tralac Daily News
Luno, the biggest cryptocurrency group in South Africa, welcomed the publication by the Financial Sector Conduct Authority (FSCA) on Friday of a draft declaration of crypto assets as a financial product under the Financial Advisory and Intermediary Services (FAIS) Act. Luno general manager for Africa Marius Reitz said they welcomed the draft declaration and cryptocurrencies were increasingly demonstrating the significant role they could play in the future of money.
Uganda’s economy on recovery trend: report (Big News Network)
Uganda’s economy is on a recovery trend from the downturn caused by the COVID-19 pandemic, a new report by the ministry of finance showed. The monthly performance report for October showed that for the fourth consecutive month, the Purchasing Managers’ Index (PMI) has stayed above the 50-mark threshold. “This gives an indication of further recovery in economic activity, from the downturn caused by the COVID-19 pandemic,” the report said.
As widely expected Ghana’s public debt has now passed the generally accepted sustainability threshold of 70 percent of Gross Domestic Product, the GHc273.8 billion in total debt by the end of September translating to 71.0 percent of GDP. The sharp increase in the public debt in 2020 – it rose by GHc55.6 billion during the first nine months of this year alone – is primarily due to the cost of successfully navigating the outbreak and viral spread of the COVID-19 pandemic.
Despite the complaint by Nigerians of the rising cost of petrol, the government says Nigerians still pay the lowest amount for the product in West Africa and that is encouraging large smuggling to countries in the sub-region. The low pump price of petrol in Nigeria compared to what obtains in other countries in West Africa encourages unrestrained smuggling of the commodity from Nigeria, a senior official said Friday.
Rwanda to host continental export development fund (The New Times)
A new fund that was created by the African Export-Import Bank (Afreximbank) last year, the Fund for Export Development in Africa (FEDA), will have its permanent headquarters in Rwanda. This follows the signing of three agreements between Rwanda and Afreximbank on Sunday, November 22 in Egypt, which paves way for the establishment of FEDA headquarters in Kigali. Under the agreements signed, Rwanda committed to offer certain benefits to FEDA including offering free rental to the Fund for the next two years, officials said.
Nigerian Economy Enters Second Recession In Five Years (Economic Confidential)
The Nigerian economy has slipped into its second recession in five years as the gross domestic product contracted for the second consecutive quarter. The National Bureau of Statistics announced Saturday the nation’s GDP recorded a negative growth of 3.62 per cent in the third quarter of 2020. The country had earlier recorded a 6.10 per cent contraction in the second quarter.
URA raises red flag over rising cross-border smuggling at Elegu border (Kampala Dispatch)
The Uganda Revenue Authority (URA) has raised a red flag against smuggling of goods in Elegu, the porous Uganda-South Sudan border. Ivan Kakaire, the URA regional manager in charge of customs in Elegu says that the commonly smuggled goods across the porous border include fuel, powdered milk, sugar and rice among others. Kakaire explains that while the border is well managed, some smugglers still use canoes to ship contraband through the water and have often intercepted them en-route to neighboring Gulu and Adjumani district.
Debt eats 58pc of taxes in 4 months (Business Daily)
Debt repayments gobbled up nearly 58 percent of taxes in four months through October ahead of the Treasury’s move to apply for additional cheaper World Bank and IMF funding and consider a debt relief offer Nairobi had earlier rejected. Treasury data showed Friday that debt servicing costs amounted to Sh246.29 billion in the July-October 2020 in an environment of falling tax receipts, which dipped Sh71.94 billion to Sh426.38 billion compared with a year earlier.
Egypt has reported a total of $1.22bn in exports to Nile Basin countries during 2019, compared to $1.20bn in 2018, reflecting an increase of 1.4%. On Sunday, the Central Agency for Public Mobilization and Statistics (CAPMAS) issued its annual bulletin of trade exchange between Egypt and Nile Basin countries for the year 2019. The bulletin reviewed the volume of trade, including exports and imports, with Sudan, Ethiopia, Uganda, Congo, Kenya, Tanzania, Rwanda, Burundi, and Eritrea.
