tralac Daily News
SARB warns rising public debt ‘will severely impact financial sector’ (The South African)
According to the South African Reserve Bank (SARB), National Treasury’s October Medium Term Budget Policy Statement (MTBPS) projections – which indicate that public debt is expected to reach 82% of GDP in the current fiscal year, and rise to 95% in 2026 – will have dire implications on the country’s financial sector. In a financial stability review report on Tuesday, the SARB outlined the potential consequences and said that the sharp rise in debt could place the country in a precarious position.
How values, interests and power must shape South Africa’s foreign policy (The Conversation)
The COVID-19 crisis is one of many indicators that we live in dangerous and uncertain times. Others include the international community’s struggle to respond to technological and climate change, demographic shifts, growing poverty and inequality as well as increased global insecurity. The global governance arrangements for managing these changes are no longer fit for purpose. These changes are pushing countries to reassess how they use foreign policy to serve their national interests.
Africa’s economic giant Nigeria at a ‘critical juncture’ (Eyewitness News)
More than 200 million Nigerians will slide further into poverty as the coronavirus pandemic has sent oil prices tumbling and pushed Africa’s largest economy into recession. To many in oil-rich Nigeria, Saturday’s announcement of a recession was no surprise – even the president had warned a downturn was coming. The number of poor Nigerians was expected to increase by about two million largely due to population growth, according to the World Bank, but with the pandemic, the number could increase by 7 million.
The economic and social disruptions induced by the COVID-19 pandemic have eroded progress in poverty reduction in Kenya, forcing an estimated two million more Kenyans into poverty. Using data to track the impact of the crisis on firms and households, the 22nd edition of the Kenya Economic Update, Navigating the Pandemic, finds that the pandemic and measures to mitigate the spread of the virus are creating multiple challenges for Kenya’s private sector, with severe consequences for household jobs and incomes.
Diaspora inflows increase Sh30bn in first 10 months (Business Daily)
Cash sent home by Kenyans living abroad grew by Sh29.97 billion in the 10 months to October, compared to a similar period of last year, despite pressure from the economic knocks of the Covid-19 pandemic. The Central Bank of Kenya (CBK) data shows that the remittances amounted to $2.54 billion (Sh268.63 billion) in the first 10 months of this year, compared to $2.34 billion (Sh238.66 billion) in the same period in 2019 – a nine per cent growth.
Sugar companies want parliament to intervene on deteriorating market (The Independent)
Sugar companies from Busoga sub-region are seeking Parliament’s intervention in the fight against ‘unfair’ competition from ‘sugar bonds’ which has frustrated local manufacturers. While meeting Speaker Rebecca Kadaga today, the managing directors of sugar companies revealed that sugar bonds which were earlier banned by President Yoweri Kaguta Museveni are still operating. Kadaga who said she was not aware of the illegal sugar trade, said Parliament has debated on the poor trade relations with neighboring countries and tasked the Minister of East African Community Affairs to address them at the regional level
Zimbabwe targets US$8bn industrial and commercial sector (The Chronicle)
Zimbabwe has set a target of achieving a US$8 billion Industrial and Commercial Sector by 2023 with Cabinet approving the ambitious roadmap on Tuesday. The growth of the industrial and commercial sector would be boosted by a number of investments scheduled for implementation under the roadmap, since it is private-public-sector-led. “The Roadmap outlines the plan to raise the manufacturing and commercial sector contribution to GDP from the current US$7,16 billion to US$8,03 billion by 2023, through the sector’s diversified 94 sub-sectors,” Environment, Climate, Tourism and Hospitality Minister, Mangaliso Ndlovu said in a post-Cabinet media briefing.
With barely two weeks left to the Extraordinary Summit of African Union Heads of State on 5th December, 2020, ahead of the expected start of trading under AfCFTA on 1st January 2021, the AfCFTA Secretariat is pleased to announce AfCFTA Vision, an Initiative in partnership with the Sankoree Institute, an affiliate of AfroChampions. In addition to building a community of visionaries (the “AfCFTA Visioneers”) and creating a platform for knowledge creation and sharing to help accelerate the pace of implementation of AfCFTA, a major component of the Initiative is a suite of apps (or, collectively, a “super-app”) that shall serve as the base for a continental business registry, trade directory, cross-border trade facilitation network, and a dashboard for the private sector to interact with the upcoming Africa Trade Observatory.
The African Union has announced that its Specialised Committee on Finance, Monetary Affairs, Economic Planning and Integration will discuss the launch of a payment system for the African Continental Free Trade Area (AfCFTA) from the 1st to the 3rd of December. The African Union disclosed this on Tuesday evening, the meeting will be 2 days before the planned deadline on the ratification of the agreement.
Experts decry lack of hubs, trade facilitation to support AfCFTA (National Accord)
Mrs Dabney Shallholma, Chairperson, Sealink Promotional Shipping Company, on Tuesday decried the lack of hubs and trade facilitation to support the African Continental Free Trade Area (AfCFTA). Shallholma spoke on the topic, ‘Hindrances to Maritime Transport, Intervention and Mitigation Actions to Unlock them’. “Hubs are international gateway that have a direct impact on the port, facilitate traffic along corridors, and it takes time to plan and develop. We are here today discussing on how to have trade facilitation and creation of hubs when we do not have such at home,” she said.
