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Imports pick up as trade recovers in fourth quarter, according to Reserve Bank data (News24)
South Africa’s current account balance remained in surplus territory during the fourth quarter of 2020, although it narrowed slightly. The South African Reserve Bank (SARB) on Thursday released data on the balance on the current account of the balance of payments for the fourth quarter.
Trade continued to recover from the harsh impacts of the Covid-19 pandemic and associated lockdowns, but the country’s trade surplus narrowed slightly from R450.9 billion recorded in the third quarter to R425.2 billion – this due to the value of merchandise imports increasing more than that of exports. The value of exports however surged to an “all-time high”. “The higher value of merchandise imports resulted primarily from higher volumes while merchandise exports reflected increases in both volumes and prices,” the report read. The balance of service transactions (travel, transportation and other services), income transactions (dividends, interest return on financial assets, compensation for employees) as well as current transfers, saw its shortfall widen from R156.4 billion to R227.4 billion in the fourth quarter.
UK allays fears Kenya trade pact is against spirit of regional bloc (The East African)
The UK government has sought to allay fears that the recently signed British government’s new bilateral trade agreement with Kenya will undermine the East Africa Community Customs Union protocol. While addressing the media shortly after holding the first mini Kenya-UK trade exhibition at a Nairobi hotel on Friday, the UK High Commissioner to Kenya Jane Marriott said the deal will be extended to the rest of the EAC. “The Economic Partnership Agreement between Kenya and the UK that we negotiated together is fully intended to be an EAC solution. The agreement allows the other EAC partner states to join it,” said Ms Marriot. The decision by Kenya to negotiate unilaterally, despite being a member of the EAC has not gone down well with the rest of the community members.
Rejected law on sugar haunts cane growers (Nation)
Sugarcane farmers are urging the State to protect them from low prices for their crop in the latest bid to turn around their bitter fortunes. This is after a law meant to regulate the sub-sector including producer prices was shot down by a parliament team. The Committee on Delegated Legislation in its report on the Crops (Sugar) (General) Regulations of 2020, said the Agriculture ministry did not undertake public participation contrary to the law.
The rules, which were gazetted in May last year among other things empowered Agriculture CS to form a committee to set prices for sugarcane delivered to millers to protect growers from unfair pricing. And now the Kenya National Federation of Sugarcane Farmers (KNFSF), a lobby for sugarcane growers says they need a safety net from a looming market price destabilisation over planned importation of sugar to cover the country’s supply deficit.
How commodity exporting countries like Ghana have been hit by COVID-19 (The Conversation CA)
Ghana generates over 80% of its export revenues from three primary commodities - gold, crude oil and cocoa exports. It is classified by UNCTAD as commodity dependent, making it vulnerable to sharp drops in commodity prices. Since the COVID-19 pandemic demand for oil dropped precipitously due to a sudden reduction in industrial production, trade, travel, and movement of freight. Prices fell dramatically as a result. Revenues from the newly established oil and gas industry have had a profound impact on Ghana’s macroeconomy, even though oil and gas accounted for just 3.8% of Ghana’s GDP in 2018. Cocoa, a key ingredient in chocolate, a luxury food product, has also seen a decline in demand. Ghana is the second largest cocoa bean supplier globally, with an estimated 1 million Ghanaian smallholder farmers and their communities depending directly on cocoa for their livelihoods. The only commodity that did well of Ghana’s main exports was gold. The country is the largest gold producer in Africa. Demand – and the price – of gold increased.
Ghana attracts biggest FDI in Africa in 2020 (GhanaWeb)
The latest data emanating from the Ghana Investment Promotion Centre reveals that the country attracted US$2,650.97 million worth of foreign direct investment in 2020, which translates to an increase of 139.06 percent over the US$1,108.93 million recorded in 2019 . Although not quite as high as the nearly US$5 billion achieved in 2017, Ghana’s performance with regards to attracting FDI in the middle of the world’s first ever truly global pandemic vividly illustrates the country’s lure; indeed Ghana, along with neighbouring Nigeria which attracted roughly the same amount last year were jointly the second most successful destinations for FDI in the whole of Africa for 2020, behind only Egypt. This defies global trends as COVID-19 continues to take its toll on global trade and investment. A report by the United Nations Conference on Trade and Development estimated the pandemic-induced decline in global FDI at 42 percent. The decline was concentrated in developed countries, where FDI flows fell by 69 per cent to an estimated $229 billion.
