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Diarise: EAC experts meeting on outstanding issues under Phase 1 of the AFCFTA negotiations (22-24 July)
The selection process for the next WTO Director General began today, and will continue on Thursday and Friday.
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View the press conference from the candidates interviewed today: Dr Jesús Seade Kuri (Mexico); Dr Ngozi Okonjo-Iweala (Nigeria); Mr Abdel-Hamid Mamdouh (Egypt)
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Tomorrow’s interviews: Mr Tudor Ulianovschi (Moldova); Ms Yoo Myung-hee (South Korea); Ms Amina C. Mohamed (Kenya)
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Friday’s interviews: Mr Mohammad Maziad Al-Tuwaijri (Saudi Arabia); Dr Liam Fox (United Kingdom)
Extract from the vision statement posted by Ms Amina C. Mohamed (pdf): Once recovery is under way, however, we will still face the need to update the trading system to respond appropriately to pressing global issues like climate change, the digital revolution, deepening poverty and sustainable development. The WTO should be where governments come together to forge trade responses based on concertation among themselves, sharing of best practices, and reaffirmation of key principles. Bilateral and Regional Trade Agreements can bring important benefits, especially where localized interests relevant to near neighbours are at stake. But a trading world networked by overlapping preferential arrangements among subsets of economies cannot be a substitute for the rules-based multilateral trading system.
Africans must explore opportunities in digital trade, says AfCFTA chief (UN Renewal)
Secretary-General of the AfCFTA Secretariat, Mr Wamkele Mene, would like Africans to take advantage of the opportunities in digital trade because Africa is “one of the fastest-growing penetrations of mobile subscribers in the world.” “Digital trade is possible through mobile phones. We know, from the experiences of various countries across Africa, that you can access distant markets using your mobile phone,” Mr Mene told Africa Renewal in an exclusive interview. He added: “It is a question of leveraging all those technological innovations and advantages into a common platform for free trade in Africa, under the AfCFTA agreement.”
Already, women traders in countries such as Kenya and Nigeria are applying digital solutions in informal trade. The AfCFTA, he explained, intends to establish the requisite regulatory environment and architecture, through laws and digital platforms. “We need to find a way to digitize our customs capabilities to make them seamless across the continent. It is going to take quite a lot of work, but I believe it’s possible.”
Q: The commencement of free trade in Africa trade was expected to increase intra-African trade from 18% to about 50% within a few years. Is that timetable still on?
A: We aim to reach up to 50% of intra-African trade between now and 2030. So, there is not that much time. COVID-19 aside, whether we can reach 50% of intra-African trade depends on our capacity to accelerate regional value chains in Africa’s industrial development. Second, the manner and pace with which we implement the agreement, collectively, will also determine whether we increase that number from 18% up to 50%, and hopefully above that. So, it is an objective that we will have to actively work towards, and we will have to vigorously pursue.
Tripartite Capacity Building Programme, phase II: AfDB posts a GPN
The key outputs from the Bank’s intervention ($1.1m in funding to the COMESA Secretariat) will be the development of guidelines, procedures, regulations and manuals required to operationalize the Agreement in areas such as rules of origin and dispute settlement. The Programme will also support the establishment of online databases for non-tariff measures in Tripartite RMCs, building on the pilots under Phase I. This will improve transparency in trade, speed up the resolution of non-tariff barriers (NTBs), deter arbitrary application of regulatory measures that hinder trade, and improve awareness of traders about legitimate regulatory requirements, which provides a foundation for them to improve their capacity for compliance. The programme will enhance awareness of traders and the business community on the market access opportunities now availed by the Agreement, with a view to effectively harnessing such opportunities.
COMESA NTBs Focal Points meeting: update
At least 82% of the reported non-tariff barriers in the COMESA region are those imposed on imports and exports of goods and services and are largely operational by design. According to trade experts, these type of NTBs are easy to identify and monitor. Thus, from an analytical perspective, the relatively high rate of resolution of NTB cases in COMESA, which is over 95%, does not necessarily imply that the mechanisms established to eliminate NTBs are effective.
Rather it shows that mechanisms in place capture more of the operational as opposed to the behind-the-border types of NTBs. The behind-the-border measures are mainly imposed internally and include domestic legislations covering health, technical, product, labour, environmental standards, internal taxes or charges, and domestic subsidies. According to the COMESA Director of Trade, Dr Christopher Onyango, the latter category is much more complex and difficult to identify and have in recent times become major sources of NTBs. He was speaking at the opening of the virtual 8th Meeting of the COMESA NTBs Focal Points which took place last week, 8 – 10 July 2020. Its objectives were to deliberate on the revised COMESA Non-Tariff Barriers regulations, the 2nd draft of the Working Procedures on implementation of COMESA NTBs regulations and to consider the outstanding Intra-COMESA NTBs.
He said several strategies and mechanisms have so far been put in place to reduce the occurrences and eliminate NTBs since the establishment of COMESA, particularly following the advent of the FTA regime. However, the NTBs have remained prevalent and continue to constrain the growth and expansion of intra-COMESA trade and investments. In the COMESA region, some NTBs have remained unresolved for long, some dating back to 2000. “In as much as willingness and commitment of parties involved may be critical, the effectiveness and capability of the mechanisms and institutional structures to resolving all types of NTBs require sustained review,” Dr Onyango explained. “Regulations should take into account the nature, forms and categories of various non-tariff measures, domestic policies, laws and regulations and the diversity of economic sectors. But even more importantly, the regulations and procedures should be inclusive, taking into account small scale enterprises, youth and women as important players in the integration process.”
AfDB Policy Brief: Transformative policy solutions to support women-led businesses in Africa in a post covid-19 world
Women-led businesses across Africa are already significantly impacted by COVID19. A survey conducted by ImpactHER with over 1,300 women SME owners across 30 African countries revealed that most women-led SMEs are at risk of permanent business shutdown as a result of the pandemic. In responding to how COVID-19 has affected their business operations, 80% of the respondents reported that they had to temporarily shut down their business. Of those that are still fully or partially operating, 41% reported that they had significantly reduced the number of work hours, 34% reported that they laid off workers, and 25% reported that they had to reduce their employees’ salaries. Similarly, in a survey conducted by UN Women with 165 women entrepreneurs in Mali, as much as 96% had seen their economic activity reduced in the first two months of the crisis. Also, women-led businesses are being impacted at a faster rate than SMEs led by men. A survey by UN Women and the SME agency of Cote D’Ivoire showed that a significantly higher number of women-led businesses has been forced to stop its operations because of the crisis (64% for women-led businesses as compared to 52% for men-led).
Statement by UN Women and Women 20 to G20 Finance Ministers and Central Bank Governors
527 million women work in the four hardest-hit sectors – accommodation and food services, real estate, business and administrative activities, manufacturing, and wholesale/retail trade, unsuitable for remote-working. This represents 41% of total female employment vis-à-vis 35% of total male employment. Of 740 million informal economy women workers, 42% work in these sectors vis-à-vis 32% of men. Women comprise 70% of the global health workforce, at the front lines of response. Already encumbered by gendered labour-market disadvantages, women workers have been disproportionately affected by job loss, reduced working hours and bankruptcy. Also, health risks to health workers, paid and unpaid care work and violence against women have escalated with COVID-19 and lockdowns. Women contribute 37% of the global GDP. Moreover, all types of women’s care work, including unpaid work generate $11 trillion globally (9% of global GDP). Deploying women’s full potential is critical to economic recovery. However, it is unclear how much the sizeable G20 (or non-G20) economic packages have invested in women’s priorities, despite evidence that the socio-economic impacts of COVID-19 are worse for women.
The crisis will worsen economic loss, including the $160 trillion loss in wealth globally due to gender earning gaps. If shrinking fiscal space in countries of the Global South prompts spending cuts in public services, this will have further harsh impact on poor women and girls. Intentional expansion of fiscal space that recognizes and invests in women’s specific priorities must be central to the design of recovery packages. [Executive Director of UN Women, Phumzile Mlambo-Ngcuka: Addressing the needs and rights of at-risk and crisis-affected women and girls]
pdf Post-COVID-19: Investment promotion agencies and the “new normal” (3.12 MB) (UNCTAD)
In the past months, IPAs have continued to strengthen their online presence. A total of 77% of national IPAs worldwide have provided COVID-related information and services online as they developed specialized virtual platforms and tools. The response, however, has been asymmetric, and differences in their digital capacity, culture and resources have surfaced. While developed countries are multiplying their digital channels of communication on COVID-related business issues for investors, 44% of national IPAs from developing countries provided no or little information for investors about the pandemic on their websites or social media channels.
The offering of investment facilitation and aftercare services by IPAs has expanded, with an increased focus on strengthening linkages between foreign companies and the local economy. The enhanced role of IPAs as trouble-shooters and business support institutions will likely remain after the pandemic. After focusing almost exclusively on providing retention and aftercare support to existing investors during the past few months, IPAs are now promoting investment help to restart economies. The new focus is on traditional as well as emerging opportunity areas linked to renewed national priorities and a growing demand in sectors such as health, food and agriculture, and tech-related sectors.
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Box 1: How IPAs are leveraging social media channels for investment promotion and facilitation during the pandemic
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Box 2: Findings from the UNCTAD regional webinar for IPAs from the EAC and SADC
Why refined products standard is critical to Africa (Standard)
A move by the African Refiners & Distributors Association (ARA), and the African Union, to ensure common standard for the importation and refining of petroleum products on the continent remains critical to trade, environment and the economy of the region, stakeholders said, Wednesday. Under the plan, Africa is expected to adopt harmonized AFRI Clean Fuel Specifications across. The Cleaner Fuel spec recommends adoption of AFRI five (50 ppm sulphur for gasoline and diesel) by 2025, and AFRI 6 spec (10 ppm for same products) by 2030. ARA Executive Secretary, Anibor Kragha, had told The Guardian that the objective is to stop the importation of fuels not meeting these AFRI specs into Africa by 2021, and give existing refineries until 2025 to upgrade their facilities to produce the cleaner specs. Kragha disclosed that the ECOWAS Council of Ministers of Hydrocarbons in February 2020 already recommended product imports to meet AFRI five specs by 2021, and regional refineries to meet AFRI five specs by 2025. While some stakeholders are concerned about the poor implementation of existing regulations in Nigeria, they noted that the new standard would allow petroleum products to be moved easily across Africa.
The Next Generation Africa Climate Business Plan: Ramping up development-centered climate action (World Bank)
The Next Generation Africa Climate Business Plan provides a platform to further galvanize climate action by prioritizing its focus on the region’s core development challenges and priorities. The plan is grounded in the World Bank’s commitment to support climate-resilient and low carbon development across the developing world and its solid engagement in technical and financial assistance to support climate action in Africa. Extract (pdf):
The COVID-19 pandemic could wreak havoc on the health and economy of the Africans while the global economic shock is going to slow Africa’s engines of growth and spur the first recession in the region in 25 years. The effects include the reduction of African exports, a decline in services like tourism, remittances and access to financial markets, and will cost the region between $37bn and $79bn in terms of output losses for 2020. The earlier and the more aggressive the restrictions of social movement, the quicker the recovery, as policy aims at flattening the “two curves”, benefiting both health and the economy. While a successful containment policy is possible and the experience of African countries fighting the Ebola virus epidemic suggests African solutions can also be effective, the welfare losses, the food insecurity and the political uncertainty will be very high.
Africa’s engines of growth are diversified, but agriculture is the largest, representing 15% of the continent’s total GDP. The relative value of agriculture, forestry, and fishing varies greatly, from 2% each in Botswana and South Africa to 50% in Chad and 62% in Somalia. In Burundi and Madagascar, the shares are more than 80%. The engine of agricultural growth is driven by total factor productivity rather than expansion in the amount of land, water, and input usage. The manufacturing sector, including the extractive sector, has been a notable engine of growth in resource rich countries in Africa, especially in boom years (Cust, J., and others; forthcoming). The extractive sectors have the potential to continue to produce growth for the next two to three decades, serve as inputs to diversify the economy, and provide both fiscal and export resources for governments. The sector has suffered from weak governance and global commodity swings but continues to be central to achieving higher productivity and growth. The oil price shock of March 2020, driven by geopolitics and reduced demand in light of the pandemic, will affect net oil-exporting countries and result in increased liquidity issues, lost tax revenues, and currency pressure.
State of Food Security and Nutrition in the World (UN)
As countries “continue to grapple with malnutrition in all its forms, including the growing burden of obesity,” Secretary-General António Guterres said that this year’s State of Food Security and Nutrition in the World report “sends a sobering message”. The authoritative global study tracking progress towards ending hunger and malnutrition, is produced jointly by the FAO, IFAD, UNICEF, WFO and the WHO. While Asia currently has the greatest quantity of undernourished (381 million), people, the report showed that the number in Africa is growing fast (250 million), followed by Latin America and the Caribbean (48 million). And although the global prevalence hungry has changed little, over the last five years, hunger has grown in step with the global population, which, in turn, hides great regional disparities. With 19.1% of its people undernourished, Africa is hit hardest and becoming even worse. This is more than double the 8.3% rate in Asia and 7.4% in Latin America and the Caribbean. On current trends, by 2030, Africa will be home to more than half of the world’s chronically hungry.
Keeping trade open amid COVID-19 crisis central to achieving SDGs and economic recovery: WTO’s report to UN High-level Political Forum
IMF staff completes virtual mission to Zambia: statement
World Bank: Productivity growth, key driver of poverty reduction, threatened by COVID-19 disruptions
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AfCFTA Africa’s plan to ride out crippling coronavirus crisis, says Vera Songwe
Africa does not need a Marshall Plan to ride out the ongoing coronavirus crisis. It has a more powerful tool in the African Continental Free Trade Area (AfCFTA) to use in accelerating regional and economic integration and prepare for uncertain times.
This was said Tuesday by Ms. Vera Songwe, Executive Secretary of the Economic Commission for Africa (ECA), in a virtual panel discussion to mark the inaugural Africa Integration Day that was set aside by the African Union to mark the implementation of the AfCFTA.
Integration, said Ms. Songwe, is key for Africa’s growth and attainment of Agenda 2030 for sustainable development and Africa’s development aspirations as found in Agenda 2063.
“We need to talk about Africa and the AfCFTA. Our Marshall Plan is the AfCFTA. The AfCFTA is our plan so let us take it and run with it,” she said.
Ms. Songwe said with the AfCFTA, Africa had collectively penned its own blueprint for growth.
“The Marshall Plan for Europe was about 160 percent of their GDP traded to bring back growth after the war. What happened to us is that we were all waiting for a health crisis but we got an economic crisis first which was very steep, very deep, not just for us but for the rest of the world,” she said.
Ms. Songwe said the ECA estimates that economic growth in Africa in 2020 will drop from 3.2 percent to -2.8 percent to about zero percent growth as a result of COVID-19, a situation she described as disastrous, throwing an extra 20 million people into poverty in a continent where almost 300 million people cannot afford one meal a day.
“COVID came and has taken us quite far behind because we need to reassess where is it that we want to go and how we want to go. We definitely need to do things differently,” she said.
Ms. Songwe added that it was crucial for Africa to integrate its financial systems to create a mutualized system of financial stability that works for the continent or regional monetary cooperation as in East Asia.
“The Afreximbank Exchange Facility is an excellent step in the right direction. But more is needed to integrate our economies and financial sectors,” the Executive Secretary said.
This means “when there is a crisis we come together and we pull and mutualize our resources so that those who are the most hit get some resources”.
“So we do not need to go the long distance of common currency to get a mutualized system of financial stability that works for the continent. We need to ensure that as we build the AfCFTA and trade integration, we begin to build stronger, much more robust monetary and fiscal systems that can ensure that as a continent we actually can work with each other in a more effective way,” Ms. Songwe added.
She shared with the panel what the ECA has been doing since the crisis began in helping African nations, the private sector and civil society to understand and draw strategies to contain the pandemic and prepare for building back better.
Ms. Songwe said COVID-19 has given Africa an opportunity to assess its weak health delivery systems with countries like South Africa, Ethiopia, Morocco and others building new health infrastructure.
Africa must produce internally, said Ms. Songwe. The continent imports $14.7 billion worth of drugs, over 95 percent of its demand. She said countries like Egypt, Kenya, South Africa, Ethiopia and Cameroon can produce drugs for the continent, adding what needs to be worked on are Intellectual Property Rights issues.
