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01 Jan 1970

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COVID-19: Trade-related news, analysis and resources

02 Nov 2020

tralac is closely monitoring trade-related policy measures and responses to the COVID-19 pandemic adopted and implemented by African countries and beyond. Below is a selection of useful resources, analyses, news items and publications particularly relevant for trade and related developments on the African continent. This webpage is updated regularly to facilitate information-sharing and dissemination.

Page contents

8 December 2020 - 21:00 GMT+2

COVID-19 Trade and trade-related measures

Africa

African countries have responded to the COVID-19 pandemic through the adoption of various trade and trade-related measures in an effort to contain the economic impact of the crisis. To monitor the situation and encourage the sharing of information, tralac has prepared a list of these measures, which is updated regularly from official sources.

To date, tralac’s country policy tracker covers COVID-19 trade and related measures for 39 African countries. In addition, tralac has a regional policy monitor covering the regional economic communities (RECs) and the African Union.

COVID 19 Country Policy Tracker   COVID 19 Response Regional Policy Monitor

Recently-added resources

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Policy monitoring tools

For information and resources relevant to Africa on the pandemic:

Additional online tools monitoring policy responses to COVID-19:

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Global monitoring by the WTO

The WTO Secretariat is monitoring member countries’ notifications on COVID-19. The list is an informal situation report and an attempt to provide transparency with respect to trade and trade-related measures taken in the context of the COVID-19 crisis.

Information Notes from the WTO Secretariat

Members’ proposals on COVID-19

In the news

 

F15 Ministers, Special Envoys for mobilization of international COVID-19 support - 26 Oct 2020

World Bank confirms economic downturn in sub-Saharan Africa, outlines key polices needed for recovery - 9 Oct 2020

G20 debt service suspension initiative applications rose to 46 countries to date - 29 Sep 2020

Click here for more news on COVID-19.

On the tralac Blog

 

Africa’s COVID-19 medical supplies trade: January-June 2020

Juliette Armelle Kouamo - 24 November 2020

South Africa’s PPE shortage – what can we learn?

David Christianson - 14 Oct 2020

National and regional perspectives and responses on the impact of COVID-19 on cross-border trade and Customs border management – what are we learning?

Rwatida Mafurutu - 12 Oct 2020

Effects of the COVID-19 Measures on Trade Facilitation in SADC

Innocent Muranganwa - 12 Oct 2020

COVID-19 Control Measures in SADC – Striking a balance between control and Trade Facilitation

Innocent Muranganwa - 12 Oct 2020

South Africa’s July 2020 trade data – exports recover while imports remain below 2019 levels

Willemien Viljoen - 05 Sep 2020

Click here to view all blogs.

tralac Publications

 

Completing and Implementing the AfCFTA in difficult times

Gerhard Erasmus and Trudi Hartzenberg - 29 Jul 2020

COVID-19: Trade and related measures and responses in Africa

Rwatida Mafurutu and Talkmore Chidede - 25 May 2020

IMF Emergency Funding in the face of the COVID-19 pandemic

Gavin van der Nest - 14 May 2020

Governance in abnormal times – dealing with COVID-19: A regional perspective from South Africa

Gerhard Erasmus and Trudi Hartzenberg - 13 May 2020

COVID-19 and the legal Measures employed to deal with the Crisis

Gerhard Erasmus - 06 Apr 2020

Click here to view all publications.

COVID-19 in Africa: Trade-related resources

 

Additional resources

 

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02 Nov 2020

National

Trade stats shows domestic recession keeps imports low (Fin24)

A recovery in commodity prices and global demand saw SA record a trade surplus of R109.5 billion for the third quarter of the year, according to an economist. The SA Revenue Service on Friday released trade statistics for September 2020, which reflected a trade surplus of R33.5 billion. Exports increased by 23.3% during the period and imports declined 3.2%. By comparison, August recorded a trade surplus of R38.7 billion “The trade dynamics relate mainly to the recovery in commodity prices and global demand during the third quarter that aided SA’s export performance,” said Investec economist Kamilla Kaplan.

Power wobbles despite $1.6 billion investments (The Guardian Nigeria)

At a peak of 5,459.50 megawatts, Nigeria’s power sector still wobbles with low transmission capacity seven years after privatisation. This is despite the $1.6 billion invested through the World Bank, African Development Bank (AfDB), and other corporations. The $1.6 billion investment is in addition to other budgetary allocations to key power infrastructure and other revenues generated by the government-owned Transmission Commission of Nigeria (TCN).

Zimbabwean govt gingers up Covid-19 response (The Sunday Mail)

Government is reactivating and strengthening its rapid response machinery to respond to a possible second wave of coronavirus. To curb the spread of new infections, Government has deployed private testing laboratories at ports of entry to intensify testing. Chief coordinator for the national response to the Covid-19 pandemic in the Office of the President and Cabinet, Dr Agnes Mahomva, said the nation should guard against complacency. She said caution should be observed during the phased reopening of borders from December 1.

Uganda Agriculture Ministry reviews its 2019/2020 performance (New Vision)

Uganda has been one of the fastest-growing economies in Africa; and agricultural growth is key in helping the country progress towards middle income status. The Minister of Agriculture, Animal Industry and Fisheries (MAAIF), Vincent Ssempijja has said that the ministry has addressed a variety of agriculture challenges. According to Ssempijja, in the financial year 2019/2020, the ministry committed itself to address the issues that included mobilising and supporting small scale farmers along with the four-acre model concept, increasing exports of specific commodities, and Supporting individuals and companies for seed production.

Why we’re focusing on agriculture, industrial revolution – CBN (Vanguard)

The Central Bank of Nigeria (CBN) said it is providing and will continue to provide interventions for agriculture and industrial revival of Nigeria as the two sectors amongst others remained a veritable tool towards building a robust economy for the country. Nwanisobi said the 5-year policy thrust of the apex bank which covered 2019-2024 initiated by the CBN Governor will grow the real economy for the country. He said that the policy which centred around establishing a firm and stable microeconomic environment would pave room for low inflation, financial stability, exchange rate stability and efficient payment system.

Eswatini Rail Link (ESRL) project plans in good progress (Construction Review Online)

Plans for the implementation of the Eswatini Rail Link (ESRL) project, which is a joint inter-railway strategic initiative between Transnet Freight Rail (TFR), the South African rail manager, and Eswatini Railways (ESR), are in good progress, reportedly in the fund acquisition stage which when successful will be followed by the construction phase. The project is aimed at creating a dedicated General Freight Business (GFB) corridor for Transnet whilst providing the much needed additional capacity for Eswatini Railways. It entails the construction of a 150-kilometer long new railway link between Lothair in South Africa and Sidvokodvo in Eswatini, formerly known in English as Swaziland.

To Better Address the COVID-19 Crisis, Niger Should Focus on Health Measures and on Protecting Jobs and Livelihoods (World Bank)

According to the World Bank’s latest Economic and Poverty Update for Niger published today, the COVID-19 pandemic has a significant impact on the economy and could trigger a recession if the many downside risks to economic activity materialize. The economic slowdown has already reversed the decline in the poverty rate seen for several years in Niger, pushing close to 270,000 Nigerians into poverty this year. The report notes that Nigerians have been severely impacted by the combined effects of the pandemic, the global recession, and the economic slowdown in the country. These different shocks have led to job and income loss, an increase in some food prices, and disruptions in the system providing social protection and delivering basic services, in particular health and education services. Consequently, the poverty rate is projected to rise from 40.8% in 2019 to 42.1% in 2020.

Africa

#BuyAfricaBuildAfrica initiative launched to promote African brands, goods (KBC)

BCW Africa, Brand Leadership, Kantar and Geopoll Friday announced the launch of the #BuyAfricaBuildAfrica initiative. This initiative encourages local brands to adopt the #BuyAfricaBuildAfrica stamp of approval for ‘made in Africa’ brands and to wear their local identity with pride. “African brands have an important role to play in helping to build the image and competitiveness of the continent,” says Thebe Ikalafeng, Executive Head: Brand Leadership and Founder of Brand Africa 100. With the #BuyAfricaBuildAfrica initiative, there are five criteria for qualification as an African brand:

IATF2021 Advisory Council Holds 7th Meeting Virtually (African Export-Import Bank)

The Advisory Council of the second Intra-African Trade Fair (IATF2021) convened on 4 September 2020 for its seventh session to review the event workplan and other initiatives accompanying the Trade Fair. Due to the ongoing COVID-19 pandemic, the Advisory Council met virtually for the second time. Addressing the meeting, President Obasanjo highlighted the difficulty in the necessary decisions made to postpone the event in light of the COVID-19 pandemic situation, giving the continent and the world more time to adjust to the challenges of the pandemic and avoiding the risk of postponing the Event more than once. “The choice of the month of September 2021 was also meant to accord countries and businesses enough time to recover from the effects of Covid-19 pandemic, and we expect that by then, global travel and global commerce and supply chains would have gotten back to normal,” he explained.

Ecobank Restates Commitment to AfCFTA (Proshare)

The Managing Director, Ecobank Nigeria, Patrick Akinwuntan has said the bank is prepared to partner with other organizations to explore the opportunities available in the African Continental Free Trade Area (AfCFTA). Akinwuntan in his remark at an event in Lagos pointed out that the pan African bank was set up primarily for the economic integration and development of Africa, stressing that the bank was ready to deploy its capacity, platform and network to achieve the AfCFTA objectives.

THE BIG INTERVIEW: Amadou Diallo, CEO, DHL Global Forwarding Middle East & Africa (Logistics Middle East)

Collaboration has been the key to ensuring consumer, medical and humanitarian goods continue to flow around the world in spite of strict border controls introduce during the Covid-19 pandemic. But the last few months have not just been about industry piers working alongside each other. Larger organisations have found themselves looking internally for guidance on how to navigate the crisis. DHL Global Forwarding is one of the firms to have enjoyed the luxury of having a rich pool of knowledge and employees based around the world. The challenges of shifting goods – regardless of their nature – across borders during a pandemic soon became clear to Amadou Diallo, CEO of DHL Global Forwarding Middle East and Africa and his colleagues. In the midst of global border closures, DHL Global Forwarding established a communication line with all of its operator partners, which provided daily updates on border closures and customs regulation changes.

ECA launches new report on extractive sector governance (UNECA)

Sudan’s Prime Minister, Abdalla Hamdok, and Economic Commission for Africa’s (ECA) Executive Secretary, Vera Songwe, on Friday launched a new publication that proposes actions that need to be put in place to stem Illicit Financial Flows leakages before they leave Africa’s shores. The Report notes that once the resources leave Africa, getting them back involves a complicated process requiring capacities often in short supply in African countries. Furthermore, the speed and ease of loss across national boundaries, easily breach Africa’s national financial security defense lines. This trend, states the Report, must be halted. The Report, titled; Institutional Architecture to Address Illicit Financial Flows from Africa, was launched during a high-level roundtable convened by UN Deputy Secretary-General, Amina Mohammed on the theme: Extractive Industries as an Engine for Sustainable Development: The Case of Africa.

pdf Institutional Architecture to Address Illicit Financial Flows from Africa: A Primer (3.84 MB)

SADC Joint Meeting of Ministers Responsible for Energy and Water Hosted by the Republic of Mozambique

The Ministers Responsible for Energy, and for Water from the Southern African Development Community (SADC) met on 30th October 2020 through video conferencing hosted by the Republic of Mozambique. The Ministers deliberated on programmes of regional dimensions in support of the implementation of the recently approved SADC Regional Indicative Strategic Development Plan (RISDP) 2020-30 and the SADC Vision 2050, particularly programmes of infrastructure development. The meeting also considered a report on the impact of the COVID-19 pandemic and how it has affected investments in the Energy and Water sectors in the Region, and proposed mitigation measures that could be applied at regional and national level. Ministers reviewed strategic instruments for guiding adherence to COVID-19 and similar pandemics in the energy sector at regional and national level, and called for continuous assessment and monitoring of the impacts.

Africa’s energy masterplan takes shape as African Development Bank and AUDA-NEPAD release key report (AUDA-NEPAD)

The African Union Development Agency (AUDA-NEPAD) and the African Development Bank have released recommendations of a baseline study that looked into the development of a continental energy grid and market. The study, supported by the European Union, is the first step in an ambitious project to create an efficient, competitive energy sector that helps to serve Africa’s vast non-connected population, which is key to the continent’s economic prospects. The recommendations were discussed at a roundtable meeting between the partners organized by the African Development Bank on Wednesday 28 October.

White Paper: Harnessing Innovation and Emerging Technologies to Address the Impact of COVID-19 in Africa (AIDA-NEPAD)

The first Specialized Technical Committee on Education, Science and Technology (STC-ESTI) requested the AU Commission and AUDA-NEPAD to advise Member States and RECs on matters of technology prospecting, including regulatory and ethical requirements that need to be put in place in order for the continent to benefit from emerging technologies. The Ministers further directed the then NEPAD Agency to establish a system for obtaining expert contribution on the matters of technology development, acquisition, and deployment for socio-economic development.

Statement of H.E. Prof. Sarah Anyang Agbor, Commissioner, Human Resources, Science and Technology On the Commemoration Of Africa Youth Month, November 2020 (AU)

The month of November is a special one for us in Africa. Fourteen years ago, the African Heads of State and Government designated November 1st as Africa Youth Day, and for the past few years, we have celebrated African Youth throughout the month of November. This year, the theme of Africa Youth Month is ‘Youth Voices, Actions and Engagement: Building A Better Africa’ This year’s theme is a testament to the immense and inspiring work of young people, further highlighted by our youth’s response to the COVID-19 pandemic which touched every corner of the world in 2020. As Africa grappled with real challenges which were further intensified by the pandemic, our youth more than rose to the occasion.

International

Nigerian Still in Line to Lead World Trade Organization, Despite US Opposition (Voice of America)

Nigerians have expressed confidence that the country’s former finance minister, Ngozi Okonjo-Iweala, will still become the first African and first woman to lead the World Trade Organization, despite opposition from the United States. The 66-year-old has secured strong backing to become the WTO’s director general, but the U.S. this week put its support behind a South Korean candidate. Okonjo-Iweala has gathered support from many WTO member countries, but the U.S. is backing her only opponent, South Korea’s Trade Minister Yoo Myung-hee, citing her skills and experience in international trade dealings. But Nigerians continue to stand behind Okonjo-Iweala, who once served as the country’s finance minister.

Covid-19 pandemic to fuel $4trn global GDP loss in 2020 (Businessamlive)

The economic uncertainties occasioned by the coronavirus induced-recession will see many economies’ real gross domestic product (GDP) plunged by $3.94 trillion in 2020, statistical data compiled and presented by BuyShares show. The statistic also shows ten countries, which will be impacted the most, will cumulatively lose $696.56 billion in real GDP due to the pandemic. And as projected, the pandemic has elicited massive losses in different sectors of these economies already, which can be reflected in metrics like the real gross domestic product.

From strength to strength: Kenya-US partnership from Agoa to FTA (The Star)

The US and Kenya believe in a strong economy through an open, free marketplace allowing entrepreneurs, businesses, and the private sector to thrive and create jobs. The African Growth and Opportunity Act enhanced markets, allowing Kenyan businesses to grow. The Act will expire in 2025 and, while it has been helpful, Agoa has not been transformative in driving the broad-based economic growth Kenya seeks. Kenya is ready for the next step, a US-Kenya Free Trade Agreement that will bring our relationship from reliance on tariff preferences that erode over time and can be unilaterally withdrawn, to an agreement that drives more efficient uses of resources and expands trade.

‘South-South collaboration can ensure equal access for COVID-19 vaccine’ (The Week)

The similarities are striking – much like India, Africa’s death rate due to COVID-19 has been lower than in the developed world, antibody surveys have detected large number of infections, and governments in the region are concerned over the threat of second wave of infections, even as economic compulsions have made lockdown and tight restrictions nearly impossible now, despite the upcoming threat. Dr Githinji Gitahi, group CEO of Amref Health Africa, the largest African-led international organisation on the continent, feels that though Africa had the experience of Ebola when dealing with COVID-19, the way forward for resource-constrained countries such as India and Africa is investing in primary health care. Focusing on health information systems with adequate data protection safeguards, too, will be crucial, as will enhanced health budgets, if countries want to successfully prepare and manage health crises in the future.

FOCAC: 20 Years of extensive consultation, joint contribution and shared benefits (Mmegi Online)

China is the largest developing country and the African continent is home to the largest number of developing countries. China and Botswana enjoy longstanding friendship, and our bilateral relations have benefited greatly from FOCAC. In 2018 when President Masisi paid a state visit to China and attended the FOCAC Beijing Summit, China-Botswana relations have ushered in a new era. Guided by the “Eight Major Initiatives” proposed at the Beijing Summit, China and Botswana have signed agreements and MOUs in such areas as mutual visa exemption; economic, trade, investment and technical cooperation; as well as human resources development. China-aided projects such as Mmopane Primary School and Kazungula Primary School are in smooth progress. And Botswana beef export to China is just around the corner.

World’s richest nations jostle to lead globalisation clubhouse (Moneyweb)

The race to fill a role at the heart of world economic policy making is turning into a new battleground for the future of globalisation. The OECD acts like an auditor for globalisation, shaping policies and setting standards in areas from taxation to trade and education. It’s currently running contentious negotiations over digital taxes that are on the brink of imploding into a transatlantic trade war. Liddell faces competition from European candidates on the other side of that issue, including former EU trade commissioner Cecilia Malmstrom. “This is the most important multilateral organisation that most people have never heard of,” said Daniel F Runde, Senior Vice President of the Centre for Strategic and International Studies. “The OECD sets the Marquess of Queensberry rules of globalisation,” he said, referring to the standards of modern boxing.

UK ministers ‘just cannot understand’ merits of aid spending, says Rory Stewart (Devex)

Rory Stewart, former U.K. secretary of state for international development, has said it was “incredibly difficult” to convince his Cabinet colleagues of the merits of aid spending while he was in government. At a time when public finances have been tight, Stewart added that politicians often preferred to avoid the topic. Speaking during a panel discussion Friday, he said that “it’s very, very difficult, frankly,” to make the case for development aid. “Not only can I not convince the public; I can’t even convince colleagues around the Cabinet table.”

DDG Wolff urges start of “serious discussion” on WTO reforms (WTO)

Our moderator has put to us three issues for our reactions: Economists say we are entering a period of deglobalisation, the UN secretary general is warning for the Great Fracture, the US and China are talking about decoupling and dual circulation. In this changing global trade context, what role is there for the WTO? How can the WTO rebuild confidence in the global trading system? What should be the priority for WTO reform, and is reform of the WTO possible?

Sustainable urbanization critical to COVID-19 recovery, better quality of life (UN News)

The World Cities Report 2020, released on Saturday, showcases the value of sustainable urbanization and how it can contribute to global efforts to build back better after the crisis. “The World Cities Report 2020 convincingly affirms that well-planned, managed, and financed cities and towns create economic, social, environmental and other unquantifiable value that can vastly improve the quality of life of all,” said Maimunah Mohd Sharif, the UN-Habitat Executive Director. “Urbanization can be leveraged for the fight against poverty, inequality, unemployment, climate change and other pressing global challenges.”

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National

Technical advisory panel on investment infrastructure being finalised (SAnews)

Public Works and Infrastructure Minister Patricia de Lille says the department is in the process of recruiting professionals to serve on the Technical Advisory Panel of Infrastructure South Africa (ISA).

“In August, we also advertised for professionals to serve on the Technical Advisory Panel for the Infrastructure Investment Plan. “This is to support the implementation of the plan and the panel will consist of technical experts from the following sectors - energy and alternative energy, financial structuring, infrastructure investment and planning, the oceans economy, urban management and green financing to name a few,” she said. De Lille said the experts will be used on a needs basis and called upon to provide independent, strategic, tactical and technical assistance to ensure the expedited planning, monitoring and implementation of the Infrastructure Investment Plan.

Bots wants to boost trade ties with Namibia (The Southern Times)

The Botswana Investment and Trade Center (BITC) wants to grow its relationship with the Namibia Investment Centre (NIC) to promote trade and joint ventures between companies from the two countries. Incoming Botswana High Commissioner to Namibia, Dr Batlang Comma Serema, last week told Globe Media that efforts were also being made encourage collaboration between the two countries’ chambers of commerce. According to the United Nations COMTRADE database on international trade, Namibia’s exports to Botswana in 2019 stood at US$610,56 million, while Botswana’s exports to Namibia were valued at US$194,63 million.

Zambia debt woes expose difficulties in international assistance (Global Times)

Zambia has reached a deal to defer debt repayments that were due this month on a loan from the China Development Bank (CDB), the Reuters reported. Zambia’s debt woes show that the impact of the COVID-19 pandemic on international development assistance is increasing. Developing countries, especially the Least Developed Countries (LDC), are facing more difficulties. For the majority of underdeveloped countries, the pandemic has exacerbated the risks they face. There are signs that in underdeveloped countries, whether in terms of governance, gender equality, social equity, or many other goals set out in the 2030 Agenda for Sustainable Development, they have stalled.

Ghana: SPS Requirements and Good Practices for Export (CUTS International)

The manual identifies the good practices of safety and hygiene procedures of five food products for export to European Union. These products are (i) Cocoa beans, whole or broken, raw or roasted (ii) Cocoa butter, fat, and oil (iii) Cocoa paste, wholly or partly defatted (iv) Fresh or dried cashew nuts, in shell (v) Prepared or preserved tuna/skipjack/bonito. This is done at all stages of the product marketing circuit (production, harvesting, transport, packaging and export) through the understanding and monitoring of the various stakeholders in agriculture sectors in Ghana. The manual is based on findings from studies conducted along the selected food products to promote the competitiveness of SMEs so that they can better leverage the Europeans Union market opportunities.

COVID-19 harm Govt revenues (The Patriot On Sunday)

Minister of Finance and Economic Development Dr Thapelo Matsheka said government revenues would fall from P62.4 billion to P52.3 billion in 2020/21 financial year due to the big decline in mineral revenue from P20 billion to P10.5 billion. Billions of dollars’ worth of goods begin the final leg of their in-land journey to Uganda, Rwanda, Burundi, South Sudan and the Democratic Republic of the Congo aboard transport trucks originating at the sprawling port of Mombasa in southeast Kenya. The drivers were identified early on as a high-risk group for the spread and transmission of COVID-19. This, combined with border closures and other mobility restrictions, brought much of the trade in the region to a grinding halt.

Rwanda to commission consulate in Ghana to enhance intra-African trade as AfCFTA takes off (Ghana Business News)

The Rwanda government has announced the commissioning of its consulate in Ghana to coordinate and strengthen Ghana-Rwanda relations in the face of a common trade platform. The Mission in Ghana will add to the already existing ten on the African continent. According to Dr. Kacyira, the High Commission in Ghana will cement the bilateral relations between the two countries. She mentioned among other things key areas both countries need to focus on including tourism, agriculture, and education. “My appeal is that we need to celebrate this milestone of Africa integration. My president is very very committed to the AfCFTA,” she said. “The AfCFTA is just one of the reasons for us to come and establish here in Ghana. Ghana produces cocoa and it’s processed in Switzerland. Why not in any other African country?” she asked.

Africa

Senzo Mchunu launches Africa Sovereign Credit Review Report (Devdiscourse)

Public Service and Administration Minister Senzo Mchunu in his capacity as the African Peer Review Mechanism (APRM) Focal Point for South Africa has launched the First Edition of the Africa Sovereign Credit Review Report. The APRM authored an Africa sovereign credit rating review report in collaboration with the African Development Bank and the United Nations Economic Commission for Africa. The report is the first edition of a bi-annual publication on developments and trends in the area of sovereign credit rating services by international rating agencies among African countries.

Nigeria – Ghana trade tensions: Proof AfCFTA may not bring unity (The Africa Report)

The African Continental Free Trade Area (AfCFTA), initially meant to rollout in July of this year, was created to solidify economic regional cooperation within the continent. But looking to the complex trade relations already brewing in West Africa, many of the problems the AfCFTA is likely to face on the continent are already being highlighted. West African governments, particularly the administration in Nigeria led by Muhammadu Buhari, have shown signs of leaning towards economic nationalism and protectionism – protecting people and property above all, with a fear of foreign competition. In addition, the path towards a singular currency in the region has not been without dispute. Looking at the trade relations between Nigeria and Ghana – the two economic giants of West Africa – in recent years, it is clear that trade relations are strained, with the actions and reactions from both sides drawing them further away from cooperation.

Digital ‘Travel Pass’ set to accelerate Africa free trade area and economic integration (The Zimbabwe Daily)

African countries agreed last year to create the world’s largest free trade area measured by the number of countries participating, by January 2021. But amid health concerns stoked by the global Coronavirus pandemic, the Africa Centres for Disease Control and Prevention (Africa CDC) has urged African governments to embrace technology that helps speed up the continent’s economic integration. This has resulted in the Africa CDC establishing the Trusted Travel Platform to help digitally verify public health documentation for travellers at national borders. “We understand that governments are under pressure to implement the African Continental Free Trade Area (AfCFTA) as a way of reviving their economies, that are expected to lose between 25 and 30 million jobs due to the COVID-19 pandemic. But we are calling for caution as they open their borders,” a spokesman for the Econet Group said recently.

