over the same period, the share of LDCs in world trade stagnated at 1%
A significant and growing ”Commonwealth advantage” in trade has driven this increase in exports, helping to build, strengthen and sustain trading relationships between Commonwealth LDCs and other member countries. Historical ties, familiar legal and administrative systems, the widespread use of English and the presence of large and dynamic diasporas, mean bilateral trade costs are around 21% lower, on average, for Commonwealth country pairs compared with the cost of trading with non-Commonwealth countries.
G20 Finance Ministers and Central Bank Governors Meeting Communiqué (US Department of the Treasury)
The global economic recovery is continuing. However, new waves of COVID-19 infections and the emergence of new variants are impacting the pace of recovery. Recovery is expected to be asynchronous, partly due to uneven access, delivery and uptake of vaccines, therapeutics, and diagnostics, with an increased likelihood of narrower and uneven macroeconomic policy space. Supply disruptions, supply-demand mismatches, and increased commodity prices, including energy prices, have also contributed to rising inflationary pressures in a number of countries and pose potential risks to the global economic outlook. We will continue to strengthen the resilience of global supply chains. We remain vigilant of the impacts of these challenges on our economies. We will also continue to monitor major global risks, including from geopolitical tensions that are arising, and macroeconomic and financial vulnerabilities. We will undertake a more systematic analysis of macroeconomic risks stemming from climate change and of the costs and benefits of different transitions. We reaffirm the importance of open and fair rules- based trade in restoring growth and job creation, reiterate our commitment to fight protectionism, and encourage concerted efforts to reform the World Trade Organization. We confirm our April 2021 exchange rate commitments.
The COVID-19 pandemic has widened inequality for the most financially vulnerable and underserved groups especially women, youth, and Micro, Small, and Medium Enterprises (MSMEs). We reaffirm our commitment to bring forward the financial inclusion agenda and we look forward to the Global Partnership for Financial Inclusion (GPFI) developing a financial inclusion framework on harnessing the benefit of digitalization, with the objective of boosting productivity, and fostering a sustainable and inclusive economy for women, youth, and MSMEs, building on the G20 2020 Financial Inclusion Action Plan.
How the Global Pandemic Widens the Gap between the Poor and the Rich (Politics Today)
According to Oxfam, a UK-based international NGO, the 10 richest people on earth have doubled their wealth, while the rest of the world and, in particular, 99% of humanity has been worse off during the pandemic. Global inequalities have overall increased twofold between 2019 and 2022.
The need for more equitable and inclusive development and a more balanced distribution of income flow between land, labor, and capital is more evident today. There is an ever-greater need for re-organization of the roles and income flows amongst all production factors. Meanwhile, the world is moving towards a new era where state capitalism is also more evident. Governments play a central role in new multinational corporations. In particular, the rise of China (and Asia broadly) with its own socialism and state capitalism is a new eye-catching case not to be missed. New measures are needed to ensure inclusive development. Social, psychological, human, and democratic capital accumulation processes and economic transformations remain as the challenges of this new era.
Before the Next Shock (Foreign Affairs Magazine)
During the coming decade, the world economy will confront a crisis. This forecast may sound rash, but the past half century revealed that disasters occur regularly. In recent times, policymakers have faced not just the COVID-19 pandemic and its economic trauma but also various eurozone crises. These dramas followed the global financial crisis of 2008 and the consequent recession, which were in turn preceded by the shock of 9/11.
Whatever its origins, the next crisis will strike an economic system already under strain. People around the world are frustrated and restless. Leaders everywhere, attentive to domestic politics, are turning toward national industrial policies and hardening their borders. Geopolitical competition has bred mistrust among major economies, and the world seems to be fragmenting into regions pulled by economic gravity toward local poles of power.
The legacy institutions of earlier economic orders are struggling to adjust to these changes. The International Monetary Fund (IMF) and the World Bank have to add climate and pandemic policies to their development missions. The World Trade Organization has been unable to modernize its rules.
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Country-related news
Presidential Climate Change Commission discusses risks of net-zero carbon emissions for South Africa (The Mail & Guardian)
The Presidential Climate Change Commission convened on Friday at the Industrial Development Corporation Conference Centre in Johannesburg. Topical to the dialogue among policymakers, civil society groups, private sector businesses and academics was the theoretical nature of a net-zero future and the importance of choosing among the models presented to the commission on how to get there.
On the prickly issue of finance, Public Enterprises Minister Pravin Gordhan told the hearings that if South Africa wanted to be among the top 10 countries to lead in new green industries then bureaucratic blocks had to be avoided and frankness was needed about the trade-offs.
“Promises are easily made, the delivery takes a hell of a long time, and sometimes not delivered at all. So $100-billion a year was promised almost 10 years ago. As part of the climate process, it was never delivered on that scale at all in the multilateral forums … and then we come to the fiscus of South Africa, which has its own constraints that we are already familiar with and we will become more aware of when the finance minister delivers the budget on Wednesday.” He said there is a political economy around climate change and the risks would devalue the country in the eyes of investors.
Brian Mantlana, a commissioner and researcher at the Council for Scientific and Industrial Research, pointed out that net-zero was a climate change concept but was also the biggest development opportunity of our time.
Siseko Maposa: Rampant illicit trade in South Africa is indicative of a failing state (News24)
The World Economic Forums’ (WEF) recently published Global Risks Report 2022 highlights the significant challenges facing South Africa. The annual report, which collates views and data from various experts and research institutions, offers an in-depth analysis of global economic, societal, and technological risks .According to the report, South Africa’s top five risks are economic stagnation, unemployment, state failure and weak institutions, and the proliferation of illicit economic activity. All identified risks feed into growing anxiety that the country is at risk of sliding into chaos if urgent preventative action is not taken. The sheer growth in illicit economic activity in South Africa over the past few years is alarming and has had a tremendously negative impact on the economy, taxes, and jobs.
The development of the Zambezi region, particularly Katima Mulilo as a major international border and logistics hub for the SADC region is critical to the promotion of deeper regional and infrastructure integration, trade and transport logistics efficiencies. In this light, the expansion and improvement of Katima as a distribution centre supports regional, continental and global value supply chains and thus promotes intra-African trade specifically to support the much-hyped Africa Free Trade Agreement.
“The region is a strategic inland hub, which will contribute towards Namibia’s vision of becoming the preferred logistics hub for the SADC region. The expanded Port of Walvis Bay is envisaged to generate increased cargo volumes for the hinterlands of Zambia, Zimbabwe, Botswana, the Democratic Republic of Congo, Malawi and Angola. Therefore, to absorb the increased throughput of cargo volumes via Katima Mulilo and Ngoma border posts in the Zambezi region, there is a need to give a facelift to the border infrastructure at Katima Mulilo border post,” said Eric Shimumbwe, a consultant for the Walvis Bay Corridor Group (WBCG) on the Walvis Bay-Ndola-Lubumbashi Development Corridor (WBNLDC) Cluster Secretariat.
Victoria Falls informal traders want temporary border passes (Chronicle)
INFORMAL cross-border traders in Victoria Falls have appealed to Government to introduce temporary border passes to allow them easy passage into Zambia for business. Victoria Falls in Zimbabwe shares the border with Livingstone in Zambia.
While Zambian traders popularly known as omzanga used to enjoy easy passage to Victoria Falls using temporary one-day border passes, the situation was different on the Zimbabwean side where one needs a passport to cross the border. The informal cross-border traders who specialise in selling curios, African attire cloths and other goods said it is not viable to have a passport stamped on a daily basis considering the cost of acquiring one.
“It is our appeal to Government to bring back border passes for locals here so that we are able to cross daily to sell or buy from Zambia. Many informal traders cannot afford to apply for passports and those who have the documents find it not worth it to have it stamped on daily as this wastes space.
EU and Kenya advance talks on interim Economic Partnership Agreement with sustainability provisions (European Commission)
The EU and Kenya agreed today to advance negotiations on an interim Economic Partnership Agreement (iEPA). This important agreement will enhance trade and investment opportunities and help boost sustainable economic growth and job creation. The iEPA will be complemented by binding commitments on environmental protection, climate and labour rights. It reflects the pending EPA initialled in 2014 between the EU and the East African Community (EAC). Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade, said: “On the day of the EU-African Union summit, we are delighted to announce our engagement with Kenya to boost our trade ties. We will now move forward with the Economic Partnership Agreement, and we will also negotiate the trade and sustainability aspects. Africa is much more than just our neighbour - it is our partner. The closer our economies, the greater the benefits for our people and businesses. This applies not just to our relations with Kenya, but to the entire Eastern Africa region and to Africa as a whole.”
The future EU-Kenya iEPA will liberalise trade in goods on mutual basis. It will give duty-free quota-free access to the EU market for all Kenyan exports and partial and gradual opening of the Kenyan market, including agriculture and fishery products. It will also set up trade-related rules on sanitary and phyto-sanitary measures, technical barriers to trade and customs and trade facilitation. This liberalisation will be accompanied by trade-related development cooperation with a view to boost sustainable economic growth and job creation.
World Bank, IMF lending to Nairobi rise as Kenya-China loan deals drop (The East African)
World Bank and the International Monetary Fund (IMF) have stepped up lending to Kenya over the past three years, which has seen Chinese loan deals reduce, firming the grip of Bretton Woods institutions on East Africa’s biggest economy. Data from the National Treasury show World Bank’s total lending rose by Ksh517 billion ($4.5 billion) from June 2019 to Ksh1.125 trillion ($9.8 billion) in December, with the bulk loans coming in the wake of Covid-19 economic hardships. The IMF lending grew from Ksh158.5 billion ($1.3 billion) to Ksh207.5 billion ($1.8 billion) in the same period while Chinese loans increased by Ksh125 billion ($1 billion) to Ksh786 billion ($6.9 billion).This is a departure from lending trends in the first term of President Uhuru Kenyatta’s reign when Nairobi was a major beneficiary of China’s loans for the development of mega infrastructure projects such as roads and a modern railway over the last decade.
Kenya-Tanzania trade marches towards $1 billion (The East African)
Kenya-Tanzania bilateral trade hit $905.5 million for January to November 2021, according to the Central Bank of Kenya. Kenya’s imports from Tanzania stood at $501 million, and exports at $403.9 million. “The bilateral talks between Kenya and Tanzania initiated by the two leaders have been the catalyst behind the improved trade figures across the border,” said Kevit Desai, Kenya’s Principal Secretary in the Ministry of EAC and Regional Development, citing the talks in May 2021 between President Samia Suluhu and her Kenyan counterpart President Uhuru Kenyatta. Tanzania’s major exports to Kenya include cereals, wood and vegetables and Kenya’s exports to Tanzania include soap, coated flat-rolled iron, and packaged medicaments.
Uganda and Tanzania bury the hatchet over border tariffs (The Exchange)
Ugandan milk and milk products are still suffering at the borders of Tanzania (and Kenya) leaving a sour aftertaste on said party relations.
According to Uganda, Tanzania was imposing unfair charges on its traders. Uganda complained that Tanzania was charging its truck fees way higher than it was charging other trucks using the same border and road. The allegations hold that Tanzania was charging Ugandan truckers up to $500 toll fees per truck yet it charged only $152 for Rwandan and other trucks. The road fees are not all. Uganda argues that its trade volumes are being affected by other non-tariff barriers including but not limited to restrictions on exports such as sugar and milk. That being said Kampala did not only file a complaint but also threatened to retaliate.
The sit-down was part of the fourth session of the recently formed Joint Permanent Commission (JPC) between Uganda and Tanzania. The two sides also agreed to appoint parties within all ministries, departments and agencies across the two countries to coordinate, follow up and ensure quick and full implementation of the resolution.
Other than the trade issues, the session examined and harmonized implementation of decisions across various sectors of bilateral cooperation including immigration, education, transport, communication, defence and security, energy and mineral development among others.
Tanzania President reaffirms her commitment to modernizing Customs (WCO)
On 17 February 2022, Dr. Kunio Mikuriya, Secretary General of the World Customs Organization (WCO), met with H.E. Ms. Samia Suluhu Hassan, President of Tanzania, on the occasion of her visit to Brussels. During their bilateral discussions, the President expressed her appreciation for the WCO’s support with the process of modernizing the Tanzania Customs Administration and sought further advice on the way forward.
Dr. Mikuriya also highlighted the need to apply technology to facilitate paperless trade, while ensuring interoperability with different IT systems. This could be achieved through the use of the WCO Data Model, a tool that supported cross-border data exchange. He went on to underline the importance of training and human resource development as an enabler to implement tools and technology.
Through the approach described above, Customs could enhance its professionalism and integrity which would in turn contribute to developing trust across the supply chain. This enhanced trust, especially with compliant businesses, would ultimately form the basis for developing an Authorized Economic Operator (AEO) programme.
Uganda looks to Kenya, Jamaica for its digital currency (The East African)
Uganda is considering a Central Bank Digital Currency (CBDC) in a move that has drawn policy attention to the large investments required for a successful trading ecosystem and crucial mileage offered by digital payments systems such as mobile money services and internet banking. Whereas the actual cost of issuing a government-owned digital currency remains unclear, the costs surrounding this venture are reflected in the development of software tools, improved electricity generation for running high energy consuming block chain technology platforms, and recruitment of specialist personnel. Implementation timelines are yet to be confirmed.
“We are studying the idea of a Central Bank Digital Currency with the aid of case studies developed by peer central banks in Jamaica, Nigeria, Ghana and Kenya among others. The law does not accommodate digital currency use in Uganda but we are exploring legal options for future amendments in financial laws that will facilitate circulation of digital currency denominations.
Uganda: The Mining and Minerals Bill, 2021 (The Independent)
Parliament has passed the Mining and Minerals Bill, 2021 which will see the establishment of the Uganda National Mining Company which will manage the government’s commercial holding and participating interests in mineral agreements. The Bill that was passed on 17 February 2022 mandates the National Mining Company to hold 15 per cent free equity in all large and medium mining ventures as well as have the right to pay up 20 per cent extra shares in the mining ventures at the commercial rate. The Chairperson of the Committee on Environment and Natural Resources, Hon Emmanuel Otaala who presented the report on the bill said that the mineral agreements and Production Sharing Agreements will apply to highly capitalised investment and complex mining.
Nigeria: Trade deficit with China worsens with $23bn imports in 2021 (Vanguard)
Nigeria has topped the chart amongst African countries importing from China in 2021 with imported goods valued at $23 billion (about N9.6trillion) or 16 percent of total continent’s imports from China.
But the country did not feature on the top 5 African countries in exports to China in the same period, as it recorded only $3 billion (about N1.3trillion) exports in the year. Data from the National Bureau of Statistics (NBS) also shows the bilateral trade deficit against Nigeria is widening in favour of China, with a steady increase in Nigeria’s importation from the Asian country from 2019 to 2021.
Unceasing import substitution policy worsens Nigeria’s economic woes (Businessday)
Faced with spiraling inflation, a weak currency due to a high import bill incurred by Nigerians and low non-oil export, the Nigerian government for decades has resorted to an import substitution policy geared primarily towards curtailing a dependency on foreign products using a host of restrictive policy tools like tariffs, bans and quotas – still – the manufacturing sector that should lead Nigeria’s industrialization strategy remains handicapped and largely unable to take up this role in a renewed drive for self-sufficiency and foreign exchange revenue generation that is desperately required to enable the country rub shoulders with emerging economies like China and South Korea.
According to the National Bureau of Statistics (NBS), Foreign Trade Statistics report, the import spend of the country has been on the rise for the past 6 years despite the host of protectionist policies and trade barriers that have been mounted by the government in a bid to reduce the dependence
Seychelles: President holds talks with the Director General of the World Trade Organisation (Africa Newsroom)
President Wavel Ramkalawan also took the opportunity to have an exchange with the Director General of the World Trade Organization, Dr. Ngozi Okonjo-Iweala, in the margins of the Summit where he congratulated her on her latest appointment at the helm of the Organization. She is the first African woman to assume such a position. Since Seychelles will this year have its WTO Trade Policy Review in December, the President solicited the support of the organization and its members for a swift and very conclusive review, that takes into context the specificities of SIDS and the issue of Special and Differential Treatment. During their discussions, they touched on the issues of fisheries subsidies and the TRIP waiver for the production of vaccines by other WTO members. President Ramkalawan reassured her of the full support of Seychelles.
Ghana’s current account deficit is projected to widen in 2022, as Nigeria records its first surplus in over 2 years (Business Insider)
The Fitch report, a copy of which was obtained by Business Insider Africa, explained that the widening would be caused by sluggishness in the West African country’s oil and cocoa production. Also, an expected increase in local demand for imported goods would lead to a narrowing of Ghana’s goods trade surplus from $1.8 billion in 2021 to $1.0 billion in 2022.
But Ghana’s situation is not hopeless. Fitch Solutions noted in its report that the country will be be able to manage the challenge thanks to an expected increase in remittances, earnings through tourism and portfolio inflows.
African trade
EAC Partner States meet minimum requirements for Category A Trading under AfCFTA (EAC)
East African Community Partner States have adopted the EAC Tariff Offer for Category A products amounting to 90.2 per cent (5,129 tariff lines out of the total 5,688 lines) to be liberalised in 10 years after the start of trading under the African Continental Free Trade Area (AfCFTA). The EAC is now among the State Parties that have met the minimum requirements for Category A to start trading on a provisional basis under AfCFTA. The EAC is negotiating the AfCFTA as a bloc. An EAC Extra-Ordinary Meeting of the Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) held on Friday further directed the EAC Secretariat to submit the EAC Tariff Offer for Category A to the AfCFTA as soon as possible.
The AfCFTA has so far verified 29 tariff offers to ensure that they meet the modalities and this will increase to 34 once the EAC Partner States offers are verified.
Robust regulatory environment needed to combat money laundering - Veep (Ghanaian Times)
The Vice President, Dr Mahamudu Bawumia, has called for a robust regulatory environment and strong financial compliance system to prevent activities of money laundering and terrorist funding activities in the sub region. “Our continent has been denied funds of up to about $88 billion through illicit financial flow, as reported by the United Nations Conference of Trade and Development (UNCTAD) in 2020, largely through financial institutions, multinational companies and high net worth individuals who do business in Africa,” he added. He said these outflows, if curtailed, could be channelled into developmental projects and rebuilding economies.
Dr Bawumia stressed the need to strengthen collaboration among member states to counter money laundering and terrorist financing. He said the region was endowed with enormous resources and “our ability to harness same in an effective manner will go a long way in enhancing the socio-economic well-being of our people.” “We have the responsibility to stop the flow of illicit finance, which will cut down the outflow of funds to these group instead, channelling same into our development and recovery, ‘’he added.
‘Africa has found a new voice’ (SAnews)
President Cyril Ramaphosa says the experiences of the COVID-19 pandemic has breathed new life into the cause for African unity.
“Our experience of managing COVID-19 has emboldened the nations of Africa. It has shown us that resources and capabilities exist across our own continent to deal with emergencies of this magnitude. It has reminded us that we have world-class institutions like the Africa Centres for Disease Control and Prevention that must be supported and capacitated to fulfill their mandates. It has given renewed momentum to the project of political and economic integration, which has been strengthened by the advent of the AfCFTA,” the President said.
President Ramaphosa highlighted that the establishment of the mRNA technology transfer hub based in Cape Town is a vital step for the continent to manufacture vaccines for its own people. “We will continue to make the case for building Africa’s capacity to produce its own vaccines, including through a temporary waiver of the Agreement on Trade Related Aspects of Intellectual Property Rights at the World Trade Organisation (WTO). “Without being able to manufacture our own vaccines, an equitable recovery will not be possible,” he said. President Ramaphosa emphasised that the continent is determined to solve its own challenges. “We must uplift ourselves by making our own medicines to treat our people and save lives. We must develop our own economies through the African Continental Free Trade Area (AfCFTA), promoting investment and tourism within Africa, accelerating industrialisation, and driving green growth and low-carbon development. We must end all conflict and entrench democracy and good governance. “Africa has found a new voice. It is bold and unapologetic in its expectations of our partners. At the same time, we are determined that Africa’s challenges must be, are being, and will be, solved by Africans themselves,” he said.