Somalia already in Comesa, how long till it joins EAC? (The New Times)
Somalia remains on course to join the East African Community, hopefully in the not too distant future. The Summit of EAC Heads of State direction last month to follow up on the verification process for the country’s admission speaks as much. Somalia’s application to join the Community has remained pending since 2012. A likely hitch explaining the delay is the country’s persistent. Its admission might however even take longer if it continues to be mired in election wrangles, which threaten escalating further violence that bedevils the country. There is little doubt the issues surrounding the missed deadline to hold the presidential elections last month can be overcome. But the collapse of talks yet again early this month to end the impasse show how fraught the situation is. Among conditions a prospective state must meet to join the Community include adherence to good governance and democracy, and wherewithal to strengthen integration.
Liberia to Power its Economy Through Improved Energy Access and Job Creation (World Bank)
Liberia’s efforts to transform the lives of poor people have received a huge boost with financing approved today by the World Bank. Two new operations will increase access to sustainable, reliable and affordable energy, and boost economic recovery by providing employment opportunities and business skills training to vulnerable Liberians. Funded by the International Development Association (IDA), these projects aims at improving Liberia’s economy and helping to build resilience for vulnerable households that are greatly at risk of falling into poverty due to the impact of the COVID-19 pandemic. Poverty remains widespread in Liberia and is now on the rise. An estimated 44% of Liberians were living with less than $2 a day in 2016 and is now projected to reach 52% in 2021. Access to healthcare, education, and basic utilities like energy, are also particularly low compared to the rest of the region.”Given the devastating impact of Covid-19 on the economy and people’s livelihoods, improved energy access will stimulate inclusive economic growth while support to the informal sector will help the most vulnerable Liberians to recover from the loss in incomes,” said Khwima Nthara, World Bank Country Manager in Liberia.
News from Africa and Africa’s international trade relations
Despite the challenging backdrop of a global pandemic and external economic shocks, Africa is expected to recover from its worst recession in half a century and reach 3.4 percent growth in 2021, the African Development Bank said in its 2021 African Economic Outlook report, launched on Friday. The outbreak of the novel coronavirus in December 2019 has taken a massive toll on Africa, hitting tourism-dependent economies, oil-exporting economies and other-resource intensive economies the hardest, as well as deepening inequality. The African Economic Outlook, published annually since 2003, provides headline numbers on Africa’s economic performance and outlook. This year’s theme “From Debt Resolution to Growth: The Road Ahead for Africa”, highlights the impact of Covid-19 and government debt, offering mitigating measures to governments and policy makers.
AFD to Expose 332 million Africans to Formal Economy (THISDAY)
The French Development Agency (AFD) said it is committed to spending $ 6.95 million on financing digital financial inclusion in Africa, which is aimed at reducing existing gender gap in digital financial services. The Development Agency has targeted 332 million more Africans of which 60 per cent are women, get access to the formal economy by year 2030. A statement from the organisation said the Africa Digital Financial Inclusion Facility (ADFI), supported by the French Development Agency (AFD) and hosted by the African Development Bank (AfDB) has committed to financing digital financial inclusion in Africa, with six grants totalling $ 6.95 million. The commitments aim to reduce Africa’s existing gender gap in digital financial services.
AfCFTA forum recommends investment in standardisation infrastructure - Ghanaian Times
Participants in a forum on the African Continental Free Trade Agreement (AfCFTA) have recommended investment in Ghana’s standardisation infrastructure to support businesses to take advantage of the Agreement. They argued that without a stringent standardisation infrastructure, Ghana stood the risk of having its export produce rejected by member countries and becoming a dumping ground for inferior goods from other states. Organised by policy think tank, Imani Ghana, with the support of the German International Corporation (GIZ), the event was on the theme ‘What does the AfCFTA mean for Ghanaian businesses?’
Zimbabwe to host international trade conference on AfCFTA (The Herald)
ZIMBABWE is set to host a high-level virtual international trade indaba next Tuesday to unpack the African Continental Free Trade Area (AfCFTA) Agreement and how local businesses can benefit from it. In line with the Covid-19 mitigation health protocols and limits on physical gatherings, the event will be coordinated virtually with participation from the wider southern African region. The forum is being organised by the International Trade Centre and the Zimbabwean chapter of the Organisation of Women in International Trade.
“There are vast opportunities in African markets, which will boost the country’s exports, riding on the high quality of Zimbabwean products and services,” said Mr Majuru. “We have no doubt that with the right support, Zimbabwean companies will perform well across all markets in the continent.”