Yellow Card Scheme (Regional Motor Third Party Insurance Scheme for the COMESA Region) (The Zimbabwe Daily)

The COMESA Yellow Card cover is a regional third-party motor insurance scheme recognised by COMESA member countries as evidence of a guarantee to provide the minimum insurance cover required by the laws of the country visited by the travelling motorists. It was established by a protocol signed by Heads of State and Government in 1986 and became operational on 1st July 1987. Members of the National Bureau of Zimbabwe have now been granted permission COMESA to issue the by COMESA Yellow Card Third Party Motor Insurance cover under the Business to Business arrangements in South Africa and Mozambique.

Ministers to deliberate on the implementation of the SADC Regional Indicative Strategic Development Plan 2020-30 and the SADC Vision 2050 (Namibia Economist)

SADC ministers responsible for energy and water will deliberate on the implementation of the SADC Regional Indicative Strategic Development Plan 2020-30 and the SADC Vision 2050 particularly programmes for infrastructure development of the two sectors on 30 October virtually and chaired by Mozambique. The ministerial meeting will among others, review the initiatives aimed to support implementation of the regional power programmes and projects, petroleum and gas subprogrammes, promotion of new and renewable energy sources and energy efficiency issues, and the status on the establishment of energy regulators and modalities of strengthening the Regional Energy Regulators Association.

Private sector investment in Benin, Burkina Faso, Chad and Senegal to accelerate following EIB insurance support (Social News XYZ)

Private sector investment in Benin, Burkina Faso, Chad and Senegal, will be strengthened following European Investment Bank support for the countries in their membership and share capital increase in the African Trade Insurance Agency (ATI). The West and Central African states, Burkina, Chad and Senegal will join 18 African countries including Benin, who is already a member, where business investment, job creation and access to finance has been increased by targeted investment insurance. As seen elsewhere across Africa, ATI membership will help to address the economic, social and health challenges caused by COVID-19.

Timely COVID-19 Testing of Mombasa Port Truckers Helps Reinvigorate Economies - Kenya (ReliefWeb)

Thousands of truck drivers across Kenya have been tested for COVID-19 by the International Organization for Migration (IOM) since July, as part of a broader effort to reinvigorate regional economies impacted by COVID-19. Billions of dollars’ worth of goods begin the final leg of their in-land journey to Uganda, Rwanda, Burundi, South Sudan and the Democratic Republic of the Congo aboard transport trucks originating at the sprawling port of Mombasa in southeast Kenya. The drivers were identified early on as a high-risk group for the spread and transmission of COVID-19. This, combined with border closures and other mobility restrictions, brought much of the trade in the region to a grinding halt.

SMEs need policy support to compete in AfCFTA – Report (News Ghana)

A research report has recommended policy support for Small and Medium Enterprises (SMEs) to be competitive in participating in the African Continental Free Trade Area (AfCFTA). The report said the support should focus on cheaper and more innovative trade finance products, trade policy, trade infrastructure, improved capacity, trade information and facilitation, market access for growth and expansion of SMEs in the country. Dr Samuel Frimpong Boateng, the Lead Consultant for the Research made these recommendations at a stakeholder workshop on the report titled “Mobilising Diagnostics Data to Inform Bottom-Up Decisions on Government Policies.”

African FTA Could Transform Trade on Continent, but Infrastructure, Complacency Seen Pitfalls (Export Compliance Daily)

The African Continental Free Trade Agreement (AfCFTA) could potentially transform trade on the continent and bring it into global supply and value chains, but key parts of the deal remain unfinished, and infrastructure investment will be necessary to tap the agreement’s potential, panelists said on an Oct. 28 webinar hosted by law firm Squire Patton. Intra-regional trade has clear benefits for economic growth, social transportation and well-being, but Africa has the least of it of any continent, said Samuel Mwale, a Kenya-based business executive and coffee trader and an adviser with the Kenya Private Sector Alliance. AfCFTA is an opportunity for a “great future” for Africa, and one of the boldest pushes for a different Africa in the 21st century, Mwale said. But the deal isn’t done yet.

‘Better customs means better trade’ (The Southern Times)

The Southern African Customs Union (SACU) needs to spruce up its systems to facilitate efficient trade and support economic development, a senior Namibian government official has said. At a workshop on customs modernisation in Windhoek this week, deputy director in the Namibian Finance Ministry, Ms Yoolokeni Haihambo said modern customs unions went beyond revenue collection and played an active role in trade facilitation.

Sensitisation of shippers and businesses on AfCFTA critical-AGI (Ghana Shippers Authority)

The Volta and Eastern Regional Chairman of the Association of Ghana Industries (AGI), Mr. Dela Gadzanku has underscored the need for shippers and businesses to be sensitised on the benefits of the African Continental Free Trade Area (AfCFTA) agreement. This, he said, would help them to make informed business decisions in order to take advantage of the full potential of the agreement for the economic transformation of Ghana and Africa as a whole.

AfCFTA key in driving auto sector investment momentum on the continent – Nissan boss (The Africa Report)

“We see Africa as a big opportunity,” says Guillaume Cartier, senior vice-president and chairman for Africa, the Middle East and India region at car maker Nissan. “The market will grow,” Cartier says. He points to the continent’s sizeable population – “it’s big.” Auto ownership is not as high nor as saturated as other more mature markets. Most importantly, “there is potential.” Nissan is looking at, among other opportunities on the continent, first-time buyers and government fleet solutions. “Africa is fascinating. What we have to look at is how we can onboard the first-time buyer. This is a large part of the market – it’s nothing compared to Europe, the US, where you have to renew customers. That is one big category,” Cartier tells The Africa Report.

Study on Extending the Benefits of Free Trade to Informal Cross Border Traders in the ECOWAS Region reviewed by experts (UNECA)

The African Trade Policy Centre (ATPC) of the United Nations Economic Commission for Africa (ECA) has today hosted the fourth in a series of five virtual experts group review meetings on innovative new research on preferential trade arrangements in Africa. The project is in partnership with the Organization of African, Caribbean and Pacific States (OACPS). The study assesses the options presented for overcoming the challenges of Informal Cross Border Traders (ICBT) and in particular policies for extending the benefits of free trade to informal traders. Two key areas are the focus of this study: i) systems for more structured ICBT, including the potential for a simplified trade regime in the Economic Community of West African States (ECOWAS) region; and ii) institutionalising ICBT data collection for policymaking.

The new investment case for Africa and emerging sectors of opportunity (How we made it in Africa)

From the days of African independence to the turn of the 21st century, developed countries’ economic engagement with African nations was largely limited to the provision of humanitarian and development aid. The beginning of the new millennium saw a shift as traditional donor countries began to focus on boosting African economic growth via increased trade. Over the past decade, this dynamic has shifted once more, with an increased emphasis on facilitating private investment into African economies. The business case for investing in African markets can no longer rest solely on the dated adage that six of the 10 fastest-growing countries are in Africa – it now needs to be updated to the post-Covid emergent economic reality.

Access to finance poses the biggest challenge for African businesswomen (UNECA)

Inadequate finance and information are among the leading non-tariff barriers (NTBs) facing African businesswomen and may undermine the success of the African Continental Free Trade Area (AfCFTA), according to an advocate for businesswomen on the continent. Speaking today during a webinar on the Trade Easier platform, a mechanism for reporting, monitoring and eliminating NTBs under AfCFTA, the Executive Director of the Pan African Business Women’s Association (PABWA), Ms Yavi Madurai, said.

The 26th ICSOE Meeting of Southern Africa Elects a New Bureau with calls for medium-term fiscal consolidation (UNECA)

The Minister of Finance, Kingdom of Lesotho, Thabo Sofonea, officially opened the 26th Meeting of the Inter-Governmental Committee of Senior Officials and Experts (ICSOE) of Southern Africa. He said that, although the current response to the pandemic was through emergency health and economic mitigation measures, fiscal consolidation and structural reforms were required to restore external balance, preserve debt sustainability and stimulate inclusive growth over the medium-term.

The meeting concluded with an outcome document which proffered recommendations and appealed to member States, United Nations and development partners to pull together resources to strengthen the national and regional macroeconomic environment, create a platform for the implementation of the AfCFTA in Southern Africa, enhance the role of the private sector and build back better post-COVID-19.

‘Better customs means better trade’ (The Southern Times)

The Southern African Customs Union (SACU) needs to spruce up its systems to facilitate efficient trade and support economic development, a senior Namibian government official has said. At a workshop on customs modernisation in Windhoek this week, deputy director in the Namibian Finance Ministry, Ms Yoolokeni Haihambo said modern customs unions went beyond revenue collection and played an active role in trade facilitation.

The renewAfrica Initiative presented to EVP Timmermans (UNECA)

The renewAfrica Initiative was today presented to Mr Frans Timmermans, the European Commission’s Executive Vice-President for the European Green Deal. The renewAfrica Initiative has been structured to implement PPPs, so to create a level playing field for European industry and investors. In this regard, the Initiative will contribute to add value to existing European financial instruments, so to mobilise the scale of public and private capital necessary to the creation of a pipeline of sustainable and bankable renewable energy projects in Africa.

EAC trade suffers due to border restrictions (The Standard)

The East African Business Council (EABC) is calling upon East African Community Partner States to allow movement of persons across border posts, lifting the restrictions currently in place. A move set to boost trade-in services such as tourism and re-open closed cross-border markets. Currently, some border posts such as the Taveta-Holili One-Stop Border Post (OSBP) and the Isebania-Sirare border post (Kenya-Tanzania) are still not allowing movement of persons despite travelers having Covid-19 certificates.

The future of mobility in Africa (The New Times)

This week, the UN published a report about the impact of used vehicles on the environment in Africa. According to this report, Africa is the destination of 40% of used light duty vehicles from Europe, Asia and the USA. This trend contributes to the astonishing low GDP-high emissions paradigm, whereby African cities have the same pollution levels such as industrialised ones. The failure to absorb internal demand of mobility products will be exacerbated with the rising middle class in Africa. The said report details how global fleet of light duty vehicles will double by 2050 and how 90% of this growth will take place in low and middle-income countries. Against this background, an urgent action plan is needed to transform the demand of mobility into an engine of growth for Africa.

Digital payments key to Africa growth (The Southern Times)

The World Bank has estimated that Africa could potentially hold 90 percent of the global poor population by 2030 and has recently cut its economic growth predictions to between -2,1 percent and -5,1 percent in 2020 from the 2,4 percent of 2019. The situation has been significantly worsened by the global pandemic, as the continent hits its first recession in 25 years. But this is not the picture that defines a continent that has long defied expectation and prediction.

SMEs need policy support to compete in AfCTA – Report (News Ghana)

A research report has recommended policy support for Small and Medium Enterprises (SMEs) to be competitive in participating in the African Continental Free Trade Area (AfCFTA). The report said the support should focus on cheaper and more innovative trade finance products, trade policy, trade infrastructure, improved capacity, trade information and facilitation, market access for growth and expansion of SMEs in the country. Dr Samuel Frimpong Boateng, the Lead Consultant for the Research made these recommendations at a stakeholder workshop on the report titled “Mobilising Diagnostics Data to Inform Bottom-Up Decisions on Government Policies.”

International

Mapping African regional cooperation (European Council on Foreign Relations)

The African regional security landscape is something of a multi-layered jigsaw puzzle. Regional conflicts in the Sahel and the Lake Chad Basin have led to the creation of multiple and overlapping membership organisations that to seek to deal with cross-border challenges. This project maps African regional initiatives in west and central Africa and provides a data-based and a geographical overview of the ‘à la carte’ nature of African regional cooperation.

Europe’s Pivot to Africa: Shaping the Future of the Strategic Partnership (EUBULLETIN)

2020 seemed set to be “a pivotal year” for EU-African relations, with the 10th Commission-to-Commission meeting between the EU and African Union (AU) held in February, followed by a renewed comprehensive EU Strategy with Africa published in March. However, with the planned 6th African Union-European Union Summit now postponed due to the COVID-19 pandemic, the leaders should use the upcoming months to forge a true strategic partnership which goes beyond the archaic donor-recipient relationship. Only then can EU-Africa relations become a building block in Europe’s quest to obtain geopolitical power, and can Africa fully benefit from its longstanding yet so far disappointing relationship with Europe.

The new investment case for Africa and emerging sectors of opportunity (How we made it in Africa)

From the days of African independence to the turn of the 21st century, developed countries’ economic engagement with African nations was largely limited to the provision of humanitarian and development aid. The beginning of the new millennium saw a shift as traditional donor countries began to focus on boosting African economic growth via increased trade. Over the past decade, this dynamic has shifted once more, with an increased emphasis on facilitating private investment into African economies. The business case for investing in African markets can no longer rest solely on the dated adage that six of the 10 fastest-growing countries are in Africa – it now needs to be updated to the post-Covid emergent economic reality.

BRICS Business Council seeks more growth opportunities post pandemic (Political Analysis South Africa)

The BRICS Business Council released a statement on Thursday, 29 October 2020, detailing the resolutions from the ten-day BRICS Business Forum. The physical gathering was conducted in Russia, but most international delegates attended virtually. The participants included business leaders and representatives from BRICS countries, namely, Brazil, Russia, India, China and South Africa. The primary focus was on growth prospects post the pandemic, as well as possible partnerships between business and the state. This is in an effort to revitalise the economies of the respective states.

Five BRICS Countries Accentuate UN’s Central Role in International Affairs (IDN InDepthNews)

Parliamentarians of five BRICS countries (Brazil, Russia, India, China and South Africa) have pledged to join hands in combating COVID-19, facing the challenges and threats that each member state currently faces, and strengthening cooperation, including at the inter-parliamentary level. In view of the coronavirus pandemic, the Sixth Parliamentary Forum on October 27 was organized via video conference. Its main theme was "BRICS Partnership for Global Stability, Shared Security and Innovative Growth: parliamentary dimension".

Market Illiquidity: Experts advocate diversifying investment options through global best practices (BusinessAMlive)

Philip Buyskes, chief executive officer at Frontclear, said there is a plan underway for the implementation of regulatory reforms to help the proper functioning of the market. “Progress has been made in the last couple of years in the government bond market. But there is still low liquidity in the African secondary market. Overall, it is still a relatively small and illiquid market. Interesting to highlight is the focus of the money market in Africa. We now look forward to seeing more liquidity in the bond and repo market. We are also working on implementing regulatory reforms to help the proper functioning of the bodies or players in the market. Ultimately, our goal is to finance infrastructure. The view is to get the basic things right and being able to achieve real payments in the market.”

FOCAC grows in pragmatic cooperation since its inception two decades ago (China.org.cn)

On October 7, the air cargo route from Wuhan in central China to Ethiopian capital Addis Ababa became operational as the first flight took off, carrying nucleic acid test kits to detect the novel coronavirus disease (COVID-19), masks and other epidemic prevention materials. It was a telling gesture with the Forum on China-Africa Cooperation (FOCAC) celebrating its 20th anniversary the same month. FOCAC, already an important platform for collective dialogue and practical cooperation between China and Africa, has, in the wake of the global pandemic, shown its role in enhancing support between the two sides to tackle the disease.

COVID-19: Remittance Flows to Shrink 14% by 2021 (World Bank)

As the COVID-19 pandemic and economic crisis continues to spread, the amount of money migrant workers send home is projected to decline 14 percent by 2021 compared to the pre COVID-19 levels in 2019, according to the latest estimates published in the World Bank’s Migration and Development Brief. Remittance flows to low and middle-income countries (LMICs) are projected to fall by 7 percent, to $508 billion in 2020, followed by a further decline of 7.5 percent, to $470 billion in 2021. The foremost factors driving the decline in remittances include weak economic growth and employment levels in migrant-hosting countries, weak oil prices; and depreciation of the currencies of remittance-source countries against the US dollar.

How COVID-19 Will Increase Inequality in Emerging Markets and Developing Economies (IMFBlog)

Emerging markets and developing economies grew consistently in the two decades before the COVID-19 pandemic hit, allowing for much-needed gains in poverty reduction and life expectancy. The crisis now puts much of that progress at risk while further widening the gap between rich and poor. As part of our latest World Economic Outlook we explore two facts about the current pandemic to estimate its effect on inequality: a person’s ability to work from home and the drop in GDP expected for most countries in the world.

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AfCFTA will address Africa’s investment challenges, says ECA’s Karingi at AIM2020
AfCFTA will address Africa’s investment challenges, says ECA’s Karingi at AIM2020

tralac Daily News

29 Oct 2020

National

South Africa’s 2020 Medium Term Budget Policy Statement (MTBPS) (National Treasury)

Two weeks ago, President Matamela Cyril Ramaphosa laid out the government’s consensus-driven and action-oriented Economic Reconstruction and Recovery plan. This particular plan is urgent and all of us should do everything in our power to implement it. We table a five-year fiscal consolidation pathway that promotes economic growth while bringing debt under control. The fiscal measures realign the composition of our spending from consumption towards investment and support efforts to lower the cost of capital. Our revised fiscal framework puts us on a course to stabilise the ratio of debt- to-GDP at around 95 per cent within the next five years. The stock of gross debt will rise from roughly R4 trillion this year to R5.5 trillion in 2023/24.

DOWNLOADS

pdf Medium Term Budget Policy Statement (MTBPS) 2020 (3.13 MB)

pdf 2020 Medium Term Budget Policy Statement Speech by Tito Titus Mboweni, Minister of Finance (373 KB)

Namibia seeks to ratify SACUM-UK EPA (New Era)

Namibia is in the process of ratifying the SACU-Mozambique-United Kingdom (UK) economic partnership agreement (EPA) aimed to provide continuity and certainty in trade amongst the parties, when the UK is no longer a member of the European Union. Trade minister Lucia Iipumbu recently tabled the SACUM-UK agreement in parliament for ratification. She said the ratification of SACUM-UK EPA therefore provides the window of opportunity for Namibia to continue reducing and eradicating poverty through the establishment of a trade partnership consistent with the objectives of sustainable and inclusive development.

Rwanda’s revenue from rare minerals drops by half as production slows (The East African)

Rwanda’s principal minerals – cassiterite, wolfram and coltan – fetched $31.6 million in revenues in the first half of 2020, down from $56.6 million in the same period last year, largely due to disruption in the sector occasioned by the coronavirus pandemic. Sector players say mineral buyers, particularly electronic companies, halted the purchase of minerals used in the manufacture of devices for much of this year as production slowed down worldwide on account of the Covid-19 pandemic. The fall in revenue earnings, as released by the National Bank of Rwanda, means less money for the government that has for a long time banked on the mining sector as a major contributor of foreign exchange, second only to tourism.

Call to link continent by rail, water and air (The East African)

In Uganda, players in cross-border trade and logistics are looking at ways to revive their sectors after being battered by Covid-19, while at the same time preparing for AfCFTA. According to Jennifer Mwijukye, the chief executive of Unifreight Cargo Handling Logistics Ltd, the focus now for Uganda, as well as the other EAC partner states, should be how to develop inter-model integrated transport that links the whole of Africa, so as to have efficiency, dependability and availability. She says now is the time to link the continent by rail, water and air transport corridors. “Decent options of transport should be made available for continental trade to flourish. And before we have transport systems, we will not have meaningful trade. Some hinterland countries like Uganda will suffer and even regret why they went into that free trade area, agreement,” Ms Mwijukye said.

COVID-19 management: Ghana adjudged one of best three in the world – Ofori-Atta (Graphic Online)

Presenting a budget to cater for the first quarter of 2021 in Parliament Wednesday, the Minister explained that an increase in business and consumer confidence was a sign of the government’s efficient management of the COVID-19 pandemic. “Indeed our efforts have been adjudged as among the best three in the world. Mr. Speaker, the robustness of our macro-economic fundamentals and the efficacy of Government’s COVID-19 mitigation measures have been borne out by recent indicators.”

Ghana exporters advised to rely on the NEDS to stay ahead of competition (Ghanaweb)

Trade practitioners and experts have outlined various means Ghana can scale up its exports as Africa gets ready for a 3 trillion-dollar continental free market from January 1, 2021. Speaking on Eye on Port on how to promote value addition to Ghana’s exports to remain competitive in a continental economy, the Director of Projects at Ghana Exports Promotion Authority, Alexander Dadzawa expressed that the Government sees a major opportunity in the African Continental Free Trade Area to take advantage of, in its ambitions to balance the trade deficit of exports to imports.

Take advantage of opportunities AfCFTA offers – Prez Akufo-Addo to businesses (Graphic Online)

President Nana Addo Dankwa Akufo-Addo has charged Ghanaian enterprises to take advantage of the opportunities offered by the African Continental Free Trade Area (AfCFTA) agreement, which comes into force in January 2021, to expand their reach and contribute to Ghana’s development. “We in Ghana cannot afford to let this window of opportunity slip. It is our hope that the private sector, facilitated and actively supported by the government, will be at the forefront to take advantage of the vast possibilities presented by the AfCFTA,” he said.

Related: Sensitisation of shippers and businesses on AfCFTA critical – AGI (Ghana Shippers Authority)

Gov’t revises fiscal deficit-to-GDP to 8.3% in 2020 (Myjoyonline.com)

Government has scaled down the projected 2021 Fiscal Deficit from 9.6% of Gross Domestic Product (GDP) as reported in the Mid-Year Review to 8.3% of GDP. This reflects improved revenues from the anticipated pick-up of economic activities and a more rationalized public expenditure programme. According to Finance Minister, Ken Ofori-Atta, it expects the country to return to the fiscal responsibility threshold of 5.0% of GDP fiscal deficit and a positive primary balance earlier than the 2024 fiscal year previously announced. “I want to assure this House that we will recover, we will revitalize, and we will transform the economy. We shall pivot off the AFCFTA headquarters in Accra for Ghana to become a dynamic regional hub. We have planted the seeds for a fast-paced and more inclusive recovery”.

CBN reveals framework for the N75 billion Youth Investment Fund (Nairametrics)

The Central Bank of Nigeria (CBN) has revealed the implementation framework for the Nigerian Youth Investment Fund. This was disclosed in a publication by the Development Finance Department under the auspices of the Central Bank of Nigeria. The CBN stated that the Nigerian Youth Investment Fund (N-YIF) would be funded through NIRSAL MFB window, with an initial take-off seed capital of N12.5 billion. The N-YIF aims to financially empower Nigerian youths to generate at least 500,000 jobs between 2020 and 2023.

pdf Framework for the Operation of the NIRSAL Microfinance Bank Window of the Nigeria Youth Investment Fund (190 KB)

Africa

African Union Ministers for Trade report progress in AFCFTA negotiations (South African Government)

The 12th Meeting of the African Union Ministers of Trade (AMOT) took place virtually on 27 October 2020 with the participation of 38 African Union Member States. Ministers noted significant progress in the finalisation of additional Rules of Origin following the adoption of a priroitised work programme and roadmap for the outstanding negotiations by the 11th AMOT held on 30 September 2020 to facilitate the start of preferential trade under the AfCFTA. It is expected that further substantive progress will be made in the conclusion of additional outstanding chapters on Rules of Origin in the next round of negotiations in an effort to unlock and finalise commercially and mutually beneficial tariff offers. In considering outstanding Rules of Origin, Minister Patel emphasised the importance of concluding Rules that promote and enhance a “Made in Africa, Grown in Africa, Designed in Africa” approach.

UN Global Compact launches first regional network in Africa (The Financial)

The United Nations Global Compact today launched its first regional network in Africa for Mauritius and the Indian Ocean region at an event attended by representatives from business, civil society, academia and the United Nations. Executive Director and CEO Sanda Ojiambo hailed the importance of the new regional network. “It’s a milestone on the road to uniting business for a better world,” she said. In her welcoming remarks at the event, she added, “This regional network is a natural response to the need for more regional integration in tackling important issues such as extreme poverty, gender inequality and fragile ecosystems. As a convener and partner, the regional network can help the region achieve inclusive recovery from the COVID-19 pandemic and deliver on the Sustainable Development Goals.”

Access to finance poses the biggest challenge for African businesswomen (UNECA)

Inadequate finance and information are among the leading non-tariff barriers (NTBs) facing African businesswomen and may undermine the success of the African Continental Free Trade Area (AfCFTA), according to an advocate for businesswomen on the continent. Speaking today during a webinar on the Trade Easier platform, a mechanism for reporting, monitoring and eliminating NTBs under AfCFTA, the Executive Director of the Pan African Business Women’s Association (PABWA), Ms Yavi Madurai, said the problem of gender inequality, corruption, and lack of trust between women and border officials were among other barriers. “Access to finance is the biggest challenge to women in business in Africa,” she said.