The ECA Executive Secretary was joined on the panel by Mr. Mukhisa Kituyi, Secretary-General of UNCTAD; Mr. Benedict Okey Oramah, President of the African Export–Import Bank (Afreximbank); Mr. Wamkele Mene, first Secretary General of the AfCFTA; Mr. Chileshe Mpundu Kapwepwe, Secretary General COMESA; and Mr. Paolo Gomes of AfroChampions.
The panelists agreed that the AfCFTA was the best stimulus for Africa to come out of the COVID-19 pandemic. They also agreed the crisis was a great opportunity the continent should not waste, in particular using lessons learned for Africa’s industrial development; produce its own drugs and save billions of dollars in the process; digital inclusion is paramount; and working closer together than ever as one united Africa with the private sector too, among others.
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82% of NTBs in COMESA are operational and easy to monitor: but behind-the-border type of NTBs are more complex
At least 82% of the reported Non-Tariff Barriers in the COMESA region are those imposed on imports and exports of goods and services and are largely operational by design. According to trade experts, these type of NTBs are easy to identify and monitor.
Thus, from an analytical perspective, the relatively high rate of resolution of NTB cases in COMESA, which is over 95%, does not necessarily imply that the mechanisms established to eliminate NTBs are effective. Rather it shows that mechanisms in place capture more of the operational as opposed to the behind-the-border types of NTBs.
The behind-the-border measures are mainly imposed internally and include domestic legislations covering health, technical, product, labor, environmental standards, internal taxes or charges, and domestic subsidies.
According to the COMESA Director of Trade, Dr Christopher Onyango, the latter category is much more complex and difficult to identify and have in recent times become major sources of NTBs.
He was speaking at the opening of the virtual 8th Meeting of the COMESA NTBs Focal Points which took place last week, 8 – 10 July 2020. Its objectives were to deliberate on the revised COMESA Non-Tariff Barriers regulations, the 2nd draft of the Working Procedures on implementation of COMESA NTBs regulations and to consider the outstanding Intra-COMESA NTBs.
He said several strategies and mechanisms have so far been put in place to reduce the occurrences and eliminate NTBs since the establishment of COMESA, particularly following the advent of the FTA regime. However, the NTBs have remained prevalent and continue to constrain the growth and expansion of intra-COMESA trade and investments.
“It is therefore important that we continue to review and improve existing regulations and mechanisms taking into account changing eco systems, understanding key causes, analyzing regulatory regimes, production techniques and technological advancements,” he said.
In the COMESA region, some NTBs have remained unresolved for long, some dating back to 2000.
“In as much as willingness and commitment of parties involved may be critical, the effectiveness and capability of the mechanisms and institutional structures to resolving all types of NTBs require sustained review,” Dr Onyango explained. “Regulations should take into account the nature, forms and categories of various non-tariff measures, domestic policies, laws and regulations and the diversity of economic sectors. But even more importantly, the regulations and procedures should be inclusive, taking into account small scale enterprises, youth and women as important players in the integration process.”
Although all member States have established NTBs Focal Points, several countries are yet to formalize and operationalize their National Monitoring Committees. These are considered critical to the implementation of the regulations and elimination of NTBs, even most important is sharing experiences and developing capacities to identify, categorize and report them as they occur.
Dr Onyango underscored the importance of sustained capacity building and information sharing to strengthen the ability to capture emerging issues and finding lasting solutions to NTBs. Going forward, he said COMESA Secretariat will endeavor to elevate capacity building and research in the efforts to strengthen NTB mechanisms and effectively support their elimination from the region.
The meeting was attended delegates from by Burundi, Djibouti, D.R. Congo, Comoros, Egypt, Eswatini, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Tunisia, Uganda, Zambia and Zimbabwe.
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Africans must explore opportunities in digital trade, says AfCFTA Chief
Secretary-General of the African Continental Free Trade Area (AfCFTA) Secretariat Wamkele Mene would like Africans to take advantage of the opportunities in digital trade because Africa is “one of the fastest-growing penetrations of mobile subscribers in the world.”
“Digital trade is possible through mobile phones. We know, from the experiences of various countries across Africa, that you can access distant markets using your mobile phone,” Mr. Mene told Africa Renewal in an exclusive interview.
He added: “It is a question of leveraging all those technological innovations and advantages into a common platform for free trade in Africa, under the AfCFTA agreement.”
Already, women traders in countries such as Kenya and Nigeria are applying digital solutions in informal trade. The AfCFTA, he explained, intends to establish the requisite regulatory environment and architecture, through laws and digital platforms.
“We need to find a way to digitize our customs capabilities to make them seamless across the continent. It is going to take quite a lot of work, but I believe it’s possible.”
Mr. Mene is optimistic about the potential impact of free trade on African countries’ economies. He anticipates a successful implementation of the free trade agreement.
“This agreement will be a shining example of how a trade agreement is negotiated in a way so it has strong development features and onboards the segments of society that have been historically left behind,” he said.
The 1st July 2020 commencement date for free trade in Africa has been postponed following the outbreak of COVID-19. Mr. Mene said African leaders will soon announce a new date.
“All Africans, including me, see this [AfCFTA] as an opportunity to turn a new page on Africa’s economic development and growth trajectory. This is an opportunity that is unprecedented. In fact, I think that since the end of colonialism, Africa has not had such a big opportunity.
High expectations
Acknowledging the high expectations that people on the continent have of the Secretariat, Mr. Mene said he wants Africa to succeed and the trade agreement to have a long-term impact.
However, Mr. Mene cautioned, that, “success is not going to happen overnight, saying the same way that market integration in Europe happened over 50 years, in Africa it will also take some time.
“I think what is being celebrated is the fact that Africa has reached this point where we are moving rapidly towards an integrated market,” he said, adding that economic dislocations resulting from COVID-19 could be mitigated by a robust implementation of the AfCFTA. “As you know, many countries in Africa do not have the monetary policy space or the fiscal policy space to provide large bailouts that go in the trillions and trillions of dollars for economic recovery.
“Therefore, for Africa, the stimulus package is the AfCFTA, the implementation of this agreement. This is what will enable Africa to drive economic growth and economic development post COVID-19, by increasing intra-Africa trade,” he said.
Digital trade is the next big thing in Africa
Wamkele Mene was recently appointed Secretary General of the African Continental Free Trade Area Secretariat. Because of COVID-19, free trade for countries that have ratified the agreement did not begin, as planned, on 1 July 2020. In this interview with Africa Renewal’s Kingsley Ighobor, Mr. Mene explains the way forward, how increased intra-African trade can boost economies post-COVID-19 and how digital trade will be next big thing on the continent:
Africa Renewal: You have said that digital trade is the next big thing in Africa. Most of the trade in Africa is informal and is usually carried out by women, especially cross-border trade. How does digital trade fit that picture?
Mr. Mene: First, digital trade is possible through mobile phones. We know, for example, from the experiences of various countries across the African continent, that you can access distant markets using your mobile phone. So, the digital platforms are already there. We also know that Africa has one of the fastest-growing penetrations of mobile subscribers. It is a question of leveraging all those technological innovations and advantages into a common platform for free trade in Africa, under the AfCFTA agreement.
In countries where women are most active and contribute significantly to the economy – I am thinking here of Kenya and Nigeria, among others – there are examples of women who use digital solutions in informal trade. We seek to establish the requisite regulatory environment and architecture, through laws and digital platforms. The other area that is very important is customs authorities. We need to find a way to digitize our customs capabilities such that they are seamless across the continent. It is going to take quite a lot of work, but I believe it’s possible.
Do you have any plans to capture the imaginations of young people, to bring them on board?
During my appointment and election process, I identified young Africans and women in trade as segments of society that we must bring with us, to benefit from the implementation of this agreement. If it benefits only the big multinational corporations in Africa, it will have failed. We are going to create a platform to engage young Africans, women in trade and small- and medium-sized enterprises in a dialogue to put this vision into practice. We don’t have all the answers. We want to hear from young Africans. We know that if you go to Kigali, you will find young African software engineers at the forefront of innovation. These are the people that we want to bring into the fold of the agreement. We can create the appropriate environment for young Africans to benefit. Our rule will be to establish the conducive environment for young Africans to leverage their ideas. This is especially important. We don’t have the answers to innovation, but we can create and establish regulatory frameworks within the context of the AfCFTA.
It appears that many young Africans are not yet aware of some of the lofty goals of the AfCFTA. How do you encourage countries to raise awareness among young people?
It’s going to be a joint effort between the Secretariat and individual countries. We take advocacy and awareness-raising seriously. The basic iterate of the agreement is only one month old, but we are already recruiting the best and the brightest Africans to ensure that we reach our mandate. We are going to engage each of the five regions of Africa through regional outreach and advocacy programs. We will work with national governments. And we will complement the efforts of national governments to raise awareness about the benefits of the agreement, as well as the potential risks, and advise African populations – young people, women in trade – on how to take advantage of this unprecedented agreement. So, we are going to roll out a robust awareness-raising campaign in the five regions, in a way that complements the efforts of individual governments.
What’s your idea of success in the short and long terms?
In the short term, success is having an institution that is established and functions smoothly. Institution building is never easy. Building a Secretariat of eventually 55 countries is not going to be easy. It’s a big challenge. Establishing a dispute settlement mechanism is going to be a particular challenge, because it signals to African investors that they should have confidence in the market. If we can operationalize a credible mechanism, that will be a short-term success.
In the long term, we aim to reach our objectives and action plans in industrial development. We might have value chains in two or three priority sectors, especially in critical areas such as agro-processing and automobiles. These are the areas that have a direct impact on job creation and economic growth in Africa. That, for me, would be a long-term success.
How would you describe the impact of COVID-19 on AfCFTA so far?
Well, the impact has been, as anybody can imagine, extremely negative, starting with just the state of the economy in Africa. According to the African Development Bank, the [African economy] was set to grow between 4% and 5% this year. And so, the dynamism in African economies was there, right up until COVID-19 hit. We know that over 53% of Africa’s exports go to countries particularly in Europe, but those consumers are now suffering from the pandemic. That has had a subdued effect on our export markets. The services sector in Africa, especially travel and hospitality, is set to fall by between 20% and 30% this year. In general, the virus has had a devastating effect on Africa. We have to find ways to mitigate the effects of the pandemic. But, for now, the primary focus should be on saving people’s lives.
Given the current situation, do you have any idea when free trade for participating countries could begin?
We have made a recommendation to the Assembly of Heads of State and Government, which is the body that has the authority to delay or postpone the date originally set for 1 July 2020. We have advised that, given the unprecedented public health crisis that we are in and the fact that there is some unfinished technical work to be completed, we are not in a position to trade on 1 July. We lost about two-and-a-half months of technical work.
So, free trade will not begin until the pandemic is defeated? Or do you have a plan?
Well, we are exploring other ways of continuing the work, but as you can imagine, the trade negotiations are very, very technical. Within the African Union, we negotiate in four languages and across different time zones. Plus, there are requirements for confidentiality. All these things must be considered before we can continue the negotiations, if at all. We are also exploring the use of virtual platforms. We would like to resume our work as soon as possible, as soon as the pandemic contagion is contained. But if, for whatever reason, the pandemic continues, which we hope it will not, we are exploring other ways of advancing our negotiations.
So, right now, you cannot say, for instance, trade can begin in February or April 2021?
Your guess is as good as mine as to when COVID-19 will be defeated to the point we can resume negotiations. We also don’t know what precisely the new timelines will be, whether the heads of state will give us new timelines. But I am sure that the heads of state will consider the fact that we are in an unprecedented crisis. They may discuss a delay to free trade. But I stress that it is entirely up to them. We are determined to continue working as soon as the physical conditions allow, or when we find a virtual means of doing so.
In event that the pandemic is protracted, what will you be doing specifically?
We are exploring the possibility of negotiating using virtual means. I must stress that it’s an exploration at this point, because we are talking about very complicated negotiations with more than 300 people at a time. The technical feasibility question is what we are exploring right now. But, as I said, there are constraints for trade negotiations, even when you are in the same room: the four different languages of the African Union, the confidentiality of the process, the different time zones of the African continent.
You just mentioned that the pandemic has the potential to decimate economies. How do you think you can regain momentum?
There are short- and long-term tools at our disposal. The first short-term tool, from a trade policy standpoint, is that our heads of state agreed to establish trade corridors to enable the transit of what the Africa Centres for Disease Control and Prevention refers to as “essential goods,” or products that are necessary to combat the pandemic. These goods include soaps and other germ-killing products. The heads of state have agreed that these products must be given priority transit across borders, particularly in the case of landlocked countries. And second, the ministers of trade are exploring the possibility of reducing customs duties on these essential products so that they are more affordable to African populations across the continent. This would be a temporary measure to ensure that we have access to the tools we need to protect public health.
In terms of the long-term tools, it is our view that accelerating Africa’s industrial development objectives and Africa’s industrial development action plans is key to reconfiguring our supply chains, establishing regional value chains, and manufacturing the essential goods that we need now. This would also boost Africa to a higher value-added product and manufacturing capacity. The second point is a review of our intellectual property rights. We aim to assess whether our intellectual property regimes enable Africa to have a generic drug industry, which would ensure that we have access to affordable health care. This is also linked to whether a vaccine is found in the next 18 months or so. It goes through to the heart of questions around intellectual property rights. Finally, we are looking at the AfCFTA agreement itself. As you know, many countries in Africa do not have the monetary policy space or the fiscal policy space to provide large bailouts that go in the trillions and trillions of dollars for economic recovery. Therefore, for Africa, the stimulus package is the AfCFTA, the implementation of this agreement. This is what will enable Africa to drive economic growth and economic development post COVID-19, by increasing intra-Africa trade.
The commencement of free trade in Africa trade was expected to increase intra-African trade from 18% to about 50% within a few years. Is that timetable still on?
We aim to reach up to 50% of intra-African trade between now and 2030. So, there is not that much time. COVID-19 aside, whether we can reach 50% of intra-African trade depends on our capacity to accelerate regional value chains in Africa’s industrial development. Second, the manner and pace with which we implement the agreement, collectively, will also determine whether we increase that number from 18% up to 50%, and hopefully above that. So, it is an objective that we will have to actively work towards, and we will have to vigorously pursue.
Do you think the current crisis will discourage the more than 20 countries that have not ratified the AfCFTA from doing so?
We hope it encourages them to ratify the agreement. As I said, it is desirable for any government or economy to have a stimulus package in a time of an unprecedented crisis like this. You need tools of trade, such as this agreement, to accelerate economic recovery and return to pre-pandemic growth projections. I think that boosting intra-African trade is one of the tools that is available to us. Countries that do not ratify the agreement, of course, will not enjoy the benefits of liberalized trade and will not be able to explore new markets in Africa. So, I hope that they will look at it very, very positively.
Do you have a way of communicating the points you just highlighted to these countries?
I think the countries that have not yet ratified are engaged in the necessary domestic consultations and processes to do so. It is a sovereign decision to enter into an international agreement. There is a standing call from the Assembly of Heads of State and Government that asks all countries to ratify the agreement as soon as possible, or as soon as domestic legal processes allow it. So, I think they are aware of the importance of this agreement. And as you’ve just suggested, it has now taken on a new dimension, as the COVID-19 pandemic continues.
Are there fears that the pandemic could encourage some countries to adopt protectionist policies?
The AfCFTA, like many other trade agreements around the world, makes provisions for countries to take measures to protect and advance public health in times of crisis. There is a degree of flexibility within trade agreements for countries to take particular measures to protect public health. However, these measures should not be permanent, and it will be up to us, as the Secretariat, to ensure that any measures that create protectionism and do not meet the need of necessity for public health are removed. We will undertake that monitoring function. And I do believe that most countries understand the importance of having an integrated market in Africa. This is why the AfCFTA was the fastest-ratified trade agreement in the African Union, by an initial 28 countries, because they recognized the importance of an integrated market as opposed to isolationism and autarky. I know that the countries that have not yet ratified are considering ratification, in line with their domestic laws.
What is your message to potential investors and traders outside of Africa?
My message is that we have established an agreement that creates a single market in Africa, from Cairo to South Africa, from Senegal to Djibouti. This single market of 1.2 billion people has a combined GDP of over $2.5 trillion, a growing young African population and a growing middle class whose purchasing power is increasing. I think all these things combined send a signal to investors that, once the agreement is fully operationalized, they will be able to do business on a single set of trade and investment rules across the African continent. This is something that will attract investors. Since they will be able to achieve economies of scale, they will overcome the challenges of market fragmentation. And, as I said, they will have the advantage of a market that is dynamic and fast-growing. You may recall that, in 2019, the World Bank said that of the 10 fastest-growing economies in the world, six were in Africa. I think, post-COVID-19, if we can implement this agreement, the dynamism of African economic growth will return. We will be able to recover. It’s going to take time; it’s not going to happen overnight. But we’re going to have to start working on economic recovery as soon as the conditions allow.