Figure of the week: Developing digital infrastructure in response to COVID-19 in Africa (Brookings)
Last month, the Brookings Africa Growth Initiative (AGI) released its annual Foresight Africa report, which explores top priorities for the region in the coming year. This year’s edition examines some of the most pertinent issues facing the continent in 2022, including its economic recovery from the COVID-19 pandemic, public health, the empowerment of African women and girls, climate change, technological innovation, and the region’s external relations. In the Chapter 5 essay, “Harnessing technology and innovation for a better future in Africa: Policy priorities for enabling the ‘Africa we want,’” AGI Senior Fellow Landry Signé argues that the COVID-19 pandemic has contributed to the acceleration of technological innovation, adoption, policy, and regulation in Africa. However, as he notes, supportive policies aimed at promoting technological innovation alone are not sufficient for ensuring their ability to promote economic growth. Government policy, Signé urges, should also support the adoption and use of transformative digital technologies.
Natural gas will outpace oil and coal by 1.6% in five years (African Mining Market)
Over the next two decades we will see a significant growth in Africa’s oil and gas sector, with population growth, urbanization, and the emergence of a wealthier middle class in Africa driving demand. Prashaen Reddy, Partner at global management consultancy Kearney and an expert within the Energy and Process Industries within Africa explains that the recent oil discovery off the coast of Namibia and gas finds in South Africa and Mozambique, could create a greater interest in oil and gas exploration within the Southern Africa region while attracting billions into the Southern African Customs Union (SACU). A white paper released by Kearney last year outlines the overarching strategic considerations for African utilities to forge a path to sustainability amidst the backdrop of this global paradigm shift. The paper also unpacks the broader macroeconomic trends that are shaping this transition.
According to the International Energy Agency (IESA) over the next five years natural gas will outpace oil and coal by 1.6%. Therefore, a bigger conversation must be had as the availability of power is essential for economic growth, and, even more importantly, for social development.
RES4Africa, IRENA and UNECA recommend 15 actions to maximise socio-economic gains of Africa’s energy transition (RES 4 AFRICA)
Fundamental to providing reliable, affordable and sustainable electricity access to all, renewable investments at scale can contribute to supporting Africa’s sustained economic growth, strengthening local value chains and promoting the creation of local jobs. In order to deepen this topic, RES4Africa Foundation, the International Renewable Energy Agency (IRENA) and the United Nations Economic Commission for Africa (ECA) developed their first joint report Towards a prosperous and sustainable Africa: maximising the socio-economic gains of Africa’s energy transition, presented today in occasion of the European Union-Africa Business Forum. Building on the knowledge and experience of the three organisations, the study is a comprehensive analysis of the job and socioeconomic impact of clean energy investments in the African continent, combining the views and experiences of leading international institutions active in supporting development, sustainable economic transition and renewable energy development in emerging economies.
United Nations Under-Secretary-General and Executive Secretary of the ECA, Vera Songwe, stated that “Our energy transition goals in African must be aligned with the development aspirations of member States. We must ensure investment in infrastructure that allows for manufacturing and value creation in green energy technologies, while availing de-risking instruments to member States to mitigate the cost of investment in energy projects.”
The Eighth Session of Africa Regional Forum on Sustainable Development (ARFSD-8) will be held in Kigali, Rwanda on March 3 – 5, under the theme, Building forward better: A green, inclusive and resilient Africa poised to achieve the 2030 Agenda and Agenda 2063. The theme is aligned with the 2022 High-level Political Forum on Sustainable Development (HLPF) on Building back better from the coronavirus disease (COVID-19) while advancing the full implementation of the 2030 Agenda for Sustainable Development.
The ARFSD-8 will conduct a regional follow-up and review of the implementation of the selected SDGs and Agenda 2063 goals; focus on identifying ambitions strategies and policy actions to build back better from COVID-19 and to dramatically scale up implementation in 2021-2030; facilitate learning, including sharing approaches, experiences and lessons learned from VNRs, VLRs and implementation efforts; deliberate and agree on Africa’ regional input to the 2022 meeting of HLPF to be held in New.
ECA engages journalists from West Africa on financing issues in the countries of the sub-region (UNECA)
he United Nations Economic Commission for Africa (ECA), through its Sub-regional Office for West Africa (SRO-WA/ECA), organized on February 16 in Lome, Togo, a dialogue with members of the West African Economic Journalists Network. This meeting, which was held in a context where Africa’s financial needs are enormous ($256 billion per year before the Covid-19 pandemic) due to the development deficit, is part of a series of dialogues initiated by the ECA/SRO-WA as a prelude to the Fifty-fourth Session of the Conference of African Ministers of Finance, Planning and Economic Development (COM2022) of ECA, scheduled for March 2022 under the theme: “Financing Africa’s Recover: Breaking New Ground”.
The Senior Director of the African Development Bank’s Africa Investment Forum, Chinelo Anohu, praised the Biden administration’s efforts to channel investment into Africa, and singled out Prosper Africa as illustrative of a deepening commitment to Africa.
Prosper Africa, a U.S. government business initiative, and Hardaway Wire, a political intelligence company, sponsored the roundtable, which provided U.S investors an opportunity to learn more about the investment and trade tools the U.S government offers. Prosper Africa, launched in 2019 across 17 U.S. agencies, provides U.S businesses and investors with market insights, deal support, financing, and solutions to strengthen business climates. Cook said: “President Biden has made investing in Africa a priority as he—and his Administration—see the importance of global investment in all corners of the globe. We have made reducing both the perceived risk and actual risk of doing business in Africa a top priority at the State Department and Prosper Africa in order to facilitate the level of investment needed to support Africa’s economic growth.”
“Prosper Africa is a one-stop shop so companies don’t have to spend valuable resources navigating Washington in order to do business,” said Leslie Marbury, Acting Chief Operating Officer of Prosper Africa.
Global economy
IMF Managing Director Kristalina Georgieva Urges Key G20 Policy Actions to Safeguard the Recovery (IMF)
Even as the global economic recovery continues, its pace has moderated. Three weeks ago, we downgraded our global forecast to a still-healthy 4.4 percent – partially because of reassessment of growth prospects in the United States and China.
Since then, incoming economic indicators point to weaker growth momentum in 2022 due to the emergence of the Omicron variant and supply chain disruptions that are more persistent than previously anticipated. At the same time, inflation readings remain high in many countries, financial markets are more volatile, and geopolitical tensions have sharply increased.
Strong international cooperation and extraordinary policy agility will be crucial to navigate a complex 'obstacle course' through 2022.
Climate Diplomacy: Council calls for accelerating the implementation of the Glasgow COP26 outcomes (European Council)
The Council today approved conclusions on 'EU climate diplomacy: accelerating the implementation of Glasgow outcomes', which stress the key importance of climate diplomacy and of EU outreach to third countries to accelerate the implementation of the COP26 outcomes in 2022. The conclusions set out that the EU and its member states, in a joint Team Europe approach, will engage with partners around the world to address the challenges linked to such implementation, and will actively work on the various COP26 sectoral initiatives and calls.
The Council also stresses that the lack of at-scale finance for resilient and just energy transitions in middle and low-income countries remains a barrier for green and sustainable development. Therefore, the EU will continue to provide a sustainable, green and positive offer to partners for the
Xi Focus: Championing economic globalization, despite countercurrents (Xinhua)
Despite the countercurrents of protectionism and unilateralism, China has been consistently committed to promoting win-win cooperation and common development through its opening-up drive and has injected confidence and momentum into a world afflicted by uncertainties.
In less than nine years since then, over 140 countries spanning different regions, cultures and stages of development, as well as more than 30 international organizations, have signed BRI cooperation documents with China.
How to empower women to take advantage of the opportunities of trade (World Bank Blog)
Poor labour force participation rates for women have been the dominant trend across South Asia. Where women do work, they have been constrained to low-skilled or unskilled labor within the informal sector. A recent World Bank Paper insists that a targeted inclusion of women in the workforce would advance economic growth and trade outcomes by 26 percent of the global GDP by 2025 and holds potential for the region as well. The COVID-19 pandemic has impacted economic growth across South Asia, highlighting the urgent need to foster growth, especially when the indicators for women’s employment, income and wealth which have suffered. However, governmental, local and international initiatives targeting economic empowerment for women have historically failed to leverage international trade and development opportunities as a potential area for expansion.
Trust Key for Higher Tax Revenues in Developing Countries (World Bank)
In many developing countries, tax revenues remain far below levels needed to provide citizens with basic services or fund extra spending to minimize the impact of COVID-19. But as governments look for ways to strengthen tax collection systems, they must take a holistic approach to tax reform that includes building citizens’ trust, says a new World Bank report.
“The report offers feasible, clear-cut paths to putting trust building into practice,” said Edward Olowo-Okere, Director of the World Bank’s Governance Global Practice. “With detailed information on successful initiatives, it urges reformers to focus on how to more effectively tailor strategies to local contexts and constraints. In Freetown, Sierra Leone, for example, successful property tax reform followed significant public education programs and new forums for engagement between taxpayers and the city.”
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Country-related news
Disruptions in South Africa’s Rail Network Supply Chain | Crisis24 (Crisis24)
Transnet, South Africa’s state-owned logistics company, has experienced significant operational disruptions in recent years; from senior leaders plundering the businesses resources during the State Capture years under former President Jacob Zuma (2009-2018) to a significant cyber-attack in July 2021 that led to several ports to declare force majeure. One standout operational impediment has been the ongoing theft of rail infrastructure across the length and breadth of the country. Hundreds of kilometers of copper line, track, and other general infrastructure have been stolen, costing the state billions in potential revenue. While the government and Transnet have promised to address the challenge, the issue persists and is likely to continue to be a significant obstacle in the years ahead.
Mining pushing towards zero-carbon future, long-term value and sustainable growth (Engineering News)
The mining industry is in an exceptional position to make a bold pivot to a sustainable future, and environmental, social and governance goals represent the most significant opportunity for the mining industry to create long-term value, trust and sustainable growth, says assurance and advisory multinational PwC South Africa energy strategy and infrastructure director James Mackay. “The mining industry has rebounded from the impact of Covid-19 and is in an excellent financial position. Operationally, it has never been in a stronger financial position and the conversations now should centre on how to repurpose and rebalance mining. “National and global narratives say that the industry must change, and partners are key to this. However, there are concerns that the world and the industry are not dealing with the pace of change, as a disruption becomes exponential once past a tipping point in terms of policy and global shifts in markets,” he says.
However, if South Africa cannot fix its energy challenges, other economic interventions and the green energy transition will not succeed, says Mackay.
SA Advocates for legally binding instrument on plastic pollution (SAnews)
South Africa will support proposals to address the issue of marine litter and plastic pollution at the upcoming 5th session of the United Nations Environment Assembly (UNEA 5.2). “South Africa supports the proposal to mandate the Executive Director of UNEP to establish an Intergovernmental Negotiating Committee (INC) under UNEA to negotiate an internationally legally binding instrument on plastic pollution given the environmental challenges faced as a consequence of plastic pollution,” Minister of Forestry, Fisheries and the Environment Barbara Creecy said on Thursday.
South Africa will also request the inclusion of the recognition of the special needs and circumstances of Africa and that any potential internationally legally binding global agreement on plastics pollution must include the principles of equity and common but differentiated responsibilities and respective capabilities, in light of national circumstances.
“We will also stress the need for new, additional and predictable finance, including technology transfer, develop and deployment as well as capacity building to support developing countries, in particular Africa for its implementation,” the Minister said.
Covid logistic hurdles lock seven countries out of tea auction (Business Daily)
Seven countries are yet to resume trading at the Mombasa Tea Auction after their supplies were cut short by logistical challenges brought about by the outbreak of the Covid-19 pandemic in early 2020. The auction manager East African Tea Trade Association (EATTA) used to trade tea from at least 12 African countries before the pandemic but the number of participating states has fallen to five. The teas from Zambia, Malawi, Madagascar, Zimbabwe and DRC Congo are among those that have not been trading at the Mombasa auction for the last two years. The pandemic has had a negative impact on the movement of cargo to and from the Port of Mombasa, keeping out the commodity from other regions.
Ethiopia, which is the only country from the Horn of Africa region that has been supplying tea at the Mombasa auction has been on and off in the weekly trading.
Food safety control office set up closer as Bill gets stakeholders’ nod (Business Daily)
Stakeholders from different sectors have validated the Food Safety Bill 2021 that is aimed at safeguarding consumers’ health and increasing Kenya’s produce access to the world market. The food safety bill, if passed, will create the Office of Food and Feed Safety Control, which will ensure compliance with international standards. The Bill aligns with the tenets of the World Trade Organisation (WTO) and the Codex- the internationally recognised food production and food safety standards established by the Food and Agriculture Organisation and World Health Organisation. The chairperson of the Inter-ministerial Taskforce Patrick Amoth said inadequate food safety is a significant contributor to the burden of disease in developing countries including Kenya and should be addressed as the food system develops. “The heavy burden of foodborne diseases imposes substantial economic losses to the individual, households, health systems and entire nations. Economic losses as a result of rejected food exports due to shortcomings in food safety are also often very significant,” said Dr Amoth.
In Kenya, the nationwide food quality and safety systems are legally controlled by various government agencies under different ministries using separate laws.
Food safety regulation agencies work under the ministries responsible for trade, industrialisation, health, livestock, fisheries and agriculture. However, the new body to be created by this Bill will rest these functions to a single body, avoiding duplication of roles.
Agribusiness, energy, housing investment can help Ugandan economy to grow (Engineering News)
Uganda could grow its economy, create jobs and strengthen its trade position in East Africa by increasing private sector investment in its agribusiness, energy and housing sectors, and by advancing business climate reforms, a report by the International Finance Corporation (IFC) and the World Bank has found. The ‘Country Private Sector Diagnostic’ (CPSD) report found that the energy, housing and agribusiness, namely fisheries, dairy and maize, sectors are among those that offer strong potential to address job creation and competitiveness challenges amid high population growth and urbanisation. However, to realise growth in these sectors, Uganda will need to continue advancing reforms and attracting private investment, the IFC and the World Bank say, while applauding Uganda for the progress it has made in liberalising parts of its economy.
EU to release $126 million to Tanzania amid improving relations (The Citizen)
Tanzania and the European Union (EU) have amicably resolved their differences and the latter would soon disburse €111.5 million ($126 million) in development financing for the country, President Samia Suluhu Hassan has said. Speaking yesterday during an interview on Deutsche Welle (DW) on Brussels, Belgium, President Hassan said the diplomatic relations between Tanzania and the EU date back to 1970s. She said the relations are now cordial. “It is true that our relations face some challenges during the past three or four years, but we have sat down and ironed out the differences. They [the relations] are now back to the same as they were before,” said President Hassan. She said with the relations back to normal, the EU has agreed to release €111.5 million in development funds that had been withheld during the period that the two parties had differed.
She said the EU was partly unhappy with Tanzania’s approach in a several areas, including in the Economic Partnership Agreements (EPAs) and the overall conduct of politics in the country at that time. “We had some differences in opinions. We were also looking at the EPAs and also some differences in ideology. Maybe, the EU had made a comment that we were not happy with but finally, we have ironed out and everything is back to normal,” she said.
How Tanzania can benefit from EPAs (The Citizen)
Tanzania needs economic intelligence and a large skilled negotiation team to ensure that the Economic Partnership Agreement (EPA) is concluded for mutual benefit, the business community and economists recommended yesterday. Those who aired their views were speaking to The Citizen ahead of a bilateral meeting between Tanzania and the European Union (EU) slated for the first week of next month to clarify and agree on the remaining contentious EPA issues under the EU-East African Community (EAC).The EPAs are trade and development agreements negotiated between the EU and African, Caribbean and Pacific (ACP) partner countries in an effort to boost trade by removing barriers to promote healthy competition in the EU market and lower prices for consumers. Economist and business expert Donath Olomi said Tanzania needed economic intelligence for it to come up with a thorough analysis on the country’s potentials and how to protect them. “We need to be very keen. Whatever decision we make today has an implication on our economy,” cautioned Dr Olomi.
Good news for soybeans farmers to effectively utilise Chinese market (The Citizen)
Tanzania needs to upscale its production of strategic crops, such as soybeans, for the local and international markets - thus effectively making a headway into the lucrative Chinese market, former President Jakaya Kikwete (2005-2015) has said. Mr Kikwete challenged stakeholders to improve soybeans farming in Mbeya, Njombe, Ruvuma, Iringa and other parts of the southern highland regions to meet and expand the current annual exports of 300,000 tonnes to China.
“A hectare of soybeans yields up to one tonne, which means about 300,000 hectares could produce enough for the Chinese market. We need to work together to introduce more farmers into soybean farming,” he said, lamenting cases of agro-processing industries operating below capacity due to inadequate raw material supplies. Between 2017 and 2021, Agra worked with diverse partners to link farmers to input and output markets, increasing maize, beans and soybean production in Iringa, Njombe and Ruvuma Regions.
The chief executive officer of the Southern Agricultural Growth Corridor of Tanzania (Sagcot), Mr Geoffrey Kirenga, called on agricultural stakeholders to continue promoting the adoption of improved technologies to improve efficiency and quality of produce - and remain competitive.
Uganda suspends International Coffee Organisation membership (Monitor)
Uganda has announced a two-year suspension of its membership from the International Coffee Organisation (ICO) in attempt to pressurise the organisation to address its concerns as a coffee producing country. Uganda has been trading its coffee under the 2007 ICO agreement, which stakeholders say does not favour farmers and other players. Some coffee producing countries have questioned the agreement, arguing that it only favours consuming countries with the interest of farmers, especially in regard to getting a premium price and obtaining better quotas, not catered for. Uganda Coffee Development Authority’s managing director, Mr Emmanuel Iyamulemye said: “Uganda does not support the two years’ extension of the International Coffee Agreement 2007, because Uganda’s concerns and interests have not been addressed in the new Agreement.” He said that suspending membership for two years will give Uganda a chance to use the resources to further enhance our coffee sector and focus on the aspirations of Coffee Roadmap to increase production to 20 million bags by 2025/30.”
Ghana partners Nigeria to build trade, investment opportunities (Vanguard)
The Ghana High Commission to Nigeria, has on Thursday announces its readiness to boost business opportunities with Nigeria. There has been a fuss between the Ghana Government and the Nigerian traders in Ghana when the Nigerian traders were asked to register their businesses with a minimum of $1 million.
Despite these disagreements, the Ghana Nigeria Business Council, GNBC, and Ghana Investment Promotion Center, GIPC, in during the 2022 CEO forum, themed: “Ghana & Nigeria Stronger Together, held in Abuja, announced its willingness to collaborate with Nigeria on expanding business ties since both countries have the largest economies with thr West Africa.
Monitoring and implementation of Free Trade Agreements (FTAs): Minister Ganoo chairs Inter-Ministerial Committee Meeting (Africa Newsroom)
The Minister of Land Transport and Light Rail, Minister of Foreign Affairs, Regional Integration and International Trade, Mr Alan Ganoo, chaired, today in Port Louis, the first Inter-Ministerial Committee Meeting on Monitoring and Implementation of Free Trade Agreements (FTAs).
In his opening remarks, Minister Ganoo recalled that, back in October 2021, Cabinet agreed to set up an Inter-Ministerial Committee under his chairmanship in order to monitor the various FTAs signed by Mauritius with a view to maximising their benefits. He informed that Mauritius is signatory to some 10 FTAs with, among others, the European Union, the Common Market for Eastern and Southern Africa, and the Southern African Development Community.
