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New EU food regulations could see many South African citrus consignments destroyed (Engineering News)
New European Union (EU) regulations, which apply from July 14, require that imports of citrus fruit must undergo specified mandatory cold treatment processes and precooling steps for specific periods, up to 25 days of cold treatment, before importation, says Citrus Growers’ Association of South Africa (CGA) market access and EU matters special envoy Deon Joubert. If enforced this month, these new regulations could result in millions of cartons of citrus currently headed to the EU being destroyed, he adds. In June, the EU Standing Committee on Plant, Animal, Food and Feed published drastic new regulations requiring the cold treatment of oranges heading to the region as a means to address False Coddling Moth (FCM) interceptions from Southern African orange exports. These regulations make extensive changes to the current applicable phytosanitary requirements for citrus coming from South Africa, says Joubert.
A More Competitive Private Sector Could Boost Growth and Jobs in Namibia – World Bank Group Report (IFC)
Namibia can transform its economy, create jobs, reduce inequality, and recover faster from the impact of COVID-19 by deepening private sector reforms and increasing private sector participation in its renewable energy, climate-smart agribusiness, housing, and other key sectors, according to a report published today by IFC and the World Bank.
The report, the Namibia Country Private Sector Diagnostic (CPSD), highlights opportunities for Namibia to attract investment and achieve sustainable private sector-driven growth. The report suggests policy reforms to encourage competition and public private partnerships (PPPs), especially in the energy and water sectors.
Namibian beef enters Ghana’s market (Graphic Online)
The Namibia High Commissioner to Ghana, Selma Ashipala-Musavyi, has given an assurance of deepened trade relations between Ghanaian and Namibian businesses. The increased relations, she explained, would enhance the activities of the businesses and capture new foreign direct investment.
Namibia is renowned for its export of beef and related products, while Ghana is a major meat importer. With the high quality of breed, it is not surprising that Namibia in February, 2020, became the first African country eligible to export meat to the United States of America.
Kenya wants share of maize imports from region raised (Business Daily)
Kenya is seeking to limit Zambia, Tanzania and Uganda from exporting maize to other countries at its expense in fresh efforts to curb the surge in maize flour prices, ease inflation and the squeeze on household budgets. Agriculture Cabinet Secretary Peter Munya says the country has opened talks with the three countries to guarantee Kenya a share of the maize export to plug the shortfall in supplies. Crop failure due to poor weather and a shift in the movement of Uganda maize to South Sudan have seen flour prices rocket to a record high of Sh210 for a two-kilo packet, up from Sh120 at the start of the year.
Rwanda SMEs Set to Access Egyptian Market (COMESA)
Rwanda’s Small and Medium Sized Enterprises (SMEs) engaged in horticulture and agro-processing are set to access the Egyptian market following a successful trade mission facilitated by the COMESA Regional Enterprise Competitiveness and Access to Markets Programme (RECAMP). Fourteen SMEs from the Private Sector Federation accompanied by two officials from the Ministry of Trade and Industry of Rwanda, participated in the four-day trade mission to Egypt 16 – 19 May 2022 and explored trade and investment opportunities.
While in Egypt, the Rwanda delegation participated in trade and investment conference which brought together government officials and 300 businesses under the Egyptian Federation of Industries with discussions focusing on trade and investment opportunities. Most of the businesses were in textile, construction, agro-processing and the manufacturing sector.
China ready with avocado exports audit, says agency (Business Daily)
The Chinese crops agency has concluded the audit of Kenya’s avocado and pack houses, raising hopes of Kenyan farmers and plantations starting exports to the lucrative Asian market soon. The Kenya Plant Health Inspectorate Service (Kephis) general manager Phytosanitary services Isaac Macharia says the audit was completed mid-last month and they are awaiting a response from the authorities in Beijing. Kephis had completed an inspection of the firms that had applied for licences to export the fruits to China in May, however, the process could not begin as the Chinese introduced another requirement, hence the audit. “We are now waiting for the findings after the Chinese finished the process of auditing the farms and the pack house last month,” said Dr Macharia.
Kenya-Uganda urged to fight growing illicit trade (The Star, Kenya)
The Kenyan government has been urged to enhance surveillance and seal-off growing illicit trade between the country and neighbouring Uganda, its biggest trading partner in the region. This follows an explosive documentary that lifts the lid on Kenya’s rampant trade in counterfeit and smuggled goods, with cigarettes topping the list. Stop Crime Kenya (StoCK), which has a secretariat at the Consumers Federation of Kenya (Cofek), has now called for urgent response from lawmakers. Investigation by African Uncensored reveals the deep-rooted involvement of law enforcement officers in the smuggling of illicit goods, ranging from cigarettes to sugar, which robs Kenyans of billions of shillings every year.
StoCK chairman Stephen Mutoro said: “This chilling expose by African Uncensored illustrates how deeply entrenched the menace of illicit trade has become as consumers struggle to cope with the soaring cost of living.”
IFC and CRDB PLC to Boost Access to Finance for Small Businesses in Tanzania and Burundi (IFC)
A new investment between IFC and CRDB PLC announced today will increase access to finance for micro, small and medium-sized enterprises in Tanzania and Burundi, helping strengthen both countries’ recovery from the economic effects of the COVID-19 pandemic.
Under the partnership, IFC is providing a $100 million loan to CRDB Bank Tanzania, half of which will be in local currency, and a $5 million loan to CRDB Bank Burundi to support lending to smaller businesses in both countries, especially to women-owned businesses.
Small businesses are critical to the economies in Tanzania and Burundi. In Tanzania, an estimated 3.2 million micro, small and medium-sized businesses contribute 27 percent of the country’s GDP and employ more than 5 million people. However, roughly 81 percent of these businesses lack access to finance. Businesses in Burundi also struggle to access financing.
Call for incentives as Rwanda and Netherlands shift from aid to trade (The New Times)
This year marks the end of Netherlands’ financial aid to Rwanda as the two countries move to boost trade to support Rwanda realise its ambition of becoming self-reliant. Both countries are ready to enter a new chapter as emphasised by the Netherlands Ministry of Foreign Affairs’ acting head of the department for Sub-Saharan Africa in, Martine Van Hoogstraten, while speaking during the 28th Liberation event at The Hague recently.
Rwanda’s business community is already tapping into the Netherlands market, however, there is hope for special incentives that traders and economists say would encourage exporters to increase their exports.
S.Sudan - Uganda forum will boost trade (Monitor)
The Republic of South Sudan is an independent country with a government though existing in an International system. The Uganda Embassy has no military forces in South Sudan. But we work with the host government and its security services to ensure safety and security for Ugandans in South Sudan. Generally, they are safe despite the isolated incidents. Ugandans are the biggest diaspora community in South Sudan involved in formal and informal business. Ugandans are also the most daring people in the region. They cannot be easily intimidated. You hear them say that dying of poverty in Uganda, they rather die from a bullet in South Sudan. They have promoted the spirit of regional cooperation and regional integration by promoting trade. We shall protect them and their businesses. After that bitter war, the government is doing its best to restore systems in all sectors. Most systems broke down because there was a total breakdown of law and order.
Uganda’s current exports to South Sudan are between $350m (Shs1.3 trillion) and $400m (Shs1.5 trillon). Before the war in 2013, it was approaching $1b (Shs3.7trillion). South Sudan exports to Uganda are valued at $86b (about Shs323b).One way of securing Uganda’s interest is through government to government engagements and private sector to private sector both in Uganda and South Sudan. We believe in that joint strategy of working together, we shall secure our business interests like we have done on the launch of a joint business forum. In Mid July during the forum, we shall have a symposium and exhibition to showcase what we have and what the South Sudanese have and use the opportunity to discuss challenges and opportunities.
Congo plans border post expansion as mining trucks endure up to 60 km queues (Engineering News)
Democratic Republic of Congo plans to expand its main border post with Zambia, a source close to its government said, to ease truck queues of up to 60 km that copper miners have faced this year due to increased production and inadequate infrastructure. The backlog of trucks at Kasumbalesa, a border town and the main exit point for metals exports from Congo, is an example of supply chain disruption that will make it harder to meet future demand for copper, essential for electric vehicles.
AfDB to boost non-oil export with agro testing centre in Nigeria (The Nation Newspaper)
A world-class agro testing centre is to be established in Sagamu, Ogun State by the African Development Bank (AfDB), it was learnt yesterday. The centre, when built, will stimulate the standardisation of farm produce export from Africa, sources privy to the development confirmed. They said the Sagamu site is the only facility approved in Africa. The site was conceived as part of ancillary infrastructure to drive viability for the about-to-be-completed Ogun International Agro Cargo Airport in Ilisan Remo, Ogun State.
Ogun State Commissioner for Works & Infrastructure, Ade Akinsanya, who confirmed the development, said the project is put together as part of international collaboration for driving air transport infrastructure in Africa. Akinsanya said the facility would address challenges associated with processing agro-allied produce for export.
IMF: the bitter pill needed to heal the economy (The Business & Financial Times)
The decision by Ghana’s economic managers to request assistance from the International Monetary Fund (IMF) started the 2022 mid-year off with a jolt. In a letter signed by the Information Minister, the President authorized the Finance Minister to commence formal engagements with the IMF, inviting the Fund to support an economic programme put together by Ghana. In a tweet, the IMF’s Country Director stated that the Fund was ready to help Ghana restore macroeconomic stability, safeguard debt sustainability, and promote inclusive and sustainable growth.
Many Ghanaians were shocked by this development because the current economic managers had repeatedly assured them that they would not request an IMF bailout despite the country’s growing economic instability and prevailing hardships.
With our debt to GDP ratio exceeding 78%, current inflation rate reaching almost 30%, our widening budget deficit, policy rate of 19%, making cost of borrowings high, it appears that Ghana has no alternative than to run to the IMF to seek refuge.
MSMEs, Backbone Of Nigeria’s Economy – UNIDO (Economic Confidential)
The United Nations Industrial Development Organisation (UNIDO) has said that Micro Small and Medium Enterprises account for 96 per cent of all business activities in Nigeria. Mr Jean Bakole, UNIDO Regional Director and Representative to ECOWAS said this at the dissemination event on ‘Strengthening the Capacities of MSMEs to Produce High-quality Personal Protective Equipment (PPEs) and Healthcare-related Products’ which held in Abuja yesterday. According to him, the MSME sector currently contributes 50 per cent of the GDP and has provided over 48 percent of all employment opportunities in the country.
Local products without certification to lose out on AfCFTA – GSA (The Business & Financial Times)
Producers of locally manufactured products risk being outperformed with the start of the African Continental Free Trade Area (AfCFTA) if they fail to ensure their products meet the standard certification requirements, Principal Scientist at the Product Certification Department of the Ghana Standards Authority (GSA), Emmanuel Adjei, has said.
This is against the background that about 50 percent of local manufacturers delay in complying with the timeline for renewal of certification licenses issued for products, by GSA, while some do not renew at all. However, every product ready for export need such certification.
GEPA to boost the capacity of exporters (News Ghana)
The Ghana Export Promotion Authority says it is committed to enhancing the capacity of Ghanaian exporters in efforts to boost the country’s non-traditional exports in line with the National Export Development Strategy. The strategy projects a revenue target of $25.3 billion by the year 2029 with a focus on three strategic pillars aimed at breaking the cycle of being an economy providing mainly raw materials and minimal volumes of manufactured goods and services.
“For exports to thrive, excel and succeed, it is important to ensure that they are well resourced in capacity to deliver as expected. In the long term, it is expected that Ghana’s educational system will be re-engineered to reflect the human resource needs of export-oriented industrialisation,” said Chief Executive Officer (CEO) of GEPA, Dr Afua Asabea Asare.
Dangote Cement Commits To Product Availability (Leadership)
Sub-Saharan Africa is home to over 1.1 billion people. The United Nations estimates that by 2050, the region will have a population of more than 2.1 billion. Two-thirds of this growth will be absorbed by urban areas, which will be home to an additional 950 million people. The World Bank describes Africa as the fastest growing and youngest region globally. As the population continues to expand, Africa urgently needs infrastructure, housing and commercial buildings. This creates a tremendous opportunity for Dangote Cement.
Dangote Cement Plc said: “as a producer of basic building material in Africa, we see a strong demand stemming from the housing needs in all our markets. Urbanisation will necessitate the demand for more schools, supermarkets, recreational centres, and more corporate organisations.
“Cement remains the most used material for building any type of house, either personal or commercial. As a result, there is no doubt that cement will continue to be a sought-after commodity across all our markets. Dangote Cement is prepared to ensure cement is available and the market is adequately satisfied through expansion and our “export-to-import” strategy. We will continue to focus on quality and delivery of superior products to our markets.”
African Development Bank Group chief in Zimbabwe to get debt clearance plan underway (AfDB)
African Development Bank Group President Dr. Akinwumi Adesina arrived in Zimbabwe today at the start of a two-day official visit to the country. Adesina accepted a request in February by the Zimbabwean government to serve as the country’s arrears clearance and debt resolution champion among international financial institutions and bilateral creditors.
The Bank Group President will meet with President Emmerson Dambudzo Mnangagwa and other government officials, including Finance and Economic Development Minister Mthuli Ncube, who is also Zimbabwe’s Governor on the Bank Group’s Board of Governors. Discussions will focus on potential areas of technical assistance that the African Development Bank will provide to the Zimbabwean government. President Mnangagwa, elected in 2018, has introduced several economic reforms to stimulate economic recovery and stability.
Zimbabwe is the only regional member country of the African Development Bank currently under sanctions from the Bank and other multilateral financial institutions because of debt arrears amounting to over $2.6 billion.
The African Development Bank has run the $145.8 million Zimbabwe Multi-Donor Trust Fund (‘the ZimFund’) from 2010 through June this year. The ZimFund has been an important source of financial support for the country’s energy, water and sanitation infrastructure.
Mali’s cotton trucks race to the border after sanctions ease (Reuters)
After months stuck at home unable to provide for his family, Malian truck driver Ibrahima Sangare is delighted to be back on the road after the lifting of regional economic sanctions let him resume long-distance drives to ports in Ivory Coast.
Sangare was waiting with a dozen fellow cotton truckers to be processed by customs at a dusty border crossing last Wednesday - among the first to cross into Ivory Coast there since the Economic Community of West African States (ECOWAS) announced on July 3 that borders with landlocked Mali could reopen.
The border closures were among the painful sanctions imposed by the bloc in January after Mali’s military-led interim government said it planned to extend its rule and delay democratic elections after a coup in 2020.
Ethiopia’s Annual Coffee Export Revenue Hits Record $1.4bln (Ethiopian Monitor)
Ethiopia has obtained a record-hit $1.4 billion dollars from Coffee export in the just concluded 2021/22 fiscal year, according to the Ministry of Agriculture. The revenue, the highest the country obtained in its history, has also surpassed the target for the budget year officials set at a little over a billion dollars. The previous recording of coffee export earnings was registered last year when the country secured $906 Million after exporting 248, 000 tonnes of coffee. “In the last 12 months, Ethiopia exported 300,000 tons of coffee and generated 1.4 billion USD,” revealed Agriculture Minister Oumer Hussien, on his Twitter on Sunday.
Coffee represents a vital part of Ethiopia’s economy, supporting the livelihoods of more than a quarter of the population and generating up to 30% of the country’s foreign exchange earnings.
Mozambique Economic Update: Getting Agricultural Support Right (World Bank)
Despite multiple consecutive shocks, including the COVID-19 pandemic that caused the first recession in nearly three decades, the Mozambican economy is recovering, but with considerable uncertainty. The country’s gross domestic product (GDP) growth reached 2.2% in 2021, as favorable weather conditions supported agricultural growth, and the gradual lifting of COVID-19 containment measures boosted private consumption, fueling the recovery of services.
Despite the gradual rise in domestic and global demand, growth in the extractive and manufacturing sectors remained moderate. Several constraints have dampened global economic performance, including the suspension of multibillion -dollar Liquefied Natural Gas (LNG) projects due to the escalation of the insurgency in the north of the country, tighter monetary policy, and new waves of COVID-19 infections.
Morocco — a top fertiliser producer — could hold a key to the world’s food supply (Down to Earth Magazine)
Morocco plans to produce an additional 8.2 million tonnes of phosphorus fertiliser by 2026
Morocco has a large fertiliser industry with huge production capacity and international reach. It is one of the world’s top four fertiliser exporters following Russia, China and Canada. Fertilisers tend to divide into three main categories; nitrogen fertilisers, phosphorus fertilisers, potassium fertilisers. In 2020 the fertiliser market size was about $190 billion. Morocco has distinct advantage in the production of phosphorus fertilisers. It possesses over 70 per cent of the world’s phosphate rock reserves, from which the phosphorus used in fertilisers is derived. And this makes Morocco a gatekeeper of global food supply chains because all food crops require the element phosphorus to grow. Indeed, so does all plant life. Unlike other finite resources, such as fossil fuels, there is no alternative to phosphorus.
African trade and integration news
Making the most of the African Continental Free Trade Area (World Bank)
The African Continental Free Trade Area (AfCFTA) could deliver far greater benefits in terms of jobs, growth, and poverty reduction than previously estimated – making it a potential game changer for Africa’s economic development if its ambitious goals are fully realized. The deal creates a continent-wide market embracing 55 countries with 1.3 billion people and a combined GDP of US$3.4 trillion. Its first phase, which took effect in January 2021, would gradually eliminate tariffs on 90 percent of goods and reduce barriers to trade in services. That could raise income by 7 percent, or $450 billion, by 2035, reducing the number of people living in extreme poverty by 40 million, to 277 million, according to a World Bank report published in 2020.
A new World Bank study, released in collaboration with the AfCFTA Secretariat, accounts for the additional benefits that would accrue from an increase in foreign direct investment (FDI) – both from within and outside of Africa – that the deal is expected to generate.
The report, Making the Most of the African Continental Free Trade Area: Leveraging Trade and Foreign Direct Investment to Boost Growth and Poverty Reduction, is intended to be a guide for policy makers charged with carrying out the agreement. To maximize its benefits, the first step will be to conclude planned negotiations on investment, e-commerce, and intellectual property. The report also recommends building grass-roots support for and understanding of the agreement, simplifying red tape to encourage investment, and pairing the deal with a “complementary agenda” that includes training and advice for national trade ministries charged with supervising compliance and administration.
Southern African Customs Union is in need of reform (BusinessLIVE)
The standard deviation of aggregate Southern African Customs Union (Sacu) receipts for non-SA member BLNS states (Botswana, Lesotho, Namibia and Eswatini), expressed as a share of mean distributions between 2020 and 2012, was 16%. For context, the excess returns to US equities have a historical variation of 15%.That degree of variability might be acceptable for hedge fund returns. It is not acceptable for the precarious public finances of the small countries SA partners with in the customs union, for which Sacu receipts can constitute as much 50% of annual state revenue. This volatility is compounded by the fact that SA makes Sacu distributions to BLNS states based on deeply flawed state forecasts that often require material revisions in subsequent years, accentuating for the unpredictability of BLNS public finances.
The Democratic Republic of the Congo finally becomes the 7th EAC Partner State (EAC)
The Democratic Republic of the Congo (DRC) has finally become a member of the East African Community after depositing the instrument of ratification with the EAC Secretary General at the bloc’s headquarters in Arusha, Tanzania. Handing over the instrument of ratification to the Secretary General, DRC’s Vice Prime Minister and Minister of Foreign Affairs, Hon. Christophe Lutundula Apala Pen’ Apala, said that the entry of his country into the EAC was an economic, cultural, geographical and historical obligation.
The Vice Prime Minister described the EAC as the most integrated bloc on the entire African continent, adding that the Summit of Heads of State also had the political will to achieve the objectives as outlined in the Treaty. Hon. Apala said that the entry of his country into the EAC had strengthened the bloc’s economic, political, socio-cultural, financial and military muscle.
EAC member states split over African trade pact regulations (Fibre2Fashion)
Member states of the East African Community (EAC) are reportedly lacking a consensus over preferential Rules of Origin and tariffs on textile and apparel and goods produced in special economic zones (SEZs) among other products. Rising protectionism could expose the region to unfair trade practices under the African trade pact AfCFTA.
The requirement for local content is 40 per cent now, and is considered too steep for sustainable production, according to a report in a Kenyan newspaper.
Why EAC Competition Bill was amended (The New Times)
The East African Legislative Assembly recently passed an amended EAC Competition Bill, 2021, after introducing a modification to limit circumstances under which a merger that leads to substantial lessening of competition in the market may be approved. The draft legislation was initially a revision of the 2006 Act meant to streamline the provisions on mergers with the international practice on competition; to confer legal personality on the East African Community Competition Authority (EACCA); to empower the latter to impose and collect financial penalties; and provide for any other related matters.
“The amendment [in the Bill] was done to provide for regulations to specify and limit the circumstances under which the Authority may approve a merger that leads to the substantial lessening of competition in the relevant market,” MP Christopher Nduwayo, Chairperson of the House’s standing committee on Communication, Trade and Investment (CTI) which introduced the changes, told Doing Business.
SADC developing measures to ease trade facilitation in the Region (SADC)
The Southern African Development Community (SADC) is developing and implementing customs instruments to tackle challenges that contribute to higher transaction costs in order to ease trade among countries in the region. The customs instruments include logistics, simplification and harmonisation of documentation associated with cross-border trade, improving transparency in operations of regulatory agencies, harmonisation of standards and technical regulations, harmonisation of Sanitary and Phytosanitary measures (SPS), monitoring and resolution of Non Tarif Barriers (NTBs), as well as improving the business environment in which transactions take place.
SADC is also conducting Time Release Studies (TRSs) along its corridors to assess bottlenecks and efficiency in the clearance of goods crossing the border posts. TRS is a method endorsed by the World Customs Organisation (WCO) for assessing a country’s trade facilitation performance. It does so by measuring the average time from arrival of goods at the border until permission is given for the goods to enter home consumption.
SADC registers progress on TIFI programmes (SADC)
The Southern African Development Community (SADC) is making steady progress on its programmes to facilitate industrial development, finance and investment and trade in goods and service among Member States. This emerged out of the Trade, Industry, Finance and Investment (TIFI) Thematic Group hybrid meeting held on 16 June 2022 to discuss progress on the implementation of its programmes to deepen regional economic integration.
Among the deliverables attained are the development of the SADC Simplified Trade Regime (STR) for small cross border traders. The STR framework aims to reduce barriers to trade by simplifying the customs procedures and processes. Its implementation will support small traders by lowering transaction costs associated with formal trade.
Another milestone achieved is the operationalisation of the SADC e-Certificate of Origin (e-CoO) framework. The pilot phase of the programme is being implemented in Botswana, Kingdom of Eswatini, Malawi, Mauritius, Mozambique, Namibia, Lesotho, South Africa, United Republic of Tanzania and Zambia. The e-CoO framework aims at enabling traders to apply for the certificate of origin electronically. This will reduce time for its issuance and transmission to the importing country. The regional e-CoO will also enhance integrity of customs and trade operations as a result of less interference with human beings.
Guidelines for implementing Commodity Based Trade during foot and mouth disease outbreaks (SADC)
In most of Southern Africa the vast majority of cattle are located in areas not free of foot and mouth disease (FMD), leaving owners of these cattle with limited access to regional and international beef markets. This situation constrains investment in cattle production, thereby limiting rural development and helping to entrench rural poverty. For decades, this situation has simply been accepted because the types of FMD viruses prevalent in the region are maintained by wildlife and are therefore essentially impossible to eliminate. Moreover, until recently, international trade rules and conventions were founded on the need for the locality of beef production to be free of FMD. Fortunately, this situation is changing and options include, among others, management of risk of FMD along individual value chains to enable assurance that the final products are free of FMD virus and therefore can be traded with negligible risk of transmission of infection, irrespective of the FMD status of the locality of production (i.e. commodity-based trade (CBT).
The Guidelines on Commodity-Based Trade Approaches for Managing Foot and Mouth Disease Risk in Beef in the SADC Region aims to inform beef producing enterprises of the nature of developments and how a value chain approach could be exploited to broaden market access.
Coming Soon: COMESA Financial Stability Report (COMESA)
The COMESA Monetary Institute (CMI) has commenced preparatory work towards the production of a Financial Stability Report (FSR) for the COMESA region. The first working group of experts meeting took place in Nairobi, Kenya on 22 – 24 June 2022 with participants from the Central Banks of DR Congo, Egypt, Mauritius, Sudan and Zambia. The FSR will contain reviews of the developments in the financial sector in the COMESA region to identify key risks, vulnerabilities and challenges facing the financial systems of member countries and provide policy recommendations to mitigate such risks and strengthen stability.
ECOWAS Wants SADC to Invest in Private Sector in Energy Conservation (Front Page Africa)
Earlier on Monday, Bomi County Senator Edwin Melvin Snowe, Representing Dr. Sidie Mohamed Tunis, Speaker of the ECOWAS Parliament addressed the official opening of the Southern African Development Community (SADC) Parliamentary Forum 51st Plenary Assembly stressing the need for private sector energy conservation. Considering the theme of the forum, “Towards Energy Efficiency, Sustainability, and Self Sufficiency in the SADC Region”, he encouraged the SADC Parliament to place the greater issues of energy efficiency, building capability in energy management, encouraging research and development in energy technologies and soliciting the public interest on the role of the private sector in energy conservation at the core of their deliberations. In his remarks, he expressed the ECOWAS Parliament’s preparedness to share experiences on public-private partnership in the energy sector, as well as promote ideas that would address this very important issue across the regions.
Africa to redouble efforts to deepen African Economic Integration; Africa Integration Day 2022 (African Union)
The operationalization of the African Continental Free Trade Area (AfCFTA), one of the flagship projects of Agenda 2063, represents an opportunity in Africa’s journey towards the operationalization of an integrated market, that will eventually culminate in the formation of an African Economic Community
The African Union Commission’s Department of Economic Development, Trade, Tourism, Industry, and Minerals and the Member States, Regional Economic Communities (RECs), Pan-African Private Sector, Civil Society, Academia, Research Institutions, Women and Youths celebrated the 3rd edition of the Africa Integration Day under the theme “Deepening African Economic Integration in the Era of De-Globalization” on 7th July 2022, Lusaka, Zambia.
The overall objective of the commemoration of the 2022 African Integration Day and Forum was for African governments, private sector, civil society, RECs and AU partners to deliberate on how to utilize regional and continental integration processes and initiatives to foster accelerated Africa’s economic integration in its recovery in the post-COVID era.
H.E Amb. Albert Muchanga, Commissioner for Economic Development, Trade, Tourism, Industry and Minerals welcoming participants to the celebration of the third edition of the Africa Integration day, mentioned few of several factors that confront the continent. “The future of Africa in this new global environment lies in deeper economic integration, continent-wide. We are stronger working together; and, more resilient. We are weaker; and more vulnerable working as individual countries,” he said. Amb. Muchanga encouraged African citizens; cross-border traders; schools; colleges; universities; organized labour; and, the media, among several stakeholders to be actively involved in the African economic integration agenda.
Natural Resources Drive Africa’s Trade, and Ports Will Play a Key Role (The Maritime Executive)
There is a general consensus that Africa is the region most endowed with natural resources. Its arable land accounts for almost a quarter of the world’s arable land, giving the continent unrivalled agricultural potential. This abundant land also has the particularity of containing natural resources that are strategic for world industry and for the continent’s economic development: 85% of the world’s platinum, 60% of manganese, 50% of cobalt, etc.
For the past two decades, the region has experienced sustained growth in the exploitation of its natural resources, driven by the increased interest of foreign investors and the willingness of African governments to identify new sources of funding for their development policies. The significant increase in commodity prices, combined with the exponential demand from emerging powers such as China, therefore provide an encouraging context for the emergence of a sustainable African mining industry. New ports infrastructure being built across West Africa, from Gabon to Ghana to Cote d’Ivoire, are accommodating this demand.
However, the sector is still facing numerous challenges to meet expectations. The intensification of mining has led to a redefinition of geographical spaces on the continent.
Keynote Speech by Axel van Trotsenburg, World Bank Managing Director, Operations (World Bank)
The final IDA20 replenishment will provide $93 billion over the next three years to support 74 countries around the world, of which 39 are in Sub-Saharan Africa. On behalf of the World Bank, I wish to convey my deep appreciation to His Excellency Macky Sall, President of the Republic of Senegal and Chairman of the African Union, for his kind invitation and generous hospitality in hosting today’s IDA for Africa Summit.
Why One African Country Opted for Full Disclosure on Debt (World Bank)
For the past three years, the World Bank has been monitoring how transparent IDA countries are in their debt reporting practices through the Debt Reporting Heat Map. Among the 74 IDA countries, one stands out by meeting the “full disclosure” rating for every single one of the nine categories on the debt transparency Heat Map: Burkina Faso. This performance is even more remarkable considering that the country has been classified as fragile and conflict-affected (since late 2020) and has been fiscally squeezed by both the COVID-19 crisis and internal population displacement (almost 2 million since 2020).
Africa’s illicit financial flows now $80bn – CDD (Daily Trust)
The Director of the Centre for Democracy and Development (CDD), Idayat Hassan, has said that the Illicit Financial Flows (IFFs) in Africa has risen to $80 billion. Her comment was part of activities to commemorate the African Union Anti-Corruption Day with the theme: “Strategies and mechanisms for the transparent management of COVID-19 funds”. Hassan, in a statement on Monday, said the African continent suffered an annual loss of over $50bn as of 2015 through IFFs which had risen due to non-practical action on it. She said, “It is pertinent to note that through corruption and mismanagement, some of the COVID-19 funds in Africa may have become a source of illicit financial flows to countries in the North.”
“Corruption and illicit financial flows are twin evils which continue to constrain Africa’s progress and development. Regrettably, the utilisation of COVID-19 funds has also become a major source of Africa’s corruption conundrum.”
Africa Economic Summit Group unveils the Future of Africa Project website to develop the ‘Africa by Africans for All’ idea (The New Dawn Liberia)
The Africa Economic Summit Group has launched the Future of Africa Project website to enable Africans from around the world to jointly design the Africa they want to see. This project initiated by the Africa Economic Summit Group, a United Kingdom based international organisation committed to the growth and competitiveness of the African continent is a two-year long journey to harvest the finest of thoughts by Africans on the future they want for their continent.
According to Dr Brian Reuben, the CEO of Africa Economic Summit Group, ‘the problems in Africa can only be solved by Africans. There is no single African who does not want Africa to succeed. And when we think about it, Africa is blessed not just by abundant natural resources but also by human resources. All around the world Africans are doing mighty things in medicine, technology, sports and just about anything you can think of. This project is our chance to come together and design the future of our Africa as one people.’
The Future of Africa Project is designed to get Africans together to generate the ideas and frameworks required to build the new Africa with opportunity for all. The idea to to develop all aspects of the African economy and deliver a high standard of living for the people.
This report which will be presented to the African Union on the 25th of May 2024 will serve as a guide to individuals and organisations interested in doing business in Africa. The report will also provide policy direction to African Governments on the pathway towards a strong, resilient and competitive Africa. These proposals will also retain the details of the people who participated in the two year long project, including how to contact them. This therefore will offer all the people who participate on the project a chance to work directly with the Africa Economic Summit Group, Governments of African nations, investors interested in Africa, other international and multilateral organisations etc.
Increase investment in instruments for financial crisis management – President Akufo-Addo urges (BusinessGhana)
Addressing the Boma of Africa Festival on the ongoing global economic turmoil last Sunday, he noted that the current international instruments for resolving those crises lacked input from smaller economies. Speaking in his capacity as the African Union (AU) Champion of Financial Institutions, the President expressed concern about how smaller economies, many of them in Africa, often suffered the harshest consequences during global downturns though they contributed the least to the causes of those upheavals.
The Boma of Africa festival is a series of insightful convenings to drive the African integration agenda through a strategic high-level engagement between the continental governance institutions, represented by the AU Commission, and the African private sector, represented by the AU’s strategic partner AfroChampions.
The AU Commission, in partnership with AfroChampions Initiative - a public-private partnership designed to galvanise African resources and institutions to support the emergence and success of the African private sector - hosted the Boma of Africa on the theme: “Taking stock of the Africa Century”. The theme sought to explore the global shifts and continental developments shaping Africa’s quest to become a powerful global force by 2063.
The African Pharmaceutical Technology Foundation: NMRAs must upgrade to match impending boom in Africa’s pharma sector (Businessday)
The last few years since the onset of the COVID-19 pandemic have revealed the vulnerability of Africa’s pharmaceutical sector and the critical need for Africa to strengthen its local manufacturing capacity. With the growing burden of diseases on the continent, Africa must achieve self-reliance to cater for the increasing healthcare demands of its population. Unfortunately, pharmaceutical manufacturing companies in Africa face immense challenges such as poor availability of sustainable financing (including market access), inadequate access to know-how, unreliable supply chains, and inexperienced regulatory authorities. The pharmaceutical industry in Africa is also severely constrained by intellectual property rights protection and patents on technologies, know-how, manufacturing processes, and trade secrets. This limits the negotiation capacity of African pharmaceutical companies to engage within the global pharmaceutical industry and take part in complex global pharmaceutical innovations.
In view of these challenges, the African Development Bank has approved the establishment of a ground-breaking institution, the African Pharmaceutical Technology Foundation (APTF) to strengthen the local capacity for manufacturing medicines, vaccines, and other pharmaceutical products. However, Africa’s capacity to leverage on the opportunities the APTF provides will depend strongly on the committed collaboration of African governments and the capacity of their National Medicines Regulatory Authorities (NMRAs). This is because NMRAs play a leading role in guaranteeing availability of quality-assured medicinal products in their respective countries, ensuring that medicines, including vaccines, medical devices, and other pharmaceutical products meet applicable standards of safety, quality and efficacy.
Can sustainable development help Africa with rising food insecurity? (The Africa Report)
Russia’s invasion of Ukraine has left many African countries no option but to find alternative sources of grain imports. Despite a dip in prices in recent weeks, Ukraine has warned that Russia has been stealing and then selling grain on the black market, mainly to Syria via countries like Turkey. This has left many countries across the continent to fend for themselves against rising inflation that has driven many to famine and farmers strained to produce enough grain. African governments are now focusing on improving agricultural conditions and investing in greater self-sustainability.
We can take lessons from war in Ukraine concerning Africa’s food need (Monitor)
Some of the countries which are reported to face acute food crises due to the war in Ukraine are African. They include Egypt, Sudan, Libya and Somalia. A year ago, it was reported that Africa imported about 54.8 metric tons of wheat. African countries are some of the world’s leading wheat importers in the world. Media reports indicate that Ukraine and Russia export about a third of the world’s wheat and barley. It is therefore no wonder that the war in Ukraine spells immense distress for Africa, from a food supply perspective. Overall, the continent is a net food importer. Previous estimates have put the food import need for Africa at $110billion, by 2025, a mere three years from now. The rest of the world is thus strategizing to benefit from utilizing a growing and lucrative food demand on the continent. This is unfortunate for a number of reasons.
Insight 07: Implications of the Ukraine invasion for Africa (IC Intelligence)
‘There’s a massive knock-on from the Ukraine crisis in Africa’ – Dr Alex Vines, Director, Africa Programme Chatham House:
Russia is increasingly economically isolated through sanctions. How will this impact Africa? The commodity producers will certainly in the short term do better. Oil is over $100 a barrel and that’s very good news for a country like Angola in the short term, and gas becomes much more strategically important with Europe looking to diversify away from Russian gas. We’re seeing plans for a high-level Italian delegation to go to Mozambique. ENI is regarding its gas assets in Mozambique as incredibly strategic. Before the invasion of Ukraine they might have been considering selling them because they were exposed cost-wise with the investments on gas in Egypt. This is a game-changer in the way that Europe in particular is looking at African energy to help in the energy transition. The same will be true for certain minerals that will help in the energy transition to net zero. This is where graphite and cobalt will become much more important – countries like DRC, and northern Mozambique will become more strategic. Suddenly a number of African countries will be more important to Europe. Likewise, although we’re seeing a partial European retreat in the Sahel at the moment, in the longer term the Sahel will remain important and West Africa in particular, because it’s basically the European near abroad. If you look at senior policymakers in Europe, they were saying a lesson from Covid is that extended supply chains to Europe were unsustainable, including farm production. So if you have more enabling business environments in West Africa, they’ll see inward FDI building up industrial capacity and capability because it’s basically Europe’s extended neighbourhood.
Staple Food Prices in Sub Saharan Africa: An Empirical Assessment (IMF)
This paper analyzes the domestic and external drivers of local staple food prices in Sub-Saharan Africa. Using data on domestic market prices of the five most consumed staple foods from 15 countries, this paper finds that external factors drive food price inflation, but domestic factors can mitigate these vulnerabilities. On the external side, our estimations show that Sub-Saharan African countries are highly vulnerable to global food prices, with the pass-through from global to local food prices estimated close to unity for highly imported staples. On the domestic side, staple food price inflation is lower in countries with greater local production and among products with lower consumption shares. Additionally, adverse shocks such as natural disasters and wars bring 1.8 and 4 percent staple food price surges respectively beyond generalized price increases. Economic policy can lower food price inflation, as the strength of monetary policy and fiscal frameworks, the overall economic environment, and transport constraints in geographically challenged areas account for substantial cross-country differences in staple food prices.
Renewable energy may boost Africa’s construction sector in tough 2022 – report (Engineering News)
Turner & Townsend has released its International Construction Market Survey (ICMS) for 2022. The company is an independent professional services entity operating in the global real estate, infrastructure and natural resources sectors. The ICMS is the company’s largest and most in-depth report, drawing from data and experience from 90 global markets. It explores the challenges and opportunities presented by the economic market conditions that affect the construction industry.
Time for a new US engagement with Africa- Tony Elumelu (Nairametrics)
In February, at the sixth European Union-African Union Summit, leaders of the 27 EU nations welcomed 40 African heads of state to Brussels and committed €150 billion in investments targeting health, education, digital innovation, transportation infrastructure, and green energy.
Global economy news
Global trade hits record $7.7 trillion in first quarter of 2022 (UNCTAD)
The value of global trade rose to a record $7.7 trillion in Q1 2022, an increase of about $1 trillion relative to Q1 2021, according to UNCTAD’s Global Trade Update published on 7 July. But the positive trend for international trade may soon come to an end amid tightening policies and geopolitical frictions.
The growth, which represents a rise of about $250 million relative to Q4 2021, is fuelled by rising commodity prices, as trade volumes have increased to a much lower extent. Though expected to remain positive, trade growth has continued to slow during Q2 2022.
According to the report, trade growth rates in Q1 2022 remained strong across all geographic regions, although somewhat lower in the East Asia and Pacific regions. Export growth has been generally stronger in commodity-exporting regions, as commodity prices have increased.
The role of WTO Aid for Trade in actualizing an inclusive circular economy (Trade for Development News)
Unsustainable use of the earth’s resources is a primary driver of the triple threat of pollution, biodiversity loss and climate change. The current linear model of production and consumption is also a significant driver of social injustice, with the majority of resource consumption and wealth accumulation occurring in the Global North, but the highest levels of environmental impact and threats to human health being experienced in the Global South. There is an urgent need to move away from an extractive, polluting, and unjust production–consumption system to one that decouples social and environmental prosperity from unsustainable resource use.
The circular economy offers a life cycle approach to tackling this problem across value chains. Rather than the current linear flow of materials through the global economy, in which they are extracted, processed, manufactured, used, and finally disposed of as waste, a circular economy uses a systemic approach to decouple economic prosperity from material use by maintaining a circular flow of resources through regenerating, retaining, or adding to their value, while contributing to sustainable development. No country can achieve a circular economy on its own. Rather, all are dependent on international trade to secure affordable and reliable access to a wide range of different materials, goods and services.
Circular trade flows have grown strongly in value over the past two decades. For example, the value of trade in second-hand goods, secondary raw materials, and waste for recovery rose by more than 230 per cent (from $94 billion to $313 billion) between 2000 and 2019, with the global export value of trade in goods rising by around 195 per cent over the same period.
Although circular trade is a key enabler of a global circular economy, a range of regulatory and technical challenges are inhibiting its advancement.
OECD Economic Outlook reveals heavy global price of Russia’s war against Ukraine (OECD)
Russia’s invasion of Ukraine immediately slowed the recovery from the COVID-19 pandemic and set the global economy on a course of lower growth and rising inflation. The OECD’s latest Economic Outlook projects global growth to decelerate sharply to around 3% this year and 2.8% in 2023, well below the recovery projected in the previous Economic Outlook last December.
The economic and social impact of the war is strongest in Europe, with many of the countries hardest hit in Europe, given exposure through energy imports and refugee flows.
“Countries worldwide are being hit by higher commodity prices, which add to inflationary pressures and curb real incomes and spending, dampening the recovery,” OECD Secretary-General Mathias Cormann said during the presentation of the Outlook. “This slowdown is directly attributable to Russia’s unprovoked and unjustifiable war of aggression, which is causing lower real incomes, lower growth and fewer job opportunities worldwide.”
G20 economies show restraint in use of trade restrictions amidst ongoing instability (WTO)
“This report arrives at a time when the world economy faces several challenges. As we continue to fight against the COVID-19 pandemic, the conflict in Ukraine has created a humanitarian crisis of immense proportions with serious implications for millions of people, especially with respect to their food security. It is in this context of economic and trade uncertainty that G20 economies must show restraint in implementing trade-restrictive measures and exercise leadership in supporting open and mutually beneficial trade,” DG Okonjo-Iweala said.
The G20 Trade Monitoring Report makes reference to the recent WTO 12th Ministerial Conference (MC12) on 12-17 June, which secured unprecedented multilaterally negotiated outcomes.
G20: SA calls for reforms at UN to give emerging economies a stronger voice (IOL)
The South African government has called for wide-ranging reforms to the United Nations (UN) in a bid to enable emerging economies (EM) to have an effective voice in the global community. Minister of International Relations and Co-operation, Dr Naledi Pandor on Friday said that the UN must be strengthened to play the development support role expected of it, and promote its collaboration with continental and regional bodies.
G20: FAO says global threats to agrifood systems need complex approach (FAO)
The challenges undermining global food security call for a complex approach embracing investment, policy reforms and better use of resources, QU Dongyu, Director-General of the Food and Agriculture Organization of the United Nations (FAO) told a key meeting of the G20 today. “Recent global events, from the COVID-19 pandemic to the climate crisis, multiple conflicts around the world and the war in Ukraine, have all heavily affected agrifood systems in multiple ways,” Qu told the G20 Sherpa meeting of senior government representatives. Qu cited the recently launched 2022 edition of the State of Food Security and Nutrition in the World (SOFI) Report, which confirms that world hunger has increased again in 2021, reflecting growing inequalities across and within countries. It says 828 million people suffered from hunger in 2021, an increase of 46 million from 2020, and 150 million from 2019 before the pandemic.
Cascading global crises threaten human survival and the SDG roadmap is the way forward (United Nations)
The climate crisis, the COVID-19 pandemic and an increased number of conflicts around the world have placed the 17 Sustainable Development Goals (SDGs) in jeopardy, according to The Sustainable Development Goals Report 2022. The Report highlights the severity and magnitude of the challenges before us, with these cascading and intersecting crises creating spin-off impacts on food and nutrition, health, education, the environment, and peace and security, and affecting all the SDGs, the blueprint for more resilient, peaceful and equal societies.
“The road map laid out in the Sustainable Development Goals is clear,” stated Mr. Liu Zhenmin, United Nations Under-Secretary-General for Economic and Social Affairs. “Just as the impact of crises is compounded when they are linked, so are solutions.”
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Key South African trade route blocked as fuel costs surge (BusinessTech)
Protesters in a city in South Africa’s north east blocked roads including a key route linking the country to Mozambique with trucks Wednesday as they demonstrated against pump prices rising to a new record.
The road between Mbombela, 350 kilometers (217 miles) east of Johannesburg, and White River has been obstructed by parked trucks, as is the N4 highway connecting the city to the border with Mozambique and the port of Maputo, Callum MacPherson, regional operations manager at Hi-Tech Security Nelspruit, said by phone.
High expectations as NNPC takes off as corporate body (Daily Trust)
By next week, President Muhammadu Buhari will unveil a corporatised Nigerian National Petroleum Company Ltd (NNPCL) which will take off with N200 billion capitalisation, drawing high expectations from petroleum industry watchers.
Speaking at the recently concluded Nigeria Oil and Gas (NOG) conference in Abuja, the Group Managing Director and CEO of NNPCL, Mele Kyari, said by July 19, President Muhammadu Buhari will unveil the corporate NNPCL, which will make decision-making, and financing easier as well as procurement of best assets for the corporatised oil and gas firm.
AfDB approves €121m loan to Senegal to implement agricultural programme (Devdiscourse)
The Board of Directors of the African Development Bank Group today approved a €121 million loan to Senegal for implementation of an emergency agricultural programme that will benefit 850,000 small farmers, 35% of whom are women.
"Senegal's dependence on the outside world for basic commodities and foodstuffs is a real bottleneck and poses a threat to the country's food sovereignty, which has been sharpened by the war in Ukraine," said Mohamed Chérif, the Bank's Country Manager for Senegal. "This operation is intended to mitigate exogenous financial, economic, social and climate shocks and to maintain the upward trend in cereal production seen in recent years, especially by focusing efforts on the availability of key inputs including seeds and fertilizers to producers," he added.
African Development Bank extends €121 million food-production loan to Senegal to cushion impacts of war in Ukraine (African Business)
The Board of Directors of the African Development Bank Group (www.AfDB.org) approved a €121 million loan to Senegal for implementation of an emergency agricultural programme that will benefit 850,000 small farmers, 35% of whom are women.
“Senegal’s dependence on the outside world for basic commodities and foodstuffs is a real bottleneck and poses a threat to the country’s food sovereignty, which has been sharpened by the war in Ukraine,” said Mohamed Chérif, the Bank’s Country Manager for Senegal. “This operation is intended to mitigate exogenous financial, economic, social and climate shocks and to maintain the upward trend in cereal production seen in recent years, especially by focusing efforts on the availability of key inputs including seeds and fertilizers to producers,” he added.
Youth of Ghana who are 36% of population have no jobs – World Bank (Ghana Business News)
“While governments have created multiple policies and programmes to address youth unemployment over the years, the many programmes aimed at helping them have often fallen short of the massive needs,” the report said.
The sixth Ghana Economic Update titled “Preserving the future: rising to the youth employment challenge” suggests that to boost youth employment, Ghana also needs to strengthen its macroeconomic framework through decisive and sustainable fiscal consolidation, notably, by improving domestic revenue mobilization, reining in on energy sector expenses, and ensuring all public expenditures maximize value for money. It observes that such measures will help address Ghana’s debt sustainability concerns which have heightened over the past year.
Africa
All eyes on Zambia as Lusaka hosts African Union (Chronicle)
ALL eyes will be on Zambia next week as the country hosts the 41st Ordinary Session of the Executive Council of the African Union (AU) from July 14-15, 2022 in Lusaka at Mulungushi International Conference Centre.
The Theme for the gathering “Building Resilience in Nutrition on the African Continent: Accelerate the Human Capital, Social and Economic Development”.
The MYCM will consider progress made so far since the agreement establishing the tripartite FTA, and identify its contribution to the continental agenda in light of the African Continental Free Trade Area (AfCFTA).
Africa Demonstrates Readiness To Protect And Sustainably Develop Ocean Resources At UN Ocean Conference – OpEd (Eurasia Review)
The UN Ocean Conference (UNOC) co-organized by Portugal and Kenya from 27 June to 01 July 2022 in Lisbon, Portugal was a landmark ocean event for regrouping decision makers, innovators, private sector actors and stakeholders towards the implementation of the SDG Goal 14 and Aspiration 1.6 of Africa’s Agenda 2063, both related to the management of the Oceans, Seas and Marine Resources for Sustainable Development.
The AUC delegation to the conference showcased steps for promoting Africa’s blue economy and to send a strong signal on Africa’s readiness to protect and sustainably develop its ocean resources as well as its contribution to the global conversation on oceans by focusing on unlocking Africa’s potential for innovative, knowledge-based and high-revenue sectors while fostering sustainability and private sector activity, which further places emphasis on the integration of women, youth and Africa’s scientific community within the blue economy.
Traders highlight challenges to regional trade (Guardian Nigeria)
Traders in the West African corridor have highlighted various challenges affecting trade among the Economic Community of West African States (ECOWAS) members.
The traders under the aegis of West African Association for Cross-border Trade in Agro-forestry-pastoral and Fisheries Products (WACTAF), said poor infrastructure, such as poor electricity supply, bad roads, cost of fueling, kidnapping and banditry are seriously affecting trade on the Nigerian corridor.
Kenya and Uganda cry foul as reality of new taxes checks in (The East African)
Just a week after the new East African Community common external tariff (CET) band came into force, businesses are already feeling the pinch and crying foul over the “unintended consequences” of the regime.
Kenya and Uganda have filed complaints to the East African Business Council (EABC), the regional lobby, over the law that raised import taxes on goods from non-EAC countries to 35 percent.
WOFA Advocates Made in Africa Initiative at CHOGM22 (THISDAY Newspapers)
The urgent need for a Made in Africa initiative that would spur infrastructure revolution across the continent was put on the front burner by the World Forum for Africa (WOFA) team at the just concluded Commonwealth Head of Government Meeting, #CHOGHM2022, in Kigali, Rwanda.
During his interactions with these stakeholders, Mr. Haruna shared WOFA’s objectives which borders on convening an innovative annual global private sector led summit that would chart the right course for the achievement of creative, innovative and sustainable financing solutions for Africa’s infrastructure transformation.
Africa gets $13 billion relief from Afreximbank- Oramah (New Telegraph Newspaper)
President of Afreximbank, Cairo, Prof. Benedict Oramah, has described the African Continental Free Trade Zone Agreement, (AfCFTA) as a new normal which will change the face of trade across the African continent.
Speaking at the launch of a festschrift, titled “The New Normal As Option for Sustainable Development in Nigeria.” written in honour of the former Vice President of the African Development Bank, (AfDB), Dr. Olabisi Ogunjobi in Lagos, Oramah said that the components of the trade agreement have the propensity to transform trade on the continent.
EAC differs on African trade pact rules amid calls for one plan (The Star, Kenya)
The region is split on preferential Rules of Origin and tariffs on textile and apparel, sugar and sugar products, goods produced in Special Economic Zones (SEZs) and automotive sector, fresh details show, with trade experts calling for a harmonised deal.
For instance in the sugar sub-sector, the AfCFTA (African Continental Free Trade Area) secretariat has proposed a value-added standard–manufacture in which the value of non-originating materials does not exceed 60 per cent of the ex-works price of the product, subject to a mandatory review after five years.
Central bank governors, finance ministers beg again for Africa's debt relief (Tribune Online)
THE 2022 meeting of the African Consultative Group of Finance Ministers and Central Bank Governors of the 54 African member states of the World Bank and the International Monetary Fund (IMF) has ended in Marrakech, Morocco with a call on the two Bretton Woods Institutions to grant “rapid, comprehensive and substantial,” debt relief to Africa.
The opening of the 2022 African Caucus was marked by a message sent by King Mohammed VI of Morocco to participants wherein he called for more international support and cooperation to enable African countries to mitigate the impacts of the soaring inflation affecting the global economy and enhance their resilience in the face of external shocks.
This year’s African Caucus held under the theme, ‘Towards a Resilient Africa’ and called for a rapid implementation of the commitment made at the G7 Summit in June 2022, including the urgent need to improve multilateral debt restructuring frameworks and address the challenges related to debt vulnerabilities.
Greater democratic rule vital to boost security in West Africa and the Sahel (Modern Diplomacy)
Khatir Mahamat Saleh Annadif was presenting the latest report of the UN Office for West Africa and the Sahel (UNOWAS), which he heads, covering developments over the past six months in areas such as politics, security and human rights.
“National dialogues are underway in many countries to consolidate democratic governance at the same time that across large parts of the Sahel, men and women are leaving their land, fleeing to safety, and to ensure that their children can receive an education,” he said.
The positive adoption of 5G technology has tremendous potential to affect African communities and economies in a positive manner. 5G networks – if correctly taken up and rolled out – will offer African businesses and individuals the critical infrastructure to fully participate in the global workforce.
“5G is nowhere near reaching ubiquity in Africa or even most of the world. The regulatory environment governing 5G spectrum will continue to be a hindrance to 5G deployments across the region.”
Africa’s earliest adopters of 5G are facing teething problems that stand to delay their 5G goals. Business news outlet QuartzAfrica comments: "The challenges have revolved around spectrum regulation clarity, commercial viability, deployment deadlines, low citizen purchasing power of 5G enabled smartphones and expensive internet."
Global
Pakistan calls for 'emergency plan' to help crises-hit developing countries address spiraling food, fuel prices (Associated Press of Pakistan)
Pakistan has called for an “emergency plan” to enable the developing countries deal with the adverse impacts of the triple crisis of COVID-19, conflict and climate change, so that they can achieve the global anti-poverty Sustainable Development Goals (SDGs).
In his opening remarks to the workshop, the Pakistani envoy said that the crises have sent the prices of food, energy and other essentials soaring, with poverty having increased and so had inequality – among and within nations.
“If these trends persist, we will fall well short of achieving the SDGs – at the national and global levels,” he warned.
“We now need an emergency plan to prevent the disaster facing so many developing countries, particularly by mobilizing financial and other assistance to enable the affected developing countries to access affordable food, energy and other essential economic inputs.”
Officials from across Asia Pacific region to adopt multilateral declaration to accelerate global trade (PR Newswire)
The World Logistics Passport (WLP), announced at its second Annual WLP Global Summit it has almost doubled in size in its second year of operation – with its footprint now covering over 40 countries and nearly half (47%) of global trade – while WLP members including India, Vietnam and Kazakhstan, among others, are to adopt a new declaration to accelerate global trade.
The World Logistics Passport (WLP) is a global, private sector-led, initiative designed to smooth the flow of global trade, unlock market access through the creation of new trade routes and provides economic efficiencies to members.
Germany boosts food exports from developing countries with €150,000 (Daily Sun)
Germany’s Federal Ministry of Food and Agriculture is contributing €150,000 (CHF148,000) for 2022 to the Standards and Trade Development Facility (STDF) to help developing and least-developed countries (LDCs) meet international food safety, animal and plant health standards for trade.
The contribution was confirmed at a signing ceremony attended by Germany’s WTO Ambassador, Bettina Waldmann, and the Director of the WTO’s Administration and General Services Division, Nthisana Phillips, held on 8 July at the WTO.
World population expected to reach 8 billion by November — UN (Manila Bulletin)
“Today, two-thirds of the global population lives in a country or area where lifetime fertility is below 2.1 births per woman, roughly the level required for zero growth in the long run for a population with low mortality,” the report said.
The global population is projected to reach eight billion on November 15 this year, based on the latest projection by the United Nations (UN).
“Rapid population growth makes eradicating poverty, combatting hunger and malnutrition, and increasing the coverage of health and education systems more difficult. Conversely, achieving the Sustainable Development Goals, especially those related to health, education and gender equality, will contribute to reducing fertility levels and slowing global population growth.”
UNCDF: Growth Capital Plan to Assist the World’s Least-Developed Nations (Capital Finance International)
Preeti Sinha, Executive Secretary of UNCDF, said the IMIF would provide access to impact capital for cities and local governments “at scale for the frontier markets of today and the growth markets of tomorrow”.
UNCDF and Meridiam signed an agreement to collaborate on the International Municipal Investment Fund (IMIF). The investment vehicle — the non-OECD sleeve of The Urban Resilience Fund — has a focus on developing countries, and was launched by Meridiam and the Rockefeller Foundation. It will help to develop, finance, build and operate sustainable and economically sound infrastructure projects that have a critical role to play in adapting and mitigating urban climate change.
Russia Talks Trade & Economic Development With Iran (Russia Briefing)
Russia is looking to enhance its trade connectivity access to the Middle-east and South Asia, with Iran strategically important in allowing it to do so. Russia has Caspian Sea access via its ports at Astrakhan, which permits maritime shipment south to Iran’s Caspian ports at Anzali amongst others. From there, road, and from early 2023, rail transport can continue south to Bandar Abbas and the Chabahar Ports giving access to the Persian Gulf.
A statement was subsequently issued by the Russian Ministry of Foreign Affairs, saying “Russia and Iran assign particular priority to implementing joint investment projects, including in the sphere of port infrastructure development for a fully-fledged launch of the International North-South Transport Corridor.
The conclusion of a permanent agreement on a free trade zone between the Eurasian Economic Union (EAEU) and Iran will allow for deregulation of 80% of trading volume and goods and further strengthen the viability and competitiveness of Russian goods to the Iranian market as well as vice versa.
Recession Angst Spurs Pivot to Emerging World's Growth Engines (Bloomberg)
As panic over inflation gives way to fears about a global recession, emerging-market investors are making a pivot too -- they’re now favoring countries where interest rates are still low.
That’s a reversal from the first months of the year, when low-yielding bonds were dumped in favor of debt from nations like Brazil and Chile, which led the world’s tightening cycle. But with fears of recession superseding concerns about prices over the past weeks, even as inflation continues to spur pain from Sri Lanka to Argentina, having high interest rates is no longer seen as the benefit it once was. It could even be viewed as a drawback when low inflation and growth are at a premium.
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Fitch maintains SA’s sub-investment rating, stable outlook (Engineering News)
Ratings agency Fitch has maintained its stable outlook for South Africa, and affirmed the country’s foreign and local currency debt ratings at a sub-investment grade BB- rating. Fitch said the key factors for the rating were high and rising government debt, low growth and high inequality. The ratings were however supported by "a favourable debt structure... as well a credible monetary policy framework."
Giant new power plants undermine South Africa’s emissions pledge (Bloomberg)
In the rolling hills of South Africa’s Mpumalanga province, hundreds of builders, welders and engineers are putting the final touches to a gigantic new power station that’s set to burn as much as 15-million tons of coal a year until it is eventually shuttered in 2073.
The 4 800 MW dry-cooled Kusile plant and the almost identical Medupi facility, which was completed last year, will be key to meeting demand for energy in a country that’s been plagued by rolling blackouts since 2008. Environmentalists however caution that their continued operation will be a major impediment to South Africa meeting its commitment to eliminating greenhouse gas emissions on a net basis by 2050.