African countries contributed the most to the fight against Covid-19 on the continent with $44.6bln (Ecofin Agency)

With $44.6 billion, African countries are the biggest contributors to the battle against Covid-19 on the continent. The figures were reported by Bartholomew Armah, an economist and Chief Development Planning, Macroeconomics and Governance Division – UN Economic Commission for Africa. The second-largest contributor is the International Monetary Fund with about $16 billion. This amount may have increased in the meantime, as the institution continues to approve disbursements to some countries in the region, as was recently the case for Cameroon. At just over $4.9 billion, the G20 and its initiative to suspend the debt of poor countries takes third place.

How trade restrictions meant to curb Covid-19 have hit Africa’s (The Citizen)

Trade routes have been significantly disrupted this year in efforts to contain Covid-19. The effects of this are already showing: global growth is set to contract by 4.9 percent and growth in sub-Saharan Africa will contract by 3.2 percent. This will get worse if continued restrictions further impede trade. In the current economic climate, trade is not a luxury that can be temporarily avoided. In Africa, there’s a growing body of evidence showing that firms – from large to very small – have been severely affected by restrictions in the movement of goods and people.

Coalition of African Nations to Coordinate Data Protection Framework (JD Supra)

A coalition of African nations have developed a data protection framework with the goal of centralizing data protection laws and the digital economy across Africa. Currently, five countries, including Nigeria, are testing the data protection framework, with the intention to make Africa a single market. After the testing is complete, the data protection framework will be replicated across additional African countries. The data protection framework, focused on data transfers, is based on the legal agreement established with the African Union Convention on Cyber Security and Personal Data Protection, also referred to as the Malabo Convention for Cyber Security and Data Protection.

Africa can’t risk a major maritime cyber attack (ISS Africa)

Cyber attacks against African maritime infrastructure threaten the continent’s recovery from COVID-19 and its long-term development and security aspirations. According to maritime cyber defence company Naval Dome, 310 incidents affecting maritime industries were recorded worldwide in 2019, a huge jump from 120 in 2018 and 50 in 2017. No data is available yet for this year, but the figure is expected to reach 500 incidents in 2020. About 90% of Africa’s trade is seaborne, making the continent dependent on well run ports and shipping, and effective protection of its maritime resources. Digitalisation will make African infrastructure a high-risk target and the impact of cyber attacks could be severe.

Smart Power lights up Africa’s Road to Pandemic Recovery (East African Business Week)

Across Africa, access to power is hampered by the lack of access to competitive funding, the dire state of the continent’s utilities infrastructure and the need for energy policy and legislation to be adapted so that it can boost investment in the sector. Post COVID-19, new solutions are urgently needed to address Africa’s power crisis and switch on a continent-wide strategy for its recovery and renewal. Such solutions must take into account the energy transition and in particular, the utilisation of renewable energy, the focus on smart power technologies and cost effective solutions, as well as the global drive towards a decentralised, decarbonised and secure energy supply that addresses climate change and stimulates economic growth.

International

US holds up Ngozi Okonjo-Iweala appointment as WTO Director-General (The Africa Report)

Nigeria’s Ngozi Okonjo-Iweala was slated to be the new Director-General of the World Trade Organization. She will be the first woman, and the first African, to lead the institution. But there was an unexpected glitch in the process. A panel at the WTO recommended her on Wednesday for the position. The announcement that Ngozi Okonjo-Iweala is to be the new director-general of the World Trade Organization would have been a tremendous boost for Africa and lines her up for one of the toughest jobs in the international system.

Discord over next global trade chief threatens to blow up WTO (POLITICO)

On Wednesday, the United States said it could not support Nigeria’s Ngozi Okonjo-Iweala as the next WTO boss even though most member countries supported her. Washington, however, is throwing its weight behind her opponent, the South Korean candidate Yoo Myung-hee, saying that she has “25 years of trade experience and that she would be able to hit the ground running,” according to a WTO spokesperson. WTO officials will now hold consultations with member countries, hoping to find a consensus by the meeting of all delegations on November 9.

See the Statement from the Office of the U.S. Trade Representative on the WTO Director-General Selection Process

African and US Development Financiers Confirm Commitment to Attracting Private Sector Capital to Africa (The Fintech Times)

The continent’s largest development finance institutions have emphasised that a sustained and collaborative approach among development partners to scale up project development activities will boost the number of bankable projects attracting investor interest and contribute to closing the infrastructure finance gap in Africa. They spoke during a panel event to discuss their organizations’ role in post-Covid-19 environment, convened on October 16, as part of a day-long public forum on investing in Africa’s future, organized by the US International Development Finance Corporation (DFC) and the Atlantic Council.

From Agoa to FTA, Kenya-US partnership getting stronger (Business Daily)

The African Growth and Opportunity Act (Agoa) enhanced markets, allowing Kenyan businesses to grow. Agoa will expire in 2025 and, while it has been helpful, it has not been transformative in driving the broad-based economic growth Kenya seeks. Kenya is ready for the next step, a free trade agreement (FTA) that will bring our relationship from a reliance on tariff preferences that erode over time and can be unilaterally withdrawn, to an agreement that drives more efficient uses of resources and expands trade. Both the United States and Kenya believe in a strong economy through an open, free marketplace – allowing entrepreneurs, businesses, and the private sector to thrive and create jobs.

NGOs & Foundations Want to Dictate Africa’s Agricultural Destiny (European Scientist)

Across Africa, farmers and governments are struggling to feed growing populations. Ongoing and deadly locusts and Fall Armyworm infestations, cancer-causing mycotoxins, crop diseases and adverse weather all threaten starvation for millions. At the same time, agricultural technologies that can help improve yields, protect the natural environment and feed hungry millions are being undermined by intentionally deceptive anti-technology campaigns. Campaigns funded by rich foundations hyping utopian visions of organic peasant agriculture and European government-funded non-governmental organizations (NGOs) are seeking control of Africa’s food and agriculture.

China to start buying soybeans from Tanzania as it seeks new suppliers (South China Morning Post)

China, the world’s biggest importer of soybeans, is opening its market to Tanzania as it seeks to reduce its reliance on the United States and Brazil for supplies of the oilseed. Wu Peng, director of African affairs at China’s foreign ministry, said an agreement had been reached on Monday for Tanzania to start exporting soybeans to the country. He said it was in line with Beijing’s pledge to support African nations by expanding imports – especially beyond natural resources – made during the Forum on China-Africa Cooperation in 2018. “Both China and Africa stand to benefit from stronger trade ties,” Wu added.

Empowering women to leave no one behind (FAO)

Agrifood systems cannot be transformed unless there is gender equality. That was the simple message underlying the launch today of a new report by the Food and Agriculture Organization of the United Nations (FAO) and the African Union that puts the spotlight on women’s role in agrifood systems. The report was launched by FAO Director-General QU Dongyu and African Union Commissioner for Rural Economy and Agriculture Josefa Sacko at the 31st Session of the FAO Regional Conference for Africa. “Rural women are the pillars of our food systems and agents of change for food security and climate justice. But they’re also disproportionately affected by poverty, inequality, exclusion and the effects of climate change,” UN Deputy Secretary-General Amina Mohammed said by video message at the launch.

pdf Leaving No One Behind – A Regional Outlook on Gender and Agrifood Systems (12.89 MB)

Policy Brief: As Second Wave of COVID-19 Sweeps the Globe, WTO Members Mull Options for Pandemic Response (IISD’s SDG Knowledge Hub)

As reports of COVID-19’s second wave dominate news headlines, the urgency for a coordinated international response has grown, especially as the pandemic continues to expose the potential limitations of existing global governance frameworks. In Geneva, the situation has lately revived one of the most entrenched debates in international trade: whether the World Trade Organization’s (WTO) rules on intellectual property rights protections are well-suited to responding to public health needs and whether further flexibilities and new approaches are needed, especially in times of crisis.

This debate took center stage at the 20 October meeting of the WTO’s TRIPS Council – the body that deals with the implementation of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The proposed waiver was reportedly opposed by the EU and the US, as well as a mix of developed and developing economies, while others sought further time to consider its feasibility and wider impact, beyond the immediate pandemic needs. India and South Africa refer to the challenges inherent in putting these TRIPS flexibilities into practice as part of the rationale for their proposal, especially given that many developing and least developed countries (LDCs) may lack the manufacturing capacity to do so.

Poor countries denied $5.7 trillion in aid because of rich countries’ 50-year failure to deliver on aid promises (Oxfam International)

“Fifty Years of Broken Promises,” published ahead of the 50th anniversary of the international aid commitment on Saturday 24th October, warns that the economic fallout of COVID-19 will increase the need for aid but will further undermine aid spending, and make it harder for poor countries to mobilize revenue from other sources. The pandemic could push as many as 200 - 500 million more people into poverty, yet just 28 percent of the $10.19 billion the UN requested to help poor countries tackle the crisis has been pledged to date.

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G20 Foreign Ministers to strengthen international cooperation in response to the COVID-19 pandemic
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African Union Ministers for Trade report progress in AFCFTA negotiations

29 Oct 2020

Minister Ebrahim Patel on progress in AFCFTA negotiations

Just short of one month after assuming Chairship of the African Union Ministers of Trade, South Africa’s Minister of Trade, Industry and Competition, Ebrahim Patel has chaired his second meeting of the Ministerial negotiating body with the aim of finalising the key aspects of the outstanding AfCFTA negotiations to enable the start of preferential trade on 1 January 2021.

The 12th Meeting of the African Union Ministers of Trade (AMOT) took place virtually on 27 October 2020 with the participation of 38 African Union Member States.

Ministers noted significant progress in the finalisation of additional Rules of Origin following the adoption of a priroitised work programme and roadmap for the outstanding negotiations by the 11th AMOT held on 30 September 2020 to facilitate the start of preferential trade under the AfCFTA. 

It is expected that further substantive progress will be made in the conclusion of additional outstanding chapters on Rules of Origin in the next round of negotiations in an effort to unlock and finalise commercially and mutually beneficial tariff offers.  In considering outstanding Rules of Origin, Minister Patel emphasised the importance of concluding Rules that promote and enhance a “Made in Africa, Grown in Africa, Designed in Africa” approach.

“It is important that we seek to ensure that agreed Rules of Origin promote and support local production and value addition in Africa. Our Rules, therefore, should not be designed to benefit third parties,” said Minister Patel.

Also participating in the 12th AMOT, Deputy Minister Nomalungela emphasised that “Rules of Origin should incentivise the expansion of Africa’s manufacturing capacity, including the development of supply chains and maximum value addition within the Continent. These rules must serve to spur increased investment in local African productive capacity and job creation.”

Ministers further emphasised the need for State Parties to the AfCFTA Agreement to prioritise the finalisation and submission of tariff offers on the basis of the agreed Rules of Origin. The importance of ratification by AU member states to enhance inclusiveness in preferential trade under the AfCFTA was again encouraged.

Minister Patel acknowledged that the spirit of consensus building in the AfCFTA negotiations would contribute to successful deliverables for the Extra-ordinary Summit.

Minister Patel also noted the series of focused meetings of the negotiations and implementation structures to be held during the month of November 2020 to ensure that the necessary prerequisites for trade are in place to support the commencement of preferential trade. These include, amongst others, the consideration of trade in services offers, the finalisation of tariff concessions on the basis of as many agreed Rules of Origin as possible, as well as the finalisation of the necessary customs documentation.

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South Africa’s 2020 Medium Term Budget Policy Statement (MTBPS)

29 Oct 2020

Finance Minister Tito Tius Mboweni delivered his Medium-Term Budget Policy Speech in Parliament on 28 October 2020 in Cape Town.

Below is his speech.

Introduction

Twenty-six years ago, President Nelson Mandela stood at this very spot to weave the tapestry of our newly democratic country. Freedom was only two weeks old. Madiba challenged us to:

Meet despair with hope and death with a reaffirmation of the beauty of life.

His plan for the country’s first democratic administration committed us to fiscal rehabilitation after the devastation wrought to our public finances by the previous regime.

Most of us sitting in this House, I amongst them, did not know it then but Madiba was ushering in a period of unmatched social progress in our history.

Over the next 15 years, the economy began to re-emerge. Real GDP rose by 61 per cent and 5.3 million jobs were created.

We are fiscally at a moment not unlike that in 1994. We must rebuild our economy, rehabilitate our public finances and recover from the devastation wrought upon us by COVID-19.

As we rose to that fiscal challenge, so we will rise to this one.

Two weeks ago, President Matamela Cyril Ramaphosa laid out the government’s consensus-driven and action-oriented Economic Reconstruction and Recovery plan. This particular plan is urgent and all of us should do everything in our power to implement it.

Summary of the Medium-Term Fiscal Strategy

The pdf June 2020 Special Adjustments Budget (723 KB) was prepared in an environment of extreme uncertainty. Given the economic situation then, government proposed a three-year fiscal consolidation.

Since June, more data has become available. The economy is now expected to contract by 7.8 per cent this year, and the 2021 outlook is more uncertain. Job losses have been particularly severe.

But we cannot allow our recent fiscal weakness and the pandemic to turn into a sovereign debt crisis.

Therefore, today government sets out active measures to avoid this risk.

We table a five-year fiscal consolidation pathway that promotes economic growth while bringing debt under control.

The fiscal measures realign the composition of our spending from consumption towards investment and support efforts to lower the cost of capital.

Our revised fiscal framework puts us on a course to stabilise the ratio of debt- to-GDP at around 95 per cent within the next five years. The stock of gross debt will rise from roughly R4 trillion this year to R5.5 trillion in 2023/24.

The medium-term fiscal strategy narrows the main budget primary deficit from an expected R266 billion in 2021/22 to R84 billion in 2023/24 and we achieve a surplus by 2025/26.

We propose consolidated spending of R6.2 trillion over the 2021 Medium Term Expenditure Framework, of which R1.2 trillion goes to learning and culture, R978 billion to social development and R724 billion to health.

We forecast the South African economy to grow by 3.3 per cent in 2021, 1.7 per cent in 2022 and 1.5 per cent in 2023.

Mr President, by putting all our efforts into implementing the Economic Reconstruction and Recovery Plan, we can accelerate growth to 3 per cent or more. This will secure fiscal sustainability and build this economy better than before.

The Economic Context

Turning now to the economic context.

A sharp – and hopefully short – global recession is underway. The International Monetary Fund expects global output to contract by 4.4 per cent in 2020, before rebounding to 5.2 per cent in 2021 in their October World Economic Outlook.

Growth in advanced economies is strengthening. Next year, emerging market countries are set to grow by 6 per cent.

Sub-Saharan Africa is expected to rebound to growth of 3.1 per cent in 2021. As always, Africa has been at the forefront of innovative solutions to the crisis, including delivering social assistance using digital technology.

Madam Speaker, you are now well aware that the country’s Aloe Ferox is drought resistant, it can survive the harshest of circumstances and can certainly withstand a pandemic.

Our little Aloe Ferox has survived! It is recovering!

In South Africa, the high frequency data that we collect suggests that green shoots are emerging. At this stage, it looks like there will be a strong rebound in the next quarter.

These will be supported by government’s Economic Reconstruction and Recovery plan.

Already there is progress on implementing the plan.

Honourable Members, improving the supply of electricity is urgent. In line with our plan, there is progress in allowing municipalities to buy electricity from different sources.

In addition, the way has been opened for the procurement of almost 12 000 MW of new electricity capacity to be provided by independent power producers.

The ongoing implementation of the Eskom Roadmap and unbundling continues. Divisional managing directors and boards of directors have been appointed.

Infrastructure is at the centre of the plan.

Mr President, our government, under your wise leadership, has championed the Infrastructure Fund to implementation. And we are starting to see results!

Subsidies of R2.2 billion will support the Social Housing Programme aimed at poor, working South Africans. A further R6.7 billion has been contractually committed to this programme. We expect that the total investment from this programme will be R20 billion over the next 10 years.

As a consequence of the Fund, the Student Housing Programme worth an estimated R96 billion is underway. It will service nearly 300 000 students a year when complete.

The Budget Facility for Infrastructure will support new projects, including through blended finance in partnership with the private sector. These include hospital projects in KwaZulu-Natal, such as the extension of Chief Albert Luthuli, and the Western Cape, like Tygerberg and Klipfontein. There are exciting new proposals for the development of more than 12 harbours in the Eastern Cape, KwaZulu-Natal, Northern Cape and Western Cape.

Finally, we will review our existing public finance regulatory framework to unblock infrastructure investment by the broader government.

Over and above this, the Independent Communications Authority of South Africa has issued an invitation to apply for the auction of additional spectrum.

Government has initiated a process to review Regulation 28 to make it easier for retirement funds to increase investment in infrastructure – should their board of trustees opt to do so. At all times, trustees are expected to put the interests of retirement fund members first. A draft gazette will be released in due course for public comment.

Notwithstanding this encouraging progress, there are priority structural reforms that require acceleration.

Operation Vulindlela is a critical coordination tool to unlock and fast track implementation of the structural economic reform agenda. Deputy Minister David Masondo is leading this initiative, and a technical team, headed by Dr Sean Phillips, will draw on expertise and capacity from the public and private sectors. This will ensure that implementation is well coordinated, sequenced and timeous.

Parliament plays an important role in this reform agenda. We thank this House for fast-tracking the Economic Regulation of Transport Bill.

Under the leadership of the Minister of Health, government is exploring greater participation in the COVAX facility, a global initiative to ensure equitable access to future vaccines.

In the area of social protection, we are happy to announce a historic agreement with all NEDLAC constituencies for the annuitisation of provident funds beginning in March 2021, which will enable all workers to continue to enjoy tax deductions on their contributions. We thank the labour constituency for identifying appropriate annuity products for low income workers.

The NEDLAC constituencies also agree to accelerate the introduction of auto- enrolment for all employed workers, and the establishment of a fund to cater for workers currently excluded from pension coverage, as an urgent intervention towards a comprehensive social security system. Government will present legislation next year to allow for limited pre-retirement withdrawals under certain circumstances linked to mandatory preservation requirements.

Today, we announce further steps to make cross-border business easier, including inward listings, loop structures and corporate foreign borrowings.

Work is well advanced to modernise the cross-border flows management regime to support South Africa’s growth as an investment and financial hub for Africa.

Update on the Fiscal Relief Package

In April this year, government announced a major fiscal relief package of around R500 billion or 10 percent of GDP, including:

  1. More than R30 billion for health and other frontline services

  2. Support vulnerable households which is now in excess of R50 billion

  3. More than R40 billion for wage protection through the UIF

  4. Around R100 billion for job creation initiatives, which will now be spread over the MTEF

  5. R200 billion for a credit guarantee scheme

  6. R20 billion towards municipalities to assist them with COVID-19 related activities

  7. R70 billion towards emergency tax measures

As the pandemic has unfolded, some shifts in resources could be implemented. The resources for the relief package came from a variety of places, including drawing down on Unemployment Insurance Fund reserves, the issuing of new guarantees and projected revenue losses.

During the lockdown, cash grants were paid to over 22 million people, nearly half of the population.

To reach the poorest South African households, we expanded social protection. Seven million people accessed the Temporary Employment Relief Scheme through the Unemployment Insurance Fund. The Special COVID-19 Social Relief of Distress grant reached six million people.

The Cabinet has decided to extend the Social Relief of Distress grant to the end of January 2021. Because this grant is so effective in reaching the unemployed, we propose to redirect R6.8 billion from the public employment programme allocation.

The temporary increases in other grants will unfortunately have to come to an end.

This adjustments appropriation also adds R1 billion for food relief to fight hunger.

Honourable members,

We are happy to announce today that we are allocating R12.6 billion in this financial year to the game-changing employment initiatives championed by the President.

The Provincial Equitable Share is augmented by R7 billion to support jobs at fee-paying public schools and government-subsidised independent schools.

R600 million goes to employ early childhood development and social workers.

R2 billion is allocated to Working for Fire, Working for Water and Working for Forests.

The rest of the allocation from the employment initiative is divided between the transport, arts, sports and culture, health and agricultural sectors.

The District Development Model will fast-track infrastructure and general socio-economic development. The revised Division of Revenue for 2020/21 proposes allocations of R806.7 billion to national departments, R628.3 billion to provinces and R139.9 billion to local government.

After extensive consultations between the Banking Association, the National Treasury and the South African Reserve Bank, work is underway to review the Loan Guarantee Scheme to improve take-up. I will also be working with my colleagues in the Cabinet to boost business restart efforts.

Net in-year spending adjustment

In summary: non-interest spending in 2020/21 is unchanged relative to the Special Adjustments Budget at R1.6 trillion.

All additional pressures have been accommodated through adjustments elsewhere.

Net in-year revenue revision

Gross tax revenue is revised down but this is offset by other receipts into the National Revenue Fund.

Main budget revenue is now projected to be R1.6 billion less compared to the Special Adjustment Budget.

Debt service costs

Debt service costs are revised down by R3.4 billion, in part because borrowing costs are lower than expected.

Revised main budget deficit

Altogether, the in-year revised main budget deficit is now expected to be R707.8 billion, a little better than the Special Adjustments Budget. As ratio of GDP, it is unchanged at 14.6 per cent of GDP. The consolidated deficit is also marginally better in rand terms, but unchanged at as proportion of GDP at 15.7 per cent.

Government has broadened its financing strategy to include drawing down on sterilisation and foreign currency deposits. We are also borrowing at favourable rates from international finance institutions. The MTBPS Review and Adjusted Estimates of National Expenditure provide greater detail on our fiscal and borrowing plans.

I now turn to the medium-term fiscal strategy.

The Medium-Term Fiscal Strategy

As we chart our way forward, we are reminded of the grizzly sea captain in Samuel Coleridge’s poem, the Rime of the Ancient Mariner, who is hit by a great tempest that throws his ship off course.

To quote:

“And now the STORM-BLAST came, and he Was tyrannous and strong:
He struck with his o’ertaking wings,

And chased us south along.”

Our job is not to tremble in fear at the storm blast, neither at plagues nor at the wide-open mouth of the hippopotamus.

Armed with a strong sense of direction, steadfastness, resolution and determination, we face these perils head-on. Our compass points towards fiscal sustainability and we must all face the same way.

In June, we published the medium-term spending plans and long-term debt projections to spark robust debate on our fiscal path – here in this House, within government, with community activists, with civil society, with the trades union movement, with our provincial and municipal colleagues, on Twitter, with small and big business, and in opinions expressed through media platforms.

We are grateful for the constructive discussions.

South Africans love a debate – even about garlic! This is the glorious, loud and rambunctious democracy that we fought so hard for.

Mr President, you summarised the consensus two weeks ago:

We cannot sustain the current levels of debt; particularly as increasing borrowing costs are diverting resources that should be going to economic and social development.

We must now rally behind fiscal rehabilitation and growth.

Right now, government is borrowing at a rate of R2.1 billion per day.

Madam Speaker, we must be careful to avoid the fate of countries like Argentina and Ecuador that defaulted on their debt this year.

Countries that find themselves in default see sharp GDP contractions and currency depreciations. On current trends, more of our taxes are being transferred to bondholders, rather than to critical services for our people.

An uncontrolled increase in borrowing costs would harm small businesses, ordinary South Africans and the poor the most.

The Cabinet remains resolute and will walk through the narrow gate towards fiscal sustainability. Before today, the economy languished in a trap of paralysis – as the Rime of the Ancient Mariner says, “As idle as a painted ship, Upon a painted ocean”. Today we break free from this trap.

Some might ask: can we not just spend our way out of the present crisis?

Certainly in 2009, when we had debt of 31.5 per cent of GDP and the real yield on government debt was about 3 per cent, every rand of government spending got us R1.60 in GDP.

Now, however, at such elevated real interest rates, every additional rand gets us less than a rand of GDP. It may even subtract GDP, leaving us poorer and more indebted than before.

And it is easy to see why. As we borrow more, we pay even more. We also have not been spending on infrastructure, which creates long-term growth.

We act to instil confidence amongst discouraged work seekers, businesses bruised by lockdown and facing uncertainty, farmers and farm workers who produce the food for the country, and our international partners who know that South Africa is a great place to invest.

Amongst other things, we will:

  1. Make it easier to do business. We must remove the needlessly complex red tape that increases the cost of doing

  2. Create stable and predictable policies. As we rebuild, there must be universal understanding of the policy trajectory of our government. It is not only investors that need confidence, but also the average South African.

  3. We must use our ingenuity and adapt after the ravages of the

  4. Embrace a sustainable future, and work towards a green and just transition.

The future of work is now different in the post COVID-19 world. The public service must adapt to the new world after the pandemic. The crisis has highlighted and unfortunately widened inequality. We must continue to protect the most vulnerable.

Compensation Adjustments

Now, as we go forward together as part of our post-lockdown rehabilitation, we need to come together to forge a new consensus on public-sector employee compensation.

Our compatriots in the private sector have made sacrifices and even negotiated salary cuts to keep businesses afloat.

Over the past five years, public sector employee compensation grew by 7.2 per cent a year on average – well above inflation. Over the next five years, it will need to grow much, much slower.

The Minister for the Public Service and Administration and the leadership of the public service unions are meeting to discuss how best we adapt to the reality that we must do more with less, and that we are all in this together.

