tralac’s Daily News Selection
The UN Secretary‑General António Guterres has announced the appointment of Ms Cristina Duarte of Cabo Verde as his Special Adviser on Africa.
The AU has advertised the position of Chairperson and Deputy Chairperson of the African Union Commission. The closing date for applications is 4 September 2020.
The AfDB Group has announced the appointment of Ms Wambui Gichuri as Acting Vice President, Agriculture, Human and Social Development.
David Tinline: “Amina Mohamed is associated with recent successes at the WTO, chairing a 2015 round that was a fair success. She is well known and well liked. There is a reason that she’s the current favourite.”
Prof J.P. Singh: “Leadership selections go through twists and turns but three contextual factors – important for understanding world trade in general – are important. These are: trade competition among major powers, role of regions and regional leaders, and decision-making procedures at the WTO.”
Peter Woicke, Daniel Runde: “Historically, the IFC’s CEO job has gone to a European, but given all of the above, now would be the time for the shareholders of the World Bank Group to choose an African woman (preferably one who is highly regarded as a business leader on the continent) to be the IFC’s next CEO. The next class of multilateral development leaders will be chosen by a number of governments, including that of the United States, and in 2020 these decisions will fall to the Trump administration. The US will be putting forward candidates for the top jobs at the OECD and IDB. This leadership vacuum at the IFC presents an opportunity for the Trump administration to do something bold and different there as well.”
Quality infrastructure in 21st century Africa (OECD/ACET)
New demographic dynamics are now playing out in Africa, including new patterns of agglomeration, changing the spatial geography of the continent and its degree of urban density. The UN estimates that the continent’s population will nearly double from 1.3 billion in 2019 to 2.4 billion in 2050, when projecting a medium-variant scenario. In addition, Africa’s urban population is projected to increase rapidly from 588 million or 44% of the total in 2020 to 1.5 billion or 59% in 2050, two-thirds of which will reside in intermediary cities or small towns. Planning will need to urgently address the integration of “informal” districts – where 62% of the urban population lives – within the rest of the cities, as well as anticipate the growth of urban housing demands.
Together with the construction of the African Continental Free Trade Area, these demographics will generate radically new opportunities and challenges for Africa. However, in order to realise the transformation of its connectivity and production capabilities, scaling up infrastructure will be vital to match the demands of a billion more Africans to fulfil the promise of the new economic geography and labour force. In this context, with more low-cost broadband services on the near horizon, digitalisation could shape Africa’s transformation and integration across all sectors at all levels. The massive uptake of mobile banking illustrates this development potential, with 500 million mobile accounts and nearly 200 million active users, far exceeding all other developing economies combined. In fact, digital transformation is already bringing in opportunities to build new industries, expand markets, deliver better services and improve people’s daily lives in Africa. Aside from mobile networks, the digital technologies used range from big data, Global Positioning System, Internet of Things, artificial intelligence, blockchains, drones, to 3D printing. At the same time, to leapfrog to the fourth industrial revolution, Africa would not only need ICT infrastructure – both physical as well as software or systems –, it will also require adequate institutional capabilities and regulatory frameworks for its governance. These range from fiscal policies, regional integration, to sandboxing and cybersecurity, in order to prevent major disruptions to the economy and society.
Can Africa take the platform economy forward? (Standard Bank)
We believe that Africa’s platform economy will tread a similar path to Asia’s, rather than following the US model. In Asia, China leapfrogged conventional underlying infrastructures thanks to investments by private firms including Alibaba and Tencent, while India did the same through an ambitious initiative led by the state. With its dearth of continent-wide digital infrastructure, Africa is rapidly forging a similar path (pdf). The continent looks set to take a hybrid approach to the platform economy, where governments collaborate to develop standards and create basic digital capabilities such as identity management, while private operators build out the necessary financial and logistics infrastructure.