Minister Ganoo underlined that, last year, Mauritius signed FTAs with Africa, China, the United Kingdom and India. All these FTAs, he stressed, provide great opportunities for the country and there is thus a need to devise appropriate strategies so as to increase our exports of goods and services, while attracting foreign investment in productive sectors. This, he added, will generate more foreign currency revenue and create quality jobs for the population.
Furthermore, he underscored that Mauritius exports some Rs 70 billion under the different FTAs. However, he observed, Government intends to increase exports by two to three times with the help of the signed FTAs. As such, a Technical Coordination Committee has been set up so as to devise an action plan with the collaboration of all stakeholders both in the public and private sectors, and will report to the Inter-Ministerial Committee on a regular basis.
African trade news
How the African Continental Free Trade Area could revolutionise IP in Africa (IP Stars)
After more than 50 years of cooperation between the African countries with a view to creating a common market, the African Continental Free Trade Area (AfCFTA) agreement was signed on 21 March 2018, making this day a memorable date in the history of the continent. The agreement entered into force on 30 May 2019. Phase I of the agreement, covering goods and services, was launched on 1 January 2021.
Phase II of the negotiations (which relate to IP rights, competition policy, and investment) is ongoing, while some important phase I issues (for instance, rules of origin) are still under consideration. At the end of phase II, an IP Protocol will be adopted, which will attract a great deal of attention because it is expected to solve most of the weaknesses in the IP regime in many African countries.
As highlighted by the United Nations Economic Commission for Africa’s 2019 report titled “Assessing Regional Integration in Africa IX“, three optional systems can be adopted by the member states: (i) a general cooperation, (ii) a regional filing system, and (iii) an implementation of one substantive law or unification of laws. These systems are well-known to the countries and the main characteristics of each are summarily exposed below.
African businesses set to drive transformational agenda across continent (ITC)
At the margins of the EU-Africa Business Forum, the International Trade Centre (ITC) signed a partnership with the Africa Business Council (AfBC) to empower African enterprises especially women and youth.
Through this partnership ITC’s One Trade Africa programme will support the AfBC in its mandate to coordinate business support organisations across the continent and provide better services to the private sector. African enterprises will also gain access to practical information, knowledge and skills to improve competitiveness and their ability to access new opportunities using the AfCFTA among others.
During the signing ceremony, ITC Executive Director Pamela Coke-Hamilton underscored ITC’s commitment to enabling micro, small and medium sized enterprises (MSMEs) participation in the new single market.
Solving Africa’s infrastructure paradox (Business Day)
The Covid-19 pandemic not only revealed how critical Africa’s infrastructure is to the continent’s development, but also underscored how vulnerable it is. Even before the pandemic hit African governments were mapping new strategies to navigate the continent’s infrastructural needs against the development of an intraregional free trade area. The pandemic amplified the urgency to develop critical infrastructure to facilitate industrial development and intraregional trade. Many parts of Africa need to upgrade their economic infrastructure to facilitate movement in-country and around the continent. This includes the improvement of land, sea, air, and digital infrastructure.
How can an East African food and beverage producer best export their products to West or Southern Africa without experiencing these challenges? In addition, physical infrastructure is rendered useless without the human capital to complement it. What plagues the African continent is not a skills dearth but more a lack of experience. The lack of experience to build and use innovative and sophisticated infrastructure, the lack of experience to derive the most benefit from it and the lack of experience with synergies that can exist in different industries and sectors, let alone countries.
Covid-hit SMEs struggle to get back on their feet (The East African)
Africa’s smallholder businesses are taking longer to recover from Covid-19 blues because of the spending habits of their clients. The “Geopoll and Africa 118 Study of MSMEs in Africa” report notes that small businesses are struggling to get back on their feet because their clientele either changed habits, cancelled projects or ran out of money to continue paying for services. Seven in 10 businesses that thrived in Kenya, Nigeria and South Africa shut down at the height of the pandemic and just 17 percent of the businesses that were forcibly closed down have resumed normal operations, the report says. “The past two years have presented unprecedented challenges for SMEs – particularly in developing countries, including those in sub-Saharan Africa. Lockdowns, containment measures and demand shifts in response to Covid19 have pushed many SMEs to the brink,” said Fred Imbo, chief operations officer at Africa 118, a digital information services provider for small and medium businesses in Africa. “With less income coming in, many construction clients likely halted long term projects over short-term uncertainties. The survey consistently pointed to a shift in spending towards food and other essentials,” said Mr Imbo.
S.Sudan urged to fully embrace Single Customs Territory (The Star, Kenya)
The East African Business Council (EABC) has called on South Sudan to fully implement the East African Community Single Customs Territory to spur intra-EAC trade. The Single Customs Territory, which Kenya and other member states have adopted, is aimed at facilitating faster clearance and improvement in cargo movement along the two corridors serving the region. These are the 1,700 kilometre-long Northern Corridor that runs between Kenya, Uganda Rwanda, Burundi and Eastern D.R. Congo, with an exit and entry point at the Port of Mombasa. The 1,300 kilometre long Central Corridor serves Tanzania, Rwanda, Burundi, Uganda and Eastern D.R. Congo, with an exit and entry point at the port of Dar-es- Salaam. The two corridors facilitate export and import activities within the EAC region on a combination of rail, road and lake transportation networks. South Sudan is second after Uganda on the use of Kenya’s Port of Mombasa , accounting for 9.9 per cent of total transit volumes.
In 2020 South Sudan’s export to the EAC Partner States amounted to $ 87million while imports were valued at $573 million. In 2016 South Sudan export and imports to the EAC Partner States were $2.6million and $400 million respectively, indicating a drop.
The EABC urged the EAC Secretariat to mobilize more resources to support South Sudan to finalize the construction of the One-Stop Border Post (OSBP), and implementation of EAC protocols and commitments in order to facilitate trade.
African competition watchdogs plan to check digital markets (The East African)
Competition supervisory bodies from Kenya and four other African countries have formed an umbrella body to help them deal with challenges posed by digital markets, signalling a more concerted effort to enforce competition laws. The regulators from Kenya, South Africa, Nigeria, Mauritius, and Egypt, signed a memorandum of understanding in Johannesburg Friday to work together under the Africa Heads of Competition Dialogue (AHCD) to address emerging digital markets challenges. In a statement, AHCD said digital markets and services have transformed how traditional markets function, raising unique competition issues that necessitate collaboration in re-evaluating the approach to regulations in the markets. “Accordingly, as regulators on the continent, we are required to consider how digital markets impact on domestic participation in the local and global economy and the terms of that participation, beyond simply as a consumer of global tech firm services,” the regulators said. In their new arrangement, the regulators agreed to collaboratively assess the conduct in their digital markets, evaluate global, continental and regional mergers and acquisitions, and share information and knowledge, building capacity to deal with the challenges.
Here’s How Africa Could Be a Global Economic Game-Changer (Northeastern)
Business leaders representing the diverse resources throughout the continent of Africa gathered Wednesday morning to discuss the rapidly growing economies, global partnerships, and technological progress throughout Africa’s 54 countries. The forum, Northeastern’s inaugural African Business Conference, comes as the continent is set to emerge as a global economic force, according to the World Bank. “Africa is poised to become one of the world’s most important economic regions,” said Florie Liser, president and chief executive of the Corporate Council on Africa. The organization works to encourage trade and investment between the U.S. and the nations of Africa.
Time for Africa to shed reliance on external vaccine producers (The Standard)
The question as to why Africa must produce its own vaccines has been persistent but it has not been decisively addressed. The result of this indecision is Africa’s disproportionately low quantum of vaccine manufacturing at the global scale. Only 1 per cent of the global vaccine manufacturing happens in the continent. The participation of the 10 African vaccine manufacturers involved in Covid-19 vaccine manufacturing has been limited to fill-and-finish processes with minimal participation higher up in the manufacturing pipeline. Africa’s bargaining power in acquiring these vaccines has as such been very low with much of the power centred around four companies that manufacture about 90 per cent of all Covid-19 vaccines.
Africa’s precarious position has been compounded by vaccine nationalism. Some High-Income Countries (HICs) have over-procured and hoarded Covid-19 vaccines. This has resulted in some of the HICs having enough doses to vaccinate their populations five times over while several Low-and Middle-Income Countries (LMICs) cannot access enough vaccines to provide the first dose to their citizens. This has resulted in Africa falling behind on global vaccination targets. At the end of 2021, Africa had vaccinated only 10 per cent of its population of about 1.3 billion, yet 70 per cent of the developed countries had vaccinated over 40 per cent of their populations. Africa should begin to explore the possibility of manufacturing Covid-19 vaccines. Local vaccine manufacturing in Africa faces several challenges, primarily the lack of sustainable financing mechanisms and limited political and fiscal prioritisation. These challenges can be circumvented by leveraging several emerging solutions such as vaccine bonds.
The investment imperative in Africa is particularly strong given that the continent’s vaccine market is projected to increase dramatically from $1.3 billion today to between $2.3 billion and $5.4 billion by 2030 driven by population and economic growth.
6 African nations chosen for mRNA vaccine production (Devex)
The World Health Organization announced the first six countries chosen to receive the tools needed to produce messenger RNA vaccines in Africa: Egypt, Kenya, Nigeria, Senegal, South Africa, and Tunisia. These countries will receive training and technical know-how on how to produce this type of vaccine from the global mRNA technology transfer hub in Cape Town, South Africa, which was established last year with the aim of ramping up this type of vaccine manufacturing in low- and middle-income countries.
Globally, vaccine production is mainly concentrated in a few high-income countries, Dr. Tedros Adhanom Ghebreyesus, WHO director-general, said during a press conference on Friday. This has led to vast inequities in access to COVID-19 vaccines — more than 80% of the population of the African continent is yet to receive a single dose.
The African Development Bank Group and Africa50, in partnership with the African Union Commission and the African Union Development Agency (AUDA-NEPAD), are exploring collaboration with global partners to create an Alliance for Green Infrastructure in Africa.
The European Investment Bank, European Bank for Reconstruction and Development, the French Development Agency, AFD, and The Rockefeller Foundation have expressed their interest in joining the Alliance. And there is a strong push to attract more African and global partners.
The Alliance for Green Infrastructure in Africa will complement, enhance and partner with continental and global initiatives to crowd in private capital to fund green infrastructure projects. The idea is to bridge investment gaps and engender financing at scale and with speed.
The Alliance’s overarching goal will be to leverage the private sector to transparently develop transformative infrastructure that sustainably bridges Africa’s infrastructure deficit in a climate-resilient manner. It will do this by addressing universal energy access and strengthening Africa’s energy systems, while minimizing sovereign debt accumulation, especially during this period of limited fiscal capacity across Africa.
Regional Consultative Conference on Migration concludes in Rwanda (EAC)
The East African Community (EAC) Conference to establish Regional Consultative Process (RCP) on Migration concluded in Kigali, Rwanda. The main objective of the conference was to consider and discuss the proposal for the establishment of the Regional Consultative Process on Migration for the EAC as a platform for regional information-sharing and policy dialogue dedicated to discuss specific migration issues in a cooperative manner among EAC Partner States.
Director General Immigration Services, State Department of Immigration and Citizen Services, Ministry of Interior and Coordination of National Government, Republic of Kenya, Mr. Alexander Imbenzi Muteshi noted that Intra regional migration is on the rise and prior to the advent of COVID-19 outbreak; there are long standing patterns of seasonal and circular migration; existence of refugees and migratory flows to the Middle East affecting migration among others. The Director General informed the Partner States that the establishment of regional consultative process is key for the EAC focusing on policy dialogues and information sharing.
The Deputy Secretary General further disclosed that the RCP will be used as a platform to bring together stakeholders and development partners to collectively mobilize resources for priorities set out from the RCP forums which will benefit Partners States’ efforts to facilitate governance of labour migration management, harmonization of labour migration policies, and capacity building initiatives, research and all initiatives geared towards, a united approach to safe, regular and humane labour migration management.
6th EU-AU Summit outcomes
Sixth European Union - African Union Summit: A Joint Vision for 2030 (European Commission)
EU and AU leaders agreed on a joint vision for a renewed partnership.
The aims of the partnership are solidarity, security, peace and sustainable and sustained economic development and prosperity for the citizens of the two Unions today and in the future, bringing together people, regions and organisations.
It aims to promote common priorities, shared values, and international law, and preserve interests and common public goods. This includes the protection of human rights for all, gender equality and women's empowerment in all spheres of life, the rule of law, actions to preserve the climate, environment and biodiversity, but also sustainable and inclusive economic growth and the fight against inequalities.
Leaders promise ‘new spirit’ of EU/Africa partnership but divides remain (EURACTIV)
European Commission President Ursula von der Leyen said leaders had had “an intense discussion on the TRIPS waiver”, and played down the difference in opinion between the two blocs, noting that “we have the same goals we just have different ways of going about it”. Ahead of the summit, the European Commission promised that €150 billion would be made available in financial support for Africa as part of its recently launched Global Gateway programme.
EU sets out plan to support Africa for the next pandemic (EURACTIV)
On Wednesday, meanwhile, at the BioNTech Vaccine Equity for Africa meeting in the German town of Marburg, the pharmaceutical giant announced that it would start building its first African factory producing Covid vaccines early next year. The EU has made a coordinated push to help support African states to prepare their health systems for the next pandemic, but without appearing to give any ground on the main short–term demand of African leaders to allow them to produce COVID vaccines.
“Stepping Up With and For Africa” (IMF)
Remarks by IMF Managing Director Kristalina Georgieva at the EU-AU Summit Roundtable on Financing for Sustainable and Inclusive Growth in Africa.
As the world emerges from an unprecedented crisis, all countries are struggling with challenges–but it is particularly true for Africa. Africa experienced a painful contraction in 2020. Since then, it has started growing again—but for many countries growth falls short of what is needed.
In both 2021 and 2022, Africa’s projected growth trailed the global average. And it ought to be the other way around. Africa should outperform the rest of the world—so countries can create jobs and lift up living standards.
It is in this context that we at the IMF have taken unprecedented action to support our member countries, especially on the African continent. I like to say: we are stepping up with and for Africa.
We also moved quickly for a Special Drawing Rights (SDR) allocation. As has been acknowledged, it has helped Africa—but it has not helped enough. In some countries, it amounted to as much as 6 percent of their GDP which is not at all trivial. But that said, US$33 billion for African countries out of a US$650 billion global allocation is clearly not where we want to be.
So, we are moving to the next frontier which is large scale on-lending of SDRs—from countries that got them but don’t need them as much, to countries that need them most.
EIB Global commits €62m for six high-impact private sector investment initiatives in Africa (Engineering News)
Private sector investment across Africa is essential to tackle the impact of Covid-19 and unlock sustainable growth and development finance institution the European Investment Bank (EIB) Global will provide €62-million as part of six new partnerships that will support targeted private sector investment, including high-technology innovation, rural microfinance and business financing, from Cameroon to Malawi.
The partnerships provide new support for African technology startups, rural microfinance, agriculture and businesses in sectors impacted by the pandemic, the EIB says.
Commission: EU committed to guiding Africa in raising sustainable food standards (EURACTIV)
The EU “is there” for African farmers and food producers with development support should the increased European green agriculture standards create trade barriers, according to a Commission official. In the meeting of the EU’s and AU’s heads of states and governments that will close today (18 February), the EU is using the partnership to encourage African states to adopt the environmental policies in its Green Deal. The agri-food part of it, the Commission’s Farm to Fork (F2F) strategy – which aims to make the European food system more sustainable through a set of stringent targets – may have a spill-over effect on African farmers even if they do not adopt parts of it. African farmers fear that requirements to meet those targets to sell their products to Europe could quickly become a significant trade hurdle. “We do not, cannot and will not wish to impose our own system on any other country in the world,” said at a recent EURACTIV event John Clarke, deputy director-general at the Commission’s agricultural service (DG) AGRI) in charge of trade aspects.
But according to the Kenyan farmer David Ndegwa, who spoke at the same event, although the EU is not directly imposing standards on African growers, the request for higher environmental and sustainable standards to sell products in the European single market indirectly leads to a request for compliance.
A hydrogen strategy for a balanced EU-Africa partnership (EURACTIV)
Renewable hydrogen is one of the central discussion topics at the ongoing European Union-African Union summit. The EU has made its ambitions to import hydrogen from the African continent clear: in its 2020 Hydrogen Strategy, the European Commission foresees 40 GW of renewable hydrogen electrolysers in the EU neighbourhood, a large proportion of which are expected to be in North Africa, by 2030. Alongside EU plans to import renewable hydrogen from the neighbourhood, member states are setting up bilateral hydrogen initiatives with countries across the African continent. Germany is a frontrunner, having set up a global hydrogen import scheme and bilateral initiatives with African countries, including Morocco, Namibia and South Africa. EU interest in importing hydrogen from Africa is driven by the assumption that member states will require significant quantities of renewable hydrogen to decarbonise certain economic sectors (for example, the chemicals industry, steel industry and heavy transport sectors such as maritime and aviation) that exceeds cost-effective domestic potential.
Historic Memorandum of Understanding signed between 12 Private Sector Automotive Associations (Business Ghana)
A memorandum of understanding was signed virtually between 12 Automotive Associations within the ambit of the EU – Africa Business Forum 2022 on 16 February with the aim of driving the development of the Automotive Industry in Africa. The Automotive sector whilst key for the industrialisation of Africa is often associated with several challenges including, persistent market fragmentation, lack of regulatory alignment between African countries and the two continents, industrial and trade policies not conducive to local and foreign investment, lack of access to finance for consumers, local suppliers, and affordability. However intra-African trade can be bolstered and diversified by developing a Pan African Auto Pact, which aims to expand the African new vehicle market from 1 to 5 million units and connecting African regions for the common good. A “coalition of the willing” will see the development of manufacturing sites and allied industries and services – both for the OEM and supplier sector - and thereby laying the foundation for Pan-African integrated automotive value chains which will incorporate neighboring countries, thus building a regional and continental production network
Germany seeks key role in new EU-Africa policy (EURACTIV)
The German government hopes the two-day EU-Africa Summit that ended on Friday (18 February) will mark a new beginning in Africa policy, with development and energy policy, in particular, being at the forefront.
In the press conference following the summit, German Chancellor Olaf Scholz stressed the importance of close collaboration with African states.
Germany is one of Africa’s largest donors and investors, and its colonial legacy in the region is relatively small compared to France and several other EU states. German MEP Udo Bullmann, development policy spokesman for the socialist S&D group in the European Parliament, told EURACTIV that “in this respect, German involvement has never been tempted to be as one-sidedly territorial as it has been in the UK or France along linguistic borders or former colonial zones”. Around €8.5 billion in foreign direct investments from Germany flowed to various African states from 2016 to 2018, according to a report by consulting firm EY. This makes Germany one of the major investors on the continent, though it still only invested half as much as France, the EU’s largest investor in Africa.
Africa-EU trade in goods: €4 billion surplus (Eurostat)
In 2021, there was an increase in goods exported from the EU to Africa (+€21 billion compared with 2020) as well as an increase in goods imported to the EU from Africa (+€41 billion compared with 2020). Thus, the EU recorded a trade in goods surplus with Africa of €4 billion, which was the lowest since 2014.
Since 2014, the EU has had a trade in goods surplus with Africa, peaking at €33 billion in 2016. However, this surplus fell to €8 billion in 2018 and 2019. In 2020, due to the COVID-19 pandemic, exports fell by €20 billion while imports fell by €35 billion, which increased the trade surplus to €24 billion.
Global economy
WTO members look at how trade can help LDCs recover from COVID-19 (WTO)
The WTO Secretariat presented the latest trends in trade in goods and services for LDCs, noting that the COVID-19 pandemic caused a 35 per cent decline in LDC services exports and a 12 per cent decline in their exports of goods in 2020. LDC exports of goods and commercial services declined more sharply than the world average, falling from a 0.96 per cent world share in 2019 to 0.91 per cent in 2020.