We wish to thank them all for the seriousness with which they approach this matter. I must stress that our public servants do important work for South Africa. They are patriots. They too wish to unburden our country of debt. They want to bequeath assets, not liabilities, to the next generation.

Still we cannot expect our civil service to carry the burden of nation building alone. Consideration should be given to the proposal for across-the-board compensation pay reductions to management-level positions, across national, provincial and municipal governments, state-owned entities and all other senior public representatives.

Progress on zero-based budgeting and spending reviews

Zero-based budgeting will be piloted at the Department of Public Enterprises and National Treasury next year. It will be fully integrated into the budget system by the 2023 Budget. In practice, it will mean programme-by- programme and project-by-project analysis. We must discard those things that we no longer need to do and scale up those that are essential for progress.

State-owned enterprises

Madam Speaker, R3 billion was allocated to the Land Bank in June. The Bank will require an additional R7 billion over the medium-term to support its restructuring.

R10.5 billion is allocated to SAA to implement its business rescue plan. This allocation is funded through reductions to the baselines of national departments, public entities and conditional grants. This allocation is in addition to the R16.4 billion allocated over the 2020 MTEF in the February Budget for settling guaranteed debt and interest.

Our approach is in line with the principle that funding to state-owned companies must come from within the current framework and reprioritised from elsewhere.

We cannot break the fiscal framework.

Dealing With Corruption

The final part of our duties as captains through the storm is to strengthen the ship.

The COVID-19 pandemic has given rise to shameful and exploitative acts of corruption. This has overshadowed our collective achievements in saving lives and supporting livelihoods.

It is not true that the R500 billion relief package has been entirely lost to corruption. As pointed out above, it is being used to cushion the impact of the pandemic and aspects will continue to be rolled out over the medium term, particularly the Presidential Employment Programmes.

We must continue to defeat the corrupt and plug the loopholes. Efforts to support a rapid response to COVID-19 underline the need for comprehensive procurement reforms. The National Treasury has withdrawn the emergency procurement instruction note and required all state bodies to revert to normal procurement processes. Procurement is now slowed down due to a few scoundrels who put themselves ahead of the country, and we must all suffer.

The details of all COVID-19 related procurement, including the names of companies awarded contracts, have been published. The majority of health spending takes place at provincial level. Provinces are taking actions against those found to have been involved in corrupt practices.

The South African Revenue Services is working with other law enforcement agencies to evaluate R3.5 billion worth of tenders awarded to entities not registered for VAT.

In addition, the State Capture Commission of Inquiry is allocated an additional R63 million from the Department of Justice and Constitutional Development to finalise investigations and produce a close-out report.

Conclusion

Honourable Speaker, Members of the House,

Today we set out a course back to prosperity. Growth is slowly returning.

Things are looking better.

The 2020 MTBPS sets out our course forward.

  1. We intend to run primary surpluses on the main budget by 2025/26 by constraining non-interest spending growth

  2. We shift spending from consumption to investment. Over the MTEF, the fastest-growing item, other than debt service costs, is spending on capital goods, i.e. investment, which is projected to grow at 7.8 per cent a year

  3. We allocate resources for the Economic Reconstruction and Recovery Programme

The Gospel according to John chapter 12 verse 35 warns us:

“You are going to have the light just a little while longer. Walk while you have the light, before darkness overtakes you. Whoever walks in the dark does not know where they are going.”

Madam Speaker, Honourable Members,

Today we embrace our higher purpose as citizens and leaders to take forward the vision of nation-building. Together we can shape a new destiny for our great, vibrant, beautiful country.

Our thanks go to the President and the Deputy President for their support, Cabinet colleagues, the members of Ministers’ Committee on the Budget, the MECs of Finance (Team Finance).

Thanks also to the chairpersons of the Standing Committee on Finance and Appropriations Committee, Mr Joe Maswanganyi and Mr Sfiso Buthelezi respectively, and members of the respective parliamentary committees.

The Medium-Term Budget Policy Statement coincides today with another important process, the tabling of the tax Bills. I am grateful to the Standing and Select Committees on Appropriations and Finance. They have the responsibility for steering the consideration of the tax bills, giving effect to the revenue proposals as announced in the 2020 Annual Budget in February and related tax administration matters. They will also consider the 2020 Division of Revenue Second Amendment Bill and the 2020 Second Adjustments Appropriation Bill.

We also wish to thank the Governor of the South African Reserve Bank, Mr Lesetja Kganyago and his staff for their cooperation with us.

A special word of thanks goes to the Deputy Minister of Finance, Dr David Masondo, and the Director-General of the National Treasury, Mr Dondo Mogajane, and the team for their courage, hard work and commitment.

Finally, we express our appreciation to the people of South Africa who continue to walk with us as we chart the way to a promising destination.

I thank you.

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28 Oct 2020

National

SACUM-UK EPA and SA-US Trade Relations, including AGOA (the dtic)

The United Kingdom (UK) is South Africa’s 5th largest trading partner with total trade amounting to R110 billion in 2019. This is up from R73 billion in 2014. Total two-way trade in goods between SA and the US grew from $7.3bn in 2001 to a peak of $16.3bn in 2011. Since then, bilateral trade declined steadily, to $12.3bn in 2019.

pdf Presentation (340 KB) by Ambassador Xavier Carim, Deputy Director General, Trade Policy, Negotiations and Cooperation Branch, dtic

Toolbox of measures needed to arrest slippage of domestic chrome competitiveness (Mining Weekly)

The Minerals Council South Africa says a comprehensive “toolbox” of measures is needed to improve the competitiveness of the entire chrome value chain, which has been impacted by a number of challenges. These challenges include nearly 40% of South Africa’s ferrochrome production having either been closed or mothballed in the past two years, as well as the significant 523% rise in the price of electricity over the past decade and shortages of electricity supply that have affected the production of mining companies and materially eroded the competitiveness of the ferrochrome industry.

Mini-budget: A tough balancing act (SAnews)

Finance Minister Tito Mboweni faces a tough juggling act this afternoon, when he presents the 2020 Medium Term Budget Policy Statement (MTBPS) in Parliament. The MTBPS will be his second budget presentation since the tabling of the Supplementary Budget in June, which was in response to the economy-crippling COVID-19 pandemic. It also comes on the back of the recently announced Economic Recovery Plan. Econometrix (Pty) Limited director and chief economist, Dr Azar Jammine, speaking to SAnews, said the country might see tough austerities being imposed due to the country’s recent dramatic deterioration in finances.

Export revenue increases by 115.6 USD million (Ethiopian Press Agency)

Exports in the first quarter of the fiscal year 2020 compared to in the previous fiscal year, export revenue increased by 115.6 million USD or 16 percent and a total of US $ 838.6 million was earned, according to the Ministry of Trade and Industry (MoTI). The mining sector has achieved 300 percent of the plan and 205 million USD earned. The industrial sector earned 95 percent and 94 million USD, while agricultural products earned 73 percent and 541 USD respectively, said MoTI. It is stated that the export Products contract registration and implementation of export contracts then major contribution to the improvement of export trade.

Kenya’s debt repayment down Sh199 billion on cheaper loans (Business Daily)

Taxpayers forked out Sh651.5 billion to service Kenya’s public debt in the year to June 30, a report by the Treasury shows, marking a 23.34 percent drop from the previous year. The loan repayments during the period were Sh198.57 billion lower compared to Sh850.07 billion in the 2018/19 fiscal year following a decision by the State to ditch costly commercial loans. “The decline of debt service was on account of decline to lower repayment of commercial debt,” Treasury Cabinet Secretary Ukur Yatani said in the annual public debt management report to Parliament.

Zambian cabinet approves ratification of African free trade agreement (Xinhua)

Zambia’s cabinet has approved the ratification of the African Continental Free Trade Area (AfCFTA), a spokesperson said on Tuesday. Chief Government Spokesperson Dora Siliya said the cabinet approved the ratification of the agreement during its sitting on Monday, Oct. 26. She said the ratification of the agreement will enable the country to have access to a larger market and to harmonize trade instruments across the continent’s regional economic communities. Zambia signed the agreement on February 10, 2019.

A high-level panel to promote the implementation of the AfCFTA in Niger (UNECA)

On the initiative of the United Nations Economic Commission for Africa (ECA), through its Sub-Regional Office for West Africa (SRO-WA), in partnership with the Ministry of Trade and the Promotion of the Private Sector and the Organisation of Industrial Professionals in Niger (OPIN), a high-level panel was organised Thursday, October 22, 2020 on the theme “Boost local production: promote the ‘Made in Niger’ label within the framework of the implementation of the African Continental Free Trade Area (AfCFTA)”.

Nigeria’s Manufacturing Sector contracts for 6th consecutive month (Nairametrics)

The Manufacturing Purchasing Managers’ Index (PMI), for the month of October, witnessed a contraction for the 6th consecutive month, as it stood at 49.4 index points. This was disclosed by the Central Bank of Nigeria (CBN), in its October PMI report released today. According to the information contained in the report, despite the fact that the Manufacturing Purchasing Managers’ Index (PMI) for the month of October contracted, the Manufacturing PMI index recorded a month-on-month increase owing to improved New orders, faster manufacturing supplier delivery time, and slight changes in production and employment levels.

Fresh concerns over $17 billion yearly freight loss to foreign shipping lines (The Guardian Nigeria)

Stakeholders in the maritime industry have expressed displeasure over the yearly $17 billion revenue loss to foreign ship owners due to the inability of the country to lift her cargoes. According to shipping experts and economists, Nigeria cannot own and manage vessels, which is a critical and essential trade facilitation tool. This is particularly worrisome as trade is the country’s second-largest contributor to its gross domestic products (GDP).

Africa

AfCFTA and Trade un Services tops the agenda of the SRO-SA Ad-hoc Expert Group Meeting (UNECA)

The United Nations Economic Commission for Africa (ECA) Sub-Regional Office for Southern Africa (SRO-SA) convened an Ad-hoc Expert Group Meeting on the theme: “The African Continental Free Trade Area (AfCFTA) and Trade in Services: Opportunities and Strategies for Southern Africa.” On opportunities and strategies for Southern Africa to benefit from trade in services under the AfCFTA, the e representative from UNCTAD, among others, highlighted the technical support that UNECA and UNCTAD were providing to member States in developing regional value chains in services, within a joint UN Development Account project. Ms. Trudi Hartzenberg, Executive Director of Trade Law Center (TRALAC), South Africa, emphasised the need to create an internally consistent regulatory ecosystem in services trade across the RECs and the AfCFTA.

A Clarion Call to ensure that trading under the AfCFTA begins in 2021 – A Manchester Trade Paper (The Habari Network)

In this brief Manchester Trade paper, we argue that unless intra-African trade under the African Continental Free Trade Agreement (AfCFTA) begins on a timely basis, Africa’s credibility as a serious player in the global economy will suffer a demoralizing blow. Specifically, if the current delays and launch dates go beyond January 2021, Africa’s various trade and investment partners may start to doubt if the AfCFTA will ever become a reality. Ideally, the current trajectory of the AfCFTA negotiations thus far should culminate in a tentative 2020 ministerial to announce the implementation of a functional AfCFTA.

AfCFTA success depends on manufacturing, value-addition – Dr Osafo-Maafo (Ghanaweb)

Senior Minister, Dr Yaw Osafo-Maafo, has said the success of the Africa Continental Free Trade Area (AfCFTA) depends on every African country having something to trade to the rest of the continent. He said while the free trade area agreement is long overdue, African countries need to emphasise manufacturing and value addition. He said while other intra-continental trade zones like Europe and the Americas are recording annual trade volumes of 60% to 70% of total trade volumes, intra-Africa trade remains a meagre 2%, per 2016/2017 figures. “We have a long way to go to make the agreement work. We must work and trade among ourselves. Others are doing 70% and we are doing 2%. So, we need definitely to do more,” he said.

Africa needs to improve continent’s integration (China Daily)

Historically, African countries have suffered from pervasive corruption and illicit financial flows, which have continually deprived them of much-needed development funds, and eroded confidence and trust on the world stage. Furthermore, the institutions that have been established to ensure transparency and accountability are lacking the leadership and political goodwill needed to effectively discharge their mandates. However, according to the United Nations Conference on Trade and Development’s “Economic Development in Africa Report 2020”, African countries need to build greater cooperation under the African Continental Free Trade Area to curb corruption and illicit financial flows. In addition, to create more resilient African economies, Africa needs to take action on deeper integration.

Opportunities to Turn Around the Low Intra-Regional Trade Abound (COMESA)

Intra-regional trade among the 21 Member countries of COMESA is estimated at a 7%. This low performance is attributed to inadequate participation of all Member States in the COMESA Free Trade Area and the challenges they face in the implementing regional commitments. The situation further aggravated by poor physical connectivity leading to high transportation costs, prevalence of non-tariff barriers, lack of information exchange about existing trading opportunities and prevalence of restrictive regulatory requirements in various markets. ”We need full application of the rules-based regime provided for under the COMESA Non-Tariff Barriers regulations and collective implementation of the commitments under the World Trade Organization Trade Facilitation Agreement,” he said. “We also need to accelerate the negotiations on Trade in Services and make meaningful commitments in sectors that impact trading conditions in the region in terms of competitiveness such as financial sector, telecommunication, tourism and transportation.”

Bioeconomy offers the opportunity to create many jobs in East Africa (UNECA)

Many policymakers and businesses have been calling a green recovery and a “Build Back Better” strategy in the post-COVID-19 era to limit the impact of future pandemics and crises such as climate change. Experts stress that moving our economies towards a bio-based economy offers opportunities for countries to rebuild their economies in an environmentally and socially inclusive manner. Mama Keita, Director of UN Economic Commission (ECA) for Africa in Eastern Africa told the participant at the meeting that ”Bioeconomy is knowledge-intensive and not well-known or understood by the general public and by decision makers. The States and their partners have an important role to play to overcome these challenges.”

African banks – finding balance between post-pandemic challenges and opportunities (East African Business Week)

In a post-pandemic environment, African banks will have to navigate not only an economy in recession, but one where there will be many disruptors to existing business models and a rapid acceleration of existing trends such as digitalisation, cybercrime and the importance of environmental, social and governance (ESG) factors. Baker McKenzie’s latest report, “Finding Balance: The Post-COVID Landscape for Financial Institutions”, states that at the beginning of the COVID-19 crisis, financial institutions faced two main challenges – prudential and operational. The prudential challenge refers to a sudden drop in the value of financial assets, or loss of liquidity, whether domestically or elsewhere in the world.

FAO aims to untap Africa’s potential to end hunger and malnutrition (FAO)

The Director-General of the Food and Agriculture Organization of the United Nations QU Dongyu says Africa’s potential gives him hope that the battle against poverty and hunger can be won. He made the remarks at today’s opening of the Ministerial segment of the 31st Session of the Regional Conference for Africa. “We meet in trying times, but the opportunities ahead of us give me hope,” Director-General Qu said. “Africa is the continent of untapped potential and remains a key priority for me. I am convinced that agricultural and rural development are the keys to winning the battle against poverty and hunger in Africa.”

Experts give insight into food safety in Africa (Food Safety News)

African experts have highlighted the main food safety concerns, challenges, and potential solutions for the continent at the International Association for Food Protection (IAFP) virtual annual meeting. Lucia Anelich, director of Anelich Consulting, presented the situation in South Africa. Lucia Anelich, director of Anelich Consulting. Anelich said not all the system is risk-based but there is a push to revise regulations and standards. “Food safety management system implementation is mainly voluntary and it has become a customer requirement. So if a company wants to do business with another they will require a specific FSMS is in place and certified by an accredited certification body,” she said.

Data-driven digital banking the way to go – KPMG report (Ghanaweb)

A new KPMG report says banks can only survive in the highly digitised era if their product offerings are designed in a way that meets the preference of millennials. The report titled: “Heightened customer expectation in the new normal and beyond,” said the future of customer experience will be insight-led, digitally-enabled and would require customer-centric culture as well as compelling value propositions. “Banks must deploy cross-cutting customer strategies that are born out of data analytics about customers as an essential tool for growth.

International

Food Security and Human Welfare Critical in Trade Agreements – South African Minister (the dtic)

The Trade Ministers Meeting discussed ways to narrow differences and generate consensus to drive the WTO fisheries subsidies negotiations towards conclusion and the contribution of the WTO to global economic recovery post-COVID-19. The negotiations on fisheries subsidies are at a critical stage and the WTO has a role to deliver on Sustainable Development Goal (SDG) 14.6 which aims to prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, and eliminate subsidies that contribute to the Illegal, unreported and Unregulated (IUU) fishing, and refrain from introducing new such subsidies, recognising that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the WTO fisheries subsidies negotiation by 2020.

Minister Patel emphasized that the key objective for the negotiations should be to discipline the subsidies that are targeted at large-scale industrial fishing, while safeguarding food security and livelihoods for subsistence and artisanal fisheries.

DDG Yi calls on ministers to ramp up cooperation on trade to bolster economic recovery (WTO)

The informal session, convened by Australia, looked at two issues: how to narrow differences and move towards an agreement in the WTO fisheries subsidies negotiations, and how the WTO can best contribute to global economic recovery in the wake of the damage caused by the pandemic. The outlook for global trade is a bit brighter than a few months ago. Your countries’ extraordinary fiscal and monetary measures have cushioned the fall in demand, forestalled financial market instability, and contributed to an uptick in trade.

What you need to know about the EU’s backing of Okonjo-Iweala to lead the WTO (African Business Magazine)

The final round in the election for the next director-general of the World Trade Organisation, the multilateral body that regulates world trade, pits former Nigerian finance minister Ngozi Okonjo-Iweala against South Korean trade minister Yoo Myung-hee. The winner, who will be the WTO’s first female director-general, will take the reins as the global trading system comes under significant pressure from an ongoing trade war between the United States and China and amid unprecedented disruption caused by Covid-19. In a significant coup for Okonjo-Iweala, European Union ambassadors confirmed this week that the Nigerian, who would be the first African director-general of the organisation, has secured the support of the EU’s 27 member states following discussions in Brussels last week after hearings with both candidates.

WTO: 106 Countries Back Okonjo-Iweala (The Tide)

The WTO’s consultation process ended, yesterday, and the new leader is expected to be named in November but an EU official said that the EU would publicly announce its support for Nigeria’s former finance minister, Dr Ngozi Okonjo-Iweala, according to AFP. If Okonjo-Iweala is confirmed, she would join the WTO at a difficult time, with the world facing a deep post-Coronavirus recession and a crisis of confidence in free trade and globalisation.

Global trade linked to resource insecurity (Cosmos Magazine)

The global economy and international trade are aggravating water, land and energy insecurity and this is taking a disproportionate toll on supply chains and remote nations, according to the first comprehensive analysis of its kind. “Whilst most mainstream economists argue for increased trade on the basis of competitive advantage, this analysis shows empirically that trade amplifies resource insecurity,” says Oliver Taherzadeh, who led the research while at the University of Cambridge, UK. “These findings call for critical reflection on whether globalisation is compatible with managing the risks countries face.”

Designing South-South trade and investment projects with impact (ITC)

A new International Trade Centre (ITC) report shows governments and donors how to design and execute effective South-South programmes that have a sustainable impact on development. Drawing from case studies and interviews with ITC staff who have worked on South-South projects, Designing for Impact: South-South Trade and Investment is a guide for good project management for trade and investment promotion. It urges learning from relevant role models to transfer knowledge and technology.

International Tourism Down 70% as Travel Restrictions Impact All Regions (UNWTO)

Restrictions on travel introduced in response to the COVID-19 pandemic continue to hit global tourism hard, with the latest data from the World Tourism Organization (UNWTO) showing a 70% fall in international arrivals for the first eight months of 2020. All world regions recorded large declines in arrivals in the first eight months of the year. Asia and the Pacific, the first region to suffer from the impact of COVID-19, saw a 79% decrease in arrivals, followed by Africa and the Middle East (both -69%), Europe (-68%) and the Americas (-65%).

United States Enables Zambia’s Leadership Role in SADC Regional Seed Export Policy (EIN News)

Today, U.S. government, through its Agency for International Development (USAID), and the Southern African Development Community (SADC), in close partnership with the Government of the Republic of Zambia, commissioned a pilot seed export from Zambia to Mozambique produced by emerging seed company, Lake Agriculture. “Through our Seed Trade Project, we are supporting the SADC Secretariat to harmonize the national seed legislation across all 16 Member States with the regional guidelines. Due to its location and ability to produce quality seeds, Zambia is uniquely positioned to provide the ideal seeds for this inaugural export,” said U.S. Embassy Zambia Chargé d’Affaires, a.i. David Young.

How Fighting Cybercrime Also Fights Global Poverty (BORGEN)

Technological advancements of the last three decades have revolutionized the nature of governance, business and daily life for the better. However, it has also given rise to a new, inconspicuous category of criminal activity. Cybercrime is the broad term for criminal activities that involve the use of digital computers. Potential victims include any individual, business or other entity with a digital device. Although there are many forms of cybercrime, the most common include hacking, committing fraud or theft, trafficking child pornography and using hate speech or inciting terrorism. Fighting cybercrime is one of the many ways governments can also help downsize poverty.

Coronavirus vaccines, World Trade Organisation and the global divide (The Financial Express)

Covid-19 has introduced several far-reaching changes in the global order. Some of these are in management of global trade. The division among countries over flexibilities to be allowed in the World Trade Organisation’s intellectual property rules, for global production and distribution of vaccines, is an indication of the turmoil that global trade management and the WTO would encounter in the days to come. Concerns over low-income populations in several countries missing out on vaccines have been highlighted by findings of a recent study by Oxfam.

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Food Security and Human Welfare Critical in Trade Agreements – South African Minister

28 Oct 2020

The Minister of Trade, Industry and Competition, Mr Ebrahim Patel participated in the Informal World Trade Organisation (WTO) Trade Ministers Meeting on Tuesday, 27 October. The Trade Ministers Meeting discussed ways to narrow differences and generate consensus to drive the WTO fisheries subsidies negotiations towards conclusion and the contribution of the WTO to global economic recovery post-COVID-19.

The negotiations on fisheries subsidies are at a critical stage and the WTO has a role to deliver on Sustainable Development Goal (SDG) 14.6 which aims to prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, and eliminate subsidies that contribute to the Illegal, unreported and Unregulated (IUU) fishing, and refrain from introducing new such subsidies, recognising that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the WTO fisheries subsidies negotiation by 2020.

A study by the Food and Agriculture Organisation estimates that 85% of governments’ fisheries subsidies benefit large industrial fleets, thereby creating perverse incentives that enable distant water fleets to target fishing stocks that are already in an unsustainable condition.

Minister Patel emphasized that the key objective for the negotiations should be to discipline the subsidies that are targeted at large-scale industrial fishing, while safeguarding food security and livelihoods for subsistence and artisanal fisheries.

In relation to the contribution of the WTO to global economic recovery, Minister Patel stressed that the prospects of economic recovery are dependent on an efficient response to curb the pandemic. “Many countries face institutional and legal difficulties when using TRIPS flexibilities due the cumbersome process to be followed to invoke the flexibilities.

The TRIPS Waiver as proposed by South Africa and other developing countries aims to promote timely, affordable and equitable access to vaccines, medical technologies and treatments of COVID-19 and ensure that IPRs are protected for the benefit of all” said Minister Patel.

This follows a call South Africa made at the G20 Ministers of Trade and Investment meeting held on 23 July 2020 in which Minister Patel highlighted the need for the G20 and the World Trade Organization, to discuss the relationship between TRIPS (the Agreement on Trade-Related Aspects of Intellectual Property Rights) and COVID-19, arguing that affordable access to technology to produce critical medical supplies remains important. The South African government argued that the provisions of the TRIPs Agreement on patents and compulsory licensing should not be barriers to sharing the technology to produce the medical equipment needed to address the crisis.

Minister Patel added that “in a post-COVID dispensation, strong and resilient national systems would have to enhance national production capacities; ensure greater diversification and value-addition, including technological upgrading. This applies even more in circumstances where developed countries are adopting measures to promote ‘strategic autonomy’ and re-shoring strategies. We strongly believe that further tariff liberalization is not a solution in the midst of a crisis.”

Furthermore, Minister Patel stressed that it is time for a fresh set of thinking about trade policy and its interface with industrial policies and legitimate national industrial objectives.

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SACUM-UK EPA and SA-US Trade Relations, including AGOA

28 Oct 2020

Presentation by Ambassador Xavier Carim, Deputy Director General, Trade Policy, Negotiations and Cooperation Branch at the dtic, to the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour on 20 October 2020.

SA-UK Trade Relations

The United Kingdom (UK) is South Africa’s 5th largest trading partner with total trade amounting to R110 billion in 2019. This is up from R73 billion in 2014.

In 2019, SA exports to the UK were worth R68.1 billion; 12.6% average annual growth since 2014, from R37.6 billion. The main export products were platinum, motor vehicles, citrus and other fresh fruit, catalytic converters, and iron ore.