The African Development Bank Group (AfDB) has approved the investment of $25 billion to develop agriculture in African countries. Akinwumi Adesina, AfDB’s president, disclosed this at the virtual conference to mark the 10th anniversary of Sahel Group, a private equity firm focused on agribusiness. He said the fund would be shared among African countries. Adesina said the fund provided to Nigeria will help the country transform from a net fertilizer importing country to a fertilizer exporting nation.
Africa’s demographic distribution, abundance of natural resources, stable political and peaceful democratic transitions, and the potentials of AfCFTA serve as spokes and hub for the progress of the continent as has not been witnessed before. There are many policy interventions to consider because as has been demonstrated in this paper so far, the AfCFTA platform has the potential to raise productivity levels, promote higher investments, improve income levels, and reduce poverty on the continent. These positives must benefit the youth of Africa now.
COVID-19 has disproportionately affected women in business, amplifying concerns about gender inequality and the financial inclusion of women in Africa. On the positive side, the pandemic has accelerated progress in digital transformation and the expansion of the digital economy in Africa, which will continue to grow across sectors such as agriculture, education, healthcare, e-commerce and ICT.
This year’s Africa Women Innovation and Entrepreneurship Forum (AWIEF) is themed ‘Reimagining Business and Rebuilding Better’ and will be held on 2-3 December 2020. African Continental Free Trade Area (AfCFTA) Secretary-General, H.E. Mene, will also speak on Day 1, addressing the crucial role of AfCFTA in rebuilding the continent post-pandemic. This year’s event MC will be popular broadcaster and SABC TV presenter, Leanne Manas
Inside Africa’s new plan to tap power of e-commerce (Business Daily)
Africa’s dream of thriving e-commerce is taking shape following the rollout of an online trade platform. The initiative, launched on Monday, is part of the continent’s plan to accelerate its move towards plugging into, and reaping the rewards of, the global digital economy. Innovators and businesses across the continent will now enjoy a one-stop platform from the African Continental Free Trade Area (AfCFTA), which eliminates hurdles in cross-border transactions while also reducing tariffs on 90 percent of all goods traded.
Africa considers merging national carriers to boost aviation (Business Daily)
Some African countries are deliberating on merging their national carriers to take advantage of economies of scale and make them competitive in the global market. The talks also include eliminating visa fees within the continent, simplifying immigration rules, improving air connectivity infrastructure and making airport charges affordable within Africa’s 54 countries.
When the Covid-19 pandemic sent the global economy into a recession, the East Africa region was not spared. According to UN Economic Commission for Africa’s Economic and Social Impacts of Covid-19 in Eastern Africa report, the region’s labour market has been the worst hit on the continent, with an estimated 38 million jobs lost. Presenting the report during the 24th Meeting of the Intergovernmental Committee, Ms Mama Keita, head of ECA in Eastern Africa, said that the region will barely grow in 2020 with only four countries on track to experience positive growth in 2020.
On the 23rd/24th of November, the EAC Secretariat and the Government of the Federal Republic of Germany successfully concluded their Government negotiations on development cooperation at the EAC Secretariat’s headquarter in Arusha, Tanzania. In total, Germany committed up to 42.9 Euros for the next two years. “We could build on the foundations that had been laid long before the COVID-19 pandemic struck – testing capacities could be made available quickly and cross-border cooperation created leverage in containing its further spread. Investments in human capital and laboratory equipment will continue in order to keep the regional level of preparedness high,” said Marcus von Essen.
The 41st COMESA Council of Ministers meeting began this morning under the theme “COMESA – Towards Digital Economic Integration”. The core business of the two-day meeting is to make decisions on the implementation of COMESA programmes and the administrative and budget matters for the regional bloc for the next one year.
Egypt has acquired 32 percent of the number of investment projects which have been carried out at the COMESA member states since the beginning of the year and till July 2020, according to a recent report issued by COMESA. Around 100 projects of foreign direct investments (FDI) have been implemented during the period of January till July, 2020, compared with 228 projects during the same period of the previous year, recording a decrease of 56.14 percent due to the impact of the coronavirus pandemic.
The United Nations Economic Commission for Africa (UNECA) Sub-Regional Office for West Africa, in partnership with the Government of the Federal Republic of Nigeria, today virtually launched the proceedings of a meeting of West African Think Tanks and experts. In view of the many challenges associated with demographic dynamics in West Africa, aggravated by the adverse effects of the Covid-19 crisis, the achievement of the 2030 Agenda for Sustainable Development and the 2063 Agenda for Africa’s future aspirations will require a better understanding of the region’s demographic transformations and the policies that are critical to achieving the demographic dividend.
The Republic of Seychelles becomes the fourth AU member states to ratify the Treaty for the establishment of the African Medicines Agency (AMA) and deposited the instrument of accession to the Chairperson of the Commission of the African Union on 23rd November 2020 in Addis Ababa, Ethiopia. The African Medicines Agency will enter into force once ratified by fifteen African Union Member States. The AMA will serve as the continental regulatory body that will provide regulatory leadership, to ensure that there are harmonized and strengthened regulatory systems, which govern the regulation of medicines and medical products on the African continent.