Speaking on behalf of the WTO’s LDC Group, Chad expressed concerns over LDCs’ dwindling share in world trade. The delegation noted that the target of the Istanbul Programme of Action of doubling their share in global exports by 2020 has not been met and that the pandemic has reversed the economic progress achieved during the previous ten years. Chad called on development partners to provide support to help LDCs recover from the pandemic and build resilient economies.
US co-sponsors India’s proposal on managing WTO trust funds (Third World Network)
The United States on 12 July co-sponsored a proposal from India to bring greater transparency in the use of voluntary contributions/trust funds by the World Trade Organization’s director-general Ms Ngozi Okonjo-Iweala, said people familiar with the development. At a meeting of the Committee on Budget, Finance, and Administration (CBFA), India explained the salient features of its proposal (outlined in restricted document WT/BFA/W/564) on the proposed regulation of voluntary funds/trust funds provided by members and observers to the DG. The proposal underscores the need for a transparent review process to ensure that the use of the proposed trust funds remains consistent with the WTOs overall objectives, policies, and guidelines. It calls for a separation in the use of regular budgetary funds from the activities funded by voluntary funds/trust funds. The Indian proposal has suggested that a standard charge of 13% may be levied on direct expenditure incurred by trust funds to reflect the supporting services provided by the WTO secretariat.
A McKinsey Report Paves the Way for an Internal Shake-Up at the World Trade Organisation (The Wire)
Who are the World Trade Organisation’s (WTO) competitors? Apparently, this question was posed by the McKinsey and Company (M&C) to the WTO’s staff. The M&C was commissioned to carry out the structural review and reform of the WTO’s Secretariat.
Consultancy firms like McKinsey are hired to help organisations like companies, governmental bodies and non-profit organisations. They are known to ask difficult questions for providing guidance to organisations, says a former McKinsey employee Paul Mainwood. Invariably, reports of private consultancy firms seem to have resulted in privatisation as well as fundamental changes in non-governmental organisations ostensibly to bring about efficiency. An elusive concept like efficiency has become the benchmark for maximising profits for the shareholders with drastic labour retrenchment. Perhaps, it may be the intended goal at the WTO. However, the moot issue remains whether a member-driven, rules-based, multilateral trade organisation’s Secretariat can be subjected to a structural reform for unknown efficiency and other gains. That too by private consultants who seem to possess little or no knowledge about the WTO. Also, it raises questions whether the audit by M&C complies fully with the WTO’s procurement rules.
A senior WTO official informed the recommendations of the McKinsey report towards the end of 2021. However, the full report has not been shared with the WTO members until now for inexplicable reasons. There are also doubts whether the disclosure of the full report to members could withstand a scrutiny by members. Questions are also asked to whether the commissioning of the report violated the WTO’s procurement rules.
As pandemic eases, LDCs face a long road to recovery (Trade for Development News)
As the worst effects of Covid-19 begin to wear off, the World Bank has warned that output in emerging and developing countries will remain substantially below pre-pandemic levels in the near future.
Global growth rebounded to 5.5% in 2021 – the strongest post-recession pace in 80 years – as easing of pandemic-related restrictions unlocked pent-up demand. However, it is expected to slow to 4.4% in 2022 and to 3.2% next year due to weakening demand, the risk of new variants emerging, and supply bottlenecks, the Bank said in a new report. Richer countries are projected to bounce back faster and the Bank warned that recovery will be slower in low-income countries, especially small, fragile and conflict-affected states. This is due to lower vaccination rates, tighter fiscal and monetary policies, and more persistent scarring from the pandemic. Growth in low-income countries rose to 3.3% in 2021 but domestic demand remains subdued due to job losses from Covid-19, limited resources by governments to support incomes, and conflict in Ethiopia, Afghanistan, Burkina Faso and other countries.
IMF Managing Director Kristalina Georgieva Urges Key G20 Policy Actions to Safeguard the Recovery (IMF)
incoming economic indicators point to weaker growth momentum in 2022 due to the emergence of the Omicron variant and supply chain disruptions that are more persistent than previously anticipated. At the same time, inflation readings remain high in many countries, financial markets are more volatile, and geopolitical tensions have sharply increased.
Strong international cooperation and extraordinary policy agility will be crucial to navigate a complex ‘obstacle course’ through 2022.
Let me focus on three policy priorities.
First, we need to broaden efforts to combat what might be described as ‘economic long COVID.’ Second, many countries will need to navigate a tightening monetary cycle. In the context of a high degree of uncertainty and significant differences across countries, macroeconomic policies need to be carefully calibrated to individual country circumstances. Third, countries need to give greater priority to fiscal sustainability.
Digital transformation can still benefit unconnected farmers (World Economic Forum)
Globally, technology has been advancing fast. The COVID-19 pandemic only accelerated the shift in digital transformation, seeing more companies, governments and civil society carry out remote training, using digital tools to boost the effectiveness and scale of delivery. These advancements have profound implications for access to skills and capacity building. But what of the farmers and coffee growers in Benin, Nigeria and Central America, for example, who may not have smartphones or access to the internet? Is there still a way to reach them with accessible content and training on the latest agronomic practices for cashew or good farming techniques?
While farmers themselves may not have access to a smartphone, the teams who train them often do. Traditionally, extension agents and other field teams receive training in person and when these trainers need a refresher or need to learn a new addition to the curriculum, they have to attend another physical session. However, by building a digital training course for trainers, we can see greater consistency, with field teams refreshing their knowledge on the go. They can easily hand over the training programmes to government extension workers, cooperatives, buying organizations and others when they end, supporting sustained impact.
Blog: Enhancing Access to Finance for NDC Implementation (The Commonwealth)
At the heart of the Paris Agreement are the Nationally Determined Contributions (NDCs), which are country-specific climate targets to reduce greenhouse emissions and adapt to climate change. With nearly 160 countries having submitted revised or updated NDCs, 46 of which are Commonwealth member countries, there is strong political will to address climate change. Support in ensuring member states can access and secure the required finance to meet these targets is a fundamental mandate of the Commonwealth Secretariat Climate Programme.
Efforts to effectively access and deploy climate finance resources is often strengthened when accompanied by strategic policy and institutional frameworks. Climate finance landscape and mapping exercises provide a foundation for understanding a country’s financing needs as well as all the relevant stakeholders including challenges and opportunities with new and existing sources. These are instrumental in guiding the development of climate finance strategies which assist policy makers in employing more targeted approaches for delivery of finance towards enhanced climate change mitigation and resilience actions.
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Country-related news
Trade conditions on an upward trend, Sacci survey shows (Engineering News)
Trade conditions continued to improve in January after an uncertain second half of 2021 and, when seasonal factors are considered, trade conditions are on an upward trend, the South African Chamber of Commerce and Industry’s (Sacci’s) latest Trade Conditions Survey shows. The disruption and mayhem in July 2021 had a negative impact on trade, but it also accelerated the recovery and inspired resilience in communities and businesses, states Sacci.
Kenya’s “Vision 2030” Eyes Access to New Markets (IFC)
Kenya’s “Vision 2030” plan charts a path toward an economically sound, sustainable future—and bringing that future within the reach of all Kenyans will depend on how easily they can access the tools they need to build their businesses and improve their quality of life. But access can take many forms. For small business owners and entrepreneurs, access to finance is key to growth. City dwellers need access to affordable housing so they can raise families in neighborhoods near job opportunities. Farmers rely on access to agricultural markets so they can sell their food while it’s still fresh and receive prompt payment. And all will require access to digital platforms as Kenya establishes a diverse and dynamic economy.
Kenya’s dairy sector is failing to meet domestic demand. How it can raise its game (The Conversation)
Kenya’s dairy sector is estimated at 14% of Kenya’s agricultural GDP. Milk is primarily produced by smallholder dairy farmers who account for 56% of total output. It is estimated that the sector has 1.8 million smallholder farmers (about 80% of producers). There are more than five million dairy cattle producing an estimated four billion litres of milk annually. Milk production is projected to grow by about 150% by 2050. Kenya has the highest per capita milk consumption in sub-Saharan Africa, at 110 litres. The demand, currently at 8 billion litres, is also expected to grow with the population increase.
The government has therefore prioritised the industry in national strategy and plans, such as the Agricultural Sector Transformation and Growth Strategy (2019-2029) and the president’s Big Four Agenda. There’s also a dairy master plan to guide the development of the industry up to 2030. But the sector faces significant challenges that affect the realisation of its full potential. As a result, Kenya has to import from neighbouring countries to meet demand.
Kenya to enhance food safety to boost agricultural exports (CGTN Africa)
Kenya plans to enhance its food safety in order to boost agricultural exports, a government official said on Wednesday. Joseph Kirubi, secretary of administration at the state department of crops, Ministry of Agriculture said in Nairobi that the country’s food safety will be strengthened to be aligned with the Food and Agriculture Organization of the United Nations, World Health Organization and the World Trade Organization agreements. “Government will emphasize on a risk based approach to food safety control and shall require all actors along the food value chain from farm to fork to be accountable,” said Kirubi during a food safety conference. According to the ministry of agriculture, food exports account for over 50 percent of the country’s total exports.
Stakeholders welcome reopening of borders (The Herald)
Stakeholders at the country’s ports of entry have said they are adequately prepared to handle an anticipated surge in vehicular and human traffic following the reopening of borders to the vaccinated public. Bus operators, informal traders and small to medium businesses have also commended the Government for the latest move to allow cross-border travel. Zimbabwe shares four land borders with Botswana at Plumtree, Mlambapele, Mpoengs and Maitengwe, and Beitbridge with South Africa. Prior to the latest decision by Cabinet on Tuesday, only commercial cargo and Zimbabweans with permits to live or work in other countries were allowed to depart via land borders. On arrivals, returning immigrants and migrants with valid permits to be in the country were being allowed via the borders. Matabeleland South provincial medical director, Dr Rudo Chikodzore, said they will continue using tight screening and surveillance measures at the ports of entry in line with the set Covid-19 protocols. “We have been very busy during the lockdown and we are ready to deal with huge volumes of traffic. Adjustments will be made depending on the context of the situation on the ground,” she said.
Nigeria, Ghana seek end to retaliatory tariff, trade policies (The Guardian Nigeria)
Worried about the trade tension between Nigeria and Ghana, members of the private sector in the two countries, many of whom are largely affected, have sought an end to imposition of restrictive trade rules and counter-actions between the countries. While there are claims of resolution, private sector operators are worried about the effect on trade and the two countries’ economic development. Ghana High Commissioner to Nigeria, Rashid Bawa, expressed readiness by the Government of the Republic of Ghana to cooperate, collaborate and work closely with the Nigerian government for the sustainable development of the economies of both countries. He stated this at the 2022 forum of Ghana Nigeria Business Council (GNBC) and Ghana Investment Promotion Council (GIPC) for Chief Executive Officers, in Lagos, yesterday.
He mentioned that the perennial tension between Ghana and Nigerian traders in Ghana are being resolved. Let me disclose that the Ministers of Trade of Ghana and Nigeria, late last year, signed a joint agreement that establishes a framework to guide the engagement between the two countries in resolving issues between Ghanaian retail traders and their counterparts from Nigeria.
“As the economic and trade relations between the two countries warm up, as world economies are beginning to find ways of functioning in the midst of the pandemic, the desire for deepening cooperation among enterprises is growing stronger. It is, however, disheartening to learn that many Nigerian entrepreneurs still fall short of the knowledge of and connectivity to the Ghanaian market. Many are oblivious of the huge potentials that exist in Ghana.
African trade
On 15 February 2022, Dr. Kunio Mikuriya, Secretary General of the World Customs Organization (WCO), and H.E. Mr. Wamkele Mene, Secretary General of the African Continental Free Trade Area (AfCFTA) Secretariat, met at WCO Headquarters to sign a Memorandum of Understanding (MoU). This MoU aims at strengthening the organizational capacity, transparency and effectiveness of African Customs administrations in a sustainable manner through cooperation between both Organizations. In his remarks on this occasion, Secretary General Mene explained that it had been a long road since the establishment of the AfCFTA Secretariat. Today, 41 of its 54 Member States had duly ratified Rules of Origin for 87.7% of tariff headings agreed upon, to name but one milestone. He recalled the mandate of his Secretariat and stated that Customs’ involvement is essential in order to realise the ambitions laid out in the Agreement establishing the AfCFTA. He also noted that expectations were high and that communities were eager to start trading under the Agreement. The AfCFTA Secretary General then acknowledged the WCO’s expertise and role in delivering capacity building in highly-technical areas which were key for implementing the Agreement.
COVID-19 amplifies urgency for effective intra-Africa trade, economic recovery (Independent)
The ongoing COVID-19 pandemic has amplified the sense of urgency in Africa’s quest towards effective and timely implementation of intra-Africa trade and economic recovery, experts have argued. The United Nations Economic Commission for Africa (UNECA) anticipates the African economy to continue its recovery from the COVID-19 pandemic in 2022 by achieving a growth rate of 3 percent, similar to that recorded in 2019. Africa’s recovery is reinforced by the increasing global demand for goods and the recovery of commodity prices, exceeding their pre-pandemic levels, which should stimulate exports from commodity-exporting African countries, economic experts from the UNECA said in a recent email interview with Xinhua.
The historic continental free trade pact that entered into force in 2019 started implementation in January 2021. It envisages creating a single continental market for goods and services, with free movement of people and investments, enhancing competitiveness and supporting economic transformation. The UNECA argued that although COVID-19 disrupted and to some extent delayed the realization of Africa’s vision of creating a single continental market for goods and services, with free movement of businesspersons and investments, and enhanced competitiveness of industry, it also gave Africa the opportunity to improve.
Amid the economic brunt caused by the disruptions as a result of the pandemic, the UNECA said African countries have shown various commitments as part of their mitigation plan, which includes developing and implementing AfCFTA National Implementation Strategies at the country level. They emphasized the crucial imperative of strengthening existing institutions and building new institutions where they do not exist at national, regional and continental levels both in the public and private sectors.
Ms. Jane Karonga, UN ECA Economic Affairs Officer and Project Lead for the AfCFTA-anchored Pharmaceutical Initiative, led a Fact-finding mission to Dakar, Senegal comprising of Dr. Chiluba Mwila, Technical Operations Manufacturing Consultant and Ms. Fiona Dereige, Senior Communications Specialist to meet with Sahel Gaz Limited from Monday 31st January, 2022 to Tuesday 1st February, 2022. The purpose of the mission was to enable the ECA Pharma Technical Team to familiarize themselves with Medical gas production capacity of Sahel Gaz Ltd., (a family owned and run Medical Grade Oxygen Manufacturer established in 1991 by the 95 year old patriarch, who although retired still comes into the business from time to time to check on everything) and facilitate the possibility of investment for scaling up production of oxygen on the African continent, critical in mitigating Covid-19 and other critical conditions.
SACU members migrate to Harmonised System 2022 (New Era)
All SACU member states simultaneously implemented the 2022 version of the Harmonised System (HS) Nomenclature on 1 January 2022, in the context of the SACU Common External Tariff (CET), which has replaced the HS 2017 version. This is the first time that SACU member states migrated the CET to a new version of the HS in a well-coordinated manner across the Customs Union, with the support of the SACU Secretariat. The migration was also made possible by the technical support from the World Customs Organisation (WCO) under a programme known as the HS-Africa Programme, funded by the European Union (EU). The HS 2022 version reflects the amendments to the HS Nomenclature as adopted by the WCO Council (on 28 June 2019 and 25 June 2020) and accepted by HS Contracting Parties in accordance with Article 16 of the International Convention on the Harmonised Commodity Description and Coding System (HS Convention) of the WCO. SACU member states, being contracting parties to this convention, are required to align their Customs and Statistical Nomenclatures with this latest version of the HS.
Elago explained that the changes were necessitated by, amongst others, public health and safety requirements, the inclusion of goods specifically controlled under various conventions, food security and environment protection, new products introduced as a result of progress in technology, deletion of certain products due to low volumes of trade, and clarification of the classification of certain products.
The SACU CET is a legal instrument that provides for various schedules of customs duties on imported goods, excise duties on certain goods produced in the Customs Union and similar imported goods, as well as rebates and refunds of such duties, and trade remedies. The nomenclature used in the CET for classification and application of the duties, rebates, refunds and trade remedies, is based on the HS. However, as some of the HS six-digit codes have been extended up to eight digits to cater for regional requirements, the CET comprises more than 8 000 specific commodity groups referred to as “tariff lines”. In addition, the nomenclature in the CET is used for the collection of international trade statistics.
AfDB strengthens African Union’s Agenda 2063 with $11.48m grant (Vanguard)
As the 35th Ordinary Session of the African Union Assembly closes in Addis Ababa, the Ethiopian capital, the African Union Commission (AUC) will soon benefit from an $11.48 million grant from the African Development Bank Fund, AFDB, to strengthen its governance and provide it with institutional support. The approval for the grant, from the Fund’s regional public goods window, was announced by the African Development Bank, AFDB President Akinwumi Adesina when he met with the African Union Commission Deputy Chair Dr Monique Nsanzabaganwa, on the sidelines of the Assembly, to discuss the organization’s future and challenges.
Covid testing: Non-tariff barrier killing EAC trade (The Standard)
Multiple barriers continue to stand in the way of Kenya and Tanzania fully exploiting the potential for cross-border trade between the two countries. While relations have eased and trade picked up following a meeting between the countries’ presidents in 2020, businesses say the movement of goods and people remains restricted by what they term unnecessary requirements. The latest of these barriers that has significantly slowed clearance of cargo and people at the border posts is Covid-19 testing. “In view of the Covid-19 pandemic, the business community is facing challenges in relation to unharmonised Covid-19 testing charges, and the validity as well as mutual recognition of Covid-19 certificates,” said a brief on regional trade by the East African Business Council (EABC).
EU will have to wait for East Africa regional bloc trade pact (RFI)
African leaders are meeting in Brussels on Thursday with European leaders for a two-day summit that will inevitably discuss growth and trade. However, signing the long-awaited economic partnership agreement with the East African Community (EAC) regional bloc remains off the agenda, according to the Tanzanian Ministry of Investment, Industry and Trade. Tanzania, one of the six members of the EAC, has long been the stumbling block of the trade agreement. Addressing rumours circulating on social media, a statement signed by trade ministry spokeswoman Suzan C. Mshakangoto, reads: “Tanzanian position has not changed, the information spreading does not come from any official source.” The European Council president, Charles Michel, the European Commission chief, Ursula von der Leyen, and other European leaders will be meeting African leaders, including Kenya’s President Uhuru Kenyatta, who has already indicated that the deal is ready for signature.
EPA trade negotiations set to resume, Samia confirms (The Citizen)
President Samia Suluhu Hassan said yesterday that Tanzania was ready to host an Economic Partnership Agreements (EPAs) negotiation meeting early next month. The EPAs are trade and development agreements negotiated between the EU and African, Caribbean and Pacific (ACP) partner countries in an effort to boost trade by removing barriers to promote healthy competition in the EU market and lower prices for consumers. EPA negotiations between the EU and East African Community (EAC) member states were finalised in 2014. However, actual signing and ratification of the trade arrangement stalled and in the process, Kenya, which is the biggest exporter to the European market, had to seek temporary access to the EU market under special arrangements. So far, Tanzania, Uganda and Burundi have neither signed nor ratified the agreement, citing various country-specific concerns. The pact requires all EAC countries to sign and ratify for it to take effect, but only Kenya has signed and ratified, while Rwanda had signed but not ratified.
But President Hassan said yesterday that the government had agreed to go back to the drawing board and discuss the sticking points.