Indeed, the influence of the Chinese and Indian models is already being felt in Africa. Alibaba has launched the eWTP5 (Electronic World Trade Platform) service in Rwanda. This public digital infrastructure could serve as a standardised continent-wide backbone for trade as more African countries adopt it. Similarly, the IndiaStack model could be replicated on the continent. To develop a national digital identity system, Morocco has engaged IIIT-B, an Indian research institution, to build a modular, open-source identity management platform (MOSIP)6 modelled on IndiaStack. [The authors: Sangeet Paul Choudary, Kent Marais, Jonathan Lamb]
- Related analysis, by SA’s National Planning Commission: pdf Digital futures – South Africa’s readiness for the fourth industrial revolution (2.96 MB)
South Africa’s trade data update – the May 2020 data reveals the effect of eased lockdown restrictions (tralacBlog)
Since the beginning of May 2020 South Africa gradually started to ease lockdown restrictions with a consequent increase in trade reflected in South Africa’s trade data for May which was released by the South African Revenue Services (SARS) on 30 June 2020. However, while exports show signs of improvements imports have remained relatively constant throughout the lockdown period, which is at significantly lower levels than imports in May 2019. Consequently, South Africa has a trade surplus for May 2020 after a significant trade deficit for April 2020. [The author: Willemien Viljoen]
South Africa’s Industrial Development Corporation: Economic overview, June 2020 (pdf)
With the global economy and most of South Africa’s key trading partners in a deep recession, the export performance in 2020 will be considerably weaker. In real terms, exports are projected to drop by 10.8% in 2020, with a modest rebound anticipated in 2021. The economy is expected to record very modest growth over the outlook period to 2024, affecting detrimentally ongoing efforts to reduce unemployment, alleviate poverty and address prevailing inequalities through economic transformation. A rebound in GDP growth in the order of 3.1% is anticipated in 2021, but growth rates over the subsequent three years could be within the range of 1.9% to 2.5%. The economic landscape will also undergo drastic changes beyond Covid-19, some of which may turn out to be irreversible. On the positive side, the current global crisis has brought to the fore important economic opportunities going forward, largely associated with the following developments:
The strategic imperative for companies all over the world to diversify their sources of supply, for the crisis has highlighted the threats to global supply chains brought about by excessive concentrations of market power. This may open up opportunities for:
Further integration of South African businesses into global supply chains and other export market development opportunities;
Import replacement in the domestic market.
TIPS Tracker: The South African economy and the pandemic, 29 June - 12 July 2020. Comments on the ANC and Business for South Africa recovery proposals (extract):
Finally, neither paper explores how South Africa should respond to the likely decline in export income over the next two or three years. The extent of the decline will depend largely on the speed with which the US and Europe, in particular, recover; China seems to be doing better already, based on its comparatively coherent response to the pandemic. It is also uncertain when demand will revive for tourism and other services such as the provision of private education and healthcare to foreign visitors. In theory, slower export markets should prompt diversification away from the excessive dependency on mining as well as measures to prolong support for workers and small businesses that depend on foreign visitors. Instead, both papers propose measures to promote mining exports, especially by providing new bulk freight and more reliable electricity, without discussing how to manage if commodity prices remain depressed.
South Africa: Citrus body wants export levy hiked. The statutory levies, a tax imposed on exports making them more expensive, has been in place since 2004, and is administered by the Citrus Growers’ Association of Southern Africa, an organisation representing 1 250 citrus growers and almost 400 packhouses. The association said on Monday the levy is crucial to fund the long-term goals and objectives of the sector. The association has made an application through the National Agricultural Marketing Council to agriculture minister Thoko Didiza for the approval of a substantially increased statutory citrus export levy for the next four year cycle - from 2021 to 2024.
South Africa: Annual State of Cross-Border Operations Report 2019-2020 (CBRTA)
The report is focused on strategic transport corridors in the SADC region. There are 18 major transport corridors that traverse SADC. However, this report is largely limited to the following corridors which carries the bulk of cross-border road traffic movements (passengers and freight):
Maputo Development Corridor
Walvis Bay-Ndola-Lubumbashi Development Corridor (previously known as the TransCaprivi Corridor).
The rationale for focusing on these corridors was informed by the significance of the corridors in terms of cross-border traffic volumes and flow dynamics. Furthermore, all four corridors are major gateways to most land-locked countries in the SADC region. Conclusion to Chapter 4: Status of corridor performance monitoring in the SADC and recommended interventions
To date, the SADC has not yet implemented an online data portal (transport observatory) along any of the strategic road transport corridors that traverse the region to measure corridor performance. In the absence of a formal system that releases real-time road traffic data, it becomes challenging to prioritise infrastructure spending to address higher order needs. Plans are underway to introduce corridor-wide monitoring along the TKC to measure the performance of this corridor from the port of Walvis Bay up to Pretoria in South Africa where the TKC connects with the MDC. The C-BRTA is assisting the TKCS in developing CPIs that will be piloted along the TKC during 2019 / 2020. It is imperative that relevant corridor role-players (e.g. SADC MS, SADC Secretariat, CMI, private and public-sector transport and logistics service providers) join hands in developing online monitoring tools (e.g. transport observatories) that will be able to measure the performance of strategic transport corridors, from point of origin to destination points (corridor wide performance) from an infrastructure and service delivery point of view. In conclusion, ultimate success depends on the availability of accurate and specific data on those components of transport corridors that are not working well to influence policy-makers to direct infrastructure spending to specific points along the corridor(s) where the greatest costs are incurred.