Tunisia Host eBusiness Forum (COMESA)
The Tunisian Export Promotion Center in partnership with GIZ organized an online business-matching event dubbed “Tunisia Africa E-Business Meetings” on 18th-19th and 20th of November 2020. The main objective of the event was to promote South-South partnership and boost economic exchanges between African countries. This is expected to be achieved through consolidating economic relations through Networking, identifying new opportunities for cooperation with African economic operators, mobilizing all actors towards better African integration and boosting intra-African trade exchanges.
African think tanks want better funding (The Southern Times)
The postponement of trading under the African Continental Free Trade Area (AfCFTA) from July 2020 to January 2021 due to the COVID-19 outbreak presents challenges that bring to the fore the role of think tanks in promoting economic growth and development. Speaking at the opening of the 7th Africa Think Tank Summit, organised by the Africa Capacity Building Foundation, Prof Kevin Chika Urama – a senior director at the African Development Institute of the AfDB Group – said: “This is a clarion call for Africa to accelerate the implementation of this agreement to be able to achieve the great implications of trade for development.”
Mr Alan John Kojo Kyerematen, the Minister of Trade and Industry, says that for the continent to benefit from the single market, there was the urgent need to create awareness among the regulatory authorities, including customs of all state parties, economic operators, including producers and exporters as well as the logistics industry in the various countries.
An official pact that could prevent trade tensions under the soon to be implemented Africa Continental Free Trade Area (AfCFTA) is almost ready. This strategic initiative is under the auspices of the African Union and the International Trade Centre. This is expected to provide solutions to countries in an effort to avoid overlapping of export sector priorities as countries could potentially prioritize similar produce ahead of AfCFTA implementation next year January.
The Economic Commission for Africa presented an online trading platform Thursday, that will facilitate trading between buyers and suppliers when the African Continental Free Trade Area (AfCFTA) agreement starts next year. Known as the African Trade Exchange (ATEX), the business-to-business e-commerce platform will not only improve cross-border trade but also provide businesses with quality products from verified African suppliers in an efficient way at reduced average trading costs based on AfCFTA rules.
The COVID-19 pandemic reminds us of the complex societal, governance and security linkages that underpin sustainable development. The pandemic also requires governments to look beyond borders. Look at how the restricted global trade in vital goods such as pharmaceuticals, PPE, and oxygen impacted the level of preparedness in some African countries.
The African continent also needs to increase local manufacturing while taking advantage of the momentous opportunities presented by the Africa Continental Free Trade Agreement. Once in place, intra-African trade is expected to grow by 33%, and Africa’s total trade deficit is expected to be cut in half. And there is another crucial point – we need an immediate debt moratorium for countries with unsustainable debt levels.
As individuals, our lives have been transformed; as businesses, our operating models have been revolutionised; and as a society, we have been shaken to the core. Fortunately, many of the technologies that have helped us through the worst of the pandemic and the lockdown, hold the key to success and prosperity in the post-lockdown era. The new ways of interaction that emerged this year – characterised by remote work, distance education, remote healthcare, online shopping and mobile money – will define how society works in the future.
From agro-processing initiatives to energy, transportation and water and sanitation services, transformative investments by the African Development Bank are paving the way to unlock Africa’s economic potential, according to the 2020 Annual Development Effectiveness Review (ADER), released on Friday. The report is themed Building resilient African economies. “Our goal has been and always will be to transform Africa through investments that make a difference to those who need it most. We are a bank that invests in people,” said Bank President Akinwumi Adesina.
SADC can be a major force: Guibeb (The Southern Times)
The Ambassador of Namibia to Germany, Andreas Guibeb, has called for strengthening of regional groupings in Africa such as SADC because they have the ability to collectively develop the African continent and make it a bigger player in global economics and politics. “There is saying that you can go far along but you can indeed further in unity hence the reason the importance of regional groups such as our SADC which we must continue to strengthen,” said Ambassador Guibeb.