“It absolutely doesn’t make any sense to invest in mega coal-fired power stations in the face of a climate crisis when we should be focusing on a just transition to renewable energy,” said Melita Steele, interim program director for Greenpeace Africa, whose members chained themselves to Kusile’s entrance gates more than a decade ago to try and halt its construction.
Matawalle’s guns (Vanguard)
The 2020 SBM Intelligence Report on Nigeria said there were about six million illicit small arms in circulation in the country, up three-fold from the two million reported by Oxfam in 2016. The SBM report indicates that about 10 million small arms were on the loose in West Africa. Nigeria accounts for six out of every 10 illicit weapons in the region.
Given that many such weapons are military grade, their description as “small arms” is grossly misleading considering the amount of violence and destruction they can be used to unleash.
These weapons have “liberalised” and “democratised” conflicts. With them, every coward in the neighbourhood feels emboldened, invincible and hungry for a fight. The ISWAP and Boko Haram conflicts in Nigeria, Cameroon, Chad, Niger, Mali and Burkina Faso; the ethnic wars of South Sudan, the unravelling of Libya; the banditry in North and Central Nigeria, and indeed all conflicts in diverse places, are the direct manifestations of ease of access to weapons by unauthorised persons.
Matawalle is not the first governor or prominent citizen to make a rallying cry for ordinary Nigerians to take up arms in self-defence. Deposed Emir of Kano, Muhammadu Sanusi II, made a similar call in November 2014 at the height of Boko Haram’s callous and brutal reign of terror.
National Treasury allocates first phase R516m floods funding (SAnews)
The National Treasury has confirmed the allocation of R516 million in the first phase funding in response to the April flood disaster that caused significant damage to infrastructure in various provinces.
In the wake of the disaster, which largely affected KwaZulu-Natal, President Cyril Ramaphosa on 18 April declared a National State of Disaster. Over 400 people died in the floods, which also damaged 4000 homes and left about 9000 people displaced.
Six land-based borders prioritised for one-stop border management roll-out (Engineering News)
South Africa is creating a Border Management Authority (BMA) that will unify the border control functions and processes from various national departments, and BMA CEO and national commissioner Dr Mike Masiapato says the authority will also help to manage crucial transport and trade corridors.
Six land-based ports of entry have been identified to be the first forerunners of one-stop border posts, which will see the BMA deploy personnel, information technology systems and intelligence and information sharing systems to improve the efficiency of immigration and the movement of goods.
The model, called juxtaposed, that South Africa will pursue uses separate infrastructure on either side of the border, but with staff from each of the countries working in both facilities, enabling goods and people to be cleared for exit from a country and entrance into another through a single border post office, rather than on each side of the border.
Scale-up capacity in trade finance to support private sector – Governor BoG (BusinessGhana)
Financial institutions in the country must collaborate and take advantage of the opportunities offered by the African Continental Free Trade Area (AfCFTA) initiative to boost their businesses, Governor of Bank of Ghana, Dr Ernest Addison, has said.
To this end, he entreated financial institutions to strengthen their risk management systems and scale-up capacity in trade finance to support the private sector.
“Additionally, banks and non-bank financial institutions are encouraged to increase investments in digitisation platforms as well as cyber-security systems to facilitate safe and secure trade transactions through AfCFTA,” he said during the opening of the Africa Trade roadshow.
AfCFTA: Ghana's intra-Africa exports to increase by 132 per cent (BusinessGhana)
Regarding the continent, increased FDI is expected to increase Africa’s exports to the rest of the world by 32 per cent in 2035 as well as increase intra-Africa trade by 109 per cent. According to the World Bank’s new report, the AfCFTA had the potential to bring significant economic and social gains for the region, leading to higher incomes, lower poverty, and faster economic growth.
The projected increase in the country’s intra-Africa exports, the report noted, will be on the back of increased foreign direct investment (FDI) to Ghana and the continent at large.
ACR budgets US$100m for Zim agric insurance (The Herald)
AFRICAN Risk Capacity (ARC) Limited intends to invest US$100 million towards agriculture insurance in Zimbabwe, as it broadens its African footprint and interventions to improve the strategically key sector’s resilience in the face of climate change.
ARC is a specialised agency of the African Union (AU) established to help African Governments to enhance their capacities to better plan, prepare and respond to the extreme weather events and natural disasters.
The agency predominantly works with governments, humanitarian agencies and small to medium farmers across the continent, but intends to broaden its services in the country through collaborations with local insurance companies.
Solidarity calls on the private sector to apply for energy generation permits en masse (Creamer Media's Engineering New)
The only viable and sustainable solution to South Africa’s escalating electricity crisis is for small independent power producers (IPPs) to immediately flood the market on a large scale, trade union Solidarity’s Research Institute (SRI) has said.
Through a concerted effort by the private sector – including businesses and private citizens alike – to invest in IPP capability, the country’s energy crisis could be resolved within months, the trade union said during a media briefing on July 8.
South Africa: Nuclear energy is not off the table (ESI Africa)
Over the weekend, the President of South Africa, Cyril Ramaphosa, was misquoted by an SABC News reporter as saying that “nuclear energy is off the table”.
The President was interviewed in Botswana at the 7th SACU Summit on the energy crisis, amongst other challenges the country is facing. He did, however, break ranks in the interview by expressing his concerns about renewable energy not being available at any given time, which does not provide solutions to South Africa’s energy crisis.
Making the most of the African Continental Free Trade Area in Zim (Zimbabwe Independent)
Zimbabwe is one of the 54 countries that have signed (and one of the 27 countries that have ratified) the AfCFTA agreement to date. The benefits of the AfCFTA agreement are unarguably huge, but implementation of this agreement also poses some challenges that needs to be tackled to ensure that countries can ultimately benefit from this arrangement. Some of the issues include the involvement of the private sector, the readiness of the country and the availability of adequate capacities to ensure a successful implementation of the AfCFTA.
Africa
Without sustainable finance, Africa risks $415b economic loss to climate change (Guardian Nigeria)
Energy and financial experts are worried about sustainable financing for Africa, especially in the energy sector, stressing that Africa risks a yearly $415 billion economic loss due to climate change by 2030 if the infrastructure is not improved.
While the experts on one hand said Africa needs over $23 billion to upgrade existing refineries on the continent to produce cleaner fuels and displace charcoal with modern fuels, they insisted that without significant improvements in infrastructure resilience, yearly economic losses from natural disasters’ damage to urban infrastructure alone would increase from $300 billion currently to $415 billion by 2030.
At Dakar Summit, Buhari Joins Other African Leaders To Launch $93bn Investment Fund (Channels Television)
President Muhammadu Buhari on Thursday joined African leaders in Dakar, Senegal to launch “the largest financial package ever mobilised in the history of the International Development Association (IDA) – $93billion – geared towards a “robust and resilient economy for Africa.”
Seventy percent of the global fund will be spent on African countries between now and 2027, with Nigeria getting the biggest cut among the African States, said a statement signed by presidential spokesperson Garba Shehu.
ISO pledges support for Prof Dodoo's ARSO presidency (Graphic Online)
The International Organization for Standardization (ISO) has pledged to commit technical and financial resources to the development of standards in Africa.
The worlds most trusted standards organisation will also provide experts to help build a robust standards regime and ensure that African standards were aligned with that of the ISO.
With Ghana’s Professor Alex Dodoo leading the standards community as President of the African Organization for Standardization (ARSO), the ISO is confident that the time was ripe for standards to drive trade and help position African businesses on the apex of global trade.
SADC registers progress on TIFI programmes (SADC)
The Southern African Development Community (SADC) is making steady progress on its programmes to facilitate industrial development, finance and investment and trade in goods and service among Member States. This emerged out of the Trade, Industry, Finance and Investment (TIFI) Thematic Group hybrid meeting held on 16 June 2022 to discuss progress on the implementation of its programmes to deepen regional economic integration.
According to a joint update from the SADC directorates of Finance, Investment and Customs and of Industrial Development and Trade, 25 percent of the 64 outputs or deliverables from the TIFI Multi-Year Action Plan 2021-2023 have been completed with support from International Cooperating Partners (ICPs) such as the European Union, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH (GIZ), World Bank and the African Development Bank (AfDB).
Why is this UN Body Pushing for Developing Nations in Africa to Regulate CryptoCurrencies? (bitcoinke.io)
The United Nations Conference on Trade and Development (UNCTAD) is calling on developing nations to monitor the growth of cryptocurrencies which it warns risks replacing ‘domestic currencies.’
In its policy brief, UNCTAD warns that the use of cryptocurrencies may lead to financial instability risks.
Talks yield positive results as Angola brokers peace between Rwanda and DRC (News24)
Rwanda and the Democratic Republic of Congo's (DRC) first step to mending fences will be through the "Luanda Mechanism" talks, which will get underway on 12 July.
During the 12 July meeting, Rwanda and the DRC are expected to establish a Joint Permanent Commission, which will share intelligence about rebel operations affecting both countries.
The major problem is instability in the eastern DRC, where M23 rebels have been fighting against government forces.
Business council offers to defuse Uganda-Rwanda trade deadlock (Monitor)
Speaking on the side-lines of a closed door meeting at the Rwandan High Commissioner in Kampala last week, Mr John Bosco Kalisa, the EABC chief executive officer, said whereas there were still some challenges, they were optimistic that trade relations between Rwanda and Uganda will be restored.
The East African Business Council (EABC) has offered to organise a bilateral business forum between Uganda and Rwanda as a way of restoring trade relations.
Research: Rating Action: Moody's confirms BOAD's Baa1 ratings; outlook stable (Moody's)
Moody's Investors Service ("Moody's") has today confirmed the long-term foreign currency issuer and senior unsecured debt ratings of The West African Development Bank (BOAD) at Baa1 and changed the outlook to stable.
While Moody's continues to believe that the political situation in Mali and more broadly in the Sahel remains highly risky, the decision to confirm BOAD's rating at Baa1 reflects Moody's view that the risk of a severe deterioration in asset quality has been significantly reduced.
African Heads of State Reaffirm Commitment to Recovering from Crises and Achieving Economic Transformation (Mirage News)
DAKAR, July 7, 2022 – African Heads of State and Government reaffirmed their commitment to seize key opportunities to respond to multiple crises and steer their economies to transformative paths, in partnership with the World Bank’s International Development Association (IDA).
“We are convening this Summit in a context of deep crisis, marked by the double impact of the COVID-19 pandemic and the war in Ukraine. While we have exponentially increased our spending to respond to the health crisis and foster the economic and social resilience of our people, our fiscal space has shrunk dramatically, and debt vulnerabilities were exacerbated,” said President Macky Sall of the Republic of Senegal who hosted the event.
TROUBLED KINGDOM: SADC calls extraordinary summit to address Eswatini crisis (Daily Maverick)
Eswatini’s King Mswati has finally agreed to attend the extraordinary summit of the security organ of the Southern African Development Community (SADC) on 21 July, after keeping the organisers guessing for weeks about his presence, sources said.
SADC intervened in the crisis in the country last year after unprecedented violent protests in June which left scores of protesters dead and much infrastructure destroyed or damaged. After another flare-up of violence in October, Ramaphosa visited Eswatini in November to meet Mswati and announced afterwards that the king had agreed to launch a national political dialogue.
Experts advocate increased collaboration between Nigeria, South Africa (Guardian Nigeria)
Consistent business collaborations of private sector stakeholders across countries on the African continent would surely guarantee its economic growth, eradicate poverty and place Small and Medium Enterprises (SMEs) on a better platform for transacting business with European countries.
According to the Consular General, there is a need for Nigeria and South Africa, being the two biggest economies on the continent, to come together and bridge the gap so that both countries can get the right trajectory for economic growth.
The Managing Director, WESGRO, Michael Gamwo, on his part, identified continuous partnership between private sector stakeholders in Nigeria and South Africa as the only means of guaranteed African economic growth.
DPA of ECOWAS Meet in Accra for Collaborative Planning Exercise (News Ghana)
The Directorate of Political Affairs (DPA) of the Economic Community of West African States (ECOWAS), through the Conflict Prevention unit of the Mediation and Coordination of Regional Political Affairs Division, and the USAID Reacting to Early Warning and Response Data Program in West Africa II (USAID REWARD II), convened a three-day Collaborative Planning Exercise (CPX) at the Kofi Annan International Peacekeeping Training Center (KAIPTC) in Accra, Ghana.
“The complementary work of regional, national, and community-based organizations in Ghana will build viable relationships with the diverse stakeholders operating in the EW/ER space”, he added.
Blockchain can provide infrastructure for financial inclusion in Africa – Standard Bank (Creamer Media's Engineering News)
To address the unique challenge of providing the large portion of the African population that remains unbanked with more accessible tools for financial management and inclusion, Standard Bank and others have been researching and developing transformative fintech and blockchain products, says Standard Bank head of blockchain Ian Putter.
Informal trade in charcoal and firewood in Africa creates need for sustainable approach (Forests News)
As demand for charcoal and other wood energy soars in Central Africa, with wide-ranging consequences for biodiversity and local communities, a new brief from the Center for International Forestry Research and World Agroforestry (CIFOR-ICRAF) calls for governments and others to develop strategies to ensure coordination of policies and enforcement. The lack of alignment between governments on official policies also leaves small-scale traders — particularly women — vulnerable to exploitation.
With charcoal and firewood comprising roughly 60 percent of the energy needs for cooking and heating in Sub-Saharan Africa, this trade is likely to increase. Africa’s population is expected to double by 2050.
Why a peaceful DRC is critical for East Africa (Monitor)
DR Congo now has up to September 29, to undertake internal and constitutional processes to ratify the Treaty and deposit the instruments of ratification with the Secretary General. DRC’s admission excited most of us as it provides a wider market for our products and services under the removal of non-tariff barriers on free movement of people, goods and services across the region.
However, DRC has for long been facing a security crisis and the consequences have been devastating for the Congolese people with over five million displaced.
Global
G20 kicks off in Bali, covering global issues from climate change to food crisis and war in Ukraine (The World On Arirang)
The G20 Foreign Ministers Meeting has officially begun in Bali, Indonesia, where the top diplomats of the world's leading economies are going to discuss a range of global issues from climate change to the food crisis and the war in Ukraine.
Opening the summit on Friday, Indonesian Foreign Minister Retno Marsudi stressed that it's the G20's responsibility to end the war at the negotiating table, not on the battlefield.
A remarkable win-win relationship is growing between China and Africa (SABC News)
According to a report by Swiss-African Business Circle, over the past 10 years China has maintained its position as the largest investor in Africa, a continent that is in dire need of direct foreign investment and job creation.
Among several examples of China’s economic stimulation of the continent was in Zimbabwe, where the government of President Xi Jinping aided the Harare regime to develop its infrastructure, including telecommunications, energy as well as agriculture.
China-Africa cooperation is also credited with pushing back frontiers of unemployment in the continent. On average, it created some 18 562 jobs per annum. This led to a reduction unemployment and improvement in poverty alleviation efforts, and a drastic promotion in investment was also realized. This has led to tangible evidence in Africa’s industrialization as well as gross economic development across various sectors.
Ukraine war divides Western alliance from the Global South (Nikkei Asia)
Still, until recently, BRICS has remained an acronym in search of a purpose and struggled to become a substantive institution representing important developments in international relations. That might now be changing.
Prompted by larger geopolitical shifts, with the United States in relative decline and China challenging it as the would-be new global superpower and further propelled by the war in Ukraine, BRICS might finally be emerging as an organization that genuinely speaks for the Global South.
Russia's invasion of Ukraine has turned out to be a critical wedge issue dividing the United States and its Western allies from almost all of the Global South, including the BRICS countries.
Next China: Biden's Bargaining Chips (Bloomberg)
The US is considering rolling back some of the tariffs imposed on hundreds of billions of dollars worth of Chinese goods under Donald Trump’s administration, according to people familiar with the deliberations.
Why now? The alarming speed at which prices of everything from food to gasoline are rising is threatening to push the US into recession. But economists are skeptical this will do much to tame inflation.
Meta Stock Sinks As Investors Ponder: Is The Sun Setting On The Glory Years For Facebook And Mark Zuckerberg? (Investor's Business Daily)
Meta stock has lost more than half its value since last September, as Facebook and Chief Executive Mark Zuckerberg have tethered the company's future to the metaverse, an entirely new method of communicating.
As Meta's latest quarter closed June 30, founder Zuckerberg reportedly told staffers on a conference call that the company faces one of the "worst downturns we've seen in recent history" when it comes to Facebook's current status amid a troubling economy, according to the New York Times.
India & Free Trade Agreements: Make haste slowly (The Financial Express)
After a hiatus of almost a decade, India has signed free trade agreements (FTAs) in quick succession in the past few months, with Mauritius and the UAE and an interim FTA with Australia.
The new FTAs mark a bold, reinvigorated India seeking to maximise its advantages from the economic and geopolitical upheavals worldwide. For most trading partners, seeking reduction in tariffs for access to the Indian market is a big ask. With skilful negotiations keeping sensitive products from key sectors outside of the purview of the FTAs, including dairy, agriculture, automobiles, medical devices and consumer electronics, the stumbling blocks that prevented India from being part of the Regional Cooperation for Economic Partnership (RCEP) in 2019 have so far been avoided.
As corporations increasingly make public commitments to reduce greenhouse gas (GHG) emissions, allegations of “greenwashing” have been elevated to the global stage. Consumers, investors and government bodies alike are seeking clear standards by which to measure concrete action on climate-related goals. A recent report published by Ceres1 —The Investor Guide to Climate Transition Plans in the U.S. Food Sector (May 2022)2 (the “Investor Guide”)—describes the evolution of these trends in the agricultural industry.
According to the Investor Guide, climate transition plans should outline clear and concrete short and medium-term actions to achieve a company’s long term commitment and address climate change throughout the company, from growth strategy to operations.
Global trade hits record $7.7 trillion in first quarter of 2022 (UNCTAD)
The growth, which represents a rise of about $250 million relative to Q4 2021, is fuelled by rising commodity prices, as trade volumes have increased to a much lower extent. Though expected to remain positive, trade growth has continued to slow during Q2 2022. “The war in Ukraine is starting to influence international trade, largely through increases in prices,” the report says.
UN Chief Warns G20 About Famine Risks - UrduPoint (UrduPoint News)
Guterres said that the Ukraine conflict is contributing to other crises and may cause social and economic devastation. The UN chief believes that the Ukraine crisis is behind the current spike in food prices and increase in the number of undernourished people.
UN Secretary-General Antonio Guterres warned G20 nations on Friday about the risk of multiple famines this year.
'No more wasting time on GSP': FBCCI stresses FTA with USA (The Business Standard)
Bangladesh has no other option but to enter into comprehensive free trade agreements in goods, services and also investment with major regional trade and economic blocs along with bilateral and reciprocal FTAs with the US, Canada and the UK, covering over 95% of the global market in order to effectively deal with the predictable post-LDC graduation challenges, the FBCCI says.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has recommended that the government start talks on a free trade agreement (FTA) with the United States – a key export destination for the country – immediately instead of wasting time negotiating for a restoration of generalised system of preferences (GSP) privileges there.
2021 Annual Statistical Report on United Nations Procurement - World (ReliefWeb)
As the United Nations continued to support COVID-19 response and recovery efforts, a new report published by UNOPS on behalf of the UN system details how 41 UN organizations spent $29.6 billion on goods and services last year. The United States remained the largest supplier country in 2021, providing $2.3 billion of goods and services to UN organizations – increasing its supplies by almost $400 million compared to the previous year.
During Thailand's durian season every year, orders from China for the thorny "king of fruits" always surge, driving up shipments from the world's top fresh durian exporter.
This year, after the Regional Comprehensive Economic Partnership (RCEP), the world's largest free trade deal that entered into force in January, Thailand's durian sales to China have been further boosted.
Faster customs clearance and other trade facilitation measures provided by the RCEP agreement, as well as the launch of the "Durian Express" and special fruit train services to China, helped boost the trade of Thai durians and reduce exporters' costs, said Narongsak Putthapornmongkol, president of the Thai-Chinese Chamber of Commerce.
Import explosion and trade deficit pushing Nepal into economic crisis (The Kathmandu Post)
According to a research report entitled "Remittances, Banking Credit to Private Sector, and Nepal’s Trade Deficits" unveiled by the Confederation of Banks and Financial Institutions, Nepal, on Thursday, 20 percent of the loans issued by banks have gone to fund trading, which particularly represents wholesale and retail services.
An import explosion in the past few months has drained foreign exchange reserves to dangerously low levels, threatening to precipitate an economic disaster with most indicators showing warning signs. Experts have described Nepal's current economic situation as the "Dutch disease" because feverish consumption has been a bonanza for the trading sector, but brought disaster to manufacturing and agriculture. They say that a huge amount of money is being invested in the unproductive sector, resulting in a trading boom and a gaping trade deficit.
Sanctions are worsening global economies (Monitor)
Economically devastating embargoes are perceived as viable alternatives to direct military confrontation with a nuclear armed Russia, accused of aggression. Russia, one of the world’s leading producers and exporters of crude oil, oil products and natural gas, joins Iran and Venezuela, two other major worlds’ largest oil producers whose capacities are apparently curtailed by Western sanctions.
Combined, Russia, Venezuela and Iran are reported to produce roughly 17.7 million (18 percent of total globe oil production) barrels daily – bpd in accordance to Congressional Research Service (CRS) Report 2020.
Imposing sanctions on major world supplier of not only oil but also other critical farm or industrial range of inputs and food, during times when the world is grappling with shortages stemming from adverse effects of the Covid lockdowns, refugees crisis, climate change, increased debt and looming economic recessions, migrations driven by poverty and inequalities, then insecurity and famine in East of Asia which occurred after 20 years of US occupation , was such undoing that only points to indifference Western countries harbor against the rest of the world.
Related News
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Local news
Trucks Block South Africa Road to Mozambique as Fuel Costs Surge (Bloomberg)
Protesters in a city in South Africa’s north east blocked roads including a key route linking the country to Mozambique with trucks Wednesday as they demonstrated against pump prices rising to a new record. The road between Mbombela, 350 kilometers (217 miles) east of Johannesburg, and White River has been obstructed by parked trucks, as is the N4 highway connecting the city to the border with Mozambique and the port of Maputo, Callum MacPherson, regional operations manager at Hi-Tech Security Nelspruit, said by phone.
the dtic assist SA companies look for export and investment opportunities in Angola (The dtic)
Nineteen South African companies supported by the Department of Trade, Industry and Competition (the dtic) will get an opportunity to explore trade and investment opportunities in Angola when they participate in the 37th edition of the annual Feira Internacional de Angola (FILDA) trade exhibition that will take place in Luanda from 12-16 July 2022. The companies are from six of the country’s provinces and are operating in the agro-processing; chemicals; plastics; electronic; capital equipment; mining and metals; and clothing and textiles sectors.
the dtic assisted the companies to showcase their products and services in the exhibition through its Export Marketing and Investment Assistance (EMIA) Scheme. The objective of the scheme is to develop export markets for South African products and services, and to recruit new foreign direct investment into the country.
Govt, stakeholders discuss investment in logistics (The New Times)
Experts are optimistic about economic gains Rwanda could get by establishing itself as a regional logistics hub, to improve the supply chain and facilitate trade among African countries. Earlier this year, the World Bank, in a report on Rwanda themed ‘Boosting regional integration in the post-Covid era,’ stated that Rwanda, serving as an intermediating node between the East and Central Africa regions, offers prospects to increase revenues and generate efficiency gains through the concentration of logistics services. Given Rwanda’s location, conducive business and trading environment, there is an opportunity for it to become a strong regional logistics hub, Antoine Kajangwe, Director General of Trade and Investment in the Ministry of Trade and Industry said.
“In many ways, we are able to make progress across the region but when you don’t have trade logistics, then you are forced to import from distant countries because they have a way of getting products to you.”
Miraa traders hit with transport, export fees (Business Daily)
The government has introduced a tonnage-based levy on commercial miraa transporters where the traders will pay up to Sh10,000 in licence fees. The new charges contained in the recently published Crops (Miraa) Regulations are part of rules meant to ensure the production of quality miraa, both for export and local consumption. Miraa traders transporting less than 500 kilogrammes of the commodity will pay Sh5,000, while those handling between 1,000 and 10,000 kilos will produce Sh10,000.
The rules seek to impose a Sh30 levy on each kilo of exported miraa and related products and Sh60 per kilo for imports. Export licences will be acquired for Sh20,000 and renewed at Sh10,000 while importers will pay Sh50,000 for the permits and Sh30,000 to renew. Under the regulations, an export permit will cost Sh4,000 while an import permit will cost Sh6,000. The regulations were published in June, three years after they were formulated. Traders have in the past paid varied rates depending on the county of operation, exposing farmers to exploitation.
SGR records flat revenue despite increased cargo (Business Daily)
The Standard Gauge Railway registered a marginal drop in revenue in the first quarter of the year, in a stagnant performance that may delay its break-even. The latest data from the Kenya National Bureau of Statistics (KNBS) shows that the passenger and cargo trains generated Sh3.65billion in the first quarter of 2022, down from Sh3.66 billion between January and March last year, translating to a 0.32 percent drop. Cargo trains accounted for the biggest chunk of the revenue generated in the first quarter of 2022 at Sh3.08 billion representing 84 percent of the total revenue while passenger service posted Sh569.27million.
The flat growth comes at a time when the logistics sector is reeling from the Covid-19 shocks, which affected long-haul transits following the imposed night curfew and restrictions on movement in and out of the Nairobi metropolitan area, Mombasa, Kilifi, Kwale and Mandera.
The cargo service remained in operation as the passenger trains were halted in line with the government’s directives, to support flow of goods through the Mombasa port. Despite the flat revenues, the volume of freight transported through SGR increased by 10 percent from 1.39 million tonnes in the first three months of 2021 to 1.53 million tonnes in the first quarter of 2022.
M-Pesa launches interest-free loans for buying goods (Business Daily)
Safaricom has unveiled a zero-interest credit service that will allow millions of its customers to shop for goods up to Sh100,000 and pay later in a move that is set to disrupt the mobile loans market. Users of the interest-free product to be known as Faraja will buy goods and services from as low as Sh20 to a maximum of Sh100,000 and pay the same amount without any extra fees witnessed on other credit products. However, only the normal M-pesa transaction charges will apply at the point of sale on the product to be bankrolled by Equity Bank.
It will work like a digital credit card where a user will have a credit limit of up to Sh100,000, depending on their credit score, to make purchases against and then repay at a later date within the 30-day window.
Safaricom’s till and pay-bill service has risen to take an 85.8 percent market share of non-cash payment for ordinary goods and services, underlining the entrenchment of the mobile money platform in everyday transactions. In the year to March, payments of Sh1.4 trillion were made through the Lipa-na-M-Pesa platform and a total of Sh9.78 trillion was paid through the M-Pesa the popularity of the platform as a means of commerce as opposed to paying via cash.
Animal feeds prices keep rising as yellow maize import flops (Business Daily)
The price of animal feeds has shot up to historic levels as attempts to ship in yellow maize to curb the rising cost flopped with millers citing a shorter import window. The price of a 70 kilogramme bag of layers marsh has now jumped to Sh4,500 from Sh3,800 in April, chick mash is going for Sh4,940 from Sh4,200 while dairy meal is now selling at Sh2,850 from Sh2,500, pointing to tough times for consumers who will have to absorb extra cost when buying animal products such as eggs. The government opened the import window for duty-free yellow maize last November and is expected to close it at the end of October. The millers have not shipped in the commodity since then, citing the difficulty of securing the produce that is free of genetically modified organisms (GMO).
“We cannot import the yellow maize now unless the window is extended. This means that the price of feeds will continue to rise in the coming days unless we get sufficient raw material for processing,” said Joseph Karuri, chairman of the Association of Kenya Feeds Manufacturers.
Mr Karuri said that it would take at least three months before the yellow maize gets to the country because of the longer route that it would have to take following the interruption of trade along the Black Sea, which was occasioned by the ongoing Ukraine-Russian war.
Uganda has attained middle income status, Ubos insists (Monitor)
Uganda Bureau of Statistics (Ubos) has insisted that Uganda has attained middle income status. While addressing a media briefing yesterday, Dr Chris N. Mukiza, the Ubos executive director, said government data for the 2021/22 financial year indicates that gross domestic product per capita is estimated at $1,046, which is within the middle income threshold. On July 1, he said, the World Bank had released its economic update indicating that Uganda’s gross national income per capita for the 2020/21 financial was $840, which meant that the country had not crossed into the threshold for middle income status.
“This created confusion among the general public,” Dr Mukiza said, adding: “The reference periods in the two reports is different. Whereas the report by government was based on the financial year 2021/22, the one by World Bank was based on the financial year 2020/21. Thus, the per capita income in the two reports refer to two different periods, the government of Uganda report being the most up to date.”
Angola, Namibia to open new border posts this year (ANGOP)
The Republics of Angola and Namibia plan to open, later this year, new official border posts at their common border, with a view to increasing trade and consolidating solidarity ties.
The new posts may be opened in the provinces of Cunene, Namibe and Cuando-Cubango (Angola) and Ruacaná, Oshikango and Rundu (Namibia), according to the Director for Institutional Communication and Press of the Angolan Migration and Foreigners Service (SME), Simão Milagres.
Speaking to the press on Tuesday in Lubango, during the opening of the 2nd bilateral meeting between the SME and the Directorate for Migration Control and Citizenship of the Republic of Namibia (DCMCN), Mr. Milagres stressed that the intention was a result of the existing cooperation between the two countries in the context of migration.
Buhari Seeks Total Democratization of West African Subregion (This Day)
President Muhammadu Buhari has declared that Nigeria will continue to seek consensus on the full resumption of democratic governance throughout the 16-nation West African subregion. Responding Thursday in Lisbon, Portugal, to commendations by President of the Portuguese Parliament, Augusto Santos Silva, on the role Nigeria is playing under the present administration, stabilizing West Africa and Guinea Bissau in particular, the President regretted that three countries in the subregion have slipped back to undemocratic, military rule saying the former Portuguese colony was lucky to have survived those attempts.
While attributing some of these reversals to the process of development which the new nations will pass through, the Nigerian leader said Nigeria will continue to work within the framework of the Economic Community of West African States (ECOWAS) to reverse the unwanted situation, stressing that “we have to go back to proper democratization.”
Why DRC market is exciting to CRDB (Dailynews)
CRDB Bank has said it will champion social development in the Democratic Republic of Congo (DRC) with a 30 million US dollars (70bn/-) subsidiary. The lender said in a statement on Wednesday from Lubumbashi, the DRC’s second-largest city that it finalised plans to launch operations in Congo in the second half of this year. The investment is part of CRDB Group’s regional expansion strategy, targeting the larger Eastern African market.
The Group CEO and Managing Director, Mr Abdulmajid Nsekela said that in regard to the DRC subsidiary, which will be based in the commercial hub of Lubumbashi, the bank has already got approval from the Central Bank of Tanzania (BoT) since last May. “We see the DRC as an exciting market for us since it provides a unique opportunity for our Group to transform lives beyond our borders,” Mr Nsekela said.
‘Manufacturers under severe pressure over diesel, raw materials’ (The Sun Nigeria)
Members of Nigeria’s Organised Private Sector (OPS) have expressed concern over consequences of rising diesel prices and raw materials now threatening local manufacturers.
Beyond the need for diesel for transportation logistics, the stakeholders noted that the current model of high dependence on the national grid to power businesses has continued to hobble production processes in the economy, considering the vastness of the country which does not support the highly centralised regime of national grid.
They argued that the continued ownership and control of the transmission component of the power supply chain is also a challenge to grapple with, as many manufacturers are left to generate their own electricity to bridge supply gap.
Challenges slow growth in manufacturing (New Telegraph)
The first six months of year 2022 for the country’s manufacturing sector was marred by profound trajectories, including the sudden war between Russia and Ukraine, importation of contaminated petrol, subsidy crisis, elections and new alcoholic tariff among many others. These challenges slowed the pace of growth and performances in the real sector of the economy.
Already, members of the organised private sector (OPS) have expressed worries that the fragile Nigerian economy in terms of performance and growth trajectory is going to pose challenges to the country’s manufacturing sector as greater attention is expected to be paid to political issues than economic transformation by the Federal Government. Not too far in the beginning of the year 2022, specifically in the first week of January, government announced new excise duty on carbonated and non-alcoholic drinks despite outcry from OPS for government to reconsider the move. Since then, it has been one challenge and the other in the country’s manufacturing sector, with many firms forced to review their operations.
Another major happening in the half year under review was the promoters of the the Africa Continental Free Trade Area (AfCFTA) disclosing that the abnormalities being experienced in the foreign exchange rate conversion were costing multilateral trade in the continent an estimated $5 billion yearly and also playing a major role in the continent’s GDP retrogression. Precisely, the management of Af- CFTA said that was the reason the Pan-African Payments and Settlements System (PAPSS) of the Afreximbank was debuted to assist the continent to save the $5 billion annually loss from the accruals conversions to dollars in exchange rate.
Following the announcement by the Central Bank of Nigeria (CBN) on new circular on e-Valuation and e-Invoicing for import and export, the Manufacturers Association of Nigeria (MAN) urged CBN to hold on its implementation until stakeholders were consulted. MAN suggested to the apex bank that there was need to ensure that CBN does not go ahead to implement the guidelines without accommodating the constructive inputs of stakeholders, especially those whose businesses would be negatively impacted. The Director-General of MAN, Segun Ajayi-Kadir, stated that the association was concerned about the new CBN circular on E-Valuation and E-Invoicing for import and export as it related to some measures of impact on the foreign exchange (forex) profile of the country.
African trade and integration news
Fixing the Pan-African Payment System for start-ups (The Africa Report)
The latest milestone for the Africa Free Continental Trade Area (AfCFTA) plan is the new interconnected Pan-African Payment and Settlement System (PAPPS) which launched in January this year. It will facilitate cross-border payments, boost intra-African trade and provide expansion opportunities for businesses. This is sorely needed and will significantly benefit Africa’s start-up ecosystem, but five months from launch it’s clear that more needs to be done to ensure it fulfils its potential.
The current picture is concerning: Africa has more than 171 mobile-money wallets – most of which can’t work with each other – more than 1000 banks and more than 12 card networks in 55 countries with little interoperability. Over 80% of African cross-border payment transactions must be routed offshore for clearing and settlement using third-party banks usually located outside the continent. African local currencies need to be converted into hard currencies to make cross-border payments, which leads to significant losses through currency conversion fees as well as reducing the volume and frequency of cross-border trade. This also results in inefficiencies including time lags and high foreign currency reserve requirements for banks. Consequently, Africa’s intercontinental trade remains below its potential – in 2020 the share of intra-Africa trade was just 16%, meanwhile in Asia this figure for the same time period stood at 58.5%.
This new financial market infrastructure connects African markets, enabling cross-border payment in respective local African currencies. However, much more could be done to help start-ups in African countries and deliver the benefits of this new payment system.
Financial experts, academics chart path for good governance (The Guardian Nigeria)
Contemporary issues in governance, economy and trade will take centre stage in Lagos tomorrow, July 8, 2022, as banking and finance experts and academics, including President of Afrexim Bank, Cairo, Prof. Benedict Oramah, launch a festschrift, titled “The New Normal As Option for Sustainable Development in Nigeria.”
The 20-chapter book, written in honour of former Vice President of African Development Bank, and pioneer Pro-Chancellor of Glorious Vision University (GVU), Chief Bisi Ogunjobi, will assess budget financing, trade restriction, human capital development, governance and COVID-19 policy response plan. Other issues to be interrogated are sustainable public economic recovery in Nigeria, security, globalisation and social justice, fallow state of Africa, foreign direct investment and AfreximBank as catalyst for intra-Africa trade and investment
Trade Finance Demand and Supply in Africa: Evidence from Kenya and Tanzania (AfDB)
This report presents the findings of the fourth study in a series of trade finance surveys in Africa. For the first time, we conduct a deep-dive analysis of the trade finance market in Kenya and Tanzania. In doing so, we use data from 804 firms – that cut across multiple sectors of these economies – and 58 commercial banks – that account for over half of all commercial banks in both countries.
Involve border agencies for free movement of goods - ECOWAS Director of Trade (GhanaWeb)
Director of Trade at Economic Community of West African States (ECOWAS) Commission, Kolawole Sofola, has said there can only be free movement of goods and services under Africa Continental Free Trade Area (AfCFTA) if border agencies are brought on board. He noted that intra-regional trade on the continent is relatively low compared to that of Europe [70%] and Asia [60%]. Intra-African trade in 2020 declined from 18% to 16% due to the outbreak of the global pandemic – coronavirus. The disruption in the supply chain by the COVID-19 outbreak led to a decline in revenue.
“One of the challenges perhaps is as tariffs and duties go down, Any products that are made in West Africa should be able to transit freely in West Africa without customs or duties and that’s why we are of Free Trade Area but we also found that there are blockages to the movement of goods…We need to work with our border agencies to make sure that they can process products that move across borders as quickly as possible,” he pointed out. He also called on all heads of government to address the challenges concerning cross-border trade on the continent.
Creative Arts is one of the ways we can promote AfCFTA—Okraku Mantey (BusinessGhana)
Mr. Mark Okraku-Mantey, the Deputy Minister of Tourism, Arts and Culture, says the creative arts industry is indispensable in the promotion of African continental trade and integration. He said the arts and culture industry had long taken up the initiative, with notable exploits within the concept of continental integration. The Deputy Minister, who was addressing a Public Private Partnership Forum (PPPF) held by the Ministry in Ho, said the industry had developed the nation into a layer for creative talents and art icons, and had been instrumental in sustaining trade networks across the Continent. “To talk about the African Continental Free Trade Area (AfCFTA), before we even got to the stage of accepting the policy, we have signed a treaty or pact called the African Continental Free Trade Area, the creative industry have had this culture over the years. “Creative arts is one of the ways that we can market the African continental free trade area because it has already been in that motion for a very long time. And so we need to spread the news that the creative industry is one of the ways we can make the AfCFTA very popular,” he said.
Russia-Ukraine crisis presents challenges for Rwanda, EAC but there’s a silver lining (The New Times)
According to the Food and Agriculture Organisation of the United Nations (FAO), in 2021, Russian and Ukrainian wheat exports accounted for 30 per cent of the global market with sunflower oil exports at 55 per cent. Russia and Ukraine are also significant exporters of maize, barley and rapeseed oil, with Russia and Belarus being leading exporters of fertiliser but both currently under economic sanctions. In the East African Community (EAC), Rwanda, Tanzania and the Democratic Republic of Congo (DRC) source more than 50 per cent of their wheat from Russia and Ukraine, with 11 other African countries in a similar position.
The short-to-medium term global impact is likely to result in price increases anywhere between 8 per cent to 22 per cent in wheat, maize, other coarse grains and oilseeds which FAO estimate could lead to the undernourishment of over 13 million people worldwide. Rwandan Finance Minister Uzziel Ndagijimana has said these price increases were already causing rising inflation and slowing economic growth in Rwanda.
This scenario poses both a threat and an opportunity for the region. The threats are obvious, but the opportunities are for countries to act quickly to enhance food security and open up export opportunities for critical crops and related finished products both regionally and internationally.
Buhari attends IDA for Africa summit in Dakar (Vanguard)
President Muhammadu Buhari departed Abuja, Wednesday, to participate in the International Development Association (IDA) for Africa Summit in Dakar, Senegal.
An institution of the World Bank Group, IDA, is deepening its support to drive a resilient recovery for countries hit by the global crises of climate and COVID -19, growing levels of insecurity and, more recently, by the impact of the war in Ukraine. It hopes to do this through its historic $93 billion 20th replenishment cycle (IDA20) which goes into effect between July 1, 2022 and June 30, 2025.
China’s trade ties with Africa continue to strengthen (Modern Ghana)
Trade between China and Africa is growing. The General Administration of Customs of China recently noted that bilateral trade between China and Africa amounted to USD 254.3 billion in 2021, an increase of 35.3% from 2020. In the first quarter of 2022, China’s Customs Data confirmed that trade between the two regions increased by 23%, to USD 64.8 billion.
A recent report by Economist Corporate Network, supported by Baker McKenzie and Silk Road Associates, BRI Beyond 2020 (Economist report), showed how these strengthening trade links are, in part, a result of favourable financial incentives offered to African jurisdictions by China. According to the Economist report, 33 of the poorest jurisdictions in Africa export 97% of their exports to China with no tariffs and no customs duties. This report noted that bilateral trade was still heavily centred on China’s import of Africa’s natural resources. However, in recent years China had increased its import of manufacturing products from more diversified economies such as South Africa.
A UK-Africa trading partnership for the 21st century (GOV.UK)
The vast, diverse and dynamic Continent can never be defined in a few words: Increasingly its story is one of modern cities – places like Lagos, Luanda and Kigali – where new tower blocks are springing up over the skyline and with young, energetic and educated citizens. It’s a story of a booming fintech industry. Major firms like Nigeria’s Paystack, South Africa’s Yoco, not to mention Chipper Cash, are connecting millions of consumers and entrepreneurs to the global financial system. This is also a story of a continent that is a green energy pioneer.
Of course, for too many people, in too many places, this latest chapter in Africa’s story is yet to unfold.
A strategy that is about building a sustainable, enduring and productive partnership. A partnership in which we use trade’s power to make dependable friends to strengthen the rules-based order. This partnership is about truly understanding Africa’s needs and exploring how our businesses can support them through projects that create jobs, support inclusion and sustainability and bring lasting value. In turn this will build the Continent’s economic strength, so that countries can command a fair price for their vast resources and their people’s skills, that reflects their true worth.
Africa: Where do rich countries stand on their debt commitments? (The Africa Report)
“Let me be very clear, the UK would like to transfer some of its Special Drawing Rights (SDRs) to Africa through the African Development Bank (AfDB),” Vicky Ford, UK minister for Africa, Latin America and the Caribbean, said at the 2022 Annual Meetings of the AfDB Group in Accra in May. The UK government reiterated that statement on 27 June, and many other developed countries have also expressed their willingness to transfer SDRs to African countries. Recently, Akinwumi Adesina, president of the AfDB, said he was “in talks with Canada and France” on this subject. However, despite all these announcements, nothing has yet materialised.
The African Union Commission, in cooperation with the Embassy of the Arab Republic of Egypt, hosted a team from the COP 27 Incoming Presidency, led by Ambassador Mohamed Nasr, Director of the Climate Change, Environment, and Sustainable Development Department of the Ministry of Foreign Affairs of Egypt and the COP 27 Presidency Lead Negotiator from 29th June until 2nd July 2022.
The visiting delegation met with H.E. Monique Nsanzabaganwa, Deputy Chairperson of the Commission, to discuss the ongoing preparations for the 27th Conference of the Parties to the United Nations Framework Convention on Climate Change. The meeting underlined the significance of the African COP 27 as an opportune moment for Africa to voice its priorities and bring forward its demand with regard to climate change. The meeting commended that Africa will be a cross-cutting theme in all the 11 thematic days planned on the margins of COP 27.
During the visit, the African Union Commission hosted the fifth session of the “Africa Climate Talks: Road to COP 27” series entitled “Towards a Just Transition in Africa” organized the Permanent Mission of the Arab Republic of Egypt in cooperation with the Department of Agriculture, Rural Development, Blue Economy and Sustainable Environment of the. The session highlighted Africa’s commitment to a green transition that is Just and Fair, that accounts for the socio-economic realities in the continent, and Africa’s legitimate rights to development and eradication of poverty.
Inaugural ECA monthly press briefing focuses on the modernization of national statistical systems. (UNECA)
The Economic Commission for Africa (ECA) on Tuesday 5 July launched the ECA Monthly Press Briefing, a channel through which the Commission aims to enhance collaboration with the media and facilitate regular access to its experts and knowledge products. During the event, ECA’s African Center for Statistics (ACS) presented some of its ongoing work and underscored the importance of collaboration between ECA and the media journalists who regularly utilize data and statistics to report the news and put stories into context. ACS Director, Oliver Chinganya, delivered a presentation detailing the work being done by the Center in areas such as demographic and social statistics, economics statistics and geospatial information statistics and more.
Mr Chinganya discussed the Centre’s realization of the need to update the 2008 Systems of National Accounts (SNA), which is the internationally agreed upon standard set of recommendations on how to compile measures of economic activity.
Global economy news
The Global Findex Database 2021: Financial Inclusion, Digital Payments, and Resilience in the Age of COVID-19 (World Bank)
The fourth edition of Global Findex - the world's most comprehensive database on financial inclusion - offers a lens into how people accessed and used financial services during COVID-19, when mobility restrictions and health policies drove increased demand for digital services of all kinds. Published every three years since 2011, Findex is the only global demand-side data source allowing for global and regional cross-country analysis to provide a rigorous and multidimensional picture of how adults save, borrow, make payments, and manage financial risks. Findex 2021 data were collected from national representative surveys of about 130,000 adults in over 120 economies. The latest edition includes new series measuring financial health and resilience and contains more granular data on digital payments adoption, including merchant and government payments. The Global Findex is an indispensable resource for financial service practitioners, policymakers, researchers, and development professionals.
Training opens new horizons for women in ports (UNCTAD)
Ports are dominated by men. Globally, women’s participation rate in ports is only 18%, according to an UNCTAD port performance scorecard. Their participation in ports’ operations and services departments is even lower at 16%.
UNCTAD’s TrainForTrade port management programme is helping to bridge the gender gap by empowering more women in ports. In 2021, 35% of its trainees were women. “The share of women participants in the programme is very encouraging,” said Shamika N. Sirimanne, director of UNCTAD’s technology and logistics division.
Interview: BRICS commitment to multilateralism important for holding world together -- South African scholar (China.org.cn)
The BRICS commitment to reinforcing multilateralism during its recent summit is important as the group has a capacity to exert influence in the world, Philani Mthembu, executive director at the Institute for Global Dialogue, a South African foreign policy think tank, has said. Multilateralism “is what holds the world together and could help build a better world for all.” But over the last few years, the role played by multilateral institutions, such as the World Health Organization, World Trade Organization and the United Nations, has taken a hit, and multilateralism has been confronted with challenges, Mthembu told Xinhua in a recent interview.
How Africans can assess the value of the latest G7 summit (The Conversation)
Leaders of the world’s seven advanced economies have once again pledged economic support for Africa and other developing countries. But the realisation of these commitments depends on political developments in the Group of Seven (G7) countries, specifically the United States, the outcome of Russia’s war with Ukraine, and whether Russian president Vladimir Putin retains his grip on power. How each of these political developments will pan out is difficult to tell. But each has an important bearing on the decisions African leaders must make in terms of which power blocs, if any, they align with.
African governments especially face many challenges, amid escalating tensions between western democracies, Russia and China. Africa’s interests would be best served if its leaders were to avoid being drawn into the hostile divide between Russia and China and the west. But it may not be possible to avoid taking sides while trying to maximise advantageous partnerships.
The G7 summit offered the most recent insights for Africa into how the western advanced nations are considering their stakes in Russia’s invasion of Ukraine, and the impact that could have on developing nations. Sorting substance from rhetoric will take time. African scepticism as to whether the west will deliver has merit. As African governments assess the significance of the G7’s promises of support in areas of vital concern to Africans, four key political possibilities could advance or derail them.
Trade restrictions are inflaming the worst food crisis in a decade (World Bank)
The worst global food crisis in a decade was one of the top issues discussed at the 12th ministerial meeting of the World Trade Organization last month . It is a crisis made worse by the growing number of countries that are banning or restricting exports of wheat and other commodities in a misguided attempt to put a lid on soaring domestic prices. These actions are counterproductive—they must be halted and reversed.
The price of wheat, a key staple in many developing countries, has shot up by 34 percent since the Russian invasion of Ukraine in late February. Other food costs have also risen. In response, as of early June, 34 countries had imposed restrictions on exports on food and fertilizers – a figure approaching the 36 countries that used such controls during the food crisis of 2008-2012.
These actions are self-defeating because they reduce global supply, driving food prices even higher. Other countries respond by imposing restrictions of their own, fueling an escalating cycle of trade actions that have a multiplier effect on prices.
How Farm Subsidies in Wealthy Countries Harm African Producers | Alexander Jelloian (Foundation for Economic Education)
It’s estimated that in 2021, approximately 490 million of Africa’s almost 1.4 billion people lived on less than $1.90 per day. To get a sense of African poverty, note that 9 of the 10 poorest countries are in sub-Saharan Africa. Many factors cause Africa’s underdevelopment, but contrary to what some may think, the continent’s economic prospects are far from hopeless. Indeed, even in the developed world, much can be done to help improve the lives of millions of the world’s poorest people. If we in the West are to help those that we proclaim to care about, one of the first policies to go should be price-distorting agricultural subsidies.
Western (and Chinese) subsidies are bad for many African farmers. Africa relies on commodity exports, and when developed states dole out gargantuan sums of money to domestic producers, global commodity prices fall. These subsidies not only waste an enormous amount of taxpayer money, but by artificially lowering commodity prices, subsidies distort the price mechanism and prevent African producers from earning the fair market price for their labor. The case study of cotton subsidies impacting West African producers illustrates this phenomenon well. The four West African countries that have a significant interest in the global cotton trade are Benin, Burkina Faso, Chad, and Mali. Together they are known as the Cotton-4. They are all on the United Nations’ Least Developed Countries list and collectively earn about 60 percent of their total crop revenue directly from cotton. The Cotton-4 countries only produce about 3 percent of the world’s cotton.
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President Ramaphosa receives Just Energy Transition framework (SAnews)
President Cyril Ramaphosa says the Just Energy Transition (JET) Framework will serve as a key evidence-based guide for policy making for South Africa’s transition from a carbon intensive economy towards a greener and cleaner economy. The framework was presented to him by the Presidential Climate Committee (PCC) on Tuesday.
“As this Just Transition framework underscores, combating climate change is not only an environmental imperative, but an economic one as well. This framework is an evidence-based document and a victory for evidence-based policymaking. “The publication of this framework must now serve as a call to action to each of us to embrace the opportunities presented by a low-carbon, inclusive, climate resilient economy and society,” he said.
Namibians show interest in US trade (The Namibian)
Several Namibian entrepreneurs have shown interest in pursuing business opportunities in the United States after making contacts at the Namibia-US trade summit held in Namibia early this month. This was said by Namibia Chamber of Commerce and Industry (NCCI) chief executive officer Charity Mwiya on Monday, although she could not provide further details.
The Ministry of Industrialisation, Trade and SME Development chief information officer Elijah Mukubonda said the ministry was still collating data from different sources to have a clearer picture of the situation. The NCCI small and medium-scale enterprises development officer, Travis Mathews, sent out a memo on Monday last week to the Namibian business community requesting feedback.
Kenya surpasses South Africa as continent’s top avocado exporter (Capital Business)
Kenya has overtaken South Africa to become Africa’s top exporter of avocados. In Central Kenya, where the majority of the country’s small-scale avocado farmers are found, coffee bushes are fast being replaced by avocado trees amid global demand and higher earnings. There is a problem, however, theft. Avocado thieves are keeping farmers in the county awake as they opt to form vigilante groups to guard their crops.
Kenya’s imports from South Africa more than doubles to Sh17.7bn (Capital Business)
Kenya’s imports from South Africa more than doubled in the first three months of 2022 after rising by 64 percent to Sh 17.7 billion from Shs10.8 billion reported during a similar period in 2021. Data from the Kenya National Bureau of Statistics (KNBS) indicate that overall, imports in Africa registered an increase of 24.7 percent from KSh 54.0 billion in the first quarter of 2021 to Shs67.3 billion in the period under review. While imports from Tanzania increased by 23.7 percent compared to a similar period last year, the import bill was a decline from the previous quarter which stood at Shs14.8 billion. The country’s total imports increased from Shs508.7 billion in the first quarter of 2021 to Shs 593.2 billion in the first quarter of 2022.
KEBS urges manufacturers to adopt new standards to boost trade (Capital Business)
The Kenya Bureau of Standards (KEBS) has called on local manufacturers and importers to conform to the 205 new standards which have been developed targeting various products to boost their competitiveness. In the third quarter of Financial Year 2021/2022 (January to March 2022), KEBS developed and published the new standards categorized into seven categories which include; Food & Agriculture standards (5), Chemical standards (49), Cosmetics standards (18).
Speaking during the inaugural Emerging Standards Workshop to assess their implementation on Monday, Kenya Bureau of Standards MD, Bernard Njiraini said manufacturers are expected to ensure they adhere to the new standards when six months window after gazettement elapses in December this year.
Used trucks, buses import ban revs up flagging auto industry (The Standard)
Kenya has stepped up efforts aimed at developing a robust local auto industry by banning the importation of second-hand buses and trucks. The ban took effect last Friday and is expected to play a key role in growing the local vehicle assembly industry. The Kenya Bureau of Standards (Kebs) announced in May plans to roll out new standards aimed at improving safety on Kenyan roads. Other than buses and trucks, Kebs also intends to ban the importation of second-hand tractor heads and prime movers beginning next year.
UN: Over 4 million Kenyans own crypto, highest share in Africa (Business Daily)
Kenya has the largest share of its population with cryptocurrencies in Africa, says the United Nations, pointing to the country’s exposure to the ongoing meltdown in the crypto market. A report by United Nations Conference on Trade and Development (UNCTAD) says that 8.5 percent of the population or 4.25 million people own cryptocurrencies in the country. This places Kenya ahead of developed economies such as the United States, which is ranked sixth with 8.3 percent of its population owning digital currencies.
Transporters protest ban on second-hand buses, trucks (Business Daily)
Long-distance transporters in Kenya have protested the ban on the importation of second-hand buses and trucks, older than three years since their year of manufacture, even as authorities say the policy takes effect on July 1.According to transporters, the new policy will give transporters from other countries in East Africa an edge in the sector as new ones are expensive. Transporters have also claimed that lowering the age limit from eight to three is a further attempt by the government to force the use of standard gauge railway as it will make long-distance trucks more expensive. Car Importers Association of Kenya (CIAK) chairman Peter Otieno said the ban will affect not only importers but Kenyans who will not be able to import new trucks which will in turn increase the cost of transportation as the number of such units will reduce in the coming months.
Yatani: Why we are considering DP World to manage Lamu port (Business Daily)
Kenya turned to port operator Dubai Port World (DP World) to manage Lamu Port due to a lack of capacity at the state-run Kenya Ports Authority. Treasury Cabinet Secretary Ukur Yatani said DP World was among port operators being explored by the government as potential private partners to run the new port. Lamu port was launched last year following delays linked to funding shortfalls and the operalisation of the three berths.
“For us actually the motivation (for signing an MoU with DP World) is Lamu port, we have put Sh50 billion into Lamu port from the exchequer and we do not have the capacity to run it,” CS Yatani said. “There are other players including DP World and others who have done very well in port management so we are asking whether they can be our partners. That does not confer t them any financial gain,” he said.
Kenya has been at pains to explain the rationale behind signing a concession with DP World to undertake the development, operation, management and expansion of transport logistics services in Kenya on various components.
CS Yatani said the country has not yet committed to an agreement but a memorandum of understanding to grant private parties the right to run and operate port terminals and infrastructure such as container freight, dry ports and storage facilities.
Tourism players step up push for open skies policy (Business Daily)
Players in the tourism industry have asked the government to implement the open skies policy to ensure the tourism hubs attract more international airlines. The industry players said they are looking to meet President Uhuru Kenyatta who is expected to tour the Coast region, to deliberate on the importance of implementing the open sky policy to revive the international tourism segment that dwindled at the onset of the Covid-19 pandemic.
“We have a problem and a challenge, international airlines that are trying to get licences to fly to Mombasa are being stopped ostensibly to protect our national carrier. There is a lot of focus on Mombasa because the President is coming to launch his projects. Let’s lobby on the open skies policy,” said Pollman’s Tours and Safaris Director, Mohammed Hersi.
Non-Traditional Export up by 17 percent in 2021- CEO of GEPA (GhanaToday)
Revenue from Ghana’s Non-Traditional Export (NTE) increased from 2.846 billion in 2020 to $3.330 billion in 2021, an increase of $484m representing 17 per cent. The Chief Executive Officer of Ghana Export Promotion Authority (GEPA), Dr Afua Asabea Asare, who disclosed this at the launch of the 2021 NTE Report, said available statistics have revealed that NTE was increasing at an average rate of four per cent over the past five years and has contributed an average of approximately 20 per cent to the total export.
On the sector-by-sector contribution to the NTE, she said the manufacturing sector contributed $2.81billion representing 84 per cent, the agriculture contribution was $467 million representing 14 per cent, and industrial arts and crafts contributed $45.2million representing two per cent.
According to the CEO, the products were exported to 152 countries in the European Union (EU), the United Kingdom (UK), African Union, Economic Community of the West African States and other advanced countries.
Mobile money adoption drives Nigeria’s banking penetration to record high (Businessday)
Higher adoption of mobile money is driving the growth of account ownership in financial institutions particularly in Sub-Saharan Africa (SSA) countries like Nigeria, a recent 2021 Global Findex report by World Bank has said. An analysis of the report titled ‘Financial Inclusion, Digital Payments, and Resilience in the Age of COVID-19, showed that Nigeria’s banked population increased by 15.6 percentage points to 45.3 percent in 2021, the highest in 10 years from 29.7 percent in 2011. The 45.3 percent put Africa’s biggest economy in the 18th position out of 25 SSA countries.
“Mobile money has become an important enabler of financial inclusion in Sub-Saharan Africa especially for women as a driver of account ownership and of account usage through mobile payments, saving, and borrowing,” the report stated.
US’s Zambia investment plan targets African food security (African Business)
Zambia’s post-pandemic drive to diversify from mineral exports received a healthy boost as USAID announced an investment package worth over $44m. Aimed at “spurring private investment at a scale that could never be matched by foreign aid alone”, TradeBoost Zambia will build upon USAID’s new flagship, continent-wide Africa Trade and Investment programme.
Just three sectors – retail trade, mineral extraction and construction – constituted almost half of Zambian GDP before the pandemic. USAID’s focus on agricultural development will be welcomed in a country where population growth outstrips domestic agricultural production, which accounts for only 5.8% of GDP despite providing employment to 70% of Zambians. In the short term, it is hoped that an $8.5m export deal with agricultural companies Zdenakie and NewGrowCo will also help to relieve pressure on East African grain importers suffering the consequences of the war in Ukraine.
