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tralac Daily News

tralac Daily News
Photo credit: Waldo Swiegers | Bloomberg

09 Sep 2020

National news

South Africa’s GDP tanks 51% in the second quarter (BusinessTech)

South Africa’s gross domestic product (GDP) dropped by a massive 51% in the second quarter of the year, reflecting the immense damage done to the economy by the Covid-19 lockdown. This pushes South Africa even deeper into recession, after GDP growth for 1Q20 was recorded at -2%, following drops of 0.6% in 3Q19, and 1.4% in 4Q19.

Manufacturing contracted by 74.9% in the second quarter. All ten manufacturing divisions reported negative growth rates in the second quarter. The agriculture, forestry and fishing industry was the only positive contributor to GDP growth, with an increase of 15.1% and a contribution of 0.3 of a percentage point to GDP growth. The increase was mainly due to increased production of field crops and horticultural and animal products.

Economists have flagged concerns that the country’s fiscal situation, corruption allegations, and weak growth prospects will continue to weigh negatively on investor confidence, reduce the attractiveness of the country’s assets and potentially undermine foreign capital inflows. Growth is expected to recover in the third quarter; however, South African consumer confidence remains at an almost three-decade low.

Citrus industry negotiates a new trade deal (IOL)

After eleven years of negotiations, South Africa’s citrus industry has been given the go-ahead to export to the Philippines, with the signing of a work plan between the Department of Agriculture, Land Reform and Rural Development, and the Philippines Bureau of Plant and Industry. “The South African citrus industry remains an important sub-sector in agriculture and the department appreciates the ongoing efforts of all concerned parties to ensure promotion, retention and optimisation of South Africa’s export markets for fresh fruit. Both industry and the department will soon communicate to all relevant role players the detailed prescripts of the exports agreement reached with the Philippines towards ensuring full compliance,” the department said.

Kenya’s manufacturers need external financing to survive (The Africa Report)

Kenya urgently needs a credit guarantee scheme to protect small and medium-sized businesses from the impact of COVID-19, Kenya Association of Manufacturers (KAM) CEO Phyllis Wakiaga tells The Africa Report. Wakiaga met the central bank and the government last week to discuss such a plan, which for now remains a “work in progress.” The government, which has committed some money, needs external partners to financially contribute to the scheme, with development finance organisations a possible avenue, she says. “It’s an urgent priority.”

Kenyan truck drivers to pay the price for Uganda Covid-19 tests (Business Daily)

Transporters have accused Kenya of inefficiencies in carrying out Covid-19 tests, forcing local truck drivers to flock to Uganda where the service is rendered with fewer hurdles. The transporters say because of the influx of Kenyan cargo crew to Uganda to have Covid-19 certificate, the neighbouring country has introduced a levy for the test, a move the players say will push up the cost of goods for consumers.

Mthuli admits Zim economy under negative growth but says better than rest (New Zimbabwe)

Finance Minister Mthuli Ncube has admitted the country’s economy was experiencing negative growth although insisting it was not the worst such battered economy in the world. Addressing parliament last week, Ncube said the negative trajectory was not only unique to Zimbabwe but was now a world phenomenon caused by Covid-19. Ncube was responding to contributions by MPs after a report on the mid-term budget and economic review statement to parliament by Budget and Finance Committee chairperson Felix Mhona. “The report notes the anaemic growth, generally due to Covid-19 that is panning out across the globe, in fact a negative growth frankly,” Ncube said.

Tanzania: Resumptions of passengers, freight operations to spur northern regions economic growth (Dailynews)

Picha

The revival of the passengers and freight operations to the northern regions has marked a major milestone of the government quest to increase efficiency and speed up the country’s economic development. Due to the role it performs in growth and development process, reliable and efficient railway networks provide good physical connectivity to the urban and rural areas which are essential for economic growth.