Do you have ways of discouraging countries from entering into bilateral trade agreements, even at this stage?
Discouraging countries from entering into trade agreements with third parties is a political goal. Under the agreement, countries can enter into agreements with third parties provided that they give African countries similar or better treatment than they are giving to the third party. So, in terms of AfCFTA law, it is permissible. But, since our political objective is to integrate and consolidate our market first, it is obviously desirable that countries refrain from doing so.
So, you expect, based on solidarity, that countries focus more on the trade area in Africa rather than getting into agreements with third parties?
Yes. And the Assembly of Heads of State and Government has said precisely that. It is a political aspiration.
As you prepare to launch, what is your message to Africans across the continent and in the diaspora?
After my election, I received literally thousands of messages congratulating me and wishing me well in this task. I received these messages from Africans in Africa, from Africans in the diaspora. I think all Africans, including me, see this as an opportunity to turn a new page on Africa’s economic development and Africa’s growth trajectory. This is an opportunity that is unprecedented. In fact, I think that since the end of colonialism, Africa has not had such a big opportunity. I am conscious of the high expectations that that all Africans have of this Secretariat. In all the messages that I have received, the theme is the same: We want Africa to succeed and we want this trade agreement to have a long-term impact. I think people are aware, as much as they have high expectations, that it is not going to happen overnight. In the same way that market integration in Europe happened over 50 years, in Africa it will also take a long time. I think what is being celebrated is the fact that Africa has reached this point where we are moving rapidly towards an integrated market.
We are determined to make it work. When we started negotiating, some said that we would never conclude the negotiations. We concluded the first phase of negotiations in less than four years. Then, they said that the countries would never sign it. Out of 55 countries, 54 signed the agreement. Then, they said it would never be ratified. The agreement was ratified by 28 countries, which enabled it to enter into force. Now, they are saying that we will never be able to implement it. I want to tell the doubting Thomases out there that we will implement it. This agreement will be a shining example of how a trade agreement is negotiated in a way so it has strong development features and onboards the segments of society that have been historically left behind. It’s one of the reasons why there are problems in Europe, and one of the reasons why globalization is being rejected in Europe by some. Segments of society have been left behind. We have learned from the lessons of Europe and other parts of the world. We are determined to ensure that we bring everybody on board as we implement this agreement, that the biggest and the smallest countries in Africa benefit equally from this agreement. That is our determination.
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Productivity growth, key driver of poverty reduction, threatened by COVID-19 disruptions
First Comprehensive Study on Challenges and Opportunities to Rekindle Productivity Growth
Productivity growth, a force that has contributed to lifting millions of people out of poverty in developing countries, will need substantial support from policymakers if it is to withstand the severe challenges posed by the COVID-19 pandemic’s economic shock, a comprehensive World Bank study finds.
A crucial foundation of income growth and poverty reduction, productivity growth has been in decline globally and in emerging market and developing economies since the 2007-2009 financial crisis, in what is the steepest, longest and broadest productivity deceleration of recent decades, according to Global Productivity: Trends, Drivers, and Policies. Evidence from past epidemics and deep recessions suggests that the COVID-19 pandemic could depress labor productivity even further for years to come unless urgent policy action is taken, the study warns.
“Productivity levels in emerging markets and developing economies remain less than 20 percent of the average in advanced economies, and only 2 percent in low income countries,” said World Bank Vice President for Equitable Growth, Finance and Institutions, Ceyla Pazarbasioglu. “A possible silver lining may be that changes in behavior from the pandemic will accelerate the adoption of new technologies, greater efficiencies among businesses, and the pace of scientific innovation. However, it is vital to ensure that these gains are widely distributed and that technology-driven labor market disruptions are well managed.”
The report, first of its kind, draws from a comprehensive dataset covering 35 advanced economies and 129 emerging market and developing economies. It finds factors that have spurred productivity growth, such as working age population growth, educational attainment, and growth of global value chains, have faded or gone into reverse since the 2007-09 global financial crisis. Furthermore, the collapse of global trade and disruptions in global supply chains during the current pandemic, if prolonged, could be particularly damaging to prospects for productivity growth among emerging market and developing economies, the report finds.
While emerging market and developing economies have historically lagged advanced economies in productivity levels, falling poverty rates in recent decades had been an encouraging sign that some of these economies had made productivity and income gains. Convergence to higher productivity levels has been associated with factors including greater political stability, better education systems, diversified economies, and integration into global supply chains. However, the current drop in global manufacturing, slower trade growth, erosion of human capital, and weak outlook for commodity prices may make closing the gap harder, the report finds.
“Even prior to the COVID-19 pandemic, there had been a broad-based slowdown in productivity growth,” said World Bank Prospects Group Director Ayhan Kose.“This indicates that any policy package to rekindle productivity growth needs to be similarly broad-based. A comprehensive policy package should spur investment in human and physical capital, encourage reallocating resources to more productive sectors, foster technology adoption and innovation, and promote a sound institutional and macroeconomic environment.”
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UN report sends ‘sobering message’ of deeply entrenched hunger globally
In much of the world, “hunger remains deeply entrenched and is rising”, the UN chief said on Monday, launching this year’s major UN food security update, highlighting that over the past five years, tens of millions of people have joined the ranks of the chronically undernourished.
As countries “continue to grapple with malnutrition in all its forms, including the growing burden of obesity,” Secretary-General António Guterres said that this year’s State of Food Security and Nutrition in the World report “sends a sobering message”.
The authoritative global study tracking progress towards ending hunger and malnutrition, is produced jointly by the Food and Agriculture Organization (FAO), International Fund for Agriculture (IFAD), the UN Children’s Fund (UNICEF), World Food Programme (WFP) and World Health Organization (WHO).
In the Foreword, the heads of the UN agencies involved cautioned that “five years after the world committed to end hunger, food insecurity and all forms of malnutrition, we are still off track to achieve this objective by 2030.”
In his video message marking the launch, the UN chief spelled out that if the current trend continues, “we will not achieve Sustainable Development Goal 2 – zero hunger – by 2030.”
Pandemic ‘wake-up call’
As progress in fighting hunger stalls, the coronavirus pandemic is intensifying the vulnerabilities and inadequacies of global food systems, making things even worse.
“We cannot continue thinking of agriculture, the environment, health, poverty and hunger in isolation,” IFAD President Gilbert F. Houngbo said at the virtual launch. “World problems are interconnected, and the solutions are intertwined. The current pandemic is a wake-up call to all of us”.
WHO Director-General Tedros Adhanom Ghebreyesus said that “while it is too soon to assess the full impact of #COVID19, the report estimates that 130 million more people may face chronic hunger by the end of this year”,
At the same time, Mr. Guterres maintained that COVID-19 response and recovery investments must help deliver on the longer-term goal of a more inclusive, sustainable world, with resilient food systems for people and planet.
“The transformation can begin now,” he upheld.
To help “make healthy diets affordable and accessible for everyone,” Mr. Guterres announced that he would be “convening a Food Systems Summit next year”.
Against the backdrop that “many more people could slip into hunger this year”, the UN chief concluded: “We cannot let this happen”.
Most undernourished continents
While Asia currently has the greatest quantity of undernourished (381 million), people, the report showed that the number in Africa is growing fast (250 million), followed by Latin America and the Caribbean (48 million).
And although the global prevalence hungry has changed little, over the last five years, hunger has grown in step with the global population, which, in turn, hides great regional disparities.
With 19.1 per cent of its people undernourished, Africa is hit hardest and becoming even worse. This is more than double the 8.3 per cent rate in Asia and 7.4 per cent in Latin America and the Caribbean.
On current trends, by 2030, Africa will be home to more than half of the world’s chronically hungry.
Unhealthy diets, malnutrition
Around the world, countries continue to struggle with multiple forms of malnutrition, including undernutrition, micronutrient deficiencies, overweight and obesity, according to the food security survey.
It reveals that a staggering three billion people could not afford a healthy diet and in 2019, some 191 million children under five were stunted or wasted – too short or too thin – while another 38 million were overweight.
Meanwhile, adult obesity has become a global pandemic in its own right.
“This is unacceptable,” said FAO Director-General QU Dongyu. “We need urgent transformation of food systems to reduce cost of nutritious foods and increase affordability of healthy diets.”
The report evidenced that a healthy diet with nutrient-rich dairy, fruits, vegetables and protein-rich foods, are the most expensive food groups globally and cost far more than $1.90 a day – the international poverty threshold.
Although high costs and low affordability prohibit billions from eating nutritiously, securing healthy diets for people who do not have enough money to pay would help check the backslide into hunger while saving some $1.3 trillion in health costs by 2030.
While specific solutions differ from country to country, and even within them, the overall answers lie with interventions along the entire food supply chain, in the food environment, and the political economy that shapes trade, public expenditure and investment policies, according to the publication.
“Despite COVID-19, conflicts, weather extremes and desert locusts,” WFP chief David Beasley stressed, “we have enough wealth in the world to feed everybody”.
And yet, the UN agency is “scaling-up its scope from feeding 100 million to 130-140 million people,” he added.
In support, the IFAD president chimed in, “there are 7.8 billion people in the world. We grow enough food to feed 10 billion”.
“The problem is not production,” he said. “Persistent and chronic hunger is the result of poverty, inequality, conflict, poor governance and marginalization of the most vulnerable.”
Clarion call
The study calls on governments to mainstream nutrition in their approaches to agriculture; support local small-scale producers to grow and sell more nutritious foods and secure their access to markets; prioritize children’s nutrition as the category in greatest need; and embed nutrition in national social protection systems and investment strategies.
tralac’s Daily News Selection
The UN Secretary‑General António Guterres has announced the appointment of Ms Cristina Duarte of Cabo Verde as his Special Adviser on Africa.
The AU has advertised the position of Chairperson and Deputy Chairperson of the African Union Commission. The closing date for applications is 4 September 2020.
The AfDB Group has announced the appointment of Ms Wambui Gichuri as Acting Vice President, Agriculture, Human and Social Development.
Perspectives:
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David Tinline: “Amina Mohamed is associated with recent successes at the WTO, chairing a 2015 round that was a fair success. She is well known and well liked. There is a reason that she’s the current favourite.”
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Prof J.P. Singh: “Leadership selections go through twists and turns but three contextual factors – important for understanding world trade in general – are important. These are: trade competition among major powers, role of regions and regional leaders, and decision-making procedures at the WTO.”
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Peter Woicke, Daniel Runde: “Historically, the IFC’s CEO job has gone to a European, but given all of the above, now would be the time for the shareholders of the World Bank Group to choose an African woman (preferably one who is highly regarded as a business leader on the continent) to be the IFC’s next CEO. The next class of multilateral development leaders will be chosen by a number of governments, including that of the United States, and in 2020 these decisions will fall to the Trump administration. The US will be putting forward candidates for the top jobs at the OECD and IDB. This leadership vacuum at the IFC presents an opportunity for the Trump administration to do something bold and different there as well.”
Quality infrastructure in 21st century Africa (OECD/ACET)
New demographic dynamics are now playing out in Africa, including new patterns of agglomeration, changing the spatial geography of the continent and its degree of urban density. The UN estimates that the continent’s population will nearly double from 1.3 billion in 2019 to 2.4 billion in 2050, when projecting a medium-variant scenario. In addition, Africa’s urban population is projected to increase rapidly from 588 million or 44% of the total in 2020 to 1.5 billion or 59% in 2050, two-thirds of which will reside in intermediary cities or small towns. Planning will need to urgently address the integration of “informal” districts – where 62% of the urban population lives – within the rest of the cities, as well as anticipate the growth of urban housing demands.
Together with the construction of the African Continental Free Trade Area, these demographics will generate radically new opportunities and challenges for Africa. However, in order to realise the transformation of its connectivity and production capabilities, scaling up infrastructure will be vital to match the demands of a billion more Africans to fulfil the promise of the new economic geography and labour force. In this context, with more low-cost broadband services on the near horizon, digitalisation could shape Africa’s transformation and integration across all sectors at all levels. The massive uptake of mobile banking illustrates this development potential, with 500 million mobile accounts and nearly 200 million active users, far exceeding all other developing economies combined. In fact, digital transformation is already bringing in opportunities to build new industries, expand markets, deliver better services and improve people’s daily lives in Africa. Aside from mobile networks, the digital technologies used range from big data, Global Positioning System, Internet of Things, artificial intelligence, blockchains, drones, to 3D printing. At the same time, to leapfrog to the fourth industrial revolution, Africa would not only need ICT infrastructure – both physical as well as software or systems –, it will also require adequate institutional capabilities and regulatory frameworks for its governance. These range from fiscal policies, regional integration, to sandboxing and cybersecurity, in order to prevent major disruptions to the economy and society.
Can Africa take the platform economy forward? (Standard Bank)
We believe that Africa’s platform economy will tread a similar path to Asia’s, rather than following the US model. In Asia, China leapfrogged conventional underlying infrastructures thanks to investments by private firms including Alibaba and Tencent, while India did the same through an ambitious initiative led by the state. With its dearth of continent-wide digital infrastructure, Africa is rapidly forging a similar path (pdf). The continent looks set to take a hybrid approach to the platform economy, where governments collaborate to develop standards and create basic digital capabilities such as identity management, while private operators build out the necessary financial and logistics infrastructure.
Indeed, the influence of the Chinese and Indian models is already being felt in Africa. Alibaba has launched the eWTP5 (Electronic World Trade Platform) service in Rwanda. This public digital infrastructure could serve as a standardised continent-wide backbone for trade as more African countries adopt it. Similarly, the IndiaStack model could be replicated on the continent. To develop a national digital identity system, Morocco has engaged IIIT-B, an Indian research institution, to build a modular, open-source identity management platform (MOSIP)6 modelled on IndiaStack. [The authors: Sangeet Paul Choudary, Kent Marais, Jonathan Lamb]
- Related analysis, by SA’s National Planning Commission: pdf Digital futures – South Africa’s readiness for the fourth industrial revolution (2.96 MB)
South Africa’s trade data update – the May 2020 data reveals the effect of eased lockdown restrictions (tralacBlog)
Since the beginning of May 2020 South Africa gradually started to ease lockdown restrictions with a consequent increase in trade reflected in South Africa’s trade data for May which was released by the South African Revenue Services (SARS) on 30 June 2020. However, while exports show signs of improvements imports have remained relatively constant throughout the lockdown period, which is at significantly lower levels than imports in May 2019. Consequently, South Africa has a trade surplus for May 2020 after a significant trade deficit for April 2020. [The author: Willemien Viljoen]
South Africa’s Industrial Development Corporation: Economic overview, June 2020 (pdf)
With the global economy and most of South Africa’s key trading partners in a deep recession, the export performance in 2020 will be considerably weaker. In real terms, exports are projected to drop by 10.8% in 2020, with a modest rebound anticipated in 2021. The economy is expected to record very modest growth over the outlook period to 2024, affecting detrimentally ongoing efforts to reduce unemployment, alleviate poverty and address prevailing inequalities through economic transformation. A rebound in GDP growth in the order of 3.1% is anticipated in 2021, but growth rates over the subsequent three years could be within the range of 1.9% to 2.5%. The economic landscape will also undergo drastic changes beyond Covid-19, some of which may turn out to be irreversible. On the positive side, the current global crisis has brought to the fore important economic opportunities going forward, largely associated with the following developments:
The strategic imperative for companies all over the world to diversify their sources of supply, for the crisis has highlighted the threats to global supply chains brought about by excessive concentrations of market power. This may open up opportunities for:
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Further integration of South African businesses into global supply chains and other export market development opportunities;
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Import replacement in the domestic market.
TIPS Tracker: The South African economy and the pandemic, 29 June - 12 July 2020. Comments on the ANC and Business for South Africa recovery proposals (extract):
Finally, neither paper explores how South Africa should respond to the likely decline in export income over the next two or three years. The extent of the decline will depend largely on the speed with which the US and Europe, in particular, recover; China seems to be doing better already, based on its comparatively coherent response to the pandemic. It is also uncertain when demand will revive for tourism and other services such as the provision of private education and healthcare to foreign visitors. In theory, slower export markets should prompt diversification away from the excessive dependency on mining as well as measures to prolong support for workers and small businesses that depend on foreign visitors. Instead, both papers propose measures to promote mining exports, especially by providing new bulk freight and more reliable electricity, without discussing how to manage if commodity prices remain depressed.