Private sector input critical for AfCFTA (Chronicle)
IT is the third month now since the historic African Continental Free Trade Area (AfCFTA) Agreement came into force but the real benefits could take longer to be felt by ordinary citizens and small businesses. Commendable political will has been exhibited by regional governments prior to commencement of official trading and through subsequent ratification of the agreement. However, a range of factors still need to be fine-tuned and properly aligned before Zimbabwe and the entire region could enjoy the fruits of an integrated free trade Africa. Scaling up production and enhancing product competitiveness, investing in quality and standards, technology and submission of tariff offers in line with national interest by relevant authorities, remain key outstanding points.
GYCC holds seminar on AfCFTA - The Point
The Gambia Youth Chamber of Commerce (GYCC) on Thursday concluded a two-day seminar on the Africa Continent Free Trade Agreement (AfCFTA) for 30 cross-border entrepreneurs, traders with export potentials at the NaNA conference hall. The theme for the seminar was ‘enhancing the capacity of youth and women border traders’ on Non-Tariff Barriers (NTBs) and its reporting mechanism to facilitate intra-Africa trade. Ismaila Sambou, GYCC president described the AfCFTA as a significant milestone in the journey to Africa’s free trade integration and development. The agreement, he said, also seeks to benefit youth and women as well as small and medium scale enterprises, which predominate economic activities within the African continent.
Southern African Development Community :: SADC holds Council of Ministers Virtual Meeting
The Council of Ministers of the Southern African Development Community (SADC), on 12 March, 2021, held a virtual meeting to discuss policies, strategies and programmes geared towards consolidating SADC regional integration in fulfilment of Council’s mandate as spelt out in Article 11 of the SADC Treaty.
Honourable Verónica Nataniel Macamo Dlhovo, Minister of Foreign Affairs and Cooperation of the Republic of Mozambique, chaired the meeting in her capacity as the Chairperson of the SADC Council of Ministers and underscored the timeliness and importance of the issues discussed by the SADC Council of Ministers in relation to the impact of the COVID-19 pandemic; disaster risk management and response, industrialisation, promotion of free trade at regional and continental levels and the Annual Corporate Plan and Budget of the SADC Secretariat to deliver the outcomes of the Regional Indicative Strategic Development Plan (RISDP) 2020-2030 and the SADC Vision 2050.
On regional infrastructure development, H.E. Dr Tax highlighted that a total of 63 regional Infrastructure projects, including 17 regional energy projects were developed under the second Priority Action Plan for Programme for Infrastructure Development in Africa (PIDA PAP 2), the African Union continental strategic infrastructure framework, whereby three of the 17 projects were shortlisted, namely Luapula Hydro-power between the Democratic Republic of Congo and Zambia; Baynes Hydro-power between Namibia and Angola; and ZIZABONA transmission interconnector between Botswana, Namibia, Zambia and Zimbabwe. In a bid to accelerate regional industrialisation and infrastructure development, H.E. Dr Tax called for speedy implementation of the SADC Regional Development Fund; enhancement of capacities and capabilities of Small and Medium Enterprises (SMEs) for SADC citizens to realise employment and wealth creation benefits H.E. Dr Tax called for speedy finalisation of the SADC Digital Economy Strategy in order to realise the targeted long-term industrialization objectives, and added that digitisation of regional economies is a necessity, given the advent of 4th Industrial Revolution and the lessons learnt from the COVID-19 pandemic.
The EAC and the never ending cross-border headaches (The Citizen)
The recent decision of Kenya to ban maize imports from Tanzania and Uganda is the latest episode in the never ending headaches and heartaches endured by those whose activities require them to cross political borders in the region and the general health of the EAC integration project. Kenya’s decision was based on what its authorities say are “high levels of mycotoxins which are consistently beyond safety limits”. This is just one of the many episodes of strained cross-border relations between the two countries which have continuously exposed the limits and powerlessness of the EAC in intervening between disputes among partner states. The mounting losses for traders and the agriculture sector is particularly severe in Uganda where there has been another long running issue of its milk being banned to access Kenya’s market for some time now in what some regional analysts have said is a reversal of fortunes between the two countries because at the beginning of the common market project, partner states agreed to impose tariffs on some of Kenya’s products for five years to give time for the rest of the partner states to “catch up”.
