tralac Daily News
South Africa will be hard pressed to realise its ambitions of attracting R1 trillion ($61 billion) of private investment in infrastructure if its past record is anything to go by. The investment drive began two years ago and is a key component of an economic blueprint unveiled by President Cyril Ramaphosa last week that aims to revive the coronavirus-battered economy. It envisions the government spending R100 billion on infrastructure, an allocation that’s expected to galvanize 10 times as much private investment within four years. Yet International Monetary Fund data shows investment as a percentage of South Africa’s gross domestic product has been in decline since 2016 and the Washington-based lender forecasts that the ratio will reach a record low of 13% this year.
South Africa could become an effective exporter of cost-effective green hydrogen to the world, given its immense renewable energy potential, according to the inaugural PwC report on hydrogen published yesterday. The report titled ‘Unlocking South Africa’s hydrogen potential’ said that South Africa had one of the highest renewable energy generation potentials in the world citing the billions of rand committed to solar, wind and pumped storage projects across the country. The reported said the Integrated Resource Plan-the blueprint for South Africa’s energy mix, which was gazetted last year, made clear guidance for renewables to account for a bigger proportion of the country’s generation capacity.
Kenyan banks in big trouble over locust, Covid-19 shocks (The East African)
Top Kenyan banks have yielded to the Covid-19 pandemic with grim prospects of weaker profitability, slowed loan book growth and a surge in the volume of bad loans, signaling reduced dividends for shareholders and reduced corporate tax to the government this year. According to a special report by rating agency Fitch on eight banks that control 83 percent of the industry’s deposits and 76 percent of the total assets, weaker operating conditions have resulted in substantially lower earnings and profitability metrics for the lenders that have also borne the brunt of huge loan restructuring to protect borrowers whose loan repayments have been impacted by the Covid-19 pandemic.
It is imperative for Namibia to ratify the Southern African Customs Union (SACU), Mozambique and United Kingdom (UK) Economic Partnership Agreement (EPA) as soon as possible to ensure the country continues to benefit from duty free and quota free trade with the UK after December 2020. As part of SACU Namibia currently trades with the UK under a signed memorandum of understanding on an interim basis until December this year. Minister of Industrialisation and Trade Lucia Iipumbu cautioned in Parliament last week that the ratification process must be completed to ensure that Namibia continues to trade with the UK under favourable conditions after December 2020 when the current agreement between the European Union (EU) and the UK lapses.
First merchandise trade surplus in 13 years (The Namibian)
Namibia recorded a merchandise trade surplus for the first time in 13 years, thanks to a reduction in imports and an increase in the export of raw minerals. Bank of Namibia that monitors the country’s balance of payments noted in its latest Quarterly Bulletin (September 2020) that Namibia recorded a surplus of N$918 million in its merchandise trade account for the second quarter. “Namibia registered a merchandise trade surplus during the second quarter of 2020, the first since the third quarter of 2007, due to a decline in import payments and increased export earnings,” said the central bank.
Last week, Rwanda approved the revised African Civil Aviation Commission (AFCAC) constitution, becoming the 13th African state to ratify this establishment. The constitution, which seeks to promote coordination, better utilisation and orderly development of African air transport systems – will enter into force after the ratification of two more countries. Among the benefits, Udahemuka said, Rwanda expects a boost in tourism revenues and jobs.
A recent report published by Burundi Institute for Statistics and Economic Studies reveal new data on the impact of COVID-19 in Burundi from January to June 2020, among key finding, are: The effects of COVID-19 on formal exports and imports were deeply felt in May 2020 with a profound decrease in the entry or exit of goods in the national territory. Exports and imports in value decreased by 51.6% and 22.4% respectively in May 2020 compared to January 2020 (month without COVID-19). However, a resumption in due form of exchanges was recorded in June 2020.
The Nigerian Association of Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA) has pledged to partner with the federal government in the ongoing effort to reposition the economy for greater performance. The association said it will participate in the arrangements for the implementation of the economic programmes under the Economic Sustainable Plan (ESP) announced by the federal government to kick-start the economy after the ravaging effect of Covid-19 pandemic, while also working to ensure that Nigeria maximises benefits derivable from the African Continental Free Trade Area (AfCFTA) agreement.
Ethiopia’s effort to stamp out counterfeiting by introducing new currency notes is pulling people who’ve never had a bank account into the financial system. Over the past four weeks, almost 1 million previously unbanked Ethiopians have handed in their two-decade-old banknotes, according to the central bank. In exchange, they were given a bank account from which they can draw the new notes. The regulator is trying to deter cash hoarding that enables corruption and illegal trading to thrive, and escapes the tax net. While Kenya’s demonetization process that started last year went smoothly, the equivalent of about $68 million was not returned, according to the central bank. South Sudan is also contemplating demonetization to curb illicit financial flows.