EU-Africa Summit: Vaccines, Climate Investment, Security Top Agenda (VOA News)
Green investments, migration, security and unequal access to vaccines will top the agenda as dozens of African heads of state head to Brussels on Thursday for a two-day summit of European Union and African Union leaders. Around 70% of Europeans have received at least one dose of coronavirus vaccine; In Africa, just 16%. That inequity is among the issues high on the summit agenda. “Donating vaccines is one thing, but ensuring that people are vaccinated is another, and equity demands more than donations. It requires systemic change and access to doctors, to nurses, to hospitals, to medical equipment, to scientists, to technologies and to research. And last, but not least, it requires new manufacturing capabilities,” said Stella Kyriakides, the European commissioner for health and food safety earlier this month, following an EU health summit in Lyon, France.
The EU aims to boost investment in Africa. “The A.U.-E.U. summit is a key moment and opportunity to strengthen political and economic ties between the two continents. Leaders are expected to discuss how both continents can build greater prosperity. The aim is to launch an ambitious Africa-Europe Investment Package, taking into account global challenges such as climate change and the current health crisis,” the EU Commission said in a statement. As it transitions to a green economy, Europe is seeking to diversity supply chains, including those for the rare earth metals needed for battery technologies — Africa is rich in such raw materials. In December, the bloc unveiled a $300 billion “Global Gateway” fund to invest in jobs, green technologies and digital infrastructure.
Africa and Europe: A time for Action (Africa Renewal)
As African and European leaders gather for a crucial EU AU summit in Brussels, Africans are gripped by both a sense of hopeful anticipation – and a sense of fatigued apprehension. Hope because the summit is about Financing for Recovery, and adequate sustainable finance for recovery is exactly what is needed. Apprehension, because too many summits have happened with too little impact in the last few years, and too few leaders north or south of the Mediterranean have grasped the huge challenges – but also even larger opportunities – that lie before us now in this extraordinary historic moment. In a few decades Africa’s youth will be some six times as large as Europe’s. Our youthful creativity, dynamism and problem solving will be essential to a host of challenges Europe is facing today and will increasingly face in the future.
How do we partner to fight climate change and promote democracy? How do we partner to ensure health systems are delivering health security for all regions’ citizens? How might Africa’s dynamic diaspora help be a key part of powering Europe’s own dynamism? How do we rally common efforts to fight illicit financial flows? Europeans and Africans agree – globally we need an average 2-3% more of global GDP invested in sustainable infrastructure to avert a climate catastrophe and deliver a jobs-rich inclusive growth. For African countries the investment need is proportionally more because financing for our recoveries has so far been virtually non-existent, our youth have huge aspirations, and our starting point is from a far lower investment and per capita income point.
The pandemic is of course one of the reasons that so much time has passed since our last meeting. It further reinforces the exceptional dimension that both parties wish to give to this summit. The aim is nothing less than to jointly lay the foundations of a renewed partnership between our two continents, a fresh start that has been in the making for some time now. Growth, shared prosperity and stability are the main objectives of this partnership. Our summit will be based on two fundamental principles.
Respect and values. Our two continents and their peoples share geographic proximity, languages, and human and economic ties. The peace and security of our two continents are interdependent. That is why the first fundamental principle must be respect. The future requires us to accept and respect our differences. The second fundamental principle is the rights and values of dignity, freedom and solidarity, exercised within the framework of the rule of law and good governance. On this common ground, we can learn from each other every day. Finally, our project is based on common interests. At its heart is a prosperous, stable, secure and sustainable Africa which is fully capable of facing all the challenges of the future.
A partnership calls for exchange and sharing. Each of our two continents has enormous potential to contribute to this joint project. The EU will provide public and private investment capacity, as well as expertise with the green infrastructure and technologies that are vital to our common fight against climate change and to transforming African economies. Africa has vast natural resources, a young and dynamic population just waiting to step up, and an impressive capacity for innovation and invention. It also needs better access to resources, including through the reallocation of special drawing rights on a voluntary basis, in order to finance its massive economic and social development requirements. In the same vein, a debt relief initiative for poor countries should be put in place to support the resilience and recovery efforts of African countries.
40 African heads of state head to Brussels for EU Summit (The East African)
At least 40 heads of state and government are expected in the Belgian capital Brussels for a Summit with the European Union, officials said on Wednesday ahead of the crucial inter-bloc meeting. The attendance list on Wednesday indicates more African heads of state will gather in Europe for the meeting than the number that attended the AU General Assembly in Addis Ababa last week.
This will be a first EU-AU Summit in four years. The meeting signals changing tides in relations, and also comes at a time the world is recovering from the Covid-19 pandemic, with Africa still lagging on vaccination rates. Officials told journalists on Wednesday the meeting will touch on an investment package to address the urgent challenges of climate change and insufficient healthcare in Africa, as well as the unresolved issue of intellectual property rights for vaccine production in Africa. “Our investment in Africa responds to demands and needs of our African partners,” said an official during a background virtual briefing to journalists on Wednesday. “The EU is working on a comprehensive response, through the World Trade Organisation…but also the most important issue is the know-how of vaccine production,” he added.
As part of a wide-ranging package of financing, the officials said the EU is allocating up to $170 billion worth of funding for Africa to go into investments in transport, economic integration, green energy, healthcare and security programmes in the next two years. Activists called for “fairness” in negotiating financing deals, warning the African continent that Covid-19 has posed unprecedented challenges, with countries diverting reserves, delaying repayments or borrowing to respond to the pandemic.
President Dr. Akinwumi A. Adesina will attend the sixth European Union-African Union (EU-AU) summit in Brussels this week. He is expected to call for greater access to Covid-19 vaccines and the reallocation of $100 billion in International Monetary Fund Special Drawing Rights (SDRs) to Africa. The Bank Group chief will urge that these SDRs be channelled through the African Development Bank, as a prescribed holder of SDRs. Fresh from the recent 35th African Union summit in Addis Ababa, which passed a resolution supporting the African Development Bank’s position, Adesina will join African and European heads of state and government to discuss measures, including an investment package to address the urgent challenges of climate change and insufficient healthcare in Africa.
Addressing last week’s African Union Assembly, Dr Adesina decried Covid-19 vaccine inequality. He stressed that citizens of industrialized countries had secured as many as four or five Covid-19 shots, while no more than 11% of Africans had received any vaccination at all. Adesina described healthcare as “a national security issue” for Africa and called for a cross-continental healthcare defence system based on strong infrastructure, domestic pharmaceutical industries and Africa-based vaccine manufacturing know-how and capacity. The African Development Bank Group has committed to spend $3 billion over the next 10 years to support pharmaceutical and vaccine manufacturing capacity on the continent.
Adesina gained strong support among African leaders in Addis Ababa and renewed calls for the reallocation of $100 billion in SDRs to African countries via the African Development Bank, a prescribed holder of SDRs with a triple-A credit rating.
Investment in Africa to top the agenda at AU-EU summit (SAnews)
Launching an ambitious Africa-Europe investment package and strengthening health systems in Africa, will be among the key discussions that will top the agenda at the Africa Union - European Union Summit. President Cyril Ramaphosa said this when he held a question and answer session with journalists at the Imbizo Centre in Parliament on Wednesday.
“Now this one is an important one because it is with the whole European continent and we are going to be discussing some very important issues that have to do with economic growth on our continent, and how well the European Union could play a supporting role in fostering economic growth on the continent. “So that is top of the agenda and also looking at our infrastructure development, the extent to which the European Union (EU) supports the African continent in economic development and infrastructure roll-out,” he said.
Keynote speech by Commissioner Wojciechowski at the 7th EU-Africa business forum (EU News)
Global economy
Global trade hits record high of $28.5 trillion in 2021, but likely to be subdued in 2022 (UNCTAD)
UNCTAD’s Global Trade Update published on 17 February shows that in 2021, world trade in goods remained strong and trade in services finally returned to its pre-COVID-19 levels. “Overall, the value of global trade reached a record level of $28.5 trillion in 2021,” the report says. That’s an increase of 25% on 2020 and 13% higher compared to 2019, before the COVID-19 pandemic struck. While most global trade growth took hold during the first half of 2021, progress continued in the year’s second half. After a relatively slow third quarter, trade growth picked up again in the fourth quarter, when trade in goods increased by almost $200 billion, achieving a new record of $5.8 trillion. Meanwhile, trade in services rose by $50 billion to reach $1.6 trillion, just above pre-pandemic levels.
Global development finance coalition commits over $5.5 billion for MSME financing in Africa (AfDB)
The coalition for a sustainable and inclusive recovery of the private sector, an international group of 20 development finance institutions that came together in 2020, today announced commitments of over $5.55 billion of financing to micro, small and medium enterprises (MSMEs) in Africa between mid-2020 and end of 2021, beating their set target of $4 billion over the period. The coalition said it had exceeded its initial target by 40 percent, while development finance institutions jointly committed over $5.55 billion of financing of micro, small and medium enterprises in Africa over the period.
In response to the unprecedented global health and economic crisis caused by Covid-19, the coalition recognised the critical role development finance institutions play in supporting the crisis response in vulnerable countries. While micro, small and medium enterprises are the economic lifeblood of emerging and frontier economies, they are also more vulnerable to crises than larger enterprises. In developing countries, formal small and medium enterprises contribute more than one third of gross domestic product and account for 52% of formal employment. Improved access to finance for micro, small and medium enterprises is critically important to boost growth and the prospects of the 450 million young Africans projected to join the labour market by 2050. The Covid-19 crisis put the viability of micro, small and medium enterprises under acute pressure and efforts to expand inclusive financial solutions are crucial for a successful recovery.
African Development Bank President Akinwumi Adesina said: “Micro, small, and medium-sized enterprises are vital to Africa’s prosperity, representing 90% of all businesses and generating more than half of all jobs. Many small entrepreneurs will tell you that limited access to finance is a major hurdle to growth. The $5.5 billion that we are committing together will go a long way in overcoming this hurdle. I am confident our initiative will make a major contribution to the success of micro, small, and medium-sized enterprises all over Africa. If they grow, we all do.”
World Bank says debt crisis in lower-income nations is ‘alarming’ (Devex)
The World Bank is ringing the alarm bells louder than ever about a debt crisis in the lowest-income nations threatening the economic recovery from the COVID-19 pandemic. “The evidence available so far suggests that the economic effects of the pandemic will be more persistent and severer for emerging economies,” according to the latest edition of the bank’s annual “World Development Report.”
While 40% of advanced economies have exceeded their 2019 economic output levels in 2021, only 21% of low-income nations achieved the same level of recovery. Within countries, vulnerable groups were disproportionately impacted by job losses and other forms of hardship during the pandemic, the report found. For example, women-owned businesses were relatively more likely to see income losses and struggled more to get public support, compared with those owned by men.
Given that the world still is facing the COVID-19 pandemic, the WCO has updated the COVID-19 HS classification reference lists for medical supplies, priority medicines, vaccines and related equipment to reflect the amendments to the HS 2022 edition.
Chair of fisheries subsidies negotiations reports on consultations with members (WTO)
The chair told the Negotiating Group on Rules that he had met with delegations and groups bilaterally and in different formats broadly representative of the whole membership. During the consultations, many delegations had pointed to issues in the negotiations that could benefit from further technical clarifications to pave the way for final decisions by ministers, the chair said. Several members also had noted that it was important that further work does not unravel the progress made in the negotiations.
Commission publishes analysis of trade and sustainable development policies around the world (European Commission)
The European Commission is today publishing a new study on global approaches to trade and sustainable development (TSD) as part of its work to strengthen environmental and sustainability aspects of EU trade policy. The independent study, carried out by the London School of Economics, covers the EU, Australia, Canada, Chile, Japan, New Zealand, Switzerland and the US. It reveals that TSD implementation and enforcement vary significantly, for example when it comes to dispute settlement and the use of trade remedies in case of breaches of TSD provisions. Despite such differences, cooperation remains the watchword for TSD implementation, even for countries that rely on trade sanctions for TSD enforcement. Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade, said: “We are always working on making trade policy better. This is why we are now reviewing whether we need to recalibrate our approach to sustainability in our trade and investment agreements. Today’s independent analysis, together with the contributions to our public consultation, gives us valuable input on what our stakeholders at home want, and what our partners around the world are actually doing on the ground. It shows that positive engagement can be most effective in bringing about positive and sustainable change. The study also demonstrates that TSD policy is dynamic and fast developing and should be tailored to specific contexts. We are now ready to take this forward to make trade policy better, stronger and more sustainable.”
Related News
tralac Daily News
Country-related news
Red tape delaying R90bn investment in ready-to-go projects – Minerals Council (Mining Weekly)
Red tape is delaying investment worth R90-billion in ready-to-go mining-related projects, at a time when the South African economy is in desperate need of such projects proceeding, to create jobs and to stimulate economic growth. Projects worth R30-billion would be able to proceed if the 4 000-plus mining and prospecting rights backlog could be eliminated, and R60-billion worth of renewable energy projects could release 3 900 MW into the energy space if inhibiting bureaucracy were removed, Minerals Council South Africa has revealed in response to President Cyril Ramaphosa’s State of the Nation address (SoNA).
Against the background of the President appointing stalwart Sipho Nkosi to remove red tape, Minerals Council CEO Roger Baxter stated in a release to Mining Weekly: “We need to do things completely differently to get economic growth back to 5% per annum. The government should be the chief enabler and the private sector the chief doer,” said Baxter. The SoNA has opened the door for partnerships with the State to reverse the economic slump the government cannot address on its own.
PwC highlights Carbon Tax as single biggest revenue changer in upcoming Budget (Engineering News)
While professional services firm PwC foresees no significant tax changes in the upcoming 2022 Budget – to be delivered on February 23 – it does expect some Carbon Tax changes and more clarity on its third phase. Phase 1 of South Africa’s carbon tax comes to an end on December 31, this year, with Phase 2 to start thereafter. The carbon budget allowance will be phased out at the end of 2022. The Climate Change Bill will mandate participation in carbon budgets and it is expected that taxpayers that exceed their carbon budget will be subjected to a penal carbon tax rate of about R600 for every ton of emissions above their assigned budget, the firm warns.
Meanwhile, the firm says the Medium Term Budget Policy Statement (MTBPS) was conservative in its gross domestic product (GDP) growth forecasts for 2022 to 2024. PwC expects this conservative stance to continue in the 2022 Budget, although a slight upward revision could be expected for the current calendar year.
US investors eye bigger share of Kenyan market (Business Daily)
US President Joe Biden’s administration and American firms are expected to announce new investments in Kenya across sectors such as energy, health and agri-business as top officials and business delegation land in Nairobi this week. A brief released ahead of the visit by the US government seen by Business Daily said US deputy assistant secretary of State Akunna Cook and Prosper Africa acting chief operating officer Leslie Marbury will travel to Kenya alongside Nigeria, South Africa, and Namibia on an economic diplomacy visit, between February 14 and March 1. “The delegation will meet with entrepreneurs, women-owned and small and medium-sized enterprises, investors, and policy-makers to drive US trade and investment in Africa’s creative industries, ICT and digital technologies, and energy and infrastructure, among other fast-growing sectors,” said the US State Department. The visit by the US officials is part of president Biden’s new push to expand business ties between US companies and African countries like Kenya.
The effort is part of the revival of Prosper Africa, an initiative began by former US President Donald Trump in 2018 that the Biden administration aims to make the “centrepiece of US economic and commercial engagement with Africa.”
Kenya eyes direct flower exports to Gulf countries (Business Daily)
Kenya is looking to create a direct linkage of fresh flower cuts from farmers to United Arab Emirates and the other five Gulf Cooperation Council (GCC) member countries as it seeks to diversify exports. The government is holding bilateral talks with GCC countries – Saudi Arabia, Kuwait, UAE, Qatar, Bahrain, and Oman – to remove tariffs and logistics constraints to increase export volumes. Currently, over 70 percent of the country’s flowers are exported to the Netherlands with only less than one percent into GCC. The country is eyeing the projected demand from the gulf region with over 54 million population, available cold storage facilities and direct flights, especially between Kenya and UAE.
21 export items: Uganda’s opportunity in Africa Trade Zone (Daily Monitor)
It is no longer a secret that most of Uganda’s products, despite being referred to as “good,”struggle to access prime markets. According to market research analysts and economic sector players, the market accessibility challenge is not a “new disease” but rather a “growing one”. This is because the market access issue has not only been neglected but also allowed to mushroom to a point that is now affecting the country’s products across the globe. The Covid -19 pandemic interruptions have taken a toll on the economy, impairing the country’s market access to the traditional market. The good news is that through the African Continental Free Trade Area (AfCFTA,) there is a window that if well executed can turn Uganda into a top notch continental producer and provider of some of the needed goods and services. However, all this will depend on how well Uganda goes about its business in the continental trade.
While presenting the AfCFTA market Assessment Report publication (UNCCI, 2022) that sought to establish the potential product mix for Uganda’s exports to the AfCFTA to both private and public players at the launch of free trade awareness project last week in Kampala, Mr William Babigumira, team lead project said there are 21 products that have potential for expanded exports into 11 priority AfCFTA markets.
Zambia Transport Report 2022 (Business Wire)
The “Transport in Zambia 2022” report has been added to ResearchAndMarkets.com’s offering. Zambia is a landlocked country and depends on a strong and efficient transport system for the smooth transit of exports and imports and growth of its economy. However, economic conditions and poor maintenance of transport infrastructure mean that this industry faces significant challenges, and requires further investment. The 923m Kazungula Bridge across the Zambezi river and one-stop border post facilities opened on 10 May 2021, aimed at easing the flow of trade and people between Botswana and Zambia. It will also provide alternative trade routes between SADC countries, and relieve some pressure off the Beitbridge border post between South Africa and Zimbabwe.
This report covers the Zambian Transport Industry, which includes road, rail, air, water and pipeline transport systems for passengers, freight, cargo, and crude oil. The report includes country information, developments, regulations and corporate actions and the factors that influence the industry,
World Bank Supports Cameroon and Chad to Improve Regional Connectivity and Resilience (World Bank)
Central African country Cameroon and its landlocked neighbor Chad are getting a significant boost to improve the efficiency and safety of cross-border trade and transit. The World Bank today approved a financing package to boost regional connectivity through a regional Cameroon-Chad Transport Corridor project. The World Bank also established Cameroon and Chad’s eligibility for the Prevention and Resilience Allocation. The Cameroon-Chad Transport Corridor Project will be supported by $538 million from the International Development Association (IDA). It combines investments in rail and road infrastructure, with interventions on trade facilitation to improve the flow of people, goods, and services along the multimodal Douala-N’Djamena corridor—that concentrates 35 percent of the GDP for both countries, 20 percent of Chad’s population, and 35 percent of Cameroon’s population. “Improving the rail and road corridor between Cameroon and Chad is essential for the competitiveness and improved integration of both countries into the regional market,” said Abdoulaye Seck, World Bank Country Director for Cameroon. “This project is a real window of opportunity to improve the lives of people living in the Lake Chad region, which is affected by climate change, political unrest, and violence,” added Clara de Sousa, Country Director for Burkina Faso, Chad, Mali and Niger.
African trade news
Making the continental free trade area work is a mountain before us – traders don’t realise this (Namibia Economist)
It is now one year since the Africa Continental Free Trade Area was supposed to start with tariff-free trading, an event that was much publicised with two container loads of goods shipped from Ghana, but that was also the last of any free trade. The Africa Continental Free Trade Area reminds me a lot about the ostrich industry in Namibia. Here we had a completely new commodity with a great future until the government started interfering around 2012 with grandiose ideas of creating an ostrich production hub in the south. But it was all centrally planned and like all communist systems, it went the way of the dodo.