Igad legal and policy experts now validate visa-free movement (The East African)
The Inter-Governmental Authority on Development (Igad) has validated a roadmap to implement the protocol on free movement of persons, which is expected to take 10 years. This was arrived at a high-level legal and policy experts meeting of the regional body held in Entebbe, Kampala on November 16-17 and was also endorsed by the Igad committee of ambassadors and ministers in charge of migration and labour. Upon adoption by the region’s summit, the roadmap will ease cross-border mobility for its 270 million people, improve regional economic integration and development.
SA’s Musina SEZ counts on Zim for resources (The Herald)
South Africa will look to Zimbabwe for resources for its proposed Musina-Makhado Special Economic Zone. The MMSEZ is located in the vicinity of the Beitbridge Border Post, which is one of the busiest ports of entry to South Africa and a gateway to the South African Development Community (SADC) countries. Lehlogonolo Masoga, CEO of Musina-Makhado, says the MMSEZ has the potential to become an inland intermodal terminal, facilitated by its anchoring position along the North-South Corridor, and directly connecting to the country’s major ports for the trans-shipment of sea cargo and manufactured goods.
To mark the launch of the latest African Energy Outlook 2021, the African Energy Chamber will be hosting a Power Breakfast in Malabo on Wednesday November 25th. The event will gather all of the Chamber’s partners and industry stakeholders in Equatorial Guinea as the market embarks on a path to recovery in 2021.
The Government of the Kingdom of Eswatini, through the Ministry of Commerce, Industry and Trade, requested for technical support from the ECA in developing an inclusive financing model to cater for the needs of MSMEs. ECA SRO-SA Acting Director, Sizo Mhlanga, noted that, “For frameworks to contribute to the desired outcomes, they must be effectively implemented and this calls for the identification and addressing implementation barriers. Experiences from the region and beyond, show that once policies are adopted, implementation as envisaged becomes a challenge.”
A two-day meeting convened to evaluate the status of the ratification, domestication and implementation of the Protocol to the African Charter on Human and Peoples’ Rights on the Rights of Women in Africa, commonly referred to as the Maputo Protocol on Women’s Rights, has concluded with strong recommendations on how to accelerate actions on the commitment to African women.
G20 Summit highlights
We, the G20 Leaders, meeting for the second time under the Saudi Presidency, stand united in our conviction that coordinated global action, solidarity, and multilateral cooperation are more necessary today than ever to overcome the current challenges and realize opportunities of the 21st century for all by empowering people, safeguarding the planet, and shaping new frontiers. We are committed to leading the world in shaping a strong, sustainable, balanced and inclusive post-COVID-19 era.
We welcome that the Saudi Presidency has prioritised the matter of G20 Support to COVID-19 Response and Recovery Plans in Developing Countries, especially Africa and Small Island Developing States. Our recovery from the crisis requires that we redouble our efforts to meet our global obligations as reflected in the UN 2030 Agenda for Sustainable Development – particularly our commitment to leave no-one behind and help those furthest behind first.
ICC welcomes G20 commitment on equitable distribution of Covid-19 vaccines; calls for emergency summit to deal with risks to real economy in early 2021 ICC welcomes G20 commitment on equitable distribution of Covid-19 vaccines; calls for emergency summit to deal with risks to real economy in early 2021.
G20 wraps up with African debt relief a priority (Africa Times)
With Zambia’s recent default on debt repayment and global concern over pandemic-related economic impacts, the G20 meeting in Riyadh wrapped up Sunday with a commitment through June for the Debt Service Suspension Initiative (DSSI) to allow developing nations to defer debt payments. Both Ramaphosa and President Paul Kagame of Rwanda attended the G20 virtual meetings hosted by Riyadh, the latter in his capacity with the African Union Development Agency (NEPAD).