Curbing Tunisia’s crippling illicit financial flows (ISS Africa)
Tunisia loses about US$1.2 billion annually to illicit financial flows (IFFs) – around 3% of the country’s gross domestic product. These outflows involve the illegal transfer of unlawfully earned money or capital from one country to another.
From 2008 to 2015, the Economic and Social Commission for Western Asia ranked Tunisia first for IFFs and eighth for corruption in the Middle East and North Africa. In 2015, illicit financial inflows made up US$2.6 billion (11.4%), and outflows constituted US$1.28 billion (5.6%) of Tunisian trade. More recent figures aren’t available – highlighting a major gap that needs Tunisia’s urgent attention.
The problem is likely much more extensive than available data suggests.
African trade and integration news
The creation of the African Continental Free Trade Area (AfCFTA) provides a unique opportunity to boost growth, cut poverty, and reduce Africa’s dependence on the boom and-bust commodity cycle. A World Bank (2020) report estimates that the AfCFTA has the potential to raise income in the continent by 7 percent by 2035 and lift 40 million people out of extreme poverty, mainly by spurring intraregional trade (termed the “AfCFTA trade scenario” for purposes of this analysis). Reductions in nontariff barriers on goods and services and improvements in trade facilitation measures will account for about two thirds of the US$450 billion in potential income gains by removing long delays across most of the continent’s borders and lowering compliance costs in trade, making it easier for African businesses to become integrated into regional and global supply chains. This report builds on that earlier study by including potential gains arising from greater flows of foreign direct investment (FDI), termed the “AfCFTA FDI broad scenario,” and from deeper integration beyond trade, the “AfCFTA FDI deep scenario.” FDI has traditionally been low in Africa. The AfCFTA is likely to attract cross-border investment by eliminating tariff and nontariff barriers and replacing the existing patchwork of bilateral and regional trade deals with a single, unified market. Investors in any one of 55 member countries will have access to a continent of 1.3 billion people with a combined GDP of US$3.4 trillion. Integration in global and regional value chains offers a further magnet for FDI and the jobs, investment, and know-how that FDI brings.
Right infrastructure needed to enhance intra-Africa trade - Trade Expert (Graphic Online)
A trade expert, Maame Awinador-Kanyirige, has urged African governments to put in place the right road infrastructure to facilitate trade on the continent. Although the Africa Continental Free Trade Area is expected to remove trade barriers on the continent, she said one of the critical things that has to be done was the need to put in place an effective transportation system to enable the smooth movement of goods.
In an interview with the Graphic Business on June 29, 2022, on the effect of the two-year border closure due to COVID-19 on the Ghanaian economy in terms of cross border trade, she said an improved transportation system was the only way to move goods at a cheaper cost between states.
COVID-19 poses risk to smooth operation of AfCFTA – AU (Businessday)
The African Union (AU) says COVID-19 poses the most formidable risk to the smooth operation of the African Continental Free Trade Area (AfCFTA) agreement. AU in a statement, Tuesday, ahead of an industrialisation-themed continental meeting said, “COVID-19 pandemic has further heightened the risks of perpetuating the continent’s trade and business vulnerability.’’ It stressed that the pandemic and its attendant disruption of global supply chains have brought to the fore the urgency and significance of driving industrialisation in the African continent.
The statement came ahead of the AU’s high-level industrialisation-themed continental summit, slated for November 20 to 25 in Niamey, the capital of Niger. The summit will be held under the theme “Industrialising Africa: Renewed commitment towards inclusive and sustainable industrialisation and economic diversification.
Making trade easier for Africa’s youthful population (Businessday)
The youth are spearheading a lot of change initiatives not only in Nigeria but also across Africa. The world’s population is estimated to hit 10 billion people by 2055. It’s projected that Africa will account for 57% of the growth at about 1.4 billion people. With Africa’s youthful population growing there is a growing need to ensure that the youth are well resourced. If harnessed, the creativity and innovation of the huge youthful population can play a key role in Africa’s economic transformation.
Across the continent, the informal sector has provided a major source of employment for many youths. Majority of them are in the small and medium enterprises (SME’s) space. This resort to informality is due to the need to explore available opportunities and earn a living. SMEs in Africa have proven to be key drivers of growth, innovation development and job creation.
A vibrant SME segment provides a strong foundation for development, increased standards of living and poverty reduction.
Sadly, the challenges with facilitating trade especially among SMEs are well known. They include, fragmentation, market access, operational and administrative inefficiencies and in some cases, bureaucratic delays.
SADC developing measures to ease trade facilitation in the Region (SADC)
The Southern African Development Community (SADC) is developing and implementing customs instruments to tackle challenges that contribute to higher transaction costs in order to ease trade among countries in the region. The customs instruments include logistics, simplification and harmonisation of documentation associated with cross-border trade, improving transparency in operations of regulatory agencies, harmonisation of standards and technical regulations, harmonisation of Sanitary and Phytosanitary measures (SPS), monitoring and resolution of Non Tarif Barriers (NTBs), as well as improving the business environment in which transactions take place.
SADC is also conducting Time Release Studies (TRSs) along its corridors to assess bottlenecks and efficiency in the clearance of goods crossing the border posts. TRS is a method endorsed by the World Customs Organisation (WCO) for assessing a country’s trade facilitation performance. It does so by measuring the average time from arrival of goods at the border until permission is given for the goods to enter home consumption.
The North South Corridor (NSC) is earmarked for the first regional TRS in 2021/2022 and 2022/2023 financial years. The NSC connects the South African port of Durban to Lusaka, Zambia, Lubumbashi, Democratic Republic of Congo, and to Lilongwe and Blantyre in Malawi, through Johannesburg (South Africa), Botswana, and Zimbabwe, and is a vital corridor for trade and the sustenance of SADC regional integration. SADC is supporting the implementation of trade facilitation measures to both the at-the-border and behind-the-border initiatives. This is with regard to requirements for access to markets outside the SADC Region.
On 08-09 July 2022, the Southern African Development Community (SADC) will hold the 33rd Committee of Ministers of Trade and 22nd Ministerial Task Force for Regional Economic Integration at Crossroads Hotel in Lilongwe, Republic of Malawi. The purpose of the meeting for the 33rd Committee of Ministers of Trade is to consider progress report on the implementation of the Protocol on Trade and its annexes. The key issues to be discussed include; Rules of origin, Sanitary and Phytosanitary Measures (SPS), Technical Barriers to Trade (TBT), ratification of the Free Trade Area and implementation of Trade in Services Protocol. On the other hand, the 22nd Ministerial Task Force for Regional Economic Integration will consider progress report on implementing the Industrialisation Strategy and Road Map 2015-2063. The key issues include a progress report on the ratification of the Protocol on the Industry, Private Sector engagement, Value Chains, Macro Convergence, Infrastructure Development, AfCFTA and rules of origin.
Sacu to refocus on development of value chains…as it prioritises financing for industrialisation (New Era)
The Southern African Customs Union (Sacu) member states have agreed to refocus the bloc’s work programme on industrialisation through the development of regional value chains, export, and investment promotion. Speaking at the 7th Summit of Heads of State in Bostwana last week, Executive Secretary Paulina Elago noted that Sacu has prioritised, financing for industrialisation, trade facilitation and logistics together with the implementation of the African Continental Free Trade Area (AfCFTA) as key focus areas. “This refocused Work Programme is deliberately structured to ultimately position Sacu as the manufacturing and innovation hub for the continent, and in doing so, to take full advantage of the AfCFTA,” said Elago at her last Sacu summit, given her term of office ends in October 2022.
Tax disputes, trade wars headache for new EABC board (The East African)
The East African Business Council (EABC), which last week elected a new executive committee, says it will expedite the formation of a trade remedy committee to deal with disputes and cut disruptions in the East African Community (EAC) Common Market.
The executive committee was scheduled to meet Ugandan President Yoweri Museveni on June 30, amid threats by Kampala to withdraw duty remission in retaliation to a trade war with Kenya involving agricultural products, and blamed on Nairobi’s persistent introduction of tax measures on Uganda’s exports.
“We are having so many challenges in accessing markets for Ugandan goods in Kenya. “In fact, Uganda is trying to pull out of the duty remission scheme but we are working on keeping them there,” said Simon Kaheru, chairperson of the EABC Ugandan Chapter, who was retained as the vice-chair to the council. “Uganda has surplus industrial sugar but there’s nowhere to sell it. The same with milk and other commodities,” he added. If Ugandan manufacturers pull out of the duty remission scheme, this would have far-reaching consequences on intra-EAC trade as no country would have mandate to collect import revenues.
Advancing integrated development (China.org.cn)
Over the past 20 years, the African Union (AU) has made great achievements in promoting African integration and maintaining peace and security in Africa. China advocates multilateralism and supports the democratization of international relations, so it has always attached importance to cooperation with the AU and regarded it as one of the important partners in building a China-Africa community with a shared future.
Africa is an important region for the joint construction of the BRI. With 52 African countries as well as the AU Commission having signed cooperation agreements under the initiative, Africa has become the region with the largest number of countries participating in the initiative.
China has supported the AfCFTA since its establishment. In the China-Africa Cooperation Vision 2035 adopted by the Eighth FOCAC Ministerial Conference in November 2021, China committed to actively participate in the development of the AfCFTA, as it will not only help promote intra-regional trade and African economic integration, but also help combine China’s development experience, technology and capital with Africa’s rich natural and human resources, injecting new vitality into China-Africa cooperation.
At present, China and Africa are striving to build a China-Africa community with a shared future in the new era to further strengthen China-Africa cooperation. The nine programs announced at the Eighth FOCAC Ministerial Conference identified the priority cooperation projects and objectives of the two sides in the next three years.
Global economy news
the real transition toward a sustainable economy will first and foremost be carried out by the Private Sector. Companies are investing as never before in net-zero strategies, sustainably produced products and decarbonization of global supply chains. Both public and private efforts translate around the world into an incredible effort to put a price on carbon as well as develop carbon measurement and accounting standards. It is also important to take into account issues of verifiability and certification — and to avoid double counting. This is an unprecedented and most welcome commitment to the green economy. Yet, from a world trade perspective, this effort is also associated with some challenges.
The most important one is associated with the risk of market fragmentation. For example, more than 60 different carbon pricing schemes already exist globally. Fragmentation coming from these schemes risks generating trade frictions and unpredictability for businesses seeking to decarbonize. It also risks marginalizing developing countries and small businesses, in their efforts to participate to global value chains.
2022 High-Level Political Forum on Sustainable Development kicks off in New York (UNECA)
The 2022 High-Level Political Forum on Sustainable Development (HLPF) officially opened on 5 July, with a call to action from Collen Kelapile, President of ECOSOC and Permanent of Representative Botswana to the United Nations, to overcome the challenges facing the global community, outlining many reasons for optimism regarding sustainable development.
ECOSOC President champions optimism ‘against all odds’ at key UN development conference (UN News)
The senior UN official outlined five reasons for his optimism “against all odds”, beginning with successes in controlling the COVID-19 pandemic, in many countries. While acknowledging its detrimental effects on societies, people and the global development agenda, he said the pandemic has also “served as a wakeup call in exposing many aspects of our societies which were not right”.
Despite rising inflation, major supply-chain disruptions, policy uncertainties and unsustainable debt in developing countries – all of which have slowed the global economy – Mr. Kelapile cited the latest forecast in the World Economic Situation and Prospects for global growth of 3.1 per cent.
Global natural gas consumption is expected to contract slightly in 2022 and grow slowly over the following three years as Russia’s war in Ukraine pushes up prices and fuels fears of further supply disruptions, according to the IEA’s latest Gas Market Report. Today’s record high gas prices are depressing demand and causing some gas users to switch to coal and oil, while recent sharp cuts in Russian gas flows to Europe are raising alarms about supplies ahead of the winter. The turmoil is damaging natural gas’ reputation as a reliable and affordable energy source, casting doubts about the role it was expected to play in helping developing economies meet rising energy demand and transition away from more carbon-intensive fuels. The recent developments have led to a considerable downward revision of gas’ growth prospects. Global gas demand is set to rise by a total of 140 billion cubic metres (bcm) between 2021 and 2025, according to the new Gas Market Report – less than half the amount forecast previously and smaller than the 170 bcm increase seen in 2021 alone.
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Eskom crisis: ANC NEC hears calls for state of emergency, moving power utility to energy dept (Engineering News)
"There were a lot of calls made by ANC leaders on how the government should respond to the crisis, and some people felt that there must be a state of emergency on the energy crisis, especially when you consider what this means for townships and other areas," a well-placed source who attended the meeting told News24.
However, the ANC NEC did not make concrete resolutions on the way forward in the energy crisis gripping South Africa.
South Africa's Eskom, trade unions yet to solve outstanding issues as severe load shedding extends (China.org.cn)
Trade unions have settled some of their demands with Eskom, South Africa's national power utility, but they haven't reached an agreement on two outstanding issues, a union spokesperson said on Monday, as a severe load shedding was extended to Monday.
Eskom and trade unions are set to meet on Tuesday to discuss the wage offer and give feedback from their member workers on the company's latest wage proposals, Luphert Chilwane, media officer of the National Union of Mineworkers (NUM), told Xinhua in a telephone interview.
South African business activity expands at faster pace in June – PMI (Engineering News)
The S&P Global South Africa Purchasing Managers' Index (PMI) rose to 52.5 in June from 50.7 in May, posting its highest reading in just over a year. Anything above 50 indicates growth in the sector.
South African companies surveyed attributed higher sales to a recovery in economic conditions, particularly in regions affected by recent floods.
ICRC to Gazette $22bn PPP Projects in 2022, Says Acting DG (THISDAY Newspapers)
NIGERIA: The acting Director-General, Infrastructure Concession Regulatory Commission (ICRC), Mr. Michael Ohiani, yesterday said the commission intended to gazette a pipeline of 53 eligible and bankable Public-Private Partnership (PPP) projects valued at about $22 billion this year.
He said creating a friendly investment climate could only be achieved by reducing risks and costs of doing business and by securing private property rights, improving governance, fighting corruption, simplifying regulations, and promoting competition.
Among several other achievements, Ohiani said following the inauguration of the ICRC governing board, between 2010 and 2021, the federal government had approved PPP projects valued at over $9 billion, pointing out that the commission had issued 128 Outline Business Case Compliance Certificates which included certified bankable projects to date, to enable them to proceed to procurement phase.
Government targets $39bn from private-public partnerships in two years (Guardian Nigeria)
The Federal Government is hoping to generate about $39 billion from privatisation of public institutions between 2021 and 2022, the Acting Director-General of the Infrastructure Concession Regulatory Commission (ICRC), Michael Ohiani has said.
The ICRC boss, who disclosed this yesterday in Abuja, at the opening of a two-day summit of the Africa Public Private-Partnership Network (AP3N), hinted that in 2021, the ICRC published a pipeline of 51 eligible and bankable PPP projects, worth over $17 billion.
We've put in place adequate policies to reduce money laundering, others (Myjoyonline)
The Governor of the Bank of Ghana, Dr. Ernest Addison, says, there are adequate policies and protections in place to strengthen Anti-Money Laundering and Combating the Financing of Terrorism (AML-CFT) activities.
Additionally, banks and non-bank financial institutions are encouraged to increase investments in digitisation platforms as well as cyber-security systems to facilitate safe and secure trade transactions through AfCFTA.
Russia/Ukraine war contributing to Nigeria's food insecurity (Daily Trust)
The war in Ukraine is shaking the commodity market and threatening global food security. The Western economic sanctions on Russia are supposed to force the hands of Russia to withdraw from the invasion, but the responses from the old Baltic power shows resilience. The war is a heavy blow to the global economy, mainly low-income African countries, and no one knows when it will end.
The impact on food items is a worry for African households because they spend a high share of their expenditures on food. Precisely, Nigeria spends 57 per cent on food items based on 2019 data. These shortages will likely impact Nigeria’s demand as global prices of these commodities will likely increase, and some food items will be scarce. And let’s not forget how world oil prices affect the Nigerian economy – they say whenever the oil market sneezes, Nigeria catches a cold.
Kenya's Q1 global trade value hits Sh802bn, deficit widens (The Star, Kenya)
Latest government data shows the country's imports value totalled Sh593.2 billion in the first quarter of 2022, a 16.6 per cent increase from Sh508.7 billion the previous year.
Kenya's import bill continues to swell even as export earnings grow slowly, widening the trade deficit between it and its partners.
Sanctions on Zim: A form of economic invasion (The Herald)
The impact of sanctions by the United States (ZIDERA) and European Union on Zimbabwe has been felt by ordinary people across urban, rural and diaspora communities of Zimbabwe.
These illegal and unwarranted sanctions were carefully crafted with the aim of making Zimbabwe a dysfunctional state.
The US and Europe in general have a propensity of investing heavily in institutionally-packaged programmes of economic terror towards African and other countries that are rich in minerals, that are not complying to their demands, to loot their raw materials and other natural resources.
These targeted countries such as Zimbabwe have clearly rejected this structured economic superiority by the US and its allies to continue siphoning natural resources and raw materials laterally for free at the expense of localised beneficiation investment where only finished products are exported.
S'pore, Morocco to cooperate on carbon markets, providing tech aid to Africa (The Straits Times)
Singapore and Morocco have agreed to collaborate on carbon markets and work together to provide technical assistance to governments in Africa.
At the end of a three-day official visit to mark 25 years of bilateral diplomatic ties, Foreign Minister Vivian Balakrishnan said on Monday (July 4) that a memorandum of understanding, which he and Moroccan Foreign Minister Nasser Bourita signed, sets the two countries to cooperate in achieving emission targets.
Zimbabwe to introduce gold coins as local currency tumbles (Engineering News)
The central bank governor John Mangudya said in a statement on Monday that the coins will be available for sale from July 25 in local currency, US dollars and other foreign currencies at a price based on the prevailing international price of gold and the cost of production. The "Mosi-oa-tunya" coin, named after Victoria falls, can be converted into cash and be traded locally and internationally, the central bank said.
DR Congo declares end to latest Ebola outbreak (UN News)
The Democratic Republic of Congo (DRC) has declared the end of its 14th Ebola outbreak after less than three months, the UN World Health Organization (WHO) said on Monday.
“Thanks to the robust response by the national authorities, this outbreak has been brought to an end swiftly with limited transmission of the virus,” said Matshidiso Moeti, WHO Regional Director for Africa.
ECOWAS lifts economic sanctions on Mali -- after six months (TheCable)
In the communique, ECOWAS said while the economic and financial sanctions have been lifted, Mali remains suspended from decision-making within the organisation.
India, Mozambique review ties, exchange views on global developments (Business Standard)
India and Mozambique on Monday reviewed the multi-faceted bilateral relationship including political exchanges, development partnership projects, defence and security cooperation during the second round of Foreign Office Consultations held here.
An External Affairs Ministry release said the two sides also exchanged views on global developments and issues of common interest including cooperation in the United Nations, South African Development Cooperation (SADC)and the African Continental Free Trade Area (AfCFTA).
"During the FOC, both delegations reviewed the multi-faceted bilateral relationship, covering political exchanges, development partnership projects, defence and security cooperation, trade and economic matters, consular issues, and cooperation in areas such as agriculture, sports, health," it said.
Africa
Advancing Investments into Africa: USD$100 million is just one deal in a broader agenda (Social News XYZ)
Canada announced key projects while at the Commonwealth Heads of Government Meeting, including Process Research Ortech's (PRO) mining project in Botswana with investment partners – valued at CAD $129 million (USD $100 million), as announced (https://bit.ly/3Ajg2Oe) by Prime Minister Justin Trudeau.
"This project shows Canada is the partner of choice for local beneficiation, skills development, and job creation across Africa and in Canada, within the context of deeper intra-Africa trade to which Canada has been committed," says Jacques NdoutouMvé, VP of Business Development at Process Research Ortech.
Establishment of African Pharmaceutical Technology Foundation: An innovative approach to transforming Africa's health system (Businessday)
For decades, Africa has relied on other countries to provide for the healthcare needs of its population. Over 70 percent of all the medicine needs on the continent are imported, accounting for about $14 billion per year. With the growing burden of diseases on the continent, particularly non-communicable diseases and pandemics, such as COVID-19, the health systems in Africa have come under an immense strain due to its very limited capacity to produce its own medicines and vaccines.
This critical situation has in the last few years, drawn significant attention and emphasised the need for collaboration among world-leading organisations like the World Health Organisation, the African Union Commission, the World Trade Organization, the African Development Bank, among others, to provide sustainable interventions for Africa’s healthcare industry.
African pharmaceutical companies lack the negotiation capacity to engage with global pharmaceutical companies and are often marginalized and left behind in complex global pharmaceutical innovations. A major contributor to this challenge is the absence of an institution in Africa that supports the practical implementation of Trade Related Intellectual Property Rights (TRIPs) on licensing of proprietary technologies, know-how, and processes. It is to fill this important gap that the African Development Bank has approved the establishment of the African Pharmaceutical Technology Foundation, an innovative institution that will strengthen Africa’s access to the technologies that support the manufacture of medicines, vaccines, and other pharmaceutical products.
AfDB to set up pharmaceutical foundation in Rwanda (The East African)
Rwanda will host the new African Pharmaceutical Technology Foundation, a venture by the African Development Bank (AfDB) that is expected to boost the continent’s access to technology in manufacturing medicines and vaccines.
AfDB said the foundation is crucial to help African pharmaceutical companies better scout for technologies and negotiate with global pharma to facilitate local production of the fundamental health products that take up to $14 billion of Africa’s income annually.
The continent is currently home to about 375 pharmaceutical firms, which produce less than 25 percent of the needed products annually, forcing the countries to import vastly to meet demand.
Afreximbank approves $1 billion facility to boost AfCFTA operations (TODAY)
“The renewal of the US$1 billion facility and the US$10 million grant funding represents resounding entrustment by our Board of Directors of these efforts. These facilities will again be contributing to making a great idea a reality. We thank the AfCFTA Secretariat for the solid partnership that is bringing the aspirations of the AfCFTA within reach.
Pan-African Parliament Appoints Fortune Charumbira New President (Black Star News)
Charumbira was overwhelmingly elected at the just concluded Pan-African Parliament (PAP) Ordinary Session of the Fifth Parliament held in Midrand, South Africa.
In his acceptance speech, Charumbira committed to ensure the full participation of African citizens in the economic development and integration of the continent. The decision also charged the Office of the Legal Counsel of the Union to prepare modalities and conduct the elections of the new Bureau of the Pan-African Parliament.
The visiting delegation met with H.E. Monique Nsanzabaganwa, Deputy Chairperson of the Commission, to discuss the ongoing preparations for the 27th Conference of the Parties to the United Nations Framework Convention on Climate Change. The meeting underlined the significance of the African COP 27 as an opportune moment for Africa to voice its priorities and bring forward its demand with regard to climate change. The meeting commended that Africa will be a cross-cutting theme in all the 11 thematic days planned on the margins of COP 27.
The Deputy Chairperson of the African Union Commission announced the intention to convene a series of meetings and mechanisms to enhance interdepartmental and intergovernmental coordination ahead of COP27 to ensure the most active participation in the upcoming conference, including the preparatory meetings, promoting even further common African interests in climate change, an issue that assumes a special importance for the continent.
Global
Asia and digital neo-mercantilism (East Asia Forum)
Is there an Asian digital regime? There was, though it was closer to a global regime based on neoliberal principles of free trade and globally distributed supply chains in which Asia played a special part. But that order is disintegrating, as nations inside and outside Asia revert to a new form of neo-mercantilism focused on digital technologies. In this new model, national security seeks to displace trade and growth on the agenda.
Neo-mercantilism calls attention to the way trade and investment in technology and national industrial policies are related to national security and the relative power of the state. In contemporary policy dialogues, trade policy, tech policy, foreign policy, military strategy, cybersecurity and industrial policy are distinct areas of expertise. But looking at the US–China conflict as the two nations competing for a dominant role in the global order analytically slots those pieces together. It is a digital neo-mercantilism because technologies such as 5G telecommunications, semiconductors, social media platforms and artificial intelligence capabilities are at the centre of the competition.
The globalised regime that East Asian countries benefited from so greatly is fragmenting into several large geopolitical blocs — the United States, Europe, China and India — resulting in a more bordered space governed by tensions and power plays.
Regional leaders begin two days of summit talks (Jamaica Gleaner)
Caribbean Community (CARICOM) leaders begin their annual summit in earnest on Monday, coinciding with CARICOM Day marking the signing of the Treaty of Chaguaramas that gave birth to the regional integration movement, hoping for fresh perspectives on deepening the 15-member grouping.
CARICOM is going to place much emphasis during this summit on the issue of implementation, a situation that has dogged the regional integration movement since its inception, and as Santohki asked, “Have we as a region advanced functional cooperation, and increased coordination of policies to benefit our people?
CARICOM Secretary General Dr Carla Barnett said the summit was taking place at a time of severe global crisis in three vital areas, namely, food, energy and finance.
How carbon markets use digital technology to track emissions (World Economic Forum)
For decades, carbon markets have been seen as part of the solution to climate change. They have mostly been dominated by the private sector, but this will soon change. More than two thirds of countries are planning to use carbon markets to meet their Nationally Determined Contributions (NDCS) to the Paris Agreement.
Carbon markets help mobilize resources and reduce costs to give countries and companies the space to smooth the low-carbon transition. It is estimated that trading in carbon credits could reduce the cost of implementing NDCs by more than half – by as much as $250 billion by 2030. Over time, carbon markets are expected to become redundant as every country gets to net zero emissions and the need to trade emissions diminishes.
BRICS summit to benefit South Africa with 8 practical outcomes: Chinese envoy (China.org.cn)
Eight practical outcomes, among many highlights, of the recent 14th BRICS Summit will particularly benefit South Africa and the African continent at large, said Chinese Ambassador to South Africa Chen Xiaodong.
According to the ambassador, the BRICS countries reached a digital economy partnership framework and proposed a cooperation initiative on the digital transformation of the manufacturing industry, as many African countries including South Africa attach great importance to digital economy.
Can BRICS become the anti-G7 that Russia and China want it to be? (The Strategist)
While China and Russia would both like the BRICS to become the anti-G7 that rallies the emerging world in opposition to the ‘hegemonic’ West, both India’s Narendra Modi and South Africa’s Cyril Ramaphosa flitted from their screen-based BRICS summit to the Bavarian Alps to participate as observers at the G7 summit, to which they had been invited, along with the leaders of Indonesia and Senegal (which holds the presidency of the Organisation of African Unity).
The trade and investment links between the nations are weak. There has been no real growth in trade between the five members since 2011, and the trade that does take place is mainly the sale of primary products by Brazil, Russia and South Africa to China, and China’s sale of manufactured goods in return. Excluding China, internal BRIC trade is less than 3% of the total exports of Brazil, Russia and India, and 6% for South Africa.
The second-coming of the BRICS (East Asia Forum)
Within the BRICS bloc, Russia has already developed financial architecture to achieve de-dollarisation in collaboration with China and India. After Russia was cut off from the dollar-based global financial system and half its foreign exchange reserves were frozen by the West, Russia called on its BRICS partners to extend the use of national currencies and integrate BRICS payment systems in April 2022.
Like it or not, the BRICS as a global governance architecture representing the Global South is here to stay with an expanded policy agenda. The BRICS may even try to entrench their unique role by developing an alternative global financial system that is not based on the US dollar.
Rising freight rates push up food import costs (The Kathmandu Post)
Between February and May 2022, the Baltic Dry Index—a global benchmark for dry bulk freight rates—increased by 59 percent, according to The War in Ukraine and Its Effects on Maritime Trade Logistics, a report published by the United Nations Conference on Trade and Development (UNCTAD) recently.
The report said that among four economies—high income, upper middle income, lower middle income and low income—lower middle income countries may suffer an additional 4.2 percent increase in consumer food prices.
UNCTAD has made six recommendations regarding maritime transport challenges which include supporting developing countries, especially the most vulnerable economies such as small islands, developing and least developing countries and net food importers.
The importance of financing a sustainable future (Nairametrics)
While climate change may have taken a back seat in a news cycle dominated by COVID 19, war and the cost-of-living crisis, the risks and threats associated with our warming planet remain the biggest long-term threat to our combined economic future.
Banks and financial institutions will be critical to managing that risk and this includes financing of sustainable infrastructure, supporting transition and investing in green innovation. In fact, the banking industry has a responsibility to bridge top-down and bottom-up approaches to net-zero and help the public and private sectors realise the vast opportunities the energy transition and the move to sustainable infrastructure promises.
To achieve net zero across the whole economy, legacy carbon intensive assets and companies will require financing to help them transition to a cleaner future.
Collaboration of G20 countries in handling global food crisis (ANTARA English)
According to the World Food Program, 323 million people in 2022 are at risk of acute food insecurity. The G7 and G20 have a big responsibility to overcome this food crisis
In the last week of June 2022, President Joko Widodo (Jokowi) visited several countries in Europe and the United Arab Emirates to meet leaders of G7 and G20 members, including conflict-stricken nations, Russia and Ukraine.
The president urged countries to act quickly to find concrete solutions to increase food production and to normalize global food and fertilizer supply chains.
The G20 countries must immediately channel funding for increasing food production by providing fertilizer subsidies, assisting farmers, and maintaining stable harvest prices, as well as increasing loan distribution to the agricultural sector, especially farmers with land areas under two hectares.
Up to 90% of governmental websites include cookies of third-party trackers (EurekAlert)
The results reveal that in some countries up to 90% of these websites add third-party tracker cookies without users' consent. This occurs even in countries with strict user privacy laws.
The researchers considered studying the behavior of government websites and their compliance or non-compliance with data protection laws during the COVID-19 pandemic, a time when citizen information was provided through official websites of international organizations and governments. "Our results indicate that official governmental, international organizations' websites and other sites that serve public health information related to COVID-19 are not held to higher standards regarding respecting user privacy than the rest of the web, which is an oxymoron given the push of many of those governments for enforcing GDPR," comments Nikolaos Laoutaris, Research Professor at IMDEA Networks.
A total of 5,500 websites of international organizations, official COVID-19 information and governments of G20 countries were analyzed: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, UK and USA.
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S. Sudan traders now plan to ditch Mombasa port for Djibouti route (Business Daily)
The Port of Mombasa is staring at a new threat from South Sudan, with fresh clamour to transfer business to the Djibouti route, in what will deny Kenya revenue on 1.1 million tonnes of cargo that the facility handles annually. Mombasa has been the main route for all consignments destined to the landlocked country and South Sudan now says Port of Djibouti is shorter. “We are in talks with Djibouti authorities so that we can connect Djibouti, Ethiopia, and South Sudan to use Djibouti port through Ethiopia,” deputy chairperson for Chamber of Commerce in South Sudan Lado Lukak Legge was quoted saying by the media in Sudan. “Djibouti is near to South Sudan compared to Mombasa port in Kenya and the government of Djibouti is willing to strengthen trade ties with South Sudan and Ethiopia,” he said.
Used car prices jump up to 30pc in three months (Business Daily)
Used car prices in Kenya have jumped by up to 30 percent over the past three months on weak shilling, scarcity of vehicles and rising shipping costs, pushing low-range types such as Vitz above the Sh1.2 million mark.
Buyers are cutting orders and shunning popular Toyota car models in favour of Nissan and Mazda brands due to cost pain. Dealers are facing increased competition from buyers in source markets such as Japan and the UK as automakers have scaled down production owing to shortages of semiconductors used in electronic devices.
Lagos plans new industrial estate to boost investment in MSMEs (Businessday)
A new industrial estate is springing up at Gberigbe, Ikorodu, Lagos, aimed at encouraging more investment in micro, small and medium scale enterprises (MSMEs) in the state, Lola Akande, commissioner for commerce, industry and cooperatives, disclosed on Sunday. The small-scale industrial estate, according to Akande, is coming to complement existing small industrial estates like Isolo, Mushin, and Sabo in Ikorodu, and is a further demonstration of the state government’s resolve to continue to provide the enabling environment for businesses to thrive.
Kenya launches int’l financial center to boost inflow of foreign capital (China.org.cn)
Kenya on Monday launched the Nairobi International Financial Center (NIFC) to help spur the inflow of foreign capital to fund the country’s development agenda. President Uhuru Kenyatta said in a speech read on his behalf by Joseph Kinyua, Head of Public Service that the center seeks to enhance the business environment to enable companies to raise funds for projects, support innovation, and tap into new investments coming into Africa. “The Nairobi International Financial Center has been designed as an efficient and predictable business environment to give more confidence to the large pools of global capital that have been watching our progress but have not yet taken the decision to invest,” Kinyua said.
Kenya, TZ trade crosses Sh100bn as Suluhu marks a year in office (Business Daily)
Annual trade between Kenya and Tanzania crossed the Sh100 billion mark for the first time in President Samia Suluhu’s tenure in office, signaling improved ties between the two neighbouring countries. Fresh official statistics show the value of goods traded between the two countries amounted to Sh107.63 billion in 12 months through March 2022, a 66.86 percent growth over Sh64.51 billion the year before. Kenyan traders spent Sh56.78 billion to truck in goods from Tanzania in the year ended March 2022, according to data collated by the Kenya National Bureau of Statistics (KNBS)That is a 77.92 percent jump of over Sh31.91 billion a year earlier. Exports to Tanzania, on the other hand, bumped 56.03 percent to Sh50.85 billion, the KNBS data shows. Trade balance was in favour of Kenya in prior years.
Central African Republic (CAR) Launches Native Crypto “Sango Coin”, Eyes Blockchain-Driven Economy (Coinspeaker)
The CAR is taking its crypto aspirations up a notch by launching a native digital currency that will be backed by Bitcoin. Central African Republic (CAR) has launched its national crypto “Sango Coin” as part of a push toward the metaverse. According to CAR President Faustin-Archange Touadéra, the country’s national crypto will exist alongside Bitcoin (BTC) as recognized digital currency. Touadéra also stated that Sango Coin would play an integral role in modernizing the infrastructure of the landlocked Central African country, including a planned metaverse project.
EU pledges $1.4bn in climate funding to Nigeria (Engineering News)
The European Union (EU) and development finance institutions will provide $1.4-billion in funding aimed at cutting its reliance on oil. The funds for agriculture, climate and digital projects will help Africa’s largest oil producer, “achieve low carbon, resource efficient and climate resilient development, creating jobs for youth and economic growth,” Samuela Isopi, EU ambassador to Nigeria and the Economic Community of West African States, said at a conference in Lagos.
Kenya signs treaty to establish African medicines agency (The Star, Kenya)
Kenya has become the latest member state of the continental body-Africa Union-to ratify a Treaty that will pave way for the establishment of an African Medicines Agency (AMA).The specialized agency that will help state parties and regional economic communities enhance its capacity to regulate medical products is born out of the Union’s Accord which came into force in November last year. “It will help the parties improve access to quality, safe and efficacious medical in the continent,” the memorandum from the ministry of foreign affairs reads in part.
Trade facilitation: $1.5bn Lekki Deep Seaport’ll be fully automated at take-off –Bello-Koko (Daily Sun)
As the Nigerian Ports Authority (NPA), received the first-ever vessel Zhen Hua 28 to berth at the $1.5bn Lekki Deep Seaport, the Managing Director of the Authority, Mohammed Bello-Koko,has said that the port would be the first to be fully automated in Nigeria when fully operational. Speaking while receiving the vessel, which brought three Ship To Shore (STS) cranes and 10 Rubber Tyred Gantry (RTG) cranes, Bello-Koko disclosed that the successful delivery of the three STS and the 10 RTG cranes was critical to the commencement of operations of the deep seaport.
Lekki Deep Seaport: Changing Nigeria’s Maritime Story (This Day)
Last Friday, the vessel ZHEN HUA 28, a heavy lift carrier, berthed at the Lekki Deep Seaport, Lagos, delivering three Ship to Shore (STS) Cranes and 10 Rubber Tyred Gantries (RTG) that will help in the swift evacuation of cargoes from vessels to the shore. It was a first. These cranes, touted as the most sophisticated port equipment, will be used for the first time in Nigeria at the Lekki Port, putting Nigeria at the forefront of container operations in West Africa.
The Lekki Deep Seaport with almost 17-meter draught constructed by China Habour Engineering firm is a $2 billion investment in the Lagos Free Trade Zone initiated by the Tolaram Group and conceived to be a key game-changer in Nigeria’s dawdling maritime economy. An upbeat President Muhammadu Buhari congratulated the Federal Ministry of Transportation and the Nigerian Ports Authority (NPA) and all stakeholders in the maritime sector over the successful berthing of the first ship at the Deep Seaport. He recalled that his approval of four new seaports in the country, including the Lekki Deep Sea port, was hinged on growing the economy.
Nigerian Shippers’ Council urges FG to promote exportation of non-oil products (Tribune)
The Nigerian Shippers’ Council has called on the Federal Government to provide a suitable environment for the exportation of non-oil products to boost foreign earnings through the African Continental Free Trade Areas (AfCFTA). This was contained in a communique issued at the end of a one-day sensitisation programme organised by NSC South West Zone, held at Abeokuta, last week, towards the promotion of AfCFTA. The communique emphasised the need for the government at the centre to convey on developing the infrastructural capacity to address the challenge of smuggling across the borders. It noted that smuggling activities into the country had continued to affect economic growth.
EU Provides €28M to Improve Liberia Maritime Security (Liberian Daily Observer)
Under the largest EU-funded Support for West African Integrated Maritime Security (SWAIMS) component, implemented by the Camoes I.P., the capacities of the Liberian Coast Guard and related entities to carry out patrolling and evidence collection at sea will be strengthened with the supply of rigid-hull inflatable boats (RHIBS) and relevant training of its personnel.
Africa
Use trade to cushion yourselves, AfCFTA tells African nations (The Citizen)
The African Continental Free Trade Area (AfCFTA) yesterday called on African countries to increase the level of trade among themselves in order to avoid challenges they face during crises. The AU body asked member countries to stop reliance on exporting primary commodities largely to the North, accelerate self-sufficiency and establish regional continental value chains. AfCFTA said fragmentation, smallness of the countries’ economies and lack of industrial capacity contributed to the 18 percent inter Africa trade. AfCFTA secretary general, Mr Wamkele Mene made the statement yesterday when gracing the official opening of the 46th Dar es Salaam International Trade Fair (DITF).Speaking during the event, Mr Mene said when Covid pandemic hit the world, Africa lacked the capacity to manufacture germ killing products, masks and other required tools to fight the pandemic.
At their 134th Meeting held on June 13, 2022, the Board of Directors of African Export-Import Bank (Afreximbank) has renewed their approval of a US$1 billion facility to operationalise the African Continental Free Trade Agreement (AfCFTA) Adjustment Funds. It also approved a Grant Funding in an amount of US$10 million to seed the Base Fund of the AfCFTA Adjustment Funds. Afreximbank and the AfCFTA Secretariat were mandated by the AfCFTA Council of Trade Ministers and the African Union Heads of State and Government to establish and operationalise the AfCFTA Adjustment Funds, which consists of the Base Fund, the General Fund, and the Credit Fund. The Base Fund will be used to mobilise grants to address tariff revenue losses and to support AfCFTA State Parties to implement the various protocols under the AfCFTA. Afreximbank Board also approved a grant funding in an amount of $10 million as seed funding to kick-start the establishment of the Base Fund. The General Fund will be used to mobilise concessional funding, while the Credit Fund will be used to mobilise commercial funding that will be used to support the public and private sector including small and medium enterprises (SMEs), youth and women to adjust to the new trading environment arising from the AfCFTA.
Small and medium-sized enterprises (SMEs) form the backbone of the African economy, representing more than 90% of businesses and employing about 60% of workers, many of whom are women and youth. Despite the significant role which SMEs play in the development of African economies, they have yet to be fully integrated into the regional value chains system and in turn the continental trading system. It is against this backdrop, as Commemoration of the International Micro, Small and Medium Enterprise (MSME) Day, the First Edition of African Union Small and Medium Enterprises (SME) Annual Forum kicked off on 27 June 2022 in Cairo, Egypt under the theme “Economic Empowerment of SMEs, Women and Youth Entrepreneurs to Realize Africa’s Industrialization in the Context of the Integrated Market”.
It is in this context that the African Union Commission’s novice Women and Youth Financial and Economic Inclusion (WYFEI) 2030 Initiative proposes a set of multi-level innovative, resilient and inclusive recovery solutions in the form of a10-point agenda that will assist women and young entrepreneurs to climb the ladder of change towards financial and economic inclusion. The 10- point agenda includes interventions at the personal level, systems level and environmental level which call for personal income enhancement, financial sector innovation and macroeconomic policy reform, respectively,” said Dr. Monique Nsanzabaganwa.
How Poorly Negotiated Trade Agreements Fuel Illicit Financial Flows, Tax Evasion (The Whistler Newspaper)
In a 2020 Economic Development in Africa Report released by the UN Conference on Trade and Development (UNCTAD), Africa lost about $88.6bn or 3.7 per cent of its Gross Domestic Product, to illicit financial flows. Illicit financial flows are multi-dimensional, comprising several different kinds of activities, including flows originating from illicit activities, illicit transactions to transfer funds that have a legal origin, and flows stemming from legal activity being used in an illegal way. The $88.6bn lost in Africa to IFFs is huge when considered from the standpoint that the continent is home to some of the poorest countries in the world. While governance is supposed to be at the heart of addressing development challenges on the continent, the story is different in some countries in Africa because of lack of transparency and accountability which had undermined social, economic and political progress at many levels.
The Former President of South Africa, Thabo Mbeki had identified the three principal challenges to confront in addressing IFFs. They are building capacity to combat illicit financial flows at national and continental levels; establishing a global coherence on agreed actions between African countries with a common position on the Mbeki Report; and developing global mechanisms to ensure adherence to implementation of whatever is agreed as solution.
Launch of the Africa SDGs Progress Dashboard (UNECA)
The African Centre for Statistics of the United Nations Economic Commission for Africa is pleased to announce the launch of the Africa SDGs Progress Dashboard. The tool is developed to assist evidence-based policy making in Africa on the Global Sustainable Development Goals and the continental Agenda 2063, “The Africa We Want”. It provides evidence on how much progress has been made on each of the Sustainable Development Goals, Targets, and Indicators and how likely they are to be achieved by 2030 based on the current pace of progress. The results are provided at continental, subregional and country level.
African Heads of State to Convene to Champion a Strong Start to IDA20 Implementation for a Robust Recovery (World Bank)
The Republic of Senegal and the World Bank Group will host a high-level meeting on July 7, 2022, with African leaders to leverage the powerful voice of African countries in implementing the IDA20 program whose financing and policy package was successfully endorsed by the Heads of State a year earlier at a similar summit in Abidjan. The cycle for the twentieth replenishment of the International Development Association (IDA20) will run from July 1, 2022, to June 30, 2025.The meeting, hosted by H.E President Macky Sall of Senegal, will call on leaders and implementers to fully tap into IDA20, underpinned by World Bank global expertise and country presence, to deliver lasting results to African citizens.
Africa has the most number of countries (39 of 74) benefiting from IDA20 whose theme is Building Back Better from the Crisis: Towards a Green, Resilient, and Inclusive Future. African countries have been hit hard by multiple global crises including climate change, the COVID-19 pandemic, growing levels of insecurity, and more recently the crisis in Ukraine. The World Bank Group stands ready to partner with Governments as they implement policies for building back better and for accelerating the development and economic transformation of the continent.
A financing facility associated with the African Development Bank’s Desert to Power Initiative was featured at a side event held on the margins of the just-ended Africa Energy Forum in Brussels, Belgium. The event, dubbed “Accelerating private sector investments in the G5 Sahel - leveraging the Desert to Power Financing Facility,” was held on 23 June, to engage the private sector on the financial resources needed for the innovative Desert to Power G5 Sahel Financing Facility, which forms part of the broader energy Initiative.
The ending cotton season has been a lot of things, but stable and consistent are not really among them, ICAC says in its latest update. However, production and consumption in the final month of the 2021/22 season are virtually unchanged from the numbers in June, it notes.
ICAC says the drastic increase in fuel and energy costs has had a direct impact on fertiliser prices and availability on the cotton season.
Worse, there are growing concerns that the world will experience multiple famines as a result of the conflict in Eastern Europe, which spells trouble for everyone but especially African nations.
There is, however, some good news, ICAC says. Arica has made gains in developing The African Continental Free Trade Area (AfCFTA), which went into effect on 30 May 2019, and the agreement has the potential to facilitate the movement of commodities across borders with the elimination of tariffs on most goods and services. The ICAC has been actively engaged in education and training efforts in several African countries, including the concept of regenerative agriculture. Those projects are longer-term but add significantly to the African cotton industry’s outlook in the coming years, it notes.
East African Crude Oil Pipeline praised (Independent)
The East African Crude Oil Pipeline (EACOP) represents a critical solution to making energy poverty history in Africa by 2030, say experts led by says NJ Ayuk, Executive Chairman of the African Energy Chamber (AEC). In addition to transporting much-needed oil across the region and improving energy security by connecting hydrocarbon-rich basins in Uganda with both its regional and international destinations, the pipeline will be instrumental for job creation, local community empowerment and wider socioeconomic growth. However, despite its significance, western environmentalist groups are demanding the abandonment of the project, citing environmental concerns. But at what point does Africa’s energy needs and the wellbeing of the people take precedence over sensationalist eco-socialism?
“Stop disrupting Africa’s development and let’s use the EACOP and every other oil and gas project on the continent to drive Africa into a new era of energy and economic success,” says Ayuk.
Afreximbank Welcomes Algeria as its 52nd Member State (Afreximbank)
African Export-Import Bank (Afreximbank) has announced that The People’s Democratic Republic of Algeria (Algeria) has joined the Bank as a Member State. That brings the membership of Afreximbank to 52 out of the 55 African Union member States. Algeria’s accession to the agreement establishing Afreximbank was formalised on 8 June 2022 by Presidential Decree No. 22-212. The subscription of the country to the shares of Afreximbank as part of its membership in the institution was also authorised by Presidential Decree n°22-222 of 14 June 2022. Algeria becomes a Class A shareholder in the Bank and will be represented by the Algerian Ministry of Finance. Algeria has the 9th largest population and the 4th largest economy in Africa. It is also a member of the African Union, the African Continental Free Trade Area (AfCFTA) and the Greater Arab Trade Area.
Vibrant Validation Session for the Women & Youth Financial & Economic Inclusion (WYFEI) 2030 (AU)
The Women, Gender, and Youth Directorate (WGYD) held a validation session with partners and stakeholders in Cairo, Egypt on 28th June 2022. The session sought to validate the draft strategy document of the WYFEI 2030 initiative as part of a series of consultations ahead of its finalization and launch on 22 July 2022. The validation session was delivered in a hybrid format and was attended by over 50 participants across a broad spectrum of economic inclusion sectors, including; development finance institutions, international non-governmental organizations, women’s economic empowerment movements, civil society organizations, and the private banking sector.
Expected key outcome, beside the validation of the WYFEI 2030 Draft Strategy Document; will be WYFEI 2030 Cluster Member recruitment drive.
Global economy
Members mark 5th anniversary of Trade Facilitation Agreement, share experiences on impact (WTO)
In her welcoming remarks to the event, Deputy Director-General Anabel González highlighted that the TFA had “added an entirely novel dimension to multilateral trade cooperation: the need to work together to alleviate frictions caused by trade procedures and processes.” With the entry into force of the TFA, trade facilitation had joined trade opening as an essential element of national, regional and global trade policy reform.
Maritime Trade Disrupted: The war in Ukraine and its effects on maritime trade logistics (UNCTAD)
The war in the Ukraine is stifling trade and logistics of Ukraine and the Black Sea region. The search for alternate trade routes for Ukrainian goods has rapidly increased the demands on land and maritime transport infrastructure and services. For Ukraine’s trading partners, many commodities now have to be sourced from further away. This has increased global vessel demand and the cost of shipping around the world. Grains are of particular concern given the leading role of the Russian Federation and Ukraine in agrifood markets, and its nexus to food security and poverty reduction.
Rare period of stability in an up-and-down cotton season (just-style.com)
As the 2021/22 cotton season comes to a close, the industry is seeing a rare period of stability but the International Cotton Advisory Committee (ICAC) warns things are not expected to remain stable for long, with issues from the pandemic and conflict in Eastern Europe still impacting the market.
Related News
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Local trade news
Trade Statistics for May 2022 | South African Revenue Service
The South African Revenue Service (SARS) today releases trade statistics for May 2022 recording a preliminary trade balance surplus of R28.35 billion. The R28.35 billion preliminary trade balance surplus for May 2022 is attributable to exports of R179.46 billion and imports of R151.11 billion.
South Africa imported record volumes of steel in 2021, new report shows (Engineering News)
At close to 1.7-million tonnes, South Africa imported record volumes of primary steel in 2021, constituting about one-third of all steel used in the country, a new Steel Report published by the South African Iron and Steel Institute (SAISI) confirms. The report, which is the inaugural edition of what will be a yearly publication, concludes that South African apparent steel consumption, which recovered by “an astonishing 36%” following the Covid lockdown, is now substantially propped-up by imported primary steel products. Written by SAISI secretary-general Charles Dednam, the report notes that South Africa, which was historically a steel exporter, became a net importer at the beginning of 2020. It also notes that the rise in imports has occurred notwithstanding the “much-contested trade measures introduced to curb the influx of foreign steel to the country”. Price and availability have been given as reasons for the surge in imports.
South Africa to appeal against EU decision to reintroduce import regulations on oranges (FreshFruitPortal.com)
The South African Citrus Growers’ Association (CGA) has announced it will appeal against the EU Standing Committee on Plant, Animal, Food and Feed’s decision to reintroduce new import regulations, regarding the entry of the False Codling Moth (FCM) pest.
Firstly, the CGA highlighted that “South Africa operates a sophisticated Systems Approach for FCM Risk Management, which already includes different cold treatment protocols”, indicating that the new regulations were not “necessary”. Secondly, the association hinted that the measures were unjustified, arguing that “there is no crisis with regard to FCM interceptions relating to citrus imports”, given that there has been a decrease in notified interceptions over the past three years, the length of time that the FCM has been a quarantine pest. Thirdly, the CGA said that “the proposed measures would severely impact SA exports to the EU”, insinuating that they are disproportionate. “There are clearly less trade restrictive and equally effective measures available such as the continuation of the existing Systems Approach, which has been further strengthened ahead of the 2022 season,” it added.
Lastly, the South African association implied that the EU regulations were not “feasible”, as “86.6 percent of South African oranges exported to the EU in 2021 were loaded under Codes specified in the Risk Management system that do not require pre-cooling.”
Digital transformation of manufacturing expected to improve efficiencies (Engineering News)
The transformation of manufacturing processes and operations into connected, integrated, automated and smart operations, collectively known as Industry 4.0, will reduce the amount of low skilled positions but also create new skilled positions, assurance and advisory services multinational PwC South Africa’s ‘Insights into the I4.0 maturity of SA Manufacturing’ report has found. The report surveyed representatives across nine industrial sectors in South Africa during April and May and found that 35% of respondents predicted that throughput would increase between 10% to 20% owing to Industry 4.0 investments made over five years, and enable them to see a return on their investments.
Kenya requires mandatory recordal of IP rights for imported goods (Inventa International)
Kenya has taken recent measures regarding anti-counterfeiting to be implemented by the Anti-Counterfeiting Authority (ACA). The ACA’s Public Notice (No.1/2022), issued on 26 April 2022, established that all IP rights for goods imported into Kenya must be recorded with the ACA starting July 1, 2022. This applies to all imported goods freed of where the IP right is registered. The second Public Notice (No.2/2022) states the deadline extension to submit a mandatory record to 1 January 2023. Not complying with the legislation can lead to legal consequences.
Application submissions for an ACA recordal process require detailed information about the IP rights owner, subsidiary, or foreign company which uses the IP rights abroad, the goods, and the place where they are manufactured. Samples or photographs of goods to be imported and certified copies of the respective IP registration certificates must also be added.
The record will remain valid for one year, after which period the IP owner will be able to request its renewal. This is a clear progress in the country to combat counterfeit goods and illicit trade in the country.
World Bank faults Kenya’s ‘ad hoc’ disaster budgets (Business Daily)
The World Bank has urged Kenya to review its budgeting for disaster and emergency management citing unsustainable ad hoc tweaks in the expenditure plans of ministries and State departments and agencies(MDAs) whenever such mishaps occurred. The multilateral lender said the Covid-19 pandemic and floods encountered in the country in the 2019/20 financial year exposed deep weaknesses in the current trend where the State heavily relies on reallocating the budgets of MDAs to tackle disasters.
“The financial year2019/20 revealed some weaknesses in the Kenyan ability to effectively finance a disaster response with poor contingency planning and an overreliance on reallocations,” the World Bank said.
Official data shows that in the financial year 2019/20 alone, the Treasury reallocated approximately Sh50 billion from the budgets of the various MDAs towards disaster response compared to the initial total provision of Sh5 billion for contingencies.
“Although reallocations per se are a normal instrument used for financing emergencies and although the level of reallocations might be expected given the size of the Covid-19 crisis, the Kenyan experience reveals delays and, in some instances, inaccurate predictions, which led to numerous corrections of estimates that affected crucial votes,” the World Bank said.
Kenya, UK business lobby sign deal to fight corruption (The Standard)
The government has signed a memorandum of understanding (MoU) with the British Chamber of Commerce Kenya (BCCK) to promote business climate reforms, including the fight against corruption. BCCK’s Business Integrity Initiative and the Department of Business Reforms and Transformation (DBRT) under the Ministry of East African Community (EAC) and Regional Development will establish a joint programme to identify and recommend areas for reform, host public-private workshops, and build private sector capacity. Speaking during the signing of the MoU, Principal Secretary in the State Department for EAC Kevit Desai said business integrity is the foundation of international trade. “While corruption is a global issue, it is a concern that has been raised in our discussions with businesses and international investors. This MoU will create a platform to reaffirm Kenya’s commitment to strengthening the business climate,” he said.
Today, Administrator Samantha Power launched a groundbreaking new $30 million, subject to appropriations, trade and investment program, called TradeBoost Zambia, that will advance the U.S. government’s Prosper Africa and Feed the Future initiatives. TradeBoost is among the first projects to be launched as part of USAID’s new continent-wide Africa Trade and Investment program, the Agency’s flagship effort in support of Prosper Africa. TradeBoost will amplify market intelligence, increase investment in Zambian businesses, and direct targeted trade facilitation support to Zambian businesses to reach regional and international markets. TradeBoost prioritizes locally-led development with all sub-contracts and grants going to local partners. The program will focus on businesses led by women and young people who invest in climate smart production.
As part of this new trade and investment program, Administrator Power announced two private sector partnerships that will enhance Zambia’s ability to grow food for people across Africa.
Seychelles’ economic recovery in 2021 vastly outperformed projections, fueled by a faster-than-expected rebound of the tourism sector. The recovery is expected to continue in 2022 with projected real GDP growth of 7.1 percent as the tourism sector shows resilience to COVID-19 waves and geopolitical tensions. The recovery has been accompanied by a significant fiscal overperformance.
The Seychellois economy continues to face significant risks. The economic outlook, while positive, remains subject to external risks including a further surge of commodity prices and fewer tourist arrivals. Higher nonperforming loans in the banking sector could emerge as COVID-support and forbearance measures are being withdrawn. The country remains vulnerable to climate change.”
Following the Executive Board discussion, Mr. Li , Deputy Managing Director and Acting Chair, made the following statement: “Fueled by a fast rebound of the tourism sector, Seychelles’ economic recovery in 2021 outperformed expectations, with stronger-than-expected growth and fiscal outturns. The tourism sector has shown resilience to COVID-19 waves and geopolitical tensions. The recovery has been accompanied by a significant fiscal overperformance, creating fiscal space to address current challenges. The economic outlook, while positive, remains subject to external risks including from spillovers of the war in Ukraine, a further surge of commodity prices and fewer tourist arrivals.
The DRC’s macroeconomic environment has improved since the last Article IV consultation in 2019. The authorities have adopted prudent macroeconomic policies, most visibly by halting central bank financing to the government. Despite the COVID-19 pandemic, considerable macroeconomic gains were achieved in 2021 and reform momentum under the ECF arrangement was sustained. The economy rebounded more than envisaged with growth at 6.2 percent, supported by non-extractive growth. Consumer Price Index (CPI) inflation declined to 5.3 percent year-on-year, accompanied by a stable exchange rate as the central bank stopped providing financing to the government. The fiscal outturn was better than projected, as higher fiscal revenues and external financing provided space for additional spending, mostly on investment although domestic arrears accumulated. The external position improved, and gross international reserves increased to US$3 billion at end 2021. However, despite excess liquidity, private sector credit remains subdued at 7 percent of the GDP and the banking sector faces vulnerabilities. Fragility continues to hinder inclusive growth as 72.5 percent of the population is in poverty and access to basic public services is severely under-provisioned.
In 2022, the DRC’s economy is facing some headwinds from the war in Ukraine, which has increased the cost of living and the fiscal costs associated with the fuel subsidy. Despite the deteriorating global economic prospects, the outlook remains favorable sustained by improved mineral prices. Growth has been revised down to 6.1 percent (6.4 percent previously) and inflation revised up to 11 percent due to imported prices. The domestic fiscal deficit (program target) is projected to widen by 0.4 percentage points of GDP, to 1.4 percent of GDP as the higher mining revenues will not fully compensate for the increased fiscal costs associated with the fuel subsidy and higher domestically financed investment for priority social infrastructure projects.
African trade and development news
African SMEs yet to be fully integrated into the regional value chains system (News Ghana)
The first African Union (AU) SME Annual Forum is aimed at realizing Africa’s industrialization in the context of the integrated market, experts reveal. And they also add that Small and medium-sized enterprises (SMEs) form the backbone of the African economy, representing more than 90% of businesses and employing about 60% of workers, many of whom are women and youth.
But despite the significant role which SMEs play in the development of African economies, they have yet to be fully integrated into the regional value chains system and in turn the continental trading system.