‘Covid 19, non tariff barriers killing regional trade’ – Experts (The Independent Uganda)

Uganda has condemned the continued use of non-tariff barriers by her East African Community neighbors despite several petitions, saying it beats the purpose for which the community was created. Recently, sugar exports to Tanzania have been blocked and returned to Uganda, while Kenya has often blocked Uganda’s sugar, poultry, and dairy products. And in all instances, exporters say, there are no proper reasons given The Assistant Commissioner for Regional and Bilateral Division External Trade at the Ministry of Trade, Richard Okot Okello, says there must be renewed efforts to remove all barriers if intra-regional trade is to be revamped. 

Ghana and Côte d’Ivoire taste success in raising price of cocoa (The Africa Report)

Through a joint initiative, Ghana and Côte d’Ivoire have managed to convince chocolate traders and makers to raise the price they pay for cocoa. With Côte d’Ivoire and Ghana, the world’s top two cocoa producers, as well as Nigeria, which ranks fifth behind Ecuador and Cameroon, ECOWAS member countries account for 68% of global cocoa supply. In other words, 3.4 million tonnes were harvested in the 2019-2020 season, out of a worldwide total of 5 million tonnes. The problem is that Africa’s cocoa producing countries capture just 3% of global chocolate industry revenue, according to figures from the International Cocoa Organization (ICCO).

The port of Lomé is a top transshipment platform for goods transiting to Sahel countries (Togo First)

At the fifteenth position, worldwide, and first in Africa, under the Starting a Business index of the 2020 Doing Business ranking, Togo sustains its reformative dynamics with more reforms. In comparison to previous years, Togo has significantly improved its ranking under the”Trading across borders” indicator by adopting multiple reforms that focus mainly on the digitization and reduction in delays, for import and export procedures related to import and export. Togo has significantly improved its ranking on the “Trading across borders” index by adopting multiple reforms that focus mainly on the digitalization and reduction in delays, for import and export procedures related to import and export.

Ethiopia faces series of challenges on international and domestic fronts (Egypt Independent)

Ethiopia’s government, led by Prime Minister Abiy Ahmed, has found itself in a quagmire of rising domestic and international tensions, raising fears for the survival of the government in question. For almost a decade, Egypt, Ethiopia, and Sudan have been engaged in negotiations on the Grand Ethiopian Renaissance Dam (GERD), to conclude an agreement, governing both the filling and the operation of the dam. Earlier this year, the US tried to mediate the talks, but Ethiopia walked away amid accusations that Washington was siding with Egypt. Now the three countries are engaged in dialogue under African Union supervision, yet no breakthrough was reached.

Nigeria: Economic group calls for re-opening of closed borders (Journal du Cameroun)

The Nigerian Economic Summit Group (NESG) has urged the Nigerian Government to expedite actions at re-opening its closed borders given its negative impact on trade and employment.In a statement released on Tuesday in Abuja entitled “Matters of Urgent Attention”, the NESG noted that Nigeria’s role in ECOWAS should not be limited to security and diplomacy, “but must also effectively harness trade opportunities within the sub-region. “We remain of the firm belief that with the necessary infrastructure, the Nigerian economy and the Nigerian people, with our innovative capacity, hard work and creativity, will be one of the greatest beneficiaries of African and West African free trade. This will also enable fair competition, competent institutions, efficiency and transparency in our processes,” the group said.


Regional and continental news

AGRF: Conditions to Feed Africa Amidst Rising Urban Populations – Speakers (AgroNigeria)

Improving Africa’s urban food system governance can help to sustainably feed the expanding population size in urban cities Rudy Rabbinge, a Professor Emeritus of Sustainable Development and Food Security, made the submission on Tuesday while delivering a keynote address at the launch of the African Agriculture Status Report (AASR). The AASR launch was one of the activities for Tuesday in the ongoing African Green Revolution Forum (AGRF) Virtual Summit which started on September 7th and ends 11th.