According to the Trade Law Centre (Tralac) in South Africa, by September last year, the number of countries that have deposited their instruments of ratification with the African Union Commission, has grown to 38 with another three pending, despite the immense drag from Covid-19. This shows that a sizeable majority of all members of the African Union has put in place the instruments and structures to take the FTA from a concept to a functional entity. But Tralac, in their December 2021 bulletin, also highlights a number of issues indicating that the African Continental Free Trade Area is at this stage still just an idea and that many years and many multilateral agreements will still be required before it becomes a real thing.
Africa: AfCFTA update – the streamlining of intra-African trade gathers momentum (Lexology)
Just over a year ago, on 1 January 2021, trading began in African countries that had ratified the African Continental Free Trade Area (AfCFTA) agreement and submitted their tariff offers. All countries in Africa, except for Eritrea, have now signed the agreement and 39 countries have ratified it so far, including most of Africa’s major economies (South Africa, Kenya, Nigeria and Ghana, for example). AfCFTA Secretary-General Wamkele Mene said recently that the negotiations on the rules of origin had been completed and 87.7% of the rules agreed. He said AfCFTA member states would now gazette these legal instruments nationally so that the rules of origin could be applied. Further, the Protocol on Dispute Settlement has been operationalized and the negotiation of rules for appointing members of the dispute-settlement body is in progress. The AfCFTA tariff book, which will include rules of origin and the customs procedures that apply to products, will be published imminently. This tariff book will enable traders to identify and apply the correct rules of origin and associated tariffs to each specific product.
A sophisticated pan-African legal and regulatory framework that enables digital trade transactions is also vital for the success of AfCFTA. Phase two of AfCFTA negotiations have begun, which include discussions on competition policy, investment protection and intellectual property rights, as well as deciding on the rules for governing trade on digital platforms. The intention is to conclude these negotiations by the end of 2022. Further, the Pan-African Payment and Settlement System (PAPSS), a platform that facilitates free trading, was launched in January 2022, with the African Export-Import Bank providing liquidity for the settlements and the technology. The AfCFTA secretariat provided the legal framework for the platform, which will be legally tied and anchored to the AfCFTA.
The impact of COVID-19 has provided further impetus for African governments to overhaul national regulation relating to tariffs, bilateral trade, cross-border initiatives as well as capital flows – which will all allow for the full and successful implementation of AfCFTA. Domestic policies will also play a crucial role in alleviating some of the current trade barriers that are not related to tariffs, such as issues around corruption, infrastructure development, onerous regulations, liquidity and security threats. However, even after tariffs are lowered and simplified procedures put in place, the full benefits of AfCFTA may not be realized unless other barriers to intra-regional trade have also been addressed. In light of these challenges, it is expected AfCFTA’s momentum will build gradually, with tangible benefits expected from 2030 onwards.
Regional plan focuses on SMEs in plan to ease import, export trade (Business Daily)
Regional revenue authorities will now focus on Small and Medium Micro Enterprises (SMMEs) to improve uptake of Authorised Economic Operators (AEO) initiative, which has remained low since it was implemented in 2006. Tedious application processes that take long without sufficient guarantee that a company will be accredited has been cited as one of the major obstacles in the implementation of the AEO programme run by the customs authorities in East Africa, the latest report on logistics has revealed. SMMEs have over the years complained of being cost-disadvantaged and have not been able to keep up with the high standards and stringent measures adopted by customs in vetting the companies for AEOs accreditation. AEOs are compliant and trusted traders who are allowed to operate with minimal customs controls. The scheme significantly reduces the physical and document-based controls, offers priority treatment in customs, and guarantees easy access to customs by businesses, among other benefits. A study by the Federation of East African Freight Forwarders Associations (FEAFFA) supported by the Commonwealth Secretariat (COMSEC), revealed that low uptake of the AEO scheme by SMMEs is due to low level of awareness, the complexity of the programme, and the insufficient capacity of most businesses to meet requirements.
TradeMark East Africa turns west, aims to improve Lagos-Abidjan trade route (The Africa Report)
The secretariat of the African Continental Free Trade Agreement (AfCFTA) asked TradeMark to look at West Africa, and it has secured an initial grant from the UK Foreign, Commonwealth and Development Office, Matsaert says. TradeMark will be seeking to get further grants and private-sector funding, he adds. “Our aim is to become a pan-African trade facilitator.”
Northern Corridor seeks new routes to ease congestion at Malaba, Busia (The East African)
The Northern Corridor is surveying alternative transit routes within East Africa to increase cargo haulage and reduce backlog at border points. The transport corridor, long disadvantaged by the effects of the Covid-19 pandemic and facing fierce competition from the Central Corridor, is now eyeing alternative transit routes through Lwakhakha (Kenya-Uganda border), Nadapal (Kenya-South Sudan border), and Todonyang (Kenya-Uganda-Ethiopia border). The Northern Corridor links the Kenya sea port of Mombasa to the hinterland countries of Burundi, DRC, Rwanda, South Sudan and Uganda. “To ease congestion of traffic at Malaba and Busia border stations and to offer alternative transit routes for truckers, the NCTTCA Policy Organs in their August 2021 session, directed the Secretariat to undertake a trade and transport logistics survey of Northern Corridor alternative transit routes through Lwakhakha and Nadapal,” said Justus Omae Nyarandi, the executive secretary of the Northern Corridor Transit and Transport Coordination Authority (NCTTCA).
Despite Kenya having many border stations in operation, only two — Busia and Malaba — are used by heavy commercial vehicles. However, with increasing volumes of traffic on the Northern Corridor, these stations are stretched, often leading to long queues of trucks and delays in clearance of freight. Total cargo throughput at Mombasa increased in the past five years, from 27 million tonnes in 2016 to 34 million tonnes in 2020 against a target of 35.90 million tonnes, the June 2021 Northern Corridor Observatory Report shows.
East Africa plans integrated approach to reap from migration (Independent)
The East African Community (EAC) is consulting widely on ways of streamlining migration in the region to make it more beneficial to the development of the member countries. The ministers in charge of EAC, internal and labour, directorates of immigration from the region, as well as the EAC Secretariat, the International Organisation for Migration (IOM) and other UN agencies hope to establish a Regional Consultative Process on Migration (RCP) after their meeting in Kigali, Rwanda. According to the Secretariat, the RCP is aimed at addressing migration in “a holistic approach and build effective consultation networks on migration governance and policy frameworks that promote migration and development.”
Empowering farmers with innovative financing (Business Daily)
In sub-Saharan Africa, around 80 percent of agricultural production is by smallholder farmers, who are mostly rural women. Most economies are predominantly agriculture-based. However, the limited investment in value-addition is making farming mostly low-income activity, not able to provide the rural population with adequate income. As a way of addressing some of the challenges collectively, smallholder farmers have resorted to forming and running their own collectives in form of cooperatives and other outfits. The cooperative sector is considered a lifeline for many women, men and young people because of the concept of pooling resources. While these farmer-based organisations have weathered some challenges through a value chain approach to production, there are still outstanding challenges.
Some of the current challenges are lack of suitable financial products, high cost of inputs, unfavourable agricultural and financing policies, a lack of knowledge in farming as a business, negative perception by members, weak management and governance and issues of climate change. These are but just a few.
African tech startups could unlock $90bn with reforms (African Business)
Africa could secure tech startup funding of more than $90bn by 2030, if policymakers pursue significant reforms to drive growth, according to a new report from the Tony Blair Institute for Global Change. Using data that covers the past six years, the former UK prime minister’s institute projected a business-as-usual scenario versus an improved policy-environment scenario. Projected until 2030, this scenario sees African startup funding reaching $93.9bn, based on the assumption that gains from the past few years are maintained. To achieve the goal, governments need to enable more tech financing, cultivate the business environment and strengthen networks, says the institute. The improved policy-environment case is based on the compound annual growth rate of venture-capital funding to Africa between 2015 and 2020. “Recognising the importance of these ecosystems for jobs and growth, governments are putting in place bold measures to support tech entrepreneurs. With the creation of the AfCFTA, the possibility of a continent-wide single digital market is now real. If current positive trends are sustained, and the transformative potential of technology is unlocked, Africa could secure tech-startup funding of more than $90bn by 2030,” the report says.
Winning imperatives for Africa’s power and energy industry in 2022 (ESI Africa)
Access to power and energy is the key to industrialisation, modernisation, and socio-economic development of the African continent. With an abundance of natural resources and unprecedented renewable energy potential, Africa is on the path to reap maximum benefits from the power and energy sector in 2022. It is also expected to boost the economy of the region through employment and new industry establishment. Oil and gas are valuable energy resources and lifelines of developed economies. It supports socio-economic development and ensures energy security. As the foundation of global energy and economic development, oil and gas has the potential to eradicate the energy crisis, and enable economic growth. Positioned as the world’s last frontier in oil exploration, Africa is accelerating oil and gas exploration activities, making important discoveries in the past year that mark the beginning of a promising decade for the continent.
Sustainable and green energy has massive potential if done right with the proper measures. Multinational companies and international organisations have joined hands to promote sustainable energy development and enable universal access to electricity through programmes like “Agenda 2063: The Africa We Want” and the “2030 Agenda”. However, difficult operating environments, lack of transparency, regulatory uncertainty, political instability, and ongoing lack of infrastructure might hinder investment opportunities.
For the power and energy market, 2022 will be the year that defines the decade as many leaders, organisations and businesses have expressed their interest and commitment to attain inclusive and sustainable growth in Africa.
There is a need to improve access to modern energy to boost Africa’s economic development. Currently, in sub-Saharan Africa, fossil fuels make up about 40% of the total energy mix. We can expect a rise in these numbers as oil and natural gas exploration projects accelerates throughout the continent. Despite the massive impact of the COVID-19 pandemic on fossil fuel development and investment, the discovery of new light oil and shale gas reservoirs has reaffirmed Africa’s position and potential to be a key oil-producing region.
Rwanda gears up to host Commonwealth meeting (The East African)
Rwanda has allocated $4.7 million towards preparation to host the Commonwealth Heads of Government Meeting (CHOGM) that will take place in Kigali in June. The meeting, which was first set for June 2020, has already been postponed twice due to the Covid-19 pandemic. Before the first postponement, Rwanda had put aside up to Rwf10 billion ($10.5 million) to improve and build infrastructure needed for the event.
“We have been preparing for CHOGM for a long time so most of what was supposed to be done has been done. In this budget we allocated money for those things that haven’t yet been completed. The rest of the money will meet expenses related to receiving and hosting CHOGM delegates,” said Minister of Finance and Economic Planning Uzziel Ndagijimana.
Will EU-African summit reform Europe-Africa relations? (Africanews)
The whole idea for the EU-African Union Summit, which is expected to take place in Brussels next Thursday (17 February), started some two years ago after the EU set out its plan for a ‘strategic partnership’ with Africa. The EU plans to unveil six initiatives at the Summit, including three investment packages, as part of what it calls a ‘Prosperous and Sustainable Partnership’. “At the summit, investments will be at the heart of the discussions because they are the means of our shared ambition,” European Commission President Ursula von der Leyen said in Senegal’s capital Dakar on Thursday, after announcing that the Global Gateway would comprise an investment plan worth more than €150 billion for Africa. Though the summit promises to establish an EU investment platform in each Africa, it will not be backed by any new financing commitment by Brussels. Most importantly is to find out how much of the $450 billion Special Drawing Rights issued by the International Monetary Fund last year, a large chunk of which was allocated to EU member states, will be reallocated to Africa to help cover the costs of the COVID pandemic.
EU will continue to partner with Nigeria on investments – Official (Premium Times Nigeria)
The European Union (EU) Commission on Tuesday said it would continue to partner Nigeria on business opportunities, investments and other developmental issues. The Executive Vice President of the European Union (EU), Margrethe Vestager, gave the assurance during a visit to the Honourable Minister of Industry, Trade and Investments, Adeniyi Adebayo, at the Old Federal Secretariat Complex in Abuja.
According to Ms Vestager, “I have trust in agriculture as it has the capacity to create access to trade channels that would otherwise be difficult.” She said the EU was open to holding high level talks with Nigerian authorities with a view to knowing specific priorities that benefit the citizenry. “We are open to holding high level talks with Nigerian authorities to know specific areas of priority especially as it pertains the industrialization of the nation. In the coming days, we hope to intensify discussion that will lead to signing investment agreements with Nigeria which will facilitate industrialization.
Africa’s Ties With Europe Should Be Shaped by African Agency (World Politics Review)
The sixth leaders’ summit between the African Union and European Union will finally take place this week in Brussels, following several postponements due to the coronavirus pandemic. Traditionally occurring every three years, the summit was initially scheduled for 2020. The AU-EU summit is often touted as the ideal venue for European and African elites to discuss issues of mutual concern. But this one is particularly significant, as it provides the opportunity for both sides to unpack the new EU strategy directed toward Africa, which was launched in 2020
EU aims to counter China’s Africa drive with €20bn plan (BusinessLIVE)
The EU is working on a €20bn financing package to support African transport networks, as well as energy, digital, education and health projects to counter China’s reach in the continent. Member states, however, have yet to commit to financing the infrastructure plans, according to officials familiar with the discussions. The bloc’s plan includes strategic corridors, international submarine cables, new energy interconnections and investments in renewable sources in Senegal, Ivory Coast, Egypt, Morocco and Kenya, according to a draft of the package seen by Bloomberg. The investment is aimed at underpinning the new partnership that the EU and Africa want to seal at a February 17-18 summit in Brussels.
African leaders have prioritised roads, railways and bridges. But some EU governments face national budgetary constraints that make it hard for them to pledge significant funding ahead of the meeting, while others, including Germany, remain sceptical about the readiness of some of the proposals, officials added.
EU, Gates Foundation to support African medicines agency – source (Reuters)
The European Union and the Gates Foundation are set to announce financial support for nascent efforts to set up an African medicines regulator to boost the continent’s drugs and vaccine production, a person familiar with the matter told Reuters. The treaty establishing the African Medicines Agency (AMA) came into force in November but the agency currently exists only on paper. So far just over half of the 55 African Union (AU) member states have ratified the treaty setting up the AMA. Financial and technical support to the new agency is seen as crucial to help it to begin operations. This in turn would be a boost for the continent’s vaccine and drugs industry, which needs a trusted regulator to flourish.
African countries must protect their fish stocks from the European Union – here’s how (The Conversation Africa)
Fisheries serve as a source of employment for millions of people in the small scale sector on the coastline of Africa. Their fishing activities, in turn, provide food security to over 200 million Africans. To regulate the fishing industry, African countries have signed numerous agreements with trading blocs such as the European Union (EU). The EU has two forms of Sustainable Fisheries Partnership Agreements with African states: the tuna agreement and the mixed agreement. The tuna agreement allows EU vessels to pursue migrating tuna stocks as they move along the shores of Africa and through the Indian ocean. The mixed agreement allows EU vessels access to a wide range of fish stocks in the coastal state’s exclusive economic zones.
While these agreements contribute revenue to coastal states, who cannot extract the resources themselves, they are not all that they seem.
UK-Africa relations: The need for an urgent reset (Brookings Institution)
The COVID-19 pandemic, the United Kingdom’s post-Brexit economic and political orientation towards the Asia-Pacific, and cuts in development assistance all appear to have widened the political and economic distance between the U.K. and Africa in recent years. But these changes are part of a long-term trend of a slow decline in the relationship: For example, Africa’s share of U.K. imports has fallen from 2.1 percent to 1.7 percent over the last 10 years (ONS). The trade, aid, and financing environment within Africa is also changing: Despite delays in its negotiation and implementation, the African Continental Free Trade Area (AfCFTA), under which trading began in 2021, represents a significant opportunity for many African countries to transform their economies and develop regional value chains, reducing reliance on trade and investment with the U.K. and other traditional partners. Both Africa and the U.K. can benefit from a reversal of this trend. Indeed, given the dynamism of many African economies, technological innovations, and the climate change challenge, stronger strategic engagement with Africa is essential for the U.K., now more than ever. From a commercial point of view, demand from Africa is not only increasing but also becoming more sophisticated as its middle class expands. This growth generates medium- and long-term opportunities for investment in critical sectors such as business services, in which the U.K. has substantial expertise.
Global economy
Outlook 2022: Global Trade Trends in 2021 – US, China, and the Rest of the World (Proshare Nigeria)
On a global scale, trade growth continued in 2021. The value of global trade in goods increased in each quarter of 2021 although recovery was more muted for trade in services, remaining below its pre-pandemic levels. Global trade stabilized Q-o-Q growth was still positive in Q3 2021. The value of global trade in goods and services added about 1 % to the already high level of the previous quarter. Global trade growth was about 24 % in Q3 2021, on a year-over-year basis, significantly higher than pre-pandemic levels, with an increase of about 13% relative to Q3 2019. Valued at about USUS$ 5.6 trillion, the global trade in goods set a new all-time record in Q3 2021. Trade-in services stood at about USUS$ 1.5 trillion. The quarter-over-quarter growth of trade in goods was about 0.7%, while that of services was about 2.5%. On a year-on-year basis, the trade growth rate for goods remains substantially higher than for services (22 % vs 6 %). Both the trend of slower growth for the trade in goods, as well as a more positive trend for services, will probably continue in Q4 2021. Trade-in goods are expected to remain constant at about USUS$ 5.6 trillion in Q4 2021, while the trade-in services will likely continue to slowly recover.
A glance at the major trading economies shows that as of Q3 2021 shows that compared to the average before the pandemic, US Import of Goods rose by 14% while exports only a managed 7% increase. In the case of Brazil, good imports rose by 20% while the import of services fell by 25%. China, Japan, Republic of Korea, Russia, South Africa, and the EU all recorded services import lower pre-pandemic levels.
Greater Transparency on Hidden and Distressed Debt Can Reduce Global Financial Risks and Support Recovery (World Bank)
Developing countries face growing risks from financial fragility created by the COVID-19 crisis and non-transparent debt, says a new World Bank report. As rising inflation and interest rate increases pose further challenges to recovery, developing countries need to focus on creating healthier financial sectors. According to World Development Report 2022: Finance for an Equitable Recovery, risks may be hidden because the balance sheets of households, businesses, banks, and governments are tightly interrelated. Today, high levels of non-performing loans and hidden debt impair access to credit, and disproportionately reduce access to finance for low-income households and small businesses. “The risk is that the economic crisis of inflation and higher interest rates will spread due to financial fragility. Tighter global financial conditions and shallow domestic debt markets in many developing countries are crowding out private investment and dampening the recovery,” said World Bank Group President David Malpass. “It is critical to work toward broad-based access to credit and growth-oriented capital allocation. This would enable smaller and more dynamic firms – and sectors with higher growth potential -- to invest and create jobs.”
Ensuring Equitable Digital Futures for Everyone (UNDP)
The strategy will also help guide the organization in its efforts to tackle the emerging challenges associated with our new digital world. If left unchecked, digital technology can exacerbate existing inequalities and reinforce biases. And while some progress has been made in closing the digital divide, 2.9 billion people – mostly in developing countries, and mostly women, remain without access to the Internet. “We’re committed to a rights-based, whole-of-society approach to digital transformation that leaves no one behind. We want to make digital work for everyone, everywhere – this generation, and future ones,” added Robert Opp.
UNDP will also engage with global and local businesses and entrepreneurs, academics, researchers, young people, and policymakers to foster collaboration around the responsible and sustainable use of technology. This necessary conversation will feed into the work of the UNDP Accelerator Labs network as it surfaces and scales up local development solutions – many of which are digital.
‘Historic expansion’ of joint UN fund to boost sustainable development (UN News)
“The Fund is in a position to bridge the gap in giving and impact investing”, said Hiro Mizuno, UN Special Envoy on Innovative Finance and Sustainable Investments, adding that it offers “a sustainable investment model by leveraging the power of markets to accelerate businesses, empower communities, and provide a clear path to self-sufficiency.”. From health in a world still plagued by the COVID-19 pandemic to youth empowerment and climate change, the investments will respond to the challenges of our time, said the Fund in a press release. The Fund is in a position to bridge the gap in giving and impact investing – UN Special Envoy Kenya, Madagascar, North Macedonia, Suriname, and Zimbabwe were selected from proposals submitted by over 100 countries, as being the most impactful and investment-ready to take public.