QU Dongyu, Director-General of the Food and Agriculture Organization of the United Nations, today called on G20 members to address the impacts of COVID-19 on agri-food systems by boosting farmers productivity, scaling up social protection mechanisms and investing in digital innovation, among other measures. The Director-General also called on G20 Members to support investment in digital innovation and extension.
With respect to trade, there are three immediate challenges: to utilize trade to help underwrite the economic recovery, to facilitate trade in essential medical products to treat the pandemic, and to reform the institutional framework for world trade. First, trade finance for the developing world needs to be restored.
A No-Brainer for the G20 | by Jim O’Neill (Project Syndicate)
G20 leaders, representing the world’s largest economies, will discuss COVID-19 this month at a virtual summit, where they will have a chance to secure a return on investment that would make even the legendary investor Warren Buffett blush. With less than one-tenth of one percentage point of global GDP, the international community can vastly expand access to life-saving COVID-19 tests, treatments, and vaccines (once they are available), thereby putting the global economy back on track to long-term growth and stability.
“The Debt Service Suspension Initiative, in particular, gave many poor countries much needed temporary ‘breathing space’. The Common Framework for Debt Treatments beyond the DSSI, endorsed by G20 Leaders at this meeting, will allow low-income countries with unsustainable debts to apply for permanent debt relief on a case-by-case basis, with a level playing field for creditors. It is critical to operationalize this Framework promptly and effectively.”
International cooperation has never been more important. I’ve been very pleased to see the progress the G20 has made on debt transparency and debt relief. These are important, positive steps for development, and I’ve been glad to see constructive responses from major creditors.
Emergency economic measures to tackle the crisis will need to be adapted, support to people and businesses become more targeted, and new policies put in place to make the objective of a stronger, sustainable and inclusive global economy, a reality. 22/11/2020. The COVID-19 crisis has exposed major weaknesses in our economies that can only be fixed through greater global co-operation and strong, targeted policy action, according to a new OECD report presented to the Leaders of the G20 countries at their virtual Summit this weekend.
G20 leaders united to address major global pandemic and economic challenges (European Commission)
President von der Leyen said: ”I am glad that G20 leaders agreed to make Covid-19 vaccines available and affordable for all. But more funding is needed. This is why I called G20 Leaders to commit to fund 4.5 billion US dollars for the ACT-Accelerator by the end of the year. G20 leaders also agreed to maintain economic measures until the recovery is firmly on the way. As a lesson from the crisis we need to step up global preparedness.”
The Secretary-General will press them to support global mechanisms striving to make any COVID-19 vaccines and therapeutics affordable and accessible to anyone, anywhere, who needs them. Speaking in New York on the eve of the virtual meeting, the UN chief told reporters that the world must ensure recovery from the crisis will be inclusive, sustainable and in line with global climate goals.
Xi, who has pledged to make his country carbon-neutral by 2060, said China “applauds” the so-called circular carbon economy put forward by Saudi Arabia, a controversial plan that seeks to reduce emissions while capturing and reusing greenhouse gases produced by burning hydrocarbons. World leaders urged countries not to lose sight of climate goals, and endorse the aims of the Paris Agreement.
Four summits, one message: Trade cooperation for global recovery (The Manila Times)
After four years of diminished prospects, stagnation and divisive geopolitics, four summits (RCEP, Brics, APEC, G20) suggest world trade could show the way toward a better future but only through effective execution.
Hosted by Russia on November 17, the Brics Summit brought together major economies of the emerging-market bloc: Brazil, Russia, India, China and South Africa. The Summit focused on practical measures to battle the pandemic and support the Brics’ economic recovery. China’s President Xi Jinping warned about “the practice of using the pandemic to pursue ‘de-globalization’ or clamor for ‘economic decoupling’ and ‘parallel systems’,” which will end up hurting “the common interests of all.”