pdf Annual State of Cross-Border Operations Report (March 2020) (2.62 MB)
A political economy analysis of the Nacala and Beira corridors (ECDPM)
This ECDPM study maps out the different factors and actors that shape current use of the Nacala and Beira corridors connecting Malawi to the Mozambican coast. High-level political relations have fluctuated through time, and though cordial, do not provide a solid basis for improving efficiency along the Nacala rail corridor, with domestic priorities on both sides dominating cross-border cooperation. Thus far, Beira has emerged in Mozambique as the more efficient port serving Malawi and the wider region where state-business relations have aligned with political objectives. Nacala has been made efficient for coal exports but coordination for other trade is lacking, with political interests more geared towards a competition for control of rents. Mozambican road transporters have also the upper hand over Malawian transport, though the market is highly segmented for imports and exports and different goods. Given the numerous players and services involved in the transport sector, cross-border coordination will be required to raise efficiency of the corridor – the need for this is only increased by the COVID-19 pandemic. Coordination efforts are underway in Beira, but are less apparent in Nacala. While transport in both countries is a political issue, it is unclear whether raising efficiency is among the top priorities of the leaders or high level actors on either side, though this may change with the newly elected Malawian president. In the absence of a champion that can coordinate activities and push for particular interests, one can only expect incremental use of the Nacala corridor in the short to medium term though the longer-term potential remains.
External support to improve efficiency will need to take account of the vested state-business interests round the ports and corridors, particularly in Mozambique, and rekindle multi-actor cross-border coordination mechanisms, ideally including different government bodies, private service providers as well as businesses engaged in exports/imports, and learning from past failures to coordinate better. [The authors: Bruce Byiers, Poorva Karkare, Luckystar Miyandazi]
Tripartite Transport Facilitation Response to COVID 19: pdf Impacts on trade and transport facilitation in Eastern and Southern Africa region (401 KB)
Jaindi Kisero: Revamp Kenya’s investment negotiations (Business Daily)
The news that the government has paid more than Sh7 billion in penalties to investors behind the Lake Turkana Wind Power project is the latest example of badly negotiated deals that end up exposing the taxpayer to huge losses. The payment may be legal. But in terms of opportunity cost, payment of a contractor claim running into billions for no value or service is a national scandal. ‘How Kenya paid Sh7 billion for non-existent power’ was the headline of a story reported by the Daily Nation yesterday. We lose billions in taxpayer money every year in payment of claims and pending bills arising from poorly negotiated contracts and lopsided agreements with investors. Here is a brief background to this saga.
Improving agriculture and food security risk financing in Southern Africa (World Bank)
The objective of this report is to provide a review of and recommendations for improving the agriculture and food security risk financing framework in the Southern Africa Development Community member states. This report presents the compilation of various analyses and activities realized in the context of a World Bank Group Advisory Services program to the SADC Region during 2019 and 2020, which included:
a stocktaking of the agro-climatic information systems of the region
the implementation of four innovation challenges to identify the most promising solutions to advance the risk finance agenda for food security and agriculture in the region
the implementation of one of the innovative solutions to one SADC Member State (the Democratic Republic of Congo)
the development of a regional risk financing policy note for agriculture and food security in SADC.
Southern Africa regional maize supply and market outlook July 2020 (FEWS NET, WFP)
The onset of the COVID-19 pandemic coincided with the start of regional harvests in Southern Africa. Moving into the 2020/21 marketing year, opening stocks were 20% below average. Below average opening stocks were offset by the region’s above-average 2020 maize harvest despite dryness experienced in many areas earlier in the year. Southern Africa, which is typically self-sufficient in maize, is expected to register well above average net maize supply ---over four million MT. This supply will be above the previous 2019/20 marketing year and similar to 2018/19. Structurally deficit countries are expected to maintain typical import dependence, while the import gap in Zimbabwe will be well above average. South Africa, the region’s largest maize exporter will have an above-average surplus while Zambia will maintain its surplus at below-average levels. Malawi will also have an above-average surplus. In terms of intra-regional trade, South Africa’s maize export volumes to Zimbabwe are expected to remain above average while Zambia’s exports are expected to remain below average. Given anticipated imports by Kenya from international markets, export demand from Tanzania destined for East Africa are expected to be limited. Some international trade (via South Africa) is also expected.
OCHA: Zimbabwe Situation Report, 10 July 2020
UNHCR, WFP warn refugees in Africa face hunger and malnutrition as COVID-19 worsens food shortages