Trudi Hartzenberg, Executive Director of the Trade Law Centre (TRALAC), on her side, proposed digital trade solutions to the problems of continental trade movements such as documentation. On food safety, Hartzenberg pinpointed the need to strengthen national laboratory structures to provide assurance to both producers and the final consumer of food products.

pdf Africa Agriculture Status Report. Feeding Africa’s Cities: Opportunities, Challenges, and Policies for Linking African Farmers with Growing Urban Food Markets (9.93 MB)

Related: Africa agric stakeholders call for resilient food system, intra-African trade (Naija247news)

AfCFTA’s postponement affords Nigeria time for ratification – official (Naija247news)

The Nigerian Office for Trade Negotiations (NOTN), says the postponement of the commencement of African Continental Free Trade Area (AfCFTA) will afford Nigeria the opportunity to ratify the agreement. Mr Victor Liman, the Acting Chief Trade Negotiator and Director-General, NOTN said the postponement gave Nigeria sufficient time to ratify the AfCFTA agreement. “On the other hand, in as much as the postponed period presents an opportunity for Nigeria and other signatory states to ratify the agreement, it can also result in a reluctance to ratify, thereby delaying the speed of further negotiations on trade,” he said.

EAC rolls out Regional Electronic Cargo and Driver Tracking System

The East Africa Community (EAC) Secretariat and its Partner States held a virtual roll out event on Tuesday to mark the technical completion and development of the Regional Electronic Cargo and Driver Tracking System (RECDTS). RECDTS is designed as a mobile phone application and will enable the issuance of the EAC COVID-19 digital certificates that are mutually recognised by Partner States, thus eliminating need for multiple testing as well as contributing to alleviating ongoing congestion at East Africa border crossing points.

Unconventional monetary policies necessary to address the impact of COVID-19 (COMESA)

Central Banks in the COMESA region has been implementing new policy instruments and made changes to their monetary policy frameworks in order to address low growth and increase in unemployment resulting from the negative impact of COVID-19.According to a special report published by the Director of the COMESA Monetary Institute (CMI), Mr Ibrahim Zeidy, most of the banks in the region and beyond are applying different combinations of what have been labelled as Unconventional Monetary Policy Tools (UMPTs) and adapted their operations to the circumstances in their jurisdictions. “Central Banks should consider lowering the interest rate to increase loans to businesses (and decrease their cost) and provide commercial banks with more liquidity to support business activities,” the director says.

ECOWAS postpones single currency launch (The Nation Nigeria)

The Economic Community of West African States (ECOWAS) has postponed the launch of its planned single currency “ECO”, it was learnt. “The authority expresses satisfaction at the improved status of macroeconomic convergence in ECOWAS in 2019, compared to 2018. Nevertheless, it notes that while the convergence phase ended on 31 December 2019, the necessary conditions for ECOWAS to move into the stability and performance consolidation phase have not been met, as set out in the Macroeconomic Convergence and Stability Pact among ECOWAS Member States. It also notes the negative impact of COVID-19 on Member States’ compliance with ECOWAS macroeconomic convergence in 2020,” the communique stated.

Kenya Secures First Horn of Africa Initiative Project to Boost Regional Integration and National Development (Mirage News)

he World Bank Board of Directors today approved $750 million in International Development Association (IDA) financing to improve the movement of people and goods, digital connectivity and access to social services for over 3.2 million people living in the North Eastern region where the Isiolo-Mandera Regional Road Corridor traverses. Through the new operation – the Horn of Africa Gateway Development Project (HoAGDP) – the World Bank will finance the upgrading of 365 kilometers of the 740-kilometers Isiolo-Mandera Regional Road Corridor and 30km of spur roads, while the upgrading of the remaining sections will be financed by other development partners.

Young Africans need more and better jobs, not more training (Brookings)

When the world rebuilds after the COVID-19 crisis, Africa will have a unique challenge to face: bringing its overwhelmingly young workforce into decent, productive, and secure jobs. Even before the global pandemic, many young Africans struggled to find productive employment, often finding themselves underemployed or perpetually engaged in low-paid, low-productivity, precarious self-employment. This trend, paired with a persistent, although, we argue, unfounded, worry among political leaders and the international community that some frustrated young people may turn to violent crime, militant extremism, or protest, has fostered a plethora of youth employment initiatives.