It is against this backdrop, as Commemoration of the International Micro, Small and Medium Enterprise (MSME) Day, the First Edition of African Union Small and Medium Enterprises (SME) Annual Forum kicked off on 27 June 2022 in Cairo, Egypt under the theme “Economic Empowerment of SMEs, Women and Youth Entrepreneurs to Realize Africa’s Industrialization in the Context of the Integrated Market”.
SACU summit to find solutions to the impact of COVID-19: Patel (SABC News)
Trade, Industry and Competition Minister Ebrahim Patel says five Southern African Development Community (SADC) regional leaders will use the Seventh Southern Customs Union (SACU) summit to find solutions to the impact of the COVID-19 pandemic and the Russia-Ukraine conflict on the regional bloc. He was speaking to the South African Broadcasting Corporation (SABC) ahead of the one-day gathering scheduled for Gaborone, Botswana later on Thursday morning.
“SACU is the place where we put together a common position on trade for the rest of the African continent. More than a quarter million jobs in South Africa are dependent on what we are selling to the rest of the African continent.”
“So, the African trade is a very big part of our job space, our economic growth and what we generate in a way of taxes that we use for housing, health care, education and so on and so our focus has been on why the inability of African countries to trade with each other. Parliament has ratified the African Continental Free Trade Area and this year we seek to complete the offer to each other and in that way help to create more jobs,” says Patel.
150 Trucks Cross Katuna-Gatuna One Stop Border Post Daily (EABC)
Over 150 transit trucks cross over the Katuna-Gatuna One Stop Border Post (OSBP) daily following the reopening of the border. This was revealed during the EABC-TMEA Public Private Dialogue with Trade Facilitation Agencies at the Katuna-Gatuna OSBP. Mr. Peter Gikwiyakave, Regional Manager, Uganda Revenue Authority said “800 people cross the Katuna border.”
The Gatuna Katuna OSBP currently only facilitates movement of transit cargo. Traders pleaded for Ugandan exports to be allowed to enter Rwanda and vice versa for bilateral trade ties to flourish better. Transporters called for harmonization of road tolls citing Rwanda charges a flat fee of USD.76 while Uganda charges USD 10 per 100 mileages.
Ms. Akaukwasa Miria, Chairperson of Katuna Women Cross Border Traders appreciated that a trade information desk is instituted at the border. She stated that women need to be sensitized on the EAC Simplified Trade Regime and small cross border traders should be allowed to do business at the Gatuna-Katuna OSBP.
Investors should be heartened by Africa’s economic resilience in a trying global environment (The Africa Report)
This can extend to Africa, and there is an air of scepticism about Africa’s economic recovery and long-term growth prospects. While not as severely impacted as the West and other developed economies, Africa’s growth was dented by Covid-19 as trade flows stuttered and tourism stalled. This has prompted the IMF to predict that Sub-Saharan Africa will grow at just 3.8% in 2022, much lower than the average performance since 2000.
However, there remains much cause for optimism, not just over the next decade, but in the second half of 2022. This positive outlook lies foremost in recognising that the pandemic has not impaired the continent’s main structural drivers of growth. Africa’s youthful population, ongoing urbanisation and development of its financial services, technology and power infrastructure continue to serve as the cornerstones for its ascent.
In the short term, the continent has shown promising signs of organic recovery from the pandemic which will be boosted further when China, Africa’s biggest trading partner, reengages. Meanwhile, Africa’s commodity markets, the backbone of many of the continent’s largest economies, are relatively buoyant and countering some of the headwinds in the international environment.
Africa’s collective strength is its diverse economic backdrop; growth is multi-speed and with varying primary drivers.
there remain at least two major headwinds that will inhibit more spirited near-term growth across the continent. The first of these is global monetary tightening which will curtail capital flows to the continent and elevate risk aversion. The second is the impact of the war in Ukraine. While most African countries have less than 2% of their overall international trade with Russia and Ukraine, there are some notable exceptions, such as Egypt and Malawi. Moreover, for the vast majority of Africa, more than half of these countries’ wheat supplies come from Russia and Ukraine, with Benin and Somalia completely reliant on these two countries.
AFRICA: A new financial innovation centre for renewable energy (AFRIK21)
The new partnership involves the Opec Fund for International Development (OFID), the United Nations Capital Development Fund (UNCDF) and the Sustainable Energy for All Initiative (SEforALL). These organisations want to set up a financial innovation centre to support access to renewable energy in developing countries, many of which are in Africa. The centre, which is due to be launched at COP27 in Sharm el-Sheikh, Egypt, in November 2022, will identify innovative solutions to the development challenges of partner countries, including gaps in green finance and private sector investment. It will also promote innovative business models and financing instruments to find, unlock, de-risk and scale up private sector investment in energy access.
“Designed as an end-to-end global political and financial platform, the Hub will harness the power of financial innovation to ensure maximum leverage. Every dollar of sovereign finance is expected to attract $4 of green and sustainable capital into projects in the medium term,” says UNCDF. The centre is being set up at a time when electricity access in Africa remains low. According to the African Development Bank (AfDB), 600 million Africans still do not have access to electricity.
African countries must take cyber-security measures seriously—AGA-Africa (Myjoyonline)
Participants at the Attorney General Alliance (AGA) Africa have stressed the need for African countries to tighten cyber-security measures as African nations open their borders for the implementation of the African Continental Free Trade Agreement (AfCFTA). This, they say is necessary to block trans-national fraud in the banking sector estimated to be around 1.4 trillion dollars in 2018. Speaking at the AGA Annual Conference in Accra, the Executive Director of the Alliance, Karen White, said African countries stand to lose the most if cyber fraud is ignored. “Recent developments like the ratification of the AfCFTA are commendable—facilitating the free movement of people and goods across the continent. They also signal the ease with which trans-national criminals can expand the scope of their operations,” she said.
How Micro Businesses are Overcoming Challenges of Doing Business in Rural Areas (TechEconomy)
Contrary to the erroneous belief in some quarters that doing business in rural areas is immune from the common challenges that businesses generally face, reality is that micro business owners in underserved areas also have peculiar challenges they go through. Some of these challenges include difficulty in accessing goods on time. Dearth of infrastructure such as good road network, long distance to the market and lack of adequate transportation system to move purchased goods are among the factors that constitute access barriers to goods and commodities. As a result, many owners of micro businesses spend longer time or wait for days and weeks to receive inventory or restock, while oftentimes they experience supply shortages.
The delay or disruption in supply also affects the end-users/consumers, who are unable to purchase things they need as at when due.
However, the increasing impact of digital technology that is rapidly transforming every segment of our socio-economic ecosystem is also changing the narrative positively for businesses including retail trade.
The digitalisation of the economy, which is enabling e-commerce platforms in the B2C segment and lately the B2B segment, has had and continues to have great impact on the manufacturing, distribution and retail value chains.
Hackers now shifting focus to small traders (Business Daily)
It is always thought cybercriminals target big companies in order to demand ransom running into millions. However, recent trends show that hackers are shifting their focus to small online businesses mainly because they are vulnerable.
“Cybercriminals are now targeting small businesses more as they have realized that these enterprises do believe they would be exposed due to their comparatively low turnovers until they lose their data and payments are compromised,” Agora Group co-founder and chief executive officer (CEO) Hadi Maeleb said.
Speaking during the inaugural Africa Cybersecurity Congress held in Nairobi, Mr Maeleb said the threats to online businesses were growing at an exponential rate as more than 90 percent of business owners are unaware that their enterprises are at risk.
Whereas these measures accelerated the adoption of digital platforms, they also increased vulnerability such as data breaches, ransomware, cyber bullying, harassment, data breaches, and phishing attacks. With more than 1 million local businesses running online, Mr Maeleb said this creates an attractive environment for threat actors.
Rural industrialisation gathers steam (The Herald)
President Mnangagwa yesterday commissioned a US$20 million edible oil refinery plant in Mahusekwa Mashonaland East, where he said global shocks that have caused food shortages and related challenges in many countries have driven Zimbabwe’s desire to produce adequate food for its citizens. The President implored farmers to take advantage of the National Enhanced Agricultural Productivity Scheme (NEAPS) and the Second Republic’s rural industrialisation drive and access inputs for strategic crops whose production is being supported by the Government through accelerating the construction of dams and existing schemes to increase size of land under irrigation.
President Mnangagwa has declared that his administration will drive rural industrialisation, which will see industrial activity being launched in rural areas based on factor endowments in each rural space. Such endowments become the definers and drivers of the industrial activity envisaged in any one area. The objective of rural industrialisation is to stem rural-urban migration. Government has already laid the preparatory groundwork for the transformation through, among many other things, establishing tertiary institutions, including vocational training centres in rural areas and intensifying the rural electrification programme.
Green Energy’s Dirty Secret: Its Hunger for African Resources (Foreign Policy)
In June, the European Parliament voted to effectively outlaw the sale of new cars using gasoline or diesel by 2035. If approved by the European Union, the move would revolutionize the world’s third-largest auto market after China and the United States—and hasten the global transformation of the entire automotive industry to battery technology. What the parliamentarians didn’t mention: The world cannot mine and refine the vast amounts of minerals that go into batteries—lithium, nickel, cobalt, manganese, palladium, and others—at anywhere close to the scale for this rapid transition to electric vehicles (EVs) to occur. The dirty secret of the green revolution is its insatiable hunger for resources from Africa and elsewhere that are produced using some of the world’s dirtiest technologies. What’s more, the accelerated shift to batteries now threatens to replicate one of the most destructive dynamics in global economic history: the systematic extraction of raw commodities from the global south in a way that made developed countries unimaginably rich while leaving a trail of environmental degradation, human rights violations, and semipermanent underdevelopment all across the developing world.
A key issue is cross-border infrastructure such as railways and access to seaports. This is not just a prerequisite for bringing battery resources to market. The dearth of cross-border infrastructure in much of Africa also means that efforts to integrate the continent’s economies have never really taken off, even though the African Continental Free Trade Area, created in 2018, is the world’s largest free trade zone, at least on paper, encompassing 43 states. Here, China is far ahead, with rail and port infrastructure funded and built by Chinese entities transforming African logistics. In 2019, the Center for Strategic and International Studies estimated that 46 sub-Saharan African ports were built, expanded, or operated by Chinese entities.
Renewed calls for SMBC to halt East African pipeline support (Global Trade Review)
A group of environmental organisations and NGOs are putting pressure on Japanese lender SMBC to end its involvement in a controversial US$5bn East African crude oil pipeline, ahead of a shareholder meeting this week. In a letter sent to SMBC’s board this month, the campaign groups warn the bank’s role in the East African Crude Oil Pipeline (EACOP) is inconsistent with its own environmental and social pledges, leaving it open to accusations of “greenwashing” and possible legal action.
AAFA on AGOA: Africa ‘Logical’ Choice for Brands Fleeing China (Sourcing Journal)
The American Apparel and Footwear Association (AAFA) urged the office of the United States Trade Representative (USTR) to renew the African Growth and Opportunity Act (AGOA), as U.S. brands and retailers look to diversify sourcing. While the trade agreement’s expiration is still three years away, the Washington, D.C.-based trade group believes that establishing long-term, forward-looking policy will help brands commit to new sourcing strategies with the 36 AGOA-eligible sub-Saharan African nations. “U.S. investment in the region already faces mounting uncertainty” in the absence of a decision on AGOA’s renewal, AAFA vice president of trade and customs policy Beth Hughes wrote to Trade Policy Staff Committee chair William Shpiece last week.
“Companies are poised to diversify out of China, and Africa is a logical place for many of them,” she added. Brands are looking to work with Free Trade Agreement (FTA) countries to counteract ongoing supply chain challenges and tensions with China.
The AGOA region’s growing textile and garment sector has gained business from American brands in recent years, but the legislation’s “on-again, off-again nature” has eroded U.S. importers’ interest in utilizing its benefits, according to Hughes. While its 10-year renewal in 2015 was an “important first step,” she said officials should extend the agreement’s active period to “sustain the kind of long-term trade and investment that is needed to alter centuries of underdevelopment.” Should AGOA be renewed for a decade or longer, “companies would have the necessary certainty and timeframe they need to grow a vertical, responsible, and competitive industry in Africa up to and past 2025,” Hughes said.
Africa’s dream of feeding China hits hard reality (CNBC Africa)
Taking advantage of Beijing’s deeper focus on trade with African countries to help reduce gaping deficits, Kenya struck an export deal with China for fresh avocados in January after years of lobbying for market access. Six months later, no shipments have left, Kenya’s avocado society, the East African country’s plant health inspectorate and Kakuzi KUKZ.NR told Reuters.
“You can actually have a market, but if you can’t meet the standards, you can’t take advantage,” said Stephen Karingi, head of trade at the United Nations Economic Commission for Africa. Reuters spoke to nine officials and businesses across Africa who said Chinese red tape and a reluctance to strike broad trade deals were undermining Beijing’s plan to boost African imports.
Ramping up agricultural exports, however, is one of the few options many African countries have to rebalance their trade relationships with China and earn the hard currency they need to service mountains of debt, much of it owed to Beijing.
For decades, China has loaned billions of dollars to Africa to build railroads, power plants and highways as it deepened ties with the continent while extracting minerals and oil. That has helped China-Africa trade balloon 24-fold over the past two decades and two-way trade hit a record $254 billion last year despite the turmoil of the global pandemic. But for $148 billion of Chinese goods shipped to Africa in 2021, China imported only $106 billion and five resource-rich nations – Angola, Congo Republic, Democratic Republic of Congo South Africa and Zambia – accounted for $75 billion of that.
US President Biden backs African Development Bank’s plan to feed Africa (AfDB)
The United States has announced support for the African Development Bank’s initiative to significantly increase food production in Africa to avert the looming food crisis caused by the Russia-Ukraine war. The Bank Group’s $1.5 billion African Emergency Food Production Facility, approved by its Board of Directors in May, will provide 20 million smallholder farmers with climate-smart, certified wheat, maize, soy and other staple crop seeds, as well as more affordable fertilizer and extension services. This will allow Africa to rapidly produce over the next four farming seasons an additional 38 million tons of food worth $12 billion. At a summit of G7 leaders on Tuesday, U.S. President Joseph Biden and fellow G7 leaders announced a contribution of $4.5 billion to address global food security, with the United States meeting 50% of that commitment. The Biden administration announced that it will invest $760 million of its contribution to combat the effects of high food, fuel, and war-driven fertilizer prices in those countries that need this support most.
Global economy news
New joint publication highlights benefits of paperless trade (WTO)
“The Cross-Border Paperless Trade Toolkit that we are launching today responds to growing demands for practical and solutions-oriented instruments that can harness trade digitalization for easier, less costly and more inclusive global trade,” WTO Deputy Director-General Anabel Gonzalez said at the launch of the report. “Paperless trade specifically — and trade facilitation more generally — are also highly relevant in the broader context of the supply chain disruptions that we have been witnessing over the past two years,” she added. “Paperless trade can be a very powerful tool to reduce trade costs, which is key to making economies more efficient, global trade more inclusive, and supply chains more resilient,” DDG Gonzalez concluded.
Ramaphosa warns G7 leaders of new aim for Covid patent... (Daily Maverick)
After winning what he called a success on Covid vaccines, President Cyril Ramaphosa has warned the leaders of the G7 rich countries that he will remain on their case to support another “TRIPS waiver” – to suspend the intellectual property rights of international pharmaceutical companies over their Covid therapeutics and diagnostics so that developing countries could manufacture these without the authorisation of the patent holders. Ramaphosa said South Africa, India and other countries were “celebrating the success of achieving a TRIPS waiver” on 17 June 2022 when the World Trade Organization (WTO) agreed to suspend patent rights of the pharma companies for their Covid vaccines. This waiver has received mixed reviews, with some health rights activists dismissing it as a “very bad deal”, while others in the South African pharma industry welcomed it as “balanced” but also warned that many bridges still had to be crossed before it could be practically implemented in Africa.
Ramaphosa reminded G7 leaders at their just-completed summit in Schloss Elmau, Germany that some of them had at first resisted the waiver of these Covid vaccine patent rights – which are governed by the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). However, “we finally got them to concede that there should be a waiver”, Ramaphosa told the government information service, GCIS. But he added that he had warned the G7 leaders at the summit that the WTO concession on vaccines should be just the foundation for further concessions on Covid-19 therapeutics and diagnostics, which the WTO will decide on in six months.
UN Ocean Conference opens with call for urgent action to tackle ocean emergency (United Nations)
With climate change, biodiversity loss and pollution exacting a devastating toll on the world’s ocean — critical to food security, economic growth and the environment — the 2022 UN Ocean Conference opened in Lisbon, Portugal today with a call for a new chapter of ocean action driven by science, technology and innovation. “Sadly, we have taken the ocean for granted, and today we face what I would call an “Ocean Emergency,” United Nations Secretary-General António Guterres told delegates at the opening of the Conference. “We must turn the tide. A healthy and productive ocean is vital to our shared future.” The theme of the Conference, “Scaling up ocean action based on science and innovation for the implementation of Goal 14: stocktaking, partnerships and solutions,” in line with the UN Decade of Ocean Science for Sustainable Development, stresses the critical need for scientific knowledge and marine technology to build ocean resilience.
The Secretary-General also stated there is good news with a legally binding instrument on the conservation and sustainable use of marine biological diversity of areas beyond national jurisdiction; a new treaty that is being negotiated to address the global plastics crisis that is choking our oceans; and a week ago multilateral action on display with a World Trade Organization agreement on ending harmful fishery subsidies. But he also noted much more needs to be done.
Fisheries subsidies deal will contribute to sustainable blue economy: DG Okonjo-Iweala (WTO)
Today, over three billion people depend on marine and coastal biodiversity for their livelihoods. How quickly and how well we manage these resources, and the decisions we all make now, will greatly impact people and the planet for decades to come. This is a moment for global cooperation and for global solidarity.
A sustainable, global blue economy requires a strong set of rules, regulations and policies. In 2015, world leaders tasked the international community with the SDGs, including SDG 14 on sustainable ocean and fisheries management. We are now in a race against time to complete the Agenda 2030 for sustainable development and the relevant SDGs.
The Geneva package adopted at MC12 was multilateralism at its best — our 164 members, from Ukraine and Russia to US, China, EU, India, Japan and so many SIDS and LDCs and other developing countries — came together across geopolitical fault lines to strike agreements that will make our ocean healthier, and enhance our collective ability to respond to the COVID pandemic and the food crisis that has been made much worse by the war in Ukraine. It shows that with the right level of political commitment and leadership, multilateralism can work.
The new agreement on fisheries subsidies - the WTO’s first to put a primarily environmental objective at its core — responds to SDG 14.6. After over 20 years of negotiations, members agreed on curbing the estimated US $22 billion in annual public support that contributes to the depletion of marine resources. It bans subsidies that contribute to illegal, unreported, and unregulated fishing, as well as fishing in the unregulated high seas and in overfished stocks.
A new Fund has been established to provide technical assistance — in partnership with organizations like FAO, IFAD (and World Bank) — and capacity building to developing countries, helping them implement the new rules and improve their fisheries management. We’ve already received substantial pledges from donor countries and more is expected.
While small-scale fisheries provide jobs along the value chain for 60.2 million people — nearly 90 per cent of fishing employees worldwide — their voices are often undervalued and unrecognized in global food systems, experts and delegates alike stressed today, as participants in the fifth Lisbon dialogue explored ways to protect their valuable stocks from overexploitation. Taking place on day three of the 2022 Ocean Conference, the interactive dialogue — “Making Fisheries Sustainable and Ensuring Access to Marine Resources and Markets for Small-Scale Fishers” — looked at how subsidies exacerbate the problems of overcapacity and overfishing and are often a source of unfair competition against small-scale fishers. Against that backdrop, Qu Dongyu, Director-General of the Food and Agriculture Organization (FAO), said oceans, rivers and lakes can help feed the world, provided that their precious resources are exploited responsibly, sustainably and equitably. While marine food production is proven to be more nutritious, has less environmental impact and emits fewer greenhouse gases than land animals, too few countries include fish in their food security and nutrition strategies. Nonetheless, he said effectively managed fish stocks are recovering, citing progress on Sustainable Development Goal 14.6, which aims to eliminate subsidies that promote overfishing and illegal, unregulated and unreported fishing.
The speaker from Africa Blue Economy highlighted fishing’s share of gross domestic product in many African countries, noting that steps have been taken at the national, regional and continental levels to promote sustainable fisheries management. The African Union is also working to establish a food security agency to reduce post-catch losses by upgrading the “cold chain” and other measures to facilitate market access.
The global agrifood sector faces fundamental challenges over the coming decade, particularly the need to feed an ever-increasing population in a sustainable manner, the impacts of the climate crisis and the economic consequences and disruptions to food supply linked to the war in Ukraine, according to a report released today by the Food and Agriculture Organization of the United Nations (FAO) and the Organisation for Economic Co-operation and Development (OECD). The OECD-FAO Agricultural Outlook 2022-2031 focuses on assessing the medium-term prospects for agricultural commodity markets. The findings of the report underscore the crucial role of additional public spending and private investment in production, information technology and infrastructure as well as human capital to raise agricultural productivity.
Prices of agricultural products have been driven upward by a host of factors, including the recovery in demand following the outbreak of the COVID-19 pandemic and the resulting supply and trade disruptions, poor weather in key suppliers, and rising production and transportation costs, which have been further exacerbated recently by uncertainties regarding agricultural exports from Ukraine and Russia, both key suppliers of cereals. Russia’s role in fertilizer markets has also compounded already existing concerns about fertilizer prices and near-term productivity.
The report provides a short-term assessment of how the war may affect both global agricultural markets and food security. It underlines major risks to key commodity markets: equilibrium prices for wheat could be 19% above pre-conflict levels if Ukraine fully loses its capacity to export and 34% higher if in addition Russian exports are 50% of normal amounts.
COVID-19 Drives Global Surge in use of Digital Payments (World Bank)
The COVID-19 pandemic has spurred financial inclusion – driving a large increase in digital payments amid the global expansion of formal financial services. This expansion created new economic opportunities, narrowing the gender gap in account ownership, and building resilience at the household level to better manage financial shocks, according to the Global Findex 2021 database. As of 2021, 76% of adults globally now have an account at a bank, other financial institution, or with a mobile money provider, up from 68% in 2017 and 51% in 2011. Importantly, growth in account ownership was evenly distributed across many more countries. While in previous Findex surveys over the last decade much of the growth was concentrated in India and China, this year’s survey found that the percentage of account ownership increased by double digits in 34 countries since 2017.
The pandemic has also led to an increased use of digital payments. “The digital revolution has catalyzed increases in the access and use of financial services across the world, transforming ways in which people make and receive payments, borrow, and save,” said World Bank Group President David Malpass. ”Creating an enabling policy environment, promoting the digitalization of payments, and further broadening access to formal accounts and financial services among women and the poor are some of the policy priorities to mitigate the reversals in development from the ongoing overlapping crises.”
Industry experts unravel technology’s influential impact in pursuit of sustainable development goals as part (Business Insider India)
Opening the High-Level Political Forum on Sustainable Development last year, the United Nations Secretary-General António Guterres stressed that the situation “can and must” be turned around. “We have the knowledge, the science, the technology and the resources”, said the UN chief. “What we need is the unity of purpose, effective leadership from all sectors, and urgent, ambitious action”. As the world faces the ravaging consequences of climate change, biodiversity loss, pollution, pandemic, and multiple socio-economic disruptions, it’s crucial that we combine all our strength and knowledge to pursue sustainable development. Meanwhile, the world is rolling towards a digital future, and the far-reaching influence of digital technology can help adopt sustainable practices, improve resource efficiency, reduce pollution and emissions, and adapt to climate change better.
How global fintech charted a positive course during COVID-19 (WEF)
When the Global COVID-19 Fintech Market Rapid Assessment Study provided a snapshot of the fintech market’s performance during the first six months of the global pandemic, the indications were that it had fared pretty well. All but one of the fintech verticals reported growth in the first half of 2020 compared to the same period in 2019, with some sectors even reporting a 21% year-on-year growth in transaction volume.
But after two years of lockdowns, vaccination programmes and varying levels of governmental intervention, what impact has this had on the fintech industry? And why is this important? As a follow-up to the initial study, the Cambridge Centre for Alternative Finance at the University of Cambridge Judge Business School, the World Bank Group and the World Economic Forum have jointly published the Global COVID-19 Fintech Market Impact & Industry Resilience Study.
How Crypto and CBDCs Can Use Less Energy Than Existing Payment Systems (IMF Blog)
Most of the world’s central banks have already agreed they should help fight climate change, a critical challenge that necessitates reductions in both energy consumption, which is our focus here, and the carbon emissions associated with the energy consumed.
To meet these aims, it’s important to pay attention to the energy used by the payment systems that central banks regulate and oversee. Monetary authorities now have a unique opportunity to improve efficiency as the way people pay is undergoing rapid changes worldwide. Digital currencies, from crypto assets to central bank digital currencies, can play a role in the transformation that policymakers envision.
With a desire to limit the energy consumption comes a need to understand what drives it. Policymakers confront researchers like us with several questions yet to be fully explored. These include how crypto assets compare with existing payment systems, what factors influence the energy use of the networks, and how new technology can make payments cleaner and greener.
Britain pledges to tackle trade barriers for exporters (Reuters)
Britain’s trade minister will on Thursday pledge to target dozens of bureaucratic barriers to exports in a pitch for freer trade, the day after she extended a protectionist package of tariffs and quotas on steel products. Anne-Marie Trevelyan acknowledged the move to increase barriers to steel imports breached international trade rules but said the situation warranted the extension of safeguards, even though she considers herself a champion of free trade. read more Ahead of her speech on Thursday, the trade ministry said it would target 100 priority issues worth 20 billion pounds ($24.24 billion) that could be resolved outside of negotiations over new Free Trade Agreements to replace the arrangements that Britain operated under in the European Union.
Among the trade impediments listed, it cited blocks on meat exports to countries in Asia, rules that delay medical devices entering South Africa and restrictions on UK-trained lawyers practicing in Japan.
The trade ministry said it had gained extra powers to remove such trade barriers due to Brexit - although Britain and the EU face the prospect of a possible trade war themselves over a dispute around trading arrangements in Northern Ireland.
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South Africa is still an attractive investment, with billions flowing in: government (BusinessTech)
South Africa remains an attractive and lucrative investment destination, says Alvin Botes, deputy minister of international relations and cooperation. This was highlighted in the recent South African Reserve Bank Quarterly Bulletin, foreign direct investment (FDI) inflow from across the globe was R27.2 billion in the first quarter of 2022. This comes after an inflow of R22.7 billion in the fourth quarter of 2021, marking an uptick as a result of non-resident parent entities increasing equity investments and granting loans to domestic subsidiaries, said the Reserve Bank.
The Reserve Bank added that other investment liabilities switched from a revised outflow of R29.6 billion in the final quarter of 2021 to a significant inflow of R81.2 billion at the beginning of 2022.
Botes said the upward revision of foreign investment could be attributed to the decisive steps taken by the government toward more predictable and transparent policies. “This signals that South Africa’s macroeconomic and political fundamentals are in place, reinforcing our position as a credible investment destination.”
The deputy minister, speaking at an investment seminar in Portugal on Monday, said that South Africa offers a high return on investment and vast opportunities for investors.
From 2012 to 2021, total trade between South Africa and Portugal increased from approximately R2 billion in 2012 to approximately R7.5 billion in 2021. However, the trade balance is currently skewed in favour of Portugal, added Botes. “South Africa has embarked on an ambitious investment drive, which aims to raise $100 billion in new investment over five years,” said the deputy minister.
South Africa in a position to export energy – Anglo American Platinum (Engineering News)
South Africa is one of only four countries that has more renewable energy available to it than what it needs for itself, which places the country in a very strong position to be able to export energy, with hydrogen in the form of ammonia, hydrogen gas or liquid hydrogen among the best ways of doing so, Anglo American Platinum CEO Natascha Viljoen said on Tuesday. “If you look at the northern hemisphere broadly, they just don’t have enough renewables for their own need, which puts us, as a country and as a platinum group metals (PGMs) sector, in a very good position,” Viljoen told a media breakfast in which Mining Weekly participated.
KRA records 55pc rise in border post revenue (Business Daily)
The Kenya Revenue Authority (KRA) has registered a 55 percent growth in revenue due to increased efficiencies at the Lunga Lunga one-stop border post (OSBP).The authority collected Sh810 million by April 2022 from September 2021 against Sh553 million obtained in the same period previously. The state is seeking to grow trade after officially commissioning the border post next month following the completion of a key border infrastructure. According to KRA, traffic at Lunga Lunga one-stop border post grew by 166 percent from September 2021 to January 2022 compared to the same period the preceding year as the economy recovers from the effects of Covi-19. Incoming traffic represents over 65 percent of the OSBP traffic flow. “There has been a smooth flow of cargo, vehicles and passengers through the border where time to clear was reduced by more than a half. For instance, cargo which used to be cleared for about 45 minutes, due to enhanced efficiency, now takes less than 15 minutes,” said Mr Changole.
Government to implement AfCFTA strategy to boost country’s trade (Capital FM)
The government has embarked on a sensitization campaign countrywide to create awareness amongst the business community on the opportunities offered by the African Continental Free-Trade (AfCFTA) and how to exploit the openings offered. Industrialisation, Trade and Enterprise Development Cabinet Secretary Betty Maina said Kenya has prepared a national implementation strategy that provides a framework for the implementation of the AfCFTA to facilitate an expansion of the country’s trade and investment in Africa and support structural transformation. She said the strategy, which is also aimed at fostering economic growth and sustainable development, is envisioned to secure markets for goods and services within the African region, promote value addition and diversification of products in the AfCFTA markets.
SGR seeks to reap from rising demand for freight services (Business Daily)
The ramping up of Kenya’s cargo operations on the standard gauge railway line between Mombasa, Nairobi and Naivasha has pushed the government to increase haulage on the freight service. The Kenya Railways Corporation (KRC) has begun the process of buying 500 wagons for freight services to meet rising demand. KRC coast operations manager Thomas Ojijo told Shipping & Logistics that purchase approval has been made. Currently, KRC is operating 10 freight trains from Mombasa to Nairobi and Naivasha Inland Container Depots.
“We are only carrying 40 percent of containerised cargo and 10 percent of the conventional cargo. The remaining cargo is still being transported on the roads,” said Mr Ojijo.
Maize Flour Price to go down as Govt removes tax on imports (Capital FM)
The government has suspended all taxes on maize imported into the country in a bid to boost food security. The move will come as a relief to Kenyans as the price of flour is set to go down. Currently the price of a 2kg packet of maize flour retails at a cost of Sh210 up from Sh140 last month. Agriculture Cabinet Secretary Mr. Peter Munya said the abolishment of taxes levied on maize imports will ensure there is enough maize supply in the country lowering the cost of flour production. Speaking at the Namanga border Tuesday after meeting several stakeholders to address the maize shortage crisis, Munya said all maize imported into the country from Tanzania and other COMESA countries will be exempted from taxation effective July1. “We have suspended all levies and charges on maize coming into the country from all border points. The move is aimed at averting the maize shortage crisis and ensuring cost of maize flour comes down,” said Munya.
Impact of soaring fuel price keeps transport sector on edge (Addis Standard)
The soaring fuel prices have greatly impacted the transportation services, Addis Ababa City public transport users and taxi drivers told Addis Standard. According to various economists and international reports, oil prices have risen sharply as a result of the Russia-Ukraine war to the extent that the price of a single barrel of crude oil has risen to $140, which is a significant increase since mid-2008. The oil price hikes at the international level have put Ethiopia, which has already been languishing in high inflation due to civil war, drought, and other factors, placing the country in a difficult position.
Due to the price increment in the international market, the Ethiopian government announced last month that oil prices would be augmented too. Addis Ababa Transport Bureau, on its part, subsequently stated an increment of transportation fees for taxis ranging from 0.50 cents to 3.50 ETB. The government warned that it would take action against those who raise prices on utilities or consumer goods following its oil price adjustment.
Following the oil price adjustment in the country, Addis Abeba City Administration Transport Bureau announced its decision of revising the tariffs for mid-bus and mini-bus transport vehicles to be implemented from June 8th of 2022 in accordance with its assessment.
Oxford Business Group signs MoU with LCCI for 2023 economic analysis (The Sun Nigeria)
Nigeria’s plans to put the private sector at the heart of the next phase of its economic development will be explored in a forthcoming report by the global research and advisory company Oxford Business Group (OBG). The Report: Nigeria 2023 will look in detail at the key sectors of the country’s economy with high growth potential, which include agriculture, energy, ICT and industry. It will also consider the important role earmarked for public-private partnerships in supporting Nigeria’s infrastructure development, with major projects such as the Lekki Free Zone and the Lekki-Epe road among those in the spotlight.
Kaduna dry port plans domestic export warehouse operation (The Sun Nigeria)
The Kaduna Inland Dry Port (KIDP) is set to commence operation as Nigeria’s first Domestic Export Warehouse (DEW) to promote export of made in Nigeria goods and agricultural produce. Rotimi Raimi-Hassan, the Port General Manager told newsmen in Lagos that the facility is ready to be launched while listing support infrastructures already put in place for seamless and efficient operation. According to him, KIDP is set for commissioning to pilot the DEW services as the most equipped facility in Nigeria with modern laboratory to check quality of exports that would be processed through the dry port.
Unleashing entrepreneurial skills, key to Ghana’s economic transformation - Alan Kyerematen (News Ghana)
Speaking at the launch of the Business Resource Centers (BRCs) on Monday, 27th June, 2022 at the Accra International Conference Centre (AICC), the Minister of Trade and Industry, Alan K. Kyerematen, challenged individuals to start up their own business ventures in order not to be found wanting after retirement. He indicated that, many countries, especially in the Europe, Asia, and North America, developed their economies by critically looking into the building of strong MSMEs from family-owned businesses into multinational companies we see today. Noting that, while these countries have experienced significant economic transformation by paying critical attention to the development of the MSMEs sector, our entrepreneurs and private sector operators continue to face serious challenges which successive Governments have made attempts to overcome.
Mr. Alan Kyerematen, emphasized that, “the great nations of this world are not where they are because of their natural resource endowments. If that were the case, countries like Singapore and South Korea would be the poorest countries in the world and Africa would be the richest. They are great because of their commitment to the development of entrepreneurs.
He stressed that, “If the only answer to export revenue mobilisation is proceeds from the export of cocoa, then we may have a problem in this country. We have been depending on the export revenues of cocoa and gold for over a century now. It must occur to us that we have to move beyond cocoa. We should mobilize MSMEs to produce for export.”
Prices of imported food products jumped 15.3% YoY in Douala in May 2022 (Business in Cameroon)
May 2022 was marked by an increase in the prices of imported food items in Douala. According to data just published by the National Institute of Statistics (INS), compared to the same period in 2021, “final household consumption prices have risen by 6%” in Cameroon’s economic capital. This is well above the tolerance threshold of 3% allowed in the CEMAC.”
“This development in May 2022 is linked to the surge in food prices,” which rose by 12.4% year-on-year, with a peak of 15.3% for imported food products (compared with 11.4% for local products).
Egypt’s industrial sector contributes 11.7% of GDP (ZAWYA)
Minister of Trade and Industry Nevine Gamea stated that industry contributes 11.7% to the country’s GDP and employs about 28.2% of the total Egyptian workforce, and that its investments amounted to approximately EGP 49bn in FY2020/21, representing about 6% of total public investments.She also said that the industry and trade sectors have achieved tangible development over the past eight years since President Abdel Fattah Al-Sisi took office in 2014.Moreover, the Egyptian government has paid unprecedented attention to developing industrial sectors and increasing export rates, as they are among the mainstays of the national economy and the engine of comprehensive economic development in Egypt. They also play a pivotal role in achieving social stability by providing job opportunities for young people and improving citizens’ living standards.
African trade and integration news
Digitalise operations to harness AfCFTA benefits, Sanwo-Olu tells MSMEs (TheCable)
Babajide Sanwo-Olu, governor of Lagos, has urged micro, small and medium enterprises (MSMEs) to embrace digitalisation to maximise the advantages of the African Continental Free Trade Area (AfCFTA) agreement. Sanwo-Olu said at the opening ceremony of the 7th edition of MSME Exclusive Fair on Tuesday in Lagos. “The theme of this fair, Sustainability of MSMEs on AFCFTA Opportunities for Global and Digitalised Economy is apt because the AFCFTA is expected to bring huge gains to MSMEs in Nigeria,” he added. “AFCFTA agreement can play the role of unlocking innovation, growth and productivity across the continent but significantly for its MSMEs segment by translating spending power to economic development.
EAC boss says new common external tariff to benefit citizens (The New Times)
For over a month now, tension has heightened in the east of the Democratic Republic of Congo, and the region, after the resurgence of the M23 rebellion even after the country made a big step forward in joining the East African Community (EAC). Besides the difficulties in the bloc’s new member, in May, EAC Ministers in charge of trade and finance adopted 35 per cent as the 4th band of the region’s Common External Tariff (CET). Implementation of the reviewed EAC CET commences on July 1. In an exclusive interview with The New Times’ James Karuhanga, EAC Secretary General, Peter Mathuki, maintained a positive outlook while discussing the Congolese issue, among other prevalent challenges. Mathuki insists that however difficult the situation may look, there is always a way out. Mathuki also talked, at length, about the region’s revised Common External Tariff, stressing that it is, eventually meant to benefit the region’s common man.
SADC to increase renewable energy generation to reduce carbon emissions (SADC)
The Southern African Development Community (SADC) is developing the Regional Gas Masterplan to enable the utilisation of the abundant gas reserves in the Region to reduce its reliance on coal in the wake of the global commitment, including the Paris Agreement’s ambition to decrease carbon emissions and maintain global temperatures below 1.5° Celsius. This was said by Dr. Thembinkosi Mhlongo, the SADC Deputy Secretary for Regional Integration, on June 23, 2022, in Gaborone, Botswana, during a meeting with Ms. Yuka Fujino, the Chargé d’affaires of the Japanese Embassy in Botswana. The purpose of the meeting was to discuss the Eighth Tokyo International Conference on African Development (TICAD-8), as well as other issues of mutual interest to the two parties.
Dr Mhlongo highlighted SADC’s efforts to expand solar energy generation output in order to increase its power generation capacity, corridor involvement, and economic prosperity while also reducing the Region’s carbon footprint. He said that in light of the recent increase in the number and severity of disasters, there was a need for increased collaborative efforts with partners to put in place mechanisms, including the operationalisation of the SADC Humanitarian and Emergency Operations Centre that will aid the Region in mitigating disasters and monitoring all disaster risk factors.
Regional lobby makes case for women cross border traders (The New Times)
The East African Business Council (EABC), the regional body for private sector associations has called for more efforts and enforcement in easing cross-border trade for women, especially those in the informal sector. The request was made on Monday June 27, during a public-private dialogue that convened representatives from trade facilitation agencies, importers, exporters, transporters, East African Grain Council members, Private Sector Foundation Uganda and women cross-border traders to chart out solutions to ease the free movement of persons and cargo at Gatuna One Stop Border Post (OSBP). The border links Rwanda to Uganda, but officials said that many of the challenges here are shared across other common borders connecting member states.
The meeting was aimed analyzing the efficiency and implementation of the EAC Simplified Trade Regime (STR) at the border posts, the efficiency and implementation of the Regional Electronic Cargo, Trucks and Drivers System (RECTDS) tracking system and the EAC Single Customs Territory (SCT) framework among other initiatives.
Miria Akaukwasa, the Chairperson of Katuna Women Cross Border Traders appreciated that a trade information desk had been set up at the border to ease trade for informal traders. However, she stated that women need to be sensitized about the EAC Simplified Trade Regime and small cross border traders should be allowed to do business at the Gatuna OSBP.
African economies see reasons for optimism despite crises (Eyewitness News)
From COVID-19 to the war in Ukraine, external crises have put pressure on African economies, but many on the continent see opportunities to undertake radical reforms. Africa already showed some resilience during the pandemic as its economic contraction was less severe than in the rest of the world, shrinking by 2% compared to 3.3% globally in 2020.While Russia’s invasion of Ukraine is weighing on the world economy, Africa faces a better outlook again in 2022.”Africa is headed towards growth of around 3.7%, while in North America and Europe there is a real risk of recession”, said economist Lionel Zinsou, formerly prime minister of Benin.
“We haven’t been the biggest victims of the pandemic, and we won’t be the biggest victims of the collateral consequences of the war in Ukraine”, added Zinsou. Another positive signal is that investor confidence in Africa is up to a higher level than that before the pandemic.
IATA backs air transport liberalisation for Africa (New Telegraph)
The Director-General of the International Air Transport Association (IATA), Willie Walsh has urged Africa to take a cue from Europe in its air transport deregulation process, adding that the Single Africa Air Transport Market (SAATM) would give a massive increase in connectivity, increase in the number of flights, increase in the number of activities, much better competition. He noted that this would benefit the African consumers, the connectivity which has a huge benefit for the industry and the economies; stressing that it is the right way to go.
The Single African Air Transport Market (“SAATM”) was launched in 2018 with the aim of developing air services and harmonising associated regulations in Africa and stimulating the flow of private capital in the industry. The full implementation of SAATM by all countries in Africa could reap enormous economic benefits. However, in the absence of a clear implementation framework, the open skies treaty is facing significant challenges. Alternatives to full liberalisation are being explored as existing carriers seek other routes to gain market access.
Aviation has the potential to make a significant contribution to economic growth and development in Africa. An IATA survey suggests that if just 12 key African countries opened their markets and increased connectivity, an extra 155,000 jobs would be created and approximately US$1.3 billion in annual GDP generated in those countries He further stated that liberalisation of air space creates new routes and greater connectivity on the continent leading to shorter travel times, greater convenience, and fare savings for customers.
How hydrogen can transform Africa’s reliance on expensive imported energy (The National)
Mobile phone technology enabled Africa to leapfrog fixed-line telephones and revolutionise communication on the continent. Now, hydrogen may do the same, freeing African countries from the imported energy that drains many of their economies. For sub-Saharan Africa, which is almost entirely dependent on imported petrol and diesel, hydrogen could be the path to energy independence. Currently, even oil producers such as Angola and Nigeria are reliant on imported refined fuels. “Africa can leapfrog some of the legacy technologies of the West, such as fossil energy,” says Benedikt Sobotka, chief executive of global mining company Eurasian Resources Group.
AU to extend insurance to agriculture, green energy sectors (ETEnergyWorld)
The African Risk Capacity, a specialised agency of the African Union, has said that it will extend insurance covers to the continent’s agriculture and green energy sectors. Lesley Ndlovu, CEO of African Risk Capacity told a continental forum in Nairobi, the capital of Kenya, that it will provide insurance to cover losses for farmers against common weather-related areas of drought, floods, and tropical cyclones, Xinhua news agency reported.
“We cover staple crops such as wheat and maize, cash crops including cocoa and livestock products to boost food security in Africa,” Ndlovu said during the 48th Africa Insurance Organization Conference. Currently, 35 African Union member states have joined the African Risk Capacity.
Overcoming the barriers to technology adoption on African farms (Brookings)
Sub-Saharan Africa’s agricultural sector is widely recognized to have vast, under-utilized potential. Land and labor productivity are low compared to other regions and have barely increased over the last 20 years. Low productivity has created widespread rural poverty and food insecurity, so the potential for productivity increases represents an opportunity to boost inclusive growth.
In a recent report, we use new data and trends in output and employment, review the main productivity issues that are preventing transformation in the African agricultural sector, and ask how Fourth Industrial Revolution (4IR) technologies might address them and unlock better job opportunities. The optimistic narratives around African farmers’ adoption of technology often overlook the more long-standing challenges they face that are preventing the adoption of much older productivity-increasing technology, such as fertilizers and conventionally produced hybrid seeds. For digital agriculture to be effective and transformational in Africa, a concerted effort to address Africa’s long-standing agricultural productivity challenges is needed.
World Bank Boosts Pastoral Economies and Climate Action in the Horn of Africa (World Bank)
The World Bank Board of Directors approved $327.5 million to cushion pastoralists in Djibouti, Ethiopia, Kenya, and Somalia from the impacts of drought and better connect them to markets. The De-risking, Inclusion and Value Enhancement of Pastoral Economies in the Horn of Africa (DRIVE), will enable the region to adapt to the impacts of climate change, commercialize livestock production in pastoralist communities, and ensure inclusion of the marginalized and vulnerable groups such as women in the sector.
The project will enable $572 million in private capital to help pastoralists tap into drought insurance and savings, get access to digital accounts, and attract more private investment in pastoral areas. About 2,500 pastoralists groups will be connected to markets so that they get better value from their livestock rearing activities, as currently, they are at the bottom of the value chain.
Crypto market meltdown rattles 12 million East African investors (The East African)
A painful financial journey has ensued for at least 12 million East Africans who are now counting, in billions of dollars, losses both from the cryptocurrency market crash and a series of related Ponzi ‘get-rich-quick’ schemes that have unfolded in the wake of the crisis. As extreme market conditions force legitimate crypto-exchanges to close shop with many laying off employees, reports of some crypto-investment schemes disappearing with investors’ funds have started to surface. This raises questions about the future of unconventional assets.
In general, total global market value for all crypto assets has fallen to about $890 billion from $2.8 trillion last November, which has plunged several East Africans holding cryptocurrencies into financial turmoil. Also, there are growing cases of fraudulent schemes around cryptocurrency investments, which, according to American consumer protection agency Federal Trade Commission, led some 26,000 people to lose over $1 billion since 2021 in the US alone.
Just two weeks ago, some cryptocurrency founders disappeared after defrauding Kenyan would-be investors of at least $8.5 million, barely six months after it surfaced on the internet, and this week, four young men were brutally murdered over alleged crypto-scamming.
New platform to enhance Sino-African trade (ecns)
A new platform to promote economic and trade cooperation between China and Africa was established in Beijing on Tuesday. The Asia-Africa Innovation Cooperation Center was set up following President Xi Jinping’s proposal made at the Beijing Summit of the Forum on China-Africa Cooperation in 2018 to set up a China-Africa center on innovation cooperation to promote innovation and entrepreneurship among young people in China and Africa, according to the Administrative Committee of Beijing Daxing International Airport Economic Zone. The center was jointly set up by the committee, the embassies of a number of African nations in China and Chinese companies including Asia-Africa Silk Road International Business Co.
It is set to become an important channel through which Chinese and African entrepreneurs can set up and develop business more efficiently, the zone’s administrative committee said.
The committee said it will intensify cooperation with African countries and improve the business environment and services, with the center facilitating China-Africa cooperation in areas such as trade, investment, science and technology, environmental protection, culture, tourism and talent cultivation.
UAE to increase exports to countries in West Africa (AI-Monitor)
An Emirati exports arm has announced a new agreement to boost trade with several West African states. The Abu Dhabi Exports Office signed today a financing agreement with the ECOWAS Bank for Investment and Development. The deal establishes a $20 million credit line between the two entities for the purpose of boosting trade between the United Arab Emirates and the 15 ECOWAS member states in West Africa, the Abu Dhabi Exports Office said in a press release. The ECOWAS Bank for Investment and Development is the financial arm of the Economic Community of West African States (ECOWAS).
EU’s renewed trade ties with Africa will boost development (ZAWYA)
The European Parliament has passed a motion calling on the EU to elevate tech transfers and trade with Africa so the developing continent can move beyond the paradigm of mostly supplying cheap raw materials. Backing a report that advocates redressing imbalances left over from the colonial era, the multinational legislature signalled it wants to better equalize trade relations to enable Africa to move up the development and digital scale. Kathleen Van Brempt, a Belgian Member of the European Parliament (MEP), says “For too long, Africa has been reduced to a supplier of raw materials, with the result that the continent’s immense economic potential remains untapped”. Fellow Belgian MEP Saskia Bricmont says the EU should emphasize improvements and funding for infrastructure, food security, civil society, free trade agreements and sustainable economic development.
Global economy news
EIF partnership helping LDCs enhance trade capacities, Annual Report reveals (WTO)
The report highlights how the EIF partnership has catalysed support for LDCs, helping them to improve their trading capacity and to generate over USD 200 million in new exports in 2021. “LDCs took a lead role in improving their economic situation in 2021, working closely with the EIF partnership to build their institutional and productive capacities,” said EIF’s Executive Director, Ratnakar Adhikari.
Trade in ocean goods shows resilience, UNCTAD data reveals (UNCTAD)
Trade in ocean-based goods showed remarkable resilience during the recession induced by COVID-19 in 2020, according to the latest available data from a new UNCTAD database. Such goods include resources either sourced from the ocean, made from marine resources or manufactured for marine activities. UNCTAD’s ocean trade database, released in April 2022, draws on official statistics from all UN member states. It shows that trade in ocean-related goods fell by 3.2% in 2020 compared to 2019, faring better than both world trade in goods, which dropped by 5.3%, and trade in ocean-related services, which collapsed – for example, international tourist arrivals declined by 74% in 2020.
“The resilience of trade in ocean goods helped sustain millions of livelihoods amid the slowdown caused by the pandemic,” said David Vivas, an UNCTAD legal officer working on ocean economy issues.
Exports of ocean-based goods were worth at least $678 billion in 2020 in these sectors: high technology and other manufactured goods ($268 billion), ships, port equipment and parts ($257 billion), marine fisheries and aquaculture ($87 billion), seafood processing ($65 billion) and sea minerals ($1.4 billion). UNCTAD’s analysis shows that the manufacturing sector represented 77% of exported ocean economy goods, reflecting its higher added value compared to the primary sector.
DDG Paugam cites need for closer WCO-WTO cooperation to facilitate green transformation (WTO)
More and more trade measures are related to the environment, DDG Paugam noted. Since 2009, WTO members have notified around 14,600 trade-related environmental measures, with one in six measures now being environmentally related compared to one in 12 measures in 1997. “Most of these measures are the kind of policies that will require direct or indirect action from customs officials, such as environmental requirements, conformity, risk assessment procedures, import and export licences, bans, quotas, and so on,” he said. “This means a lot of added challenges and work for customs officials. And trade negotiators absolutely need to be aware of these challenges if they want their measure to be efficient in practice in having a concrete impact for the environment.” Customs officials need to be engaged early in the process to ensure these policies are coherent, fit-for-purpose and implementable.
South Africa among countries where debt collection is most difficult (The Mail & Guardian)
Out of 49 countries, South Africa is the 43rd most difficult for debt collection, according to a ranking by international insurer Allianz Trade. The Allianz Trade Collection Complexity Score, which measures how difficult it is to collect debt in a given country, found that South Africa has a severe level of collection complexity. The ranking measures the level of complexity relating to international debt collection procedures from zero (least complex) to 100 (most complex). South Africa has a score of 67. Sweden and Germany top the ranking as having the least complex debt collection, both with scores of 30, with global collection complexity at 49.
G-7 Launches Climate Club to Try and Avoid Green Trade Wars (TIME)
Leaders of the world’s most advanced economies have agreed to start a Climate Club where members agree on joint rules and standards in the fight against global warming with the hope that it will avoid spats over green tariffs. The Group of Seven nations reached a deal on the issue at a three-day summit in Bavaria, Germany, that ended on Tuesday. It’s a significant achievement for German Chancellor Olaf Scholz, who has made better coordination on climate protection measures a key theme of his G-7 presidency. “We note with concern that currently neither global climate ambition nor implementation are sufficient to achieve the goals of the Paris Agreement,” the final G-7 leaders said in a statement. The Climate Club will address that by “accelerating climate action and increasing ambition, with a particular focus on the industry sector.”
Scholz has argued that the Climate Club would help eliminate a chaotic patchwork of national regulations that could increase the risk of new trade conflicts as countries slap levies or tariffs on imports deemed less sustainable. It will also potentially help mitigate disadvantages faced by companies doing business in regions with more ambitious carbon-reduction goals, and put pressure on non-members to adopt stricter climate protection measures.
WTO members review six free trade agreements, stress importance of transparency (WTO)
Members considered the Preferential Trade Agreement between Namibia and Zimbabwe on goods, which entered into force in April 1993. The parties noted that this agreement is based on the Southern African Development Community Protocol on Trade, which seeks to promote trade as an engine for economic development and poverty eradication in the region.
Effective Health Care Reform Requires Transparency, Accountability, and Decentralized Financing, Says New Report (World Bank)
Nearly two decades ago, many low- and middle-income countries began a transformation in health care financing. Centralized budgets and low levels of autonomy for facilities and workers were replaced with frontline autonomy, performance pay, and greater transparency and accountability for results, all through a package of reforms that came to be known as performance-based financing. Unfortunately, while health coverage did expand dramatically over the past two decades, this expansion was not accompanied by the expected improvements in health outcomes. A new World Bank Policy Research Report, Improving Effective Coverage in Health: Do Financial Incentives Work?, draws on research from 15 years and 40 countries to better understand the gap between health coverage and outcomes and point a way forward.
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Local news
South Africa’s FDI inflows increased to R27.2bn in the first quarter (Engineering News)
South Africa recorded foreign direct investment (FDI) inflows of R27.2-billion in the first quarter of 2022, up from R22.7-billion rand in the fourth quarter of 2021, the central bank said on Tuesday. The South African Reserve Bank said in its Quarterly Bulletin that the increase was due to foreign entities increasing equity investments and granting loans to domestic subsidiaries.
Infrastructure delivery key to growing economy, creating local demand (Engineering News)
The construction and development of infrastructure is critical to accelerating demand for associated goods and services, as well as to significantly boost the economy, Infrastructure South Africa investment and unblocking chief director Mashopha Moshoeshoe said earlier this month. Speaking at the Southern Africa France Business Forum on June 22, he explained that the gap in infrastructure required in South Africa was significant, but that, as South Africa emerges from destruction and delays as a result of the Covid-19 pandemic, it was on a path to recovery.
Zim targets US$3,4 trillion bloc (NewsDay)
Industry and Commerce minister Sekai Nzenza believes Zimbabwe has built the foundation to compete in the African Continental Free Trade Area (AfCFTA), a US$3,4 trillion regional bloc that kicked off in 2021. In a paper released during a tour of Gweru-based companies last week, Nzenza said recoveries in firms such as Bata Shoe Company, cement maker Sino Zimbabwe and yeast maker Lessafre showed domestic firms were building the blocks to tackle stiffer competition from bigger African producers as the continent opens up. There have been concerns that lack of capital in Zimbabwe’s manufacturing sector, which says it requires up to US$2 billion to scale up production, would be a stumbling block to trade in a bigger market. And in a recent interview with our sister paper the Zimbabwe Independent, a United Nations Economic Community for Africa (Uneca) executive said a strong Zimbabwean financial system would be a crucial factor in the quest to shore up trade under AfCFTA.
Zimbabwe lobbies to rejoin Commonwealth (The East African)
Zimbabwe at the ongoing Commonwealth summit in Rwanda continued with lobbying for readmission 18 years after it was thrown out of the body over allegations of human rights abuses. President Emmerson Mnangagwa’s government submitted an application on May 15, 2018 to re-join the grouping of 54 countries, a year after the ouster of strongman Robert Mugabe in a military coup. “Zimbabwe is excited to be participating in Commonwealth forums as this presents opportunities to network with the international community taking into account the government of Zimbabwe’s policy of engagement and reengagement,” Zimbabwe’s ambassador to Rwanda Charity Manyeruke said.
Transporters call for level playing field (The Citizen)
Parliament’s Budget Committee yesterday asked the government to introduce charges on commercial vehicles from the Southern African Development Community (SADC) entering Tanzania in response to fees Tanzanian transporters are subjected to when travelling within the bloc. It is estimated that goods destined for neighbouring SADC member states account for up to 75 percent of all transit goods that pass through Tanzania’s ports. The committee recommended the introduction of three different fees to align with charges Tanzanian transporters were subjected to when their vehicles go to any of the other 15 SADC member states. Data shows that the value of cargo passing through Tanzania to Zambia, the Democratic Republic of Congo (DRC) and Zimbabwe is estimated at $1.5 billion annually.
Tanzania needs Sh44 trillion to cut Green House Gas emissions (The Citizen)
As the country is determined to contribute to the global efforts to reduce greenhouse gas (GHG) emissions with a number of interventions being implemented to mitigate the negative impacts of climate change, it needs $19.2 billion (Sh44 trillion) to achieve the goal come the year 2030.Vice President’s Office environment assistant director Catherine Bamwenzaki said the mitigation and adaptation measures include implementation of the Ecosystem-based Adaptation for Rural Resilience (EBARR) in five districts— Kishapu, Mvomero, Mpwapwa, Simanjiro and Kaskazini ‘A’ in Zanzibar.
She said Tanzania’s share of GHG emission is low at 0.36 percent, but the country is vulnerable to climate related disasters such as extreme floods and droughts that affect livelihoods as well as agricultural production, water resources, public health, energy supply, infrastructure, biodiversity and marine and coastal zones.
Kenya Private Sector Alliance position on the Kenya Standard 1515 (Kenya Broadcasting Corporation)
In Kenya, the automotive industry has the potential to significantly contribute to the manufacturing sector’s growth, and the government target to increase its share of the GDP from the current 9.2pc to 15pc by 2022 as part of the Big Four Agenda. This will also be instrumental in achieving the aspirations of Vision 2030, of creating a globally competitive and prosperous country with a high quality of life. Passing the Kenya Standards 1515 which lowers the importation age of trucks, buses, and prime movers is an important incentive to increase the volume of vehicles produced locally hence attracting investment into the Industry.
Uganda U-turn on car imports upsets Kenya vehicle dealers (The East African)
Uganda has made an about-turn and relaxed the tough import conditions it has set for vehicles aged over nine years entering its market from July, dealing a setback to Kenyan dealers who had hoped to benefit from curbs on the sale of such automobiles. The Uganda Revenue Authority (URA) had in April issued a directive that imports of vehicles older than nine years be cleared under the East Africa Community’s Single Customs Territory (SCT)-- which allows members of the bloc to jointly collect customs taxes-- from July 1, 2022.
“Pursuant to section 64 (k) of the East African Customs Management Regulations 2010, the Uganda Revenue Authority wishes to inform the general public that effective July 1, 2022 motor vehicles of nine years old or more from the date of manufacture shall no longer be cleared under the warehousing regime,” URA said in a notice in April. “The customs clearance of such motor vehicles shall be facilitated under the Single Customs Territory arrangement where taxes will be paid upon arrival at the port of entry into the East African Community,” the Ugandan taxman added.