Imports from the UK were worth R41.3 billion; 3.1% average annual growth since 2014, from R35.2 billion. The main import products were printed materials, machinery and computer equipment, motor vehicles, whiskies, electric equipment including sound and visual equipment.

Current trade between SA and the UK takes place under the Economic Partnership Agreement between the Southern African Development Community and the European Union (SADC-EU EPA) which has been in force since October 2016. The SADC-EU EPA is a free trade agreement (FTA) between the Southern African Customs Union (SACU) members – Botswana Eswatini, Lesotho, Namibia (BELM) and South Africa – who negotiate and implement FTAs as a bloc, plus Mozambique (SACUM) on the one side, and the EU on the other. The SADC-EU EPA replaced the trade chapter of the 1999 Trade, Development and Cooperation Agreement (TDCA) which was a bilateral FTA between SA and the EU.

In March 2017, the UK formally notified its intention to leave the EU (‘Brexit’). The UK formally left the EU on 31 January 2020 through the so-called Withdrawal Agreement. The Withdrawal Agreement stipulates that EU trade agreements will continue to apply to the UK until 1 January 2021.

Soon after the UK notified its intention to leave the EU, SACU, Mozambique and the UK agreed to initiate negotiations to “roll-over” the trade arrangements of the SADC-EU EPA into a new bilateral agreement. The SACUM-UK EPA was signed in October 2019. This ensures trade between SACUM and the UK continues uninterrupted when the UK leaves the EU.

The terms of the SADC-EU EPA have been largely transposed into the new SACUM-UK EPA. However, some changes were required with respect to: Tariff-rate quotas (TRQs), Sourcing inputs from the EU into products traded between the UK and SACUM, Transitional Arrangements, Geographic Indicators (GIs), and a Built-in Agenda

  • TRQs. A TRQ establishes a tariff preference for a specific volume of imports. Under the SADC-EU EPA, the UK shares TRQs with other EU Members on exports of 8 agricultural products to SACU. South Africa has 13 TRQs to the EU of which a share had to be carried over to the UK under the new arrangement. Shares were calculated on historical trade covering 13 products for export to the UK, notably wine, sugar, canned fruit, fruit and fruit juices. TRQ volumes will increase annually.

  • Cumulation. A new provision was negotiated that would allow the UK and SACUM to fully cumulate with EU inputs for production to export to each other, meet the Rules of Origin requirements and obtain the preferential tariff. It ensures continuity of highly integrated value chains across EU-SA-UK, notably in automotive. The provision is applicable for 3 years pending the outcome of a new trade arrangement between the UK and EU. This period can be extended or revised if deemed necessary by SACUM and the UK

  • Transitional Arrangements. The SACUM-UK EPA contains transitional arrangements to carry over measures and actions from the SADC-EU EPA. These include continuation of the current safeguard on imports of poultry. South Africa agreed that UK safety and health regulations affecting agricultural trade would continue to match those of the EU. On Customs matters there is continued recognition of Certificates of Origin as issued under the SADC-EU EPA. If changes are effected in future, the UK is obliged to provide sufficient time for SACUM exporters to adjust to new regulations and requirements.

  • Built-in Agenda. A Built-in Agenda was agreed to address areas of interest that could not be resolved during negotiations. For SA, areas of interest are DFQF market access or increase of TRQ volumes into UK; Regional cumulation to allow BELN and Mozambique to cumulate with SA products (especially basic agricultural product inputs); Treatment of vehicles with engine capacity of 1000cc and less; Export taxes; Enhanced cooperation on TBT, i.e. standards, conformity assessment procedures, etc.

The South African Parliament ratified the SACUM-UK EPA in December 2019. The UK, Botswana, and Lesotho have also ratified. Eswatini and Namibia are at an advanced stage of ratification. Once ratified by all, instruments of ratification have to be deposited at the SACU Secretariat by 30 November 2020, so the agreement is in force on 1 January 2021.

SA-US Trade Relations

Since 2001, SA exports enter the United States under three regimes: a) the MFN (most-favoured nation) tariff rates that are applied to all WTO members; b) GSP that offers preferential tariffs for most developing countries on around 4650 products; and c) AGOA that offers preferential tariffs for eligible sub-Saharan African countries, that covers GSP products and an additional 1835 products.

Being eligible for GSP is a prerequisite for preferences under AGOA and while the GSP is subject to annual reviews, AGOA benefits are locked-in for extended periods of time. AGOA was established in 2000 and has been renewed twice; in 2008 and again in 2015 for a duration until 2025.

These extended periods aimed to foster greater certainty in market access and encourage productive investment in sub-Saharan African countries. Nevertheless, both schemes are subject to considerable discretion by the US Government, and countries can and have been removed from the schemes from time to time.

Total two-way trade in goods between SA and the US grew from $7.3bn in 2001 to a peak of $16.3bn in 2011. Since then, bilateral trade declined steadily, to $12.3bn in 2019. SA exports to the US increased from $4.3bn in 2001, peaking at $10bn in 2008 at the time of the global financial crisis, and then steadily declined to $7.6bn in 2019. SA imports from the US increased from $2.8bn in 2001 to $7.1bn in 2012 but declined to $4.6bn in 2019. Over the period 2001-19, the trade balance often favoured SA due to high levels of SA’s commodity exports (notably platinum, diamonds and gold).

GSP and AGOA offers SA preferential market access for exports of higher value added manufactured goods. SA’s top higher value added exports under GSP include chemicals, iron and steel, precious stones, metals, machinery, plastics, auto components. Under AGOA, they include autos, iron and steel, fruit and nuts, organic chemicals, beverages and spirits. The share of SA exports under GSP and AGOA increased from 20% in 2001 to 44% in 2014, but fell to 26% in 2019. GSP exports increased from 11.4% in 2001 to 17% in 2005 but then declined to 10% in 2019. The share of AGOA exports (excluding GSP) increased from 9.4% in 2001 to 31% in 2013 but then declined to 16% in 2019.

SA exports under MFN contribute the largest share of SA exports to the US. In 2001, MFN exports accounted for 79% of all our exports, declined to 56% in 2013, before rebounding to 74% in 2019. We are seeing a steady return of a greater share of commodities in our total export basket to the US. A corresponding decline in the value of the US market for SA value added manufactured products. The US ranking in our global trade has declined from a share of 8.7% in 2010, to 6.9% in 2019.

In general, the decline is due to poor trade conditions since the global financial crisis in 2008 in which demand and growth in the US real economy has been subdued. Moreover, there have been significant shifts in the US import policy stance with greater focus on supporting US manufacturing, particularly under the Administration’s “America First” policies.

The changes affected SA in various ways: In March 2018, citing national security, the US imposed WTO inconsistent tariffs of 10% and 25%, respectively, on aluminium and steel imports from all except six WTO Members. SA steel exports to the US declined by 33% between 2017 and 2018 (to US$187mn).

In 2018, the initiation an investigation into tariffs in the auto sector generated uncertainty for SA auto exporters. This lead to changed decisions on sourcing, with the effect that SA auto exports to the US (worth $1.2bn in 2017) fell 51% in 2018. In June 2020, the US announced an investigation into vanadium imports. SA exports of vanadium may be at risk. SA has also faced the prospect of being removed from the preference schemes if certain US market access or policy concerns were not addressed.

In 2015, the US enacted new AGOA legislation that introduced an ‘out-of-cycle’ review of SA’s AGOA eligibility. Under the threat of removal from AGOA, SA granted the US an annual quota of 65 000 tons for poultry imports subjected to WTO-legal anti-dumping duties.

In October 2019, the USTR initiated a review of SA’s GSP eligibility based on concerns of some US firms who argue that SA’s Copyright Amendment Bill undermines their commercial interests. The President’s decision on 16 June 2020 to return the Bills to Parliament due to constitutional concerns has delayed a final decision by the US. All this has a dampening effect on exports and trade.

SA-US Trade Relations: African Growth and Opportunity Act (AGOA)

AGOA will expire in 2025. The US has indicated that it will not extend AGOA and, if it does, it will not include developing countries such as SA. The GSP scheme is also under review that could bring changes to the eligibility criteria.

At the annual AGOA Meeting in September 2019, the USTR announced a new post-AGOA policy approach to sub-Saharan Africa. The USTR proposed to negotiate an FTA with one African country that would serve as a model for others. They indicated that its recently concluded US-Mexico-Canada FTA would be the model for such FTAs.

US FTAs are demanding and the scope for flexibility is narrow. US FTAs:

  • require close to full tariff liberalisation for trade in industrial and agricultural goods. There are no rules to limit the large support provided to the agricultural sector;

  • limit government measures on preferential procurement and localisation, and seek access to government procurement markets;

  • require extensive liberalisation and deregulation for trade in services (finance, telecommunication amongst others);

  • include stringent (WTO-plus) rules to protect intellectual property rights while restricting policies for technology transfer;

  • and on digital trade, prohibit customs duties on electronic transmissions, localisation programmes and local content requirements but lock-in provisions for free flow of data.

SA will need to carefully consider post-AGOA trade relations with the US. SA-US trade remains important; SA continues to benefit from AGOA and GSP, and the US remains an important source of investment and technology for SA. The SA government, through the Department of Trade, Industry and Competition (dtic), continues to cooperate with the US Government and Embassy in SA to enhance trade and investment, and to address issues of concerns on both sides.

Find out more on AGOA.info.

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27 Oct 2020

National

How the virus worsened South Africa’s debt woes (Bloomberg / Engineering News)

South Africa is faces surging debt as the havoc wrought by the coronavirus pandemic compounds a deterioration in public finances caused by overspending, mismanagement and alleged graft during former President Jacob Zuma’s nine-year rule. “South Africa’s debt position is going to be unsustainable over the next five years because the fiscal consolidation measures are unfeasible,” said Mpho Molopyane, an economist at FirstRand Group’s Rand Merchant Bank.

Done deal for Dar-Kampala oil project (Dailynews)

Tanzania has finally sealed the Host Government Agreement (HGA) with TOTAL in implementing the East African Crude Oil Pipeline Project (EACOP), after protracted negotiations. The long-drawn-out move in reaching an agreement with the French firm was due to unresolved harmonisation issues between Dar es Salaam and Kampala, two East African countries. Speaking shortly after signing the agreement with the French multinational integrated Oil and Gas Company, the Attorney General of Tanzania, Dr Adelardus Kilangi, who also led the country’s team on the negotiating table, said the deal signalling Tanzania’s readiness and commitment in welcoming potential investors to the country.

Govt asks banks to support import substitution (Dailynews)

The government has called upon financial institutions to channel their lending in areas which will enhance import substitution. The pledge came during Minister of State in the Prime Minister’s Office (Investment) Angellah Kairuki’s tour of various banks in Dar es Salaam. Ms Kairuki said that the move would make country not to depend on foreign goods that could easily be produced locally and save the economy’s foreign reserve. She said one of the key areas was the pharmaceutical industry.

Kenya shilling hits record low of 108.85 on import pressure (Business Daily)

The Kenya shilling dropped to a record low of 108.85 units against the dollar on Monday, market data showed, on demand for the greenback by importers. This was despite a fall in the Central Bank of Kenya(CBK) dollar reserves to a five-month low of $8.223 billion (Sh888 billion) or 4.99 months import cover – a sign that the regulator may have acted to support the local currency. The shilling has come under intense pressure after reopening of the economy as imports pick up despite slower recovery of dollar-earning exports and tourist receipts.

Doing Business Roadmap To Improve Cameroon’s Environment (Cameroon-Tribune)

The 11th session of Cameroon Business Forum which is the main forum for dialogue between the State and private sector took place at the Auditorium of the Prime Minister’s Office in Yaounde on October 22, 2020 and ended with adoption of the roadmap on priority actions to improve Cameroon’s ranking in Doing Business report. Prime Minister, Head of Government, Chief Dr Joseph Dion Ngute chaired the session that took place on the theme, “COVID-19: Proofing the business environment.” As he closed the event, Prime Minister Dion Ngute called on the public and private sector actors to ensure the success of reforms put in place to caution the impact of the COVID-19 pandemic in the country’s socio-economic life. He said the topics presented and Doing Business roadmap adopted were all intended to make the business environment in the country attractive.

COVID: 4% of Kenyan business professionals expect their firms to fold (Kenya Broadcasting Corporation)

4 percent of business professionals in Kenya expect firms they work for to fold on account of COVID-19 according to a survey conducted by the Africa Business Panel. South Africa had the highest number of professionals who expected their firms to wind up at 10, followed by Nigeria at 5 percent and Ghana 3 percent. The COVID-19 pandemic has seen caused disruptions in the continent as a result of stringent measures undertaken by the states to suppress the spread of the viral disease. According to the Panel, 62 percent of African companies indicated that they are struggling but will survive.

Zambia’s private sector shows slow recovery from COVID-19 in September (Xinhua / CGTN Africa)

The private sector in Zambia eased the slowdown imposed by the COVID-19 pandemic during the month of September following government’s decision to ease some restrictions to stimulate economic activity, results of a survey showed on Monday. While the business environment remains volatile due to the pandemic, the decline in business activities was much slower during the month of September compared to previous months.

Somalia Scales up Social Protection Measures as COVID-19 Constrains Economic Growth (World Bank)

Somalia’s economic growth is forecast to contract significantly due to the negative impacts of COVID-19 (coronavirus), the locust infestation and extreme flooding. The economy is projected to contract by 1.5 percent in 2020, down from earlier estimate of 3.2 percent before the pandemic. The latest World Bank Somalia Economic Update says COVID-19 has impacted all sectors of the economy leading to declines in revenue for both Federal and state governments. The pandemic has limited livestock exports, trade taxes and remittances, with direct impact on poor households, services and core government functions.

Africa

Call for African govts to adopt ‘Travel Pass’ in preparation for 2021 Africa free trade area (263Chat)

African governments have been urged to embrace the Africa Centres for Disease Control and Prevention (Africa CDC)’s Trusted Travel Platform to protect local economies and lives as the continent prepares for its largest free trade area. The COVID-19 pandemic has affected several economic sectors on the continent since its onset. Trade and supply chains have been disrupted while some sectors - such as aviation, tourism and hospitality - have been among those hardest hit by the pandemic, resulting in massive job losses and lost revenue. The African Union Commission recently launched the ‘saving lives, economies and livelihoods’ campaign that seeks to reduce the spread of infections within and across borders by creating a unified public health corridor for safe travel on the continent.

African money transfer firms thrive as pandemic spurs remittances (news.trust.org)

Despite predictions of a historic drop in remittances due to a pandemic-induced global economic slump, Africa’s money transfer companies have seen a boom. “We saw an increase of transfers as the diaspora wanted to help their family,” said Patrick Roussel, who heads mobile financial services for the Middle East and Africa at French telecom company Orange – a dominant player in French-speaking Africa. “We’ve seen an influx of new customers, and we see them mainly coming to us from the informal market,” said Andy Jury, chief executive of Mukuru, the company Takawira now uses.”

Africa’s food security in the spotlight (FAO)

African member countries of the Food and Agriculture Organization of the United Nations (FAO) will come together for the first ever virtual session of the Regional Conference for Africa, from Monday 26 October. The Government of Zimbabwe is hosting and chairing the biennial event. The 31st Session of the Regional Conference for Africa will also look at the impacts of COVID-19 on food security and nutrition, and ways to build more-resilient food systems. A publication by FAO and the African Union, “Regional Outlook of Gender and Agribusiness in Africa”, will be launched that contains policy recommendations and new data based on a review of 40 country gender assessments of agriculture and rural livelihoods.

Magufuli’s bold actions rattle EAC, benefit Tanzania (The East African)

When John Pombe Magufuli took over the reins as president of Tanzania in November 2015, the East African Community was already pulling in two opposite directions. Kenya, Uganda and Rwanda were already coalescing around the “Coalition of the Willing,” as it came to be known — to accelerate the regional integration agenda, from functional issues like trade and tourism to more ideological ones like political federation. At the East African Legislative Assembly, opinion is divided whether President Magufuli is responsible for the slow pace of integration after missing summit meetings. The Heads of States Summit hasn’t met for two years.

Thoughts On Re-Opening Leisure Travel (Mmegi Online)

It is well documented that the coronavirus (COVID-19) is hurting the country’s key revenue earners namely mining, SACU’s customs and excise duties and tourism. These key revenue lines have been suffering due to closed borders since March with tourism on its deathbed. It is encouraging on the mining side that diamond sales have improved since August with De Beers reporting that demand has risen. The same cannot be said for tourism as border exits and entries remain restricted to essential travel.

How to make EAC economic integration dream a reality (Business Daily)

A recent Ugandan High Court ruling in a case involving a Kenyan bank is a manifestation of confusion that continues to cloud the process of integrating East African Community (EAC). The ruling, which has since been appealed, may entrench scepticism about the adopted EAC Protocols on the Establishment of Customs Union, Common Market, Monetary Union, and Political Confederation. Even though the BoU has since circulated press statements clarifying that its regulatory powers are limited to financial institution business conducted by BoU-licensed entities in or outside Uganda and that these powers do not extend to activities of foreign banks outside Uganda.

Women, migrants the hardest-hit by Covid-19 pandemic (The Citizen)

Sectors dominated by women and migrant workers in Southern Africa are the hardest-hit by the Covid-19 pandemic, according to a new report, as workers across the region face lower quality lives, loss of income and a battle for a “living wage”. The Southern African Trade Union Coordination Council released a study into the impact of the pandemic on workers in the Southern African Development Community (SADC) region this week, with findings calling for a coordinated effort by governments to improve the lives of migrant workers. The findings largely pointed to the cases of Zimbabwe, Mozambique and Malawi as top providers of migrants and Botswana, Namibia and South Africa as top recipients in the SADC region.

Africa climate change report reveals heat rising north and south, Sahel getting wetter (UN News)

“In recent months we have seen devastating floods, an invasion of desert locusts and now face the looming spectre of drought because of a La Niña event. The human and economic toll has been aggravated by the COVID-19 pandemic,” WMO Secretary-General Petteri Taalas said in a statement. The report aims to fill a gap in reliable and timely climate information for Africa, which translates into a lack of climate-related development planning, said Vera Songwe, Under-Secretary-General, and Executive Secretary of the United Nations Economic Commission for Africa (UNECA). The agricultural sector is key to building climate resistance, since it is the dominant employer and it relies on the use of water and energy – both heavily implicated in climate change, WMO’s Regional Strategic Office Director, Filipe Lucio, said.

International

A new take on trade (UNA-UK)

The COVID-19 pandemic has gravely impacted the global economy. Countries have sought to contain the spread of coronavirus by limiting the mobility of people, suspending many non-essential activities and implementing social distancing. While these measures have saved countless lives, they have also created the worst recession since the Great Depression of the 1930s. The global economy is now expected to shrink by about 5 per cent in 2020.

While many countries have now begun to resume economic activity, the potential negative effects of the pandemic are far from over. In the absence of reliable vaccines or better treatments, the risk is that further waves of contagion could derail the economic restart. Given the uncertainty, it is essential that policymakers remain vigilant and continue to devise policies that protect their economies against worsening conditions. As part of this, trade policies will be essential to create a more resilient global economy.

Mukhisa Kituyi, Secretary-General, United Nations Conference on Trade and Development (UNCTAD)

AU-EU partnership: Goals and expectations (ECDPM)

This year marks 20 years since the formalisation of the partnership between the African Union (AU) and the European Union (EU). During that two decades, the partnership has matured and withstood numerous challenges. As it forges ahead, it will continue to be tested by issues such as the COVID-19 pandemic and global trends in governance, peace and security, trade, and multilateralism. These, and the impacts of poverty and inequality within and between countries, also provide opportunities to consolidate and deepen mutual understanding and promote a paradigm shift. Now, in 2020, four priority areas represent the greatest opportunities for increased collaboration and impact of the partnership: Peace, security and governance; Investing in people; Migration and mobility; and African sustainable structural transformation.

UK turning to Ghana as trade and investment destination (Ghanaweb)

As the United Kingdom gets closer and closer to a widely feared no-deal exit from the European Union, its private sector is already making moves to cement alternative trade and investment counterparties. One of them is Ghana, a traditional major trade and investment partner which has lost ground to various counterparties in both western and eastern Europe over the past couple of decades because of the more favourable terms and conditions offered it by being part of a continental free market. Instructively the governments of both countries are currently engaged in negotiations which, if successful, would allow the two countries to continue the preferential trade terms applicable through the ECOWAS – EU Economic Partnership Agreement.

Restrictions in trade to contain COVID-19 have been devastating for Africa’s urban poor (The Conversation)

Trade routes have been significantly disrupted this year in efforts to contain COVID-19. The effects of this are already showing: global growth is set to contract by 4.9% and growth in sub-Saharan Africa will contract by 3.2%. This will get worse if continued restrictions further impede trade. The World Trade Organisation has warned that at worst, global trade could collapse by a third this year, and at best, it will contract by 13%, similar to the recorded drop after the 2009 financial crisis. Trade enables formal firms to flourish, which will be essential for economic recovery. It also protects the urban poor operating in the informal economy against poverty and hunger. The continuation of trade is even more essential for their survival as they operate without an adequate safety net.

Stakes are high for Africa in US presidential election (The Africa Report)

In a week’s time, Americans will see their votes counted in an election seen universally as the most consequential for half a century. Consequential for the direction and stability of the country for decades, and for the international system it has dominated. Africa has not figured in any of the presidential and vice-presidential debates, or in much of the campaigning. Yet it has a serious stake in the outcome as shown by a clutch of Trump administration actions in the last few months.

UNCTAD, AU to remove trade barriers in Africa (The Nation)

Breaking down non-tariff barriers is vital to better trade and stronger African integration. To this end, the African Union (AU) and United Nations Conference on Trade and Development (UNCTAD) are seeking ways to help people trade easier, the UNCTAD has said. In a statement said the AU, UNCTAD and other partners are on a mission to ease trade on the continent and make the African Continental Free Trade Area a viable reality for economic development. According to the statement, one way to do so is to eliminate a costly and complex suite of irritants to freer trade: non-tariff barriers (NTBs).

COVID-19 and migrant remittances: Supporting this essential lifeline under threat (Brookings Institution)

In Africa, one out of five people sends or receives international remittances. Since 2009, the flow of remittances to the continent has nearly doubled; they now comprise more than 5 percent of GDP in 15 African countries. In 2019, migrant workers sent about $85 billion to their relatives on the continent. Worryingly, under COVID-19, precarious working conditions facing expatriates and operational difficulties facing remittance service providers (RSPs) have resulted in a major drop in this essential lifeline. In fact, remittance inflows to Africa are projected to decline by 21 percent – $18 billion in 2020. In comparison, global remittances to African countries fell by 5 percent during the global financial crisis of 2008.

Leading Experts Urge WTO to Extend Moratorium on Customs Duties for Digital Trade; New Report Compiles Evidence of Benefits From Dozens of Countries Around the World (ITIF)

The World Trade Organization (WTO) since 1998 has maintained a moratorium on customs duties for electronic transmissions of digital products and services. But now, despite a strong consensus among economists and trade policy experts that countries around the world greatly benefit from duty-free e-commerce and digital trade, some countries have begun pushing for the moratorium to end. This would be a terrible mistake, according to new report from the Information Technology and Innovation Foundation (ITIF) and the Global Trade and Innovation Policy Alliance (GTIPA), a worldwide network of independent think tanks that support trade liberalization and integration.

Negotiations on e-commerce continue, eyeing a consolidated text by the end of the year (WTO)

WTO members participating in the negotiation of rules on e-commerce shared updates on the work done to streamline the negotiating text at a plenary meeting on 23 October. The co-conveners, Australia, Japan and Singapore, encouraged members to propose constructive solutions and show flexibility in an effort to deliver a consolidated negotiating text by December this year.

Global foreign direct investment falls 49%, outlook remains negative (UNCTAD)

Global foreign direct investment (FDI) flows fell 49% in the first half of 2020 compared to 2019, due to the economic fallout from COVID-19, reveals UNCTAD’s latest pdf Global Investment Trends Monitor (2.43 MB)  released on 27 October. In the wake of the pandemic, lockdowns around the world slowed existing investment projects and the prospects of a deep recession led multinational enterprises to reassess new projects. “The FDI decline is more drastic than we expected, particularly in developed economies. Developing economies weathered the storm relatively better for the first half of the year,” said James Zhan, UNCTAD’s investment and enterprise director. “The outlook remains highly uncertain.”

New UN report details environmental impacts of export of used vehicles to developing world (UNEP)

Millions of used cars, vans and minibuses exported from Europe, the United States and Japan to the developing world are of poor quality, contributing significantly to air pollution and hindering efforts to mitigate the effects of climate change, according to a new report by the UN Environment Programme (UNEP). The report shows that between 2015 and 2018, 14 million used light-duty vehicles were exported worldwide. Some 80 per cent went to low- and middle-income countries, with more than half going to Africa.

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A new take on trade

27 Oct 2020

How can trade help the global economy recover sustainably from the pandemic?