Since early spring, the major rich-income economies have been crafting massive stimulus responses against the pandemic. In 2020, fiscal support packages could climb to $15 trillion to $20 trillion worldwide. Meanwhile, many medium- and particularly low-income economies are suffering from excessive debt burden. On November 21 and 22, the G20 Summit focused on addressing the implications of the global pandemic, future health care plans and steps for revising the global economy, including fiscal support, debt reductions and other vital measures.
Today, two architects of the modern world trade order [the US and UK] have taken a sharp turn away from far-reaching global agreements, and gone back to the more cautious approach of negotiating one nation at a time. Meanwhile, two separate massive trade blocs are forming in different parts of the world. Last week, Nigeria ratified the African Continental Free Trade Area (AfCFTA): The pan-Africa trade bloc will come into effect in January. And in Asia, 15 countries including China just formed the Regional Comprehensive Economic Partnership (RCEP), which could dramatically streamline trade in the region when ratified.
Former Vice President of Nigeria, Atiku Abubakar has warned that Nigeria must stop borrowing for anything other than essential needs, he also added that very non-essential line items in the proposed 2021 budget must be expunged and others in a bid to kick start the economy from a recession. Atiku disclosed this in a social media statement on Sunday, titled: “We Must Exit This Recession With Precision”.
The government is in urgent need of cash for its annual budget support and will therefore have to implement tough conditions imposed by international lending institutions, Treasury Permanent Secretary Julius Muia has said. The IMF on Friday released a statement disclosing that tax, governance and monetary policy reforms are part of its ongoing debt negotiations with the government, stoking fears of a return to painful prescriptions of the past that have resulted in civil servant job losses and increased taxes.
On November 11, 2020, the International Monetary Fund granted the Republic of South Sudan a $52 million emergency disbursement under the Rapid Credit Facility to help its economy weather the shock of the COVID-19 pandemic. This is the first time this new and still fragile country has received financial support from the IMF.
A multi-agency platform providing vital trade and market information is helping micro, small and medium-sized enterprises – and the institutions that support them – to weather the COVID storm. Smaller firms have been among the hardest hit by COVID-19 as demand for their goods and services plummeted and disrupted supply chains. In response, chambers of commerce and other business support organizations worldwide have been diligently working to support MSMEs to adapt their business strategies and put them on the path to recovery.
Commonwealth private sector targets green, digital recovery (The Commonwealth)
Trade ministers and business leaders from across the Commonwealth will gather virtually to examine how they can work together to spur a digitally-inclusive and green recovery in the face of devastating economic impacts linked to COVID-19. Commonwealth Secretary-General Patricia Scotland said: “The disruptions triggered by COVID-19 has greatly accelerated the shift towards digital trade, which was already unfolding before the pandemic struck. We now stand at a pivotal crossroads where entire countries, sectors and companies are at risk of being left behind.”
The World Trade Organisation (WTO) is likely to take a decision next month on the India-South Africa proposal for the temporary waiver of global intellectual property obligations to fight the pandemic. But developed members such as the EU, the US and Canada are continuing to oppose the proposal, according to a Geneva-based official. “The chair of the TRIPS council will now get in touch with delegations bilaterally and in groups to see what a possible solution could be,” the official said.
Guy Ryder, Director-General of the International Labour Organization (ILO), said that the WTO has been instrumental in powering the growth and dynamism of the global economy. This has provided the enabling conditions for the ILO to promote the achievement of many of its goals, such as the provision of decent work opportunities and reduction of poverty, he said.
Céline Charveriat, Executive Director of the Institute for European Environmental Policy, stressed that the world needs to focus on what sort of trade we need to help it recover from where it currently stands and to become climate neutral by 2050. She said the WTO needs to be a place where there is an equitable sharing of the benefits and risks from “greening” trade. The WTO is the only place that can bring an end to environmentally harmful subsidies, she added.
Joshua Bolten, President and CEO of the US Business Roundtable said: “Only a bold and comprehensive reform agenda can restore the central role of the WTO and prevent its downward spiral into irrelevance. To those of us who believe in the multilateral system in the WTO, we must come together to prove it can meet the challenges of today, and of the future.”