Shining a light on women in transport (Sandton Chronicle)

Increased female participation remains beneficial for the economy at large and transport is not different. To shine a light on the importance of having female players in the private and public sector, Consumer News and Business Channel Africa (CNBC Africa) and the Department of Transport partnered with the Rail Safety Regulator (RSR) to host a panel discussion on 25 August.

AfrIPI endorses Intellectual Property cooperation plan in Africa (EUIPO)

AfrIPI, the first-ever African cooperation project focusing on Intellectual Property Rights, held its inaugural Project Steering Committee (PSC) meeting on 7 September. “The reason why cooperation is so important is that IP rights are closely related to economic wellbeing – in particular sustainable development, the creation of quality jobs, and of balanced trading conditions. In a globalised economy, especially with the internet by-passing physical borders, it is essential that IP rights are understood in a common way and also protected” said Christian Archambeau, EUIPO Executive Director.


Global news

Sub-Saharan Africa to benefit €5bn from EU green plan (Premium Times Nigeria)

Sub-Saharan Africa will benefit five billion euros from the EU Green Economy Recovery Plan, an EU official has said. Speaking at a panel discussion tagged: “The Key Role of SMEs in Serving Urban Food Markets,” Mr Mizzi said the fund set aside for sub-Saharan Africa was part of the EU’s seven-year green plan from 2021 to 2027. “Sub-Saharan Africa will benefit around five billion euros. The money is a composite amount for emergency, humanitarian with a focus on saving lives but it was also made to address water, health, sanitation and social economy.” He said that sub-Saharan nations should focus on developing local and regional markets as well as bridging infrastructure gaps.

Germany’s Marshall Plan with Africa will promote innovation and harness the potential of Africa’s youth (GMIS)

Germany’s Marshall Plan with Africa marks a new era of cooperation between Europe and Africa that could drive industrial development and deliver huge opportunities for the Africa’s fast-growing youth population, according to speakers at the #GMIS2020 Virtual Summit, which took place from September 4-5. H.E. Ebrahim Patel, Minister of Trade and Industry of South Africa, spoke of the urgent need for Africa to start living up to its true potential by increasing its GDP and providing employment for a burgeoning youth population. Developing a strong manufacturing base, he said, was one way to shift from being a provider of raw materials and unprocessed agricultural products to becoming an importer of consumer goods.

“African countries are learning the hard lesson that we cannot remain simply exporters of raw materials and importers of finished goods like medical supplies and processed food products,” he said. “We must confront uncomfortable facts and deal with Africa’s position in the global economy. Africa has 17% of the world’s population, yet only 3% of the world’s GDP, 2% of the global manufacturing output and 1% of global steel production.”

Auditors call for overhaul of EU’s Africa spending (EURACTIV)

The European Court of Auditors, which monitors European Union spending, has called for an overhaul of the bloc’s development spending programmes for African, Caribbean and Pacific (ACP) countries to prioritise domestic manufacturing and energy. In a report published on Tuesday (8 September) examining the use of €435 million of EU funding to Kenya between 2014 and 2020, the Court found that the bloc’s ‘standard formula’ for allocating cash to African countries “does not address their specific development obstacles or the funding gap

African leaders are expected to demand more support for their manufacturing, agriculture and energy sectors at an EU-African Union summit scheduled for October, although EU officials are tight-lipped on whether the summit will have to be postponed as a result of COVID-19. The summit had been ear-marked as the setpiece when the two sides would agree on a ‘strategic partnership’ between the two continents.

Angola and the EU strengthen their multidimensional partnership and increase Covid-19 response by €20 million (European External Action Service)

As the fourth biggest economy of Sub-Saharan Africa, and with its geographical position - straddling central and southern Africa - Angola has an important role to play to contribute to regional stability and promoting democratic values in a region where several neighbouring countries are facing domestic challenges and where persistent drivers of conflict are present. Angola has faced serious recessionary pressures, linked to a combination of factors including a severe reduction in oil revenue and the COVID-19 pandemic. President Joao Lourenço, elected in 2017, has dedicated his leadership to modernizing the economy, improving the business and investment climate and deepening the democratic system.