The COVID-19 pandemic has gravely impacted the global economy. Countries have sought to contain the spread of coronavirus by limiting the mobility of people, suspending many non-essential activities and implementing social distancing. While these measures have saved countless lives, they have also created the worst recession since the Great Depression of the 1930s. The global economy is now expected to shrink by about 5 per cent in 2020.

While many countries have now begun to resume economic activity, the potential negative effects of the pandemic are far from over. In the absence of reliable vaccines or better treatments, the risk is that further waves of contagion could derail the economic restart. Given the uncertainty, it is essential that policymakers remain vigilant and continue to devise policies that protect their economies against worsening conditions. As part of this, trade policies will be essential to create a more resilient global economy.

COVID-19 and international trade

In 2019, global trade stood at about $25 trillion, with estimates then predicting a 3 per cent rise in 2020. Without a swift recovery in the second half of 2020, the consensus now is that trade will instead plummet by about 20 per cent this year, or by about $6 trillion. Such a decline would be unprecedented, being significantly larger than the $4 trillion fall seen during the 2009 recession.

The impacts of COVID-19 on international trade have been many and varied. We have seen falling commodity prices, reduced manufacturing output and disrupted operations in global value chains. Trade in services has been significantly affected. International tourism arrivals are expected to fall by between 60 and 80 per cent in 2020. Remittances have greatly diminished.

At the regional level, the picture is mixed. While East Asia appears to be on a recovery path, concerns remain for other developing regions where COVID-19 is not yet under control. As many borders remain closed and safety controls delay the movement of goods, developing countries that are highly reliant on external markets are being hit particularly hard. Small countries with high levels of external debt and limited resources to sustain their economies are most at risk of a severe economic recession.

Before the pandemic, there was a growing scepticism towards international trade. Yet the COVID-19 emergency has shown the importance of keeping trade open in times of crisis. For example, cross-border trade has been instrumental in meeting the demand for COVID-19-related medical products on a global scale. International trade of items such as personal protective equipment and ventilators more than doubled in just a few months. The pandemic has also driven an increase in e-commerce, linking consumers to producers not only domestically but also across borders.

Trade and economic recovery

The past few years have been characterised by the high-profile trade spat between the United States and China. In such a context, the pandemic adds to global instability by making the conditions unsuitable to meet the commitments of the two superpowers’ ‘phase one’ trade deal. Coronavirus has the potential to further exacerbate tensions, and to create a more segmented and polarised global economy, with obvious negative repercussions for many countries.

While developed and emerging countries have implemented massive economic packages to support people and businesses, many developing countries are severely fiscally constrained in their recovery efforts, and need a lifeline. Development assistance and a moratorium on debt repayments related to COVID-19 are welcome, but a truly global economic recovery will require international markets that remain open and are made more resilient.

Yet, during periods of economic downturn, the allure of unilateral measures generally increases. For example, at the onset of the pandemic, several countries imposed export restrictions and stockpiled essential medical goods and basic foodstuffs. But countries would be wise to refrain from adopting ‘beggar-thy-neighbour’ policies. While trade restrictions may provide short-term relief, often they provoke retaliation, creating supply shortages and price hikes in international markets, with dire consequences for the global economy.

Trade protectionism will also increase imbalances in the recovery process, adding to the risk that the pandemic will exacerbate existing inequalities, creating the real possibility that the least developed countries (LDCs) will fall further behind. To avoid an insurgence of protectionist measures, governments must monitor how responses to COVID-19 affect trading partners. They must ensure that any such measures are targeted and temporary, and duly address the interests of affected countries, particularly LDCs. Ultimately, keeping exports to developing countries flowing without unwarranted impediments will be crucial to a broad-based recovery.

Trade beyond economic gains

The current world economic crisis can serve as an opportunity for redirecting public policy towards a more inclusive, sustainable and resilient global economy. The metrics of the recovery should not be based solely on economic growth but should also consider the other aspects of development agreed in the Sustainable Development Goals.

This will take a concerted effort, as economic downturns often result in diminished environmental protection. We must avoid a ‘race to the bottom’, where countries seek to secure competitive advantage by watering down environmental safeguards. Instead, to negate this risk, we must align trade policies more closely with climate objectives and further integrate environmental aspects into the international trade framework. For example, international cooperation could focus more closely on greening the trade infrastructure and expanding transnational environmental standards to drive a more sustainable post-COVID-19 economy.

International trade must be part of any recovery effort aimed at building a more fair and sustainable global economy. Promoting free trade as an end in itself, however, will risk fuelling anti-trade sentiments. Instead, the pandemic calls on us to recognise that international trade can have profound effects on lives and livelihoods, both in positive and negative ways.

Commitment to and implementation of the 2030 Agenda for Sustainable Development and the Addis Ababa Action Agenda on financing for development would help to ensure that inclusive trade growth is an economic foundation for sustainable development. The crisis has yet again underscored the case for continued multilateral trade cooperation and for a robust trading system to contribute to the post-crisis recovery.

Mukhisa Kituyi is Secretary-General, United Nations Conference on Trade and Development (UNCTAD).

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Global foreign direct investment falls 49%, outlook remains negative

27 Oct 2020

The biggest drops occurred in developed countries, cutting across all major forms of foreign direct investment.

Global foreign direct investment (FDI) flows fell 49% in the first half of 2020 compared to 2019, due to the economic fallout from COVID-19, reveals UNCTAD’s latest Global Investment Trends Monitor released on 27 October.

In the wake of the pandemic, lockdowns around the world slowed existing investment projects and the prospects of a deep recession led multinational enterprises to reassess new projects.

“The FDI decline is more drastic than we expected, particularly in developed economies. Developing economies weathered the storm relatively better for the first half of the year,” said James Zhan, UNCTAD’s investment and enterprise director. “The outlook remains highly uncertain.”

Developed economies suffer steepest fall

According to the report, developed economies saw the biggest fall, with FDI reaching an estimated $98 billion in the six-month period – a decline of 75% compared to 2019.

The trend was exacerbated by sharply negative inflows in European economies, mainly in the Netherlands and Switzerland. FDI flows to North America fell by 56% to $68 billion.

Meanwhile, the 16% decrease in FDI flows to developing economies was less than expected, due mainly to resilient investment in China. Flows decreased by just 12% in Asia but were 28% lower than in 2019 in Africa and 25% lower in Latin America and the Caribbean.

In the six months to June 2020, developing countries in Asia accounted for more than half of global FDI. Flows to economies in transition were down 81% due to a strong decline in the Russian Federation.     

The decline cut across all major forms of FDI, the report shows.

The report shows that cross-border M&A values reached $319 billion in the first three quarters of 2020. The 21% decline in developed countries, which account for about 80% of global transactions, was checked by the continuation of M&A activity in digital industries.

The value of greenfield investment project announcements – an indicator of future FDI trends – was $358 billion in the first eight months of 2020. Developing economies saw a much bigger fall (-49%) than developed economies (-17%), reflecting their more limited capacity to roll out economic support packages.

The number of announced cross-border project finance deals declined by 25%, with the biggest drops in the third quarter of 2020, suggesting that the slide is still accelerating.

Outlook for full year remains negative

Prospects for the full year remain in line with UNCTAD’s earlier projections of a 30% to 40% decrease in FDI flows, the report indicates.

The rate of decline in developed economies is likely to flatten as some investment activity appeared to be picking up in the third quarter.

Flows to developing economies are expected to stabilize, with east Asia showing signs of an impending recovery.

The flows will hinge on the duration of the health crisis and the effectiveness of policy interventions to mitigate the economic effects of the pandemic. Geopolitical risks continue to add to the uncertainty.

Despite the 2020 drop, FDI remains the most important source of external finance for developing countries, according to UNCTAD. Global FDI stock stood at $37 trillion at the end of 2019.

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26 Oct 2020

National

SA Government Commits to Strengthening Economic Ties with the Middle East (dtic)

The South African government is committed to strengthening bilateral economic relations with the United Arab Emirates (UAE), Saudi Arabia and the greater Middle East region in order to promote South African value-added goods and services. This was said by the Director of Export Promotion and Marketing responsible for the Middle East at the Department of Trade, Industry and Competition (the dtic), Mr Thulani Mpetsheni during the virtual Outward Selling Mission held with both countries this week. In 2019, total bilateral trade to the region was valued at R159.7 billion. The UAE accounted for R54.7 billion of this total. Whilst Saudi Arabia accounted for R58.8. The UAE represented 34.2% of total trade when compared to Saudi Arabia 36.8%, highlighting the strategic nature of the relationship with both countries.

Growing export markets boost trade (New Vision)

The Government pledged to undertake numerous trade initiatives to improve the country’s trade balance so as to achieve the goals. These include increasing and diversifying exports and ensuring stable supply to meet market targets, identifying new export destinations in regional and emerging markets and ensuring that the exports are competitive and meet international standards. The country’s exports have indeed posted substantial growth over time. Available statistics indicate that Uganda’s overall merchandise exports have registered substantial growth over the years, growing from $450.1m (sh1.65 trillion) in 2001 to $3.3b (sh12.2 trillion) in 2017, before rising to $3.64b (sh13.4 trillion) in 2018. In 2019, Uganda’s exports were valued at close to $4.09b (sh15.1 trillion), according to figures from Bank of Uganda.

Uganda Plans to Build Shs 83bn Structure to Host EAC Statistics Bureau in Entebbe (ChimpReports)

Government of Uganda is lobbying to host the East African Community Statistics Bureau (EACSB) at Entebbe, Chimp Corps report. The bid to lobby EACSB was decided by Cabinet on July 30, 2014 and UBOS Board resolved to support the Cabinet position on April 3, 2019. Consultations with the development committee of the Ministry of Finance and other stakeholders are underway to oversee the success of the project in its entirety. “This same environment will host statistics in service training centre, data science labs, archive centre, Conference Hall, disaster recovery centre and some offices to decongest Statistics House in Kampala,” said Byamugisha during the new board’s first visit to UBOS Entebbe office this past Friday.

GIPC eyes increased intra-Africa investment (Ghanaweb)

The Ghana Investment Promotion Centre (GIPC) says it will promote intra-Africa investments in an effort to monetise the economic opportunities spread across the continent. Speaking at the launch of the half-year Foreign Direct Investment (FDI) report on Friday, CEO of the centre, Yofi Grant added: “We are also preparing to have a dialogue with the EU to see how many European companies we can actually bring to locate and manufacture in Ghana and the continent.” Increasing intra-Africa investment will ensure that the continent takes over its own destiny, he said. GIPC registered total investments of US$869.47m, with total FDI value amounting to US$785.62m, between January and June 2020, as FDI project registration showed rare strength in the final moments of the second quarter of the year, undeterred by the Covid-19 pandemic.

Egypt becomes largest orange exporter by volume (FreshFruitPortal)

Egyptian orange production is undergoing a boom in desert regions, establishing the country as the world’s top supplier by volume, according to government officials. Officials in Cairo say Egypt has become the world’s largest exporter of oranges by volume, surpassing rivals Spain and South Africa, though these two countries still make much more in revenue from their orange exports. Egypt exported almost 1.8m metric tons (MT) of oranges in 2019 scraping to first position just ahead of Spain, according to the International Trade Centre. The exports generated a value of US$660m. “Global orange consumption has grown and Egypt has been able to capture the increase in the market,” Mohamed Abdel Hady, an orange grower and exporter who heads the Citrus Committee at the Agricultural Export Council, told The Financial Times.

FG Seeks ECOWAS Cooperation against Illegal Trans-Border Gold Trade (THISDAYLIVE)

With a view to delivering its maximum economic benefit, the federal government has called for collaboration and cooperation of West African leaders in monitoring and halting illegal trans-border trade of solid minerals within the sub-region Oga, in a statement to the press in Abuja by the Acting Director of Press of the ministry, Mr. Timothy Akpoili, while explaining efforts being made to diversify Nigeria economy, through the Mineral Sector, especially the Presidential Artisanal Gold Mining Initiative (PAGMI), said for the sub-region to properly harness the economic benefit of the abundant mineral resources, efforts must be made to curb illegal exploitation and transaction of minerals in the sub-region.

Rwanda, Angola Sign Deal To Exploit Investment Opportunities (Taarifa Rwanda)

Rwanda and Angola have begun discussions on how to showcase investment opportunities for business people in both countries. Rwanda Development Board (RDB) together with the Agency for Private Investment and Promotion of Exports of Angola (AIPEX) held a Rwanda-Angola virtual business seminar on Friday morning to showcase investment opportunities in both countries. The two countries will showcase investment opportunities in Manufacturing, ICT, Tourism, Mining, Health, Agriculture and Transport. In addition, an MOU on Investment and Export Promotion was signed between RDB and the AIPEX.

Africa

AfCFTA – The Key to Ushering Trade and Investment to Africa (The National Law Review)

Amid the COVID-19 pandemic, the African continent has seen challenges like other parts of the world that are affecting trade. This includes a moving effective date for the African Continental Free Trade Agreement (AfCFTA), which slid from July 1 to possibly January 1, 2021, to avoid distracting African leaders as they respond to the pandemic. Nevertheless, there is a push to have the continent move forward with the implementation of the AfCFTA, to spur further collaboration and intra-Africa trade, which, in turn, could help the continent better weather economic downturns related to the global pandemic. The AfCFTA, once implemented, will create a US$3.4 trillion economic bloc, which would provide Africa with increased leverage in the global economy.

Phase II negotiations of the AfCFTA have also been delayed. If Africa truly desires increased US investments, there needs to be more proactive and expansive action on addressing corruption at all levels in the second phase of the AfCFTA talks.

F15 Ministers, Special Envoys for mobilization of international COVID-19 support (African Union)

23 October 2020 | As part of the continuing efforts to address the impact of the COVID-19 pandemic, a teleconference was held on 09 October 2020 between the African Union Commission, the F15 Finance Ministers and the AU Special Envoys, for the mobilization of international support for Africa’s response to the COVID-19 pandemic. The purpose of the meeting was for the Finance Ministers, Special Envoys, and the AUC to collectively discuss and agree upon a coordinated approach for the negotiations of resources to secure the COVID-19 vaccine for the continent and build back the economies.

AU COVID-19 Response Fund raises USD 44 million (SAnews)

African Union Chairperson, President Cyril Ramaphosa, says while the African Union COVID-19 Response Fund has to date raised USD 44 million – more still needs to be done. “However, we need to raise at least a further USD 300 million to ensure assistance is provided to societies and countries in need, and to enable us to weather the health and economic storm in the weeks, months and years ahead,” said the President. The call for more funds was made by the President during the virtual fund-raising webinar for the AU COVID-19 Response Fund on Saturday. Established in April this year, the Fund was set up to mitigate the social, economic and humanitarian impact of the pandemic across the continent. It is a financial instrument to mobilise and manage funds from the private sector and other stakeholders.

Time for integrated regional value chains in Central Africa (UNECA)

“The African Continental Free Trade Area (AfCFTA) will offer an opportunity to sell to over 1.2 billion persons with a collective GDP of US$ 2.5 trillion, but what can Central African countries sell on the new continental market? As a result of COVID-19, Africa has not been able to get some of the food supplies it usually imported from other parts of the world. With Central Africa’s vast expanse of arable land and a good mix of agricultural geographies, why not produce these locally instead of importing them?” These were teasers for reflection put to an assembly of senior State officials from all the eleven countries of the Economic Community of Central Africa States (ECCAS) by the Director of the Subregional Office for Central Africa of the UN Economic Commission for Africa (ECA) – Antonio Pedro, Friday.

Small farmers are SADC’s future – Dr Tax (Dailynews)

The Southern African Development Community (SADC) joined the international community to commemorate World Food Day on 16 of October which was proclaimed by the Conference of the United Nations Food and Agriculture Organisation to heighten public awareness of the global problem of food absence, scarcity and to strengthen solidarity in the struggle against hunger, malnutrition and poverty. This year, the day was commemorated under the theme “Grow, Nourish, Sustain, Together. Our actions are our future”. It is a clarion call for countries, the private sector and civil society to ensure that food systems grow a variety of food to nourish a growing population and sustain the planet, together.

Africa after COVID19: Policy Priorities to drive economic transformation (ORF)

As Africa entered a new decade, there was sustained, if not vibrant, optimism for the future. Many of the continent’s economies were continuing to grow, while poverty was continuing to decline. The COVID-19 pandemic has dramatically altered that landscape. While the pandemic has not hit Africa as hard as Asia, Europe, and parts of the Americas from a health perspective, it continues to severely strain African economies, threatening to undermine decades of progress and jeopardize long-term goals, including economic transformation. African governments and their development partners must leverage the urgency of the COVID-19 crisis to make meaningful policy changes that will not only help in the short term but also strengthen Africa’s long-term recovery efforts.

Dissecting Africa’s Covid-19 response in the extractives sector: diversification, enhancing local content, offer solutions (AfDB)

The African Development Bank’s African Natural Resources Centre (ANRC) and the African Legal Support Facility (ALSF) hosted a dialogue on responses by governments and the industry to the COVID-19 pandemic in the extractive sector, focusing on South Africa, Ghana, Nigeria, and Kenya. Umar Isa Ajiya, Group Executive Director at the Nigeria National Petroleum Corporation (NNPC), made the point that national oil companies should set aside risk funds to minimize the impacts of unforeseen events. Nigeria’s heavy reliance on oil revenues, oversupply and the dramatic fall in demand for example, has impacted its economy, he said.

Rwanda and British envoys get COMESA accreditation (East African Business Week)

The new Ambassador of Rwanda to Zambia Amandin Rugira and the British High Commissioner to Zambia Nicholas Woolley have been accredited to COMESA as Permanent Representative and Special Representative respectively. The two presented their letters of credence to COMESA Secretary General Chileshe Kapwepwe on yesterday at the COMESA Secretariat in Lusaka. As part of the collaboration, the UK government has announced a new partnership between Trademark East Africa and Zambia to improve trade flows at one of Southern Africa’s busiest borders – the Nakonde border post between Zambia and Tanzania were 135,000 trucks pass every year.

International

US foreign policy toward Africa: An African citizen perspective (Brookings)

Despite the Trump administration’s announced December 2018 Africa strategy, a significant gap between the lofty blueprint and the concrete actions needed to turn it into reality remains. U.S. interests in the region are being increasingly undermined as China, Russia, and other powers move to fill the policy spaces left vacant by the United States and other Western nations. When it comes to policy priorities, given the increased importance of job creation to everyday African citizen, directing more aid toward efforts that (directly or indirectly) lead to job creation – or at least making a better case for why investment in areas such as education, infrastructure, and electricity is directly tied to economic growth and jobs – might also increase positive sentiments toward the U.S. in the region.

EU-Africa must be a ‘fair partnership’ of equals, say NGOs (EURACTIV)

African civil society groups want to be part of drawing up a new ‘strategic partnership’ between the EU and the African Union, in a bid to overhaul a process which many believe is deeply dysfunctional. More than two thirds of civil society organisations from Africa and Europe believe that cooperation between the two continents “does not work well” or “not at all”, according to a survey of over 360 representatives of civil society organisations from Africa and Europe by VENRO, the umbrella organisation of German development NGOs, in October. “A deeper partnership has to be more than a process between governments. It must be built on human relationships, and enable dialogue and participation,” argues a VENRO policy paper published ahead of the delayed EU-Africa summit, which is pencilled in for December.

India Goes Roaring Into Africa; Looks To Ink Defence & Other Key Pacts With Morocco (EurAsian Times)

As India seeks to emerge as a prominent global power, New Delhi is cementing its both defence and economic ties with countries of significance. With Africa drawing both new Delhi and Beijing, India and Morocco could sign a defence pact to further boost bilateral relations. Morocco is also considered as a gateway to Africa by the Indian businesses since the country’s stable political environment and promising economic returns ensure a safe haven to invest in the country. Many leading Indian companies in several sectors are currently operating in the country, reflecting the aligned interest of both sides. Morocco is rapidly emerging as North Africa’s economic leader and is a major source of phosphates for India, and continues to bolster its trade ties with Indian businesses.

UK risks road rage with China in Africa (POLITICO)

Britain is eying investment in Africa as a way to boost trade and influence after Brexit – but it faces stiff competition from China. The U.K. has, to date, announced one significant project as part of its new strategy – more than £100 million for a road in the West African state of Benin. China, on the other hand, plowed $683 million into the country in borrowed funds between 2000 and 2018, according to the China Africa Research Initiative. African states have been eager to soak up Chinese money, after western nations lost interest in recent decades. “The Chinese have largely taken advantage of the fact that Africa was desperate for investment and there wasn’t enough competition,” said Nick Westcott, director of the Royal Africa Society. That’s now changing, with the EU and the U.S. pushing to up their influence and increase trade with the continent. And Britain is getting in on the action too. U.K. Export Finance, Britain’s export credit agency, is investing more than £100 million to improve the link between the cities of Bohicon and Parakou, boosting trade lines between Benin and neighboring nations.

Turkey to establish logistics centers in Africa, Americas, Europe, Far East (Daily Sabah)

Turkey plans to establish logistics centers in strategic areas in Africa, the Americas, Europe and the Far East, the country’s trade minister said on Sunday. The centers aim to enable Turkish goods to reach customers in foreign markets in the fastest way and at affordable costs, Ruhsar Pekcan said in a statement. “Sustainable export growth will be achieved to these regions with these centers, which will increase Turkey’s competitiveness in international markets,” Pekcan said. “We will establish the logistics centers that we aim to launch as soon as possible in a way that can serve within the framework of the demands and needs of our exporters.”

IMF to offer low-cost lending into next year as loans hit Sh1.7trn (Business Daily)

The International Monetary Fund has pledged to continue loaning sub-Saharan countries into 2021 after the Bretton Woods body hit Sh1.7 trillion loans over the last six months. IMF said this year, it released $16 billion in loans and debt relief as emergency assistance but more would be needed since the global financial markets have become too expensive for small economies. “The IMF is stepping up efforts to continue this support in 2021. Many of the countries that have received funding from the IMF have reached, or are approaching, their relevant limits for annual access,” IMF said in ‘ pdf Sub-Saharan Africa regional Economic Outlook (2.44 MB) ’. “So the IMF has temporarily increased these annual limits and has allowed for more frequent disbursements under the Rapid Credit Facility, allowing members to obtain further financial support from the IMF during this extraordinary period.”

WTO holds back on LDCs’ request to extend TRIPS waiver (The Financial Express)

The Least Developed Countries’ (LDCs) request to extend the transition period of Trade-Related Aspects of Intellectual Property Rights (TRIPS) didn’t get full support from the members of the World Trade Organization (WTO) Chad, on behalf of the LDC Group, placed a formal request at the meeting of the Council for TRIPS on October 16 in Geneva to extend the transition period for further 12 years. The current transitional period ends on July 1, 2021. In the request, Chad argued that LDCs continue to face serious economic, financial and administrative constraints and are still struggling with various challenges to uplift the socio-economic conditions with very limited capacities. “Such a situation is restricting them to divert resources from other areas, where there is utmost necessity to improve the socio-economic condition of their people,” the written request added.

Services trade drops 30% in Q2 as COVID-19 ravages international travel (WTO)

The latest contraction in services trade is the steepest since the financial crisis, when global commercial services trade plummeted by 17% in the second quarter of 2009. Services exports in the second quarter of 2020 were down 32% in North America, 29% in Asia and 26% in Europe on a year-on-year basis. Preliminary estimates suggest even sharper declines for Latin America and the Caribbean (-46%) and a drop of 60-65% for least-developed countries.

Pandemic offers SMEs a once-in-a-lifetime opportunity for e-exports (Daily Sabah)

The coronavirus pandemic has proved itself as an unprecedented challenge on a global scale that disrupted global trade and the global economy in just a few short months. Yet it carries major opportunities in the area of e-commerce, particularly for small- and medium-sized enterprises (SMEs), according to the general manager of GittiGidiyor, an eBay enterprise and one of the leading e-commerce sites in Turkey. “From this process, especially SMEs can get the opportunity to open up to the world through e-exports,” Öget Kantarcı said, stressing the growth of e-commerce in the global market. “In this process, SMEs that best keep up with technological developments can benefit from the $1.5 trillion e-export pie in global trade.

Global collaboration is key to recovery and achieving the SDGs (Modern Diplomacy)

The COVID-19 pandemic has stalled the advancement of the sustainable development goals (SDGs). It is creating many challenges, yet also it unveils opportunities to build back better. In this context, inclusive and sustainable industrial development, which is at the core of SDG9, is expected to play a critical role in overcoming the crisis and setting countries back on the path of economic development. SDSN President, Jeffrey Sachs, highlighted the need for global collaboration, and how the world should turn toward six transformation pathways to achieve the SDGs amidst the pandemic. Sachs specifically highlighted the need for the first transformation relating to education, gender and inequality, and the sixth transformation relating to a Digital Revolution for Sustainable Development.

pdf G20 Anti-Corruption Ministers Meeting Ministerial Communiqué (203 KB)

22 October 2020 | In a context of unprecedented global social and economic fragility caused by the COVID-19 pandemic, we stress the heightened threat from and serious impact of corruption on economic growth, sustainable development, quality investment and innovation, and trust between governments and citizens.... The fight against corruption in international trade and investment, as a key dimension to promote a level playing field, remains a top priority of the G20. We encourage countries to promote cooperation with the private sector on this topic and we encourage enterprises of G20 countries to take appropriate measures to raise awareness of corruption risks and deploy effective mitigation and compliance systems.