Emerging strategies for ports during the pandemic (pdf, UNCTAD)
The coronavirus (COVID-19) pandemic has had a significant impact on humankind and on global commerce. Ports and port communities have experienced major changes to normal operating environments. The strategies used by ports to remain open and continue to facilitate sustainable economic development throughout the pandemic may provide useful lessons for policymakers, particularly in relation to the protocols and innovative measures that have been employed to mitigate the impact of the pandemic on the movement of imports and exports as well as ships’ crew and essential port workers.
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Country-related news
New gas report says LNG pathway ‘optimal’ for South Africa as it lower stranded-asset risk (Engineering News)
A new report on ‘The role of gas in South Africa’s path to net-zero’ argues in favour of a pathway based on the importation of liquefied natural gas (LNG), which it describes as “optimal” because it minimises the risk of stranded assets and gas infrastructure lock-in post-2040. In addition, such a pathway is less complex and capital intensive than ones based on the possible exploration and development of domestic gas fields and/or the building of a pipeline to import gas from northern Mozambique.
Google Africa’s economic recovery initiatives aim to benefit SMMEs (Eyewitness News)
Google South Africa Director Alistair Mokoena said this week that Google was committed to partnering with the government and stakeholders to drive digital transformation and economic recovery.
A number of initiatives, programmes and business opportunities that will benefit SMMEs and start-ups in South Africa have been announced by Google. They are part of a slew of initiatives the multinational company has already committed to Africa to help boost economic growth. Google South Africa Director Alistair Mokoena said this week that Google was committed to partnering with the government and stakeholders to drive digital transformation and economic recovery. “Our goal is to help SMMEs recover as they are the drivers of our economy and help South Africa grow and thrive,” he said. Google’s investments in the country focus on education, non-profit organisations and small businesses. “Google has assisted over six million SMMEs across Africa to digitise through Google Business Profiles and other Google products.”
Dube TradePort opens mini factories for SMMEs (Engineering News)
The Dube TradePort Special Economic Zone (SEZ) has opened a R90-million mini-factory complex development aimed at supporting small, medium-sized and microenterprises (SMMEs) requiring light manufacturing, assembly and warehousing. The SEZ’s development team had identified an opportunity to enable small and medium-sized enterprises to access the world-class infrastructure and support services available within the SEZ, which had largely been reserved for established businesses.
Slow implementation of infrastructure investment plan delaying revival of economy - SEIFSA (Bizcommunity)
A shrinking domestic market, declining production, weak production sales, a smaller contribution to the economy, increasing joblessness, cheap imports and low investment levels are just some of the issues faced by South African businesses in the metals and engineering (M&E) sector. The knock-on effects are felt throughout the economy due to its role as supplier and customer into the auto, motor, mining, construction and other manufacturing sub-industries, according to the Steel and Engineering Industries Federation of Southern Africa (SEIFSA)
“Manufacturing companies play an integral part in the supply chain of the South African economy and the sector will struggle to recover without support. The sector already relies heavily on demand from government projects to boost its production and sales, especially for products such as steel and other downstream products. This is why the government must speed up the implementation of its infrastructure investment plan and reforms across state-owned enterprises (SOEs) as the lack of progress on these and other projects is delaying the revival of our economy,” says Lucio Trentini, the CEO of SEIFSA.
US trade authority intensifies anti-dumping probe into SA lemon juice (Business Day)
Investigators at the US International Trade Commission (USITC) have found “reasonable indication” that imported SA lemon juice materially injures the US industry, the body said in a statement, opting to deepen anti-dumping investigations. If dumping is found in the US and duties are imposed, the excess SA volumes will be forced to move to smaller markets, further suppressing prices and increasing the probability of anti-dumping actions in those markets. Key markets for SA citrus include China, India, the Philippines, Japan, Vietnam and the EU. But the US is the biggest aggregate market for SA lemon juice. The initial investigation kicked off in December after US citrus juice giant, Ventura Coastal, one of only two US producers of lemon juice, alleged unfair competition. It called on authorities to impose anti-dumping duties, or protectionist tariffs, on imports of the product from SA and Brazil. After an exhaustive hearing in January and numerous consultations with the prices of individual suppliers and stakeholders, specialist investigators in a variety of fields, including the body’s commissioner, Jason Kearns, voted last week in the preliminary phase to go ahead with an anti-dumping investigation.
US lobbying: Kenya fights to preserve Trump’s trade deal (The Africa Report)
For all his protectionist tendencies and disparaging remarks about Africa, former President Donald Trump managed to raise hopes through his launch of trade talks with Kenya. The US leader announced his intent to negotiate a free trade agreement (FTA) in February 2020 following his White House meeting with President Uhuru Kenyatta. Six months later, America’s trade representative Robert Lighthizer and Kenya’s cabinet secretary for trade Betty Maina formally launched negotiations. The US was looking to move beyond its two-decade-old African Growth and Opportunity Act (AGOA) duty-free scheme.
Inside Kenya’s multibillion scrap metal underworld (Business Daily)
As Nairobi Expressway takes shape with finishing touches, a metal fence is being erected at sections of the Sh67 billion road; in what would be every scrap metal dealer’s dream if a ban on the trade was not in place. A lucrative scrap metal trade is funding vandalism that had become so daring the culprits are filling away at public roads and carting away anything made of steel including lampposts, road barriers and even a footbridge. A spot check by the Business Daily along the busy Haile Selassie Avenue near Muthurwa Market in Nairobi shows the barricade that separates lanes moving in opposite directions has been torn away, and now pedestrians cross the street at undesignated points oblivious of the dangers of speeding cars. The rods that would have acted as restraints are clipped from the root, it’s hard to tell there was ever a barrier in some sections. All that is left of a nearby footbridge linking Muthurwa Market to the opposite side of the road is an ugly skeleton –only with most of its bones missing.
Digital shilling to cut currency printing costs (Business Daily)
Kenya can make a significant saving in the cost of printing currency with the adoption of a virtual shilling, the central bank has said ahead of a public debate over the proposed rollout of its digital currency. The CBK’s most recent currency printing contract, awarded to British security printer De La Rue in 2018 for the new generation banknotes, was worth £85 million (Sh13.08 billion) over three years. The initial batch of the notes, delivered in 2019, cost the monetary regulator £19 million (Sh2.9 billion), with additional printing expected to fill the full quota and replace worn-out notes. The savings, the CBK added, would however be weighed against the additional administrative costs it would incur to manage the virtual cash, known as a Central Bank Digital Currency (CBDC).
Cash circulation hits record Sh253bn (Business Daily)
Cash circulating outside the banking system hit an all-time high of Sh253.4 billion in December last year as Kenyans went into the festive period. Data published by the Central Bank of Kenya (CBK) shows that the metric which is a blunt measure of the economic times of a country grew by Sh14.8 billion (6.2 percent) from Sh238.6 billion. The rising value of cash outside the banking system is an indicator of economic recovery as Kenyans increased their spending for December and reopening of schools for the third term. Improved consumption brought by increased confidence and income as a result of new hirings and removal of containment measures aimed at combating the pandemic have lifted the economy recover thereby increasing peoples’ disposable income. “There is continued optimism about business activity and economic growth prospects for this year attributed to continued recovery of key sectors supported by government stimulus programmes.” Said the Central Bank in the monetary policy committee statement.
Why the emissions trading system is crucial for Kenya (Business Daily)
The call to take action against global warming is only getting louder, driven by the havoc in countries that have been on the receiving end of erratic weather patterns that endanger human life as well as property and adversely impact economies. The clarion call is for all countries to join forces to reduce emissions and keep global warming below the 1.5 degree celsius target which portends catastrophic effects if exceeded. Kenya has heeded the call and ahead of the UN Climate Change Conference held in Glasgow in late 2021 (COP26) and submitted its updated national climate change action plan containing its Nationally Determined Contributions (NDCs). Kenya’s updated NDCs target abatement of greenhouse gas emissions (GHG) by 32 percent which is an increase from the previous 30 percent target by 2030 in the energy, transportation, industrial processes, agriculture, land use, forestry and waste sectors.
Uganda, Kenya set up depot to unclog Malaba border (The East African)
Kenya and Uganda will build a marshalling yard at Malaba border to decongest one of the region’s busiest transboundary crossings. This was announced by officials who admitted the congestion had become an added non-tariff barrier to trade between the two countries. Kenya Ports Authority (KPA), Kenya Revenue Authority (KRA) and Uganda Revenue Authority (URA) agreed to speed up construction of the yard to match improvement in paperless cargo clearance.
“URA is reviewing its processes to increase trade volumes and to achieve that, KPA and KRA remain critical partners by ensuring clearing agents within EAC have been granted the rights to relocate and carry out their duties in any of the partner states as part of a strategy to improve flow of goods and curb dumping,” said Mr Musingizi.
According to the Mombasa port and Northern Corridor service charter, use of the Single Customs Territory (SCT) system and adoption of paperless transaction as a result of Covid-19 pandemic, traders are saving up to $300 per transaction through joint clearance of cargo by EAC partner states at Mombasa port. KPA is already working on plans to speed up construction of the Malaba facility.
Uganda’s economy on strong rebound after ease in COVID-19 restrictions: central bank (Capital Business)
Uganda’s central bank on Monday said the country’s economy is on a strong rebound after the easing of COVID-19 restrictions that were closing out some sectors. Bank of Uganda in a monthly monetary policy statement for February said between the months of October 2021 and January 2022, high-frequency indicators showed that the economy was on a recovery trend. “Domestic demand is making a strong comeback as COVID-19 related restrictions are eased, adding to the gains of robust external demand,” the statement said. The bank said the outlook of economic growth is more positive than earlier projected since the recovery, and signs that the effect of the Omicron outbreak has been relatively small. Real Gross Domestic Product is projected to grow by around six percent as domestic demand recovery broadens.
Tanzania-Kenya total trade hit usd 905.5 million (EABC)
Kenya Tanzania bilateral trade hit USD 905.5 million in 2021 for the period January – November 2021 according to the Central Bank of Kenya. This was highlighted during the EABC Trade Facilitation Forum at Namanga One-Stop Border Post. Speaking at the Forum, Mr. John Bosco Kalisa said “Kenya imports from Tanzania stood at USD 501. million and exports USD 403.9.” He applauded President Samia Suluhu Hassan and President Uhuru Kenyatta for resolving Non-Tariff Barriers resulting in better trade ties.
Trade minister Lucia Iipumbu said micro, small and medium enterprises (MSMEs) are the roots of many economies around the globe and would play the same role in Namibia if supported and developed. She said these small businesses could eventually grow into larger enterprises that would contribute greatly to the country’s gross domestic product. Iipumbu made these remarks on Friday at the launch of the Know2Grow (K2G) initiative spearheaded by the Namibia Investment Promotion and Development Board (NIPDB). K2G is a regional knowledge dissemination initiative for MSMEs focussing on financing and market access for sectors such as agriculture, horticulture, and food processing. The trade minister noted the decision to start the K2G in the southern part of the country as key as the ministry had observed low participation by businesses in the southern regions (Hardap and Kharas) in funding and training initiatives rolled out in the past two years.
IFC, Zimbabwe Partner to Develop Agriculture Insurance to Protect Smallholder Farmers (IFC)
IFC and Zimbabwe’s insurance regulator, the Insurance and Pensions Commission (IPEC), today announced a partnership to create a market for agricultural insurance products in Zimbabwe to protect smallholder farmers from weather-related crop damage and other shocks. Through the partnership, IFC will assess the risks smallholder farmers face, how they are coping with those risks, and will gauge the farmers’ appetite for agricultural insurance to protect their livelihoods. IFC will also help IPEC develop a regulatory framework and enabling environment for agricultural insurance and determine the features of insurance products appropriate for Zimbabwe’s farmers
Agriculture is a significant contributor to Zimbabwe’s economy, employing almost two-thirds of the country’s working population and contributing about eight percent to GDP. However, there are currently no insurance products in the country specifically designed to protect smallholder farmers.
Addressing Challenges in Nigeria’s Agricultural Value Chain (This Day)
Nigeria’s population is expected to hit 264 million people in 2030 even as food inflation continues to rise and food prices skyrocketing. Gilbert Ekugbe writes on the need to address the challenges hindering the free flow of healthy food from farm to table. Apart from climate change and the prevailing COVID-19 pandemic that have ravaged the global economy, Nigeria’s agricultural value chain is currently hindered to meet the nation’s food needs. Poor farming conditions, lack of technical know-how, poor seedlings, insecurity, and absence of Good Agricultural Practices (GAP), are among the multiple factors that should be addressed if Nigeria would be liberated from food importation.
The APP (2016-2020) deliberately designed to end decades of failed policies and create a sustainable plan for the advancement of the agriculture sector has long expired. And with less than 18 months to be in office, the Minister of Agriculture needs to act swiftly to develop a new APP or have a consolidated APP for (2021-2024) as recommended by the National President, All Farmers Association of Nigeria (AFAN), Mr. Kabir Ibrahim. Ibrahim expressed doubts if a new APP would be developed due to the limited time the present administration has in office.
IFC and World Bank to Help Nigeria Pave the Way for Domestic Carbon Storage (IFC)
The International Finance Corporation (IFC) and the World Bank have begun to work with the Government of Nigeria to develop a domestic market for carbon capture, utilization, and storage for industrial emissions - an area that could accelerate the energy transition and help Nigeria reach its emissions targets. The initiative will produce a nationwide atlas of CO2 emissions sources and potential sites for underground sequestration. IFC will work with the government to identify the most promising sectors and private companies that can pilot new technologies for capturing, using, and storing carbon. In parallel, the World Bank will collaborate with the Nigerian Government to outline policies and regulations that can accelerate the technologies’ uptake while helping the local CCUS industry meet international standards. The project is funded by the World Bank’s CCS Trust Fund under the Energy Sector Management Assistance Program (ESMAP). The Trust Fund is supported by the Governments of the United Kingdom and Norway.
Dabiri: Lekki Port Will Reposition Nigeria as Regional Hub in Maritime Business (This Day)
Biodun Dabiri is a titan in the Nigerian banking & finance sector and has worked as a chartered accountant, an investment banker, a corporate finance specialist, a stockbroker, as well as a pension fund manager. As a result of his extensive experience, he is an asset to many companies where he sits on their board. He is the Lagos State Government nominated director on the Lekki Port board where he serves as chairman. He spoke to Ugo Aliogo recently on Lekki Port. Excerpts
Before the Board of Lekki Port was constituted, I spent some time with the original promoters of the project (Tolaram) to understand the complexities of the project especially from the financing and stakeholder management perspectives. I could see that truly, this was a unique infrastructure development endeavor, the type of which rarely succeeds in developing countries from a financing and economic contribution perspective. Being one of the single largest infrastructure investments in Nigeria with State and Federal Government equity contribution, it was clear to us that it had to be financed on a non-recourse, project finance basis, with financing principally from the international market thus freeing both Lagos State and the Federal Governments from any addition to its foreign debt profile. We were conscious of this financing model in structuring the deal. The economic impact for Nigeria is significant with high employment potential (about 170,000 jobs will be created from port operations alone). Substantial revenues will be generated in local and foreign currency from taxes, royalties, and duties. All these, in addition to other direct and ancillary business employment and revenues, have been projected to be valued at more than $400 billion in the medium term, giving financial viability assurance throughout the 45-year concession. For Lagos State, Lekki Port is located strategically to also serve the Lekki Free Trade Zone, which is the flagship of the Lagos State Government’s industrial development initiative.
Somaliland: Ethiopia Studying Rail Connection to Berbera (SomTribune)
The Ethiopian Railway Corporation (ERC) is undertaking new studies to determine the feasibility of building railway networks linking Ethiopia to Berbera, Lamu, and Assab ports. It is a part of the country’s port diversification plan and surfaces three years after Prime Minister Abiy Ahmed (PhD) signed agreements with neighbouring countries, including Sudan and Somalia, to develop ports as a gateway for the Africa’s most populous landlocked country. While linking Ethiopia with more ports through railway expected to avert the overdependence of the country on ports of Djibouti, which handle over 80 percent of its imports, the corporation is undertaking the pre-feasibility studies using internal capacity.
According to Behailu, for the railway projects that will link Berbera, Assab and Lamu ports, diplomatic efforts are underway to secure consents of neighboring countries. “The railways will link the ports with major economic corridors in Ethiopia. Ethiopia has a big economy and cannot depend on one port. Ethiopia is also a huge market for the ports,” said Behailu, adding “The new cross border railway lines will focus on linking Ethiopia with the red sea, gulf of Eden and the Indian Ocean. All ports in this area will be linked to Ethiopia via a railway line. We have various sources of finance for the studies.”
Region starves as Tanzania seeks wider market for its surplus food (The East African)
As the African Union endorsed 2022 as the Year of Nutrition last weekend, seeking to strengthen the continent’s resilience in food security, the UN was waving the red flag about biting hunger in the Horn of Africa, where at least 13 million people are starving. In fact, 50 million people in the larger East African region are at risk of starvation, according to experts.
The UN agency noted that three consecutive failed rainy seasons in Ethiopia, Kenya and Somalia, “have decimated crops and caused abnormally high livestock deaths, while shortages of water and pasture are forcing families from their homes and triggering conflict between communities”. “Harvests are ruined, livestock are dying, and hunger is growing as recurrent droughts affect the Horn of Africa,” said Michael Dunford, regional director of the WFP Regional Bureau for Eastern Africa.
Katima Mulilo one-stop border post gains traction (New Era)
With the Zambezi region seen as a “Gateway to SADC” in unlocking the economic potential of the area, Zambezi governor Lawrence Sampofu has joined other voices for the Katima Mulilo Border Post to be upgraded to a One-Stop Border Post (OSBP). This would facilitate the free movement of goods to avoid bottlenecks at the border, he observed. Last week, international relations minister Netumbo Nandi-Ndaitwah said in order to facilitate trade between Namibia and Zambia, the government, through SADC programmes, recognised the Zambezi region as a gateway to the regional market through the Katima Mulilo and Ngoma border posts. The Zambezi region is the gateway to SADC countries such as Angola, Botswana, the Democratic Republic of Congo (DRC), Zimbabwe, Malawi and Tanzania.
Africa’s role model: modernising Ghana is ripe with opportunity (Business Day)
As countries around the world are being urged to “build back better” from the global pandemic, one African country is embarking on an exciting modernisation journey, embracing digitisation and automation to improve the lives of its citizens and appeal to foreign investors. Ghana unveiled its recipe for success at the UN, where it was re-elected as a non-permanent member of the UN Security Council earlier this month. Ghana’s vice-president, Mahamudu Bawumia, delivered an address on combating the pressing matter of urban warfare and outlined a four-pronged approach to ensuring citizens get the best possible protection from the ravages of urban conflict. In addition to calling for increased collaboration between states and better contingency planning to fight terror groups such as Boko Haram in West Africa and Isis in the Middle East, he called on governments to use the power of automation and digitisation to improve citizens’ lives and enable them to resist being attracted to supporting such groups. Bawumia told the UN he and Ghanaian president Nana Akufo-Addo had both identified modernisation as the best way of improving rural opportunities and making urban areas safer.
Morocco – playing a key role in the region (EU Reporter)
All agree on the urgency for the African continent to address the multiple challenges it faces, taking full advantage of its potential and resources, and innovative partnerships with the EU in particular, in a common quest for shared prosperity.