WTO Director-General Selection Process: Candidates Present Their Visions, Final Phase Kicks Off (SDG Knowledge Hub | IISD)

The third and final phase of the World Trade Organization (WTO) Director-General selection process has commenced, after eight candidates for the post (from Egypt, Kenya, the Republic of Korea, Mexico, Moldova, Nigeria, Saudi Arabia, and the UK) “made themselves known to members.”

Abdel-Hamid Mamdouh (Egypt) emphasizes the need for “a different type of leadership,” where the WTO Director-General is a “trusted advisor,” “honest broker,” and facilitator, enabled by knowledge of the multilateral trading system and impartiality.

Ngozi Okonjo-Iweala (Nigeria) offers to “bring a fresh pair of eyes to the WTO’s challenges,” including “renewing and improving” the Organization. Her vision is “a WTO with Purpose,” where trade helps foster economic growth and sustainable development, “fresh challenges” such as ensuring complementarity between trade and the environment and responding to the realities of e-commerce and the digital economy are addressed, and solutions to the dispute settlement “stalemate” are found.

Amina C. Mohamed (Kenya) identifies reform, recovery, and renewal as the three main themes of her vision for the WTO. She stresses the need “to recapture the visionary inspiration of the original architects of the system” and “breathe new life into the WTO” so that it can assist in COVID-19 recovery by helping rebuild economic resilience to boost growth and sustainable development.

Fashion and the end of the Brexit transition period – What next? (Apparel Sourcing & Textile Industry News)

With less than four months until the end of the Brexit transition period on 31 December 2020, fashion businesses need to prepare. Here, Stephen Sidkin and Charlotte Kong from Fox Williams solicitors set out some of the key points businesses should be thinking about as the deadline looms. The publication last month by the European Commission of ‘Getting ready for changes: Communication on readiness at the end of the transition period between the EU and the UK’ is worth consideration. The Communication – a copy of which can be found here – provides a business sector by sector overview of the main areas where changes will arise irrespective of the outcome of current EU-UK trade negotiations.

Public procurement is a powerful tool for sustainable development – UN report (UNCTAD)

Strategic government spending on goods and services can increase the uptake of sustainability standards in the wake of COVID-19, driving our sustainable development ambitions.As governments respond with unprecedented spending to combat the coronavirus pandemic, a new report released by the United Nations Forum on Sustainability Standards (UNFSS), urges them to ensure public procurement does no harm to people and the planet.

DDG Wolff: Trade, global cooperation can best deliver adequate medical supplies (WTO)

Six months into the pandemic, its onslaught against the world’s population has not ended. Supply issues, in countries where the pandemic has eased, are less acute, but remain. While a stockpile might provide some cushion, a surge in critical demand needs to be met either from international trade or, as another option, increased manufacturing output.

The third option for access to medical supplies – relying on imports – works well in general but not necessarily in the short term. At the onset of a pandemic, demand for essential products skyrockets everywhere – if not all at once, then in waves that arrive close enough together to put pressure on the supplies available for trade. Imports may also be less available due to export controls in their country of manufacture or due to pre-emptive purchasing by foreign governments. Importing can also, as a practical matter, be constrained by an importing country’s financial capacity.

LDC group to seek support for 10 years after graduation (The Financial Express)

The group of least developed countries (LDCs) has opted to request the rich nations for extending support measures, available to the graduating LDCs, for at least a period of 10 years after they are excluded from the category, officials said. The proposal will be placed in line with the UN General Assembly resolution 59/209, which stated the need for creation of “smooth transition strategies for countries graduating from the list of LDCs. The LDC group, in a draft communication, recently circulated among the member states, referred to the context of the current COVID-19 crisis “which may reverse many of the development progress, achieved so far by the graduating LDCs”.