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F15 Ministers, Special Envoys for mobilization of international COVID-19 support

26 Oct 2020

Communiqué of the teleconference between the African Union Commission, the F15 Finance Ministers and the AU Special Envoys for the mobilization of international support for Africa's response to the COVID-19 pandemic

As part of the continuing efforts to address the impact of the COVID-19 pandemic, a teleconference was held on 09 October 2020 between the African Union Commission, the F15 Finance Ministers and the AU Special Envoys, for the mobilization of international support for Africa’s response to the COVID-19 pandemic. The purpose of the meeting was for the Finance Ministers, Special Envoys, and the AUC to collectively discuss and agree upon a coordinated approach for the negotiations of resources to secure the COVID-19 vaccine for the continent and build back the economies.

In his welcome address, H.E. Prof. Victor Harrison, Commissioner for Economic Affairs at African Union Commission (AUC) highlighted the various initiatives being undertaken by African countries and the AUC to curtail the pandemic and sustain economies. He commended the AU Special Envoys' work in mobilizing resources for the continent, including grants and loans received as emergency support by African countries. He noted that the International Monetary Fund (IMF) increased its support to the continent from US$4 billion to US$24 billion, with ongoing negotiations for the allocation of Special Drawing Rights (SDRs) to enhance the liquidity of governments. He concluded by reiterating the importance of a coordinated and harmonised approach to negotiations for resources for the continent, towards securing vaccines and building back the economy.

H.E. Mr. Tahir Hamid Nguilin, Minister of Finance of the Republic of Chad and Chair of the F15, emphasized the need for additional resources for the continent and commended member states for their efforts so far, despite the limited resources at their disposal. He underscored the need for the AUC, the F15 Ministers, and the Special Envoys to take stock of progress made on the current activities and devise additional strategies for better effectiveness.

Update by the Special Envoys

Dr. Donald Kabureka, representing the AU Special Envoys for the mobilization of international support for Africa’s response to the COVID-19 pandemic stressed that, the pandemic had wiped out the benefits of the economic reforms undertaken over the last two decades in Africa, and is likely to hinder the continent from achieving the SDGs. With regards to the debt moratorium, the Special Envoy stated that only 26 of the 38 eligible countries had applied and managed to create fiscal space of US$ 1.8 billion. He noted that other countries were hesitant to participate in the moratorium due to the stigma around the moratorium, including fear of anticipated negative ratings from international credit rating agencies, denial of future access to capital markets, and excessive cross conditionalities. He further noted that they were working on the extension of the moratorium to the end of 2021.

He commended the IMF for the flow of resources to the continent, noting the US$26 billion received from the IMF since the beginning of the pandemic, and encouraged the Ministers of Finance to seek additional resources from the IMF. He informed the meeting that China was participating in the moratorium through the China Eximbank. He noted the need to clarify whether the funds released by the World Bank were additional resources, or a re-allocation or reprogramming of existing resources.

The Special Envoy appealed to the Finance Ministers to obtain the Special Drawing Rights (SDRs) and consider leveraging it with market sources through a trustworthy institution, such as the African Export Import Bank (Afreximbank). He emphasised that this will enable Africa to have a second source of funding to procure vaccines and support the rebuilding of the private sector and African commercial banks. The Special Envoy stressed the importance of private and commercial creditors' participation in supporting Africa’s recovery.

The Special Envoys recommended that Africa should work together to avoid disorderly default to lenders, negotiate collectively in the bargaining, and ensure Africa's voice is amplified during annual meetings of the IMF/World Bank and other global forums. They highlighted that these measures were important to ensure the credibility of countries and to protect access to capital markets in future. Lastly, the Special Envoys highlighted the importance of strengthening direct relationships between the Finance Ministers and Health Ministers.

Vaccine Finance

Mr. Strive Masiyiwa (AU Envoy for COVID-19 Procurements), highlighted that all African countries are able to procure medical supplies and equipment through the African Medical Supplies Platform (AMSP), and there are no longer shortages. To date, the platform has over 650 suppliers, with Afreximbank facilitating payments between buyers and suppliers. He noted that Afreximbank has also made an overdraft facility available for countries that need short term funding for quick procurement.

He stated that African countries may face challenges acquiring sufficient doses of the COVID-19 Vaccine, noting that the GAVI COVAX initiative, while very good for the continent, may not have the capacity to fully supply Africa with the required volumes, hence the need to access the market to bridge the gap. He stated that an estimated US$10 billion dollars is required for Africa to acquire vaccine doses that will cover 60% of the population, and appealed to the Finance Ministers to commit a portion of anticipated SDRs of about US$1.5 billion, and leverage the amount through the Afreximbank to enable the purchase of vaccines to fill the gap. He warned that failure to secure adequate doses of vaccines for the continent may significantly delay the continent’s recovery from the ravages of the pandemic. 

Other Initiatives

H.E. Ken Ofori-Atta, Minister of Finance, Ghana, Chair of Development Committee of the World Bank and co-chair of Global liquidity and financial stability and  Dr. Mohamed Maait, Minister of Finance, Arab Republic of Egypt, Co-chair on Discussions Group on External finance, remittances, jobs and inclusive growth provided overviews on work in their respective groups, which were noted by the Ministers.

Afreximbank’s Capitalisation

Professor Benedict Oramah, President of Afreximbank noted that COVID-19 has reminded Africa that lack of capital remained a binding constraint to Africa’s growth and development. He emphasised the value of an alternative financing system for the continent, in addition to foreign funding, stating that the Afreximbank was ready and willing to bridge the vaccine funding gap by leveraging the SDRs from the IMF. He highlighted the Bank’s track record of providing substantial support to African countries during the pandemic and in past crises, noting that Afreximbank approved and disbursed funds of over US$6 billion over the past 6 months, to complement continental and national efforts in addressing immediate needs during the pandemic.

In addition, Prof. Oramah emphasized that increased capitalization of Afreximbank would deepen and expand its effectiveness and enable the Bank to intensify its post-COVID-19 interventions, including through vaccine financing by committing US$5 billion in financing the procurement of vaccines on the continent, and dedicating a US$300 – US$500 million facility to support the development of at least two vaccine manufacturing facilities on the continent. He reiterated that capitalization will enable the acceleration of a private sector-led economic recovery, as well allow expansion of the Bank’s commitment to the AfCFTA Adjustment Facility from US$1 billion to US$3 billion, among other benefits. Further to this, additional capitalisation will help realise new and funding opportunities for African countries.

Recommendations and Way forward

In conclusions, the F15 Ministers:

  • Urged for a collective approach, as well as speaking with one voice in Africa’s negotiations with the international community, for additional resources to curtail shocks posed by the pandemic and ensure access to COVID-19 vaccines;

  • Endorsed the additional capitalization of Afreximbank, by leveraging US$1.5 billion of the SDRs to support the continent in the procurement of the COVID-19 vaccines, expand Afreximbank’s capacity to support African economies and their private sector, and to rebuild their economies post pandemic, including support the implementation of the AfCFTA;

  • Urged the Special Envoys to engage and assess the issue of additional resources from the World Bank, to evaluate if it is only reallocating or reprogramming existing resources, while emphasising the need for additionality;

  • Noted that Africa must develop a mechanism to ensure access to adequate vaccines for the continent to complement the Gavi COVAX facility;

  • Urged for rigorous action by the Ministers of Finance, to ensure that Africa does not diverge from the rest of the world; and called for the strengthening of the coordination between the Special Envoys, the Ministers of Finance and Ministers of Health in mobilising additional resources.

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AfCFTA will harmonize investment rules, create level-playing field, says ECA Director

23 Oct 2020

The African Continental Free Trade Area is going to harmonize investment rules between its member countries and the rest of the world in order to create a level playing field after it starts trading next year, said Stephen Karingi of the Economic Commission for Africa.

The investment protocol to replace the rules would help to attract foreign direct investors to come and establish businesses in Africa, Mr. Karingi, Director for Regional Integration at the ECA, made the statement recently at a Nordic-African Business Webcast.

According to him, there are currently multiple bilateral treaties between African countries and bilateral investment treaties between some African countries and the rest of the world but negotiations to harmonize them would start after trading begins on 1 Jan.2021 and be concluded very quickly.

“The AfCFTA is a very deep and broad agreement that is not just focusing on trade in goods and trade in services but it is looking at those issues that would make this regional integration functional through competition policy, intellectual property rights, investment protocol and also e-commerce,” he said.

The agreement entered into force on 30 May 2018, having been ratified by the required 22 countries. Currently, 54 countries have signed, and 30 countries have ratified the AfCFTA. The AfCFTA provides the opportunity for Africa to create the world's largest free trade area, with the potential to unite more than 1.2 billion people in a $2.5 trillion economic bloc and usher in a new era of development.

Apart from exchanging views on AfCFTA, participants at the forum who included business persons, experts, politicians and policymakers from Africa and the Nordic countries discussed issues ranging from agribusiness in Africa, strengthening the business climate on the continent and how businesses will operate in a post-COVID-19 environment.

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AfCFTA will address Africa’s investment challenges, says ECA’s Karingi at AIM2020

23 Oct 2020

Regional Investment Agreements and Investment Drivers in Africa: Shaping Global Investment Strategies through the African Continental Free Trade Area

The African Continental Free Trade Area (AfCFTA) is a game changer for investment on the continent which in recent years has seen foreign direct investment continuing to weaken, Economic Commission of Africa’s (ECA) Regional Integration and Trade Division Director, Stephen Karingi said Thursday.

The ECA Director said this while presenting for discussion reports by the ECA on investment issues during the Annual Investment Meeting (AIM2020) Africa regional focused session advancing ideas for action on the AfCFTA.

“African economies continue to punch below their weight in terms of attracting foreign direct investment. Moreover, FDI to the continent continues to weaken. While FDI inflows reached US$56.6 billion in 2015, they had fallen to less than US$42 billion by 2017. This figure represents less than three percent of the global investment flows,” he said.

Investment flows to all African regions fell in 2017 to different degrees. This has largely been attributed to the end of the commodity super-cycle. Many African economies remain dependent on exports of primary commodities which are particularly prone to shocks.

“Foreign direct investment is a catalyst of economic growth, structural transformation and regional integration on the continent. African economies need FDI as a means to build productive assets, a vector of positive spill over-effects and an additional and relatively stable source of development finance,” said the ECA Director.

Mr. Karingi said African countries can surmount a number of policy and regulatory challenges through the AfCFTA to attract greater investment by linking individual chapters of the agreement and achieving coherence on the various policy areas they cover; harmonizing heterogeneous approaches to investment regulation in Africa; clarify the relationship and precedence of the AfCFTA Investment Protocol and IIAs; pool resources to strengthen domestic and regional institutions and the business climate.

His presentation summarized the main elements and key findings of two ECA publications on investment and regional integration in Africa which came out earlier this year. These are the “Drivers for boosting intra-African investment flows towards Africa’s transformation” and “Linkages between double taxation treaties and bilateral investment treaties.”

Mr. Karingi said African regional integration has gained momentum with the current efforts to establish the AfCFTA.

“Intra-African investments in particular can be conducive to structural transformation and regional integration in that they can underpin African trade and its industrial contents, enable economies of scale and can facilitate entry into regional and global value chains,” he said.

Mr. Karingi added that the knowledge generated by the ECA enables member States to become informed and position themselves to review, negotiate, renegotiate or terminate investment agreements with careful consideration of the legal, policy, economic and social implications of such agreements to ensure that a balance is struck between protecting investment and preserving policy space for development objectives; and contemplate opportunities for expanding intra-African investment in the context of the AfCFTA.

The Africa Regional Focus Session engaged with the Guinean Minister of Investments and Public-Private Partnerships, Gabriel Curtis, and Yofi Grant, the Chief Executive Officer of the Ghana Investment Promotion Centre on critical issues to shape investment strategies through the AfCFTA.

Mr. Curtis said he sees digitalization as a major opportunity of the AFCFTA with the advancement of an e-commerce protocol to support digital and mobile trade.

“E-barriers are even more cumbersome than barriers to physical trade because they are technology driven and can be addressed through the AfCFTA e-commerce protocol,” he said.

Mr. Grant said reforming business practices and regulations are key actions to support the private sector in realizing the benefits of the AfCFTA.

The Africa Regional Focus Session, which was hosted by the ECA, was held under the theme: Regional Investment Agreements and Investment Drivers in Africa: Shaping Global Investment Strategies through the African Continental Free Trade Area.

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AU Heads of State at the 2nd Mid-Year Coordination Meeting call on political and social actors to respect human rights and the rule of law

23 Oct 2020

Five years after the adoption of the Africa Agenda 2063 and its vision for greater African economic and political integration, and taking into consideration that next year marks three decades since the adoption of the Abuja Treaty establishing the African Economic Community, Heads of State and Government from the Regional Economic Communities (RECs) and the Regional Mechanisms (RMs) together with the African Union Commission, held a virtual meeting on 22nd October 2020 to take stock of the progress made in the area of integration and different aspect of development in the continent. The main objective of this meeting is to enhance effective collaboration between the AU, RECs, RMs, the Member States, and other continental institutions, in line with the principle of subsidiarity.

The coordination meeting which is holding against the backdrop of the COVID19 pandemic was also expected to formalize the framework that will help to strengthen the collaboration between the African Union, the RECs/RMs and the Member States with the view to advance the implementation of the continental development agenda, through a well-established division of labor in accordance with the Heads of State meeting held in Niamey, Niger, in July 2019. These entities are expected to better serve the goal of rapid continental integration and the overall objectives of Agenda 2063. To that effect, the meeting emphasized on the need for continued consultations with Member States on the institutional reform process with the respective RECs playing a facilitating role.

H.E Cyril Matamala Ramaphosa, President of the Republic of South Africa and Chairperson of the African Union (AU) in his opening remarks urged all member states to join the Chairperson of the AU Commission in calling on all political and social actors to reject the use of violence and respect human rights and the rule of law. He noted that, even though COVID19 has tremendously affected the developmental and economic plans of every single country, and caused a set back to the progress in implementing key integration projects, the response to this grave public health emergency has been swift and commendable.

The AU Chair also underlined that the Africa Joint-Continental Strategy for COVID-19 Outbreak has guided the continental effort to mitigate the pandemic. “We established a COVID-19 Response Fund to assist with boosting the capacity of the Africa Centres for Disease Control and Prevention – the Africa CDC – and to assist African countries in combating and containing the spread of the virus,” he stated. Chairperson Ramaphosa further recalled that Special Envoys were appointed to mobilise international support for a comprehensive economic stimulus package for Africa. Adding that, through cooperation at a continental level, the African Task Force for Coronavirus was formed, and that the Partnership for Accelerated Covid-19 Testing campaign was established. The AU Chairperson also highlighted that the innovative Africa Medical Supplies Platform was launched to ensure that all African countries have access to affordable medical equipment, diagnostics and other essential supplies.

President Ramaphosa commended the joint efforts to address the pandemic saying that the continent was able to respond proactively to the COVID-19 threat due to the great work of the AU Commission and the Member States. “As a continent we remain united in our call for equitable access to a COVID-19 vaccine once it is developed.” The Chairperson of the AU further pointed out that, while some Regional Economic Communities have made significant progress in key areas of integration, others have struggled to achieve the goals set out in their respective treaties and conventions and in meeting the milestones set out in the Abuja Treaty. “We welcome the fact that all the Regional Economic Communities affirm the importance of trade in advancing economic integration. Once the African Continental Free Trade Area comes into operation next year, economic integration will be given added momentum,” emphasised the AU Chairperson.

Similarly, the Chairperson of the AU Commission (AUC), Moussa Faki Mahamat, recalled in his opening speech that this meeting is being held in a unique context, deeply marked by the COVID-19 pandemic that has affected the continent negatively. This, he said “has presented a huge challenge for our continent that needs a new dynamics of solidarity, resilience and development.” The AUC Chairperson applauded the outstanding leadership of H.E Cyril Ramaphosa, President of the Republic of South Africa, who in his capacity as Chairperson of the AU has multiplied initiatives and provided guidance with the support from member of the Bureau of the Assembly of the AU and leaders of the RECs, to enable the continent achieve considerable development milestone, despite the obstacles caused by the covid-19 pandemic. “This pandemic, has taught us several lessons, one of them is the strength and efficiency of the coordination…The efficiency in the fight against COVID-19 was attested by the international honorary distinction awarded to Dr John Nkengasong, the director of Africa CDC,” said Mr Moussa Faki Mahamat

Mr Moussa Faki Mahamat underscored the purpose of the coordination meeting, which is to include, in a formalized framework, the relations between the African Union, the RECs/RMs and the Member States so that all these entities cooperate in the development of the continent, without interference or overlap on the skills of each other.

The AUC Chairperson recalled that a general framework for the division of labor has been approved by the Assembly of the Union, at its February 2020 session. “The document on the division of labor between the AU, the RECs/RMs and the Member States which will be presented to you is therefore the result of collective work which was intended to be as detailed as possible, and which adopted a progressive approach, by limiting itself to only three areas, namely Peace and Security, Political Affairs and Trade,” said Mr Moussa Faki Mahamat.

Regarding the African Continental Free Trade Area (AfCFTA), which offers the continent a great opportunity for job creation, industrial linkages, economic diversification and structural transformation, the AUC Chairperson urged Member States to proceed with the ratification of all legal instruments whose entry into force will facilitate the optimal functioning of the AfCFTA. The AUC Chairperson concluded by emphasizing the need to sign the revised Protocol on relations between the African Union and the RECs/RMs, which will take place in December 2020.

The AUC Commissioner for Social Affairs, Amira Elfadil Mohammed Elfadil, then presented the Progress Report on COVID-19 Pandemic in Africa for adoption by the Heads of States. The meeting commended Member States that have made pledges to support the AU COVID-19 Response Fund and the Africa CDC in an effort to pull together continental resources to support the AU fight against the pandemic. Other development reports were also tabled for consideration and adoption by the Heads of State.

Worth noting that, the African Union (AU) Reforms proposed that the Mid-Year Extra-Ordinary AU Summit be converted into a Coordination Meeting between the AU and the Regional Economic Communities (RECs) to better coordinate the African integration agenda as well as to re-enforce the position of the RECs as the building blocks of the Continental integration process. The Mid-Year Coordination Meeting is the principal forum for the AU, RECs, and RMs to harmonise their work and coordinate implementation of the continental integration agenda.

The virtual meeting was attended by Members of the Bureau of the Assembly of the AU and the Chairpersons of the RECs; the African Union Commission (AUC); Chairpersons of the RECs; Regional Mechanisms; the Chief Executives of the African Union Development Agency (AUDA/NEPAD); UN Economic Commission for Africa (UNECA); African Development Bank (AfDB), the President of Niger as the Champion of the African Continental Free Trade Area (AfCFTA) Agreement and the Secretary-General of the AfCFTA.

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Sub-Saharan Africa: A Difficult Road to Recovery

23 Oct 2020

With difficult recovery ahead, policy makers have fewer resources at their disposal as they cautiously lift restrictions and reopen economies. Transformative reforms are urgently needed for rekindling resilient growth, which will be difficult without external support, the International Monetary Fund (IMF) said in its latest Regional Economic Outlook for Sub-Saharan Africa.

“Sub-Saharan Africa is contending with an unprecedented health and economic crisis,” stressed Abebe Aemro Selassie, Director of the IMF’s African Department. “In just a few months, this crisis has jeopardized years of hard-won region’s development gains and upended the lives and livelihoods of millions. The onset of the pandemic was delayed in sub-Saharan Africa, and infection rates have been relatively low compared to other parts of the world. However, the resurgence of new cases in many advanced economies and the specter of repeated outbreaks across the region suggest that the pandemic will likely remain a very real concern for some time to come.

“Nonetheless, amid high economic and social costs, African countries are now cautiously starting to reopen their economies and are looking for policies to restart growth. With the imposition of lockdowns, regional activity dropped sharply during the second quarter of 2020, but with a loosening of containment measures, higher commodity prices, and easing financial conditions, there have been some tentative signs of a recovery in the second half of the year.

“Overall, the region is projected to contract by 3.0 percent in 2020, the worst outlook on record. Tourism-dependent economies faced the largest impact, while commodity exporting countries have also been hit hard. Growth in more diversified economies will slow significantly, but in many cases will still be positive in 2020.

“Looking forward, regional growth is forecast at 3.1 percent in 2021. This is a smaller expansion than expected in much of the rest of the world, partly reflecting sub-Saharan Africa’s relatively limited policy space within which to sustain a fiscal expansion. Key drivers of next year’s growth will include an improvement in exports and commodity prices as the world economy recovers, along with a recovery in both private consumption and investment.

“The current outlook is subject to greater-than-usual uncertainty with regard to the persistence of the COVID-19 shock, the availability of external financial support, and the development of an effective, affordable, and trusted vaccine.”

Against this backdrop, Mr. Selassie pointed to a number of policy priorities going forward.

“Where the pandemic continues to linger, the priority remains to save lives and protect livelihoods. For countries where the pandemic is under greater control, limited resources will mean that policy makers aiming to rekindle their economies will face some difficult choices. Both fiscal and monetary policy will have to balance the need to boost the economy against the need for debt sustainability, external stability, and longer-term credibility. Financial regulation and supervision will have to help crisis-affected banks and firms, without compromising the financial system’s ability to support longer-term growth. And these efforts must also be balanced against the need to maintain social stability while simultaneously preparing the ground for sustained and inclusive growth over the long term.

“Navigating such a complex policy challenge will not be easy and will require continued external support. Indeed, without significant assistance, many countries will struggle to simply maintain macroeconomic stability while meeting the basic needs of their population. In this context, the IMF has moved swiftly and disbursed about US$17 billion so far in 2020 – which is about 12 times more than we typically disburse each year – to help cover a significant portion of the region’s needs and to catalyze additional support from the international community.

“But looking ahead, sub-Saharan Africa faces significant financing gaps. If private financial inflows remain below their pre-crisis levels – and even taking into account existing commitments from international financial institutions and official bilateral creditors – the sub-Saharan Africa could face a gap in the order of $290 billion over 2020-23. This is important, as a higher financing gap could force countries to adopt a more abrupt fiscal adjustment, which in turn would result in a weaker recovery.

“Countries must also play their part – governance reforms will not only improve trust in the rule of law and improve business conditions, but also encourage external support.

“Despite the lingering effects of the crisis, the potential of the region and the resourcefulness of its people remain intact, and tapping this potential will be vital if the region is to find its way back to a path of sustainable and inclusive development. In this context, the need for transformative reforms to promote resilience, lift medium-term growth and create the millions of jobs needed to absorb new entrants into labor markets is more urgent than ever. Priority reforms are in the areas of revenue mobilization, digitalization, trade integration, competition, transparency and governance, and climate-change mitigation.”

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Food Security and Human Welfare Critical in Trade Agreements – South African Minister
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23 Oct 2020

National

Tax hikes and changes proposed for South Africa – including digital products and services (BusinessTech)

South Africa is facing a significant shortfall in revenue collection due to the coronavirus lockdown and other economic factors, says the Parliamentary Budget Office (PBO). In a presentation ahead of finance minister Tito Mboweni’s Medium-Term Budget Policy Statement (MTBPS) next week, the PBO said the cost-of-revenue collection ratio continued to decline from 0.97 in 2014/15 to 0.78 in 2019/2020. “Covid-19 economic conditions together with continued digitalisation of business activities and continued base erosion and profit shifting will negatively affect all of these tax revenue sources,” it said.

Experts urge govt to prioritise informal-trading-friendly policy (Engineering News)

With 60% of South Africa’s economic activity happening in the informal sector, national, provincial and local government alike need to realise the importance of empowering these entrepreneurs to contribute more to the gross domestic product of cities, University of the Witwatersrand associate Professor Margot Rubin said on October 20. Rubin noted that challenges facing entrepreneurship in South Africa include inconsistent policy regimes that have been in place for a long time.

South African businesses: Key to success may be close to home (The Africa Report)

A string of high-profile failures in Western markets has highlighted the brighter prospects that lie in continental expansion for many South African corporates. New Frontier’s ill-fated investment in the UK is just one recent example of South African companies betting big on markets outside Africa, only to see the value of these foreign operations nosedive. Beyond banking and insurance, examples of successful expansion into Africa abound. MTN’s transformation into a multinational behemoth owes much to its early push into Nigeria, in 2001. Shoprite launched its first foreign operation, in Namibia, in 1990, and today is Africa’s largest food retailer, with a presence in 14 countries outside South Africa.