South Africa: Citrus body wants export levy hiked. The statutory levies, a tax imposed on exports making them more expensive, has been in place since 2004, and is administered by the Citrus Growers’ Association of Southern Africa, an organisation representing 1 250 citrus growers and almost 400 packhouses. The association said on Monday the levy is crucial to fund the long-term goals and objectives of the sector. The association has made an application through the National Agricultural Marketing Council to agriculture minister Thoko Didiza for the approval of a substantially increased statutory citrus export levy for the next four year cycle - from 2021 to 2024.
South Africa: Annual State of Cross-Border Operations Report 2019-2020 (CBRTA)
The report is focused on strategic transport corridors in the SADC region. There are 18 major transport corridors that traverse SADC. However, this report is largely limited to the following corridors which carries the bulk of cross-border road traffic movements (passengers and freight):
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North-South Corridor
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Maputo Development Corridor
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Trans-Kalahari Corridor
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Walvis Bay-Ndola-Lubumbashi Development Corridor (previously known as the TransCaprivi Corridor).
The rationale for focusing on these corridors was informed by the significance of the corridors in terms of cross-border traffic volumes and flow dynamics. Furthermore, all four corridors are major gateways to most land-locked countries in the SADC region. Conclusion to Chapter 4: Status of corridor performance monitoring in the SADC and recommended interventions
To date, the SADC has not yet implemented an online data portal (transport observatory) along any of the strategic road transport corridors that traverse the region to measure corridor performance. In the absence of a formal system that releases real-time road traffic data, it becomes challenging to prioritise infrastructure spending to address higher order needs. Plans are underway to introduce corridor-wide monitoring along the TKC to measure the performance of this corridor from the port of Walvis Bay up to Pretoria in South Africa where the TKC connects with the MDC. The C-BRTA is assisting the TKCS in developing CPIs that will be piloted along the TKC during 2019 / 2020. It is imperative that relevant corridor role-players (e.g. SADC MS, SADC Secretariat, CMI, private and public-sector transport and logistics service providers) join hands in developing online monitoring tools (e.g. transport observatories) that will be able to measure the performance of strategic transport corridors, from point of origin to destination points (corridor wide performance) from an infrastructure and service delivery point of view. In conclusion, ultimate success depends on the availability of accurate and specific data on those components of transport corridors that are not working well to influence policy-makers to direct infrastructure spending to specific points along the corridor(s) where the greatest costs are incurred.
pdf Annual State of Cross-Border Operations Report (March 2020) (2.62 MB)
A political economy analysis of the Nacala and Beira corridors (ECDPM)
This ECDPM study maps out the different factors and actors that shape current use of the Nacala and Beira corridors connecting Malawi to the Mozambican coast. High-level political relations have fluctuated through time, and though cordial, do not provide a solid basis for improving efficiency along the Nacala rail corridor, with domestic priorities on both sides dominating cross-border cooperation. Thus far, Beira has emerged in Mozambique as the more efficient port serving Malawi and the wider region where state-business relations have aligned with political objectives. Nacala has been made efficient for coal exports but coordination for other trade is lacking, with political interests more geared towards a competition for control of rents. Mozambican road transporters have also the upper hand over Malawian transport, though the market is highly segmented for imports and exports and different goods. Given the numerous players and services involved in the transport sector, cross-border coordination will be required to raise efficiency of the corridor – the need for this is only increased by the COVID-19 pandemic. Coordination efforts are underway in Beira, but are less apparent in Nacala. While transport in both countries is a political issue, it is unclear whether raising efficiency is among the top priorities of the leaders or high level actors on either side, though this may change with the newly elected Malawian president. In the absence of a champion that can coordinate activities and push for particular interests, one can only expect incremental use of the Nacala corridor in the short to medium term though the longer-term potential remains.
External support to improve efficiency will need to take account of the vested state-business interests round the ports and corridors, particularly in Mozambique, and rekindle multi-actor cross-border coordination mechanisms, ideally including different government bodies, private service providers as well as businesses engaged in exports/imports, and learning from past failures to coordinate better. [The authors: Bruce Byiers, Poorva Karkare, Luckystar Miyandazi]
Tripartite Transport Facilitation Response to COVID 19: pdf Impacts on trade and transport facilitation in Eastern and Southern Africa region (401 KB)
Jaindi Kisero: Revamp Kenya’s investment negotiations (Business Daily)
The news that the government has paid more than Sh7 billion in penalties to investors behind the Lake Turkana Wind Power project is the latest example of badly negotiated deals that end up exposing the taxpayer to huge losses. The payment may be legal. But in terms of opportunity cost, payment of a contractor claim running into billions for no value or service is a national scandal. ‘How Kenya paid Sh7 billion for non-existent power’ was the headline of a story reported by the Daily Nation yesterday. We lose billions in taxpayer money every year in payment of claims and pending bills arising from poorly negotiated contracts and lopsided agreements with investors. Here is a brief background to this saga.
Improving agriculture and food security risk financing in Southern Africa (World Bank)
The objective of this report is to provide a review of and recommendations for improving the agriculture and food security risk financing framework in the Southern Africa Development Community member states. This report presents the compilation of various analyses and activities realized in the context of a World Bank Group Advisory Services program to the SADC Region during 2019 and 2020, which included:
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a stocktaking of the agro-climatic information systems of the region
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the implementation of four innovation challenges to identify the most promising solutions to advance the risk finance agenda for food security and agriculture in the region
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the implementation of one of the innovative solutions to one SADC Member State (the Democratic Republic of Congo)
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the development of a regional risk financing policy note for agriculture and food security in SADC.
Southern Africa regional maize supply and market outlook July 2020 (FEWS NET, WFP)
The onset of the COVID-19 pandemic coincided with the start of regional harvests in Southern Africa. Moving into the 2020/21 marketing year, opening stocks were 20% below average. Below average opening stocks were offset by the region’s above-average 2020 maize harvest despite dryness experienced in many areas earlier in the year. Southern Africa, which is typically self-sufficient in maize, is expected to register well above average net maize supply ---over four million MT. This supply will be above the previous 2019/20 marketing year and similar to 2018/19. Structurally deficit countries are expected to maintain typical import dependence, while the import gap in Zimbabwe will be well above average. South Africa, the region’s largest maize exporter will have an above-average surplus while Zambia will maintain its surplus at below-average levels. Malawi will also have an above-average surplus. In terms of intra-regional trade, South Africa’s maize export volumes to Zimbabwe are expected to remain above average while Zambia’s exports are expected to remain below average. Given anticipated imports by Kenya from international markets, export demand from Tanzania destined for East Africa are expected to be limited. Some international trade (via South Africa) is also expected.
OCHA: Zimbabwe Situation Report, 10 July 2020
UNHCR, WFP warn refugees in Africa face hunger and malnutrition as COVID-19 worsens food shortages
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Keeping trade open amid COVID-19 crisis central to achieving SDGs and economic recovery
In a report to the United Nations High-level Political Forum (HLPF) taking place from 7 to 16 July, the WTO Secretariat highlights that trade, fiscal and monetary policies are key to supporting global sustainable development and achieving the UN Sustainable Development Goals (SDGs). Amid the COVID-19 crisis, keeping trade open and fostering a favourable business environment will be critical to spur the renewed investment needed to meet the SDGs, the report says.
The theme of the 2020 HLPF – to be held under the auspices of the United Nations Economic and Social Council – will be “Accelerated action and transformative pathways: Realizing the decade of action and delivery for sustainable development”. Participants will review progress on the SDGs in light of the impact of the COVID-19 pandemic. They will also reflect on how the international community can respond to the crisis in a way that will accelerate progress towards meeting the SDGs.
The WTO reports annually to the HLPF on WTO efforts to achieve trade-specific targets in the SDGs. The HLPF is the United Nations’ main forum for reviewing the 2030 Agenda for Sustainable Development, providing the opportunity for all UN members and specialised agencies to meet annually to evaluate progress on achieving the SDGs.
The WTO report to this year’s HLPF highlights that the multilateral trading system has contributed significantly to unprecedented economic development over the last few decades. Greater certainty over trade policies has created predictability, creating the conditions for long-term business planning and investment.
However, a rise in trade-restrictive measures since 2019 – especially between major economies – and the suspension of activities of the WTO’s Appellate Body have created new challenges for the multilateral trading system. In addition, the COVID-19 crisis is having a major impact on global supply and demand, leading to disruptions in global supply chains for both goods and services.
At this time of crisis, the multilateral trading system becomes all the more important, providing a forum for a coordinated response to the COVID-19 pandemic, the report says.
The report summarises the latest progress in the WTO’s multilateral trade negotiations, highlighting that talks on reducing harmful fisheries subsidies are playing an important role in advancing developing countries’ sustainable development objectives and meeting a key target in SDG 14.
Other WTO work contributing to meeting the SDGs includes discussions within the Committee on Trade and Environment on issues such as the circular economy, domestic initiatives on waste and chemicals management and recycling; and through the Aid for Trade initiative, which supports the achievement of SDG 8a.
The report also highlights the importance of improving transparency in WTO members’ trade policies, particularly those taken in response to the COVID-19 crisis.
Another issue covered by the report is the role of gender-responsive trade policies as a means of increasing women’s participation in global trade and contributing to economic growth. These efforts were catalysed by the signing of the pdf Buenos Aires Declaration on Trade and Women’s Economic Empowerment (493 KB) in December 2017 and the implementation of the WTO’s Trade and Gender Action Plan for 2017-19.
The WTO's work with other international agencies on increasing access to trade finance is also outlined by the report. Trade finance can help facilitate international trade, helping small businesses in particular play a more active role in the global economy.
Mainstreaming trade into national development plans is cited as an important means of helping governments meet the SDGs. This includes integrating trade into sector strategies, defining a clear national trade policy and ensuring effective institutional coordination. The contribution of the multi-agency Enhanced Integrated Framework in this area is underscored by the report.
Finally, the report underlines the need for governments to implement measures that address the challenges faced by least-developed countries in international trade to ensure a more equitable distribution of the gains from trade and support the achievement of SDG 17.11, which calls for doubling LDCs’ share in global trade by 2020. The report also points to the importance of open trade policy and responsive fiscal policy to bring about a sustained and socially inclusive recovery from the COVID-19 crisis.
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The Journal of African Trade has posted a call for papers for a forthcoming special issue: The AfCFTA and African trade. This special issue aims to provide a timely collection of articles that shed light on the challenges and opportunities that the AfCFTA presents on the road towards achieving the long-standing goal of closer African economic and political integration, in particular at a time when the rest of the global economy is entering into an unprecedented global crisis after months of escalating trade tensions between the two leading global economies.
Guest Editors for the special issue are Augustin Fosu (Institute of Statistical, Social and Economic Research, University of Ghana), Hippolyte Fofack (Chief Economist, African Export-Import Bank) and Andrew Mold (Economic Commission for Africa, Rwanda). The paper submission deadline is 1 August 2020. The topics considered may include, but are not limited to, the following:
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Modelling the AfCFTA’s impact (quantitative estimates of the potential socio-economic effects of the AfCFTA)
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The role of trade facilitation
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Value-chain analysis
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Environmental impacts
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Services trade
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The role of Regional Economic Communities
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Rules of origin
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The impact of Covid-19 on AfCFTA implementation and effectiveness
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Technological development and AfCFTA
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Payment and Settlement Systems for intra-African trade
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Financing the implementation of the AfCFTA
Call for proposals: Digitisation of financial products for cross border traders between South Africa and Mozambique, Eswatini, and Zimbabwe. FinMark Trust is looking for proposals to conduct a scoping exercise of values, volumes, products and general behaviour of cross border informal traders, and to understand their financial constraints. Submissions by 24 July 2020.
The East African Business Council, through the TradeMark East Africa Public‐Private Sector Dialogue for Trade and Investment in Eastern Africa, has posted consultancy opportunities to develop post-COVID19 recovery recommendations for four sectors. Applications close on 25 July.
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On a post COVID-19 recovery strategy for EAC businesses. The technical proposal should detail how the consultancy will be conducted with a detailed work plan, methodology and the proposed budget. The main activities of the consultant are:
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Conducting literature review on available study reports, assessments and other published materials to set the context and the current status of COVID-19 within the EAC
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Providing an overview on the impact of COVID-19 to EAC businesses while highlighting the relevant sectors including cross border trade
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Developing a general post COVID-19 recovery strategy for businesses that is tailor-made for MNCs, corporates and SMEs
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Developing sector-specific recovery strategy focusing on tourism, manufacturing, transport and logistics and agriculture
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Developing a policy brief on the post-COVID-19 recovery strategy for EAC businesses.
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On the regional transport and logistics sector. The EABC is concerned with the disruptions in the global transport and logistics and the rising cost of transport that have tremendously led to the increased cost of doing business. The consultant will:
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Assess the impact of COVID-19 on the transport and logistics sector (air, road, rail and maritime) in light of the pandemic, taking into consideration the effect on other support services such as clearing and forwarding, warehousing facilities
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Identify the level of effect (both qualitative and quantitative) to sector players while moving cargo across the EAC land borders amidst the pandemic
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Analyse partner states’ response to COVID-19 through different stimulus packages and other measures taken in the 2020/2021 budgets
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Develop post COVID-19 recovery recommendations for stakeholders in the Transport & Logistics Sector.
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Identify related policy pronouncements related to containment measures that are hindering the efficient flow of cargo across borders and propose recommendations to address such bottlenecks.
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On the regional tourism industry. The main activities of the Consultant are not limited to:
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Assessment of the impact of COVID-19 pandemic on the tourism sector in EAC
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Analysis of partner states’ response to COVID-19 through different stimulus packages and other measures taken in the 2020/2021 budgets
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Develop EABC Policy brief on the impact of COVID-19 pandemic on the tourism sector
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Organize internal validation workshop and present report of the impact assessment of the COVID 19
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Provide recommendations on how the industry should restructure for resilience in light of global pandemics post COVID-19.
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East Africa Economic Outlook 2020: Coping with the COVID-19 pandemic (AfDB)
East Africa’s economies are slowly transitioning from agriculture to services. The contribution of agriculture to the region’s GDP went down from an average of 33.4% at the turn of the millennium to 28.3% in 2018.This was against an increase in the contribution of services to GDP from 44.6% in the early 2000s to 53.8% in 2018. This movement is more prominent in Seychelles, Eritrea, Kenya and Rwanda where services contribute 80%,67%, 60% and 47% of GDP, respectively. However, services are not the higher value-added activities in the region to trigger the desired structural transformation. In line with this shift, the ILO had estimated that the number of employment opportunities in the region’s service sector would have more than doubled to 40.8 million while those in agriculture would have increased at a slower pace from 56.7 million to 97.6 million in 2020. These estimates are no longer tenable given the ongoing supply and demand shocks related to COVID-19-business disruptions have lowered production while the loss of income, fear of contagion and heightened uncertainty has made people to spend less, thus lowering aggregate demand with the service sector being hit the hardest.
Part 1: Recent macroeconomic trends and developments. Potential impact of the COVID-19 pandemic on East Africa (extract from Box 3):
The COVID-19 pandemic will likely be transmitted to East African countries through at least five major channels, namely reduced commodity prices and trade, FDI, tourism and travel, volatility in financial markets, and disruptions in the education and health sectors. The impact on commodity prices, tourism and financial markets is largely expected to be short-term while lasting effects are envisaged for FDI, education and health.
Commodity prices and trade: Intra-Africa trade accounted for less than 15% of Africa’s total trade in 2018, with Europe, United States and China accounting for 36%, 6% and 14% of Africa’s trade with the rest of the world, respectively. Reduced economic activity in the COVID-19 affected countries is expected to dampen global demand and prices for commodities including oil and other minerals like zinc, copper, cobalt, and agricultural products. Most East African countries are net commodity exporters with heavy reliance on markets in Asia, notably China. For instance, China accounted for over 90% of South Sudan’s oil exports and over 50% of Eritrea’s market for zinc and copper ore. Consequently, economic slowdown in China will reduce East Africa’s public revenues and foreign exchange inflows and weaken the trade balances. However, net importers will benefit from lower commodity prices. Asia is also a source of inputs for the region’s budding industrial sector, but global supply chains have been disrupted, adversely affecting East Africa’s industry and services sectors.