Since the first Summit of 2000 in Cairo, the relationship between the two continents has continued to evolve. While the EU has expanded from 15 to 28 – and then 27 – members, Africa has also changed profoundly. It has become a crossroads of opportunities, making it necessary to recast the partnership between the two continents. A redesign in this case would be the name of a bold and ambitious change of paradigms, with the ultimate goal of moving away from the outdated and reductive “donor-recipient” and “student-prescriber” schemes. Among the countries most committed to this line is Morocco. Both in its closeness to the EU, forged over more than 50 years of cooperation and dialogue, and its commitment and anchorage in its African continent, Morocco is at the crossroads of all the paths of the EU-AU partnership. Morocco’s multi-faceted projection on the continent rightly presents a cutting edge and an innovative and pragmatic model on which the EU-AU partnership could usefully be built.
On the African side, the approach of this Summit is pragmatic. African countries, led by Morocco, argue that the partnership must go beyond meetings and political declarations to become more involved in concrete and tangible action that meets the expectations of citizens. The goal is to establish a Euro-African space of peace, stability and shared prosperity. It is in this spirit that Morocco, at the Kigali Ministerial Meeting of October 2021, supported the Rwandan proposal to create a Ministerial Committee to monitor the implementation of commitments. Whether it is renewable energy, industrialization, support for youth empowerment, or migration, it is not a matter of prioritizing objectives, but of pursuing them together.
African trade
ADESINA: Africa must industrialise so that its global share of trade moves beyond just 2pc (The East African)
The African Continental Free Trade Area is a game-changing development for Africa; it links an economy worth $3.3 trillion and a market of close to 1.4 billion people. The AfDB is strongly supporting that, says Akinwumi Adesina, president of the African Development Bank. “[But] I don’t want the African Continental Free Trade Area to just be an area for trade. And that’s because we’ve been trading forever, right? The issue is what are we trading? What value are we adding to what we’re trading? And how is that helping to increase economic growth and development? That’s why the African Development Bank supports the African Union Commission on industrialisation. We must develop regional value chains, whether it’s for cotton for textiles and garments or pharmaceuticals, electronics, automobiles, food and agriculture... The AfCFTA is an incubation zone for us to develop and industrialise. We must industrialise so that Africa’s share of trade globally is not just two percent. We want to play globally, so why not start with viable and competitive, well financed, and – with infrastructure and finance – value chains?
$11.48m boost for African Union’s Agenda 2063 from AfDB Fund (ESI Africa)
The African Union Commission (AUC) welcomes an $11.48 million grant from the AfDB’s African Development Fund to strengthen the delivery of Agenda 2063. Agenda 2063 is the African Union’s vision for “an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena.” The grant will contribute to the Institutional Capacity Building for the African Union project. A portion of the funds will be allocated to the AUC’s Disaster Risk Reduction practices, and Climate Change Adaptation mechanisms, while support for women will include developing the Commission’s Gender and Youth Mainstreaming Guidelines and Scorecard and related activities over and above the support towards the AU’s institutional reform. Approval for the grant, from the Fund’s regional public goods window, came a few days ahead of the 35th Ordinary Session of the African Union Assembly, which was held in Addis Ababa, Ethiopia.
The smooth movement of goods and people across countries’ borders is vital as it removes bottlenecks that hinder intra-regional trade. That is why the Southern African Development Community (SADC), together with its tripartite partners in the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC), is working flat out to have legally binding standards to be met in all Member and Partner States to ensure minimum disruption of movement of goods and people during COVID-19 period.
The COMESA, EAC and SADC Member and Partner States represent 53 percent of the African Union membership, constitute over US$1.4 trillion Gross Domestic Product (GDP) which is roughly 60 percent of African continental GDP and a combined estimated population of 800 million, making the tripartite region an important building block for the implementation of the Africa Continental Free Trade Area. Road transport agreements and model laws/principles are among the guidelines that have been developed and adopted to ensure a coordinated and harmonised transport system to ease the movement of people and goods across the regions. The COMESA-EAC-SADC model laws and regulations for Vehicle Load Management (VLMA), Cross Border Road Transport, Road Traffic, Road Traffic and Transport Transgressions and the Transport of Dangerous Goods by Road were developed and approved by Tripartite Committee of Ministers in June 2021. This means that transporters moving people or goods across the tripartite region have to recognise and abide by these laws to ensure their smooth movement. The model laws are coordinated and managed through the Tripartite Transport and Transit Facilitation Programme (TTTFP) funded by the European Union.
DR Congo on the threshold of entry as 7th EAC member (The Citizen)
Despite the security challenges in its eastern jungles, the DR Congo is set to become the newest member of the East African Community (EAC). The resource-rich country in the heart of Africa will join the six-nation bloc later this month: earlier than previously thought. The likelihood of the EAC becoming a seventh member came on the heels of the recent conclusion of detailed negotiations in Nairobi. “The negotiations were concluded and a negotiation framework matrix jointly adopted,” a source at the EAC said. Adoption of the matrix discussed for two weeks in Nairobi last month technically clears the road of the country’s entry into the bloc. Admission of a new member is the prerogative of the EAC Summit of Heads of State, the supreme organ of the Community.
EABC calls for quick roll-out of the EAC Covid-19 Pass (EABC)
The Principal Secretary in the State Department of East Africa Community, Ministry of East African Community and Regional Development of Kenya, Dr. Kevit Desai said the EAC Partner States will soon adopt the EAC Pass to ease the movement of East Africans amid the pandemic during the EABC Trade Facilitation Forum held at Taveta/Holili One-Stop Border Post. Dr. Desai lauded the strong leadership of H.E. Uhuru Kenyatta, President of the Republic of Kenya and Chair of EAC Heads of State Summit for bolstering the EAC regional integration agenda for businesses and East Africans to actualize prosperity. Dr. Desai called for collective efforts towards trade facilitation & value addition to boost manufacturing and urged East African businesses people to boldly tap into the markets of the Democratic Republic of Congo and the African Continental Free Trade Area (AfCFTA). On their part, the chairpersons of women cross-border traders stated un-harmonized measures on COVID-19 increase the cost of business operations citing the USD.10 antigen test on the Tanzania side while on the Kenya side is free of charge. Women cross-border traders also elaborated that EAC Simplified Trade Regime is not implemented as envisioned.
Better days ahead for artisans and technicians in East Africa (The Standard)
Countries in East Africa have commissioned major infrastructure development projects, including the East African Crude Oil Pipeline, the Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) Corridor, the Northern Corridor Infrastructure Development Projects, Standard Gauge Railway Projects the Ethiopian Grand Renaissance Dam, among others. With substantial investments running into billions of dollars, these projects present an opportunity to foster the region’s economic development while also increasing youth employment.
The East African Community (EAC) Common Market Protocol emphasises free movement of labour as one of the pillars for realising regional integration. However, with different qualifications offered by technical and vocational colleges in each of the countries, movement of labour with vocational skills has been a major challenge.
Entrepreneurs on unleashing Rwanda and Africa’s SME potential (The New Times)
There is a need for innovative solutions to unleash the African economy by supporting the private sector, SMEs and young business owners to create more jobs, emerging entrepreneurs have reiterated. According to Gilbert Ewehmeh, the coordinator of Accelerate Africa (AA), a new Pan-African think tank created by African Young Entrepreneurs two months ago to unleash Africa’s growth and recently launched in Rwanda, Africa is still lagging behind in employment, job creation and business financing.
The African Continental Free Trade Area offers employment and entrepreneurship opportunities for youth, but policymakers and development organizations must take steps to ensure the agreement reaches its full potential, experts have said. The framework has the potential to create more than 14 million new jobs by 2025 in the manufacturing sector alone. “We have to unleash African Economy by supporting startups so that jobs are created by Africans in Africa,” he said adding the new Pan-African entrepreneurs’ think tank seeks to create a new generation of economic leaders in infrastructure sector, agribusiness, energy, digital transformation, industrialization across the continent.
Comesa maintains U$2 000 threshold for STR charges (Chronicle)
The Common Market for Eastern and Southern Africa (Comesa) has recommended that the US$2 000 threshold being charged to businesses on every consignment under the regional Simplified Trade Regime should be maintained at that figure. A Simplified Trade Regime (STR) is an arrangement implemented by Comesa member States to formalise and improve the performance of the small-scale cross border traders enabling them to benefit from the regional preferential treatment when importing or exporting goods within the region. The current STR threshold was adopted by the Comesa Council of Ministers in 2014. Recently, the Comesa secretariat conducted a study to review the suitability of the existing STR threshold of US$2 000 per consignment per crossing within the trading bloc.
“The Comesa Secretariat has conducted a study to review the suitability of the current Simplified Trade Regime (STR) threshold, which stands at US$2 000 per consignment, per crossing. “Specifically, the study was commissioned to review the current STR threshold value with a view to establishing a suitable level that is capable of effectively facilitating intra-regional trade in member States already implementing the STR and those that will implement it in future,” said Comesa in a statement.
RIFF Holds Planning Workshop for Project Roll-out (COMESA)
The Regional Infrastructure Financing Facility (RIFF), an investment financing arm funded by the World Bank to support infrastructure development in the COMESA region is set to roll out its activities for 2022. Recently, the Project Implementation Unit of the RIFF held a three-day orientation workshop in Siavonga south of Lusaka to discuss the work plan and review the guidelines, processes and procedures that apply to the World Bank and COMESA Secretariat. The objective of the interaction was to enable officers and partner divisions and units from COMESA Secretariat to have a common understanding of the RIFF implementation plan and the linkages. RIFF was launched in August 2020 and has three components which include a US$325 million credit facility for Project and Infrastructure Finance. This will provide long term finance to infrastructure projects that meet the development impact criteria and it will be administered by the Trade and Development Bank (TDB). The second Component is the COVID Infrastructure Sector Small and Medium Enterprise (SME) Response with US$75 million which will facilitate access to debt financing to renewable energy.
ICT poised to oil regional integration (Times of Zambia)
According to the organised crime in Southern Africa report, which was published before the construction of the new Kazungula Bridge, speed boat owners on both the Zambian and Zimbabwean side have been assisting smugglers to load Zimbabwean Ivory, cigarettes, liquor and fish to sell to Zambians. Zambians in turn have been supplying Zimbabweans with the much needed foreign exchange such as United States dollars and other convertible currencies, foodstuffs and toiletries and the transactions which are usually carried out at night. Other goods that have also been smuggled are firearms, audio-visual pirated products, counterfeit medicines, cosmetics and cigarettes, fuel and counterfeit currencies as well as illicit drugs across borders of southern Africa. This tax evasion, which sometimes also involves under-invoicing, entails reporting a lower quantity, weight or value of goods to pay lower import tariffs, misclassification, in terms of falsifying the description of products so that they are misclassified as products subject to lower tariffs, improper declaration of the country of origin and bribing customs officials.
Prospects and challenges of de-dollarization in Africa (Businessday)
The crystal ball that foretold an eventual conglomeration of currencies in Africa into a single medium of exchange and store of value looks to now been accorded some attention. This is because some countries in the West African Monetary Zone (WAMS) – Gambia, Gambia, Ghana, Guinea, Liberia, Nigeria, and Sierra Leone have concluded a successful pilot scheme on the Pan-African Payment and Settlement System (PAPSS). Launched by the Afreximbank – the PAPSS has been around since July 2019 but was only recently commercially launched in Accra, Ghana on the 13th of January 2022. The interoperability of the PAPSS Platform is mainly focused on the promotion of trade within the continent especially with the existence of the African Continental Free Trade Area (AFCFTA) which has a market value of $3 trillion, there is a prospect for African countries to leverage the system to increase the demand for their local goods and services. This in turn will strengthen their respective currencies. The scheme will also bridge the gap in the erstwhile fragmented payments system that long existed on the continent with a renewed opportunity for deepened trade.
The Search for Sustainable Solutions to Debt Accumulation in Sub-Saharan Africa (Observer Research Foundation)
Like in some other regions of the world, the COVID-19 pandemic accelerated external debt accumulation in Sub-Saharan Africa (SSA). This could have massive, adverse impacts on growth as governments prioritise debt servicing commitments over key development expenditures such as healthcare and education. For the countries in SSA with relatively lower GDP, this could mean getting caught in a vicious cycle of low output and mounting debt. A path towards debt resolution, therefore, is important for long-run sustainable development. This paper examines the rise in debt in the countries of SSA and identifies trends, outlines drivers, and explores the impacts on development. Using the cases of Angola, Kenya, and Zambia, the paper evaluates the different triggers for debt accumulation and argues that immediate debt relief requires a heterogenous approach.
AU-EU Summit
African Stakeholders Joint Submission on the 7th EABF Business Declaration (EABC)
African and EU Businesses call upon the AU and EU Commissions to design programme aimed at promoting joint venture between African and EU businesses to transform African resources for continental consumption and exports. This would also include the development of an enabling environment, such as fast-tracking the conclusion of the AfCFTA Investment Protocol.
African and EU Businesses call upon EU and AU Member States to direct the AU and EU Commissions to design and implement robust programmes to strengthen the capacity of all the relevant institutions, in particular national, regional and continental levels private sector organizations, as well as in the education sector, involved in implementing recommendations emanating from the EABF.
European Union targeting comprehensive partnership with Africa (The Exchange)
The European Union (EU) is seeking to build strongly on its existing economic and trade relations with Africa. At the February 17 – 18th summit with African leaders, and the African Union, leading business enterprises and representatives from academic, civil society organizations and media will be present at the summit to discuss their ways of strengthening aspects of various issues relating to development in Africa. Long before this summit, EU members and business investors have been making consistent efforts at capitalizing on and exploring several emerging opportunities offered by the newly introduced African Continental Free Trade Area (AfCFTA), which provides unique and valuable access to an integrated African market of over 1.2 billion people.
Several reports indicate that the summit strives to bring Africa and Europe closer together through strengthening economic cooperation and promoting sustainable development, with both continents co-existing in peace, security, democracy, prosperity, solidarity and human dignity. It is against this backdrop that the two partners are determined to work together on a strategic, long-term footing to develop a shared vision for EU-Africa relations in a globalized world.
African and European agriculture needs protection (EURACTIV)
In the lead up to the sixth European Union – African Union Summit, small, rural farmers from umbrella organisations in Africa and Europe are calling for coherent policies that protect small-scale African and European agriculture. From climate issues to trade, Ibrahima Coulibaly, Morgan Ody and Sonia Vidal call for future relations to be built on mutual respect and societal needs.
The sixth European Union – African Union Summit will be held in Brussels on 17-18 February. On this occasion, as peasant farmers in Africa and Europe, we jointly express the urgent need to rebuild food sovereignty on our two continents. Today, people in Europe and Africa are still fed by peasant and family farming. Our small and medium-sized farms create jobs and provide a living for rural areas. When scientists agree on the urgency of a global agroecological transition to respond to the climate crisis and the collapse of biodiversity, it should be a shared priority to maintain large numbers of farmers practising diversified agriculture in all territories. However, for decades, deregulation policies and the opening of agricultural markets have weakened our farms.
The liberalisation of investments opens the door to massive land and water grabbing by multinational organisations or hedge funds against small producers.
Instead of supporting young people who would like to settle in the profession, governments promote false technological solutions like GMOs, digitalisation or robotics. The Economic Partnership Agreements between the European Union and the African Union countries are primarily responsible for this situation.
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Europe Must Be Africa’s Partner of Choice | by Josep Borrell (Project Syndicate)
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EU, Africa at odds over vaccine patents ahead of summit (EURACTIV)
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SADC leaders to participate in the AU and EU Summit on 17-18 February 2022 (SADC)
Global economy
How trade facilitation can support supply chain diversity in a post-pandemic world (World Economic Forum)
After two years of a global pandemic, international trade is bruised and battered. The carefully tuned machinery we call the supply chain has become erratic, impacting all parts of the world. We overestimated the sturdiness of the system and underestimated the costs of dysfunction. While international trade remains resilient, its recovery will probably take an adjusted form. Emerging economies are bearing the brunt of the pandemic inflicted trade disruption. Countries that painstakingly invested in joining the international value chain producing textiles, machinery parts, electronic components and agricultural produce are feeling the pinch.
Stretched supply chains threaten job stability, downsize business expansion plans, reduce investment, and undermine government tax revenues in the very countries that can least afford to cushion the blow by supporting the private sector through to recovery.
We can counter this disruption by increasing our efforts to cut the unnecessary delays and red tape at borders that continues to cause frustration, generate unnecessary costs and affect livelihoods. What used to be considered an inconvenience, or the cost of doing business, risks terminally damaging developing nations competitiveness in supply chains. But a crisis can also be a catalyst for change and the sheer scale of this pandemic presents an unprecedented opportunity for reform. Large enterprises, realising the fragility of their production processes, are scrambling to rethink their operations. Boardroom executives are considering spreading risk among multiple production plants, multiplying component suppliers, shortening the distances between production and assembly facilities, and bringing their manufacturing closer to their customers.
As pandemic eases, LDCs face a long road to recovery (Trade for Development News)
Like many patients dealing with long-Covid, the road to recovery from the pandemic for low-income countries is long and arduous, but it is not insurmountable. The economies of LDCs are projected to grow at a higher rate of 4.9% in 2022 on the back of higher commodity prices and recoveries in agriculture and mining – but this is below the annual average growth rate of 5.5% seen between 2000 and 2019. Emerging market and developing economies need to reduce their reliance on commodity exports by diversifying their export and national asset portfolios. Low-income countries need policy measures to facilitate cross-border trade and investment which, combined with reforms “to improve business climates, human and physical capital, can help these countries generate the productivity growth needed to catch up to advanced-economy per capita incomes,” the World Bank notes. LDCs will also need help from the outside. Exploring trade financing opportunities to reduce the cost of doing business and boost exports will speed up recovery.
How the intellectual property monopoly has impeded an effective response to Covid-19 (The Conversation)
In an interconnected world, a pandemic can be overcome only when it is overcome everywhere – no one is safe until everyone is safe. Vaccination delays and supply shortages in protective equipment and treatments increase the possibility of the virus mutating. This undermines our ability to control the pandemic, even in highly vaccinated countries. And yet two years into the pandemic, vaccine doses are highly concentrated in rich countries. As of October 2021, only 0.7% of all manufactured vaccine doses had gone to low-income countries. Manufacturers had delivered 47 times as many doses to high-income countries as they had to low-income countries. Since its inception, COVAX, the UN-backed initiative dedicated to promoting access to Covid vaccines, has struggled to obtain doses. It recently passed the 1 billion doses delivered – half way to its goal of delivering 2 billion doses by the end of 2021. Indeed, AstraZeneca, Pfizer/BioNTech, Moderna, and Johnson & Johnson have delivered between 0% and 39% of their already inadequate commitments to COVAX in 2021. The Global Commission for Post-Pandemic Policy, meanwhile, estimates that while Asia and Europe will be able to fully vaccinate 80% of their populations by March 2022 and North America by May 2022, Africa will not reach 80% at current rates until April 2025.
WTO, WHO, WIPO to hold workshop on access, use of pandemic-related information resources (WTO)
A virtual workshop jointly organized by the World Intellectual Property Organization (WIPO), the World Health Organization (WHO) and the WTO on 28 February will provide an overview of particular COVID-19-related information resources. The workshop aims to enhance understanding of the characteristics, potential uses and limitations of particular information sources related to COVID-19. The workshop responds to the needs of policymakers and other stakeholders working on health, intellectual property and trade issues related to the pandemic, and is specifically targeted at them.
DG Okonjo-Iweala: Climate-related trade policies must focus on needs of most vulnerable (WTO)
Speaking at the “Climate Change Priorities on Trade and Investment” webinar hosted by the government of Bangladesh on 14 February, Director-General Ngozi Okonjo-Iweala outlined her views on how climate priorities can be addressed through trade actions which prioritize the specific challenges faced by least developed countries and small island developing states. The WTO can play a key role in providing the support these countries need for a successful green transition, she declared.