Akufo-Addo opens second AfCFTA Conference today (MyJoyOnline.com)
President Akufo-Addo will open the second edition of the national conference on the implementation of the African Continental Free Trade Area (AfCFTA) Agreement in Accra, today. The two-day conference is on the theme: “Empowering Ghanaian Businesses to Harness the Benefits of the African Continental Free Trade Agreement under the framework of the National Export Development Strategy (NEDS).”The event will bring together relevant stakeholders from the private and public sectors to discuss government’s export development interventions aimed at empowering the private sector to harness the benefits of the AfCFTA.
There is need for proper management of the interface between the continental and the regional free trade regimes to generate a range of win-win outcomes for various stakeholders in Africa’s integration agenda. According to Dr. Stephen Karingi, the Director, Capacity Building Development at the United Nations Economic Commission for Africa (UNECA), the successful implementation of the African Continental Free Trade Area (AfCFTA) will depend, on how smoothly or otherwise, it is interfaced with pre-existing regional economic communities FTAs and related instruments. He was speaking during his keynote address at the opening of the 7th COMESA Annual Research Forum whose theme is “Harnessing Intra-COMESA Trade through the Interface with African Continental Free Trade Area (AfCFTA)”.
African Agency in Mineral Resource Governance (Chatham House)
Citizens of resource-rich countries are demanding greater social and economic benefits from their natural resource endowments, and governments have moved to exert increased control of resource rents for national benefit or, in the worst cases, personal enrichment. Africa accounts for around 30 percent of the world’s mineral resources but attracts only around 15 percent of global exploration spend and accounts for only about 8 percent of global production concentrated in a few jurisdictions. To change this perception, and to support a rejuvenation of the industry across the continent, there is an urgent need for open and collaborative dialogue between government and industry that goes beyond revenue management.
Scanners cause border delays (The Chronicle)
The Zimbabwe Revenue Authority (Zimra) has since July been forced to manually enforce customs regulations on commercial imports coming into the country through Beitbridge following a major breakdown on its mobile cargo scanner. This emerged during a tour of the Beitbridge Border Post recently by the Deputy Health and Child Care Minister, Dr John Mangwiro. At least 1 300 commercial trucks enter the country’s and Sadc’s busiest in land port of entry daily and the figure has been swelling with Botswana (another Sadc transit route) have extended their lockdown to April 2021. Zimra’s spokesperson, Mr Francis Chimanda said yesterday that the cost of repairing the scanner is yet to be ascertained, as troubleshooting was still underway.
Bissau Customs DG meets Gambian counterpart (The Point)
In his welcoming remarks, CG Darboe expressed profound appreciation for the visit which he said would go a long way in cementing ties and strengthening trade facilitation between the two countries. This is critical given the huge volume of trade that takes place between Banjul and Bissau. “Today’s meeting being the first of its kind between the two administrations is a welcome development in the context of regional integration and addressing challenges in the free movement of people and goods,” he said. According to the presentation, GRA collection accounts for 60% of government revenue, which is a fundamental pillar in building a modern country.
Sudanese-Ethiopian border reopens for trade (Radio Dabanga)
Three border crossings between Sudan’s Blue Nile state and Ethiopia were officially re-opened on Friday, marking the resumption of trade exchange and border relations between the two countries. Sources from Ed Damazin, capital of Blue Nile state, told Radio Dabanga that the opening was attended by representatives of the Sudanese and Ethiopian authorities. The crossings are of great importance to the people of the two countries, especially in the field of trade. Sugar, cooking oil, coffee, soap, and perfumes from Ethiopia are sold at markets in Blue Nile state’s Geisan. In 2018, 2.5% of Sudan’s exports went to Ethiopia.
The Covid-19 coronavirus pandemic has revealed that very few countries on the African continent have the adequate policies and related mechanisms in place to cope with the pandemic shocks on their economy. According to the second Biennial Review Report of the African Union Commission titled Comprehensive Africa Agriculture Development Programme released last week, this is even more apparent in the Southern Africa Development Community (SADC) region’s agriculture sector. “Hunger is rising in Africa and there is another real threat of climate change. SADC member states need to elevate agriculture to the global agenda,” said Senior programme officer for global policy and advocacy at the Bill & Melinda Gates Foundation, Faustine Wabwire, said.
ATIGS Group has just confirmed that its Africa Trade and Investment Global Summit (ATIGS) will be held on October 27 & 28, 2021, in Dubai, UAE. For this upcoming edition, preparations have now begun to ensure the best possible results for the event, designed as the landmark global-Africa business platform to foster foreign direct investment in Africa and promote international trade. The recently-ratified African Continental Free Trade Area (AfCFTA) is poised to be a new and much-welcomed element as it is poised to serve as a powerful catalyst towards achieving new business deals and trade opportunities in the African Continent.
This year marks the 20th anniversary of the establishment of the Forum on China-Africa Cooperation (FOCAC). It has become a distinct symbol in international cooperation with Africa and in South-South cooperation. Standing at the new historic starting point, China is willing to work with Africa to stay true to our original aspiration, keep forging ahead to consolidate and strengthen the FOCAC mechanism, substantiate and deepen the Belt and Road cooperation, drive high-quality development of China-Africa trade and economic cooperation, and set a good example for the building of a community with a shared future for mankind in our times.