FDI, overseas development assistance (ODA) and remittances to East Africa will be impacted: East Africa is a leading destination of global investments in mining, manufacturing and related activities, notably construction (infrastructure) and financial intermediation. The COVID-19 induced global economic slowdown and increased uncertainty could significantly reduce FDI inflows to East Africa as investors postpone investment decisions. This is expected to affect countries like Ethiopia, which has consistently ranked among the top 5 FDI host economies in Africa. Implementation slippages are also foreseen for ongoing infrastructure and other investment projects due to delayed delivery of construction materials and equipment sourced from COVID-19 affected countries. Diaspora remittances (accounted for over 10 percent of Comoros’ GDP during 2014-2018) and ODA will possibly be affected by COVID-19 following weak global economic activity.
Tourism and travel: Restrictions on travel to combat COVID-19 have reduced airline travel and accelerated cancellations of hotel reservations. These measures will affect receipts, thereby reducing foreign exchange inflows, and impact service sector-related employment in East African countries with a high dependence on tourism like Comoros (tourism accounts for over 50 percent of export revenues), Kenya, and Seychelles, among others.
Financial markets: Investors are likely to defer investment plans or channel portfolio investments into relatively more stable assets like gold. This is expected to put pressure on local currencies and stock exchanges particularly in Kenya, Tanzania and Uganda. Consequently, COVID-19 could result in short-term in capital flight, depriving East African countries of private finance amid a constrained fiscal space (due to lower public revenue collection) on account of reduced commodity prices, trade and tourism earnings.
Related AfDB analyses:
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African Economic Outlook 2020: July 2020 supplement. Real GDP in Africa is projected to contract by 1.7% in 2020, dropping by 5.6 percentage points from the January 2020 pre-COVID–19 projection, if the virus has a substantial impact but of short duration. If it continues beyond the first half of 2020, there would be a deeper GDP contraction in 2020 of 3.4%, down by 7.3 percentage points from the growth projected before the outbreak of COVID–19.
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West Africa Economic Outlook 2020: Coping with the COVID-19 pandemic. Prior to the outbreak of the COVID-19 pandemic, the West Africa region was poised to expand by 4.0% in 2020.The magnitude of socioeconomic impact of the COVID-19 pandemic on countries in West Africa may not be known with certainty as the situation remains fluid. However, early assessment suggests that the prospect for initial growth projection is now evidently remote. Thus, under a conservative baseline scenario, the economy is now projected to contract by -2.0% in 2020, 6 percentage points below the projected growth rate prior to the pandemic. Real output could fall by as much as -4.3% in a worst-case scenario with prolonged duration and depth of the spread of the COVID-19 pandemic until the end of 2020. Growth in the region will be affected through a combination of channels, including decline in commodity prices, low financial flows, reduced tourism earnings and heightened volatility in financial markets. Deceleration in output growth will be reflected in negative growth in per capita income of 4.3% with the attendant social ramifications. Extract:
West Africa’s outward trade orientation and product concentration limits opportunities for intra-regional trade, which stands at about 8.5 of total trade for the region. This exposes the region to external shocks, including the COVID-19 pandemic, which has dislocated global supply chains. With intra-regional trade significantly low, opportunities or market substitution to cushion the impact of the virus on West Africa are limited. West African trade is increasingly extra-regional rather than internally within ECOWAS. China, Europe Union and the U.S account for about 43% of West Africa exports and 57.9% of the region’s imports (see Figure 13). However, as Table 2 shows, intra-regional trade in ECOWAS averaged about 11% of total ECOWAS trade and it has continued to decline since 2016.
What opportunities might Kenya provide US agriculture? (American Farm Bureau Federation)
If Kenya isn’t importing agricultural goods from the US where are those $2.3bn in imports coming from? As it turns out, a pretty wide variety of countries and regions. Kenya is US agriculture’s 13th largest export destination in Africa and 97th largest export destination overall. US ag exports to Kenya in 2019 totaled $53m, less than 1% of the $136.6bn in total US ag exports in 2019. Wheat, pulses and vegetable oils were the top export items from the US to Kenya in 2019. At $27m and accounting for over half the total US ag exports to Kenya, wheat was by far the largest US agricultural export.
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Commemoration of the first edition of Africa Integration Day: Closing remarks by H.E. Amb Albert M. Muchanga, AU Commissioner for Trade and Industry
We have come to the end of our 1 week commemoration of the first edition of Africa Integration Day, which as you all will agree with me was a big success, considering the COVID-19 Pandemic context in which this took place.
Initially planned from 1st to 7th July 2020, the commemoration of the first edition of Africa Integration Day took place from 3 to 9 July 2020, due to some developments in Addis Ababa!
What is important is that despite these challenges, we showed resilience and courage, and rose to the challenges. This was a sign that going forward, we have a new mindset; and that is nothing will ever stand on our path towards an integrated, peaceful and prosperous Africa, as envisioned in Agenda 2063: the Africa We Want.
During the 07 day commemoration period, the following were achieved:
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10 Panel discussions/debates in the form of webinars, some of which involved former African Heads of State and Government, African Youth, and the African Diaspora and covering a wide range of topics, including post COVID-19, energy, agriculture, creative art, financial institutions. These webinars drew the participation of more than 3000 participants, not including those who followed the commemoration on Youtube and Facebook; with the webinar on the intergenerational dialogue on the role of young people in accelerating Africa’s integration through the AfCFTA attracting 400 participants. It is worth noting the participation of the African Diaspora in the US, Europe and the Caribbean, as exemplified in the rich panel discussion we just had;
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Showcase and launch of various initiatives and programmes to foster trade and economic integration in Africa, including the Essential Innovation Design Accelerators;
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The launching and rolling-out of key instruments and tools, which will facilitate trade integration on the continent, including: the AfCFTA Online Non-Tariff Barriers Monitoring, Reporting and Elimination Mechanism; the Launch of the Competition for Youth Start Ups Pavilion at the 2021 Intra-African Trade Fair by H.E. Mr. Issoufou Mahamadou, President of the Republic of Niger and Leader of the AfCFTA, and the launch of the African E-Commerce Platform, whose name is Sukokuo, a Swahili term which means “central market;”
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The Presentation of Prizes for Africa Creative Arts Challenge organized in collaboration with the AfroChampions;
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Africa Integration Day Joint Statement by H.E. Mr. Cyril Ramaphosa, President of the Republic of South Africa, Chairperson of the African Union; H.E. Mr. Mahamadou Issoufou, President of the Republic of Niger and Champion of the AfCFTA; and H.E. Mr. Moussa Faki Mahamat, Chairperson of the AU Commission.
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The other major results was the publication of the Africa Integration Day Brochure.
As we bring the commemorative activities to a close, I wish to conclude with three main messages:
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The first message is a word of thanks to all our partners who have worked tirelessly with us to make this first commemoration of Africa Integration Day a memorable event. Let me mention the Regional Economic Communities, AfroChampions Initiative, AeTrade Group, African Development Bank (AFDB), Africa Export-Import Bank (Afreximbank), African Economic Zones Organisation (AEZO), AUDA-NEPAD, African Energy Commission, United Nations Economic Commission for Africa (UNECA), United Nations Conference on Trade and Development (UNCTAD), Trade Law Centre (TRALAC); AUC Departments and AUC Missions abroad. Special thanks to H.E. Mr. Mahamadou Issoufou, President of the Republic of Niger and Champion of the AfCFTA; H.E. Obasanjo, and H.E. Helen Sirleaf Johnson for their active participation in some of the activities as well as the messages of support such as the one delivered by the King of Eswatini.
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The second message is one of encouragement to African Union Member States and the Regional Economic Communities. I urge them to take advantage of the AfCFTA by putting in place all the necessary measures, so as to fully benefit from this huge single market of 1.27 billion consumers so that when we reconvene next year for the second edition, there will be even more results and achievements to celebrate. This will require working with all segments of the society; and in particular encouraging and facilitating intra-African private investment in national economies through the provision of conducive investment climates; collaborating with the private sector and academia in research and development; and working with the African Youth to harness their talents and innovative potentials, to support the industrialisation and economic diversification of the Continent a key lever to its trade and economic integration.
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The third and final message is that of strategic focus to deliver on key programmes of trade and economic integration outlined in Agenda 2063; so that year after year, we can build on our present collective achievements and success to realize the next milestones on our journey towards the African Economic Community, which is to establish the African Common Market by 2023. If there is one main take away from this commemoration; it is, as stated by the Chairperson of the Union, H.E. Mr. Cyril Ramaphosa, President of the Republic of South Africa; the Leader of the AfCFTA, H.E. Mr. Issoufou Mahamadou, President of the Republic of Niger and H.E. Mr. Moussa Faki Mahamat, Chairperson of the AU Commission in their Joint Statement, and I quote: “the future of Africa as regards recovery [from the COVID-19 Pandemic], development and resilience lies in accelerating its economic integration through the implementation, at the level of Africa, of the AfCFTA. The AfCFTA offers the best platform for us to build and deliver inclusive and sustainable development by using the large market space to mobilise investment.”
I thank you again for having participated in this commemoration of the first edition of Africa Integration Day; and look forward to the second edition in 2021. As we close the curtain for 2019 which was the focus of this year’s commemorative activities, let us go and convey the message that we are creating one African Market with huge opportunities for trade and investments.
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Commemoration of the first edition of Africa Integration Day: Closing remarks by H.E. Amb Albert M. Muchanga, African Union Commissioner for Trade and Industry
As we bring the commemorative activities to a close, I wish to conclude with three main messages:
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The first message is a word of thanks to all our partners who have worked tirelessly with us to make this first commemoration of Africa Integration Day a memorable event. Let me mention the Regional Economic Communities, AfroChampions Initiative, AeTrade Group, African Development Bank (AFDB), Africa Export-Import Bank (Afreximbank), African Economic Zones Organisation (AEZO), AUDA-NEPAD, African Energy Commission, United Nations Economic Commission for Africa (UNECA), United Nations Conference on Trade and Development (UNCTAD), Trade Law Centre (TRALAC); AUC Departments and AUC Missions abroad. Special thanks to H.E. Mr. Mahamadou Issoufou, President of the Republic of Niger and Champion of the AfCFTA; H.E. Obasanjo, and H.E. Helen Sirleaf Johnson for their active participation in some of the activities as well as the messages of support such as the one delivered by the King of Eswatini.
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The second message is one of encouragement to African Union Member States and the Regional Economic Communities. I urge them to take advantage of the AfCFTA by putting in place all the necessary measures, so as to fully benefit from this huge single market of 1.27 billion consumers so that when we reconvene next year for the second edition, there will be even more results and achievements to celebrate. This will require working with all segments of the society; and in particular encouraging and facilitating intra-African private investment in national economies through the provision of conducive investment climates; collaborating with the private sector and academia in research and development; and working with the African Youth to harness their talents and innovative potentials, to support the industrialisation and economic diversification of the Continent a key lever to its trade and economic integration.
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The third and final message is that of strategic focus to deliver on key programmes of trade and economic integration outlined in Agenda 2063; so that year after year, we can build on our present collective achievements and success to realize the next milestones on our journey towards the African Economic Community, which is to establish the African Common Market by 2023. If there is one main take away from this commemoration; it is, as stated by the Chairperson of the Union, H.E. Mr. Cyril Ramaphosa, President of the Republic of South Africa; the Leader of the AfCFTA, H.E. Mr. Issoufou Mahamadou, President of the Republic of Niger and H.E. Mr. Moussa Faki Mahamat, Chairperson of the AU Commission in their Joint Statement, and I quote: “the future of Africa as regards recovery [from the COVID-19 Pandemic], development and resilience lies in accelerating its economic integration through the implementation, at the level of Africa, of the AfCFTA. The AfCFTA offers the best platform for us to build and deliver inclusive and sustainable development by using the large market space to mobilise investment.
The impact of the COVID-19 crisis on trade: Recent evidence from East Africa (Brookings)
This paper uses Kenyan trade data published up through May 2020 to provide a preliminary evaluation of the impact of the COVID-19 crisis on regional trade in the East African Community. Paradoxically, given the prevailing pessimism surrounding the prospects for global trade, Kenya actually experienced a significant improvement in exports in the first quarter of the year, together with a moderation of imports, leading to a marked decline in the trade deficit. While the initial shock to Kenyan trade caused by the COVID-19 crisis initially looked dramatic in terms of the declines registered, this paper reveals that i) the shock is not so alarming when seasonality is taken into account; ii) re-exports and imports have been the primary foci of impact; and iii) domestic exports have actually performed extraordinarily well under the circumstances, with incremental growth since 2019. Highlighted policy recommendations (pdf):
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A coordinated EAC-wide approach is required to ensure trade continues to flow and vulnerable countries are cushioned from the fallout. Regional protocols and initiatives like TradeMark East Africa’s $23m Safe Trade Emergency Facility which focuses on making ports, borders, and supply chains safe for trade, are critical in this respect. The East Africa region and Africa in general need more initiatives of this nature for intraregional trade to remain buoyant in these challenging times.
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In the face of disruptions to traditional transport corridors, there is a need to be flexible in the utilization of different modes of transport. Kenya’s rapid decision to retool its passenger aircrafts for cargo is an example. Rwanda has followed a similar strategy and found success: Its air cargo (imports and exports) increased from $57m in April to $134m by May. Indeed, whereas in May 2019, just 18% of Rwandan exports were shipped by air, by May 2020 that figure had reached 73%. Air transport is, of course, more costly and as a long-term measure it may not be viable for all traded goods. However, as a short-term measure, it is a way to avoid the collapse of both export revenues and essential imports.
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Additional policies may be required to support border communities where livelihoods are heavily dependent on informal cross-border trade. This trade is typically dominated by women traders, and they and their dependents are thus likely to suffer disproportionately from the restrictions on cross-border trade.
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For Kenyan trade, imports have been the principal victim of the crisis, declining by a quarter over the three months since the crisis began (March-May 2020). This trend will have implications for long-term economic growth—capital goods imports have declined markedly. But it could also set the scene for a revitalization of national and regional industry, as local producers step up to fill the void created by the sharp lull in imports.
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Against this backdrop, the urgency of implementing the AfCFTA is even more palpable. All the evidence suggests that its rapid implementation, together with new trade facilitation measures, could significantly mitigate COVID-19’s negative impact on the continent’s economy. [The authors: Andrew Mold, Anthony Mveyange]
Uganda Economic Update: Digital solutions in a time of crisis (World Bank)
The increased use of digital technologies during the COVID-19 lockdown such as mobile money, on-line shopping, on-line education, digital disease surveillance and monitoring, and dissemination of public health messages shows the great potential to support faster economic recovery and strengthen resilience against similar shocks. “The digital space in Uganda is very innovative – and has quickly adapted during the pandemic. Fintechs have offered payment options, and digital solutions have reinforced and enabled the health sector’s calls to social distance and limit movement and contact. These solutions, if upscaled and developed to their potential would boost the digital economy and maximize its benefits to Ugandans,” said Tony Thompson, World Bank Country Manager for Uganda. Extract:
The COVID-19 pandemic is placing new pressure on the current account, reversing gains made in the first half of FY20. The external shortfall shrank to 4.8% of GDP during the first half of FY20 from 7.7% of GDP during the same period the year before. In the first half of FY20, the merchandise trade deficit more than halved (from 8.1% of GDP to 3.8% of GDP). Cheaper oil imports and a continued reduction in project-related government imports fully offset higher spending on non-oil imports. Meanwhile, exports grew faster, at 7.4% (compared to 6.2% a year ago), driven by larger exports of gold, coffee, maize and cotton. The country’s two biggest exports – gold and coffee – grew by 58 and 10 percent, respectively. Remittances grew by 7% during the first half of FY20, keeping the income account in surplus. The COVID-19 crisis is, however, reversing these gains and is expected to widen the current account deficit from 8.6 percent of GDP in FY19 to 10.4% of GDP in FY20 (Table 2). The combined fall in merchandise exports, tourism earnings and remittances are expected to outweigh the decline in imports.
pdf Uganda Economic Update, Fifteenth Edition: Digital Solutions in a Time of Crisis (9.49 MB)
Daniel Murenzi: Digital technology re-opening Africa (New Times)
To address the challenge, the EAC is working with The Commons Project, a Swiss-based non-profit public trust that builds digital services for public good. Using an app called CommonPass, travellers will share their recent test in a way that ensures authenticity of results and the privacy of the traveller. CommonPass is being implemented through a collaborative design sprint that starts on July 9 with national, regional and global stakeholders that include the design firm IDEO and The World Economic Forum, with the support of the Rockefeller Foundation. Travellers begin their journey using CommonPass by taking an accredited lab test that can be shared electronically to their mobile phone. That certificate is a digital analogue to the widely used “yellow card”, an international certificate of vaccination. Moving forward, our major priority is to ensure that Covid-19 does not disrupt implementation of the African Continental Free Trade Area, which will improve so many lives by removing trade obstacles between 28 African countries. This is a major achievement, which must be protected and progressed further. [Note: The author is the head of information technology at the East African Community]
Nigeria: Monitoring COVID-19’s impact on Nigerian households (World Bank)
The pandemic has disrupted employment and income-generating activities for large numbers of ordinary Nigerians. These impacts are risky for the majority of working Nigerians who report their main activities to be in farming or family businesses. The pandemic’s employment impacts have been large, affecting non-farm enterprises and those working in the commerce and service sectors the most. As many as 42% of respondents who were working before the outbreak reported that they were not working at the time of the survey. The second round of the NLPS was completed in June 2020 and is expected to provide further insights. Forthcoming Round 2 results will provide more information on the impacts of COVID-19 on employment and livelihoods, food security and access to basic goods, human development, and many other issues.