ECOWAS to hold 2nd forum for National Trade Facilitation Committees in Abidjan
The ECOWAS Commission will hold the 2nd Forum for National Trade Facilitation Committees from March 16th to 18th, 2021 in Abidjan, Côte d’Ivoire. The 3-days meeting is aimed at strengthening the National Trade Facilitation Committees as a central platform for institutional coordination and implementation of trade facilitation initiatives resulting from regional and international obligations including the WTO Trade Facilitation Agreement (TFA) and the African Continental Free Trade Area (AfCFTA).
FSD Africa signs Partner to develop a green bond market in the Southern Africa Development Community (Capital FM)
FSD Africa (FSDA) has signed a Co-operation Agreement with the Committee of SADC Stock Exchanges (CoSSE) to support the development of a green bond market in the SADC region. The agreement will support the SADC’s 16 member countries to leverage domestic and international capital markets for investment in green projects. The FSD Africa-CoSSE partnership program will also support member countries and both private and public sectors to issue green bonds, creating a favorable ecosystem and improving knowledge and capacity for sustainable investments.
The program will also help SADC countries to develop listing guidelines and regulations for green bonds, build a pipeline of potential green bond issuers, tap the countries’ institutional investment community for investment into green bonds, train stakeholders on climate finance and support the adoption of climate-related financial reporting and disclosure. Recently, South Africa, Namibia, Seychelles, and Mauritius have successfully issued green bonds.
Strengthening food systems must be an integral part of efforts to recover from the COVID-19 pandemic and to build resilience in Africa, said African Development Bank Director General for Southern Africa, Leila Mokaddem. Hunger is a greater threat to many Africans than the COVID-19 crisis, Mokaddem said in a session on sustainable food systems at the Southern Africa Impact Forum on 9 March.
Official Handing Over between the outgoing and incoming Deputy Chairperson of the AUC (Africanews)
The official handing over ceremony for the End of Term Report from the outgoing Deputy Chairperson of the African Union Commission, H.E. Mr. Kwesi Quartey to the incoming Deputy Chairperson, H.E. Dr. Monique Nsanzabaganwa, took place today 12 March 2021, at the headquarters of the African Union Commission (AUC) in Addis Ababa, Ethiopia.
The report highlights key milestones achieved and challenges confronted by the outgoing Commission during its mandate from 2017-2020. The report provides reflections on lessons learnt in the implementation of Agenda 2063 and its Flagship Projects as well as on Institutional Reform. It also proffers recommendations for consideration by the incoming Commission and Member States on the way forward, towards strengthening the Union and delivering on “the Africa We Want”. The End of Term Report also presents how the political and socio-economic implications of the COVID-19 pandemic have been far reaching.
Africa’s global links deepened with BRI (China Daily)
The China-proposed Belt and Road Initiative is deepening African nations’ integration into the global economy and improving people’s livelihoods, a Nairobi-based policy observer said. The initiative, which helps countries develop economy-boosting infrastructure, has taken Africa further into a global community through investment, trade, financial integration, people-to-people exchanges, policy coordination and other forms of connectivity, said Lemmy Nyongesa, a senior associate fellow at the China Africa Center of the Africa Policy Institute in the Kenyan capital.
“The idea that development assistance can take place without interference in Africa’s internal affairs is viewed positively,”Nyongesa said. “The BRI has ensured that Chinese and Africans learn from one another, and has helped the continent acquire technologies necessary for development, and provided the financial support necessary to implement critical infrastructural projects.”
International organisations urge Africa to oppose EU ivory trade ban bid (Chronicle)
“The European Commission’s proposed ban on international trade in ivory will be a disaster for those African communities who rely on wildlife for food and job security” according to a joint statement of the South Africa headquartered African Community Conservationists (ACC) and the Los Angeles-based Ivory Education Institute (IEI) issued last weekend. The statement also notes: “A ban on international trade in ivory, supposedly to protect elephant herds in danger, ignores these facts on the ground:
Global economy
ICC Partners Indigenous IT Firms To Boost Trade Among Women (Leadership Newspaper)
The International Chamber of Commerce (ICC) has partnered indigeneous IT firms to build a digital trade platform to boost trade among women in Africa. The digital trade solutions platform, tagged ‘eTradeHubs portal’ was built in commemoration of the International Women’s Day (IWD) to expand market access and economic opportunities for micro, small and medium enterprises in Africa – especially women owned businesses. The platform was built in conjunction with West Blue Consulting, United Parcel Services (UPS) and Trade Law Centre (tralac).