Trades Minister Launches 67 BRCs To Support MSMEs (News Ghana)
Mr Alan Kyerematen, Minister of Trade and Industry, has launched a one-stop enterprise support centre to provide Business Development Service (BDS) to Micro Small Medium Enterprises (MSME) at the district level. With funding mostly from the African Development Bank (AfDB) and the International Fund for Agricultural Development (IFAD), the Ministry under the Rural Enterprise Programme (REP) has established 67 Business Resource Centres (BRC). The core services provided by the BRCs include business opportunity identification; business plan preparation; facilitation of access to finance/credit; business diagnostics and training in management and entrepreneurship.
The Minister, in his remarks at the launch, said the key to transforming the country did not lie in natural resources endowment but taking advantage of the human capital and unleashing of the entrepreneurial spirit of the population. He observed that the transformation of the economy was hindered mainly by unemployment, poor revenue mobilisation and lack of sustained flow of foreign exchange.
Addressing those challenges, he said, would require the transformation of the MSME sector that created jobs and could help the country derive optimum benefit from trade agreements that allowed the country to export its products under free quota and duty free.
New Economic Analysis Calls for Bold Reforms for Malawi’s Macroeconomic Stability and Service Delivery Ambitions (World Bank)
A series of external and domestic shocks are putting acute pressure on Malawi’s macro-economy, increasing the urgency to protect essential services for the vulnerable says the latest World Bank’s Malawi Economic Monitor (MEM).The 15th Edition of the MEM underscores significant deterioration in the government’s finances, with the deficit reaching its highest level in over a decade. For several years, spending has exceeded revenues while the country has imported more than it exports. This has been financed by increased commercial borrowing and Malawi’s debt has now become unsustainable. Malawi’s economic growth is expected to decline further due to these chronic imbalances, which have been heightened by severe weather events. The Ukraine-Russia war has added a new crisis to what was already a challenging economic climate, with rising prices for fuel, fertilizer and other commodities impacting foreign reserves and exerting pressure on inflation.
Sierra Leone continues to pursue its development path amidst continued vulnerability to shocks and capacity needs. Growth is estimated to have recovered moderately in 2021 (about 3 percent) following the COVID shock and is projected to increase to 3½ percent in 2022, reflecting higher iron ore production. However, this is a downward revision relative to the 3 rd/4th review, reflecting a deterioration of the terms of trade and increased uncertainty about global economic prospects. Inflation has been on a rising trend since mid-2021 due to higher international fuel and food prices, and is expected to average about 22 percent this year, exacerbating already-high levels of food insecurity. Over the medium term, the war in Ukraine, and concerns about global growth pose renewed challenges for the outlook. Further increases in already-high fuel, food and fertilizer prices could deteriorate budget and external balances, put debt sustainability at risk, increase costs for businesses, prolong fuel subsidies, and stoke social tensions.
Guinea-Bissau: 2022 Article IV Consultation and Third Review under the Staff-Monitored Program (IMF)
After years of political turmoil and delayed reforms, the authorities started implementing in 2021 an ambitious fiscal consolidation and reform program to ensure debt sustainability, create fiscal space to address developmental needs and strengthen state capacity. A Rapid Credit Facility (RCF) disbursement of SDR 14.2 million (50 percent of quota) was approved in January 2021 to provide urgent financing to support critical spending in health. A 9-month Staff-Monitored Program (SMP) with three quarterly reviews was approved in July 2021 to support the government’s reform program aimed at stabilizing the economy, strengthening governance, and building track record of policy implementation to underpin the authorities’ request for an Extended Credit Facility (ECF) arrangement. The August 2021 SDR 27.2 million allocation and the reforms underpinned by the SMP have helped address the adverse impact of the pandemic, improve government spending transparency, mitigate debt vulnerabilities.
African trade and integration news
AfCFTA as Africa’s Industrialisation Accelerator (This Day)
The African Export and Import Bank (Afreximbank) has affirmed that the African Continental Free Trade Area (AfCFTA) agreement would be the continent’s industrial accelerator. It stated unequivocally that, “AfCFTA will accelerate the growth of labour-intensive manufacturing industries.” The Afreximbank’s affirmation was contained in a report it published in this month, which was titled “Africa’s 2022 Growth Prospects: Poise under Post-Pandemic and Heightening Geopolitical Pressures.” It said in the report that the AfCFTA agreement would usher in a period of renaissance in African manufacturing sector and become a critical driver of African economic growth in the near-term.
The report identified East and West Africa as the regions manufacturing would play a critical role in sustaining economic growth. “The sustained injection of patient capital and rise of East Africa’s automotive industry is helping to expand opportunities for labour-intensive employment under a proven manufacturing-led growth model and will expand the fiscal space to gradually strengthen the foundation of macroeconomic stability,” the report said.
Africa’s food imports to hit $110 billion in three years - Ofosu-Dorte (BusinessGhana)
The Senior Partner of AB & David law firm, David Ofosu-Dorte, has predicted that Africa’s food import will increase from $35 million to $110 billion in the next three years. “That’s food import and that tells you how much we are sending outside. Mr. Ofosu-Dorte said this when he presented a paper on Africa and the Global Economy; New Realities, New Possibilities” at a Citi Tv event organised in Accra on Monday. In terms of infrastructure development, Mr. Ofosu-Dorte said the continent needed $1.7 trillion in order to fill the infrastructure gaps.
He said fashion, integration, infrastructure, recovery, automation, healthcare and pharmaceuticals, logistics and supply chain, as well as value addition to raw materials were areas Africans needed to direct focus. Among other things, he explained that an area like agri-food where local foods were packaged could change the urban imports and reduce the demand for the dollar. “But there’s something that we overlook. As many as 400 companies of African origin or located in Africa now cross a million dollar. Seven hundred and fifty of them now have more than half a billion dollars in terms of annual turnover,” he said.
Russia-Ukraine conflict could force African countries to become more self-reliant - Ramaphosa (News24)
The Russia-Ukraine conflict could have a silver lining for African countries in the long run, according to President Cyril Ramaphosa, because it forces them to be more self-sufficient as they look to bolster their food supply. He said African countries faced a similar concern during the Covid-19 pandemic when they had no choice but to manufacture their own vaccines.
The president spoke after he took part in a G7 summit meeting in Germany on Monday. He said one of the pertinent engagements between the seven members of the G7 and the five invited non-members - South Africa, Argentina, India, Indonesia and Senegal - was around food security in light of the Russia-Ukraine conflict.
He said they reflected “on the path that we had traversed together with India and many other countries on the issue of the Trade-Related Aspects of Intellectual Property Rights (Trips) waiver to ease access to vaccines for the Global South”.
African officials renew call for financing to deliver climate justice (News Ghana)
The quest for climate justice in Africa will be realized subject to the availability of funds, technology, and capacity building to help the continent withstand extreme weather events like droughts, floods, and cyclones, officials said on Monday.
Jean Paul-Adams, director for technology, climate change, and natural resources management at the United Nations Economic Commission for Africa (UNECA), said the continent’s green and justice transition is possible once the financing gap toward climate mitigation and adaptation is bridged. Paul-Adams called for improved governance, transparency, and monitoring to ensure that adaptation financing benefits local communities bearing the brunt of climate-induced disasters like recurrent droughts and disease outbreaks.
For Africa to overcome poverty and underdevelopment linked to climatic stresses, Mwangi said, the continent should bargain for its fair share of funding from multilateral lenders besides leveraging domestic resources. “Adaptation financing is crucial to help Africa liberate itself from climate emergencies that have led to the loss of lives and livelihoods,” he said.
Africa’s dream of feeding China hits hard reality (Reuters)
Watching workers poke avocados from the treetops in an orchard owned by Kenyan agriculture firm Kakuzi, managing director Chris Flowers revels in the thought some might soon go to the crown jewel of emerging consumer markets: China. Taking advantage of Beijing’s deeper focus on trade with African countries to help reduce gaping deficits, Kenya struck an export deal with China for fresh avocados in January after years of lobbying for market access. Six months later, no shipments have left, Kenya’s avocado society, the East African country’s plant health inspectorate and Kakuzi (KUKZ.NR) told Reuters.
While 10 avocado exporters have passed Kenyan inspections, China now wants to do its own audits and, based on the past experience of some other African fruit producers, it could take a decade to get the green light.
Ramping up agricultural exports, however, is one of the few options many African countries have to rebalance their trade relationships with China and earn the hard currency they need to service mountains of debt, much of it owed to Beijing.
Global economy news
DDG González: “More cooperation on services trade key to building the WTO of tomorrow” (WTO)
To listen to the supply-chain debate these days, services is rarely mentioned. We hear about semiconductors, not ICT services; about vaccines and pharmaceuticals, not health services; and about critical minerals and large capacity batteries, not transport or energy services. And yet, services have become the most dynamic sector of world trade. In fact, just as services have come to dominate many of our national economies, they are playing a bigger role in the global economy too. Which means that it is impossible to understand modern supply chains, let alone where they are heading or how geopolitics will affect them, without understanding trade in services.
WTO issues research papers on small business and international trade on MSMEs Day (WTO)
The WTO has published on the occasion of Micro, Small, and Medium-sized Enterprises Day (27 June) three research papers on the participation of small businesses in international trade and on climate change policies that could help them engage in sustainable practices. The first research paper looks at the participation of small businesses from developed economies in international trade. The second research paper looks into the participation of small businesses in the manufacturing sector in developing countries. The third research note traces connections between international trade policy and climate change and proposes policy interventions that could help small businesses make more rapid progress towards decarbonization.
Bringing sustainable entrepreneurship to the next level (UNCTAD)
Micro, small and medium-sized enterprises (MSMEs), which employ 60% to 70% of workers worldwide and produce 50% of global GDP, were hit hard by COVID-19. They were 2.5 times more likely to go under than larger businesses during the first months of the crisis. And small businesses are less prepared for the impacts of climate change, which could trigger a pandemic-sized shock every decade. To underscore the urgent need to boost support for small businesses around the globe, UNCTAD is organizing for international MSME Day 2022 a joint UN event in New York in collaboration with the Permanent Mission of Argentina to the UN and the International Council for Small Business.
At the start of the COVID-19 pandemic and ensuing global lockdowns that severely affected businesses, UNCTAD quickly reoriented its work priorities on entrepreneurship. UNCTAD now leads the global initiative towards post-COVID-19 resurgence of the MSMEs sector, part of the UN framework for the immediate response to COVID-19. This initiative develops and implements capacity-building tools for governments and MSMEs in developing countries and economies in transition to strengthen their resilience while mitigating the economic and social impact of the crisis. The initiative also facilitates MSMEs’ contribution to the implementation of UN Sustainable Development Goals.
UN report: Reducing trade costs can help drive sustainable development (FAO)
A robust and well-integrated global agrifood system can help all countries withstand unprecedented challenges, as evidenced during the COVID-19 pandemic in early 2020 when global agrifood markets proved to be remarkably resilient. “We are committed to working together”, wrote QU Dongyu, Director-General of the Food and Agriculture Organization of the United Nations (FAO) in the foreword to The State of Agricultural Commodity Markets 2022 (SOCO 2022), an FAO flagship report launched today. The ongoing war in Ukraine, affecting a region of great importance for worldwide food security, is increasing uncertainty, and raising the risk of fragmenting global agrifood markets and magnifying hunger threats, which were already very high because of COVID-19, countries in conflict and humanitarian crises across the world.
The SOCO report, in its new edition, examines how mutually reinforcing multilateral and regional efforts can address the sustainable development challenges of today and those of the future. It does so with an eye to the global agrifood markets, agrifood systems resilience, economic growth, and environmental outcomes, cognizant that trade policies cannot be expected to fully address all the entailed trade-offs and require complementary measures.
In composing the SOCO report, FAO conducted modelling exercises to identify patterns between bilateral trade flows, relative prices and geographic barriers, and to identify key drivers of trade such as comparative advantage and trade costs.
New research shows how disruption in wheat trade can affect food security (Phys.org)
Global supply issues related to the pandemic and war in Ukraine have highlighted yet another global vulnerability: food availability. While international trade allows countries to buffer against domestic food shortfalls and gain access to larger markets, what happens when supplies run short, or the global supply chain slows or even breaks down like it did during the pandemic? A new University of California, Davis, study sheds light on how trade, and centrality in the global wheat trade network, affect food security. The study shows that many countries depend on trade to fulfill their food needs. Further, the global wheat trade is concentrated in a handful of countries whereby disruption in only a few countries would have global impacts, researchers suggest. The study, “Connected and Extracted: Understanding how centrality in the global wheat supply chain affects global hunger using a network approach,” was published in June in the journal PLOS ONE.
Public support for agriculture has reached record levels as governments enacted measures to shield both consumers and producers from the COVID-19 pandemic and other crises, according to a new report from the OECD. Only a small share of this support has been directed at longer-term efforts to combat climate change and other food systems challenges. Agricultural Policy Monitoring and Evaluation 2022 shows that the 54 countries monitored – including all OECD and EU economies, plus 11 key emerging economies – provided on average USD 817 billion of support to agriculture annually over the 2019-21 period, a 13% increase over the USD 720 billion reported for 2018-20. Support has remained substantial among OECD countries, and has increased significantly in the 11 emerging economies.
G7 Should Look to Africa for Lessons in How to Manage Multiple Crises (BusinessGhana)
The G7 will convene shortly to agree on a common response to the multiple crises buffeting our world. War, food shortages, energy shocks and inflation are causing havoc in nations both rich and poor, but Africa has been here many times before. Through long and painful experience, it has learned much about managing crises. What can Africa teach the rest of us? First and foremost, Africa’s new approach is to look beyond immediate crisis to tackle the deeper causes of recurrent catastrophes.
It is a strategy born of necessity. Africa’s best efforts at development have been repeatedly dashed by events beyond our control—with climate change the most destructive force. For a long time, the continent has depended on aid and grants to fight climate impacts. But these are often emergency responses, when what Africa needs is to build long-term resilience to both current and future shocks.
Disinvestment in Fossil Fuels is a Great Threat to Africa, Ramaphosa Says (IT News)
President Cyril Ramaphosa said that cutting investments in fossil fuels is a great threat to Africa. Ramaphosa was speaking at the G7 Summit in Germany. This summit hosted leaders of G7 countries and President Ramaphosa was participating in working sessions where Climate, Energy, Health as well Global Food Security, and Gender Equality were discussed. Ramaphosa cautioned against adverse ramifications of the proposed revision of the European Union Renewable Energy Directive, which is intended to accelerate green hydrogen investments. He highlighted that the proposed regulations have the potential to limit the ability of enterprises to supply key export industries with sustainable energy solutions and impact their global competitiveness.
“As we pursue a just transition, developing economies need development space to address high levels of inequality, unemployment, under-development and the economic impact of the COVID-19 pandemic,” Ramaphosa said. “Abrupt disinvestment from fossil fuels by international financiers poses a great risk to Africa because of the impact on jobs, stranded assets, national economies, energy, and food security,” he added.
FACT SHEET: President Biden and G7 Leaders Announce Further Efforts to Counter Putin’s Attack on Food Security (The White House)
President Biden and G7 leaders will announce that they will contribute over $4.5 billion to address global food security, over half of which will come from the United States. President Biden will announce $2.76 billion in additional U.S. Government funding commitments to help protect the world’s most vulnerable populations and mitigate the impacts of Russia’s unprovoked and unjustified war in Ukraine on growing food insecurity and malnutrition. These new investments will support efforts in over 47 countries and regional organizations, to support regional plans to address increasing needs.
The Great Finance Divide (UN DESA)
Over the last two years, the world economy has been rocked by multiple non-economic shocks, from the COVID-19 pandemic to the war in Ukraine. Climate-related disasters continue to increase in frequency and severity. Together, these events have had enormous socio-economic consequences due to the interrelated nature of economic, social and environmental risks. But not all countries and people have been impacted in the same way, in part because a financing divide is sharply curtailing the ability of many developing countries to respond to shocks and invest in recovery. The outbreak of COVID-19 delivered a seismic shock to the global economy, but developed countries were able to respond with aggressive macroeconomic policies. They financed massive response packages (worth 18 percentage points of GDP) at very low interest rates, stabilizing household incomes and financial markets. Developing countries lacked the resources for a response at similar scale, despite international support. Middle-income countries generally had supportive fiscal policy, but at a smaller scale than in developed countries. The poorest countries, most of whom were shut out of markets or faced very high borrowing costs, were forced to cut spending in areas critical to the SDGs, including education and infrastructure, as they faced shortfalls in revenues at a time of greater needs. On the monetary policy side, while many developing country central banks lowered interest rates and reserve requirements, their interventions were smaller in scale and shorter in duration, due to concerns over currency depreciations, inflation and capital outflows.
Urban resilience: Addressing an old challenge with renewed urgency (UNDP)
Incredibly, over half of humanity already lives in urban settings. With this figure projected to rise to two thirds by 2050, the need for development action in cities can no longer be overlooked. Urban resilience – the ability of city dwellers to withstand economic, social, health, environmental, disaster and climate related risks – has assumed renewed urgency and has become central to our development discourse. We know that the impact of COVID-19 has been predominantly urban (nearly 90 percent of people affected, according to a UNSDG Policy Brief), and most significant socio-economic disruption has occurred in cities. The pandemic has exposed the “soft underbelly” of our urban development, governance and risk management systems.
More than ever before, a multitude of risks are manifesting themselves with higher frequency, greater magnitude and cascading impacts in cities. According to UNDRR, nearly 84 percent of the fastest growing cities face extreme climate and disaster risks; the vast majority of which are in Asia and Africa. This disconcerting scenario is compounded by the location of many high-risk cities in challenging development contexts such as least developed countries (LDCs), low-income countries (LICs) and Small Island Developing States (SIDs), coupled with considerable governance deficits and resource constraints. In fact, the World Bank projects that COVID-19 may have pushed an additional 88 million to 115 million people into extreme poverty, with a majority engaged in informal services and living in congested urban settings.
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Government asks cement producers for ‘no price increases’ (Moneyweb)
Minister of Trade, Industry and Competition Ebrahim Patel has reportedly asked South Africa’s cement producers to commit to “no price increases” in return for government approval of “safeguard action” against cheap cement imports, particularly from China and Vietnam. This has raised serious doubts about the success of the application by several cement producers to the International Trade Administration Commission (Itac) for “safeguard action”.
Electronic customs system to reduce cost of business in Kenya (The East African)
Importers and exporters in Kenya are set to benefit from increased competitiveness and reduced cost of doing business from reduced shipment delays and demurrage charges after President Uhuru Kenyatta assented to the National Electronic Single Window System Bill, 2021, on June 21.The Bill empowers Kenya Trade Network Agency (KenTrade) to operate autonomously without the Exchequer’s funding. KenTrade facilitates cross-border trade. KenTrade CEO Amos Wangora said; “The law will enhance the use of Single Window System by helping protect data,” stem fraud and exploitation in the logistics coordination system often faced by importers and exporters using the platform. Mr Wangora said the law makes KenTrade a one-stop Customs release centre and offers electronic trade transactions.
The law comes two months after KenTrade launched the Africa e-trade platform to handle the exchange of commercial documents. The platform is integrated in 22 countries, which are members of the African Alliance for Electronic Commerce.
Clerics push for govt to correct underinvestment in inequality (IPPMedia)
Speaking during the launch of a report titled ‘Leaving no one behind: Policy Interventions and Approaches to Fight Inequality in Tanzania and SADC region’ over the weekend in Dar es Salaam, Chairman of Interfaith Standing Committee on Economic Justice and Integrity of Creation (ISCEJIC) and Bishop at Tanzania Menonite Church Nelson Kisare said although Tanzania ranks 5th out of 15th in SADC and 39th globally, there some areas that require significant improvement especially regressive Value Added Tax (VAT) and poor tax collection. Bishop Kisare said Tanzania collects only 22 per cent of the tax it should, the top personal income tax rate is too low, and the VAT is high and doesn’t exempt basic foodstuffs.
Tanzania hits traders with nearly double export fees (Business Daily)
Tanzania has doubled the cost of export permits by 93 percent, a move likely to open another round of trade dispute between Nairobi and Dar es Salaam. The authorities in Tanzania have increased the cost of acquiring export permits from the previous Sh27,000 per truck to Sh52,000, according to border officials. The move caused a huge snarl-up of trucks moving to Kenya in the last one week as traders and truckers were caught off guard by the new requirement. “Tanzania has increased the charges that it levies on export permit to Sh52,000 per truck creating confusion at the border but activities are slowly coming back to normal,” said an officer of the Kenya Revenue Authority (KRA)
Hundreds of trucks were left stranded at the border the whole of last week as truck owners updated their export permits to meet the new requirements. However, officials from the Kenya Bureau of Standards (Kebs) told the Business Daily that they resumed the clearing of trucks last week.
Budget: Key projects to be financed next fiscal year (The New Times)
The Government has proposed to spend Rwf4,658.4 billion (over Rwf4.6 trillion) in the next fiscal year – 2022/23 which will start on July 1, representing an increase of Rwf217.8 billion or 5 per cent compared to the over Rwf4.4 trillion revised budget for the current fiscal year. Finance and Economic Planning minister Uzziel Ndagijimana told lawmakers on Thursday, June 23, that the proposed national financial plan will strengthen the ongoing economic recovery efforts as well as finance medium term development objectives planned for in the National Strategy for Transformation.
In the transport sector, the mobile bridge procurement project will be financed with Rwf1.5 billion. Such movable bridges are used to ease the movements of people and goods in case floods and landslides damage roads and static bridges. In the maritime transport component, the project for the development of water transport infrastructure was allotted Rwf13.8 billion.
Stakeholders hold expo to prepare Nigerian engineers for AfCFTA (Punch Newspapers)
Engineering and construction giants will converge on July 5 in Lagos for Elan Expo which will discuss the way forward for these professions and prepare them for the African Continental Free Trade Area. The three-day expo, which is tagged ‘the Biggest Construction and Engineering Show in West Africa’, is expected to open its doors to over 5000 engineers, architects, builders, manufacturers, and importers as over 150 brands who will showcase their products in sectors such as wastewater, water treatment, ceramics and sanitary wares, as well as building construction materials and machinery. The Chief Executive Officer, Elan Exhibition West Africa, Mr Jude Chime, noted in a press conference in Abuja that the expo, the sixth in the series, would also serve as a platform to harmonise various efforts of stakeholders in construction, engineering, and commerce, especially with the opportunities provided by the African Continental Free Trade Area, which would give them access to over 1.4 billion population.
Agricultural productivity in Ghana grows 72% within 9 years – AfDB (Myjoyonline)
Agricultural productivity in Ghana grew from $1,863 in 2012 to $3,208 in 2021, the African Development Bank has revealed. These improvements, the Bank said have increased food security, as shown by the prevalence of stunting among children under the age of five, falling from 22.8% in 2012 to 17.5% in 2021.Although Ghana outperformed other African Development Fund countries on nutrition, AfDB said in its country brief on Ghana that undernourishment remains a concern.
The report further said Ghana is in the process of developing more advanced food systems, having more than tripled its exports of processed commodities from $302 million in 2012 to $1.1 billion in 2021. This results principally from processing more cocoa, which has allowed the country to capture more value in the sector.
Shippers Authority sensitizes Exporters on AFCFTA (BusinessGhana)
The Ghana Shippers Authority has organized a sensitisation workshop for members of the Eastern Regional Shippers Committee (ERSC) on how to take full advantage of the African Continental Free Trade Area (AFCFTA). The members were taken through the requirements for registration and approved exportable products under the AfCFTA and benefits of some government policies in the export and import sector, including the benchmark reversal policy. Mr Jonathan Debra, a senior officer of the Ghana Revenue Authority (GRA-Customs division) explained that the 30 per cent discount was to cushion businesses, adding that every importer was entitled to that facility and, therefore, had the right to appeal as part of the clearing process.
On Wednesday, 22 June, the Board of Directors of the African Development Bank approved a €39.62 million loan to Cameroon to improve road access to the industrial and port areas of Kribi, in the south of the country. Designed for implementation of the second phase of the Kribi Industrial and Port Area Access Roads Development Project, the funds will complement the €114.33-million loan granted in October 2021 for the first phase. The Cameroonian Government built a deep-water port backing onto an industrial zone called ‘Kribi Industrial and Port Complex’ to address congestion in the port of Douala, which cannot accommodate deep-draft vessels, due to its proximity to the coastal town of Kribi. The complex is equipped with ultra-modern machinery and large storage and work areas. Access roads to the complex have deteriorated over time due to increasing usage by heavy-duty vehicles amid increased industrial activity at the site.
African trade and integration news
How AU platform can free Africa trade from shackles of US dollar (Business Daily)
Intra-Africa trade remains low at 13 percent compared other regions of the world. One of the factors hindering trade is reliance on third currencies - US dollars, Euros and the British Pound - for the clearing and settlement of cross-border payments and transactions, which in turn leads to high costs and long transaction times. Just recently, on his State visit to Kenya, President Hakainde Hichilema captured the impact of this obstacle aptly.”…how strange it is that sometimes we (Zambia) trade in goods from Kenya through Europe and vice versa. Really? Does that make sense? Absolutely not,” he told guests at State House during a state banquet hosted by President Uhuru Kenyatta recently.
The Pan-African Payment and Settlement System (Papss) is tipped to reduce transaction costs through more efficient direct rates and faster transfers, the Africa Export-Import Bank (Afreximbank), the platform’s developer says. That way, it notes, Africa will reduce dependency on the US dollar and other hard currencies, a situation that has particularly left Kenya facing external shocks that have weakened it, and choked supply chains.
The Eight (8th) Regional Meeting on the Trade in Services Protocol under the African Continental Free Trade Area (AfCFTA) was held virtually on 17th June 2022. The Regional meeting was preceded by a 3-day ECOWAS Commission Internal Technical Working Group (TWG) meeting on Trade in Services to consider the AfCFTA verification reports for ECOWAS Members States and provide proposals for their consideration. On behalf of Mr. Tèi KONZI, ECOWAS Commissioner for Trade, Customs & Free Movement, Mr. Kolawole SOFOLA, Acting Director of Trade, recalled the support provided by the ECOWAS Commission to Member States as part of effort at ensuring that the regional offer is in line with negotiation modalities as well as the regional integration agenda. He added that the recent bilateral sessions organized by the ECOWAS Commission with Member States, provided an opportunity to discuss issues raised from the verification reports. He concluded on the importance of submitting a regional Schedule of Specific Commitments for consideration by the AfCFTA Senior Officials for onward transmission to AfCFTA Council of Ministers.
The meeting committed to finalizing the outstanding issues in the respective national Offers and resubmit to the ECOWAS Commission for consolidating into the Regional Schedule for onward submission to the AfCFTA Secretariat.
ECOWAS sensitises member states on new regional infrastructure masterplan (ECOWAS)
Concerned by the increasing infrastructure deficit and the need to address the financing challenge of regional infrastructure projects, The ECOWAS Commission through the ECOWAS Project Preparation & Development Unit (PPDU), and the sector Departments of Transport, Telecommunication, Energy and Water Resources, has held a sensitization meeting on the recently developed ECOWAS Regional Infrastructure Masterplan. The event was held from 23rd to 24th June 2022 at the Alisa Hotel, Accra, Ghana. The objective of the meeting on one hand was to present the newly approved Masterplan to the Ministries in charge of National Planning from Member States, and on the other hand to ECOWAS Institutions (Parliament, Court of Justice and EBID) and Development Partners,
E Africa debates Kenyan prez candidate proposal to ban mitumba imports (Fibre2Fashion)
A proposal by Kenyan presidential candidate Raila Odinga in his manifesto to phase out trade of second-hand clothes (mitumba) in the country has sparked a debate on the future of the trade. The East African Community has since 2016 pushed member states to buy clothes and footwear made in the region to boost local manufacturing and help the economies. Kenya, Uganda, Tanzania, Rwanda and Burundi were to phase out mitumba trade by 2019 but only Rwanda has implemented the plan, introducing high taxes on mitumba imports to deter their imports. Now the private sector in the region says import of used clothes should be phased out gradually to allow focus on growth of the local textiles and apparel sector, according to newspaper reports from the region.
African ministers speak out on impact of global food crisis (AfDB)
African ministers on Friday outlined the impact that the global food crisis is having on their countries and added their voices to calls for action. The ministers made the call to action at a ministerial conference in Berlin, convened by the German government, as current head of the G7 group. The conference highlighted the impact of soaring food prices, brought on by the Russia-Ukraine war. As a result of the conflict, the African Development Bank estimates that the continent faces a deficit of at least 30 million metric tons of food, especially wheat, maize, and soybeans imported from the two European countries. The Bank has responded with a $1.5 billion food facility. The main goal of the conference was to coordinate responses to the global food crisis. It brought together ministers from the G7 wealthiest nations and Champions of the UN Secretary General’s Global Crisis Response Group, as well as the most vulnerable and most affected countries, among others.
African Development Bank Group urges G7 countries to support Africa’s emergency food production plan (AfDB)
The African Development Bank’s Board of Directors has approved the establishment of the African Pharmaceutical Technology Foundation, a new groundbreaking institution that will significantly enhance Africa’s access to the technologies that underpin the manufacture of medicines, vaccines, and other pharmaceutical products. African Development Bank Group President, Dr. Akinwumi Adesina said: “This is a great development for Africa. Africa must have a health defense system, which must include three major areas: revamping Africa’s pharmaceutical industry, building Africa’s vaccine manufacturing capacity, and building Africa’s quality healthcare infrastructure.”
Global economy news
DDG Ellard addresses the role of multilateralism in a world of polycrisis (WTO)
There are years in which decades happen. Indeed, the past few years have changed the world and the global economic outlook. We are living through a global pandemic, the war in Europe, rampant inflation, widespread food insecurity in the developing world. And we are facing the existential threat of climate change, extreme weather events, and environmental degradation. I use the word “polycrisis” to refer to these multiple and overlapping crises of our time. This Greek term was made famous by Jean-Claude Juncker, a former President of the European Commission, in the context of the European crises of the past decade. It is also suitable to describe today’s world more broadly. We live in the world of polycrisis.
In many ways, not enough globalization — or multilateralism — has resulted in the world’s uneven, fragmented response to the pandemic, worsening its effects. And vaccine protectionism has led to inadequate attempts to vaccinate people in developing countries, risking the emergence of new, vaccine-resistant variants threatening the world. In short, the pandemic has shown that when a global threat is mismatched with a deglobalized response, a crisis is likely.
The WTO’s multilateral approach has a tremendous role to play in solving all of these problems, to harness the best parts of globalization. It brings all 164 Members to the table and gives each of them a voice. Consensus is very difficult to achieve and negotiating international agreements is the long game. But once consensus, is achieved, it means that there is buy-in from all WTO Members, that they “own” the Agreement, and will be likely to respect it. It’s not a “majority rules” outcome.
UK to consult with WTO members on tariffs protecting steel (Engineering News)
The UK government said it will consult with other countries at the World Trade Organization on its plan to extend steel tariffs, after prime minister Boris Johnson said it was “reasonable” to use them to protect Britain’s domestic industry. “No decision has yet been taken,” Johnson’s spokesman Jamie Davies said to reporters on Monday, ahead of a June 30 deadline when some of the tariffs will expire. The decision “will balance our international obligations and the national interest.” The UK has proposed to extend safeguard tariffs and quotas on certain steel products for a further two years, after International Trade Secretary Anne-Marie Trevelyan said that ending them may cause “serious injury” to British producers. On Sunday, Johnson said UK steel ought to enjoy the “same protections” as in other European economies.
Decision on LDC trade benefit extension may come next year (The Daily Star)
The next WTO Ministerial Conference (MC) in December 2023 might have a decision on the extension of trade benefits for least developed countries (LDCs) which are due to make the United Nations status graduation to a developing one. This was stated by Senior Commerce Secretary Tapan Kanti Ghosh at a press conference in the commerce ministry in Dhaka yesterday on the outcomes of a recently concluded World Trade Organization (WTO) MC12. The WTO members countries at the MC12 held in Geneva last week reached consensus that they would extend the benefits for a certain period for a smooth graduation. However, leaders of the countries did not particularly state when and for how long the benefits would be extended.
COVID-19 recovery a chance to remake society for a better future (UNCTAD)
While the COVID-19 pandemic is not yet over, it offers valuable lessons that can help the world respond better to other crises, says UNCTAD’s COVID Report 2022 published on 24 June. Drawing on all its analyses since the beginning of the pandemic, UNCTAD says this may be a once-in-a-lifetime opportunity to remake society for a better future. The report details how the pandemic has exposed the weaknesses in the structure of the international social and economic order. At the same time, it finds remarkable resilience in various areas, but only some people have benefited from this, leaving many behind. COVID-19 has shown that only the state has the capacity to deal with systemic shocks and that responses cannot be left to the markets. The pandemic has underlined that building the resilience of the global system to shocks and protecting the most vulnerable is a shared responsibility and the only feasible way forward.
The report says the pandemic has not only shown how interconnected the world is but also revealed the deep inequalities that exist between countries in many dimensions.
CHOGM 2022 Communiqué, Leaders Statement and Declarations on Delivering a Common Future (The Commonwealth)
On the final day of the Commonwealth Heads of Government Meeting 2022 (CHOGM 2022), leaders met today in Kigali, under the theme of ‘Delivering a Common Future: Connecting, Innovating, Transforming’. Heads underscored the importance of connecting, innovating, and transforming in order to facilitate a full recovery from the COVID-19 pandemic, achieve the 2030 Agenda, and to respond to conflicts and crises in ways that increase resilience and progress in delivering a common future, underpinned by sustainability, peace and prosperity, to improve the lives of all the people of the Commonwealth.
Gabon and Togo join the Commonwealth (The Commonwealth)
The Commonwealth has admitted Gabon and Togo as its 55th and 56th members respectively. Both countries are former French colonies. Leaders accepted applications by the two west African countries at the closing session of the Commonwealth Heads of Government Meeting in Kigali, Rwanda. It follows formal expressions of interest by Gabon and Togo and consultation with member countries. Rwanda was the last country to join the Commonwealth, in 2009. Gabon is a sparsely populated country of two million people, bordering Cameroon – also a member of the Commonwealth – and Equatorial Guinea, and the Republic of Congo. Togo is bordered by Ghana – a Commonwealth member – and Benin and Burkina Faso. It has a population of approximately 7.8 million people.
Countries must not become protectionist: Singapore PM (Borneo Bulletin)
Countries must be wary of turning to protectionism, Singapore Prime Minister Lee Hsien Loong said on Friday, warning that it was “impossible” for any one nation to produce everything it needs by itself. This comes as the pandemic exposed the complexity and weakness of global supply chains, he said, pointing to how supplies of gloves, personal protective equipment, and ingredients for tests and vaccines were sometimes disrupted and interdicted. “Faced with an emergency, some governments intervened to override the normal operation of the free market,” he said, recalling how suppliers could not fulfil promised deliveries. Lee was speaking at the Commonwealth Heads of Government Meeting (CHOGM), held in Kigali, Rwanda, on post-COVID recovery.
The supply chain shocks caused by COVID-19 led to an “unhappy experience” for countries and shook their confidence in globalisation, Lee said. “Countries are now emphasising self-sufficiency, moving from just-in-time production to just-in-case precautions,” he said.
Commonwealth’s rich nations take heat for failing to help small states (The East African)
Rich and influential Commonwealth countries — including the UK, Canada and Australia — have been put on the spot for failing to help low-income and small member states in their hour of need at the height of the global pandemic. They also happen to be members of the elite G7 or G20 in the case of Australia, while on the other end of the spectrum, the Commonwealth has 13 Least Developed Countries and 32 small states. The Commonwealth is supposed to be an important “collective voice” and a vehicle to potentially provide leverage for global positions but influential and rich members remain lukewarm and pursue national interests, to the detriment of the majority of Club members who happen to be developing countries.
Trade policy can have a significant impact in making fisheries and aquaculture more sustainable. However, trade policy can also provide both positive and negative incentives to stocks conservation if not designed responsibly. Developing Oceans Economy and Trade Strategies (OETS) at the national level can frame sound ocean economic governance and provide an enabling environment for ocean-based value chains seeking sustainability. At the same time, addressing negative public incentives such as harmful fisheries subsidies need a clear and immediate multilateral response in the form of a Fisheries Subsidies Agreement under the World Trade Organization (WTO) with urgency. Seafood Interactive Maps (SIMs) can show a new path and ways for producers globally to learn, connect to markets, find technology solutions, and understand investment opportunities in sustainable seafood harvesting and farming. New risk assessment methodologies for aquaculture under the One Health Approach (OHA) can assist in understanding and mitigating impacts from the intensive use of antibiotics, including challenges with antimicrobial resistance that has broad implications for people and sustainability. This event will introduce how new and diverse partnerships, approaches and recommendations can maximize outcomes for fast-tracking the implementation of targets 1, 4, 6 and b of SDG 14.
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South Africa is making a big localisation push – and has stopped using some international products: Ramaphosa (BusinessTech)
Answering a recent parliamentary Q&A, Ramaphosa said localisation is one of several tools in the economic reconstruction and recovery plan to improve the dynamism of the economy, promote investment, develop new markets, transform the economy, promote equitable spatial development and contribute to the development of a capable state. “Localisation is pivotal in stimulating growth and transformation. It is about creating an enabling environment for inclusive growth, deepening the country’s industrialisation base and creating targeted transformation measures,” he said. “It seeks to expand the economy to include more participants and to ensure that more parts of the population, including women, young people, black South Africans and the rural poor, can contribute to and benefit from growth.”
Mutually respectful, beneficial foreign investments key – Bonakele (Engineering News)
South Africa needs “very predictable, clear regulatory systems” as it seeks mutually respectful and mutually beneficial foreign investment, South African Competition Commission Commissioner Tembinkosi Bonakele said at the Southern Africa France Business Forum on June 22. Hosted by Business France, French Foreign Trade Advisors and the French South African Chamber of Commerce and Industry, the forum sought to strengthen business ties between France and South Africa.
Stabilisation to growth: Policy reforms bear fruit as imports substitution gain ... (Chronicle)
ZIMBABWE’S economy has transitioned from stabilisation to growth as policy reforms being spearheaded by the Second Republic continue to register positive results as evidenced by the increase in capacity utilisation and the shift towards import substitution, President Mnangagwa said yesterday. Despite persistent speculative exchange rate distortions and the recent global supply chain disruptions linked to Covid-19 and the ongoing Russia-Ukraine conflict, which have induced inflationary shocks, the President said the country’s economic transformation journey remains on track. Zimbabwe’s export earnings hit the highest levels in history last year, driven by the growth in the manufacturing sector which has seen capacity utilisation increasing to above 60 percent as at December 2021, according to ZimStat. This is a huge increase when compared to 47 percent in 2020 and about 36 percent in 2019, economic experts have said.
Maize flour to remain costly on expensive imports (Business Daily)
Expensive imports have dampened hopes for cheaper flour as the cost of transporting maize from the source markets has shot by 150 percent. Transporters are charging the equivalent of Sh1,500 for a single bag of maize transported from either Malawi or Zambia from Sh600 previously, pushing the landing cost of a 90-kilo bag to Sh6,000 when it lands in Nairobi. The price of flour in the country has been on an upward trend since the beginning of the year and this week it crossed the Sh200 mark, a first in Kenya’s history as the shortage of the staple food persisted. Animal feeds manufacturers, who are also importing the same standard maize for feeds say the high cost has curtailed most of their members from shipping in the produce.
World Bank shields Kenya from costly foreign debt (Business Daily)
Kenya has relied heavily on the World Bank Group for foreign funding since January on the back of a relatively high-interest international market that saw the Treasury shun expensively-priced commercial loans. The latest Treasury data on external borrowing shows the stock of debt from rich countries (bilateral) as well as commercial lenders — banks and Eurobond — fell in the four months ended April. Loans from multilateral lenders, however, increased Sh95.71 billion on net borrowing basis — driven by World Bank’s International Development Association (IDA) and Asian Development Bank/Asian Development Fund (ADB/ADF).The two multilateral financiers, whose loans come on concessional terms as low as 0.5 percent interest and a longer repayment period with a generous grace period, accounted for nearly three-quarters of the growth in multilateral debt and 95.5 percent of the net external debt.
Manufacturers hit lenders with Sh21bn defaults in months (Business Daily)
The manufacturing sector accounted for nearly half of loan defaults in the first quarter of the year on the back of high input costs, according to the Central Bank of Kenya. The sector’s non-performing loans climbed to Sh77.8 billion by March from Sh57 billion three months earlier, the highest quarterly growth in value on record. The Sh20.8 billion jump came at a time the sector complained of the high cost of shipping and challenges in accessing adequate stocks of dollars to pay suppliers on time amid increased competition for raw materials in the global markets.
The Kenya Association of Manufacturers blames the default in servicing loans on high cost of doing business as a result of “global increase in commodity prices and the weakening of the Kenyan shilling”. “All importers of raw materials for production have been affected by these challenges from global economic crisis which have greatly disrupted global supply chains for imported goods,” KAM’s head of policy and research Job Wanjohi said on Thursday.
British firms blame corruption for low investments in Kenya (Business Daily)
British firms have blamed corruption as an impediment in the country’s business environment, but they maintain Kenya remains an investment hotspot in Africa for profitable investments. The firms under their business lobby say they will back the private sector’s fight against graft as part of the business reforms they hope to achieve. This is after Kenya signed a Memorandum of Understanding (MoU) with the British Chamber of Commerce Kenya (BCCK) to promote Kenya’s business climate reforms agenda.
Speaking during the signing of the MoU, Principal Secretary, State Department for East African Community in the Ministry of East African Community and Regional Development Dr Kevit Desai, said that business integrity is the foundation of international trade. “While corruption is a global issue, it is a concern that has been raised in our discussions with businesses and international investors,” he said. “This MoU will create a platform to reaffirm Kenya’s commitment to strengthening the business climate. It will also build private sector participation in the digitisation and automation of government services in procurement, revenue collection and cross-border trade.”
African trade and integration news
More Education Is Needed On PAPSS – GITFIC (News Ghana)
The Ghana International Trade and Finance Conference (GITFIC) at their sixth annual conference recommended the upscaling of education on the Pan African Payment and settlement systems (PAPSS). The key players, they suggested would be the PAPSS Council, GITFIC secretariat, WAMI and the African Continental Free Trade Area (AfCFTA) secretariat who would target Traders’ Unions, Industry players, Exporters, Financial Watchers and Analysts. In doing so, the stakeholders must identify and seek collaboration with existing mobile money platforms for seamless interoperability and Signatories to AfCFTA must harmonise local financial rules with AfCFTA protocols.
Speaking on high cost and bureaucratic systems of doing business in many African countries, Mr Ackom called for the creation of an African business regulatory database, which would be accessible to investors and traders and recommended the development of the opening of a, common platform describing all business rules for investors, traders in goods.
He said in the trade and finance ecosystem within Africa to address some of the key challenges affecting implementation of the AfCFTA, the GITFIC would continue to engage the key stakeholders to facilitate the execution of the proposed action points.
Adopt common approaches to tackle economic challenges: Dr Bawumia urges African countries (BusinessGhana)
The Vice-President, Dr Mahamudu Bawumia, has urged African countries to adopt common regional and continental approaches to navigate the present global economic challenges. Such measures, he said, would help the continent exploit synergies to speed up their integration into the global economy. “Regional and economic integration will not only help our countries access the expanded regional markets within but also facilitate their global competitiveness,” added. Addressing the 22nd annual general meeting (AGM) of the African Trade Insurance (ATI) Agency in Accra yesterday[June 23, 2022], the Vice-President further said Africa needed to play increasing roles in the global market to maximise opportunities available in the interconnected world economy.
Dr Bawumia also called for closer cooperation between the AfCFTA Secretariat and the ATI to speed up the implementation of the free trade area. He said if Africa worked together in that direction, “we will gain more time and mileage in reducing reliance on external markets and enhance value addition of our resources for our socio-economic development”.
The Southern African Railway Association (Sara) says improved rail infrastructure and co-operation between neighbouring southern African countries will help to boost the economies of these countries.
Sara president Sizakele Mzimela, who is also the Transnet Freight Rail chief executive, was speaking at a media briefing in Durban yesterday. The event was also attended by Babe Botana, Sara’s executive director.
“We know rail transport is crucial for rebuilding our economy. As we and our SADC countries’ economies have still been recovering from the Covid-19 pandemic, we look to rail transport between our countries to rebuild our economies.” Mzimela said the damage to infrastructure affects the rail transport industry and the economy as a whole.
East African court delivers verdict on Gatuna border closure (Independent)
The closure of the Gatuna border by Rwanda was illegal and contravened the East African Community Treaty, the East African Court of Justice has ruled. A panel of three Judges of the East African Court of Justice comprising Monica Mugenyi from Uganda, Audace Ngiye from Burundi, and Dr. Charles Nyawello from South Sudan delivered the verdict read in a zoom court session on Thursday. The judges noted that the actions of the Rwandan government contravened provisions of the EAC treaty including Article 5, which lays down the objectives of the community, Article 6 on fundamental principles of the Community, and Article 7 which provides for the operational principles of the Community. In February 2019, Rwanda closed the Gatuna border, blocking the movement of people and goods from Uganda and Rwanda.
EAC unveils Regional Bioeconomy Strategy 2021/22-2031/32 (EAC)
The East African Community has unveiled the Regional Bioeconomy Strategy 2021/22-2031/3 at the EAC Headquarters in Arusha, Tanzania. The strategy will offer an opportunity for Partners States to achieve their individual aspirations, making use of the region’s abundant natural resources, including underutilized agricultural waste materials, to produce value-added products with applications in many sectors including food, health, energy and industrial goods. Among the key interventions proposed in the strategy that was unveiled by the EAC Deputy Secretary General in charge of Planning and Infrastructure, Eng. Steven Mlote, on behalf of the Secretary General, is the creation of new forms of sustainable bioenergy, and the conversion of waste materials to useful products.
The strategy further seeks to ensure the transformation of economies and place innovation in bio-based products and processes at the centre, with a bio-based circular economy as the organising framework.
An Africa-G7 energy food and security grand bargain (UNECA)
Europe, the US, and Africa are all reeling from the prolonged Russia/Ukraine crisis. They need to forge a new grand bargain that holds out the promise of shared energy security, food security, job creation and long-term green growth and prosperity, argues Vera Songwe. This grand bargain offers a three-pronged deal to the G7.
The EU gets short to medium-term access to energy, stability of supply, and acceleration of the transition as well as new and stronger trade and geopolitical partnerships. Africa gets a surge in investment into food and energy systems and investment for its youth who number seven times as many as European youth and for whom migration seems to be the only attraction.
The African Development Bank, Africa50, and Africa Sovereign Investors Forum (ASIF), have signed a letter of intent to collaborate on developing green and climate resilient infrastructure projects across Africa. The three entities will work together to galvanize financing and to drive the development of skills and expertise within the infrastructure sector. The signing took place on 20 June 2022 in Rabat, Morocco, during an event to launch the Africa Sovereign Investors Forum. Under the high patronage of His Majesty King Mohammed VI of the Kingdom of Morocco, 10 African sovereign investors agreed to set up the Forum. The newly formed platform will accelerate coordination to mobilize patient capital for the continent’s development.
Africa50 CEO Alain Ebobissé said: “this is an important step to building strong collaboration between the right stakeholders to meet the substantial infrastructure financing needs of Africa. We must make key regional infrastructure projects attractive and bankable for both global and African private investors and today’s signing will go a long way to address the continent’s infrastructure deficit. It is therefore important that we leverage the strength of the African sovereign wealth funds on the continent, who manage significant domestic savings, to drive the growth of Africa’s economies through the development and successful implementation of strategic infrastructure”.
Firms from rich countries are taking factories home: what this means for Africa (The Conversation)
There is no doubt that globalisation has benefited Africa greatly. This includes job creation, innovation, increased productivity and foreign direct investment. But global value chains are shifting in the wake of the COVID pandemic and Russia’s ongoing invasion of Ukraine. These changes are informed by the decisions of various companies to shift or move their manufacturing or supply chain networks closer to their home country. These decisions are being driven by a number of factors. They include a race to reduce exposure to disruptions, increase proximity and reduce vulnerability to external shocks. In light of this, Africa’s current benefits from globalisation will be jeopardised. Can African countries build a resilient economic future post-COVID-19 that is less reliant on the current uncertain global value chain?
To maximise the advantages of regional growth and markets, Africa must look inward and perhaps consider how to establish its own internal and national value chains.
Now is the time for African countries to start looking for African value chains or alternatives to the global value chain. Of course, this presents a myriad of challenges. Most African nations still don’t have the necessary transportation and road infrastructure to support logistical operations in regional markets. Consequently, significant investment is required for this to work.
European Parliament advocates equalizing EU trade relations with Africa (DW)
The European Parliament on Thursday backed a report advocating the use of trade policy to equalize relations between African countries and the European Union. “For too long, Africa has been reduced to a supplier of raw materials, with the result that the continent’s immense economic potential remains untapped,” Kathleen Van Brempt, a Belgian Social Democrat member of the European Parliament, said in a statement. The 27-country bloc should focus on five strategic areas as set out in the report, according to fellow Belgian MEP Saskia Bricmont of the Green Party: efficient infrastructure, food security, civil society, fair-trade agreements and sustainable economic development.
In the European Parliament report on the future of African trade relations, one major issue highlighted is how the majority of goods imported into the EU from Africa are cheaper primary goods such as food, drink and energy, while the EU ships mostly higher-value manufactured items the other direction, such as machinery and pharmaceutical products.
“Due to the continued direction of trade from colonial times, wealth is being transferred continuously from the African periphery to the industrialized and increasingly digitized centers,” the report states.
The EU therefore ought to share more of its technical knowledge with Africa to encourage on-the-ground manufacturing, Van Brempt told journalists in a briefing.
More African Central Banks Are Exploring Digital Currencies (IMF Blog)
Several sub-Saharan African central banks are exploring or in the pilot phase of a digital currency, following Nigeria’s October introduction of e-Naira. Nigeria was the second country after the Bahamas to roll out a CBDC.
CBDCs are digital versions of cash that are more secure and less volatile than crypto assets because they are issued and regulated by central banks. Countries have different motives for issuing CBDCs but for the region there are some potentially important benefits. The first is promoting financial inclusion. They can also facilitate cross-border transfers and payments.
Sub-Saharan Africa Reveals Lessons for Governance (IMF)
Countries in the region have made important strides in tackling corruption, with some outperforming emerging market and even advanced economies. A new book by the IMF, Good Governance in Sub-Saharan Africa features three countries—Botswana, Rwanda and Seychelles—that are leading in the effort to improve governance.
The most successful countries usually have five key elements in place. First, a high level of political commitment to good governance and transparency. Second, respect for the rule of law and property rights. The third element is ensuring efficiency, transparency, and public oversight of investments. Fourth, access to information. And finally, innovation and technology, which we believe can play a big role in helping governments deliver on these priorities.
Global economy news
14th BRICS Summit Beijing Declaration (China.org.cn)
Recalling the BRICS Joint Statement on Strengthening and Reforming the Multilateral System adopted by our Foreign Ministers in 2021 and the principles outlined therein, we agree that the task of strengthening and reforming multilateral system encompasses the following:-Making instruments of global governance more inclusive, representative and participatory to facilitate greater and more meaningful participation of developing and least developed countries, especially in Africa, in global decision-making processes and structures and make it better attuned to contemporary realities;
Using innovative and inclusive solutions, including digital and technological tools to promote sustainable development and facilitate affordable and equitable access to global public goods for all;
We reaffirm our support for an open, transparent, inclusive, non-discriminatory and rules-based multilateral trading system, as embodied in the World Trade Organization(WTO). We will engage constructively to pursue the necessary WTO reform to build an open world economy that supports trade and development, preserve the pre-eminent role of the WTO for setting global trade rules and governance, supporting inclusive development and promoting the rights and interests of its members, including developing members and LDCs.
We note that the COVID-19 pandemic has caused serious shock and hardship to humanity, unbalanced recovery is aggravating inequality across the world, the global growth momentum has weakened, and the economic prospects have declined. We are concerned that global development is suffering from severe disruption, including the widening North-South development gap, divergent recovery trajectories, pre-existing developmental fault-lines and a technological divide. This is posing huge challenges to the implementation of the 2030 Agenda for Sustainable Development as economic and health scarring, particularly for EMDCs, is projected to persist beyond the current pandemic. We urge major developed countries to adopt responsible economic policies, while managing policy spillovers, to avoid severe impacts on developing countries. We encourage multilateral financial institutions and international organizations to play a constructive role in building global consensus on economic policies and preventing systemic risks of economic disruption and financial fragmentation.
Commonwealth Heads of Government Meeting opens in Kigali (The Commonwealth)
Leaders of more than fifty Commonwealth nations gathered in the Rwandan capital, Kigali, today for the official opening of the 2022 Commonwealth Heads of Government Meeting (CHOGM), held under the theme, ‘Delivering a Common Future: Connecting, Innovating, Transforming’.
This morning, His Royal Highness The Prince of Wales, representing Her Majesty Queen Elizabeth II as Head of the Commonwealth, emphasised the great value she has placed on the common friendship, humanities and values of the Commonwealth. He said: “As we build back from the pandemic that has devastated so many lives, as we respond to climate change and biodiversity loss that threatens our very existence, as we see lives destroyed by the unattenuated aggression from violent forces, such friendships are more important than ever. “The Commonwealth we need is on the frontlines of global challenges not on the peripheries watching events unfold. Our special strength is to bring issues into focus that might otherwise be overlooked.”
Rwanda to feature in UK’s new preferential trade system (The New Times)
British Prime Minister Boris Johnson has said that Rwanda is among countries expected to feature in the United Kingdom’s preferential trade system. Johnson was speaking at the closing of the Commonwealth Business Forum which concluded on Thursday in Kigali. He said that the United Kingdom would on July 6 announce countries to feature in their new preferential trade system which among other things removes tariffs when exporting to the UK. Rwanda and the United Kingdom have been negotiating the trade deal over recent months to establish future trade relations between the two countries.
The preferential system is likely to see Rwanda access the UK market without tariffs consequently reducing cost of doing business. This could have impacts such as increased production and value addition locally.
Statement By His Excellency Yoweri Kaguta Museveni at CHOGM Business Forum (Uganda Media Centre)
In the Global value chain, we see a full range of activities (design, production, marketing, distribution and support to the final consumer, etc.) that are divided among multiple firms and workers across geographic spaces to bring a product from its conception to its end use and beyond. Cross-border production has been made possible by the liberalization of trade and investment, lower transport costs, advances in information and communication technology, and innovations in logistics (e.g. containerization). Covid-19 pandemic, however, disrupted the GVC, adversely affecting the World economy and reversing the hard earned economic gains.
Uganda as a country realized the need to be creative and innovative. Uganda started efforts to produce her own Vaccine. But in this process, we found the Global value chains were not helpful.
The persistent uncertainty related to the shift of the epicentre of the pandemic from region to region, and the parallel instability affecting production costs, further exacerbated the situation, making it difficult to resume business on a global scale, leading many firms to reduce or stall their production activities.
At the same time, temporary surges of demand for certain critical commodities have not been met by increased supply since, under the current model, dramatic changes in the scale of production might not be easily absorbed after a return to normality.
GVCs have proven resilient and will play a significant role in the recovery. In addition, they have played a vital role in producing personal protective equipment and vaccine components as COVID-19 recedes. But shall require a fit-for-purpose re-modification to bring about the prosperity of those countries in most need without leaving anyone behind.
PM speech at the Commonwealth Business Forum (GOV.UK)
This is a very very timely meeting, as Jonathan has just said we’ve all come out of the misery of the covid lockdowns and look at what is going on in the world today – unfortunately we still see economic pressures. And we’re seeing spikes in the cost of energy, spikes in the cost of food, and of fertiliser.
I massively support that new Africa free trade area, we’re backing the new secretariat in Accra, and as African countries remove trade barriers from their borders, we’re making it easier to sell to the UK because on 6th July we’re launching a new preferential trade system for 65 developing countries, including Rwanda and 17 other Commonwealth members. liberalising our tariffs, getting rid of those pointless tariffs that are totally vexatious, that cost more to collect than the revenues you get from them abolishing the nuisance tariffs – they exist and improving our rules of origin to make it easier for all our countries to benefit. And what I feel so strongly about the Commonwealth is it’s not just about imports and exports – it’s about the partnerships we build
Members laud Ministerial Declaration addressing food safety, animal, plant health challenges (WTO)
The Sanitary and Phytosanitary Declaration for the 12th Ministerial Conference: Responding to Modern SPS Challenges acknowledges that the global agricultural landscape has evolved since the SPS Agreement was adopted in 1995. It instructs the SPS Committee to launch a work programme, open to all members and observers, that would further enhance how the SPS Agreement is implemented. This work programme would consist of new efforts to identify challenges in the implementation of the SPS Agreement and the mechanisms available to address them as well as the impacts of emerging challenges on the application of the SPS Agreement.
Members took the floor to underline that the principles and obligations of the SPS Agreement remain as relevant today as ever. They commended the process to achieve consensus on the Declaration, which they said could be used as a template for work in other areas. Many delegations noted that members had driven the talks leading to this outcome, with key proponents of the initiative listening to views expressed by other members and responding to questions and concerns in a constructive manner.
Commodity losses strip emerging markets of their lone attraction (BusinessTech)
The most popular trade in emerging markets this year – betting on commodity-exporting nations – is losing its appeal. The currencies and bonds of Brazil to Mexico and South Africa were the best performers among developing-nation peers in the first five months of 2022 as commodity prices skyrocketed following Russia’s invasion of Ukraine.
“We are closer to the end of the emerging-market commodity boom than the beginning or even the middle,” said Todd Schubert, head of fixed-income research at Bank of Singapore. “The rising risk of a severe economic downtown will further sap demand for a broad swath of commodities.”
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Opportunities abound in transport, logistics if challenges can be addressed (Engineering News)
There are considerable challenges facing the country’s commuter transport, freight and logistics sectors, which are impeding economic growth; however, there are signs of improvement. This was a key message from speakers during a transport and logistics panel discussion, on day two of the Manufacturing Indaba on June 22.