The UK and Sub-Saharan Africa: Prosperity, peace and development co-operation (UK Parliament)
We find that UK trade with and investment in Sub-Saharan Africa has flatlined over the last decade. Concerted action by the Government will be needed to address this. The UK–Africa Investment Summit in January 2020 was a high profile beginning, but follow-up will be required. We also identify leaving the EU as an opportunity for the UK to re-cast its trade relationships in the region, and remedy some of the defects in the EU’s Economic Partnership Agreements. We were surprised to hear that no detailed work has yet been done to consider how to offer better access to African exporters.
The UK’s economic relationship with Sub-Saharan Africa - profiled recommendations:
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There is appetite within Sub-Saharan Africa to improve trade with the UK; the UK should explore these opportunities with countries in the region. African partners are working to develop the AfCFTA and are likely to seek new agreements which are consistent with this planned continental agreement. (Paragraph 416)
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In its post-Brexit trade policy, the UK should explore ways of giving better access to Africa’s agricultural exports and supporting the processing in Africa of a greater proportion of its agricultural products. (Paragraph 417)
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UK trade with and investment in Sub-Saharan Africa has flatlined over the last decade. The appetite of UK businesses is uncertain, and a concerted effort will be needed by the Government if it is to deliver on its goal significantly to increase trade with and investment in the region. (Paragraph 430)
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The Government must ensure that its provision of export credits is consistent with its commitments to tackling climate change. It should match its announcement at the UK–Africa Investment Summit that it will no longer invest in new coalmining or power production projects with similar commitments on gas and oil. (Paragraph 432)
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Education is an important UK sector for UK–Sub-Saharan African trade The visa regime for potential students from the region is unduly onerous and requires reform. (Paragraph 433)
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Remittances from the UK to Sub-Saharan Africa are given too little profile in the narrative of the UK’s economic relationship with the region. Remittances from the UK exceed aid and charitable giving to Sub-Saharan Africa, and provide essential economic support. (Paragraph 447)
pdf The UK and Sub-Saharan Africa: Prosperity, peace and development co-operation (3.39 MB)
Rwanda: World Bank Country Partnership Framework 2021-26 (World Bank)
The World Bank Group Board of Executive Directors today discussed the Rwanda Country Partnership Framework for the period 2021-26. This CPF will guide the Bank Group’s work for the next 6 years, supporting the Government of Rwanda’s strategic priorities as laid down in the National Strategy for Transformation. The CPF also supports the recovery from the COVID-19 impacts. The proposed program of engagement is built around 5 strategic objectives: i) improving human capital; ii) improving conditions for private sector development; iii) expanding access to infrastructure and the digital economy; iv) increasing agricultural productivity and commercialization; and v) intensifying urban agglomeration.
The WTO, the International Chamber of Commerce and B20 Saudi Arabia yesterday issued a joint statement pointing to the diminishing availability of trade finance. Warning that gaps between trade finance supply and demand could seriously impede the ability of trade to support post COVID-19 economic recovery, they are urging private and public-sector actors to work together to address shortages. The joint call for action, which highlights the importance of cross-border trade in driving economic recovery from the downturn caused by the COVID-19 pandemic, has its origins in a WTO Trade Dialogues meeting with the private sector in May, where concerns about trade finance featured prominently. Given the scale of the shortfall, the public and private sectors should work together:
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Enable a rapid transition to paperless trading by: (a) making progress in removing legal requirements for trade documents to be in hard-copy paper format; and (b) fast-tracking the adoption of the UNCITRAL Model Law on Electronic Transferable Records to provide a sound legal basis for the use of e-documents in the processing of trade finance transactions.
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Exchange views on how regulatory authorities could help mitigate constraints hindering the deployment of essential trade finance - particularly to MSMEs.
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Share risk to support trade finance during this period, especially among export credit agencies, multilateral development banks, and private sector banks, including in the short term segment of the market.
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Further scale development bank schemes, if possible, to provide risk mitigation and liquidity for trade finance transactions, especially in countries that need it the most.
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pdf Trade Financing and COVID-19: Joint WTO, ICC and B20 Statement (176 KB)
Ten steps to mainstream gender in trade deals (ITC)
It’s no secret that mainstreaming gender in free trade agreements creates more inclusiveness. Yet most accords don’t even mention gender - and those that do, typically fail to offer women the same opportunities as men to participate in trade. The International Trade Centre’s new report, Mainstreaming Gender in Free Trade Agreements, addresses this shortfall with 10 key explicit preambles, explicit access to skill development and compulsory dispute settlement mechanisms are among the recommendations in the report, launched at a joint event with the Organization of Women in International Trade. More than a quarter of the 292 agreements in force today and notified to the World Trade Organization have at least one provision that explicitly mentions gender. ‘The last three years have been phenomenal in this respect,’ the report says. This report builds on analysis of 73 trade pacts in Commonwealth countries, and the results are similar. Just 28% use best practices to mainstream gender concerns, meaning they have considerable scope to improve. Only 5% are advanced, as they use best practices and need little or no upgrade, and 40% make no explicit reference at all to gender considerations. Extract (pdf):
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Some findings are not surprising. For example, only about 5% of the accords have an advanced level of responsiveness. Almost two-thirds have a limited level of responsiveness, and about 28% are evolving. Canada is the only country among the 25 that has two advanced FTAs. This shows that Canada is a frontrunner at negotiating gender-responsive trade pacts. Many African and Asian countries have agreements with the lowest levels of responsiveness. Yet, most of the FTAs classified as evolving are found among African countries. These accords do not have a stand-alone chapter on gender or women, or exhaustive provisions on cooperation activities – but they have used a handful of provisions with binding force and obligatory expressions.
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Some of these trade agreements even include gender-explicit minimum legal standards. In fact, three African countries – Kenya, Rwanda and Uganda – are party to an FTA with advanced gender responsiveness. The clusters formed mostly among East African countries with almost all evolving FTAs are informative. East African countries have signed on to various plurilateral trade agreements among themselves, most of which are evolving in terms of their gender responsiveness. Furthermore, many of these evolving accords are closer to ‘advanced’ than ‘evolving’ trade agreements in other geographical regions. This is because many African countries have included women’s economic empowerment as a key concern related to development.
Global chain reaction: Unprecedented trade measures to tackle COVID-19 (ITC)
Governments have put in place a number of trade policy responses to contain the pandemic and its consequences. The daily tracker on the ITC Market Access Map, officially launched on 9 April, shows that more than 100 countries have implemented 128 temporary export measures and 134 countries have implemented 157 temporary import measures to combat COVID-19. The exponential rise in extraordinary export and import measures coincided with WHO’s pandemic declaration on 12 March. However, by mid-April the curve of adopted measures began to ‘flatten’ and, in May-June, some countries began lifting COVID-19 trade measures. As of mid-June, 15% of temporary measures have been lifted, mostly relating to export restrictions. By end of June, 7% more lapsed, mostly on the import side. However, more than half of the measures do not have a specific lapse date, with many attached to a date of lifting the national emergency. It is crucial to continue monitoring the measures, as their dismantling appears to be more gradual than their enactment. A possible explanation is the lingering second wave of mass infections - however, protectionist motives and the new status quo could also play a role.
Staying alert and responding to sudden trade-policy changes will become part of a new daily life of small businesses in the near future. To grapple with the new trade reality, they should benefit from the ITC market intelligence tools, such as the COVID-19 dashboard on temporary trade measures and other tools, which provide timely trade intelligence, including real-time data on temporary barriers and liberalizations on medical gear, food and other products. [The authors: Yannick Joller, Dzmitry Kniahin]
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UK still has no coherent strategy for engaging with Africa
The International Relations and Defence Committee has published its report on ‘The UK and Sub-Saharan Africa: prosperity, peace and development co-operation’.
The repot criticises the Government’s lack of a coherent strategy to its engagement with Africa saying the ‘strategic approach’ launched in 2018 does not live up to its name, and is just a collection of broad ideas with little clarity on how to put them into action. The Committee calls on the UK Government to develop a new approach to the countries of Africa and regional institutions such as the African Union, based on ‘genuine partnership’, including supporting reform of UN Security Council to give African nations a voice “commensurate with their size and importance”.
Background
In August 2018 the then Prime Minister said the UK was “seeking to work more closely with the more than 50 nations of Africa to deliver our shared security and prosperity, and through this strengthening a global system that is capable of delivering lasting benefits for all”.
In 2015 the African Union outlined, in Agenda 2063, its strategy to achieve the Pan African vision of “An integrated, prosperous and peaceful Africa, driven by its own citizens, representing a dynamic force in the international arena”.
In February 2019, the UK and the AU signed a pdf Joint Communiqué on the African Union-United Kingdom Partnership (258 KB) . This set out “a broad range of shared priorities in support of the African Union’s objectives for the continent.
The Committee’s inquiry focused on how the UK could best support the AU’s Agenda 2063 and the areas for co-operation set out in the 2019 AU-UK Joint Communiqué, and the UK’s engagement with African countries on economic development, peace and security, and governance and human rights.
Chair’s comments
Commenting on the report, Baroness Anelay of St Johns, Chair of the Committee, said:
“Despite a significant fanfare when it was launched in 2018 the Government’s ‘new strategic approach’ to Africa has failed to live up to its name. It is time to press the reset button, and use the timing of the UK’s exit from the EU and the Integrated Review of foreign, defence, security and international development policy to develop an action plan for a new relationship based on genuine partnership.
“There are concrete steps the UK can take now to deliver that including supporting initiatives to improve African representation at the UN and in other international organisations, tackling unfair charges on money African diaspora communities in the UK send back to the continent, and using our exit from the EU to open up our domestic market to a new fairer trade relationship with African countries.
“We heard worrying evidence that the UK’s reputation in Sub-Saharan Africa has taken a real hit as a result of unfair visa policies and the ‘hostile environment’. We have a lot to do to overcome that damage and develop the kind of future relationship that is in the interests of both the UK and the nations of Sub-Saharan Africa.”
Conclusions and recommendations
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Africa is of strategic and geopolitical significance to the UK. It is a region where the UK really can make a difference. To do so, the UK’s future relationship with the countries of Africa and their regional institutions needs to be based, as has not always been the case in the past, on a genuine partnership. Within such a framework there are important trade and investment opportunities.
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The UK’s visa policies are damaging its reputation and the ability of international departments to build and strengthen relationships across Africa, and in some cases fall below the standards of basic human decency.
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We are disappointed to conclude that the Government’s new ‘strategic approach’ to Africa falls short. It is not a strategy, but rather some broad ideas and themes, and there is little clarity on how the Government plans to put it into action... The Government should publish a clearly articulated list of its priorities for its engagement with Africa, and an action plan for meeting them, including ministerial and departmental responsibilities.
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The COVID-19 pandemic has already had a negative and disproportionate impact on economies in Africa. Export markets have dried up, remittances have fallen, currencies have depreciated and the continent has experienced capital flight. Significant economic support from international partners will be needed to prevent the continent’s economic gains over the last two decades being reversed.
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We regret the decision to merge the Foreign and Commonwealth Office and the Department for International Development (DfID)... We request urgent confirmation that UK official development assistance (ODA) will continue to be administered with the promotion of the economic development and the welfare of developing countries as its main objective, in line with the definition of ODA agreed by the Organisation for Co-operation and Development’s Development Assistance Committee.
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Leaving the EU provides an opportunity for the UK to re-cast its trade relationships with African countries and remedy some of the defects in the EU’s Economic Partnership Agreements. We were surprised to hear that no detailed work had yet been done to identify ways in which the UK could offer better access to African exporters than was possible when the UK was in the EU.
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Remittances from the UK to Sub-Saharan Africa are given too little profile in the narrative of the UK’s economic relationship with the region. Remittances from the UK exceed aid and charitable giving to Sub-Saharan Africa, and provide essential economic support... The Government should work to lower the cost of remitting money to the region, including the use of its powers over competition policy, consistent with the Sustainable Development Goals.
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We welcome the UK’s increased attention to instability in the Sahel, and the Government’s decision to contribute UK troops to the United Nations Multidimensional Integrated Stabilization Mission in Mali. However, the Government’s wider strategy in the Sahel is unclear and the UK risks being unable to add value in a highly contested space. We would welcome further information from the Government on its objectives in the Sahel.
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The Government must continue to afford significant importance to human rights in its relationships in Sub-Saharan Africa. At the same time as the UK pursues new economic opportunities and seeks to tackle security challenges, human rights remain critical.
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Digital technologies could help Uganda’s economy recover faster
Uganda’s real gross domestic product (GDP) growth in 2020 is projected to be between 0.4 and 1.7% compared to 5.6% in 2019, according to the latest edition of the Uganda Economic Update released by the World Bank.
The report, “Digital Solutions In A Time of Crisis”, shows the economy has suffered from the triple shocks of the COVID-19 (coronavirus) related economic and social disruption, a locust invasion and floods. Up to three million Ugandans could fall into poverty due to economic hardship and a lack of alternative means of survival.
Global and local restrictions in the movement of people and goods and provision of services to contain the COVID-19 pandemic have resulted in lower consumption, loss of jobs and a 43% reduction in remittances. Due to a sharp drop in tax revenues, Government has also been forced to borrow much more to continue providing services to Ugandans.
Uganda, however, remains at low risk of debt distress based on the April 2020 joint World Bank-IMF debt sustainability analysis. With total debt service (interest and principal due) expected to average around 55 percent of government revenues over the next three years, there is a need to cut back on non-priority spending in order to provide essential public services such as health, education, water and sanitation and electricity.
A more widespread pandemic could pose significant risks to the outlook, as well as any further significant locust invasion. Weak economic growth in the post COVID-19 period will continue to reduce overall consumption and commodity demand. In addition, crude oil prices are expected to average $35 per barrel this year and $42 per barrel in 2021. Although this will limit external inflationary pressures for import-dependent Uganda, these prices are below the estimated breakeven price of $60 for oil production in Uganda. This could negatively impact Uganda’s prospects of becoming an oil producer within the next four to five years.
The increased use of digital technologies during the COVID-19 lockdown such as mobile money, on-line shopping, on-line education, digital disease surveillance and monitoring, and dissemination of public health messages shows the great potential to support faster economic recovery and strengthen resilience against similar shocks.
“The digital space in Uganda is very innovative – and has quickly adapted during the pandemic. Fintechs have offered payment options, and digital solutions have reinforced and enabled the health sector’s calls to social distance and limit movement and contact. These solutions, if upscaled and developed to their potential would boost the digital economy and maximize its benefits to Ugandans,” said Tony Thompson, World Bank Country Manager for Uganda.
The report points to the current national ID system as one of the successes of technological advancement, which can be leveraged to support more efficient e-government systems and authentication by the public and private sectors while expanding financial inclusion, strengthening social protection delivery, supporting immigration control and refugee management.
While Uganda has made reasonable technological strides, the analysis notes that it still lags with a phone penetration rate of 69.2% of the population, far below the average of 84%for Africa. There are gender and geographical gaps in access; for example, 46% t of female adults have access to mobile phone compared to 58% of male adults. Similarly, adults in urban areas are more likely to own mobile phones (70%) and have access to the internet (25%) compared to adults in rural areas (46% own phones and 5 percent have internet access).