Trade and integration – within the Middle East and North Africa (MENA) region and with the rest of the world – will be critical to lowering poverty, empowering the poor, and igniting economic growth in the post-COVID era, according to the World Bank’s latest regional economic update. The report, titled Trading Together: Reviving Middle East and North Africa Regional Integration in the Post-Covid Era, paints a comprehensive picture of MENA’s economic situation six months into the COVID-19 pandemic.
The Leader the WTO Needs | by Mo Ibrahim, Kevin Watkins and Mary Robinson (Project Syndicate)
With the global trading system under severe pressure, international cooperation to strengthen a rules-based order is vital. Now, perhaps more than ever, we need a World Trade Organization that supports economic recovery, defends multilateralism, rebuilds trust, and rises to the twenty-first-century challenges posed by poverty, inequality, climate change, and – more immediately – the COVID-19 pandemic.
Nearly 380 civil society organizations have urged Members of the World Trade Organization to strongly support the adoption of a draft decision proposed by India and South Africa for a waiver from certain provisions of the TRIPS Agreement to combat the worsening COVID-19 pandemic. India and South Africa have submitted a proposal to the WTO TRIPS Council on a “Waiver from certain provisions of the TRIPS Agreement for the prevention, containment and treatment of COVID-19”. In their letter to the WTO Members, the CSOs said that in a global pandemic where every country is affected, a global solution is needed.
Poor and middle-income countries need bold new mechanisms to dig out of crushing debt, sharply worsened by the COVID-19 pandemic, with a focus on “green,” sustainable recovery, a senior UN official told G-20 finance ministers and central bank governors at the World Bank-International Monetary Fund (IMF) Annual Meetings yesterday. Navid Hanif, Director of Financing for Sustainable Development at the UN Department of Economic and Social Affairs, welcomed G-20 plans to extend through 2021 the Debt Service Suspension Initiative (DSSI) – announced in April in response to the pandemic – but said more needs to be done to address the worst global crisis since World War II.
Finance ministers and central bank governors of the Group of 20 major economies at their meeting in Riyadh, Saudi Arabia, have agreed on an action plan to facilitate international trade, investment and to build resilience of supply chains to support growth, productivity, innovation, job creation and development, even as they committed themselves to specific actions to navigate the present crisis caused by the coronavirus epidemic. They also committed themselves to strengthen international cooperation and frameworks, endorsed at the 15 April 2020 meeting and take steps to support recovery and achieve strong, sustainable, balanced and inclusive growth. A communique issued at the close of the meeting underscored the urgent need to bring the spread of the virus under control, which is key to supporting global economic recovery.
A Leap Forward on Cross-Border Payments (IMF Blog)
Progress to improve cross-border payments has been slow, but is just about to take off. That is how history evolves – one small step at a time, until it suddenly leaps forward. The confluence of new technologies and renewed determination among policymakers are making significant improvements possible. Reforms have the potential to be transformative by making cross-border payments cheaper, faster, more transparent, and more widely accessible. The stakes are high. Changes to cross-border payments have a bearing on the stability of the international monetary system, on financial inclusion, and on the efficiency of trade and financial markets. And reforms may unlock innovation and much needed growth, particularly following the COVID-19 crisis.
Laying the Foundations for a Resilient Recovery (World Bank)
The COVID-19 pandemic continues to devastate countries, overwhelming health systems, disrupting productivity, threatening food security, multiplying job losses, and reducing incomes, particularly for the poorest. It has led to the largest global economic contraction in eight decades, affecting all economies and causing investments, trade, and remittance flows to plummet. The global crisis is threatening the lives and livelihoods of the most vulnerable by increasing poverty, exacerbating inequalities, and damaging long-term economic growth prospects. It requires a comprehensive, robust global response from the development community. These were key messages from the Development Committee.
Oxfam: Rich countries are not delivering on $100bn climate finance promise (Climate Home News)
Wealthy nations are giving less money to poorer ones for climate projects than their official statistics make out, according to analysis by Oxfam. In a report published on Tuesday, the anti-poverty charity found that nearly 80% of climate finance to developing countries took the form of loans, rather than grants. Poor nations were expected to pay richer countries back, often for investment in projects with weak climate credentials. “The excessive use of loans and the provision of non-concessional finance in the name of climate assistance is an overlooked scandal,” the report said.
At the first‑ever global summit dedicated to biodiversity held virtually on 30 September, various leaders said the COVID-19 pandemic is an opportunity for countries to put bold and ambitious environmental action at the heart of their post‑coronavirus economic recovery strategies. One of the tools at countries’ disposal is BioTrade – the collection, production, transformation and commercialization of goods and services derived from biodiversity under BioTrade Principles and Criteria, a set of guidelines that emphasize environmental, social and economic sustainability.