Innovation key for SEZs to support post-pandemic recovery (Engineering News)
There is a role for SEZs to play in the country’s post-pandemic recovery, however, this will require changes to certain approaches, speakers indicated during a ‘Growing Industrial Development Zones and SEZs’ panel discussion, as part of day two of the Manufacturing Indaba. Coega Development Corporation investment promotion manager Vuyokazi Gwabeni emphasised that, despite the challenges and impacts of the pandemic, the world is now moving towards a more environmentally conscious, sustainable approach, and that, for SEZs to contribute meaningfully to the country’s post-pandemic recovery, they must align to this as well.
Kenya to Increase Sugar Imports to Meet Local Demand (Krishi Jagran)
The Sugar Directorate of Kenya’s Agriculture and Food Authority set an annual limit of 180,000 MT for raw sugar imports from all countries in 2022. The issuance of import permits enforces this ceiling.
Sugar production in Kenya is expected to fall by 4% to 660,000 MT in MY 2022/23, owing to lower sugarcane yields caused by higher fertilizer prices, which are expected to limit fertiliser application.
Sugar has become a more appealing option than maize for many farmers in these areas due to lower labour requirements and guaranteed farmgate prices and sales through mill contracts. According to a GAIN report, USAID notes that private mills, which account for nearly 80% of total sugar production in the country, are expanding into zones previously reserved for state-owned operations. In the long run, this will almost certainly increase Kenya’s sugarcane yields and processing efficiency.
Firms in digital race to stave off supply chain disruptions (Business Daily)
The Covid-19 pandemic has come with many lessons for businesses. It has been a learning curve but Kenyan manufacturers and processing companies are fast tapping into technology to address supply chain hiccups that resulted from lockdowns and restricted movement in 2020.For close to two years, these companies were unable to source raw materials to manufacture different products. Warehouse fees went up at ports and the cost of importing materials rose. A 2022 report by South African business management software provider SYSPRO, indicates that 70 percent of businesses experienced material handling and supply chain disruptions while 60 percent were unable to engage with customers and suppliers. To solve the problem, industry players have committed to digital transformation initiatives, with 69 percent building digitisation strategies.
Ministry hosts Agoa capacity-building workshops (The Namibian)
THE Ministry of Industrialisation and Trade and the United States Agency for International Development (Usaid) Trade Hub held two African Growth Opportunity Act (Agoa) capacity-building workshops in Windhoek on 8 and 15 June. The purpose of the workshops was to provide an overview of Agoa key principles, export opportunities, and of the requirements to successfully export to the United States (US) market. The workshops came on the heels of the Namibia-US trade forum, which the ministry held in Windhoek early this month.
Agoa is a non-reciprocal unilateral US trade law providing eligible products from sub-Saharan African countries duty-free access to the US market. After its initial 15-year period of validity, Agoa was extended in 2015 by 10 years to September 2025. “The workshop on 8 June provided participants with relevant information on the overview of market entry requirements for Agoa, with discussions focused on the Food and Drug Administration Act with regards to compliance, food safety and standards,” said the statement.
The workshop on 15 June provided participants with appropriate facts on export procedures to the US through dual expositions made by Namibia’s customs experts and the US Customs and Border Protection, respectively.
TZ, China bolster diplomatic, trade ties (Dailynews)
AS trade relations between Tanzania and China continue to grow, the former is planning to open up another consulate in China’s financial hub-Shanghai. Already, Tanzania has a consulate in Guangzhou, which is operating under the coordination of the Embassy situated in Beijing which is the administrative capital of China. This was revealed yesterday by the Director General of African Affairs in the China Ministry of Foreign Affairs, Wu Peng during an exclusive interview with the ‘Daily News’. He said, successful completion of the move will significantly boost the economic and trade cooperation between the two countries that has seen a steady growth despite the eruption of Covid-19 pandemic. “It’s gratifying to see that our economic cooperation withstood the test of the Covid-19 pandemic, the bilateral trade continued to expand with the volume in 2020 and 2021 growing respectively by 9.5 per cent and 47 per cent to 6.74 billion US dollars,” he said.
Mozambique Country Economic Memorandum: Mozambique Needs a New Growth Model for Sustained, Inclusive Development (World Bank)
Mozambique has experienced rapid growth for more than two decades. Growth accelerated remarkably following the end of the civil war, averaging 7.9% between 1993 and 2015—among the highest in sub-Saharan Africa (SSA). However, growth decelerated sharply following the hidden debt crisis in 2016. The revelation of undisclosed debts led to a crisis of economic governance and a protracted economic slowdown, with growth falling to 3% in 2016-2019. The slowdown has been exacerbated by the natural disasters in 2019, the escalation of insurgency in Northern Mozambique since 2017, and the pandemic since 2020. Mozambique’s growth strategy has been limited in its capacity to generate productive jobs and support accelerated poverty reduction. Nearly two-thirds of the population lives in poverty and the country is among the most unequal in SSA. This partly resulted from Mozambique’s increased dependence on large extractive projects, with limited linkages with the rest of the economy, and low-productivity agriculture.
The discovery of some of the largest natural gas (LNG) reserves in the world is expected to provide Mozambique with a transformative opportunity for sustained and inclusive growth. However, making the most of the anticipated LNG resources and bringing growth closer to the poor will require a new ambitious growth model that goes beyond the extractives.
Togo: Sustainable and inclusive growth will depend on agricultural productivity and trade (World Bank)
While Togo has made undeniable progress in certain areas, the West African nation is yet to take full advantage of its potential to achieve sustainable and inclusive growth, the World Bank said today in its latest Togo Country Economic Memorandum. The Bank’s study entitled “Towards sustainable and inclusive growth” shows Togo could increase agricultural productivity and trade competitiveness as well as its participation in global value chains, and harness urban economic opportunities to achieve inclusive growth. The report pointed at low agricultural productivity, untapped economic potential of cities, and low levels of trade competitiveness and participation in global value chains, as the main contributing factors.
African trade and development news
Kenya to lose highest revenue in continental trade agreement – research (Monitor)
New research by the Economic Policy Research Center (EPRC) at Makerere University shows that the African Continental Free Trade Agreement will mostly inflict revenue loss on Kenya in the East African region. “Kenya will incur the largest loss at $14.2 million, followed by Uganda at $13.5 million. Tanzania is estimated to register revenue loss of $5.3million, Burundi $4.3million and Rwanda $ 3.9,” the research shows. Considering proportional tariff revenue losses, Burundi is expected to incur the biggest at 30 percent, followed by Uganda at 7.6 percent, Rwanda 5.5 percent, Kenya 4 percent and Tanzania 3.7 percent. “The overall result is that each EAC partner state will incur losses but at varying levels and proportions,” researchers observed. These custom revenue losses for the EAC member countries are trade trends in the rest of Africa where tariff revenue has significantly reduced.
Trade among African countries way to go - survey (The Star)
Africa’s reliance on external markets instead of promoting intra-Africa trade has shrank its economy and pushed up inflation, according to a new trade report .The survey by the Pan African Trade and Investment Committee (PAFTRAC) projects that the continent’s GDP growth will shrink by 0.7 percent while inflation will rise by 2.2 per cent. It attributes this to the Ukraine war which it says will push more people into food insecurity and poverty .This, at a time when the continent is still recovering from the effects of the Covid-19 pandemic which disrupted the global supply chain. According to the survey Africa imports around $40 billion (Sh4.69 trillion) worth of food annually and the soaring wheat and sunflower prices in the wake of the Ukraine crisis threatens food security in the region.
African governments must take industrialization seriously – Gabby Otchere-Darko (GhanaWeb)
Chairperson of the Advisory Board of the Commonwealth Enterprise and Investment Council (CWEIC), Gabby Asare Otchere-Darko, has stated that African governments have the potential to take advantage of industrialization on the continent. He noted that this will help the continent to gain influence on the global market. According to him, even though the African Continental Free Trade Area (AfCFTA) has been implemented, Africans have to do more to reap its benefits.
Speaking at the commonwealth business forum in Rwanda, he said, “In order for Africa to gain leverage in global trade or even trade within the continent governments across Africa need to take industrialization seriously because really even without us industrializing as much as we should, about 66% or so intra-African trade is in manufactured goods.”
Otchere-Darko added, “So it tells you the potential if we do more and I will use Ghana as an example; over the last five years a government set up “One District One Factory”, essential it means is that they identify the area that the district may have a sort of advantage … and then help fund to build a factory there.”
Côte d’Ivoire – Ghana : Will AfCFTA offer cocoa farmers a solution? (The Africa Report)
Alex Assanvo, the executive secretary of the Côte d’Ivoire-Ghana Cocoa Initiative, believes the African Continental Free Trade Agreement (AfCFTA) could offer solutions.
“It is my big dream,” Assanvo says, to push cocoa as a pilot project and show how the AfCFTA can be deployed to encourage more processing of raw commodities on the continent. “This is probably one of the best tools we have to start promoting local processing. We need to bring it to a level where processing becomes cheaper in Africa.”
Russia-Ukraine conflict hurting East Africa’s business community (The Statesman)
The Russia-Ukraine conflict is hurting the performance of East Africa’s business community due to the rising prices of key commodities, the regional apex lobby has said. John Bosco Kalisa, the chief executive officer of the East African Business Council (EABC), told journalists in Nairobi, the capital of Kenya, that the crisis has disrupted global supply chains and has been devastating given the substantial amount of products that are imported from the two nations, Xinhua news agency reported. “The financial performance of businesses has been negatively affected given that we are net importers of wheat and edible oils from Russia and Ukraine which are key inputs for businesses,” Kalisa said during the EABC-Trade Mark East Africa regional private sector consultative meeting on the African Continental Free Trade Area (AfCFTA) and Tripartite Free Trade Area (TFTA).
He observed that the transmission mechanism of the impact of the Russia-Ukraine crisis has manifested in the form of skyrocketing prices of most household and commercial goods.
Africa must end food, pharma import dependence, AfDB president says (Reuters)
Africa must wean itself off dependence on food and medicine imports, the president of the African Development Bank (AfDB) said, as the institution approved creation of a pharmaceutical tech foundation and began processing requests for food relief. Africa was hit hard by the economic fallout from the coronavirus pandemic. Now, as many countries are still struggling to rebound, they are facing rising inflation and food shortages aggravated by the war in Ukraine. “Africa should not allow itself to be vulnerable in excessively depending on others, whether it is for vaccines or whether it is for food,” AfDB president Akinwumi Adesina told Reuters on the sidelines of a meeting of Commonwealth leaders in Kigali.
Sub-Saharan Africa: Potential and Challenges in Textiles & Apparel Industry (Fibre2Fashion)
Sub-Saharan Africa is a diverse region with an abundance of human and natural resources and a great potential to be competitive in cotton production and achieve inclusive growth. Its textile and apparel industry has major importance in terms of job creation and income generation. In recent years, Sub-Saharan African countries have attracted the attention of textile companies globally and have become a budding destination for textile and apparel sourcing. This sector is witnessing a remarkable growth for which the key reasons are foreign investments, investor confidence in the continent’s manufacturing and design capability, and the rising cotton industry. In 2021, the textile and apparel exports from Sub-Saharan African countries increased by 25 per cent to $5.14 billion, compared to exports of $4.11 billion in 2020.
Call for innovative approaches to boost food security (The New Times)
Africa should not be relying on foreign countries such as Russia and Ukraine for food supplies, rather it should invest in enough resources, including technologies in the production of enough food and offset its imports, officials have said. They made the observations on Tuesday, June 21, during the “Innovating for Resilient and Inclusive Food Systems Think Tank” session which is part of the CHOGM2022 underway in Kigali.
Agnes Kalibata, President of the Alliance for a Green Revolution in Africa (AGRA), said that the agriculture sector in some places, especially in developing countries of the Commonwealth is heavily underinvested, calling for adequate funding to boost the sector productivity, strengthen its resilience and deal with climate change, as well as create jobs. “And the opportunity is very clear with us. We have a market but we have successfully isolated smallholder farmers in these markets. They are not part of these markets,” she said.
According to “the Impact on Trade and Development of the War in Ukraine,” a rapid assessment by the United Nations Conference on Trade and Development (UNCTAD) of March 2022; in 2018–2020, Africa imported $3.7 billion worth of wheat from the Russian Federation and another $1.4 billion from Ukraine.
Shift Towards Domestic Tourism a Game Changer in Post-Covid-19 Recovery (Africa.com)
For decades, tourism has remained a major contributor to the GDP of African economies. In 2019, the industry accounted for about seven percent of Africa’s GDP and contributed $169 billion to its economy—about the size of Côte d’Ivoire’s and Kenya’s combined GDP. But the advent of the Covid-19 pandemic changed all that. In July 2020, the African Union estimated that Africa lost nearly $55 billion in travel and tourism revenues and two million jobs in only the first three months of the pandemic. The International Monetary Fund (IMF) predicted that real GDP among African countries dependent on tourism shrunk by 12 percent in 2020. However, as Covid-19 restrictions ease, tapping domestic tourism demand has offered the sector some respite, as a growing middle class and young population show more interest in domestic tourism.
According to the World Travel &Tourism Council (WTTC), domestic tourism accounted for 55 per cent of travel and tourism spending in Africa in 2019, below the contribution of local tourism in North America (83 per cent), Europe (64 per cent) and Asia-Pacific (74 per cent). Domestic tourism accounted for 73 per cent of the total global tourism spending in 2017. Africa’s growing middle class and population of young travellers hungry for adventure, and the recently launched African Continental Free Trade Area (AfCFTA), the world’s largest free trade area by the number of participating countries, are among the pillars seen supporting the future growth of domestic and regional tourism in the continent.
With the sustained strain on economies and livelihoods due to the COVID-19 pandemic, and exacerbated by the Russia-Ukraine conflict, the African Union continues to engage among its Member States on ways to enhance the resilience of African economies to withstand such unprecedented events which have profoundly affected growth prospects of the continent, leaving little fiscal room for Member States to satisfy the needs of their population and meet their financial obligations to the Union.
At the just concluded African Union High Level meeting of the Committee of Fifteen Finance Ministers, also known as the F15, Amb. Ukur Yatani, Kenya’s Cabinet Secretary, National Treasury and Planning, chairing the meeting on behalf of Mr. Tahir Ngulin, Chairperson of the F15 and Minister of Finance and Budget of the Republic of Chad, underlined the significance of efforts by the continent’s leadership to reduce dependence on external resources; enhance predictability of revenues from Member States; and continue reforms towards greater accountability and transparency in the management of African Union resources.
He stated, “in this reform journey, this Committee of Fifteen Ministers of Finance has been accorded a salient role of participating in the preparation and oversight of the annual budget of the Union. This mandate provides us with the opportunity to contribute to the desire of AU Member States to achieve a financially autonomous and self-reliant African Union. I am happy that the F15 Committee has made useful input in this regard…However, a lot of work lies ahead of us to not only sustain the gains made so far, but also entrench the principles and culture necessary for efficient and effective budget making and implementation in the Union.”
UK appoints new trade commissioner to lead UK-Africa trade and investment relationship (GOV.UK)
International Trade Secretary Anne-Marie Trevelyan today (23 June 2022) appointed John Humphrey as Her Majesty’s Trade Commissioner (HMTC) to Africa. The appointment comes as the Prime Minister attends the Commonwealth Heads of Government Meeting (CHOGM) this week to further strengthen ties with Commonwealth nations – 19 of which are in Africa.
As the new Trade Commissioner for Africa, John will generate business opportunities for the UK while contributing to the growth of sustainable, resilient, and productive economies across the African continent.
With a growing population and economy worth $2.4 trillion, a thriving trade and investment relationship between the UK and Africa presents huge opportunities across a variety of sectors including tech, transport, clean energy, sustainable infrastructure and Agri-Tech.
How significant is Africa to the West, to the world? (BusinessAMLive)
The global economic growth and growing affluence are resting on Africa’s prop. The major drivers of current and possibly future economic growth will remain the unsung Africa, for a number of reasons, some of which are under consideration here. Unfortunately, for the world, keeping Africa perpetually backward is one way of holding back the development of the entire world. This is because various mechanisms in place, designed to make Africa – a major source of the engine that keeps the world economy going – continually depend on those countries that depend on commodities imported from Africa for their own survival, will also be negatively affected, albeit indirectly. Evidence abounds. Global disruption in the supply chain during the COVID-19 lockdown created huge shocks within the manufacturing sector in the West and, in particular, China that has come to assume the status of global manufacturing powerhouse. Although the impacts were widespread, the industrialised countries experienced huge shocks from the supply chain disruptions as raw material exports were truncated while the lockdown lasted.
Africa’s raw materials are needed cheaply if the economies of the industrialised countries are to continue to run well. The very day the raw material exporting countries of Africa begin to process locally and send finished products to the world market is when the yoke of dominance of the raw material importing countries is broken. It looks like a dreaded prospect for many industrial countries, particularly in the West.
Global economy news
BRICS valuable platform to tackle global challenges: President Ramaphosa (SAnews)
The BRICS response to the COVID-19 pandemic demonstrated what can be achieved when nations work together in the spirit of friendship, solidarity and responsibility, says President Cyril Ramaphosa. President Ramaphosa said the COVID-19 pandemic continues to have a devastating impact on human life, livelihoods, economies and communities around the world. He was delivering his opening remarks during the virtual 14th BRICS Heads of State Summit on Thursday. “We are here as members of BRICS to affirm our shared desire for a world in which all people have a meaningful stake, in which all have equal opportunity, and from which all can benefit,” the President said. He said that the launch of the BRICS [Brazil, Russia, India, China and South Africa] Vaccine Research and Development Centre, in March this year, will strengthen international health and science cooperation to prepare for future crises. The President said it is cause for great concern that the rest of the global community has not sustained the principles of solidarity and cooperation when it comes to equitable access to vaccines.
“We need to realise the great potential of our economic partnership to strengthen intra-BRICS trade, investment and tourism. Our combined economic strength should be a catalyst for sustainable global economic recovery,” he said.
BRICS partnership stands strong amid global challenges (Cyprus Mail)
The 14th summit of BRICS, an emerging-market group that includes Brazil, Russia, India, China and South Africa, will be held this week in virtual format under the theme of “Foster High-quality BRICS Partnership, Usher in a New Era for Global Development” under China’s chairmanship.
BRICS countries are an important driving force for regional and global economic and trade growth. Despite the prolonged impact of COVID-19, the total volume of trade in goods of BRICS countries reached nearly US$8.55 trillion in 2021, a year-on-year increase of 33.4 percent, official data shows.
Meanwhile, China’s bilateral trade with other BRICS countries totaled US$490.42 billion, up 39.2 percent year on year and higher than the overall growth of China’s foreign trade in the same period. Worldwide, BRICS countries account for 18 percent of trade in goods and 25 percent of foreign investment, statistics show.
The achievement of BRICS cooperation has not only enhanced the say of emerging markets and developing countries in the world, but also made BRICS an important platform for promoting South-South cooperation.
Commonwealth must leave no one behind – Kagame (The New Times)
President Paul Kagame has said that Commonwealth countries need to continuously engage and find out what they can do to bring a balance to ensure that everyone in the 54-nation community feels included. Kagame said this at the opening of the Commonwealth Business Forum on Tuesday, June 21, in Kigali, drawing more than 1,000 delegates. The forum is one of the events taking place in the Rwandan capital as part of the 26th edition of the Commonwealth Heads of Government (CHOGM). “With the Commonwealth, we already have many things in common indeed. Be it the language, be it the different systems, financial systems, that would enable us to make investments, trade with each other all together,” the Rwandan leader said during a panel discussion.
He said there is a starting point that is more or less good enough, but “we need to make it better.”
Whether it is trade and business, investments, or other issues such as health, Kagame said, “the pace at which things move needs to be increased, so that we give more value to the Commonwealth and the feelings of the people of the Commonwealth.”
Barometer indicates continued services trade recovery despite Ukraine conflict (WTO)
World services trade continued to grow into the second quarter of 2022, indicating resilience to the conflict in Ukraine according to the WTO’s Services Trade Barometer, released on 23 June 2022. The latest reading of 105.5 is firmly above the previous reading of 102.5 in September 2021 and comfortably over the baseline value of 100 for the index, signalling that services trade is likely to post sustained gains in the second quarter once official statistics for the period are available.
Development Committee welcomes MC12 decision on e-commerce work programme (WTO)
WTO members welcomed at a meeting of the Committee on Trade and Development on 20 June the decision taken by the 12th Ministerial Conference (MC12) to reinvigorate activities under the Work Programme on E-Commerce, with the aim of increasing the participation of developing countries and least-developed countries (LDCs) in digital trade. The Committee also received updates on initiatives to increase capacity-building training activities in these countries and on the preferential treatment extended to LDC exports.
STDF Annual Report shows strong partnerships keep safe trade flowing (WTO)
The latest Annual Report from the Standards and Trade Development Facility (STDF), launched on 22 June, spotlights how ongoing dialogue and cooperation among partners have helped developing and least-developed countries (LDCs) strengthen their food safety, animal and plant health capacity and facilitate safe trade despite the ongoing pandemic.
Policy Brief: How Can the WTO Continue Delivering Good Outcomes on Food Security? (IISD)
A few years ago, trade negotiators pacing the corridors of the World Trade Organization (WTO) would not have expected a war in Europe, a global pandemic, and a global food crisis to dominate discussions at a WTO Ministerial Conference. In fact, the Food and Agriculture Organization of the UN (FAO) has reported that world hunger increased in 2020 under the shadow of COVID-19 pandemic. Zooming into the Black Sea, the closure of Ukrainian ports amidst the Russian invasion does not bode well for net food importing countries across the globe. In June 2022, trade ministers from more than 100 WTO members gathered in Geneva to discuss international trade rules, including those on trade in food and agriculture. The Twelfth Ministerial Conference of the WTO (MC12) delivered a first important outcome on food security: a Ministerial Decision on World Food Programme (WFP) Food Purchases Exemption from Export Prohibitions or Restrictions – the WFP exemption.
The WFP exemption is a symbolically important outcome that showcases the political will of WTO members to tackle the ongoing food crisis. The WFP exemption could save time and ensure critical relief reaches the most vulnerable, as underlined by the World Food Programme. Importantly, by agreeing the WFP exemption, WTO members have demonstrated that the WTO is a forum where non-trade concerns such as food security can be progressed.
The so-called ‘Geneva package’ of MC12 outcomes also includes a Ministerial Declaration on the Emergency Response to Food Insecurity (WTO Food Security Declaration). This is a welcome development. The WTO Food Security Declaration underscores the need for agricultural trade to flow and reaffirms the importance of not imposing export restrictions or prohibitions in a manner inconsistent with relevant WTO provisions (paragraph 4). Notably, it features a commitment to having a dedicated work programme in the WTO Committee on Agriculture (CoA) to operationalize the Marrakesh Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries (paragraph 8).
How investing in trade finance can be profitable and help SMEs thrive (WEF)
Trade constitutes the backbone of every economy and 80-90% of global trade requires financing. Small and medium-sized enterprises (SMEs) account for around 90% of companies and more than half of the jobs worldwide according to the World Bank. It’s often those SMEs that are underserved and lack access to affordable trade finance.
The Asian Development Bank found that SMEs are disproportionately affected by the $1.7 trillion trade finance gap – the difference between the number of applications to finance companies’ participation in international operations and the number of approvals. SMEs account for 40% of such rejections, much higher than their share of applications.
Trade finance therefore has all the components that investors look for. It is a multi-trillion dollar asset class based on the flow of physical goods and services, making it less susceptible to financial market volatility. Default rates for trade finance products are generally lower and the time to recovery in case of default tends to be shorter than for other credit products.
But why is it that trade finance is the only asset class that doesn’t get distributed from banks’ balance sheets?
Global port leaders highlight advantages of digitalisation in crises (Daily Cargo News)
PORT leaders from around the world who met under the remit of the United Nations Conference on Trade and Development have highlighted the role of technology in safeguarding ports against challenging global events. UNCTAD’s TrainForTrade Port Management Week was held in Las Palmas de Gran Canaria, Spain last month. It provided a platform for 100 port leaders to discuss building port resilience against current and future crises. Aurelio Martínez, president of Spain’s Valencia Port Authority, said crisis such as the pandemic have reminded society of the importance of port-based logistics for the safety and security of global wellbeing. “More than ever, and bearing in mind the growing risks linked to the climate change evolution, ports should become key resilient partners for supply chain managers,” he said.
According to UNCTAD, port managers agreed that advancements in digitalisation and cybersecurity are vital to improving port resilience. It said digital technologies allow ports to minimise human interaction while remaining operational during pandemic situations. “COVID-19 showed us the importance of having reached at least a certain level of digitalisation,” Ghana Port Authority director general, Michael Luguje said. “Otherwise, many ports would have been shut down and the economy would have suffered even more.”
Global remittances flows expected to reach US$5.4 trillion by 2030 spurred on by digitalization (IFAD)
Global remittances, the hard-earned money sent by migrant workers to their family members in low- and middle-income countries (LMICs), grew by 8.6 per cent in 2021. Despite predictions that the COVID-19 pandemic would reduce remittance flows, the momentum was sustained due to a 48 per cent increase in money sent through mobile channels, according to the report MobileRemit Africa launched today by the International Fund for Agricultural Development (IFAD).
“The digitalization of remittances, particularly through mobile channels, is a great opportunity to boost rural development as over half of these funds go to rural areas. Digitalization reduces fees and other transactions costs like travel time, making the process more convenient and safer while promoting digital and financial inclusion,” said Gilbert F. Houngbo, President of IFAD, speaking on the International Day of Family Remittances.
Roundtable Considers Links of Digitization and E-Commerce to Inequality (IISD)
A roundtable, convened by the International Institute for Sustainable Development (IISD) and CUTS International, Geneva, as a part of IISD’s second Trade and Sustainability Hub, discussed the digital divide’s relationship to inequality and the impacts of e-commerce development and governance.
Torbjorn Fredriksson, Head of the E-commerce and Digital Economy Branch, UN Conference on Trade and Development (UNCTAD), outlined how the COVID-19 pandemic has accelerated digital use and e-commerce, while simultaneously deepening the digital divide between men and women, and rural and urban populations, and revealing digital skills gaps and inadequate legal and regulatory frameworks. He noted that South and Southeast Asia experienced the largest surge in e-commerce, while e-commerce in Africa plummeted, illustrating the digital divide between different regions and countries. Power imbalances intensified for digital platforms as well, with the largest online platforms experiencing extreme growth during the pandemic while smaller platforms saw more marginal growth.
Fredriksson stated that data is a “cross-cutting issue that no single ministry can handle on its own.” He suggested governments aid small startups joining the digital space, include e-commerce in “more powerful national ministries,” and consider factors like human rights and health in their e-commerce policies.
UNCTAD launches fourth edition of SDG Pulse (UNCTAD)
The purpose of this report is to: provide an update on the evolution of a selection of official SDG indicators and complementary data and statistics; provide an update on progress in the development of new concepts and methodologies for SDG indicators for which UNCTAD is a global custodian agency; and to showcase how UNCTAD is supporting member States in the implementation of the 2030 Agenda. The report also investigates thematic issues of relevance to the 2030 Agenda – this year, the report discusses, as In-Focus topic, the issue of inclusive growth with particular emphasis on gender equality and environmental sustainability, assessing progress and challenges in these areas. Over the last decades, rising inequality as well as climate change have indeed questioned the ability of economic growth to continue to play its historical role as the driver of development. To support the SDGs, growth needs to be inclusive and sustainable. The report is arranged in a way that it can be read by theme, and by goal and indicator.
the indicators are browsable by the three themes to which UNCTADs work contributes: multilateralism for trade & development; productive growth; and structural transformation. Through this thematic lens, progress towards a wide range of SDG indicators is discussed, including recent trends in trade, including barriers to trade, and policies to promote trade; financial resource mobilization, investment, debt sustainability.
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S. Africa eyes more benefits from BRICS (China Daily)
South Africa has benefited from increased trade with other countries in the BRICS grouping and the synergies that come with joint efforts against the pandemic, South African President Cyril Ramaphosa said in highlighting the opportunities created by greater cooperation. Ramaphosa will join the leaders of the other emerging economies-Brazil, Russia, India and China-that make up the grouping at the 14th BRICS Summit to be hosted by China on Thursday. In a statement on Monday, he said the five countries have embraced the BRICS economic partnership, which enables increased market access while promoting broader mutual trade and investment benefits as part of an overall business-friendly environment. “An important part of this strategy, particularly for South Africa, is to diversify trade so that more manufactured goods, rather than raw commodities, are traded,” the South African president said.
Fellow BRICS nations have become increasingly important partners for South Africa. Last year, imports from the other four countries accounted for 29 percent of South Africa’s imports, while exports to them made up 17 percent of the country’s total, he said. Ramaphosa said South Africa’s trade within the grouping jumped from about $30 billion in 2017 to $44 billion last year.
He said that BRICS membership will help the country to further improve its competitiveness, trade linkages and economic growth. South Africa is reforming large areas of its economy, including in the energy, telecommunications and transport sectors, Ramaphosa said. It is also seeking to boost investments in infrastructure and reduce red tape. Tourism is another sector in policymakers’ sights.
He said the BRICS Business Council and the BRICS Women’s Business Alliance have been tapped to build ties in sectors including agribusiness, aviation, financial services and energy. These initiatives have also helped to improve the regulatory environment and boost skills.
Ramaphosa notes that the summit will discuss the reform of the multilateral system, including the United Nations, as well as efforts to promote sustainable, fair and inclusive economic growth. In doing so, the gathering of leaders will discuss how to build a better world, he added.
South Africa on weak footing amid global recession fears (Mail & Guardian)
Talk of an impending global recession is difficult to avoid these days, especially as central banks appear determined to tame runaway inflation in the face of weaker economic growth. If a global recession does unfold, it will be the fourth in three decades, each of which rippled through South Africa’s economy. Another downturn will be no different — and may be even more difficult to recover from than the last, the pandemic-driven recession.
Patel says ‘pragmatic solution’ to be found to localisation-linked renewables delays (Engineering News)
Trade, Industry and Competition Minister Ebrahim Patel reports that government is working to find a “pragmatic solution” to the problem where local-content requirements contained in government’s electricity procurement programmes are delaying the construction of utility scale renewable-energy projects. “I’ve asked the Department of Trade, Industry and Competition (DTIC) team to meet with the energy team to see how we can ensure that our localisation goals don’t retard the development of green energy, and that we find ways to speed up processes,” Patel said in response to a question posed by Engineering News on the side-lines of the Manufacturing Indaba.
R6bn plan to overhaul SA’s busiest border posts (Moneyweb)
The Department of Home Affairs plans to issue a public request for proposals “in a few months’ time” for an ambitious R6 billion project to completely overhaul and rebuild South Africa’s six busiest border posts, Minister of Home Affairs Aaron Motsoaledi has confirmed. Responding to a Moneyweb question during a joint briefing with Transport Minister Fikile Mbalula on Monday related to addressing trucking blockades, Dr Motsoaledi said the planned border post upgrade project is linked to the African Continental Free Trade Area (AfCFTA) agreement and is to ensure the border posts have appropriate infrastructure.
Final Just Energy Transition Partnership Investment Plan expected by November (Engineering News)
A Just Energy Transition Partnership Investment Plan (JETP-IP), which will seek to unlock $8.5-billion in concessional climate finance to accelerate South Africa’s transition from coal to renewables and support workers and communities currently reliant on the coal value chain, is expected to be finalised by October for sign-off during the COP27 climate talks in Egypt in November. The JETP-IP, a first draft and revision of which are expected in July and September respectively, is viewed as the crucial next step in the conversion of a Political Declaration signed at the COP26 climate talks in Glasgow, Scotland, last year between South Africa, and the International Partners Group (IPG) of France, Germany, the UK, the US, and the European Union.
‘Jackpot’ oil discoveries may help Namibia double GDP by 2040 (Engineering News)
Namibia expects its biggest oil discoveries since independence to help double its economy by 2040, Jennifer Comalie, chairperson of National Petroleum Corp of Namibia, said in a Bloomberg TV interview. TotalEnergies in February said it had made a “significant” oil discovery off the coast of Namibia, three weeks after Shell announced a find off the southwest African nation. Explorers have drilled more than a dozen exploration wells in search of oil and gas. Consultants Wood Mackenzie estimated the combined recoverable finds at almost four-billion barrels.
Beitbridge border automation excites freight, customs agents (Chronicle)
CUSTOMS clearing and freight forwarding agents have hailed the Government for fully implementing the US$300 million Beitbridge Border Post transformation project that will among other things see services and operations being automated. In separate interviews they said the new state of affairs will enhance efficiencies and improve the speedy flow of human traffic and cargo.
Delays in the movement of goods have been a perennial headache at the country’s busiest inland port of entry until the New Dispensation, in partnership with the Zimborders Consortium, moved in in 2018. Chairperson of the border project subcommittee on ICT, Mr Shami Moyo, said the automation of the modernised border post will involve the use of cameras and more paperless transactions.
“The idea is to go hi-tech and use more of the prepayments and pre-clearance systems. People must spend as little time as possible to go through this port of entry,” said Mr Moyo.
“Where the clearance of cargo used to take days, we are now seeing the same process being done within a few hours due to changes at the border,” said Mr Itayi Misihayirambwi of Cutting Lyne Investments
Another freight forwarder, Mr Martin Dube said the border automation has led to efficiency, and that the flow of trucks north and south-bound is now clear and more defined. He said a number of loopholes and bottlenecks affecting revenue collection had been addressed under the new systems.
Gov’t launches Kenya’s eTrade Readiness Assessment (Kenya News Agency)
The government is developing a national E-Commerce Strategy (ECS) to boost Kenya’s economic opportunities that are supportive to the country’s strategic goals and Vision 2030. Industrialisation, Trade and Enterprise Development Cabinet Secretary Betty Maina said the State is cognizant that e-commerce that is driven by enhanced digital skills and innovative entrepreneurs is the foundation of economic growth. “Historically, the country’s export has been relying on narrow products and export destinations. E-Commerce will therefore be critical in steering the country to increase its products exports and expand export destinations,” said Maina.
Kenya exporters protest expensive Chinese vetting (Business Daily)
Kenyan exporters have raised concerns of high demurrage charges and loss of their agricultural produce over food certification required by China, making it difficult to trade. The Asian country on January 1 implemented new registration requirements for companies that export food to China. According to the regulations, all overseas manufacturers of foods that export to China are required to register with the General Administration of Customs China), a move that has led to products being confiscated and spoiled. Some of the exports affected include macadamia nuts, vegetables, fruits, tea and coffee.
BOT increases monetary policy objectives targets for 2022/2023 (IPPMedia)
The monetary policy statement for June 2022 indicates that the monetary targets for reserve money, extended broad money and growth of credit to private sector for 2022/2023 were increased against targets for 2021/2022. The three indicators are important components to keep the economy running, in a time when there is a huge supply chain disruptions caused by ongoing Russia-Ukraine war, as they are main stimulants to growth of economic activities and job creation. The monetary policy statement published last week says during 2022/2023, BOT is targeting an annual growth of reserve money of 11.4 percent against targeted 9.9 percent in 2021/2022.
However, the import cover will be lower than EAC benchmarks of at least 4.5 months and the SADC benchmark of at least 6 months of imports.
Economy recovers as URA gets sh133b revenue surplus (New Vision)
Uganda’s economy is steadily recovering from the shocks of COVID-19, evidenced by the improved revenue collections. According to the latest performance of the economy report, which the finance ministry released on Friday, Uganda Revenue Authority (URA) achieved its revenue collection target for last month. URA has been registering revenue shortfalls in the previous months since the financial year started in July 2021. Huge revenue shortfalls of sh3 trillion and sh2 trillion were registered in the 2019/2020 and 2020/2021 financial years, respectively, mainly due to the effects of COVID-19 on the economy.
The report indicates that domestic revenue collections in May 2022 were to the tune of sh1.75 trillion, which is much higher than the month’s revenue collection target of sh1.62 trillion. This implies that in May 2022, the Government realized a revenue surplus of sh133.2b. Of the total revenue collection of sh1.75 trillion, sh1,649.60b were tax collections, while sh106.94b were non-tax collections.
Surplus collections on international trade and transactions were registered mainly on account of higher than planned collections on petroleum duty, import duty and VAT on imports during the month.
Nigeria adopts WTO stance on e-commerce, others (Daily Trust)
The federal government has joined other countries to adopt the 10 ministerial resolutions of the World Trade Organisation (WTO) on food security, e-commerce among others.
Trade ministers from member countries adopted these at the 12th Ministerial Conference in Geneva, Switzerland, which ended at the weekend. Speaking, the Minister of State for Industry, Trade and Investment, Amb. Mariam Katagum, who led the Nigerian delegation, said it was important for Nigeria to synergise with other countries of the world to promote economic prosperity.
She called on trade ministers “to develop an institutional framework that would foster discussions towards the delivery of outcomes that would address the needs of members while adhering to WTO principles of transparency, inclusiveness, fairness and equity within the balance of the rights and obligations of all members under the covered agreements.”
Mozambique’s insecurity endangers cross-border trade (Anadolu Agency)
A violent insurgency in Mozambique’s Cabo Delgado province has shattered informal cross-border trade with Tanzania which has for many years been the mainstay of the local economy as terrorists continue to wreak havoc, dashing hopes for improved livelihoods, according to local residents. The region’s insecurity is an obstacle to cross-border trade, affecting the flow of manufactured goods and agricultural products, including maize and cashews, along with trade in livestock and timber as well as fishing activities, they said.
In October 2020, militants launched a deadly attack on a village near Tanzania’s port of Mtwara, a major oil and gas logistics base, after crossing the border from Cabo Delgado. The attack signaled a worrying trend and expansion of terrorism, raising security concerns for people engaging in informal cross-border businesses, said local analysts.
Jehonaness Aikaeli, an economist from the University of Dar es Salaam, said informal cross-border trade is a major feature in the region’s economic and social landscape, supporting livelihoods and reducing poverty and food insecurity. “The ongoing terrorism in Mozambique is a serious setback to transboundary trade with the potential to affect local livelihoods,” she told Anadolu Agency.
A spot check by Anadolu Agency revealed that informal business through porous border routes goes on unabated in some areas thanks to strong networks and relationships that persist without the knowledge of the authorities.
However, ever since Tanzania imposed a ban on the entry of its food products into the Mozambican territory through the Namoto border due to the conflict in Cabo Delgado, some traders in neighboring towns have suffered, said local residents.
UAE to build Red Sea port in Sudan in $6 billion investment package (Reuters)
The United Arab Emirates will build a new Red Sea port in Sudan as part of a $6 billion investment package, DAL group chairman Osama Daoud Abdellatif, a partner in the deal, told Reuters. Abdellatif said the package includes a free trade zone, a large agricultural project and an imminent $300 million deposit to Sudan’s central bank, which would be the first such deposit since an October military takeover. Western donors suspended billions in aid and investment to Sudan after the coup, plunging an economy that was already struggling into further turmoil and depriving the government of much needed foreign currency.
Ibrahim told Reuters on Wednesday that a memorandum of understanding had been signed with the UAE for a port and agricultural project, but the details have not previously been reported.
AfDB-supported 4th Cabo Verde Investment Forum successfully ended in Sal Island (Devdiscourse)
The fourth edition of the Cabo Verde Investment Forum has successfully ended in Sal Island, with active support from the African Development Bank. The Forum, held from 16-17 June 2022, was set up to accelerate private and public financial sector investments to drive sustainable economic growth and job creation in Cabo Verde. The island nation’s prime minister, Dr. Ulisses Correia e Silva, who presided over the two-day event, noted that it offers the island nation new avenues to mobilize partners and resources for local economic diversification and private sector investment. The Forum’s goal for this year was to mobilize €2 billion in financing for projects in the tourism, agriculture, fishery, energy, digital, transport, youth, and SME sectors.
African trade and development news
Russians must take advantage of the African Continental Free Trade Area (Modern Ghana)
Russians have to consider seriously the mutual benefits while taking advantage of the African Continental Free Trade Area (AfCFTA), which was signed in March 2018, and came into force on January 1, 2021. The AfCFTA provides a unique and valuable platform for businesses to access an integrated African market of over 1.3 billion people. The growing middle class, among other factors, constitutes a huge market potential in Africa.
In order to have an in-depth understanding of these, Russians must at least invest in initial market research and development (R&D) collaborations, as the basis for designing entry strategies, with their African partners. The call was made at the Russia-Africa Business Dialogue held on June 16.
Sadc harmonises SPS measures to boost regional trade (Chronicle)
SMALL-SCALE farmers and private sector players in the Southern African Development Community (Sadc) are being capacitated on how to comply with sanitary and phytosanitary (SPS) measures in an effort to protect the health and welfare of human, plant, and animal life in the region and beyond.
SPS measures are bio-security actions applied to protect human, animal or plant life or health from risks arising from the entry, establishment and spread of plant pests and animal diseases as well as from risks arising from additives, toxins and contaminants in food and feed. If poorly applied, experts say SPS measures could result in the emergence of non-tariff barriers (NTBs) to trade.
In a latest update, Sadc said the capacity building programme is being done under the Trade Facilitation Programme (TFP), which the bloc is implementing with support from the European Union (EU) to enable the region to further integrate in various areas of economic development. While Sadc has committed to removing NTBs in order to improve regional trade, the bloc says it recognises that imported agricultural products, which include plants, animals, and food products, could carry or contain harmful pests or contaminants. “One of the failures in trade among member States, which contributes to low intra-Sadc trade is the non-recognition of conformity assessment results between member States. “This stems from the lack of trust in each other’s national conformity assessment regimes, hence the need for a common framework for the mutual recognition of same,” said Sadc.
The EAC Post Tax And Budget Dialogue for FY 2022/23 (Uganda Media Centre)
EAC Post Tax and Budget Dialogue for FY 2022/23 is held under the theme; “Accelerating Economic Recovery and Enhancing Productive Sectors for Improved Livelihood in the EAC Region: Defining Joint Strategies for a Faster Recovery.”
2022 shall be remembered as a phenomenal year for the EAC following the admission of the Democratic Republic of Congo into the EAC bloc in April. EAC now has seven-member states including Uganda, Tanzania, Kenya, Rwanda, Burundi, South Sudan and DR Congo. I would like to reiterate that the Budget is an important tool because through the Budget, Uganda and the rest of the EAC governments can influence income distribution, provide services to its citizens, and transform the country through strategic investments.
It is also worth noting that the East African Community (EAC) member states agreed in 2007 to harmonize their budget reading as part of efforts towards harmonizing their taxation regimes. This is particularly important because when the budgets are read on the same day, it reduces the risk of policy leaks and unfair business practices. Yet again, EAC member states (except Kenya) read their respective national budgets for FY 2022/23 on June 14. For FY 2022/23 Budget, EAC Partner States also agreed on a common theme; “Accelerating economic recovery and enhancing productive sectors for improved livelihood”. Throughout the FY 2022/23, the EAC member states will continue with the implementation of the economic policies and practices for the realization of inclusive and equitable post COVID-19 economic recovery and EAC regional integration that works for everyone.
Trade with DR Congo will double exports, open new markets (Monitor)
The DRC economy is begging for regional trade in East Africa, with Uganda being the most advantaged, given its proximity. According to a survey conducted by Prosper magazine in the DRC, it did not take too long to establish that 90 percent of what is on their supermarket shelves are imports from all over the world except Africa and curiously East Africa, which by virtue of its proximity should have taken that space. The aforementioned statistic was corroborated by the SMEs sector players in Congo. This was during the Uganda DR-Congo Business Summit fact finding mission, where it emerged that DRC is a virgin economy and efforts are in place to wrestle that huge untapped market from foreign imports. During the summit, Mr Stephen Asiimwe, the chief executive officer for Private Sector Foundation Uganda (PSFU), said the Ugandan delegation of 200 people, visited DRC to market Ugandan products, to engage with business people in Congo, and to buy or sell goods and services.
sector players from Uganda are discussing with the government of Congo and the business people, to create means through which goods from Uganda can reach a particular place, so that business people can access a variety of merchandise. “Uganda is largely an agricultural country. We hope and believe we can get good clean, reliable and sustainable commodities that can be picked up from the collection centres,” Mr Asiimwe said. Despite the abundant opportunities in DR-Congo, there are other teething issues that deserve attention.
The transformation of the DR - Congo into a dollar economy according to economic analysts and sector players, poses limitations on potential investors, which limitation is bound to increase the cost of doing business.
Digital transformation of agri sector could address sub-Saharan Africa’s food insecurity: UN Report (Down to Earth Magazine)
Digital transformation of the agriculture sector could address food insecurity in sub-Saharan Africa, paving the way for prosperity in the region, a recently released report by the United Nations Food and Agriculture Organization (FAO) has said.
Saharan Africa has the largest area of arable uncultivated land in the world. It also has a youthful population and vast natural resources. It is thus uniquely positioned to double or even triple its current agricultural productivity, according to the report. Such an increase in agricultural productivity would help lift more than 400 million people in sub-Saharan Africa who live on $1.9 or less a day, out of poverty. It would also improve the livelihood of approximately 250 million smallholder farmers and pastoralists in the region, the report said.
A comprehensive approach of digital technology and policy reform could increase crop production by more than 500 per cent in some countries across the region, with positive results for food security and livelihoods, according to a separate study published by the Global Challenges Research Fund Programme. But for that, a digital transformation of the food and agriculture sector was needed. The FAO report assessed the region’s digital agriculture landscape through six key themes: Infrastructure; Digital penetration; Policy and regulation; Business environment ;Human capital and Agro-innovation
Domestic tourism low hanging fruit Africa must pluck (Business Daily)
Tourism is a major contributor to the GDP of African economies. In 2019, the industry accounted for about seven percent of Africa’s GDP and contributed $169 billion to its economy — about the size of Côte d’Ivoire’s and Kenya’s combined GDP. But Covid-19 changed all that. In July 2020, the African Union estimated that Africa lost nearly $55 billion in travel and tourism revenues and two million jobs in the first three months of the pandemic. The International Monetary Fund (IMF) predicted that real GDP among African countries dependent on tourism dropped by 12 percent in 2020.However, as Covid-19 restrictions ease, tapping domestic tourism demand has offered the sector some respite, as a growing middle class and young population shows more interest in travel.
Africa’s growing middle class and population of young travellers hungry for adventure, and the recently launched African Continental Free Trade Area (AfCFTA), the world’s largest free trade area by the number of participating countries, are among the pillars seen supporting the future growth of domestic and regional tourism on the continent. This, therefore, calls for a rethink of strategy, especially in terms of building a domestic client base to match or even exceed the international base.
But a shift to domestic tourism requires capacity-building for service providers on leveraging digital technologies for product development and marketing.
Global economy news
DDG González: “Now more than ever, business needs the WTO” (WTO)
DDG González highlighted that businesses everywhere face growing uncertainty in global trade due to continued supply chain disruptions, the COVID-19 pandemic, climate change, trade tensions, war, a looming food crisis and galloping inflation. “But this is also a time of opportunity, and businesses that are nimble, flexible and imaginative will be in a strong position to reap the gains from a rapidly changing trade landscape”, she said.
World Trade Organization steps back from the brink of irrelevance – but it’s not fixed yet (The Conversation)
After decades of conflict that has neutered its work, the World Trade Organization looks to be back in business. Its highest decision-making body – a conference of ministers from the organisation’s 164 member nations – has just met for the first time since 2017. None of what the ministerial conference (dubbed MC12 due to being the 12th such meeting) agreed on was particularly groundbreaking. But the fact there was agreement at all – on areas such as agriculture, fishing, intellectual property, e-commerce and food insecurity – was itself a milestone.
The question is what happens now, with considerable challenges ahead for the WTO and its role in promoting and protecting a global rules-based trading system.
Inclusive growth remains elusive as inequality persists globally (UNCTAD)
The fourth edition of UNCTAD’s SDG Pulse released on 21 June shows that the world is highly unequal in living conditions, with development opportunities beyond the reach of many. The report introduces an index measuring inclusive growth, defined as equal and non-discriminatory opportunities for everyone to participate in, and benefit from, economic development. The Inclusive Growth Index (IGI) analyses countries’ ability to achieve such growth, with a focus on gender equality and environmental sustainability.
The SDG Pulse – an online statistical report updated annually – indicates uneven global progress and, for too many countries and goals, even reversion in accomplishing the 2030 Agenda for Sustainable Development. It shows that progress has deteriorated under the compounding effects of the COVID-19 pandemic, the war in Ukraine and the rising costs of climate change. The analysis is based on a range of Sustainable Development Goals (SDGs) indicators and official statistics relevant to trade, investment, financing for development, transport, technology and transition towards greener and higher value-added economy.
The index’s top 30 performers are all developed economies, with Luxembourg, Iceland and Norway leading the global ranking. In contrast, developing countries in Africa have the lowest IGI scores.
The SDG Pulse shows that developed countries generate twice as much waste per capita as developing countries. Developing nations in Africa are responsible for the least waste per capita, but often face challenges in waste management, for instance due to limited institutional and organizational capacity.
Clean and affordable energy top of mind in road towards COP27 (ESI Africa)
As the world inches closer to COP27, top of discussions is ensuring clean and affordable energy for all, especially Africa. One such initiative that will could have a positive effect on the continent is the new Climate Finance and Energy Innovation Hub that will launch at COP27. The Hub will accelerate access to clean and affordable energy throughout the global South. The OPEC Fund for International Development has partnered with the UN Capital Development Fund (UNCDF) and Sustainable Energy for All (SEforALL) to design and deliver a new Climate Finance and Energy Innovation Hub.
Food security: EU to step up its support to African, Caribbean and Pacific countries in response to Russia’s invasion of Ukraine (European Commission)
The European Commission adopted today a proposal to mobilise €600 million from the reserves of the European Development Fund to address the current food security crisis aggravated by Russia’s invasion of Ukraine. These funds will support African, Caribbean and Pacific (ACP) countries to cope with the dire situation, through humanitarian assistance (€150 million), sustainable production and resilience of food systems (€350 million) and macro-economic support (€100 million).
Announcing the new support measure at the 2022 European Development Days in Brussels, President of the European Commission, Ursula von der Leyen, said: “Russia’s war of aggression is taking a heavy and senseless toll, not only on the Ukrainian population, but also those most vulnerable around the world. Russia is still blocking millions of tonnes of desperately needed grain. To help our partners we will mobilise an additional 600 million euros to avoid a food crisis and an economic shock.”
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South Africa Renews Bid to Stem Blockades on Key Trade Routes (Bloomberg)
South Africa’s government has signed an agreement with trucking associations to end frequent blockades of key trade routes that are estimated to have cost the economy millions of dollars. Truckers regularly block major arterial roads in protest of the hiring of foreigners as drivers, including last week when a key route to South Africa’s biggest port and commercial hub of Johannesburg was disrupted. The blockades will stop while a taskforce develops a plan to address truckers’ concerns, particularly around the hiring of foreigners, according to the terms of a deal signed on Monday.
Uganda: Ditch Europe, Start Importing Milk From Uganda, Museveni Woos Algeria (allAfrica.com)
President Yoweri Kaguta Museveni has met and held discussions with a Special Envoy from Algeria, Ramtane Lamamra who is also the North African country’s Minister for Foreign Affairs. The meeting that took place at Museveni’s country home in Rwakitura was also attended by the State Minister of Foreign Affairs of Uganda, John Mulimba. The president and his guest discussed bilateral cooperation between the two sister countries of Uganda and Algeria in the fields of trade, agriculture and security, among others. Museveni used this opportunity to lobby the Algerians to invest in Uganda especially in agricultural value addition but also asked the North African country to start importing milk from Uganda.
Voluntary local reviews gain traction in Uganda’s national SDG reporting process after ECA’s support (UNECA)
The Government of Uganda has scaled up the practice of voluntary local reviews – which monitor progress made by local governments towards the Sustainable Development Goals (SDGs) – and is bringing their outcomes to the forefront of its national SDG reporting process. This development builds on the country’s first voluntary local review of the SDGs and African Union’s Agenda 2063, which was conducted for Uganda’s eastern district of Ngora in 2019 with support from the United Nations Economic Commission for Africa (ECA).
“Local communities are at the heart of our shared drive to achieve the SDGs. There is no aspect of the SDGs or the Agenda 2063 where local governments do not play a central role. Without the local ownership and action, the achievement of the SDGs at the national, regional and global levels during this Decade of Action is not possible – and that has been the focus of ECA’s work,” she said.
Export strategy sector committee inaugurated html (Graphic Online)
A governance structure in the form of a sector committee to guide the successful implementation of the National Export Development Strategy (NEDS) has been inaugurated in Accra.
The NEDS sector committee which comprises stakeholder groups of all the product sectors of the Ghana Export Promotion Authority (GEPA) is expected to assist the NEDS secretariat to facilitate effective implementation of the NEDS to promote Ghana’s value-added products for export.
A media release issued in Accra on June 16, 2022 said that the NEDS, spanning 10 years (2020-2029), sought to diversify and grow the Non-Traditional Export (NTE) sector of the economy and employ a private-sector-driven approach.
Opportunity Cost of Nigeria’s Trade and Industrial Protectionist Policies (This Day)
The World Bank in its latest report on Nigeria Development Update argued that the country’s protectionist trade policy is counterproductive, writes Dike Onwuamaeze Nigeria’s trade protectionist policy, ostensibly conceived to protect Nigerian local manufacturing industry, is counterproductive. This is the verdict of the World Bank in its latest report titled, “Nigeria Development Update June 2022.” The report said that Nigeria’s trade policy is costing the country more public revenue and pushing its citizens into poverty.
One, the country’s trade policy since the inception of President Muhammadu Buhari’s administration in 2015 has been remarkably moving further in a protectionist direction and yielding several unintended consequences, including high levels of tariff evasion accounting for the loss of $1.8 billion annually in public revenue. This is estimated to be 0.4 percent of GDP. The report also asserted that the country’s increasing trade protectionist stance is constraining the efficiency and competitiveness of its domestic firms. The third assertion made in the report is that import restrictions are pushing millions of Nigerians into poverty as “distortionary trade policies can decrease overall purchasing power and, in turn, increase poverty.”
Stakeholders Advocate Stronger Bargain for Nigeria’s Bi-lateral Trade Agreements (This Day)
The Chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), Prof. Bolaji Owasanoye yesterday called for better negotiation skills in dealing with expiring international trade agreements as well as in establishing new ones. He spoke at a two-day workshop on mitigating illicit financial flows with the theme: “Capacity Building for Nigeria’s Negotiators for Improved Terms of Engagement with the Rest of the World,” which kicked off at the commission’s headquarters in Abuja. In his paper titled “From Gunboat Diplomacy to the Negotiation Table,” Owasanoye stated that globalisation made interactions with diverse global communities inevitable. He, however, noted that the rules of engagement were more often than not unfavorable to poor economies of the global south, who lack the development and technological advancements of the global north.
Why Nigeria needs to improve negotiations to curb IFFs – ICPC chair (Premium Times)
The Chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), Bolaji Owasanoye, has called for better negotiation skills in dealing with expiring international trade agreements as well as in establishing new ones. Mr Owasanoye, a professor and senior advocate, made this call in his opening remarks Monday at a two-day workshop on mitigating illicit financial flows in Abuja. The event was themed, ‘Capacity Building for Nigeria’s Negotiators for Improved Terms of Engagement with the Rest of the World’, according a statement by ICPC spokesperson, Azuka Ogugwa. In his paper titled, ‘From Gunboat Diplomacy to the Negotiation Table’, Mr Owasanoye said, although globalisation has made interactions with various global communities inevitable, the rules of engagement are frequently unfavourable to developing and technologically backward economies in the global south. “This has often led to poorly constructed trade agreements which have ultimately been disadvantageous to the growth of the country and also opened loopholes to encourage illicit financial flow,” he said.
Nigeria seeks ILO support to achieve SDGs (Tribune Online)
The Nigerian government has called for support of the International Labour Organisation (ILO) to achieve the Sustainable Development Goals (SDGs) by 2030. The Minister of Labour and Employment, Sen. Chris Ngige, said this at the ongoing 110th session of the International Labour Conference in Geneva, Switzerland. He was responding to the report of the Director-General of the ILO, Mr Guy Ryder on the Least Developed Countries (LDCs) -Crisis, structural transformation and the future of work.
Ngige, represented by Daju Kachollom, Permanent Secretary in the Ministry, said the support was imperative due to the current state of growing inequality gap. “We consider that the achievement of the SDGs by 2030 is at a great risk. If the goal of “not leaving any one behind” is ever to be realised, urgent effort, support and contribution will be required by all in a renewed commitment to multilateralism and international cooperation,” he said.
Trade Policy Review: Ghana (WTO)
The Secretariat and Government reports are discussed by the WTO’s full membership in the Trade Policy Review Body (TPRB). A policy statement by the government of the member under review.
Ethiopia secures US$23 mln concessional loan for agro-industrial park development (Ecofin Agency)
Ethiopia wants to modernize its agriculture and industrialize its rural areas. To this end, authorities have launched a project (with backing from several international partners) to develop agro-industrial parks in four regions. Ethiopia recently secured a €22 million loan from Italy for the development of agro-industrial parks in the country. The loan agreement was announced by the Ministry of Finance in a release published on its website, Monday, June 13. The loan will help build the capacity of national and regional industrial park development companies, farmers’ organizations, and private investors. It will also facilitate innovative contractual arrangements aimed at connecting farmers’ organizations with agro-processors.
According to the release published by the Ministry of Finance, the project aims to “create jobs in the rural areas of the country, increase farmers’ incomes, generate export revenues, substitute imports of agro-processed goods and contribute to economic growth and structural transformation.”
“The intervention will improve the involvement of private sectors in the Integrated Agro-Industrial Parks and Rural Transformation Centers, and their competitiveness in the internal and international market, which is in line with the Home-Grown Economic Reform agenda and the 10 years development plan of Ethiopia,” it adds.