The economic update makes several recommendations for the economy and ICT sector, including implementing supportive policies and regulation, review of taxation in the digital economy, leveraging technology to support the health sector and economic recovery through increased digitalization of agribusiness and manufacturing, expansion of social safety nets, and transparency and accountability of government’s response to COVID-19. It also recommends the development of a coherent strategy of ecosystem support and catalyzing regional and global integration of Uganda’s digital economy.
“There are areas of the economy that have shown resilience in the current crisis and by leveraging digital technologies are inventing new ways of operating and doing business,” said Richard Walker, World Bank Senior Economist for Uganda.
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COVID-19 stalls progress on Global Goals
UNCTAD’s SDG Pulse 2020 shows that progress on critical targets of the sustainable development goals has stalled amid the coronavirus crisis.
The coronavirus crisis is pushing critical economic, social and environmental development targets beyond reach, UNCTAD warned on 8 July as it launched the 2020 edition of its SDG Pulse.
The organization’s online annual update tracking progress on a range of indicators of the UN’s Sustainable Development Goals (SDGs) shows that poverty, inequality, the climate crisis, unsustainable production and other pressing challenges require even more urgent action due to COVID-19.
The world only has 10 years left to achieve the goals of the UN’s 2030 Agenda for Sustainable Development, to which more than 150 world leaders committed in 2015.
“Despite COVID-19, despite containment, despite everyone working from home, it was very important for us to publish the SDG Pulse on time,” said UNCTAD’s chief statistician, Steve MacFeely.
“The development challenges facing the world didn’t stop or go away, so it’s important that we continue to report progress towards the 2030 Agenda, and the important role that UNCTAD plays in that journey,” Mr. MacFeely said.
Far-reaching impact of pandemic
This year’s bulletin is no ordinary update, as the impact of COVID-19 is evident throughout the report.
The impact is evident in the trade of international goods, for which UNCTAD nowcasts a decline of almost 27% for the second quarter of 2020 compared with the same quarter last year. The organization also forecasts a fall of 20% in merchandise trade for the whole year.
For instance, SDG target 17.11 aims to significantly increase the exports of developing countries, and in particular to double the share of least developed countries (LDCs) in global exports by 2020.
Although LDCs had been achieving modest growth in market share, COVID-19 has likely pushed the target beyond reach.
Least developed countries’ share of global exports of goods and services
Source: UNCTAD’s SDG Pulse
Trends of goods and services trade in developing economies
Source: SDG Pulse
Another shocking result featured in this year’s update is that the coronavirus-induced record-breaking fall of 5% in carbon dioxide emissions – compared with the same period in 2019 – will not be enough to achieve even the weakest of the targets set out by the Paris Agreement on climate change.
Global emissions must be cut by almost 8% every year for the next decade to keep the world within reach of the 1.5°C target of the climate agreement. The magnitude of that task has been laid bare by COVID-19.
COVID-19 from a statistical point of view
This year’s ‘In Focus’ section of the update looks at COVID-19 from a statistical perspective, examining the measurement challenges associated with the pandemic itself, the different policy actions adopted by governments and the impact on employment by gender.
“While we discuss the impacts of COVID-19 throughout the report, we also explore the measurement issues and the implications for statistics itself,” Mr. MacFeely said.
The update also highlights the impacts on global statistics more generally, discussing how official statistics have had to adapt very quickly. Further, it examines some of the privacy risks associated with virus tracing apps.
“Governments and the public are faced with a dilemma. Technology can be used to track us during the pandemic,” Mr. MacFeely said, “but the same technology can be used to track us afterwards, too. Once the cork is out of the bottle, it’s almost impossible to put in back in again. The power to control populations is frightening.”
Related: ‘New dynamic’ needed to overcome negative impacts of COVID-19 worldwide
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tralac’s Daily News Selection
Joint Statement on the Commemoration of African Integration Day (African Union)
Joint Statement of the Chairperson of the Assembly of the African Union, The African Continental Free Trade Area Champion and the Chairperson of the African Union Commission:
"Our first commemoration is taking place in unusual circumstances given the Covid-19 pandemic that has affected us all in Africa and around the world. Difficult as it is, the pandemic has inspired us to realise the potential we have to harness and address this challenge. In this regard, we need to reconfigure alternative supply chains in the face of the disruptions that emerged as soon as blockades and quarantines came into play to contain the spread of the Covid-19 pandemic.
"Consequently, the pandemic challenged us to speed up our industrial development agenda, through the establishment of Regional value and supply chains, with the active participation of the private sector. Furthermore, the pandemic stressed the importance of strong health systems as well as e-government, e-education, e-diplomacy and e-commerce. Finally, the pandemic has unleashed the innovative spirit of Africans and built resilience as evidenced by the various adjustment measures at the community and national levels, including our use of traditional medicines.
"As we look to the post-COVID-19 era, it is clear that the future of Africa as regards recovery, development and resilience lies in accelerating its economic integration through the implementation, at the level of Africa, of the AfCFTA. The AfCFTA offers the best platform for us to build and deliver inclusive and sustainable development by using the large market space to mobilise investment. Within this framework, we urge all other African Union Member States to sign and ratify the Agreement establishing the African Continental Free Trade Area."
SADC rallies behind AfCFTA to grow Africa’s trade (Xinhua)
“We should not lose sight of the COMESA-EAC-SADC Tripartite Free Trade Area, which is a one of the major building blocks towards the establishment of the African Continental Free Trade Area,” said SADC Executive Secretary, Stergomena Lawrence Tax on Tuesday commemorating the inaugural Africa Integration Day 2020. Currently, intra-Africa trade accounts for 15 precent of its total trade volume, compared unfavorably to Europe’s 68 percent, North America’s 37 percent, and Latin America’s 20 percent. Under the AfCFTA, intra-African trade is projected to rise to 52 percent by 2040, and Africa will have a combined consumer and business spending of 6.7 trillion U.S. dollars by 2030.
pdf Statement by SADC Executive Secretary, Her Excellency Dr Stergomena Lawrence Tax (124 KB)
Sadc wants macroeconomic convergence (The Herald)
Members of Parliament who belong to the standing committee on Trade, Industry, Finance and Investment (TIFI) of the SADC Parliamentary Forum are calling for concerted and coordinated action towards macro-economic convergence within the region. They made the call when their committee met virtually this week under the theme: “The role of Parliament in mitigating the effects of Covid-19 on the trade and business environment for the SADC Region.”
Trudi Hartzenberg, the executive director of Trade Law Centre NPC (TRALAC) joined the meeting. She said it was “extremely appropriate” that MPs were keen to know how far SADC had moved towards macroeconomic convergence. “Covid-19 has shone a spotlight on some of the challenges we face in terms of our over-reliance on imports of essential goods, medicines and food supplies for our food security,” Hartzenberg said.
Ghana ready to host AfCFTA despite Covid-19 (MyJoyOnline)
Government on Tuesday announced that the nation is ready to host the African Continental Free Trade Area (AfCFTA) despite the Covid-19 pandemic. Foreign Affairs and Regional Integration Minister, Ms Shirley Ayorkor Botchwey, “It holds the potential to increasing Africa’s global trade and to facilitate the export of value-added products,” she said, adding; “I will contribute to building regional economic infrastructure, fostering food and energy security, generating jobs for the increasing number of young people, alleviating poverty and delivering shared prosperity through the implementation of appropriate policies.”
Post COVID-19: Africa’s growth stands to rebound to 3% in 2021, African Development Bank says in African Economic Outlook 2020 Supplement (AfDB)
Africa’s economic growth could rebound in 2021, provided that governments manage the COVID-19 infection rate well, according to updated forecasts from the African Development Bank, released on Tuesday. In a comprehensive socio-economic assessment of the pandemic’s impact, the Bank said growth was now projected to rebound to 3% in 2021 from -3.4% in the worst-case scenario for 2020.
The report called for urgent policy interventions to mitigate the impact of the pandemic: “Across Africa, the response must be well-sequenced and multipronged, involving a public health response to contain the spread of the virus and minimise fatalities, a monetary policy response to ease liquidity constraints and solvency risks, and a fiscal response to cushion the economic impacts of the pandemic on livelihoods and to assist businesses.”
Adopting ICT is critical in post Covid-19 trade facilitation programmes in COMESA region (COMESA)
It’s close to two months since COMESA developed and issued Guidelines for Movement of Goods and Services across the Region during the COVID-19 Pandemic. During this period, there has been a notable adherence to the guidelines and the advisories provided by World Customs Organisation (WCO) and United Nations Conference on Trade and Development (UNCTAD) at the points of entry and exit by border authorities in most Member States.
According to a report by the Team Leader of the COMESA Trade Facilitation Programme funded under the 11th European Development Fund, Mr. Charles Chaitevzi: “Government agencies are now working in a more coherent manner and have also embraced the use of ICT tools,” he notes. “There has always been conflict between facilitating trade and the overriding need for border agencies to maximize revenue collections and compliance with enforcement measures and hence, the benefits of using ICT tools were not fully realized.”
Trump Bets on Kenya for Africa Trade Pacts as Negotiations Begin (Bloomberg)
The U.S. and Kenya started negotiating a free-trade agreement on Wednesday, paving the way for President Donald Trump’s push for bilateral pacts in Africa. “We look forward to negotiating and concluding a comprehensive, high-standard agreement with Kenya that can serve as a model for additional agreements across Africa,” U.S. Trade Representative Robert Lighthizer said in a joint statement with Kenyan Trade Secretary Betty Maina.
Trump is moving to reset U.S. trade relationships with regions and nations across the world including Mexico, Canada, China, Europe, the U.K. In sub-Saharan Africa, he prefers bilateral agreements to the African Growth Opportunity Act, which allows about 6,500 products from 39 nations preferential access to the U.S. and expires in 2025.
Follow developments in the US-Kenya FTA negotiations on AGOA.info.
Eight in race for top job at World Trade Organization (Reuters)
Eight candidates from Mexico to Moldova will vie for the top job at the World Trade Organization, seeking to convince its 164 members they can steer the body through intensifying global trade tensions and rising protectionism. With three of the six previous director-generals coming from Europe and the others from Thailand, Brazil and New Zealand, pressure has been building to choose a leader from Africa. However, the continent has not united on a single figure, instead producing three candidates, from Egypt, Kenya and Nigeria. The others are from Britain, Mexico, Moldova, Saudi Arabia and South Korea. The WTO has also never had a female chief. Three in the field are women.
International Trade Centre launches a groundbreaking tool to track policies for women in trade (ITC)
The International Trade Centre today announced the launch of SheTrades Outlook, a digital tool that allows governments and others to track progress on gender equality in trade, and progress toward achieving Sustainable Development Goal 5 to empower all women and girls. SheTrades Outlook provides quantitative and qualitative data using 83 indicators across six policy areas. It contains more than 50 good-practice examples to spur policymakers worldwide to introduce and reform policies that support women in trade.
‘New dynamic’ needed to overcome negative impacts of COVID-19 worldwide (UN)
The dramatic impacts of the COVID-19 pandemic, have laid bare “weaknesses in our systems and societies”, a top official told the UN’s key international forum on sustainable development which began on Tuesday, warning that “a new dynamic” is needed to overcome the negative shocks. Introducing the Secretary-General’s progress report on the SDGs, Liu Zhenmin, UN chief for economic and social affairs, pointed out that the development goals are “all the more urgent” as the world confronts this “crisis of historic proportion…. A truly transformative recovery from COVID-19 must be pursued.”
Five years since the adoption of the Sustainable Development Goals, the Sustainable Development Goals Report 2020 notes that progress had been made in some areas, such as improving maternal and child health, expanding access to electricity and increasing women’s representation in government. Yet even these advances were offset elsewhere by growing food insecurity, deterioration of the natural environment, and persistent and pervasive inequalities.
Now, in only a short period of time, the COVID-19 pandemic has unleashed an unprecedented crisis, causing further disruption to SDG progress, with the world’s poorest and most vulnerable affected the most.
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‘New dynamic’ needed to overcome negative impacts of COVID-19 worldwide
The dramatic impacts of the COVID-19 pandemic, have laid bare “weaknesses in our systems and societies”, a top official told the UN’s key international forum on sustainable development which began on Tuesday, warning that “a new dynamic” is needed to overcome the negative shocks.
“The COVID-19 pandemic, while primarily a health crisis, also quickly became the worst human and economic crisis in decades”, Mona Juul, President of the Economic and Social Council (ECOSOC), told the inaugural meeting of the High-level Political Forum (HLPF) on sustainable development, which will run until 16 July.
“It has exacerbated the already difficult situation for millions of people living in poverty,” she added.
Under the auspices of ECOSOC, the HLPF aims to chart a clearer path for countries to trigger a better recovery, share experiences and fend off challenges in pursuing the Global Goals, while sharing strategies to tackle the pandemic and help countries meet their commitments by 2030.
UN ‘powerhouse’
In the face of the current crisis, “meaningful progress towards achieving the Sustainable Development Goals (SDGs) could not be more urgent”, Ms. Juul said, urging the meeting to be “a springboard for greater solidarity and cooperation”.
Pointing to the “remarkably ambitious” 2030 Agenda, and the “strong global framework for financing its implementation”, the ECOSOC chief called the UN “a powerhouse of world-changing ideas and global coordination”.
In closing, she encouraged the participants to “show the world” that we can rebuild better as we move forward by inspiring actions to improve lives.
“We need all hands on deck to get this work done,” concluded Ms. Juul.
SDG more urgent than ever
Introducing the Secretary-General’s progress report on the SDGs, Liu Zhenmin, UN chief for economic and social affairs, pointed out that the development goals are “all the more urgent” as the world confronts this “crisis of historic proportion”.
“A truly transformative recovery from COVID-19 must be pursued,” he said. “One that reduces the risk of future crises and equips us to meet the goals of the 2030 Agenda and the Paris Agreement on climate change,” he added.
Against the backdrop of the UN’s 75th anniversary, Mr. Liu maintained that responding to the pandemic requires “a surge in international cooperation, solidarity and multilateralism”.
Long road ahead
While demonstrating the implications of COVID-19 on the SDGs, the progress report reveals that the world is coming up short.
Before the pandemic, some strides and key targets had been achieved, such as the availability of mains electricity to more than a billion more people between 2010 and 2018, as well as a decline in global maternity mortality by 38 per cent.
However these gains were met with stalled or reversed progress in other areas, including a rise in the number of people suffering from food insecurity and inequality, along with the knowledge that climate change is occurring even faster than anticipated – 2019 was the second warmest year on record and concluded the warmest decade since records began.
‘Parallel threats’
Amidst COVID-19, the global community finds itself confronting “parallel threats linked to health, economic and social crises [that] have crippled countries and left us at a standstill”, Mr. Liu stated.
“As of the beginning of July, the death toll has reached to over 500,000 and continuing to climb, with almost no country spared,” he added.
The effects of the pandemic have overwhelmed health systems globally; caused businesses and factories to shut down; kept 1.6 billion students out of school; disrupted global value chains and the supply of products; and is expected to push 71 million back into extreme poverty.
The poorest and the most vulnerable, are being affected disproportionately, with women and children bearing the heaviest brunt.
The crisis has significantly affected the livelihoods of 1.6 billion informal sector workers, equaling half of the global workforce, exacerbating the vulnerability of one billion slum dwellers and disrupted lifesaving interventions.
It has also triggered a surge in domestic violence against women and children.
Indicating drops in world trade by 13 to 32 per cent, foreign direct investment by up to 40 per cent, and remittances to low- and middle-income countries by 20 per cent in 2020, Mr. Liu noted that “even developed countries are struggling to cope”.
Required: Global solidarity
The report underscores the urgent need for global solidarity and cooperation.
Mr. Liu supported the Secretary-General’s call for a coordinated, comprehensive multilateral response amounting to at least 10 per cent of the world’s GDP, along with his push for measures that give developing countries the financial firepower needed to weather the storm.
“Overcoming the crisis and getting back on track to achieve the SDGs will require leadership, foresight, innovation, finance and collaboration among all governments and all stakeholders,” Mr. Liu stressed. “In the coming days, we must fully use the potential of the HLPF to catalyze global action”.
The Sustainable Development Goals Report 2020
The annual Sustainable Development Goals Report provides an overview of the world’s implementation efforts to date, highlighting areas of progress and areas where more action needs to be taken to ensure no one is left behind.
Five years since the adoption of the Sustainable Development Goals, the 2020 Report notes that progress had been made in some areas, such as improving maternal and child health, expanding access to electricity and increasing women’s representation in government. Yet even these advances were offset elsewhere by growing food insecurity, deterioration of the natural environment, and persistent and pervasive inequalities.
