tralac Daily News
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.
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.
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.”
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.
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”.
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.
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.”
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.
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.
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.
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.
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.
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.
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.
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.
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.
“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.