The African Development Bank will join the Gabonese Government to host national consultations on the Country Diagnostic Note and Country Strategy Paper for the 2016-2022 period in Libreville, from 21 to 24 June. Key stakeholders in the discussions will include the Ministry of Recovery and Economy, technical departments of sectoral ministries, financial partners, civil society, academics and the private sector. “The Country Diagnostic Note provides the analytical basis for preparing the Country Strategy Paper, the strategic and programming tool for the Bank’s operations in Gabon, for the 2023-2027 period, “ says Nouridine Kane Dia, African Development Bank Country Manager in Gabon. The Country Diagnostic Note identified seven priority areas of intervention to propel Gabon’s sustainable development and these will be scrutinized during the national consultations. In addition to improving governance, the draft note also explores ways to enhance the business climate by developing the private sector, diversifying investment in agriculture and promoting agro-industry, and deepening the country’s industrialization process in timber, mining and hydrocarbons.
Mauritania Economic Update 2022: The private sector at the center of economic transformation and job creation (World Bank)
According to the fifth edition of the World Bank’s Report on the Economic Situation in Mauritania, the country’s economic recovery in 2021 was robust but below pre-COVID-19 levels and growth potential. Growth is estimated to have rebounded by 2.4% in 2021 thanks to an increase in private consumption and investment, as well as an improvement in the performance of the services sector. Likewise, the negative impact of the pandemic on human, economic and social activities decreased significantly in 2021, reflecting the recovery in growth and the effectiveness of the mitigation measures put in place by the government. The report notes that Mauritania has presented positive recent economic developments, including a surplus budget balance, a reduction in the total public debt-to-GDP ratio and a monetary policy favorable to the return of growth. With successful COVID-19 vaccination campaigns, a thriving extractive sector and an expected increase in public sector contribution, the country looks set for a more optimistic growth in 2022.
Finance minister presides over launching of ASYCUDA World System (The Point)
In his official launching statement, Mr. Keita said the launching of this new system was indeed a “great milestone” in the government’s effort to improve efficiency and effectiveness in the customs clearance process. “This state of the system, which will replace the current ASYCUDA++ system, will digitalise the entire customs clearance process, thus eliminating the need for human intervention.” “The implementation of this new system has the potential to enhance administrative efficiency, and improve the quality of international trade data,” he added. “With the introduction of the AFCFTA and its potential to improve intra-Africa trade, the Ministry of Finance aims to position The Gambia to reap the gains envisaged under the AFCFTA.”
African trade and development news
Afreximbank launches the African Trade Report 2022 (Afreximbank)
Africa’s trade grew significantly as the world gradually recovered from the COVID-19 pandemic, Professor Benedict Oramah, President and Chairman of the Board of Directors of African Export-Import Bank (Afreximbank), said in Cairo. Launching the African Trade Report along with H.E. Mr Lai Mohammed, Minister of Information, Culture and Tourism of the Federal Republic of Nigeria, at the 29th Afreximbank Annual Meetings (AAM2022), Professor Oramah said that Africa showed resilience during the COVID-19 pandemic, contracting by only 1.6% in its first recession in 25 years and rebounding strongly with GDP expanding by about 6.9% in 2021. “African trade grew significantly just as the world was gradually recovering from the COVID-19 pandemic,” he said, adding that intra-African trade was resilient, notwithstanding the restrictions imposed by COVID-19.
Dr Hippolyte Fofack, Afreximbank’s Chief Economist, noted however that despite the increasing resilience of African economies, the region remained a peripheral contributor to global trade and growth, accounting for 2.6% of global trade and less than 3% of the world’s GDP.
In order to increase its share of global growth and trade and to foster its integration into the global economy, Africa must use the AfCFTA, which has been touted as a game changer, to accelerate the process of structural transformation and growth, he quoted the report as recommending.
The 9th meeting of the Committee on Trade in Goods of the AfCFTA was held from 6 to 10 June 2022 to consider the Reports of Sub-Committees under the Committee on Trade in Goods. This covered such vital work as the Sub-Committee on Rules of Origin reports, the finalisation of the drafting the AfCFTA Rules of origin Manual and the AfCFTA Regulation on the treatment of Special Economic Zones (SEZ) in accordance with Decision 70 of the 8th Meeting of the Council of Ministers.
The meeting adopted the draft AfCFTA Manual on Rules of Origin with amendments for onward submission to the Committee of Senior Trade Official and ultimately to the AfCFTA Council of Ministers responsible for trade. The delegates had discussions on the draft Regulations on Special Economic Zones but could not reach a consensus and, therefore, recommended that the Committee seek policy guidance from high AfCFTA negotiation structures. In addition, the delegates worked on outstanding textiles and sugar issues. They had an in-depth discussion of these HS headings but could not agree on the rules of origin. These outstanding HS headings will be submitted to the higher AfCFTA structures for further guidance.
AfCFTA protocol on women and youth in trade in the offing - Wamkele Mene (Ghanaian Times)
The African Continental Free Trade Area (AfCFTA) is developing a protocol for women and youth in trade to place them at the centre of its activities, Wamkele Mene, Secretary-General, AfCFTA has announced. The move, according to him, was to ensure that women and youth had access to and derive the intended benefits from the continental trade arrangements. Speaking at a plenary session on the topic: Making the AfCFTA work for Africa we want’ at the ongoing Afreximbank annual general meetings in Cairo, Egypt, Mr Mene said “We intend to foster a favourable environment for young Africans to competitively engage in cross-border trade in goods and services, in the context of the AfCFTA,” Themed “Realising the AfCFTA Potential in the post-COVID-19 Era—Leveraging the power of the youth”, the Afreximbank annual meetings includes Advisory Group Meetings and the Annual General Meeting of Shareholders, complemented by seminars and plenaries.
AfCFTA Suffers Setback As Benin Republic Slams CFA9m On Nigeria-bound Transit Cargoes (Leadership News)
The African Continental Free Trade Agreement (AfCFTA), may have suffered setback over huge tariffs and checkpoints delaying smooth movement of transit cargoes along the West African corridor. The AfCFTA is an ambitious trade pact to form the world’s largest free trade area by connecting almost 1.3bn people across the 54 African countries. The agreement aims to create a single market for goods and services in order to deepen the economic integration of Africa.
As of 10 February 2022, 41 of the 54 signatories had deposited their instruments of ratification with the chair of the African Union Commission, making them state parties to the agreement. But, despite the ambiguous and inherent potentials in the agreement, it seems it has hit a snag as checkpoints, tariff hinder movement of goods and trade facilitation. It was gathered that the imposition of the Cfa9 million levy was a result of a retaliatory policy by the Benin authorities to express their anger over Nigeria’s decision to shut its land borders against the West African neighbours.
Speaking, chairman of Association of Nigeria Licensed Customs Agents (ANLCA) at Seme Border, Mr Onyekachi Ojinma, lamented that transit goods are being asked to pay Cfa9million instead of 0.3percent they are supposed to pay on transit. According to him, these goods are manufactured from ECOWAS region, not in Cotonou, they are not supposed to open that cargo but the Cotonou government would collect duty.
Financing Africa’s transformation requires bigger banks – Afreximbank panellists (BusinessGhana)
Panellists at the ongoing 29th Annual General Meetings of Afreximbank in Cairo, Egypt, have called on African leaders to strongly consider establishing stronger banks to fund the continent’s development needs. They unanimously agreed that small banks and microfinance institutions were useful, but they were incapable of financing Africa’s infrastructure deficit. Speaking on the topic: “Africa under the storm of external shocks and internal challenges” Mr Arnold Ekpe, former Chief Executive Officer, Ecobank Group, said financing infrastructure projects such as roads, railways, power stations, factories and large commercial operations necessary for economic development could only be financed by larger banks.
The African continent he said, must rely less on foreign funding and pay its own way for economic development. He said the current externally focused model of African economic development was not working. Mr Ekpe said by continuing to be overly reliant on developed market models of economic development, Africa would not be able to realise its full growth potential.
Investment programme aims to empower regional value chains in mining (Mining Weekly)
The Secretariat of the Southern African Development Community (SADC) has appointed globally active engineering services and consulting company DMT Group to lead the delivery of an investment programme that will empower regional value chains in copper, battery storage and mining inputs. The SADC ‘Regional Study and Project Viability Scan’ will identify investment opportunities for building local content capacity in what are noted as three critical areas for economic activity and value addition in Southern Africa. The project’s findings are intended to spur a rush of new investment activity. The SADC project will be led with the support of a range of sector experts.
Africa’s industrialization hinges on fixing logistics (Quartz)
The African Continental Free Trade Area promises to open up the continent’s market of 1.2 billion people, and improve the circumstances that currently keep intra-Africa trade around 17%, versus 68% in Europe, 59% in Asia, and 55% in America. Industrialization is the next necessary step, and the key to improved industrialization is improved logistics. That was one of the key insights to emerge from a panel at this year’s Africa CEO Forum, the largest annual gathering of Africa’s private sector. The event in Abidjan brought together close to 2,000 political, business, and thought leaders. The session on how the health crisis is revolutionizing African logistics featured speakers like Ahmed Bennis, group business development director at Tanger Med in Morocco, Africa’s biggest port complex; and Portia Derby, CEO of Transnet, one of the continent’s largest rail, port, and pipeline companies. The panelists noted that industrialization will enable Africa to create jobs for the 8-9 million Africans joining the labor force annually, and allow the continent to capture a larger value of global commodities markets. At present, Africa mostly exports raw materials, leaving greater economic benefits to other countries that add value through processing. That’s because processing on the continent is more expensive, and that is because of high energy costs and poor infrastructure.
MAN president seeks collaborations among African manufacturers (Businessamlive)
Mansur Ahmed, president of the Manufacturers Association of Nigeria (MAN) and the interim chairman of the Pan African Manufacturers Association (PAMA), has called on members of PAMA to work together and collaborate to empower the private sector and create a system of interaction that will act as a catalyst to the growth of investments in Africa. Ahmed said the major imports of countries in Africa are manufactured goods and that about two percent of the intra-African trade is in manufactured goods and emphasised on the reasons behind the formation of PAMA. According to him, with the establishment of PAMA and the AfCFTA, he said that the widening gap between imported products and those manufactured within would be bridged. Mansur, however, stated that the economies of the continent should be focused mainly on manufacturing, and to create capacity, expand the scope for value addition, and integrate Africa’s manufacturing so that Africa can achieve economies of scale. He enjoined manufacturers to ensure they prioritise the areas of comparative advantage to achieve the required industrial transformation.
African countries’ requests for information for tax collection purposes rose 26% over the previous year, signaling continued progress toward tax transparency in spite of a challenging environment, according to a report by The Africa Initiative, launched on Tuesday in Nairobi. The Tax Transparency in Africa 2022 report, which covers 38 countries, documents Africa’s progress in tackling tax evasion and other illicit financial flows (IFFs) through transparency and exchange of information (EOI) for tax purposes. The Africa Initiative is a partnership of the Global Forum on Transparency and Exchange of Information for Tax Purposes (The Global Forum), 33 African countries and 16 partners, including the African Development Bank, the African Union Commission, the European Union and the governments of Switzerland and the UK. Five non-member countries participated in the study for the report.
Protectionism as setback for Africa’s aviation (New Telegraph)
Africa is considered a growing aviation market with the International Air Transport Association (IATA) forecasting a 5.9 per cent year-on-year growth in African aviation over the next 20 years, with passenger numbers expected to increase from 100 million to over 300 million by 2026 and SAATM is a way to tap into this market. The benefits of SAATM to African countries include job creation, growth in trade resulting in growth in GDP and lower travel costs resulting in high numbers of passengers. However, is Africa ready for a Single African Air Transport Market? That is a huge question, considering the fact that if all the necessary issues are not resolved, it may go the way of the Yamoussoukro Decision (YD), which never saw the light of the day more than 30 years after the idea was set in motion.
The failure of YD gave rise to the SAATM, with a solemn declaration by about 35 African nations to forge ahead with the air transport liberalisation in the continent because of the exponential benefits it brings to Africa.
At the weeklong FAAN National Aviation Conference (FNAC) held in Abuja last week, some were of the view that the SAATM initiative was good, but hinted that the African Civil Aviation Commission (AFCAC) must come up with a regulatory framework that would see to the speedy implementation or operatability of the Africa Union Agenda.
East Africa wrestles with proposals to ban imports of used clothes (The East African)
A proposal by Kenyan presidential candidate Raila Odinga in his manifesto to phase out trade of second-hand clothes, popularly called mitumba in Kenya, has sparked a debate on the future of the trade, with opinion divided on whether time has come to ban used clothes imports in the region. The East African Community has since 2016 pushed member states to buy clothes and shoes made in the region to boost local manufacturing, help the economies and shore up the local textile industry. Kenya, Uganda, Tanzania, Rwanda and Burundi were to phase out the second-hand clothes trade by 2019 but only Rwanda has implemented the plan, introducing high taxes on mitumba imports to deter trade.
Now the private sector in the region says importation of used clothes should be phased out gradually to allow focus on growth of the local textiles and apparel sector.
Stakeholders in Africa strategise on sustainable fish production (Tribune Online)
AS Africa looks forward to end hunger by 2025, stakeholders in the fisheries sector in the African continent have converged in Abuja to chart way forward in closing the deficit in fish production. The meeting also sought to review the progress made at the Fisheries Governance project phase 1 and develop work plan for the phase 2 of the project. The Director African Union – Interafrican Bureau for Animal Resources (AU-IBAR) Dr. Nick Nwankpa in his address, said the Regional Economic Communities (the RECs) are strategic regional institutions with the political mandate for regional integration agenda, enhancing regional cooperation and fostering regional policy coherence. He said the Fisheries Governance project (FishGov) Phase 2 project therefore considered the RECs as important partners in facilitating the implementation of the Project at regional and national levels.
West African decision-makers meet to discuss economic recovery in a region destabilised by conflict, covid-19 and hunger crises (UN World Food Programme)
The United Nations Economic Commission for Africa (UNECA) in partnership with the Economic Community for West African States (ECOWAS), the United Nations World Food Programme (WFP), and the Senegalese Ministry of Economy, Plan and Cooperation, today launched the annual forum of intergovernmental organisations from West Africa, to examine and address the impact of emerging risks and challenges associated with the COVID-19 pandemic and the unfolding crisis in Ukraine. During the two-day forum in Dakar held on 21 and 22 June 2022, participants will address sustainable development issues, identify and discuss policy directions and actions needed to strengthen the resilience and recovery of West African economies. They will also lay the groundwork for policy responses to emerging development challenges in West Africa, including growing levels of food insecurity, the climate challenge, extreme violence, and the breakdown of social cohesion. The socioeconomic fallout from the COVID-19 pandemic and the ripple effect of the conflict in Ukraine have led to increased costs of food, fuel, and agricultural inputs - particularly fertilizer - in the region according to the joint studies conducted by ECOWAS, UNECA, FAO and WFP.
These studies revealed that West African countries are highly dependent on food imports – with the region spending US$ 4.5 billion in 2019 on cereal imports. Dependence on wheat imports is particularly acute in Mali, Senegal, Guinea, and Benin, where just over half of the wheat consumed comes from Russia. This situation poses a threat to the region due to the unprecedented rise in food prices witnessed in February-March 2022, with the FAO Food Price Index reaching its highest level on record in March 2022.
Expert committee meets in preparation for launching of ECO (The Point)
The activity is organised by the West African Monetary Agency (WAMA) in collaboration with the Central Bank of The Gambia and it seeks to provide the opportunity to practitioners in the banking and microfinance space of ECOWAS to harmonise their respective acts in preparation for the launching of ECO. Dr. Olorunsola E. Olowofeso, director general of West Africa Monetary Institute (WAMI), expressed delight over the state of the operations of WAMI since its establishment in 2001 which they were highly commended. This includes facilitating the integration of banking and non-banking sectors of the West African monetary zone (WAMZ).
He said WAMI is currently at an advanced stage in drafting a model act for non-bank financial institutions and non-bank financial holding companies of the WAMZ.
Summary Readout of Deputy Secretary Graves’ Travel to West Africa (U.S. Department of Commerce)
On Saturday, Deputy Secretary Don Graves concluded his travels to West Africa, where he met with representatives from the governments of Côte d’Ivoire & Ghana, participated in key commercial forums driving investment and creating opportunities for U.S. businesses across Africa, and engaged with private sector and NGO representatives.
“The Biden Administration places tremendous importance on developing deeper relationships with African countries that are based on mutual respect, which enables us to work together to overcome short-term challenges while building towards long-term economic resiliency and prosperity,” said Deputy Secretary Graves. “I look forward to continuing the collaborations that have been underway for decades, including advancing new means of partnership and identifying additional areas of collaboration in the future. Finally, I would like to commend President Ouattara, Prime Minister Achi, President Akufo-Addo, and Vice President Bawumia, along with my Ivoirian and Ghanaian counterparts and our private sector partners for an excellent series of meetings on my first of what I hope will be many trips to the continent.”
Egypt will host a critical meeting in September aimed at rallying African leaders for a single voice on Nationally Determined Contributions to cut emissions and adapt to climate change ahead of the world’s premier climate conference, COP27. Egypt will host COP 27 this November. This is the first time in six years that the global event will take place on African soil. It comes as the continent faces a growing climate threat and a huge resource deficit—of $1.6 trillion in climate finance over the next decade, according to the African Development Bank—to address the risks to lives and livelihoods. Senior Egyptian officials met with African Development Bank senior management in Abidjan on 14 June to discuss their individual and collective agendas in the run-up to the all-important climate summit. The parties also discussed how best the Bank can generally support Egypt, one of the institution’s major shareholders. Egypt’s Minister for International Cooperation, Dr. Rania Almashat—who led her country’s delegation—said the discussions would take place during the Egypt International Cooperation Forum, to be held in the North African country in September, two months before COP 27.
The 44th Ordinary Session of the Permanent Representatives’ Committee (PRC) kicked off (AU)
The 44th Ordinary Session of the Permanent Representatives’ Committee (PRC) kicked off on 20 June 2022, in preparation for 41st Ordinary Session of the Executive Council of the AU and the 4th Mid-Year Coordination Meeting of the African Union (AU) and the Regional Economic Communities (RECS) to be held in Lusaka, Zambia, from the 14-17 July 2022. Addressing the ambassadors in his opening remarks, the Chairperson of the AU Commission, Moussa Faki Mahamat underscored the importance of the session. “This 44th Session of the PRC, is held in a particularly difficult context, marked by the persistent challenges, in particular the control of the ravages of the COVID-19 pandemic, the post-COVID economic recovery, the problems of insecurity linked to the expansion of terrorism and the resurgence of the Unconstitutional Changes of Government on the Continent, the negative effects of Climate Change, the problem of refugees and Internally Displaced Persons,” said Mr. Moussa Faki Mahamat.
China Seeks to Expand Africa Trade Dominance With Role as Peace Mediator (WSJ)
China offered to mediate disputes across the troubled Horn of Africa at its first regional peace conference, the latest sign Beijing is expanding decades of economic diplomacy into matters of war and peace. Delegates from six countries gathered in Addis Ababa, Ethiopia, to hear China’s newly appointed special envoy for the region, Xue Bing, pledge that Beijing was best placed to restore stability to Ethiopia, Sudan, Somalia and other countries across the strategically important Horn of Africa, which is perched on some of the world’s key shipping lanes.
Global economy news
‘BRICS partnership has great value for SA’ (Moneyweb)
The value of South Africa’s membership of BRICS has grown substantially since we joined this group of emerging economies 12 years ago. As we work to rebuild our country in the wake of the COVID-19 pandemic, there is much to be gained from our participation in BRICS and the relationships we have established with other member countries. At the outset, BRICS countries identified the strengthening of economic and financial ties as one of the key pillars of its cooperation. The countries have adopted the Strategy for BRICS Economic Partnership to increase access to each other’s markets, promote mutual trade and investment and create a business-friendly environment for investors in all BRICS countries. An important part of this strategy, particularly for South Africa, is to diversify trade so that more manufactured goods, rather than raw commodities, are traded. Last year, over 17% of South Africa’s exports were destined for other BRICS countries, while over 29% of our total imports came from these countries. These countries are therefore significant trading partners, and the value of this trade is continuing to grow. Total South African trade with other BRICS countries reached R702 billion in 2021 up from R487 billion in 2017.
Commonwealth seeks to grow trade by $6.5 trillion in five years (The East African)
Intra-Commonwealth trade is expected to expand by $6.5 trillion in the next five years from the current $13 trillion, as the group seeks to strengthen both trade and investment ties between the 54 member countries. Figures by the Commonwealth Secretariat show that trade costs within the Commonwealth are on average 21 percent lower, while investment flows are 27 percent higher than those between other country pairs. The combined GDP of Commonwealth countries is now around $13 trillion and is estimated to reach $19.5 trillion in 2027. The population of the Commonwealth is over 2.4 billion. “At the heart of our mission is trade - the lifeblood of economic activity, and the arteries of the economic relationships between our Commonwealth member countries. The Commonwealth advantage…,” Baroness Patricia Scotland, the Commonwealth Secretary-General, said during the opening ceremony of the 2022 Commonwealth Business Forum (CBF 2022) in Kigali on Tuesday. She added that the Commonwealth’s ambition is to facilitate trading within countries.
New Word Bank research tells us how to make Global Value Chains more resilient (Trade for Development News)
The past two decades have seen the share of global exports from low- and middle-income countries almost doubling to 30% and the world’s population living in extreme poverty falling from 36% to 9%. These dramatic expansions in trade, productivity and economic growth were propelled by the emergence of Global Value Chains (GVCs). GVCs also enabled an international division of labour, increasing efficiencies and economies of scale. Firms in low- and middle-income countries now can supply intermediate inputs to global production networks, benefiting from the industrial bases of other states. They can also import cheaper and better inputs, technologies, and improved management practices. This allows them to grow faster and create better, higher-paying jobs.
Policies to maintain trade flows can limit and overcome global shocks. A crisis is a bad time to raise trade barriers, as the need for imports may increase, and exports are an important stabilizer and a source of jobs and incomes. Trade policy reforms, such as tariff reductions, cut the cost and improve the availability of essential goods and services. In so doing, they help restrain inflationary pressures, once again with positive distributional consequences for poorer households and workers. Trade reforms also reduce tax and administrative burdens and support eventual economic recovery and improved resilience through greater diversification of imports and exports.
EU to provide vulnerable countries $633M to address food crisis (Anadolu Ajansı)
The European Union will support vulnerable countries with an additional €600 million ($633 million) to face the food crisis aggravated by Russia’s war on Ukraine. “To help our partners we will mobilize an additional 600 million euros to avoid a food crisis and an economic shock,” Ursula von der Leyen, president of the European Commission, announced at the 2022 European Development Days conference in Brussels on Tuesday. She said the war that began in February is taking a “heavy and senseless toll,” not only on the Ukrainian population but also on those most vulnerable around the world. “Russia is still blocking millions of tons of desperately needed grain,” she added.
With the additional funds, “we will strengthen our support to address the crisis, while contributing to sustainable and resilient food systems,” said European Commissioner for International Partnerships Jutta Urpilainen.
Island nations urge Commonwealth leaders to bolster ocean climate action (The Commonwealth)
Small island nations are calling for strengthened global support for ocean and climate change action, just days before Commonwealth leaders convene in Kigali, Rwanda, to decide on the group’s priorities for the next two years. In their executive sessions later this week, heads of government are expected to discuss issues such as shared climate ambitions, financing climate and ocean action, and rebuilding sustainable green and blue economies in the wake of the COVID-19 pandemic, among other key items on the agenda. During a breakfast meeting co-hosted today by the Commonwealth Secretariat and the Fiji Government in the margins of the summit, High Commissioner Jitoko Tikolevu addressed an audience of mainly envoys from fellow island nations, from Tuvalu to Cyprus to The Bahamas. He said: “The ocean and climate are inextricably inter-connected and the health of our oceans dictate the livelihoods of millions of people around the world, from the Pacific to the Atlantic... The challenges facing our oceans and its resources are diverse and complex and yet our answer is simple, we need action!”
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Local news
N3 protest: Supply chain under attack, cost to economy more than R300m (Engineering News)
The Road Freight Association wrote to President Cyril Ramaphosa on Thursday to ask him to to urgently intervene in an ongoing blockade of key cargo routes across the country. In an open letter, Road Freight Association CEO Gavin Kelly told Ramaphosa road freight companies were being targeted and that the entire supply chain was under attack.
“The economic impact – initially felt and carried/absorbed by all the transporters stuck on the various routes – is not only enormous (we have already lost around R25 million in truck operating costs), but will cripple many of our smaller operators (88% of our members are SMMEs), will have a knock-on effect on all other industry sectors (from manufacturing to retail), [and] will result in penalties for late delivery, damaged goods, contract breach and even loss of business and thereby, unemployment,” Kelly said.
“Ships will sail past to other ports – they will not wait for us to ‘get our act together’. We will lose trade and business to and through South Africa. Our ports will become ghost towns – and the surrounding businesses relating to those activities of trade and support will close.
SA invests in youth empowerment (SAnews)
Minister in the Presidency, Mondli Gungubele, has encouraged the youth to utilise all opportunities presented to them by government to grow and create their own businesses.
“The youth are the future of this country and therefore, government remains resolute in creating a favourable and supportive environment for youth to become successful entrepreneurs and leaders. “The youth of 2022 is called upon to help us build a better tomorrow for everyone. Young people become agents of change, embrace the opportunities provided and rise to the challenge of leading South Africa’s post-COVID-19 recovery,” Gungubele said.
According to the Government Communication and Information System (GCIS), government is creating favourable conditions for youth-owned businesses to thrive through Presidential youth employment intervention programmes like the Youth Employment Stimulus and the Social Employment Fund.
Experts say that Rwanda’s AfCFTA strategy places the country on a firm footing (UNECA)
Trade Experts, members of the private sector and officials of the UN Economic Commission for Africa (ECA) met to discuss and validate the African Continental Free Trade Area (AfCFTA) National Implementation strategy. The validated strategy will serve as a blueprint to identify key products and services as well as markets that Rwanda will prioritize to tap into the opportunities provided by the agreement.
ECA estimates large gains for Eastern Africa, including an increase in intra-African exports by over US$ 1 billion and the creation of over 2 million new jobs.
The National AfCFTA Implementation Strategy highlights that Rwanda is expected to gain from sectors with strong potential for increased industrialisation such as agro processing of food products, mining and mineral processing of high-value extracts like coltan, tantalum and cobalt, construction materials like cement, iron, steel and ceramics, light manufacturing of textiles, leather products, pharmaceuticals, electronic equipment.
Tanzania joins a growing number of African countries imposing digital tax on big global tech firms (Business Insider Africa)
According to local media reports, the taxation will take effect from next month, following anticipated approval from the Tanzanian parliament. Business Insider Africa understands that lawmakers are scheduled to vote on the matter any moment from now. “Tanzania Revenue Authority shall establish a simplified registration process to accommodate digital economy operators who have no presence in Tanzania. This measure is intended to keep pace with rapid growth in the digital economy,” the Finance Minister was quoted to have said. Tanzania joins a growing list of African countries that have so far introduced various forms of digital taxation aimed specifically at big global tech companies that make money across Africa. Just last week, a Nigerian regulatory agency announced a code of conduct that would, among other things, require such companies to pay taxes.
M23 clash: DRC now suspends bilateral trade agreements with Rwanda (The East African)
The Democratic Republic of Congo is suspending all agreements with Rwanda, which it accuses of supporting the M23 rebels, even though Kigali denies the charge. After a meeting which ended late in the night on Wednesday, June 15, Patrick Muyaya, the government spokesman, announced several resolutions by President Félix Tshisekedi and the High Council of Defence.
The agreements include a commercial deal signed in June 2021 between President Tshisekedi and his Rwandan counterpart Paul Kagame on exploiting gold to ensure its traceability in DR Congo. The aim was to control the value chain from extraction by Sakima and refining by Dither in Rwanda.
The two neighbouring countries also had an agreement on the prevention of tax evasion and double taxation and another on the promotion and protection of investments.
Ghana, US trade to double in two years …US Department of Commerce projects (Ghanaian Times)
The United States (US) Department of Commerce has projected the value of trade between Ghana and US to double in the next two years. Currently, the value of trade between Ghana and U.S stands at $2.7 billion. “We have a strong commercial relations. I’m hoping that we can take that $2.7 billion or somewhere around that range, and double it in just a matter of two or three years and then double it again in just a few years after that,” the Deputy Secretary of the US Department of Commerce, Don Graves said at the US-Ghana Business forum in Accra on Thursday.
The forum, organised by the US Chamber of Commerce and the American Chamber of Commerce Ghana, was the 3rd High-Level meeting between US and Ghanaian government officials and businesses on the official visit of Mr Graves.
With a globe recovering from the shocks of the COVID-19 pandemic, he said US President Biden was committed to supporting agricultural investment, increased fertiliser, and energy production to meet the challenges of both countries.
He said there was a need for the two countries to find ways to work together and invest in more resilient supply chains and cooperate to reduce inflation as a key driver toward recovery.
Nigeria’s controversial fuel subsidies: A major focus for the new administration (Nairametrics)
Speaking at the hybrid launch of the World Bank’s Nigeria Development Update titled: “The Urgency for Business Unusual”, held in Abuja this week, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed expressed concerns about the federal government’s continuous retention of the controversial fuel subsidy regime, which is currently hurting Nigeria’s ability to service its debts.
For several months, Nigeria has failed to meet its OPEC quota, blaming massive oil theft, the inability to restart oil wells shut down in the wake of the Covid-19 pandemic, lack of investments as well as community issues. There has been a continuous fall in production volumes throughout the year. In an interview with Reuters, Zainab Ahmed noted that low crude oil production means Nigeria can barely cover the cost of imported petrol from its oil and gas revenue.
The country is at a crossroads, and we believe the subject of subsidy will be the starting point for the incoming administration. It is not hearsay that Nigeria has not derived what it should from the current high crude oil prices, rather rising crude oil prices are posing significant fiscal challenges to our economy. The perennial issues limiting production amidst increasing subsidy payments (with increasing global PMS prices) means we are better off with lower oil prices.
Administration of the Kenya Sugar Safeguard in Focus (COMESA)
The Fifth Meeting of the COMESA Sub-Committee on the Kenya Sugar Safeguard conducted a virtual two-day meeting 15-16 June 2022 to consider issues relating to the implementation of the Safeguard. Over the years, Kenya has been granted safeguards by the COMESA Council of Ministers to enable it undertake measures to re-structure its domestic sugar sector to attain competitiveness and become a profitable sector. The Committee oversees implementation of Kenya sugar safeguard measures and address challenges that may arise therefrom. Key issues in the agenda were deliberations on the progress report on implementation of the Kenya sugar safeguard measures and review of the implementation of the country’s sugar recovery plan. The Committee also considered proposals related to administration of the quotas allocated to member countries that export sugar to Kenya, which has been a key issue.
COMESA Assistant Secretary General in charge of programs, Dr Kipyego Cheluget said: “The modalities for the administration of the safeguard measures have so far been stable and serve all parties fairly under the circumstances. My plea to all of us is to avoid introducing drastic changes in the modalities which may bring discomfort or dissatisfaction to some members or section of Member States given that the diversity of sugar production regimes in the entire region.”
Cargo delays hit Mombasa port over payment dispute (Business Daily)
Importers using Mombasa port are experiencing delays in cargo delivery and collection following a payment dispute pitting Kenya Ports Authority (KPA), Kenya Railways Corporation (KRC-SGR) against shipping lines. The Business Daily has learnt that several containers are stuck at different port facilities in Mombasa and Nairobi after KPA, which is owed substantial amounts of money by KRC and shipping lines, suspended the release of cargo until the debts are cleared.
In correspondences, KPA has been writing to shipping lines which use SGR to ferry cargo to Nairobi and Mombasa to clear their arrears in vain, forcing them to take action.
One of the notices dated June 10 2022 added: “For invoice under disputes should be paid in full pending resolution of the disputes and where credit notes are subsequently issued, they will be used to offset subsequent invoices.”
Tanzania grain stuck at Kenya border due to new export requirement (The East African)
Tanzania has imposed a new requirement on grain traders to get an export permit before shipping maize out of the country, in a policy shift that has locked already bought stocks of grain by Kenyan millers at the border. Kenyan millers say the new requirement could paralyse their operations at a time scarcity of grain and other costs of production have conspired to push the price of flour towards Ksh200 ($1.70) for a two-kilo packet. Millers say the requirement was not there before after the two countries resolved their trade dispute last year. This has seen hundreds of trucks stuck at the Namanga border post, cutting the supply of grain to Kenya given that Tanzania is the only source of maize where processors are getting grain from at the moment after local stocks fizzled out. “Our tracks have been stopped from proceeding to Kenya and we are currently incurring more cost on delay charges even as our milling plants have grounded to a halt for lack of stock to process,” said John Gathogo, the publicity secretary of animal feeds manufacturers.
New regional digital plan to bridge data gaps in food stocks (Business Daily)
Kenya is among 27 countries that will soon have a digital system that will play a key role in giving real-time estimates on the availability of food stocks in the region. Alliance for Green Revolution in Africa (AGRA) and Common Market for Eastern and Southern Africa (Comesa) are leading the efforts to develop a digital Regional Food Balance Sheet (RFBS) that uses data from a variety of public and private sources to develop the system. Once fully developed and operational, the RFBS will inform data-driven decisions around production support, trade policy, and stock management by governments, business decision-making and investment by the private sector. So far six countries including Kenya, Rwanda, Malawi, Uganda, Zambia and Tanzania have been involved in the pilot phase.
Gambia’s performance in third Biennial Report reviewed (The Point)
The African Union Commission initiated a comprehensive Africa Agriculture Development Programme (CAADP) Biennial Review Report which is the main mutual accountability tool to track the progress of the African Union (AU) member states in implementing the Malabo Declaration of 2014 focusing on Agricultural growth and poverty reduction based on its seven commitments. The Gambia as a signatory to the Malabo declaration submitted its Third Biennial Report to the African Union through the Regional Economic Community (REC).
Agriculture is limited with funding gaps even though it is a productive sector, Francis Mendy, Director of Planning at the Department of Planning Services, Ministry of Agriculture, stated, adding that a lot of resources is needed to support a productive sector. He also described agriculture as a risk enterprise, saying limited funds allocated to agriculture make it very difficult to implement most of the activities under the sector.
Mombasa, Dar ports behind global rivals in efficiency (The East African)
East African ports are trailing their global peers in operations through red tape and underperformance, a global report says. The region’s busiest ports by cargo handled — Mombasa and Dar es Salaam — are still a far cry from gateways in the Middle East, for example. They are ranked 293 and 362, respectively, out of 370 in the global Container Port Performance Index (CPPI).The latest report for 2021, released last week, shows that the two ports were bogged down by shipment delays, supply chain disruptions, additional costs, and reduced competitiveness resulting in inefficiencies.
“Poorly performing ports are characterised by limitations in spatial and operating efficiency, limitations in maritime and landside access. Inadequate oversight and poor co-ordination between the public agencies involved results in lack of predictability and reliability,” the index reads.
Egypt Adapts to Climate Change (IMF)
Higher temperatures and extreme weather have inflicted crippling losses in countries across the Middle East and Central Asia. Egypt is highly vulnerable to water scarcity, droughts, rising sea levels, and other adverse impacts of climate change. Without adaptation, agriculture, tourism, and coastal communities will be at particular risk.
To support the move to a greener, climate-resilient economy, the Egyptian government recently launched the National Climate Change Strategy. The private sector is scaling up adaptation efforts and will play a key role in this transition. To develop the green finance market, Egypt has also issued the region’s first sovereign green bond to finance projects in clean transportation and sustainable water management. As host of COP27, Egypt is also coordinating global action on climate adaptation, mitigation, and finance.
IMF Executive Board Concludes 2022 Article IV Consultation with Côte d’Ivoire (IMF)
Supported by solid macroeconomic stability, the Ivorian economy proved resilient to the COVID-19 pandemic thanks to the authorities’ effective policy response. COVID-related fatalities remain at low levels by international standards. Vaccination efforts continue and about 70 percent of the target population has already received a first dose.
The economy recovered strongly in 2021 , with growth estimated at 7 percent (from 2 percent in 2020), while annual inflation rose to 4.2 percent due to external and supply shocks. The overall fiscal deficit reached 5.1 percent of GDP, lower than anticipated, mainly due to improvements in customs collection and tax administration which offset higher security spending.
African trade and integration news
AfCFTA seen achieving early positive effect on intra-Africa trade levels (Businessamlive)
The African Continental Free Trade Area (AfCFTA) agreement will have an early positive effect on intra-African trade levels, according to the latest Africa CEO Trade Survey Report. The report, which was based on a survey of over 800 executives from 46 countries in Africa who are active in the continent, shows that the positive effect of the AfCFTA will be felt as early as 2022-23.
Speaking on the survey results, Pat Utomi, chairman of PAFTRAC, said the “survey clearly shows that the vast majority of African CEOs believe that the implementation of the AfCFTA will have a positive effect on levels of intra-African trade, even as early as 2022-23”.
“Just 4 percent of participants believe that the AfCFTA will have, or has already had, a negative impact on their businesses,” he said. While intra-African trade and the AfCFTA play a big part in the report, the survey also highlighted how African businesses see opportunities in external markets.
“African companies do not seem to greatly favour exporting to any one region of the world over another. However, the survey showed while Europe appears to be the favoured export destination, the Middle East is an increasingly popular destination given growing trade and investment ties with Africa,” Utomi said.
The African Trade Report is the annual flagship report of the African Export-Import Bank (Afreximbank). The combined 2021-2022 edition of the report focuses on “Leveraging the Power of Culture and Creative Industries in Africa”
Ukraine crises: Afreximbank establishes $4bn Adjustment Trade Finance Programme for Africa - Ghanaian Times (Ghanaian Times)
The ongoing Ukraine crisis presents new challenges to Africa as it is hindering access to grains, fertilisers and petroleum products, Professor Benedict Oramah, President and Chairman of the Board of Directors of African Export-Import Bank (Afreximbank) has said.
He said the crises have led to galloping inflation in many African countries, which were only beginning to recover from the COVID-19 pandemic. Addressing participants at the official opening of the 29th Afreximbank Annual Meetings (AAM2022) in Cairo, Egypt yesterday, he said “Mindful that Africa’s problems are for Africans to solve, Afreximbank has once again stepped in with the launch of a 4 billion dollar Ukraine Crisis Adjustment Trade Finance Programme for Africa (UKAFPA) to help countries to contain the short-term impacts of the crisis.”
Themed “Realising the AfCFTA Potential in the post-COVID-19 Era—Leveraging the power of the youth”, the Afreximbank annual meetings includes Advisory Group Meetings and the Annual General Meeting of shareholders, complemented by seminars and plenaries.
North African conference on labor, entrepreneurship and MSMEs concludes with the “Rabat Declaration” (AfDB)
“The post-Covid-19 world is opening up new avenues and opportunities. All public and private actors have a role to play in making themselves even more accessible to entrepreneurs. This will only be possible if a new impetus is given to entrepreneurship and MSMEs, with a synergy of all programs, public and private, which will have to be scaled up, have greater capacity, and be seamlessly interwoven.” This was the conclusion of a regional conference held on 7 and 8 June in Rabat, Morocco, on the future of labor and the role of entrepreneurship and MSMEs.
The Rabat Declaration calls for new political awareness and a change of paradigm. It establishes convergence around the need for a new job creation model that is nurtured by entrepreneurship.
Eight specific action points were identified, including: improving regulatory frameworks, investing in high-potential value chains, creating public-private partnerships to leverage investment funding, providing targeted support for entrepreneurs and helping them technically and financially.
Top 10 most-innovative economies in Africa (Business Insider Africa)
Data from the report found that Sub-Saharan Africa has the highest number of economies performing above expectations in the GII. Here are the top 10 most-innovative economies in Africa, according to the 2021 Global Innovation Index:
- Mauritius
- South Africa
- Kenya
- Cabo Verde
- Tanzania
- Namibia
- Rwanda
- Senegal
- Botswana
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Malawi
Africa could earn billions in unpaid taxes (DW)
Every year, African countries miss out on vast sums of taxpayers’ money due to a lack of logistical support for business transactions and monitoring systems. However, the real problem is that much of the working population is employed in the informal sector: on markets, in agriculture, the arts and craft industry, in the construction sector, or in transport. Moreover, many small, independent businesses are not registered — self-employed people often pay neither taxes nor social security contributions.
If they were collected, more tax revenues could significantly improve health and education, expand infrastructure, and contribute to other urgently needed development projects in many African countries.
Professor John Gartchie Gatsi, a finance and economy lecturer at Cape Coast University in Ghana, told DW that it would make sense to incorporate the informal sector into the overarching “normal” scheme for taxes: ”If we grow the informal sector and formalize it through various policy interventions, we will gradually move a chunk of the informal sector into the formal sector,” he said. But he added that Africa faced several hurdles along the way. “We have identified digitilization, electronic and automation of systems, but we have not been consistent.”
The 2nd Extraordinary Session of the African Union Specialized Technical Committee on Transport, Transcontinental and Interregional Infrastructure, and Energy (STC-TTIIE) that convened from June 14-16 virtually came to a close after making crucial decisions regarding the Russia-Ukraine crisis, the Common African Position Paper on Energy Access and Just Transition in Africa to be presented at COP27, the SAATM Dispute Settlement Mechanism and the revised African Civil Aviation Policy, among others.
During the opening of the ministerial session, the Chair of the STC-TTIIE Hon. Tsoeu Mokeretla, Minister of Transport of the Kingdom of Lesotho said the ongoing Russia-Ukraine Crisis is already taking its toll on Africa and it is time to collectively as a continent find ways of mitigating the impacts on the energy and infrastructure sectors thereby addressing the knock-on effects on other sectors. African Union Commissioner for Infrastructure and Energy, Dr. Amani Abou-Zeid, calls the situation ‘a double crisis’ as it came at a time when African economies strive to recuperate from the global covid-19 pandemic, adding that the crisis has contributed to soaring prices of energy and high cost of transport in Africa which has negatively impacted agriculture, industry, trade, tourism, and many other socio-economic sectors in addition to important pressures on the public budgets of African countries.
Commissioner Abou-Zeid emphasizes the need to rapidly adapt to the existing situations and devise innovative ways to seize possible opportunities that may arise. “Africa can step in as an alternative source energy market through its number of projects under the Programme for Infrastructure Development in Africa (PIDA) and other similar initiatives like the African Single Electricity Market (AfSEM) that can be expedited to first address Africa’s energy needs and export to other regions,” underscores the Commissioner.
Global economy news
WTO members secure unprecedented package of trade outcomes at MC12 (WTO)
WTO members successfully concluded the 12th Ministerial Conference (MC12) in Geneva on 17 June, securing multilaterally negotiated outcomes on a series of key trade initiatives. The “Geneva Package” confirms the historical importance of the multilateral trading system and underlines the important role of the WTO in addressing the world’s most pressing issues, especially at a time when global solutions are critical.
Round-the-clock negotiations among delegations produced the "Geneva Package", which contains a series of unprecedented decisions on fisheries subsidies, WTO response to emergencies, including a waiver of certain requirements concerning compulsory licensing for COVID-19 vaccines, food safety and agriculture, and WTO reform.
5 critical policy agendas for economic recovery in developing countries (UNCTAD)
The financing needs of developing countries have significantly expanded in recent years, reflected in increased debt accumulation throughout the 2010-2020 period.
This pre-COVID-19 trend placed a major constraint on government responses to confront the urgency of the pandemic and, in the medium-term, restricts their capacity to recover in the face of emerging shocks such as climate disasters and those associated with the conflict in Ukraine.
During a recent workshop held by UNCTAD and the Economic Commission for Latin America and the Caribbean (ECLAC), experts and policymakers identified five critical policy agendas to support economic recovery across developing regions in 2022.
- Re-channel unused special drawing rights and initiate a new allocation
- Expand state-contingent debt instruments
- Establish a multilateral credit rating agency
- Increase South-South learning from development banks
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Deploy capital flow management
Climate change: Green energy ‘stagnates’ as fossil fuels dominate (BBC News)
“The share of renewable energy has moved in the last decade from 10.6% to 11.7%, but fossil fuels, all coal and gas have moved from 80.1% to 79.6%. So, it’s stagnating,” said Rana Adib, the executive director of REN21.
Targeted Financing Crucial for Ocean Health and Achieving SDGs, New Report Shows (WEF)
A new white paper, published on World Ocean Day by the World Economic Forum, outlines critical steps to channel funding to support the health of the ocean and those who depend on it.
SDG14 Financing Landscape Scan: Tracking funds to realize sustainable outcomes for the ocean highlights the fragmented nature of current data on ocean financing and points to the need for innovative tools to track commitments towards and investment in the Sustainable Development Goal for the ocean, SDG14, with better traceability and granularity of information on financial commitments for the ocean.
Challenge for 2023: Guaranteeing Sufficient Food Production (Inter Press Service)
If the war in Ukraine and other conflicts around the world continue, the challenge for 2022 will be to guarantee greater access to existing food supplies, and sufficient food production by 2023. As we approach four months since the start of the war, data continues to show a trend of rising food prices, particularly in the poorest countries, while concern grows about the possible effects of these increases. It will be the most fragile countries in Africa and Asia that will pay the highest price, even though many European countries are 100% dependent on Russian fertilizers, the world’s leading exporter.
The potential shortages of some commodities may generate internal instability in many countries, increasing internal and external migratory flows.
Related News
WTO members secure unprecedented package of trade outcomes at MC12
WTO members successfully concluded the 12th Ministerial Conference (MC12) in Geneva on 17 June, securing multilaterally negotiated outcomes on a series of key trade initiatives. The “Geneva Package” confirms the historical importance of the multilateral trading system and underlines the important role of the WTO in addressing the world’s most pressing issues, especially at a time when global solutions are critical.
Round-the-clock negotiations among delegations produced the "Geneva Package", which contains a series of unprecedented decisions on fisheries subsidies, WTO response to emergencies, including a waiver of certain requirements concerning compulsory licensing for COVID-19 vaccines, food safety and agriculture, and WTO reform.
"The package of agreements you have reached will make a difference to the lives of people around the world. The outcomes demonstrate that the WTO is, in fact, capable of responding to the emergencies of our time," said WTO Director-General Ngozi Okonjo-Iweala. "They show the world that WTO members can come together, across geopolitical fault lines, to address problems of the global commons, and to reinforce and reinvigorate this institution. They give us cause to hope that strategic competition will be able to exist alongside growing strategic cooperation."
DG Okonjo-Iweala expressed her conviction that "trade is part of the solution to the crises of our time" and noted that the WTO "can and must do more to help the world respond to the pandemic, tackle environmental challenges and foster greater socio-economic inclusion."
The package adopted by members include:
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a package on WTO response to emergencies, comprising:
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pdf Decision on the E-commerce Moratorium and Work Programme (61 KB)
In addition, ministers adopted two decisions – on the pdf Work Programme on Small Economies (61 KB) and on the pdf TRIPS non-violation and situation complaints (52 KB) – and a pdf Sanitary and Phytosanitary Declaration for the Twelfth WTO Ministerial Conference: Responding to Modern SPS Challenges (82 KB) .
Ministers also agreed on a process for addressing longstanding calls for reform of the WTO. The Ministerial Declaration commits members to an open, transparent and inclusive process overseen by the WTO's General Council, which will consider decisions on reform for submission to the 13th Ministerial Conference (MC13).
All documents can be found here.
Acknowledging the "vital importance of agriculture," DG Okonjo-Iweala noted that differences on some issues, including public stockholding for food security purposes, domestic support, cotton and market access "meant that we could not achieve consensus on a new roadmap for future work." However, she added, "members found a renewed sense of purpose: they are determined to keep at it on the basis of existing mandates, with a view to reaching positive outcomes at MC13."
Her full remarks are here.
The WTO's 12th Ministerial Conference was held in Geneva, Switzerland, from 12 to 17 June 2022. Initially scheduled to end on 15 June, the ministerial gathering was extended by two days to allow more time for negotiations and reaching agreements. Co-hosted by Kazakhstan, the Conference was chaired by Timur Suleimenov, First Deputy Chief of Staff of the Kazakh President.
In his closing remarks, Mr Suleimenov thanked the DG for never giving up. "Her determination, her leadership, her perseverance made all the difference. Dr Ngozi, the WTO owes you a great debt."
He told members: "This week, you have all contributed to making what seemed impossible come to fruition. We have all engaged in frank and sometimes very difficult conversations. We may have not achieved everything that we set out for, but we have delivered, and this is something that all of us should be proud of."
"Congratulations to you all. Congratulations on going beyond your national interests and looking to the common good that the WTO embodies, and in doing so, carrying out our shared responsibility to restore confidence in this organization. It is so much needed in these difficult times," he added.
MC13
The Ministerial Conference requested the General Council to hold consultations with a view to deciding on the date and venue of the 13th WTO Ministerial Conference (MC13). The Chair recalled that the Decision on the Work Programme on Electronic Commerce contains an understanding that MC13 should ordinarily be held by 31 December 2023. Two proposals – by Cameroon and the United Arab Emirates - have been received to host the ministerial gathering.
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South Africa Ponders Buying Russian Oil, Signifying Potential Win for Putin (Newsweek)
South African officials are openly considering importing Russian oil to ease record fuel prices, a move that would help Moscow sidestep sanctions imposed by Westerns powers for its invasion of Ukraine. Gwede Mantashe, minister of Mineral Resources and Energy, said during a parliamentary debate Wednesday that it was time for South Africa to turn to Russia for its fuel needs. Mantashe’s remarks, which were met with applause, point to possible limits of efforts to economically squeeze as fuel prices continue to soar. “We should consider importing crude oil from Russia at a low price because it is not sanctioned,” said Mantashe. Mondli Gungubele, South Africa’s minister in the presidency, told reporters last week that the government hadn’t ruled out purchasing oil from Russia if it could lower fuel prices, reports fin24.
Namibia mulls developing poultry industry standards (News Ghana)
Namibia plans to develop poultry industry standards to boost sectoral growth, an official said Wednesday. The standards will serve as a structured guide for poultry production to tackle bottlenecks that have hindered market access to local producers, said Rebekka Shiimi, promotion officer at the Ministry of Industrialization and Trade. “The country does not have standards for poultry production and its products. As a result, local producers cannot export products due to the absence of such, which limits them to the domestic market,” she said. The standards will address issues of safety, quality assurance, supply chain processes, and other aspects, Shiimi said.
National treasury to progressively eliminate fuel subsidy (Kenya News Agency)
The government is mulling a plan to gradually adjust domestic fuel prices saying that the move is necessary in order to progressively eliminate the need for the fuel subsidy, possibly within the next Financial Year. National Treasury and Planning Cabinet Secretary (CS) Ukur Yatani said that this will then create the fiscal space necessary for the government to support targeted public spending on productive sectors that support the most vulnerable, such as fertilizer subsidies, universal health coverage, and subsidized primary and secondary education, among others.
Kenya eyes open skies in deal with eight countries (Business Daily)
The Ministry of Transport has tabled bilateral air service agreements between Kenya and eight countries that will see national career Kenya Airways expand its routes network to new markets. The Transport Ministry said Kenya had air agreements with the Czech Republic, Cyprus, Chile, Belize, Suriname, Austria, Tanzania and Barbados. Transport Cabinet Secretary James Macharia told Parliament the bilateral air services agreements will enable airlines to expand their existing route networks by directly operating scheduled services to other markets. “Bilateral air services agreements between Kenya and the various countries are established to enable Kenyan air operators such as Kenya Airways to provide scheduled air services and expand their existing route networks,” Mr Macharia said in a report to Parliament. “In addition, the agreements allow foreign careers to access the Kenyan market.”
He said where airlines are unable to offer services, the agreement allows them to enter into commercial arrangements such as codeshare agreements, which allow airlines to grow the demand in other markets by putting their code on other carriers thereby offering seamless connectivity to the travelling public.
Millers to import 1.5m bags of wheat (Business Daily)
Millers will be shipping in at least 1.5 million 90-kilo bags of wheat in the next 10 days as they rush to replenish the diminishing stocks amid poor crops locally from the current season. According to the Port of Mombasa, four ships carrying bulk wheat will be docking at the harbor by Sunday next week. They will be among the 35 vessels that are expected to dock at the port between 13 and 25 June with different cargo. Kenya is grappling with a shortage of wheat following disruption at the source markets of Ukraine and Russia in the wake of the conflict between these two countries which has cut the supply of the grain. “Local wheat production for the current season was lower at 1.2 million 90 kg bags compared to 1.8 million last season,” says Agriculture and Food Authority (AFA).
The shortage of grain in the local market has seen the price of wheat flour steadily rise to now hit Sh212 for a two kilogramme packet up from Sh200 last month. Total wheat imports for the current season stood at 1.5 million tonnes by April 2022 against a total allocation of 2.7 million tonnes that millers were permitted to ship in.
US starts resetting trade ties with Kenya to reflect Biden priorities (Business Daily)
The US government on Monday started reshaping trade deals with Kenya to reflect the priorities of the Joe Biden administration, American officials said. The US and Kenya agreed to discuss an “ambitious” trade arrangement with “high-standard commitments” in key areas including agriculture, digital trade and climate change, the Office of the United States Trade Representative (USTR) announced on Monday. The USTR stated this after the US Trade Representative Katherine Tai and Kenya’s Trade Cabinet Secretary Betty Maina met on Monday on the margins of the ongoing World Trade Organization’s 12th Ministerial at WTO headquarters in Geneva, Switzerland.
“They discussed a number of issues where the United States and Kenya could develop an ambitious roadmap for enhanced cooperation and, where appropriate, explore negotiating high-standard commitments,” a statement from Ms Tai’s office said without divulging additional details.
“As a next step, the two countries will work to finalize a list of areas for cooperation to deepen economic engagement, and the two ministers agreed to meet again in the coming weeks to announce the next steps,” the USTR said.
Kenya, Zambia agree to remove barriers hindering trade (Kenya Broadcasting Corporation)
Kenya and Zambia have agreed to work together towards removing barriers that hinder trade and investment between the people of the two countries. President Kenyatta said his discussions with visiting Zambian President Hakainde Hichilema on Wednesday focused on opportunities to harness the strong bonds of friendship as well as the business and economic ties including the removal of obstacles to trade.
“In this context, we have agreed to address the prevailing bottlenecks, including addressing ourselves to a few tariff and non-tariff barriers that bar our people from enjoying the freedom of trade amongst themselves,” President Kenyatta said.
Budget: Tanzania’s new tax targets Google, Facebook (The East African)
Tanzania will introduce a digital tax this year, the country’s finance minister said, in a move targeting global internet giants offering services in the country. The two percent tax will come into effect in July and follows similar attempts by other countries to force US multinational tech companies to pay at least a portion of their revenues in local tax. Tanzania’s Minister for Finance and Planning, Mwigulu Nchemba, announced the measure on Tuesday as he presented the national budget.
RRA increases taxes for imported goods manufactured in EAC (The New Times)
Importers of products such as construction materials, furniture, wine, beauty and makeup products to the East African Community are set to pay more taxes as new EAC directive comes into force. Effective July 1, a 35% tax rate will be charged on products that are imported from outside the East African Community yet they are manufactured within the community. In a communique issued by Rwanda Revenue Authority last week, the new tax rate will affect commodities such as construction materials including tiles, steel bars and barbed wires.
Other products to be taxed include mattresses, packaging, soap, beverages, toilet paper, footwear, vegetables, fruits, coffee, tea, dairy and meat products. The new tax rate is for the fourth band of the EAC’s Common External Tariff (CET). Common External Tariff is a uniform tariff rate adopted by a customs union or common market, such as the East African Community, to imports from countries outside the community.
Uganda Budget Offers Distant Hope Rather than Instant Relief (East African Business Week)
In recent years, it has become the norm for the finance ministry to come up with a breathless theme to pivot the annual budget presentation. This year was no exception. The government is proposing to spend UGX48.1 trillion ($12.8 billion) for financial year 2022/23 under the theme, ‘Full Monetisation of Uganda’s Economy through Commercial Agriculture, Industrialisation, Expanding and Broadening Services, Digital Transformation and Market Access’. Of the projected total expenditure, UGX 30,797.3 billion is to be raised through domestic revenue sources specifically UGX23,754.9 billion as tax revenue and UGX1,795.9 billion from Non-Tax Revenue.
Launching into his budget speech with a determined air, the Minister of Finance Planning and Economic Development, Matia Kasaijja said, “The theme is in line with that of the East African Community which is ‘accelerating economic recovery and enhancing productive sectors for improved livelihood’.” He spelt out the government goals in the coming year and the medium term. These are to kick-start the process of getting the households still engaged in subsistence into the money economy. Support businesses and the overall economy to recover from the impact of the Covid-19 pandemic and restore the lost jobs and livelihoods as well as protect households from the rising prices of food, fuel, and other essential commodities using prudent economic policies.
He said the size of the economy is projected to expand to UGX162.1 trillion for the financial year ending 30th June 2022.”This is equivalent to $45.7 billion. Economic activity has been more buoyant at the growth rate of 4.6 percent per annum this financial year, up from 3.5 percent of last year. This shows that the economy is on a path to full recovery from the Covid-19 disruptions,” he said.
Leveraging Non-oil Exports for Nigeria’s Export Diversification Agenda (This Day)
One of the biggest challenges facing policymakers across the globe is how to reinvigorate their economies following the COVID-19 pandemic, which disrupted global supply chains and decimated demand leading to losses across various economic sectors. Consequently, policymakers have had to leverage fiscal and monetary tools to stimulate growth. The programmes and initiatives deployed in each economy depend on the needs, challenges, and dynamics at play. For Nigeria, expanding non-oil export has remained a matter of strategic economic importance requiring continual intervention. The impact of the pandemic on oil demand and, by extension, the price of crude oil in the international commodities market further exposed Nigeria’s over-dependency on crude oil earnings and its susceptibility to oil-related vagaries. The events that characterised the pandemic also highlighted the limited range of the country’s exports to foreign markets. While non-oil export is increasingly becoming a major source of foreign exchange earnings for Nigeria, accounting for 11.32 per cent of total exports in 2021, oil still contributes about 76 per cent of the country’s total exports, according to the National Bureau of Statistics (NBS).
The expectation is that export diversification programmes and initiatives will intensify as Nigeria continues to re-orient its export profile and boost foreign currency earnings. In 2020, the Federal Government rolled out an NGN50 billion Export Expansion Facility Programme (EEFP) under the NGN2.3 trillion National Economic Sustainability Plan. The programme is designed to increase Nigeria’s export capacity in the near term and export volumes in the medium term by supporting exporters, especially micro, small and medium entrepreneurs (MSMEs). The EEFP targets sixteen programmes in five areas, including capacity building, financing, market development, infrastructure, and institutional strengthening, and will be implemented by the Nigerian Export Promotion Council (NEPC).