Empowering Ghanaian Businesses to Harness the benefits of the AfCFTA under the framework of the NEDS (GEPA Exporters Portal)

Stakeholders in the public and private sector have been engaged in vibrant discussions bordering on the theme for the 2-day National Conference on the Implementation of the AfCFTA Agreement at the Accra International Conference Centre from October 20-21, 2020, themed “Empowering Ghanaian Businesses to harness the benefits of the African Continental Free Trade Agreement under the framework of the National Export Development Strategy”.

pdf Ghana National Export Development Strategy (NEDS): Overview (11.25 MB)

Rwanda unemployment rate falls to 15 per cent (The New Times)

Unemployment rate fell to 15 per cent in the last three months from May to August, the National Institute of Statistics of Rwanda (NISR) said in its latest labour force survey released on Wednesday. The third quarter report shows unemployment fell sharply from the historic 22.1 per cent that was recorded in May due to the Covid-19 pandemic, to 15 per cent at the end of August.

Museveni Commissions Ambitious Roads Projects in Northern Uganda to Spur Trade (ChimpReports)

President Museveni has commissioned multibillion road works for the construction of the 100 km Rwekunyu-Apac-Lira-Puranga road with an original contract price of Shs 337,526,153,350 in a 36 months projection duration. Once complete, the road is expected to improve access to markets, improve access to social services, enhance increased inter-regional trade volumes and reduce transport costs as well as travel time in the fast-growing northern part of Uganda

South Sudan’s currency loses more value amid plans to change it (The East African)

South Sudan’s currency drastically depreciated against the dollar last week, just after the government announced plans to change it, an indication that more currency hoarders had surrendered the now seemingly old notes. On October 9, the country’s Council of Ministers decided to change the national currency in an attempt to mop up hoarded cash it claims is to blame for the decline of the economy, according to the Information Minister. Although details of how the new currency will be rolled out have not been announced yet, the pound immediately depreciated against the dollar.

Uhuru tariff cut dims Kenya Power revenue by Sh4.8bn (Business Daily)

Kenya Power chairman Mahboub Mohamed said the revenue drop from the unplanned tariff review forced the company to take up short-term loans to cover for the resultant financial hole. “The review dimmed the company’s revenue prospects by Sh4.8 billion of the total projected revenues in the tariff application, thereby necessitating stop-gap measures in short-term borrowings to enable the company meet its financial obligations,” said Mr Mohamed.

Fitch Forecasts 72.8% Debt-To-GDP By End Of 2020 (Modern Ghana)

In its latest ratings report on Ghana, Fitch stated, “We forecast debt at 72.8% of GDP by end-2020, which includes the outstanding stock of GH¢7.6 billion (2.1% of GDP) in the Energy Sector Levy Act bonds. We expect debt to continue rising through 2022, although at a slower pace. “We expect gross reserves to end 2020 at US$6.6 billion, broadly the same as in December 2019, as some foreign-exchange intervention by the BoG to support the currency is offset by new inflow from debt and 4Q cocoa receipts. The import compression will slightly improve reserve coverage to 2.8 months of current external payments, from 2.7 in 2019.”

Mozambique: Sharp Fall in Transit Trade in Maputo Port (allAfrica.com)

The port of Maputo recorded a drop of 13 per cent in the volume of cargo in transit handled in the January-August period this year, compared with the same months in 2019. In the first eight months of 2019, the port handled 8.1 million tonnes of cargo in transit, compared with only seven million tonnes in the same period this year. For businesses in much of South Africa, it is much quicker and more convenient to use Maputo than the South African ports of Durban or Richards Bay. But South African trade went into sharp decline when the Pretoria government imposed one of the most severe lockdowns in the world, in an attempt to halt the spread of the coronavirus pandemic.

Zimbabwean President sets out new legislative agenda to spur economic growth (China.org.cn)

Zimbabwean President Emmerson Mnangagwa on Thursday set out the legislative agenda for the Third Session of the Ninth Parliament of Zimbabwe, which mainly focuses on further driving economic growth. In his virtual address to the joint sitting of both the National Assembly and Senate, Mnangagwa exhorted Parliament to expedite some of the Bills to accelerate economic growth. He said it was encouraging that despite the impact of COVID-19, the country’s exports grew by 4.9 percent to 1.96 billion U.S. dollars in the first half of 2020, from 1.86 billion U.S. dollars recorded during the same period last year. Imports declined by 5.9 percent from 1.96 billion dollars in the first half of last year to 1.84 billion dollars this year..

Burkina Faso’s AfCFTA national strategy implementation meeting holds next week (UNECA)

Government officials and experts in Burkina Faso are meeting next weekto develop the country’s strategy for the implementation of the African Continental Free Trade Area agreement (AfCFTA) ahead of its commencement next year. Besides sensitizing participants on the theme of AfCFTA, the meeting will also hold discussions on the risks and opportunities associated with the implementation of the agreement for the country and the implications for stakeholders. The two-day meeting in Ouagadougou from 26 Oct. to 27 Oct. is being organized by the country’s trade and industry ministry in collaboration with international partners including the United Nations Economic Commission for Africa, the International Trade Center and the African Union Commission.

Ghana-Nigeria trade relations face further tensions (Ghanaweb)

The ongoing public demonstrations in Lagos, the commercial capital of Nigeria and the fatalities that occurred as a result of the use of live ammunition on protestors at the Lekki toll booth on Tuesday, are threatening to further exacerbate the existing tensions between Nigeria and Ghana, which have been created by an ongoing dispute over the status of NIgerian retail traders in Accra and Kumasi, as well as the fate of their shops. This is because Ghanaian president Nana Akufo Addo is the incumbent chairman of the Economic Community of West African States, ECOWAS, and he is therefore coming under increasing pressure at home to publicly criticize the intolerant stance taken by the government of Nigerian president Muhammudu Buhari which led to several confirmed deaths in Lagos on Tuesday.

2nd African Union Mid-Year Coordination Meeting

Meeting calls on political and social actors to respect human rights and the rule of law

Heads of State and Government from the Regional Economic Communities (RECs) and the Regional Mechanisms (RMs) together with the African Union Commission, held a virtual meeting on 22nd October 2020 to take stock of the progress made in the area of integration and different aspect of development in the continent. The coordination meeting was expected to formalize the framework that will help to strengthen the collaboration between the African Union, the RECs / RMs and the Member States with the view to advance the implementation of the continental development agenda, through a well-established division of labor in accordance with the Heads of State meeting held in Niamey, Niger, in July 2019. These entities are expected to better serve the goal of rapid continental integration and the overall objectives of Agenda 2063.

Closing Remarks by African Union Chairperson, His Excellency President Cyril Ramaphosa (The Presidency)

“The report on the status of regional integration and the insightful perspectives provided by Chairpersons of the RECs show that commendable progress has been made in the integration process, and that implementation of the AfCFTA is a priority. With the finish line now in sight, we must make this final push; and ensure all outstanding issues on Phases 1 and 2 are finalised in order for us to start trading by the 1st of January 2021.... It is imperative that we strengthen the RECs as building-blocks for Africa’s continental integration. Intensified coordination and harmonisation will bring us closer to the realisation of the African Economic Community in line with the principles of the Abuja Treaty.”

Africa’s numerous currencies a challenge to AfCFTA implementation – Akufo Addo (Ghanaweb)

President Nana Addo Dankwa Akufo-Addo has said Africa playing host to several currencies impedes the effective implementation of the Africa Continental Free Trade Area (AfCFTA). Akufo-Addo believes a single currency market will aid in the smooth running of the AfCFTA. He made this known in a speech read on his behalf by the Minister of Foreign Affairs and Regional Integration, Shirley Ayorkor Botchwey. “Africa has more than 40 currencies, which are characterised by frequent volatility, illiquidity and rarely traded status on the global financial market, which makes trading among African countries difficult. This constitutes one of the biggest barriers to the effective implementation of the AfCFTA and the development of the continent”.

Egypt’s Sisi: Coronavirus consequences prompted African leaders to bolster joint cooperation (Ahram Online)

President Abdel Fattah El Sisi affirmed on Thursday that despite the coronavirus repercussions on the entire international community, especially African countries, those challenges have prompted African leaders to strengthen joint cooperation with a view to harnessing energies, and finding effective and innovative solutions that help overcome the current difficult circumstances. Delivering a speech via video conferencing, Sisi said Egypt has been keen to be at the forefront of African countries providing medical aid and lab equipment, and transferring technical expertise to support its brotherly African states.

President urges African leaders to ratify investment bank legal instrument (MyJoyOnline)

President Nana Addo Dankwa Akufo-Addo has urged African Union Member States, who have not signed and ratified the legal instrument for the African Investment Bank and Monetary Fund, to expedite the process of accession. He encouraged them to ensure that efforts were coordinated leading to the operationalisation of the African Monetary Institute, the establishment of the Pan African Stock Exchange, and the setting up of African Payment and Settlement System in 2020. “Since the adoption of the protocols for the establishment of the African Investment Bank and African Monetary Fund in 2009 and 2014, respectively, the signatures and ratifications registered have not reached the requisite number to enter into force,” he said.

OUTCOME

African Union 2nd Mid-Year Coordination Meeting closes with a resolve to strengthen collaboration between the AU, RECs, RMs, the Member States, and other continental institutions, in line with the principle of subsidiarity

Africa

Trade Experts Call for Implementation of AfCFTA (THISDAYLIVE)

African trade experts have called for the swift implementation of the African Continental Free Trade Area (AfCFTA) to lift the continent out of an economic downturn caused by COVID-19. Speaking at a trade forum in Dakar, Senegal, AfCFTA Secretary-General Wamkele Mene, was quoted in a statement to have said the pandemic had, for the first time in 25 years, caused a contraction of GDP of between two to five per cent in sub-Saharan Africa. “This decline will manifest itself in reduced exports and loss of employment, among other challenges,” Mene said.

AfCFTA is key to post-COVID recovery – Islamic Trade Finance (The Africa Report)

Implementing the African Continental Free Trade Area (AfCFTA) agreement is fundamental to the post-pandemic economic recovery, Hani Salem Sonbol, CEO of the International Islamic Trade Finance Corporation (ITFC), tells The Africa Report. The agreement is “one of the solutions for Africa,” says Sonbol, speaking from Jeddah in Saudi Arabia. The ITFC is working closely to help launch the accord early in 2021, he adds.

AfCFTA, technology can help Africa leapfrog development, affect world, say experts (Businessamlive)

Trade and fiscal policy experts have posited that Africa can use digital technology and the African Continental Free Trade Agreement (AfCFTA) to leapfrog development and also affect the world’s economy, especially China and the United States. This was the broad context of discussion at the fourth annual Babacar Ndiaye lecture. “The AfCFTA is a big move for Africa to take its destiny in its hands. The continent sees it as something it has to do to take itself out of poverty and become a global power. Africa with all resources divided into 55 countries, 84,000 kilometres of borders. The colonial masters made colonies not trade, with themselves. They couldn’t use the powers they have to create a value chain globally and develop a trade advantage. This is what the AfCFTA is here for,” the Afreximbank president said.

AfCFTA will harmonize investment rules, create level-playing field, says ECA Director (UNECA)

The African Continental Free Trade Area is going to harmonize investment rules between its member countries and the rest of the world in order to create a level playing field after it starts trading next year, said Stephen Karingi of the Economic Commission for Africa. The investment protocol to replace the rules would help to attract foreign direct investors to come and establish businesses in Africa, Mr. Karingi, Director for Regional Integration at the ECA, made the statement recently at a Nordic-African Business Webcast.

Current, reliable and trusted data critical for Africa’s growth and development, says ECA’s Chinganya (UNECA)

The virtual United Nations World Data Forum ended Wednesday with the Economic Commission for Africa’s (ECA) Director for the Africa Statistics Centre, Oliver Chinganya, stressing the importance of current, reliable and trusted data to ensure Africa leaves no one behind as it implements the 2030 Agenda for Sustainable Development and Agenda 2063, the continent’s blueprint for development. Speaking on a panel discussing the theme; Balancing Data and Data Protection: Learning from African Experiences, Mr. Chinganya said building trust in a field littered with many players is difficult but critical if it is to be used to unlock Africa’s full potential through evidence-based policymaking that will change people’s lives at the grassroots level.

IOM Launches Continental Strategy on Migration for Africa 2020-2024 (EAC)

The International Organization for Migration (IOM) has launched the first Continental Strategy on Migration for Africa for the period 2020-2024. The Strategy provides an excellent opportunity to further develop synergies for more robust migration dialogues and outcomes across regions and with all relevant partners. The IOM’s Continental Strategy was conceived to reinforce commitment towards safe, orderly and regular migration within and outside the African continent. Through multi-stakeholder engagement, it is expected to give impetus for adaptive measures for better migration management and scale up the positive impacts, opportunities and benefits of migration for the whole of society.

SADC develops Regional Migration Policy Framework

Southern African Development Community (SADC) is in the process of developing a Regional Migration Policy Framework in order to promote regular, safe and orderly migration. The Migration Policy Framework will outline key strategies and actions for regional response, as well as the roles and responsibilities of various actors in migration governance and also assist SADC Member States to align to Global, Continental and Regional frameworks on migration. Once in operation the Regional Migration Policy Framework will facilitate and promote the development and implementation of National Migration Policies as well as tailored National Action Plans.

Rising aflatoxins in food import worry East Africa states (Africa Science News)

The East Africa partner states have expressed fear that there is increasing levels of aflatoxins in the foodstuff imported into the region. “The fight against aflatoxin can be won by putting in place the necessary legislation, regulations, standards, coordination, infrastructure, capacity development, and innovation,” he said, noting that efforts are being put in place to promote safe trade through the construction of Busia Jumuiya market,” said Kevit Subash Desai. EABC Executive Director, Dr. Peter Mathuki said Aflatoxin in foodstuffs, as well as COVID-19 pandemic, have caused a heavy toll on cash flow among East African Member states, frustrating normal volumes of business exports across East Africa countries.

International

Sub-Saharan Africa: A Difficult Road to Recovery (IMF)

With difficult recovery ahead, policy makers have fewer resources at their disposal as they cautiously lift restrictions and reopen economies. Transformative reforms are urgently needed for rekindling resilient growth, which will be difficult without external support, the International Monetary Fund (IMF) said in its latest Regional Economic Outlook for Sub-Saharan Africa.

pdf Regional Economic Outlook Sub-Saharan Africa - October 2020 (2.44 MB)

African countries are now cautiously starting to reopen their economies and are looking for policies to restart growth. With the imposition of lockdowns, regional activity dropped sharply during the second quarter of 2020, but with a loosening of containment measures, higher commodity prices, and easing financial conditions, there have been some tentative signs of a recovery in the second half of the year. “Overall, the region is projected to contract by 3.0 percent in 2020, the worst outlook on record. Tourism-dependent economies faced the largest impact, while commodity exporting countries have also been hit hard. Growth in more diversified economies will slow significantly, but in many cases will still be positive in 2020.

Development finance institutions pledge to sustain COVID-19 mitigation, livelihood recovery (AfDB)

Multilateral development finance institutions on Wednesday pledged to continue to collaborate in their efforts to mitigate the adverse impact of the COVID-19 pandemic and accelerate the recovery of economies and livelihoods. At an extraordinary virtual meeting to discuss the impact of their responses to the pandemic and the worsening debt situation, the organizations said that sustaining their joint efforts would protect livelihoods, especially among vulnerable populations, preserve macroeconomic stability and promote a stronger private sector role after COVID-19.

Financiers reaffirm commitment to Africa’s private sector (New Vision)

Closing the infrastructure gap in Africa will take collaboration and sustained financing, development agencies say. This was during an online panel event last week to discuss the role of development finance in the post-Covid-19 environment and investing in Africa’s future. The panel was put together by the US International Development Finance Corporation (DFC) and the Atlantic Council. The continent’s largest development finance institutions have emphasized that a sustained and collaborative approach among development partners to scale up project development activities, will boost the number of bankable projects attracting investor interest and contribute to closing the infrastructure finance gap in Africa.

US economist tips entrepreneurs on continental, global trade (Nation)

An economist in the US government has challenged African women to advocate for inclusion of gender responsive trade mechanisms under the African Continental Free Trade Area (AfCFTA) agreement. International economist and advisor at the US Department of Agriculture, Ms Pauline Simmons said in an October 14, virtual meeting that women should hold their governments accountable in implementing AfCFTA commitments. “Timely and accurate information is important to identify market opportunities, reduce risks and maximise profits. You cannot trade if you don’t have data,” she said. “You have to work with your governments to ensure you have data that informs of available demand,” she added.

Africa’s WTO Moment | by Kingsley Chiedu Moghalu (Project Syndicate)

If she is chosen to head the World Trade Organization, former Nigerian finance minister Ngozi Okonjo-Iweala, an experienced development economist, would make a broken institution relevant again. She has the gravitas to build bridges between the US and China, on the one hand, and between the WTO and Africa, on the other. Despite being widely regarded as the world’s next frontier for investment and development, Africa is essentially an onlooker in the world trading system, accounting for a meager 2% of global exports. Although the continent is a growing market for the products of globalization, it does not benefit much from world trade, owing to its limited presence in globalized value chains. Instead, Africa trades mainly in agricultural goods and natural resources, whereas most world trade is in manufacturing and services.

There’s still time to change EU-Africa agenda, say activists (EURACTIV)

As policy-makers in Brussels and Addis Ababa plough ahead with plans for what is billed as an ambitious ‘strategic partnership’ between the EU and Africa, civil society groups complain that they have been repeatedly shut out from having any influence over EU-African relations. “We have never been asked to participate (in AU-EU summits) and we don’t know the agendas,” Million Belay, co-ordinator of the Alliance for Food Sovereignty in Africa, told EURACTIV. That needs to change says Belay and fellow civil society leaders, who also insist African governments need to take more ownership of the ‘strategic partnership’, because there is a prevailing sense that the blueprint has been drawn up by Europe for Africa.

Focus on migrant returns threatens AU-EU negotiations (ISS Africa)

Last month the European Commission unveiled its New Pact on Migration and Asylum (New Pact). The pact’s goals of rebuilding trust and developing workable compromises within the European Union’s (EU) 27 states could well be achieved at the expense of external partnerships. The New Pact says all available tools should be used to enforce more returns. These include offering an additional 10% in development assistance to countries that cooperate and applying restrictive visa measures for those who don’t. The African Union (AU) and most African countries have resisted intensified returns policies, maintaining that returns must be voluntary. The overwhelming majority of African migration is intra-continental and the continent is working towards free movement, free trade and regional integration.

NDF joins the Sustainable Energy Fund for Africa to accelerate the green transition in Africa (Nordic Development Fund)

This week, NDF joined the Sustainable Energy Fund for Africa (SEFA). SEFA is a special fund designed to catalyse private sector investments in early-stage renewable energy and energy efficiency markets to accelerate the transition to more inclusive and green growth in Africa. SEFA is also a delivery vehicle for the African Development Bank’s (AfDB) New Deal on Energy for Africa (NDEA). NDF’s total contribution to SEFA is EUR 10 million.

Members cite role of trade facilitation in ensuring access to goods to tackle COVID-19 (WTO)

Several members made presentations during the committee meeting regarding initiatives they have taken to facilitate trade during the COVID-19 pandemic. The United States, Brazil, Colombia and Japan issued a joint call for accelerated implementation of the TFA, arguing that cross-border trade is a critical channel for getting essential products to those who need them. The committee also reviewed more than 70 notifications from members outlining steps taken or planned to implement provisions of the TFA.

Secretary-General urges support for poorest countries (The Commonwealth)

The Commonwealth Secretary-General has called for “swift, coordinated, multilateral action” to support the world’s poorest nations, which are now even more vulnerable in the face of the COVID-19 pandemic. “While some progress has been made in poverty eradication, the levels of poverty remain alarmingly high, with poverty gaps closing only slowly.... We need swift and coordinated multilateral action to address the challenges arising from the pandemic, and their effects in compounding existing vulnerabilities in the world’s poorest countries.”

Women have a vital role to play in post-pandemic recovery (ITC)

There are nine actions that policymakers, corporations and the global community can take to ensure that ‘building back better’ after the COVID-19 pandemic unlocks women entrepreneurship and creates more equal and sustainable societies.

COVID-19 should be the accelerator for e-health in the least developed countries (Trade 4 Dev News)

Healthcare is being transformed the world over, instigated by the fourth industrial revolution and hastened by a common, invisible and deadly enemy – COVID-19. E-health can bring innovation to the healthcare sectors of LDCs, which are mostly low-resource environments with inadequate healthcare infrastructure and services, as well as poor access to information. The way forward is anchored in a digital foundation driven by governments to level the playing field by ensuring uniform access to technologies.

The OPEC Fund and West African Development Bank (BOAD) boost cooperation in Western Africa (Africanews)

The OPEC Fund for International Development (the OPEC Fund) and the West African Development Bank (BOAD) have signed a Framework Agreement to further strengthen their development cooperation in the member countries of the Western African Economic and Monetary Union (WAEMU): Benin, Burkina Faso, Côte-d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo. The agreement focuses on increased engagement and knowledge-sharing between the two institutions and ensures enhanced cooperation in co-financing public and private sector projects, as well as supporting international trade and regional integration.

Impact of COVID-19 on Commodity Markets Heaviest on Energy Prices; Lower Oil Demand Likely to Persist Beyond 2021 (World Bank)

While metal and agricultural commodities have recouped their losses from the COVID-19 pandemic and are expected to make modest gains in 2021, energy prices, despite some recovery, are expected to stabilize below pre-pandemic levels next year, the World Bank said. Oil prices fell dramatically in the early stages of COVID-19 and have only partially regained pre-pandemic price levels, while metal prices declined relatively modestly and have returned to levels that preceded the shock, according to the semi-annual Commodity Markets Outlook report. Agriculture prices were relatively unaffected by the pandemic, but the number of people at risk of food insecurity has risen as a result of the broader effects of the global recession.

UK and Japan sign free trade agreement (GOV.UK)

The UK has officially signed an economic partnership agreement with Japan, marking an historic moment, as the UK’s first major trade deal as an independent trading nation and offering a glimpse of Global Britain’s potential. The deal brings together two of the world’s most technologically advanced nations, placing the UK at the forefront of shaping new global standards on digital trade.

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African Union 2nd Mid-Year Coordination Meeting closes with a resolve to strengthen collaboration in line with the principle of subsidiarity

23 Oct 2020

Meeting ends with resolve to strengthen collaboration between the AU, RECs, RMs, the Member States, and other continental institutions

The virtual meeting that took place on 22nd October 2020 under the chairmanship of H.E Cyril Ramaphosa, President of the Republic of South Africa and Chairperson of the African Union (AU), concluded its work with a strong determination for the Heads of State and Government of the member countries to work hand in gloves so as to effectively accelerate the implementation of Agenda 2063. The African union 2nd Mid-Year Coordination meeting extensively discussed a range of issues on regional integration, division of labour and the continental strategy to overcome COVID-19 among others.

In his closing remarks, the Chair of the Union stated that the pandemic has shown a great deal of resilience and countries that have experienced a decline in infections have also encountered surges in infections that have made them to revisit the lockdown measures. “We must try to avoid that scenario in Africa….We remain optimistic the momentum will not be lost and we will ensure that all outstanding work is completed,” President Cyril Ramaphosa emphasized.

The Chair of the AU further noted that, the report on the status of regional integration and the insightful perspectives provided by Chairpersons of the RECs show that commendable progress has been made in the integration process, and that implementation of the AfCFTA is a priority. “With the finish line now in sight, we must make this final push; and ensure all outstanding issues on Phases 1 and 2 are finalised in order for us to start trading by the 1st of January 2021,” he said.

On the Division of Labour, the Heads of State welcome progress made in the development of the detailed proposal on the Division of Labour by the AUC, the AUDA-NEPAD, AfCFTA Secretariat, the APRM, the RECs and RMs and Member States in the areas of trade, political affairs and peace and security.

“We look forward to the finalisation of the remaining areas concerning the Division of Labour for consideration at the latest by the 35th Ordinary Session of the AU Assembly in February 2022,” underlined the Chairperson of the AU, stressing that this will give the relevant stakeholders enough time to consult and to come back with a comprehensive document which has the buy-in of everyone. “In this context, we would have fulfilled the aspirations set out in the institutional reform process,” reiterated the Chair of the Union.

During the meeting, the Heads of State also considered and noted with appreciation the report of H.E. Nana Akufo Addo, the President of the Republic of Ghana and the Champion of the AU Financial Institutions. According to President Ramaphosa, the establishment of the AU Financial Institutions will go a long way in fulfilling the objectives of the Abuja Treaty and further deepen the continental economic integration project.

“It is imperative that we strengthen the RECs as building-blocks for Africa’s continental integration”. Underscored the Chairperson of the African Union, adding that, “Intensified coordination and harmonisation will bring us closer to the realisation of the African Economic Community in line with the principles of the Abuja Treaty.”

President Ramaphosa proceeded by thanking the preparations undertaken under the guidance of the Executive Council and the commendable work of the AU Commission. “We have been able to have a productive Mid-Year Coordination Meeting,” concluded the AU Chairperson with satisfaction.

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