Now, in only a short period of time, the COVID-19 pandemic has unleashed an unprecedented crisis, causing further disruption to SDG progress, with the world’s poorest and most vulnerable affected the most.
Using the latest data and estimates, this annual stocktaking report on progress across the 17 Goals shows that it is the poorest and most vulnerable – including children, older persons, persons with disabilities, migrants and refugees – who are being hit the hardest by the effects of the COVID-19 pandemic. Women are also bearing the heaviest brunt of the pandemic’s effects.
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Adopting ICT is critical in post Covid-19 trade facilitation programmes in COMESA region
It’s close to two months since COMESA developed and issued pdf Guidelines for Movement of Goods and Services across the Region during the COVID-19 Pandemic (740 KB) . During this period, there has been a notable adherence to the guidelines and the advisories provided by World Customs Organisation (WCO) and United Nations Conference on Trade and Development (UNCTAD) at the points of entry and exit by border authorities in most Member States.
According to a report by the Team Leader of the COMESA Trade Facilitation Programme funded under the 11th European Development Fund, Mr. Charles Chaitevzi, this is a departure from the past, where agencies were working in silos without a designated lead agency to ensure a “whole of government” response.
“Government agencies are now working in a more coherent manner and have also embraced the use of ICT tools,” he notes. “There has always been conflict between facilitating trade and the overriding need for border agencies to maximize revenue collections and compliance with enforcement measures and hence, the benefits of using ICT tools were not fully realized.”
The COMESA guidelines provide procedures and standards to reduce the spread of the Coronavirus disease and at same time minimizing disruptions in the supply chain and to facilitate movement of goods and services across the region during the pandemic.
Mr. Chaitevzi notes, it has increasingly become apparent that embracing technology in various trade facilitation instruments can unlock the COVID-19 induced restrictions and help accelerate the much need cross-border trade and investment even during such difficulties.
According to his report, emerging changes in perceptions of border agencies regarding trade facilitation and enhanced use of ICT have created opportunities for redesigning border processes and operations. These will build and sustain the emergency measures that were adopted to maintain supply chains under the COVID-19 pandemic environment.
The report recommends for upgrading of the ICT systems with connectivity among the government agencies coupled with the application of the principles of risk management and reducing physical inspections.
“There are opportunities to utilize track and trace systems offered by Electronic Cargo Tracking Systems and Global Positioning Systems in freight vehicles units and to institute performance management systems that will ensure that operations at border crossings reduce the costs of transporting goods and contribute to the competitiveness of the products from COMESA Member States,” the report says.
Currently, several key interventions are already being implemented through the COMESA Trade Facilitation Programme at targeted border posts in the region. Under the programme, technical and financial support has been provided to automate government agencies systems to support full implementation of Coordinated Border Management principles.
According to the report, the lessons that COVID-19 has and specifically the need to ensure more sustainable systems are put in place to facilitate efficient and effective border operations.
“Ultimately, an expedited implementation of interventions under the COMESA Trade Facilitation Programme, in partnership between COMESA Secretariat and Member States, will create an enhanced trading environment underpinned by upgraded border crossings and efficient cross-border goods clearance processes.”
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Joint Statement on the Commemoration of African Integration Day
Joint Statement of the Chairperson of the Assembly of the African Union, The African Continental Free Trade Area Champion and the Chairperson of the African Union Commission on the Occasion of the Commemoration of African Integration Day
We are meeting today to close the inaugural commemoration of the African Integration Day, which began on 1 July 2020. It is a Day on which we reflect on and celebrate our achievements in bringing African economies and peoples closer together, in conformity with our motto of Africa speaking with one voice and acting in unison. In so doing, we also assess the progress made so far in the implementation of the Agenda 2063 of the African Union, with its vision of establishing the Africa we want, through the realisation of “an integrated, prosperous and peaceful Africa, led by its own citizens and representing a dynamic force on the international scene”.
The road to African integration began long ago and has witnessed some important milestones. It dates back to 1963 with the inception of the Organisation of African Unity, when our predecessors called for the establishment of the African Common Market. Continental economic integration was, therefore, a key objective of the post-colonial period. This led to the setting up of the Regional Economic Communities and, later, to the Lagos Plan of Action for the Economic Development of Africa for the period 1980-2000, whose main objective was to galvanise the spirit of collective self-reliance. The Lagos Plan of Action was the springboard for the negotiation of the Treaty establishing the African Economic Community (Abuja Treaty) signed in 1991 and is the legal basis and vision for the economic integration programme of Africa. The Abuja Treaty entered into force on 12 May 1994 with a gradual approach towards the African Economic Community, whose first phase was to use the Regional Economic Communities as pillars.
At this historical moment, the Abuja Treaty has ushered in the African Continental Free Trade Area (AfCFTA), one of the flagship projects of the Agenda 2063 of the African Union. On 21 March 2018, the Agreement establishing the AfCFTA was concluded and signed in Kigali, Rwanda. Another important milestone was reached on 30 May 2019, when the Agreement entered into force.
The entry into force of the AfCFTA Agreement was historical, opening a new development vista for our Continent. To date, 54 countries have signed the Agreement and 28 countries have deposited their instruments of ratification with the African Union Commission. Africans from all walks of life should be very proud of this unprecedented achievement, which makes Africa the land of opportunities and promises.
By establishing this market of 1.27 billion people, we are also defragmenting Africa to put behind us the history of small uncompetitive markets that have thwarted our efforts to achieve inclusive sustainable development for the benefit of our peoples. This important and inclusive market will now position us to attract increased trade and investment and, in so doing, afford opportunities for young African entrepreneurs, women and small and large enterprises. Their business activities should lead to the creation of decent jobs for millions of Africans as a means of achieving widespread prosperity.
Our commemoration of today was designed at the launch of the operational phase of the AfCFTA in Niamey, Niger, on 7 July 2019, when the 12th Extraordinary Session of the Assembly of the Heads of State and Government of the African Union decided that 7 July each year be designated as the African Integration Day. This Day is to be observed annually by all Member States, without it being a public holiday.
pdf Africa Integration Day Programme 1-7 July 2020 (532 KB)
On this day, Africans from the continent and from the Diaspora propose commemorative activities to observe and celebrate the achievements of the AfCFTA in the previous year. Aware that the fate of the AfCFTA lies in our hands, the celebration also serves to reaffirm our unwavering commitment to continue the process of establishing the African Economic Community as outlined in the 1991 Abuja Treaty.
The 33rd Ordinary Session of the Assembly of the African Union, held on 9 and 10 February 2020 in Addis Ababa, Ethiopia, adopted guidelines for the commemoration of the African Integration Day and these have been widely disseminated. Today we are also celebrating the pillars of the African Economic Community. These are the Regional Economic Communities, which have paved the way for economic integration in Africa at this level. Through the AfCFTA, we are now entering uncharted territory, opening a new era of continental economic integration. But we are convinced that the lesson learnt and the institutional and programmatic arrangements of the Regional Economic Communities will greatly help the AfCFTA gain momentum as we roll out trade in this market.
As we conclude the commemorative activities today, we look with satisfaction and pride at the range of activities carried out and the broad participation of African Union Member States, the private sector, academia, youths, women, the civil society and the African diaspora through the following:
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Round tables and debates on historical and contemporary African issues, such as the promotion of industrialisation and structural transformation in Africa;
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Deployment of some of the main instruments that will be used in the AfCFTA, such as Essential Innovation Design Accelerator (EIDA); the competition for exhibition space at the Young Enterprise Pavilion at the forthcoming 2021 Intra-African Trade Fair; the AfCFTA online Mechanism for monitoring, reporting and removing non-tariff barriers; and, the African E-Commerce Platform.
All these elements testify to the passion and preparation of the various stakeholders to implement the AfCFTA. Future commemorations will be expanded to include the following activities to be carried out at the Community, National, Regional, Continental and International levels:
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Exhibitions and art competitions;
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Commemorative street rallies and walks;
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Media campaigns;
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Supplements in national and pan-African media;
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Sporting events; and
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Culinary festivals, music and dance.
Our first commemoration is taking place in unusual circumstances given the Covid-19 pandemic that has affected us all in Africa and around the world. Difficult as it is, the pandemic has inspired us to realise the potential we have to harness and address this challenge. In this regard, we need to reconfigure alternative supply chains in the face of the disruptions that emerged as soon as blockades and quarantines came into play to contain the spread of the Covid-19 pandemic.
Consequently, the pandemic challenged us to speed up our industrial development agenda, through the establishment of Regional value and supply chains, with the active participation of the private sector. Furthermore, the pandemic stressed the importance of strong health systems as well as e-government, e-education, e-diplomacy and e-commerce. Finally, the pandemic has unleashed the innovative spirit of Africans and built resilience as evidenced by the various adjustment measures at the community and national levels, including our use of traditional medicines.
As we look to the post-COVID-19 era, it is clear that the future of Africa as regards recovery, development and resilience lies in accelerating its economic integration through the implementation, at the level of Africa, of the AfCFTA. The AfCFTA offers the best platform for us to build and deliver inclusive and sustainable development by using the large market space to mobilise investment. Within this framework, we urge all other African Union Member States to sign and ratify the Agreement establishing the African Continental Free Trade Area.
In conclusion, we wish to call on all Africans, in a spirit of Pan-Africanism, to look forward to a bright future in a gradually integrating Africa. By acting together and in perfect harmony, we will create a better future for present and future African generations. In this regard, let us ensure, in the coming year, distinct achievements in the Regional Economic Communities and the AfCFTA so that we celebrate the African Integration Day of 2021 with the satisfaction that our economic integration agenda is producing substantial results and benefits for all Africans.
Long live Africa! Long live the spirit of unity and integration of the peoples of Africa!
Signed:
Chairperson of the African Union
AfCFTA Champion
Chairperson of the African Union Commission
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A political economy analysis of the Nacala and Beira corridors
While trade and transport costs in Africa are high, those faced in Malawi are higher than in the wider region. International partners are keen to invest in improving trade and transportation, with a view to promoting socio-economic development in the region, but trade and transport are highly political in both Malawi and Mozambique.
This ECDPM study maps out the different factors and actors that shape current use of the Nacala and Beira corridors connecting Malawi to the Mozambican coast. High-level political relations have fluctuated through time, and though cordial, do not provide a solid basis for improving efficiency along the Nacala rail corridor, with domestic priorities on both sides dominating cross-border cooperation. Thus far, Beira has emerged in Mozambique as the more efficient port serving Malawi and the wider region where state-business relations have aligned with political objectives. Nacala has been made efficient for coal exports but coordination for other trade is lacking, with political interests more geared towards a competition for control of rents. Mozambican road transporters have also the upper hand over Malawian transport, though the market is highly segmented for imports and exports and different goods.
Given the numerous players and services involved in the transport sector, cross-border coordination will be required to raise efficiency of the corridor – the need for this is only increased by the COVID-19 pandemic. Coordination efforts are underway in Beira, but are less apparent in Nacala. While transport in both countries is a political issue, it is unclear whether raising efficiency is among the top priorities of the leaders or highlevel actors on either side, though this may change with the newly elected Malawian president. In the absence of a champion that can coordinate activities and push for particular interests, one can only expect incremental use of the Nacala corridor in the short to medium term though the longer-term potential remains.
External support to improve efficiency will need to take account of the vested state-business interests round the ports and corridors, particularly in Mozambique, and rekindle multi-actor cross-border coordination mechanisms, ideally including different government bodies, private service providers as well as businesses engaged in exports/imports, and learning from past failures to coordinate better.
Download the paper here.
The authors of this paper are Bruce Byiers, Head of the African Institutions and Regional Dynamics Programme, ECDPM; Poorva Karkare, Policy Officer; and Luckystar Miyandazi, Policy Officer: African Institutions and Regional Dynamics Programme.
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According to Ms Mama Keita, Director of ECA in Eastern Africa, the COVID-19 pandemic disrupted our normal way of doing things but all is not dark as the crisis has created unusual opportunity, exposing that heavy reliance on imports of essential goods in sensitive areas such as medical, nutritional and pharmaceutical, is not a sustainable solution for Africa.
COVID-19: Travel in Africa updates
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WHO urges strong COVID-19 safety measures as African countries to resume air travel (WHO)
As African countries begin to reopen borders and air spaces, it is crucial that governments take effective measures to mitigate the risk of a surge in infections due to the resumption of commercial flights and airport operations. “Air travel is vital to the economic health of countries,” said Dr Matshidiso Moeti, WHO Regional Director for Africa. “But as we take to the skies again, we cannot let our guard down. Our new normal still requires stringent measures to stem the spread of COVID-19.”
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Quarantine Measures Threaten Aviation Restart in Africa & the Middle East (IATA)
The International Air Transport Association (IATA) urged governments in Africa and the Middle East (AME) to implement alternatives to quarantine on arrival that would allow economies to re-start while avoiding the importation of COVID-19 cases. Government-imposed quarantine measures in 36 countries across Africa and the Middle East (AME) account for 40% of all quarantine measures globally. With over 80% of travelers unwilling to travel when quarantine is required, the impact of these measures is that countries remain in lockdown even if their borders are open.
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Pandemic costs Africa travel, tourism almost $55 billion (Reuters)
African countries have lost almost $55 billion in travel and tourism revenues in three months due to the coronavirus pandemic, the African Union (AU) commissioner for infrastructure and energy said on Thursday. Amani Abou-Zeid told a news conference the economic impact of lockdowns and border closures to curb the spread of the virus would be severe, with the continent’s air industry hit particularly hard.
European travel bans impacting oilfield productivity, says African Energy Chamber (Hydrocarbons Technology)
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Key recommendations from the June Africa ministerial roundtable (ESI Africa)
Attendees of the African Ministerial Roundtable—which focused on three key areas for Africa’s energy future: electricity, oil and gas, and sustainable inclusive transition—stressed a number of key recommendations, including:
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An efficient secure, affordable and sustainable power sector is vital to Africa’s economic recovery and transformation
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Setting bold energy sector priorities and plans today can enable much-needed investments to stimulate broader economic growth tomorrow
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Africa’s oil and gas exporters, who have been severely impacted by the crisis, can seize the opportunity to re-evaluate their strategies to generate the most value and jobs across their economies and to promote broader economic diversification.
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Enhanced regional and international cooperation can play an important role in helping to build robust, affordable, sustainable and resilient energy systems across the continent.
Nigeria launches $2.9b gas pipeline project (The EastAfrican)
Nigeria has flagged off the construction of its $2.8 billion first phase of natural gas pipeline project to supply gas to three electricity power stations and later to North Africa. The 614 kilometres Ajaokuta-Kaduna-Kano (AKK) project will be done on a build-and-transfer Public-Private Partnership (PPP) basis. When completed, the pipeline is expected to transport 3,500 million metric standard cubic feet per day of dehydrated gas from several gas gathering projects located in southern Nigeria.
South Africa: Government commences urgent investigation into the supply of scrap to the Metals Industry in response to COVID-19 (dtic)
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AfCFTA: Vegetable producers demand structured funding to survive (GhanaWeb)
Representatives of over 60 vegetables value chain-associated institutions and networks have called for the establishment of a dedicated funding arrangement to help horticultural businesses meet both domestic and continental vegetable demand, especially for those vegetables that the country has competitive and comparable advantage in producing. The proposed Horticultural Support Facility, they said, should be part of a broader value chain policy that will help the local horticultural sector withstand the threats associated with the implementation of the African Continental Free Trade Area (AfCFTA) agreement.
Tanzania joins middle income status ahead of schedule (The Citizen)
Tanzania was on Wednesday July 1 declared a middle income country, a feat that has been achieved five years ahead of schedule. Tanzania enters into that bracket of middle-income countries with a GNI per capita between US$1,006 and US$3,955 per World Bank 2018 classification. Tanzania last year recorded economic growth of 7 per cent making it one of the fastest growing economies in Africa. Tanzania which is the second largest economy in East Africa and among the top 10 in Africa joins Kenya as the second East Africa Community member state in the middle-income strata.
Namibia: Levies to discourage vegetable imports (The Namibian)
The Namibian Agronomic Board (NAB) yesterday announced strict regulations to curb the importation of fresh fruits and vegetables, with effect from 1 August 2020. The new measures involve import levies, trade levies, subjecting all aspiring and existing importers to register with the board and acquire import permits. The new regulations are aimed at protecting local producers from excessive foreign competition and to encourage local production, said NAB.