LCCI to leverage Lagos international trade fair for SME devt (The Guardian Nigeria)
The Lagos Chamber of Commerce and Industry (LCCI) has announced plans to drive Small and Medium Enterprise (SME) development in the country. The move, according to the Chamber, is due to the fact that SMEs are veritable tools for economic growth and development. The Vice president and Chairman, Trade Promotion Board, LCCI, Leye Kupoluyi, stated that the Chamber’s goal is to see today’s SMEs grow to become multinationals leveraging the Lagos International Trade Fair (LITF).
“We will continue with our generic theme, “Connecting Businesses, Creating Value”. The aim of this media parley is to continue the excellent relationship existing between the LCCI and the media. We intend to improve on the support and interaction with all our media partners for mutual benefits. This parley will also give us an opportunity to clarify issues on LITF,” he said.
Liberia: Commerce Minister Reaffirms Support for WTO Declaration on Public Health (Liberian Observer)
The Minister of Commerce and Industry, Mawine Diggs, has reaffirmed Liberia’s commitment to the WTO Doha Declaration and supports the current African group position for TRIPS Waiver on health-related products including vaccines. Speaking at the World Trade Organization in Geneva, Switzerland, Minister Diggs further called on her colleagues to demonstrate the true purpose of the work they were called to do by building consensus and delivering a win for the equitable health of the world. Chairing the G7+ WTO Accessions Group – 2nd ministerial meeting on the margins of the conference, Minister Diggs, outlined the core values of the group which aims at forging pathways out of fragility and achieving resilience. She named advocates for the integration of fragile and conflict-affected states (FCS) into the multilateral trading system through alignment with WTO rules and the domestication of WTO-related reforms as a catalyst to transition countries from fragility to peace and sustainable development as the group’s major objective.
Minister Diggs highlighted the need for continuous cooperation among member-states and the Secretariat in supporting acceding countries like Ethiopia, Comoros, Sudan, Somalia, South Sudan, and Timor Leste to meet their objective of integrating in trade multilateralism and acknowledged the WTO Accession Division’s dedication in advancing the negotiations of the above countries in spite of the challenges imposed by the covid-19 pandemic.
World Bank Report: With Peace and Accountability, Oil and Agriculture Can Support Early Recovery in South Sudan (World Bank)
Economic recovery has stalled in South Sudan amid a multitude of crises, including the COVID-19 pandemic, climate shocks and dwindling oil production, and most recently, the adverse effect of the broad-based rise in commodity prices brought on by the war in Ukraine. The latest World Bank economic analysis for South Sudan, Directions for Reform: A Country Economic Memorandum (CEM) for Recovery and Resilience, highlights the need for the country to leverage its natural capital in the agriculture and oil sectors to support recovery and resilience. Oil and agriculture are the most important sectors of South Sudan’s economy, with oil contributing to 90 percent of revenue and almost all exports, while agriculture remains the primary source of livelihood for more than four in five households. Thus, the report suggests a focus on the country’s use of its main endowments of natural capital—oil and arable land—is warranted in the early stages of recovery.
Cameroon triples its price support budget for basic necessities – (Journal du Cameroun)
In the ordinance amending and supplementing certain provisions of the 2022 finance law, currently being ratified by parliament, the provision for ‘supporting essential prices’ has been increased to 40 billion FCFA, is provided for in the initial finance law.
The government explains that this increase is aimed at fighting inflation. But it does not indicate how the money will be used to achieve this end or which products are concerned. It is however certain that fuels are not concerned. An amount of 480 billion F has already been budgeted to subsidise these products.
In order to stabilise the general level of prices, if not to reverse the trend, the National Institute of Statistics (NIS) suggested to the government, in a report published last May, to implement “additional support measures for businesses and households, both comprehensive and targeted”.
African trade and integration news
African Youths Are Catalytic Force to Propel AfCFTA, Says Afreximbank Boss (This Day)
The President of the African Export and Import Bank (Afreximbank), Prof. Okey Oramah has identified African youths as the catalytic force that would propel the realisation of the African Continental Free Trade Area (AfCFTA) initiative. Oramah said this yesterday in his opening address to the Afreximbank 2022 Annual Meetings in Cairo, Egypt, where he declared that Afreximbank Central Bank Deposit Programme (ACBDP) had mobilised $35 billion and attracted 50 participants since its inception in 2019. The theme of the annual meetings is “Realising the AfCFTA Potential in the Post COVID-19 Era: Leveraging the Power of the Youths.”
He also used the address to counter the conclusions of The Economist Magazine in an article titled “Africa’s Ambitious Trade Plan: Need to Speed Up,” which stated that continued political wrangling among Africa’s leaders might squander the promise of freer trade.
Oramah said: “A youth powered AfCFTA will trigger a continental economic expansion; and whether the next decade will become lost decade for Africa will depend on how we creatively deploy the energies and tenacity of our youth to implement the AfCFTA agreement.
“As the youths are technologically savvy, and we believe that it is technology that will bring down the borders, Afreximbank and the AfCFTA secretariat have started to implement a digital AfCFTA called the Africa Trrade Gateway. This will offer the opportunity for the youths to access African market, access payment services and access credit.
East Africa’s private sector wants rules of origin finalised (The Citizen)
The private sector in the East African region wants finalisation of Rules of Origin under the African Continental Free Trade Area (AfCFTA) speeded up.The call was made early this week in Nairobi by the business leaders during a consultative meeting organised on AfCFTA and Tripartite Free Trade Area (TFTA). It emerged at the forum co-organised by the East African Business Council (EABC) and Trade Mark East Africa (TMEA) that 43 out of 55 African countries have ratified the AfCFTA agreement.
Forty five countries have already submitted the schedule of liberalisation plus 87 percent of Rules of Origin for products that have been agreed upon. However, according to Mr Prudence Sebahizi, the chief technical advisor on the AfCFTA at the African Union (AU) Commission, the process is yet to be finalised.
He said products such as textiles and clothing products alone compose 10.5 percent of the outstanding Rules of Origin yet to be finalised under the AfCFTA trade arrangement. Motor vehicle parts and accessories compose 1.4 percent of the outstanding Rules of Origin while tobacco and tobacco substitutes and fish and others compose one percent.
“It is crucial because the outstanding products are central in the East African Community (EAC) regional value chains and job creation,” he said.
Egypt has become symbol of growth resilience in Africa: Afreximbank (Daily News Egypt)
As the only one of the three Africa largest economies (the others are Nigeria and South Africa) where GDP growth expanded strongly even at the peak of the pandemic downturn (3.3%), Egypt has become the symbol of growth resilience for the continent, according to the African Export-Import Bank (Afreximbank).
Afreximbank’s report “Africa’s 2022 Growth Prospects: Poise under Post-Pandemic and Heightening Geopolitical Pressures” highlighted that Egypt is projected to account for 17% of Africa’s combined output expansion in 2022, up from 16% in 2021. The two largest economies, Nigeria and South Africa, are expected to account for 17% and 15%, respectively of aggregate output of the region.
Mombasa Port On Course To Become Africa’s Trade Hub (Kenya News Agency)
Recent mega infrastructure projects by the government, aims to transform the Port of Mombasa into the most efficient and modern port in the region. Mombasa port is the gateway for landlocked countries such as Uganda, Rwanda, Burundi and South Sudan, and has lately witnessed major improvement through multi-billion infrastructural, technology and modern equipment investment.
The new port infrastructure developments are envisaged to firmly consolidate the new era of the port as a critical transport and logistics hub in the region. The port expansion projects seek to transform the Mombasa port, the gateway to East and Central Africa, into the most efficient, competitive, modern and safe port in Africa.
Zambia President says Africa buying its goods through Europe (The East African)
Zambian President Hakainde Hichilema says trade barriers between African countries are stifling the movement of goods to the extent that countries find it easier to buy African products through Europe.On his State visit to Kenya, President Hichilema said the continent must open its borders, implement the African Continental Free Trade Area (AfCFTA) to correct the anomaly, and ease trading between countries instead of using third parties.
Both countries belong to the Common Market for Eastern and Southern Africa (Comesa), a 21-member trading bloc that includes countries as diverse as Tunisia and eSwatini, but all of which belong to the African Union.
Since last year in March, African countries have been implementing the AfCFTA, which is seen as an ultimate solution to gradually eliminate trade barriers and make it easier to move goods between member states, and hopefully raise intra-African trade from the current 14 percent.
“I want to assure you that the Kenya Government will continue to work with its partners in Zambia and across the African continent to continuously remove barriers to trade, continue to improve the ease of doing business, continue to open our borders to our brothers and sisters across the continent,” the President Kenyatta said at the reception. In this context, we have agreed to address the prevailing bottlenecks, including addressing ourselves to a few tariff and non-tariff barriers that bar our people from enjoying the freedom of trade amongst themselves.”
What is the future of Africa’s automotive industry? (The New Times)
Experts argue that the automotive industry can leverage the African Continental Free Trade Area (AfCFTA) to scrape the continent off the tagline of being the ‘dumping site’ of old used vehicles. The long-term impact is quite sobering where EAC has a trade deficit of $2.8billion per year, only for the automotive sector.
“We have been flooded with used old vehicles and there is not a large enough market so that local supply can be viable…if you want to have a good production capacity, you need to have a strong local demand as well as external demand,” Serge Kamuhinda, CEO of Volkswagen Mobility Solutions Rwanda, claimed.
“We need to look at electric and connected vehicles if we want to participate in the continental value chain that is able to be viable within the global value chain of the automotive industry,” Kamuhinda noted.
The CEO said they are working closely with the African Association of the Automotive Manufacturers to build regional hubs, in a sense that one hub in East Africa will be producing one model of vehicles and another hub in West Africa for another kind of model. The end goal is to have cars sold on the continent with enough market size. He added that there is work in progress to have 40 percent of rules of origin under the AfCFTA, meaning vehicles produced on the continent will have 40 per cent local value addition. “Otherwise, there are not enough incentives for the industry to make investments.”
ECOWAS Postpones Plans to Launch Single Currency to 2027 (Business Post Nigeria)
Pan-African multilateral finance institution, the African Export-Import Bank (Afreximbank), has called for an increase in intra-African trade and financing on the back of the continent’s youth and technology resources. Speaking during the 29th Annual Meetings of Afreximbank on Wednesday in Cairo, Mr Benedict Okechukwu Oramah, President and Chairman of the Board of Directors, made a strong case for increasing intra-African trade, providing insight into the challenges restricting trade and providing clear solutions as to how the continent can resolve them. Mr Oramah’s suggestions come at a time when Africa is well-positioned to become a highly competitive trade hub.
A year on, the continent has been slow to unlock the full potential of this agreement, leading to an accelerated push by the Afreximbank to promote intra-African trade and finance in Africa. “While the problem was identified decades ago, it is only now that Africa can boast of possessing a combination of factors that can resolve it. These consist of visionary and committed leadership, the youth, and digital technology. “Our leadership has done the courageous work of giving us the AfCFTA. A lot now hinges on our youth. It is for this reason that Afreximbank dedicated this year’s Annual Meeting to the theme, Realizing the AfCFTA Potential in the Post-COVID-19 Era: Leveraging the Power of The Youth, stated Mr Oramah in his opening remarks.
Burundi, the Democratic Republic of Congo (DRC), and neighboring countries within the Great Lakes Region of Eastern Africa are set to benefit from the new Great Lakes Trade Facilitation and Integration Project approved on June 9, 2022, by the World Bank’s Board of Executive Directors. The $250 million International Development Association (IDA*) financing aims to facilitate cross-border trade and enhance the commercialization of selected value chains, primarily targeting small-scale and women traders in the borderlands of the Great Lakes region. “Local cross-border trade, if properly facilitated, can be an important way to address poverty, food insecurity, conflict, and other socioeconomic vulnerabilities that populations in the border areas face,” said Dr. Chris Onyango, Director of Customs and Trade of the Common Market for Eastern and Southern Africa (COMESA). “We seek to reduce the cost and time to trade and improve the volume and quality of goods that are traded to boost incomes, prosperity, and stability in Burundi, the DRC, and the wider region.”
Africa’s energy transition calls for pragmatic measures to keep the continent competitive (UNECA)
During the United Nations High Level Dialogue in Energy in September 2021 – the first such dialogue in over forty years, the UN Secretary-General – H.E. Antonio Guterres – in his address urged countries to take urgent measures towards the rapid phase out of coal power capacity in OECD countries by 2030 and in the rest of the world by 2040. Mr Guterres noted that efforts must be made to ensure that “…no one is left behind in the race to a net zero future…” and that “…the global energy transition must be just, inclusive, and equitable…”, while recognizing that “…no two national energy transition pathways will be identical…” While Africa’s climate ambition and the drive towards net zero emissions must be relentless, the continent’s energy transition cannot be identical to the rest of the world and needs pragmatic solutions.
The current geopolitical shock arising from the crisis in Ukraine has compounded the severe impacts already being felt by African countries because of the socio-economic impacts increasing climate change and the COVID-19 pandemic. In particular, the war in Ukraine has shifted forward the gear for countries to step up efforts towards the clean energy transition away from fossil fuels to renewable and cleaner energy forms. European countries are rethinking their energy plans and policies. And there is increasing possibility of the use of more coal-fired power plants in Europe, thereby impacting on climate goals. But most importantly, the crisis is causing sharp rises in fuel and food prices globally, with huge impacts on African countries. The crisis has caused European countries to rethink their energy strategy and seek new sources of oil and gas to replace Russian supplies. Meanwhile, the prices of renewable energy technologies have seen sharp increases, after many years of costs declines, at a time when African countries need more deployment of these technologies. This situation calls for renewed thinking on Africa’s energy access, mix and green transition approach, including the role of natural gas in this process.
Gender, Poverty and Environmental Indicators on African Countries 2022 (AfDB)
This is the twenty-second volume of the publication on Indicators on Gender, Poverty, the Environment and Progress towards the Sustainable Development Goals in African Countries by the Statistics Department of the African Development Bank Group. The publication provides information on the broad development trends relating to gender, poverty, environmental issues and the SDGs in the 54 African countries.
The AfDB Statistics Pocketbook 2022 (AfDB)
The AfDB Statistics Pocketbook presents summary economic and social data on regional member countries and operational activities of the African Development Bank Group. Most of the indicators shown are selected from other Bank publications, namely: Compendium of Statistics on Bank Group Operations; Indicators on Gender, Poverty, the Environment, and Progress towards the Sustainable Development Goals in African Countries; and African Statistical Yearbook which contain more detailed information.
Standard Chartered Accelerates Sustainability Commitment In Africa Through Partnership With UNECA and FSD Africa (Africa.com)
In line with Standard Chartered’s vision to be the most sustainable and responsible bank in the world, the Bank today announced its partnership with Ghana’s Ministry of Environment, Science, Technology & Innovation (MESTI), and the UK-funded financial sector development agency FSD Africa as founding members of the African Natural Capital Alliance (ANCA). The Alliance, in partnership with the United Nations Economic Commission for Africa (UNECA), will act as an African-led collaborative forum for mobilizing the financial community’s response to nature-related risks and opportunities across the continent. The ultimate aim of ANCA is to help grow and protect Africa’s natural capital by shifting financial flows from destructive activities for short-term gain to long-term stewardship of nature for sustainable economic growth.
Africa continues to be among the worst hit by the consequences of climate change, despite emitting the lowest levels of greenhouse gases that are driving its impacts. Standard Chartered is committed to shifting capital towards sustainable finance to areas where impact is needed most, with the Bank’s Opportunity 2030 study also showing an investment opportunity of $197 billion being present in funding Africa’s achievement of the United Nations’ Sustainable Development Goals.
Is it Africa’s time, or has the continent’s race been run? (BusinessLIVE)
Is Africa still stretching on the sidelines, or is the continent finally out of the starting blocks in the race to shape the global economy? Many hope the African Continental Free Trade Agreement (AfCFTA) has fired the starter’s gun, but sceptics say this ambitious trade pact may mark more false hope, perpetuating a decades-old replay of Groundhog Day. Is that true, or are the signs more promising than that?
Referencing the late Harvard professor Calestous Juma at a recent Dunning Africa Centre (DAC) webinar at Henley Business School, Francis Mangeni, senior fellow at the Nelson Mandela School of Public Governance and an acknowledged expert on AfCFTA, said: “When it comes to trade, Africa should be one country.” If this is to be the case, the AfCFTA will have to be a game-changer for the continent. To date, political buy-in has been high, with the agreement having been ratified by 42 countries, and there is a solid economic case for what so far has been a legally sound project.
But sceptics will argue that Africa has tried for many years to integrate itself to become a pan-African continent, so what is different now? Some of the common themes around why AfCFTA is doomed to a false start include the often repeated mantra that intra-Africa trade is limited to just 15% of Africa’s total trade. Weak infrastructure criss-crosses the continent, and there is a severe infrastructure deficit among nations. Varying levels of development, and diverse cultures and languages, mean trade-aligned integration is challenging, and the synchronisation of regulations is inharmonious at best. Furthermore, prohibitive bureaucracy continues to pothole border crossings with time-consuming delays and paperwork.
One of the biggest hurdles for Africa is the restricted access to finance. According to Andrew Mold of the UN Economic Commission for Africa, who was also an invited panellist at the DAC webinar, banks are a major block here. Interest rates are high, meaning borrowing is costly and exclusive to a higher-income base. This is out of touch with the majority of Africans and starves entrepreneurial green shoots from the sunshine needed to grow.
Morocco Hosts the 14th US-Africa Business Summit (Modern Diplomacy)
After several negotiations, the Corporate Council on Africa (CCA) has finally launched its 14th US-Africa Business Summit from July 19 to July 22 under the theme ‘Building Forward Together’ and will be held in Marrakech (Morocco) in partnership with Africa50 (the pan-African infrastructure investment platform) and the Kingdom of Morocco.
United States investors are looking forward to exploring several opportunities in the African Continental Free Trade Area (AfCFTA), a policy signed by African countries to make the continent a single market. The market, with estimated 1.3 billion population, requires all kinds of consumable products and new legislations stipulate localizing production inside Africa. Thus the summit will further explore a renewed commitment by both public and private sector stakeholders to building stronger United States and Africa trade, investment, and commercial ties, emerging from unprecedented health and economic challenges for the past two years.
Global economy news
Director-General Ngozi Okonjo-Iweala called today (14 June) on members to go the extra mile to find convergence on the various issues at stake at the 12th Ministerial Conference (MC12) and to be mindful that time is running out to conclude meaningful agreements. On the third day of the ministerial gathering, WTO members continued efforts towards reaching a long-awaited agreement on curbing harmful fisheries subsidies and reaffirmed their intention to pursue convergence on texts related to agriculture.
The DG noted that some delegations approached her to suggest that MC12 could go on for an extra day. “They feel that we really can cross the line on some of these things if we gave it a bit more time, so I just throw that out there for your consideration. We can all sleep over it and perhaps we will take the pulse tomorrow to see if that is needed or not,” she added.
Subsequently, MC12 has been extended by one day until Thursday, 16 June 2022, to facilitate outcomes on the main issues under discussion.
DG Okonjo-Iweala receives priorities for MC12 from business community, briefs civil society (WTO)
The Director-General briefed close to 80 representatives from a wide array of civil society groups on the ongoing negotiations and potential deliverables on the WTO response to the pandemic, including the TRIPS waiver, food security, fisheries subsidies, agriculture, WTO reform and the moratorium on imposing customs duties on cross-border electronic transmissions. “The good news is that work is going on across the board,” she said, describing members’ intensive negotiations aimed at resolving differences to arrive at consensus at MC12. “The bad news is that we are running out of time.” DG Okonjo-Iweala said: “Achieving results at MC12 is important for the credibility of the multilateral trading system.” She highlighted the importance of decision-making through multilateral consensus at the WTO, particularly because it gives developing country members a clear voice in the negotiations. For this reason, she said, it was important for members to reach multilateral agreements – to demonstrate that the multilateral instrument can deliver results.
pdf MC12 International Chamber of Commerce (ICC) Statement (282 KB) - June 2022
Rocky path to Geneva: WTO ministerial is taking place amid low expectations for a successful outcome (The Financial Express)
All bets are off whether the World Trade Organisation’s 12th Ministerial Conference (MC 12), held in Geneva from June 12-15, delivered a successful outcome for India and developing countries. Ministerial deliberations are being extended by a day to cobble up deliverables if compromises are made at the eleventh hour. Since its inception 27 years ago, WTO has managed only one update on trading rules with respect to trade facilitation, which came into force five years ago. This highest decision-making body seeks to address the challenges of making a rules-based multilateral trading system more relevant in a world where the devastation wrought by Covid-19, climate change, and geopolitical tensions have upset global trade.
MC 12’s deliberations were broadly around four main pillars plus, notably, WTO’s response to the pandemic, fisheries, agriculture, WTO reform plus other issues. These four pillars are critical issues on which India and developing countries have major stakes. It says a lot about the extremely low expectations around MC 12 when the WTO Director-General, Ngozi Okonjo-Iweala, stated that “even landing one or two (deliverables) will not be an easy road.”
Civil society organisations urge trade ministers to demand ‘real TRIPS waiver’ (Hindustan Times)
India’s position on patent waivers at the World Trade Organization (WTO) to cover Covid-19 vaccines, diagnostics and therapeutics got an unexpected boost on Wednesday with a group of more than 150 civil society organisations, including Doctors Without Borders and Oxfam urging trade ministers not to accept the current negotiating text. Doctors Without Borders or Médecins Sans Frontières (MSF), The People’s Vaccine Alliance, Oxfam, Section27 of South Africa and the other organisations have called on trade ministers at the WTO to demand a real waiver.
The group of civil society organisations sent a letter to trade minsters negotiating the draft ministerial decision on the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement at WTO’s conference in Geneva, urging them “not to accept the current negotiating text, which represents backsliding that could set a negative precedent for access to medicines and medical tools”. The group asked governments to adopt a “real TRIPS waiver that will adequately address intellectual property on all essential Covid-19 medical technologies, including treatments, tests, and vaccines during the ongoing pandemic that has claimed more than 15 million lives”, according to a joint statement.
pdf MC12 WTO CSOs call on ministers to reject current draft of TRIPS Decision: Press release (43 KB) - 16 June 2022
Customs Matters: Strengthening Customs Administration in a Changing World (IMF)
Customs administrations around the world face new challenges: an increasing volume of international trade, a revolution in new technologies, and fundamental changes in business models. The benefits of a well-performing customs administration are clear, as is the need to develop efficient, effective, fair, and modern customs administrations. Customs Matters analyzes the many changes and challenges customs administrations face and pro-poses ways to address them. By offering a cross-sectional view of the main aspects of customs ad-ministration, the book guides policymakers and customs officials as they evaluate the current state of their customs system with a view to developing, reinforcing, or relaunching their own roadmaps for customs modernization.
Russia’s War in Ukraine Is Taking a Toll on Africa (United States Institute of Peace)
Speaking at the U.S. Institute of Peace on June 14, Eziakonwa, who serves as the U.N. Development Programme’s assistant administrator and regional director for Africa, said the war has put households, communities and countries across Africa in a “very precarious situation.” Joseph Sany, vice president of the Africa Center at USIP, said: “The critical question before us today is: How can African countries and their partners leverage their abundant resources and human capabilities to address the short-term impact of Russia’s invasion in Ukraine and advance their long-term development and security needs?”
In response to the pandemic, African countries put in place effective macroeconomic policies, made strategic investments and boosted COVID-19 vaccine production and rollout. “While multilateralism appeared to be shrinking in the rest of the world, it was expanding in Africa,” Eziakonwa said. By the end of 2021, Africa exceeded expectations of a 3.7 percent GDP growth, recording a 4.5 percent growth and “showing its resilience and its muscle to bounce back,” Eziakonwa said.
On February 24, Russia invaded Ukraine in an unprovoked act of aggression. The aftershocks of the ongoing war are being felt around the world, including in Africa. While the level of trade between the African continent as a whole and Russia and Ukraine is insignificant, some African countries rely heavily on these two countries for critical imports, particularly wheat, fertilizers and steel. A disruption in these imports could adversely impact African countries.
Conference on the Promotion of Good Governance and Fight against Corruption (AU)
On June 13-14, 2022, the IMF’s Africa Training Institute (ATI) and the Department of the Economic Development, Trade, Tourism, Industry, and Minerals (ETTIM) of the African Union Commission (AUC) organized a high-level conference in Gaborone on the promotion of good governance and the fight against corruption within the context of the COVID-19 pandemic and multiple crises. The conference helped to build consensus about good governance as a critical enabler for macroeconomic stability in Africa. Welcoming the delegates to the conference, the Minister of Finance Hon Peggry Serame, in a speech delivered on her behalf by the Secretary for Development and Budget, Mr Olesitse H Masimega highlighted that weak governance and corruption impose a burden on the government budget due to continuous and elevated public expenditure on programmes that fail to deliver the expected outcomes. Opening the conference, IMF Deputy Managing Director Antoinette M. Sayeh said “Countries that have strong economic institutions respond more effectively to crises and are better prepared for a resilient recovery. And that is true across any level of development.” The importance of reforms in this regard has proven true during the pandemic where countries with stronger institutions have been able to mount more effective responses.
Countries step up efforts to close wheat supply gap (The New Times)
Other countries like Argentina, Brazil, India, have stepped in to fill the global wheat supply gap that was created by the Russia-Ukraine war, The New Times has learnt. Russia and Ukraine have been major players in the global wheat market, but the war waged by the former on the latter has disrupted the supply of this staple cereal worldwide.
Faradjallah Ndagano, Company Relations Affairs Manager at Bakhresa Grain Milling Rwanda Ltd/AZAM – a major wheat processor in the country – said that the firm buys wheat from the international commodity markets where the cereal from various countries is traded. “There is no shortage of wheat supply. The global market is not dormant, they [players in it] are dynamic as they look for other places to source the cereal such that their customers do not lack wheat,” he told The New Times.
Ndagano said countries like Argentina, Brazil, India, and [some countries in] Europe have started supplying wheat to the global market. “It depends on the [wheat] produce they have got. Once they have met their food needs, they take the surplus to the international market,” he said.
Commenting on prices, he said they keep changing as a result of different factors including the wheat output, and challenges of the day, but indicated that of course, the war somehow contributed to the prices.
Meanwhile, The New Times observed that even the traders that did not increase the price of bread and other wheat flour derived products, reduced their size as an attempt to prevent incurring losses from the rising wheat costs.
Climate change: More fossil fuel investment, just ‘delusional’, warns Guterres (UN News)
António Guterres was speaking at the Sixth Austrian World Summit on the climate crisis, convened by the Austrian Government and former Governor of California and Hollywood actor turned climate activist, Arnold Schwarzenegger. Mr. Guterres repeated his call for G20 leading economies to “dismantle coal infrastructure, with a full phase-out by 2030 for OECD countries and 2040 for all others.”
He said renewable energy was “the peace plan of the 21st century” and called on fossil fuel finance to be abandoned wholesale, in favour of the green alternative. “The only true path to energy security, stable power prices, prosperity and a liveable planet lies in abandoning polluting fossil fuels, especially coal, and accelerating the renewables-based energy transition”, he declared.
The African Development Bank Group hosted a workshop to explore securing a just transition in the developing world. The session, which took place during the World Bank’s Innovate4Climate Conference, highlighted the importance of South-South cooperation .
Innovate4Climate 2022, organized by the World Bank, took place over three days, from 24-26 May and featured plenaries and workshops. The event provided a forum for practitioners to demonstrate how to achieve a resilient and low-carbon future.
With a large oil-and-gas sector, the country has many workers that the transition will negatively impact. To mitigate these impacts, the government has incorporated renewable energy into energy efficiency technology to ease the transition for existing workers and create career opportunities. “We are not implementing a climate change or energy-only approach, but a holistic approach to transition toward a global paradigm shift, “ Kishan Kumarish, Head of the Minister of External Affairs Unit in the Trinidad and Tobago Ministry of Planning and Development said.
BRICS meet: NSAs discuss new threats and challenges to national security (Business Standard)
Top security officials of the BRICS countries have held an in-depth exchange of views and reached a consensus on issues such as strengthening multilateralism and global governance and responding to new threats and challenges to national security.
National Security Advisor Ajit Doval on Wednesday attended via video link the 12th Meeting of BRICS (Brazil, Russia, India, China and South Africa) National Security Advisers and High Representatives on National Security. The meeting also discussed strengthening and improving governance in new frontiers, the state-run Xinhua news agency reported.
In his address, Yang Jiechi, the director of the Office of the Foreign Affairs Commission of the Communist Party of China (CPC), said the BRICS was born in the historical tide of the collective rise of emerging markets and developing countries and represents the direction of the evolution and adjustment of the world pattern and international order. He called on the five countries to follow the trend of times, respond to changes of the times and inject more stability and positive energy into the turbulent international situation.
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DG Okonjo-Iweala: Time is running out to reach credible outcomes at MC12
Director-General Ngozi Okonjo-Iweala called today (14 June) on members to go the extra mile to find convergence on the various issues at stake at the 12th Ministerial Conference (MC12) and to be mindful that time is running out to conclude meaningful agreements. On the third day of the ministerial gathering, WTO members continued efforts towards reaching a long-awaited agreement on curbing harmful fisheries subsidies and reaffirmed their intention to pursue convergence on texts related to agriculture.
With less than 24 hours left before the scheduled closing of MC12, the DG told members at a meeting of Heads of Delegations (HoDs) that a great amount of hard work has been going on in each and every negotiating process but that more time might be needed in order to come to a conclusion.
“It requires that we work harder and work nights, whatever it takes to be able to do it. The good news is … that progress is being made but it needs a little more work and more time,” said DG Okonjo-Iweala. “The not so good news is that we are running out of time, so I think it is really time for ministers to make the requisite decisions that need to be made.”
The DG noted that some delegations approached her to suggest that MC12 could go on for an extra day. “They feel that we really can cross the line on some of these things if we gave it a bit more time, so I just throw that out there for your consideration. We can all sleep over it and perhaps we will take the pulse tomorrow to see if that is needed or not,” she added.
Timur Suleimenov, First Deputy Chief of Staff of the President of Kazakhstan and MC12 Chair, said: “I think this is something that we need to consider, and we will come back to this issue tomorrow.”
UPDATE: MC12 has been extended by one day until Thursday, 16 June 2022, to facilitate outcomes on the main issues under discussion
Mr Suleimenov stressed that additional meetings will continue in various configurations and reiterated the sense of urgency. “This is crunch time obviously. And regardless of whether we will have an extra day or not, we need to utilize the time remaining to the fullest extent,” he added.
The MC12 Chair reported on the thematic sessions that took place today — on fisheries subsidies and agriculture — where, he said, he did not witness the same flexibility and self-restraint expressed by members in the thematic sessions of the previous day on the WTO response to the pandemic, including the intellectual property (IP) response, and on trade and food security. “WTO members' positions were not as flexible as I would have wished them to be at this point,” he said.
Echoing the statement by the Director-General, Mr Suleimenov indicated that members know by now what is doable, what needs more time for discussion and what is not possible. “Any attempt to backload the final 22 hours of this conference only increases the chance that all of us will go home empty handed. And I know that this is contrary to what the world expects from us,” he added.
He made an appeal to “start blessing outcomes” to ensure the success of MC12. “With your collective will, we should be able to close those issues. In other areas where there is no agreement, there is a need to intensify efforts to bridge gaps and provide much needed ministerial guidance.”
The meeting of the Heads of Delegation was preceded by a morning thematic session on fisheries subsidies, facilitated by Damien O'Connor, Minister of Trade and Export Growth of New Zealand, and an afternoon thematic session on agriculture, facilitated by Betty Maina, Cabinet Secretary for Industrialization, Trade and Enterprise Development of Kenya.
Minister O'Connor said that overwhelmingly statements made by members stressed the need to conclude an agreement after more than 20 years of discussions. “I am, as always, optimistic about what I have heard today and that we can get to agreement,” said Minister O'Connor, who together with the chair of the fisheries subsidies negotiations, Ambassador Santiago Wills of Colombia, will continue to consult and meet with members in different configurations to reach an outcome.
“It's also clear that for most of you the differences are not that big, and that they are within the ranges of the draft text. Having said that, it's clear that there are some members that are outside the ranges that we have talked about. I'm not questioning the reasoning behind these positions, but I would note that they do not seem to have attracted convergence or consensus,” he added.
A total of 67 members took the floor during the fisheries thematic session, which was preceded by a press conference to introduce the fisheries funding mechanism.
On agriculture, Cabinet Secretary Betty Maina also noted the overwhelming majority in support of continuing the discussions, even having expressed the view that the text on the WTO agriculture negotiations may not represent the full extent of the ambition some members would have liked to see for such an important subject. “Nevertheless, there is an indication of commitment to continue discussing all the specific concerns of different countries after MC12, and hopefully approach MC13 with some greater progress.”
She thanked members who expressed readiness to restrain themselves from amending the existing language so that a decision can be reached before the end of the Conference. “For those who still have concerns, I hope I can persuade you that we can work on a work programme to address the concerns that you still have after this meeting so long as we can reach a decision to continue the discussion,” she said.
Jerome Walcott, Minister of Foreign Affairs and Foreign Trade of Barbados, updated members on the negotiations for a WTO response to the pandemic, including the TRIPS waiver. Keisal Peters, Minister of State with Responsibility for Foreign Affairs and Foreign Trade of Saint Vincent and the Grenadines, outlined the work done on the e-commerce work programme and moratorium.
Kamina Johnson Smith, Minister of Foreign Affairs and Foreign Trade of Jamaica and facilitator on WTO reform, said that members made progress but have not managed to bridge the remaining gaps and narrow the differences to reach convergence on the forum for reform. “Today's conversations have reconfirmed that we all agree on the need to reform and it's in this context that I urge you all to agree that we commence this crucially important conversation, post MC12,” she said.
Minister Johnson Smith will update members at the thematic session on this issue on 15 June, where she will present a report on the intensive consultations that she has been conducting in various configurations over the past few days.
Finally, the MC12 Chair told members about his efforts related to some outstanding matters in the MC12 outcome document. His consultations focused on the three paragraphs that are still bracketed, indicating lack of consensus, and presented separately at the end of the text, as put forward by proponents.
These are related to women's economic empowerment, micro, small and medium-sized enterprises (MSMEs), and environment. “I understand that there is large support to remove the brackets around these paragraphs, but so far, regrettably, no consensus has emerged,” he said.
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Progress made in Port of Durban repairs (SAnews)
The Department of Public Enterprises (DPE) has hailed Transnet Freight Rail (TFR) for the “significant progress” made in repairs to its Durban Rail and Ports following the heavy rains and flooding in that area in April. The Port of Durban is one of South Africa's most important freight ports and serves as a gateway to Gauteng.
“The recovery from the damage caused by the flooding in KwaZulu-Natal will enable exporters and importers that utilise the Port of Durban to return to normality and Transnet will endeavour that all shipping lines continue to service the Port of Durban.
“Much work still needs to be done in the south basin area and Transnet continues to work with the province, municipality and other stakeholders in that area to ensure that work is concluded speedily,” the department said in a statement.
Positive perceptions of South Africa as an EU investment destination, but challenges remain (Engineering News)
There are positive perceptions from potential investors to South Africa, and continued interest among existing investors in the country, despite impacts such as the Covid-19 pandemic and the July 2021 civil unrest; however, it is critical that challenges be addressed to engender even more interest. This was highlighted by European Union (EU) Chamber of Commerce and Industry of Southern Africa chairperson Rui Marto on June 14, presenting the key findings of two studies undertaken by the chamber between November 2021 and March this year.
New Financing Agreement to Boost South Africa’s COVID-19 Vaccination Program and Health System (World Bank)
Today, the World Bank Group Board of Executive Directors approved a 454.4 million euro (ZAR 7.6 billion or $480 million) loan for South Africa’s COVID-19 Emergency Response Project. The loan comes following a request by the Government of South Africa (GoSA) for assistance in financing vaccine procurement contracts. Specifically, this project will retroactively finance the procurement of 47 million COVID-19 vaccine doses by the GoSA. South Africa is the epicenter of the COVID-19 pandemic in Africa, with the highest cumulative numbers of infections and deaths. By supporting the country’s COVID-19 vaccination program, the project will help the government better cope with the pandemic, as the country experiences its fifth wave, and support the GoSA to create the fiscal space needed to strengthen its health system and ensure financial and institutional sustainability.
Uhuru roots for better ties between Kenya, Barbados (The Standard)
President Uhuru Kenyatta has emphasised the need to enhance transport connectivity between Kenya and Barbados to boost the mutually beneficial ties the two countries enjoy. The president said that the two countries possessed great potential that could be harnessed for the benefit of their citizens if transport hurdles that are an impediment to trade and interpersonal interactions were addressed. The transport impediments include lack of direct flights to and from the Caribbean nation.
Noting that Kenya is a big agricultural producer while Barbados boasts of being a strong financial hub, Uhuru said increased people-to-people interaction through improved transport connectivity will accelerate economic growth and create jobs for the youth of the two countries.
Kenya, US revisit trade talks, agree to expedite process (The Star, Kenya)
Kenya and the US have revisited trade talks between the two countries as ministers meet at the World Trade Organization's 12th Ministerial Conference in Geneva. As a next step, the two countries have agreed to work to finalise a list of areas for cooperation to deepen economic engagement. This was during an engagement between the US Trade Representative ambassador Katherine Tai and Kenya’s Industrialization, Trade and Enterprise Development Cabinet Secretary Betty Maina. The two have agreed to meet again in the coming weeks to announce next steps before end of next month (July).It will build on the successful consultative meeting of experts from the two countries held in Kenya in May 2022.In a statement yesterday, the US said ambassador Tai and CS Maina agreed to explore pathways towards a deeper bilateral trade and economic relationship that promotes sustainable and inclusive economic growth.
They are also keen on a deal that benefits workers, consumers, and businesses (including Micro, Small and Medium-sized Enterprises),and one that supports African regional economic integration.
Uganda faces storm in a coffee cup (African Business)
Coffee has rarely been out of the headlines in Uganda this year. In February the finance ministry signed an agreement with the Uganda Vinci Coffee Company – a mysterious firm, led by an Italian businesswoman, which promised to build a factory processing 60,000 tonnes of coffee annually. The deal sparked outrage, not least because it gave Vinci huge tax breaks and priority supply. In May a parliamentary inquiry found that the deal was “unconstitutional, illegal, void and unenforceable”, and parliament voted to terminate it.
In June, in his state of the nation address, President Yoweri Museveni hit back. “The continued export of raw materials by Africa is the new form of slavery,” he said, explaining why he was willing to offer such generous incentives for the processing factory. “The farmers are now cheated because the biggest beneficiaries from our coffee are the external roasters, grinders and packers of coffee.” Although there was suspicion about the president’s real motives, few could dispute the point he was making. Uganda is Africa’s largest coffee exporter by volume, which earned it $627m in 2020/21. Yet most of the value is captured elsewhere, in an international market dominated by European and American traders.
Exports value of Tanzania's manufactured goods hits 1.3tr/- in April (IPPMedia)
The Bank of Tanzania (BOT) and Tanzania Revenue Authority (TRA) data show the value of manufactured goods increased by a third to 1.3tr/- during the year ending April 2022, higher than 1trn/- recorded in April last year. The amount is nearly half of total value of gold exports of 2.7trn/ recorded during the year ending April, 2022 or the total value of traditional exports, horticultural products and cereals combined. The sharp rise of manufactured goods according to BOT and TRA data were on textiles, cereals, paper and paper products, iron and steel. Most of the manufacturing activities in Tanzania centered on simple consumer products such as foods, beverages, tobacco, textiles, chemicals, plastic, wood and steel allied products. This has also increased the value and volume of industrial supplies imports, as the report shows they increased by 39 percent to $3.8 billion during the year ending April, 2022 from $2.7 billion recorded in 2021.
Nigeria is in a paradoxical situation: growth prospects have improved compared to six months ago but inflationary and fiscal pressures have increased considerably, leaving the economy much more vulnerable, highlights the latest World Bank Nigeria Development Update (NDU).The report, titled “The Continuing Urgency of Business Unusual,” says that inflation in Nigeria, already one of the highest in the world before the war in Ukraine, is likely to increase further as a result of the rise in global fuel and food prices caused by the war. And that, the World Bank estimates, is likely to push an additional one million Nigerians into poverty by the end of 2022, on top of the 6 million Nigerians that were already predicted to fall into poverty this year because of the rise in prices, particularly food prices.
African trade and integration news
Long-awaited Africa free trade area takeoff delayed by six states (The East African)
Six countries drawn from three regional economic blocs are yet to ratify the African Continental Free Trade Area (AfCFTA), delaying its implementation more than a year after it was formally launched in January 2021. The AfCFTA, a brainchild of the African Union’s integration and prosperity Agenda 2063, was supposed to create one large market for its member states. But more than a year after inception, some countries are still dragging feet in adopting its legal framework in domestic laws. In the East African Community (EAC), South Sudan is yet to ratify the AfCFTA and in Southern African Customs Union (SACU), Botswana is yet to ratify and deposit its instrument of ratification.
A second coordination meeting of the Heads of Regional Economic Communities held in Arusha on June 7 also revealed that Benin, Guinea Bissau and Liberia, members of the Economic Community of West African States (Ecowas), are yet to become State Parties.
“While it is now possible for State Parties whose Customs procedures are ready to trade under the AfCFTA preferential terms, no trade is taking place. There remain a few outstanding issues hampering our collective efforts to facilitate effective trading under the AfCFTA preferential trading regime,” said Wamkele Mene, Secretary-General of the AfCFTA at the meeting in Arusha.
Africa CEO Forum: Artificial intelligence, taxation, AfCFTA – the tools of independence (The Africa Report)
"How do we want to be remembered in history? As simple consumers? Or as transformers of our potential and resources?" With this question, Kate Fotso, the boss of Cameroon's Telcar Cocoa, sums up the challenge that Africa must take up to build its economic independence. This debate, at the heart of the Africa CEO Forum held in Abidjan, was discussed during a round table on 13 June. The starting point is clear: Africa’s dependence on the outside world is greater than that of other continents, with 84% of its trade being with the rest of the world. “It is no coincidence that Africa, the continent that trades the least internally, is also the poorest,” pointed out Ghana’s President Nana Akufo-Addo, seeing the development of the African Continental Free Trade Area (AfCFTA) as the only way out for African countries. A few moments earlier, at the opening ceremony, Côte d’Ivoire’s President Alassane Ouattara said much the same thing. “The current crisis has revealed the vulnerabilities [of globalisation] and marks a calling into question of international trade. This is very disturbing for developing countries,” the Ivorian head of state warned.
7 ways to accelerate implementation of the AfCFTA (Brookings)
Despite the groundswell of popular support expressed for the African Continental Free Trade Area (AfCFTA), concerns have grown about the slow progress of its implementation in recent months. Contrary to expectations, 2021 did not start with a bang, but with skepticism among senior trade officials, which also spilled over to the private sector. Trading was put on hold as negotiations dragged on, particularly on rules of origin and tariff schedules—an indictment that technical level processes had not kept pace with the political decisions. What, then, should happen to take the AfCFTA to the next stage to become a functional agreement? We propose the following:
1. Don’t wait for the conclusion of the negotiations.
2. Focus initially on the largest continental traders.
3. Prioritize the elimination of barriers to imports.
15 most underdeveloped countries in Africa, based on UN's Human Development Index (Business Insider South Africa)
Over the years, the United Nation's Human Development Index (HDI) has become the most widely used and universally agreed tool for gauging countries' developing status.
Some of the key indicators tracked by the HDI are: life expectancy rate, adult literacy rate, gross national income per capita, access to the internet, etc. Business Insider Africa understands that these indicators are all compiled into a number between 0.00 and 1.00. Countries that score very low on these indicators (0-0.55) are classified as having low human development ratio.
Here are Africa's least-developed countries - Niger: Has a human development index of 0.394. Central African Republic: Has a human development index of 0.397. Chad: Has a human development index of 0.398. South Sudan: Has a human development index of 0.433. Burundi: Has a human development index of 0.433. Mali: Has a human development index of 0.434. Sierra-Leone: Has a human development index of 0.452. Burkina-Faso: Has a human development index of 0.452. Mozambique: Has a human development index of 0.456. Eritrea: Has a human development index of 0.459. Guinea: Has a human development index of 0.477. Liberia: Has a human development index of 0.480. Guinea-Bissau: Has a human development index of 0.480. Democratic Republic of Congo: Has a human development index of 0.480. Malawi: Has a human development index of 0.483.
The African Union Commission (AUC) is set to convene the 2nd Extraordinary Session of the Specialized Technical Committee on Transport, Transcontinental, and Interregional Infrastructure, and Energy (STC-TTIIE) from June 14th -16th to consider pressing issues pertaining to the Russia-Ukraine Crisis, CoP27 and pending decisions under the transport sector.
The meeting scheduled to take place via video conference is expected to discuss the impacts of the Russia-Ukraine Crisis on Africa’s energy and infrastructure sectors whose knock-on effects transcend across many sectors. The session is especially expected to review a paper titled ‘Implications of the Russia-Ukraine Crisis on the African Energy and Infrastructure Sectors’ that aims at proposing imperative actions to mitigate the impacts and, support Member States to manage arising risks. Another critical topic to be tabled before the 2 nd extraordinary session of the STC-TTIIE is a paper on Common African Position on Energy Access and Transition to be presented for the CoP27 set to happen in Egypt in November this year. The paper highlights Africa’s short, medium and long-term priorities for energy transition while devising an apt approach to address the huge energy access gap in the continent compared to other regions despite the resource abundance.
H.E. Dr. Amani Abou-Zeid, African Union, Commissioner for Infrastructure and Energy, says Africa has great expectations from the COP27 which is happening on its soil for the fifth time. The Common Position is thus meant to clearly put Africa’s expectations, pathways, and demands on the global climate agenda considering its strides to achieve the Universal Energy Access stipulated under goal 7 of the SDGs. “The COP in Sharm El-Sheikh is very critical for the continent as we seek to speak in one voice regarding our priorities on energy access and transition, and push for the outcomes to recognize and embrace Africa’s unique realities,” added the Commissioner.
The 2nd STC-TTIIE is also expected to consider and adopt agenda items under the transport sector including the Dispute Settlement Mechanism for the Single African Air Transport Market (SAATM), policy guidelines for negotiation of air services agreements between African countries and other countries and regions as well as the final report of the study on African Road Safety Observatory (ARSO).
Digital rights forum calls for more digital transparency & protection across Africa (Technology Zimbabwe)
While many governments in Africa have made welcome progress toward digital transformation in the last year, more work needs to be done towards offering transparency, digital inclusion, and the protection of digital rights to citizens across the continent. This was the main finding of the Londa report, launched recently at the Digital Rights and Inclusion Forum (DRIF) 2022.
The Londa report features contributions from digital rights and inclusion experts from 22 African countries, and its findings are a timely assessment of the state of digital rights and inclusion in Africa. It provides recommendations on what each country must do to move towards realising the huge gains that rights-respecting and inclusive digital policies and practices bring. Furthermore, it calls on governments to set policies ensuring a free and open Internet, which is safe for all, while working with relevant stakeholders to eliminate online violence, bullying, hate speech and misinformation.
The report states that there have been some notable positive developments in the last year. Rwanda and Zambia’s governments, for example, have enacted legislation concerning data protection and privacy.
Stakeholders in Africa strategise on sustainable fish production in continent (Nigerian Tribune)
As Africa looks forward to end hunger by 2025, stakeholders in the fisheries sector in the African continent have converged in Abuja to chart way forward in closing the deficit in fish production. The meeting also sought to review the progress made at the Fisheries Governance project phase 1 and develop work plan for the phase 2 of the project. The Director African Union – Interafrican Bureau for Animal Resources (AU-IBAR), Dr Nick Nwankpa in his address, said the Regional Economic Communities (the RECs) are strategic regional institutions with the political mandate for regional integration agenda, enhancing regional cooperation and fostering regional policy coherence. He said the Fisheries Governance project (FishGov) Phase 2 project therefore considered the RECs as important partners in facilitating the implementation of the Project at regional and national levels.
Dr Nwankpa said the project would leverage on their unique mandates to promote regional cooperation on issues of fisheries and aquaculture to gain political commitments and facilitate the implementation of activities that are regional in nature.
“The African Fisheries Reform Mechanism and the policy framework and reform strategy for fisheries and aquaculture in Africa underscored the importance of regional collaboration, coordination and coherence in the governance of the African fisheries and aquaculture sector.
AFF calls for enhanced integration of nature-based solutions for climate resilience in Africa (Myjoyonline)
The African Forest Forum has called for enhanced integration of nature-based solutions for climate resilience in Africa. Nature-based solutions have been recognised as important elements in forest conservation, sustainable use, and restoration to address climate change mitigation and adaptation.
An AFF hybrid side event titled “Strengthening forest management for enhanced livelihoods and resilience in a changing environment in Africa,” which took place, in Seoul, South Korea, last month examined the continent’s transition to a green and resilient future, as well as other crucial challenges.
Executive Secretary of the African Forest Forum (AFF), Prof. Godwin Kowero, stated that while international forest policy dialogue had aided in the development of a green and resilient agenda for the African continent, more work was needed to improve synergies across related agreements and processes.
According to him, the frequently difficult and complex challenges associated with implementing these processes necessitated a comprehensive reassessment of the continent’s prevailing policy approaches.
ECOWAS Court laments poor law application by member states (Daily News Egypt)
ECOWAS Court of Justice has complained about the poor application of community law by the national courts of member states. The court stated that this impacts negatively on the growth of the law and the region’s integration project. “In twenty years of operation, the Court has never been seized of a referral by a national court”, said Vice President Justice Gberi-be Ouatttara. Ouatttara spoke at the opening of the first ordinary session of the 2022 ECOWAS Parliament.
The judge expressed concern about the absence of nationally designated focal points for the execution of the court’s decisions in many member states. He further lamented that states were taking too long to trigger the procedure for the domestication of the instruments and urged them to make amends.
Global economy news
Twelfth WTO Ministerial Conference – Geneva: Resource page (tralac)
The WTO’s 12th Ministerial Conference (MC12) is taking place on 12-15 June 2022 at WTO headquarters in Geneva, Switzerland. Ministers from across the world will have the opportunity to review the functioning of the multilateral trading system, to make general statements and to take action on the future work of the WTO. Originally scheduled to be hosted by Kazakhstan in June 2020, the Conference was postponed due to the COVID-19 pandemic. tralac is carefully monitoring this process.
WTO response to the pandemic, trade and food security take centre stage at MC12 (WTO)
The thematic sessions were followed at the end of the day by a meeting of Heads of Delegations, where the WTO Director-General Ngozi Okonjo-Iweala said she is hopeful that members “will be gaveling agreements as quickly as possible to close on those areas where we have been able to converge and find landing zones”. DG Okonjo-Iweala noted that the thematic sessions “provided a glimpse of where we could be a day from now or two days from now.”
Beyond ODA and Aid for Trade: The critical value of alternative trade funding (Trade for Development News)
Least Developed Countries (LDCs) have continued to struggle with the challenges that led to the development of the category over 50 years ago. Periods of economic growth have been generally insufficient to address the challenges of long-term income divergence with the rest of the world. With a share of global trade which continues to hover around 1 per cent, the economic effects of the COVID-19 pandemic have further dampened prospects for some convergence with the rest of the world. The added challenge of the climate crisis has amplified vulnerabilities for many LDCs that are at the intersection of climate and economic impacts.
Official Development Assistance (ODA) has remained a key source of financing for many LDCs rising to about USD 33 billion in 2021 according to preliminary data from the OECD. One of the key ways ODA is channelled to LDCs is through Aid for Trade. OECD statistics on Aid for Trade drawn from the Creditor Reporting System (CRS) shows Aid for Trade disbursements increased on an average of 6.6% per year since 2006. Support to LDCs has also grown at a sustained pace of around 8.2% to 8.4% per year. Most recent developments such as global conflicts may have impacts on Aid for Trade, preliminary indications also point to a re-alignment of priorities that might have implications on Aid for Trade disbursements in the short to medium term at least.
WTO goes green as climate change impacts trade (EURACTIV)
The World Trade Organisation’s boss insisted Monday (13 June) that turning trade green was now urgent business, with the WTO putting climate change at the heart of its negotiations. The WTO is staging its first meeting of trade ministers in nearly five years and environmental issues are rocketing up the agenda at the global trade body.
“Greening trade is urgent: climate change isn’t waiting,” WTO chief Ngozi Okonjo-Iweala said after attending the new coalition’s launch on day two of the WTO ministerial conference in Geneva. EU trade commissioner Valdis Dombrovskis said the new group would try to tackle the climate crisis in a fair manner through trade policy. “Trade has to be part of the solution. It is an engine of growth that can create new green jobs, reduce poverty and support the transition to climate-neutral economies,” he told the group’s launch.
WTO, UN-OHRLLS sign pact to better engage LDCs in global trade (Fibre2fashion.com)
World Trade Organisation (WTO) director general Ngozi Okonjo-Iweala and Sandagdorj Erdenebileg of the UN High Representative for Least Developed Countries (LDCs) recently signed a partnership agreement in Geneva aimed at strengthening cooperation to boost participation of LDCs in the global trading system. It was signed on the eve of the 12th Ministerial Conference (MC12). Trade ministers and WTO ambassadors from over 40 LDCs attended the ceremony.
“LDCs have a special place in the multilateral trading system. Over the last decade, our members have provided increased trade opportunities to expand LDC exports and the WTO remains the main forum to achieve the Doha Programme of Action targets in the area of trade,” Okonjo-Iweala said.
Strengthening pandemic defenses will require deeper cooperation on trade (World Bank Blog)
The COVID-19 pandemic has exposed the upsides and downsides of international trade in medical goods and services. Although global trade was a critical component in addressing the pandemic, it fell short in important ways. A new joint report from the World Bank and World Trade Organization draws lessons from the pandemic experience and proposes steps to better prepare for the next emergency.
Deepening international cooperation on trade will be critical to that effort. Key steps include negotiating tariff reductions on medical goods and greater market access in services; harmonizing national health regulations or creating international standards; and agreeing on a crisis rulebook to be deployed during an emergency. Open trade will be increasingly important to meet growing demand for health-related goods and services, support innovation, and contain costs. Global health spending is expected to surge amid emergent infectious diseases (Figure 1), income convergence, and increasing life expectancy. Technological improvements and digitalization will make the delivery of medical products even more international, and increasingly complex global value chains will be crucial to innovation and production.
World FZO and UNCTAD launch the Global Alliance for Special Economic Zones Conference at AICE 2022 (ZAWYA)
The World Free Zones Organization (World FZO) announced the Global Alliance for Special Economic Zones Conference (GASEZ) at its eighth Annual International Conference (AICE). The conference is taking place in Montego Bay, St. James, Jamaica from June 13 - 17 and features world-class speakers, senior policymakers, academics, multilateral organizations, and global business leaders from over 100 countries. The first annual Global Alliance for Special Economic Zones conference was launched during AICE under the theme ‘Zones, your partner for Resilience, Sustainability, and Prosperity,’ in partnership with the United Nations Conference on Trade and Development (UNCTAD).
The alliance aims to address the most prominent and emerging issues related to the special economic zones and highlights the role of partnerships in enabling the exchange of experiences in the post-pandemic recovery phase. The alliance also seeks to develop global partnerships to facilitate cross-border and cross-sectoral cooperation in the areas of trade, investments and achieving the United Nations Sustainable Development Goals. It also helps in promoting policies to develop frameworks to enable special economic zones at the local, regional and global levels.
IMO takes baby steps to increase ambition, but immediate action still missing (Hellenic Shipping News Worldwide)
More countries than ever before agree that the global shipping industry must step up action to tackle its impacts on the climate. A clear majority of delegates intervening at the International Maritime Organization (IMO) climate talks last week (MEPC 78) were in favour of revising the IMO’s current climate strategy to decarbonise shipping by 2050 – moving the sector much closer to the Paris Agreement’s goal of keeping global heating below 1.5°C. Although long-overdue, this is an encouraging development and makes the IMO’s adoption of greater ambition more likely. However, achieving the Paris Agreement’s goal requires immediate action to halve emissions by 2030 and reach zero emissions by 2040. IMO member states have a clear duty as well as the necessary tools already at their disposal, both nationally and internationally, to bring down shipping emissions today. These include:
Time for open data in fibre infrastructure (Business Daily)
Open data standards for transparency have proven to be an effective approach to creating high-trust collaboration among multiple stakeholders for sharing data. Open data ensures that information is available to all on an equal basis and that there are common mechanisms for describing and sharing. Today, as the world pursues more open data standards through initiatives like open contracting, which is about transparency in public contracting and Open Ownership, another aspect of open standard that has been given less importance is open data for fibre networks despite being in the digital evolution era. The telecoms sector is increasingly underpinning every aspect of our lives, from education to commerce, access to government services to family life. This is more prominent during the Covid-19 where due to the lockdowns most of our daily activities were shifted to virtual and access to communication. Yet, there is little information about the physical infrastructure that carries the information highway. And the lack of transparency is holding back efforts to grow connections.
Commonwealth Business Forum: what is on agenda? (The New Times)
The Commonwealth Business Forum (CBF) is around the corner. As the public and private sector gears up to leverage the opportunities it presents, here is what you need to know about what is on the agenda. The CBF is one of four special forums that will be held during the Commonwealth Heads of Government Meeting (CHOGM), slated to take place in Kigali from June 21 to 23. It will bring together government leaders, captains of industry and business executives, leaders of global and regional development institutions, young entrepreneurs and representatives of trade and investment organizations from across the Commonwealth.
Discussions and initiatives will address the theme: "Delivering a Common Future: Connecting, Innovating, and Transforming." As such, the CBF is expected to address key topics like connecting the Commonwealth in terms of trade and regional integration, bridging the digital divide, and improving ecosystems and global value chains. The participants will explore topics such as financing future growth, trade and regional integration, and the future of work.