How regional trade agreements can improve access to medical products during crises | UNCTAD
Imported goods undergo multiple inspections for verification of conformity with the destination country’s standards and regulatory requirements. When standards and regulations in the destination country differ from those in the home country, a situation commonly referred to as “regulatory divergence,” there could be high-cost implications for businesses, with a significant slowdown in trade. The challenge gets aggravated during emergencies such as the COVID-19 pandemic, when there is a need to maintain speedy and seamless flows of essential goods across borders. The pandemic showed how high demand for medical products to support prevention, diagnosis and treatment of the virus, such as medicines, medical supplies and personal protective equipment (PPE) created many challenges with regard to their domestic availability. An UNCTAD study shows how to improve access to these products through regional trade agreements (RTAs).
How COVID-19 triggered the digital and e-commerce turning point (UNCTAD)
As lockdowns became the new normal, businesses and consumers increasingly “went digital”, providing and purchasing more goods and services online, raising e-commerce’s share of global retail trade from 14% in 2019 to about 17% in 2020. These and other findings are showcased in a new report, COVID-19 and E-Commerce: A Global Review, by UNCTAD and eTrade for all partners, reflecting on the powerful global and regional industry transformations recorded throughout 2020.
UNCTAD Acting Secretary-General Isabelle Durant said: “Businesses and consumers that were able to ‘go digital’ have helped mitigate the economic downturn caused by the pandemic.” “But they have also sped up a digital transition that will have lasting impacts on our societies and daily lives – for which not everyone is prepared,” she said, adding: “Developing countries should not only be consumers but also active players and thus producers of the digital economy.”
Members discuss TRIPS waiver, LDC transition period and green tech role for small business (WTO)
Continuing their discussions held since October 2020, WTO members addressed the proposal (IP/C/W/669) submitted by South Africa and India calling for a waiver for all members of certain provisions of the TRIPS Agreement in relation to the “prevention, containment or treatment” of COVID-19. According to proponents, the objective is to avoid barriers to the timely access to affordable medical products, including vaccines and medicines, and to the scaling-up of manufacturing and supply of essential medical products. The waiver would cover obligations in four sections of the TRIPS Agreement — Section 1 on copyright and related rights, Section 4 on industrial designs, Section 5 on patents and Section 7 on the protection of undisclosed information. It would last for a specific number of years, to be agreed by the General Council, and until widespread vaccination is in place globally and the majority of the world’s population is immune. Members would review the waiver annually until termination.
COVAX Is Our Best Chance to Beat COVID | by Oyeronke Oyebanji - Project Syndicate
The first vaccine deliveries by the COVID-19 Vaccine Global Access (COVAX) facility to Ghana, Nigeria, and Ivory Coast brought a glimmer of hope to African countries keen to start immunizing their populations against the disease. But while COVAX is ramping up deliveries, its mission to provide rapid, fair, and equitable access to COVID-19 vaccines to people everywhere is being threatened by rich countries ordering more than they need. This worrying global imbalance in vaccine distribution could hold back Africa’s recovery and prolong the pandemic worldwide.
COVAX is already on track to deliver two billion COVID-19 vaccine doses to countries of all income levels in 2021, and has the world’s most diverse and actively managed vaccine research-and-development portfolio. The goal is to ensure that the most vulnerable populations receive COVID-19 vaccines by the end of this year. And yet developing countries must compete with wealthy countries, some of which have ordered sufficient vaccine supplies to vaccinate their populations several times over. The African Union (AU), by contrast, has ordered vaccines for only 38% of the continent’s population, and even if countries want more, supplies are not immediately available. Some even fear that vaccine manufacturers may be focusing on fulfilling bilateral agreements with wealthy countries, instead of delivering doses to COVAX.
Transparent and open food commodity markets are vital for food security and nutrition (FAO)
Open and transparent food commodity markets and efficient supply chains are paramount to ensure that everyone has access to adequate, safe and nutritious food during the COVID-19 pandemic and beyond, FAO Director-General QU Dongyu said today at the opening of the 74th Session of the FAO’s Committee on Commodity Problems (CCP). “The pandemic has resulted in a dual shock to food and agricultural markets, hitting both: supply and demand,” Qu said. He pointed out that the measures introduced to control the virus caused disruptions to agri-food supply chains affecting the global trading system and, in particular, the least developed countries that depend on trade for their food security.