Strengthening Rural Decent Jobs in Africa (AUDA-NEPAD)
Africa may not reach its transformation goals as defined in Agenda 2063, without fully harnessing the demographic dividend through Investments in Youth. While youths currently constitute approximately 40% of the working age population, over 60% of them are unemployed. However, Africa has policies and programmes to tackle unemployment amongst the youths, but the different policies at both continental and national levels do not adequately address the challenges of the rural youths in a holistic and coherent manner.
Ministers from African countries representing nearly three-quarters of the continent’s energy consumption and more than half of its population met with global energy leaders today to consider how to revitalise the African energy sector and enable a sustainable economic recovery after the pandemic. Under the theme of Securing Africa’s Energy Future in the Wake of Covid-19, the Second AUC-IEA Ministerial Forum was chaired by Dr Fatih Birol, Executive Director of the IEA, Dr Amani Abou-Zeid, African Union Commissioner for Infrastructure and Energy, and Mr Gwede Mantashe, Minister of Mineral Resources and Energy of South Africa.
During an online event, the International Union for Conservation of Nature-IUCN, the Regional Centre for Mapping of Resources for Development-RCMRD, and partners on Tuesday officially launched the Regional Resource Hub and one of its flagship knowledge products, the most comprehensive analysis on the state of protected areas in Eastern and Southern Africa. “The establishment of this Resource Hub is a great milestone as it will facilitate the provision of relevant information and data to support policies and effective decision-making on protected and conserved areas which are our invaluable natural heritage,” said Luther Bois Anukur, Regional Director, IUCN Eastern and Southern Africa Regional Office.
REIPPPP lessons: To build localisation, embrace importation benefits (ESI-Africa.com)
The South African renewable energy independent power producer procurement programme (REIPPPP) has contributed vastly to the country’s economic growth since its launch almost a decade ago. Though some of the REIPPPP requirements promote localisation to boost the growth of the renewable energy sector, it is importation that has largely dominated the industry. This factor has opened room for the industry experts to talk about how the updated Integrated Resource Plan (IRP), a policy document, can better address sustainable localisation.
South Korea has decided to withdraw its candidate from the World Trade Organisation, WTO, director-general race, according to Washington Trade Daily. Yoo Myung-hee is South Korea’s Trade Minister and its candidate for the top job at the WTO following the resignation of Roberto Azevedo. Ngozi Okonjo-Iweala, Nigeria’s candidate in the WTO race, had secured the popular vote by a wide margin on October 28 but was not named DG because the US opposed her candidacy.
China may scale back investment in Africa, says new report (The Africa Report)
In the coming decade, China is expected to consume less raw materials and be more selective in its foreign lending and investment activities. In a report published on 10 November, the German insurer Allianz and its credit insurance subsidiary Euler Hermes revealed a disturbing finding: over the coming decade, China may no longer be able to provide Africa with the same amount of funding, taking the form of loans, investment and trade, as in the past. China has a heavy debt burden.
China’s resource-for-infrastructure deals (The Mail & Guardian)
Through the use of resource-financed-infrastructure (RFI) agreements, China is playing an ever-greater role in financing industrial and trade-related infrastructure projects in Africa. The RFI model is a financing mechanism whereby a government promises future revenues from a resource extraction project to repay a loan used to fund its infrastructure construction. China uses RFI deals to reach agreements with African nations that are dependent on commodities and eager to secure low-interest loans for infrastructure development.
The Chinese Embassy in Nigeria says China-Nigeria trade relations is the largest in the continent with an increase of 0.7 percent at $13.66 billion in 2020 over the previous year. “China’s exports to Nigeria were $11.58 billion, decreased by 2.4 per cent; imports from Nigeria were $2.09 billion, a year-on-year increase of 22.7 per cent,” spokesperson of Zhao Yong, Chargé d’affaires of the Embassy of China in Nigeria said. “To China, Nigeria has remained the biggest importer and second largest trading partner in Africa. Our bilateral trade volume is more than tenth of China’s trade with the whole continent.”
Within the next 10 years, consumer spending in Africa is expected to reach 2.5 trillion U.S. dollars. In fact, over 20% of this spending will occur in Sub-Saharan Africa. The continent is also experiencing mass urbanization. Therefore, Africa has the potential to become the next big international market and source of investment. Although, international companies often avoid investing in Africa due to reports of corruption, unsafe business environments and poor government policies. Several organizations and government initiatives have now implemented strategies to eliminate these concerns, reduce poverty and promote investments, which is why U.S. companies are investing in Africa.
Regional trade will drive next phase of globalisation (Khaleej Times)
The coronavirus continues to redefine how the world stays connected and has triggered an existential moment for free trade and globalisation. In turn, pressure has mounted on governments and businesses alike to nationalise supply chains, nearshore operations, and set their sights on shorter, nimbler supply chains that don’t depend on trade flows with too few countries, too far away. But while the trajectory towards globalisation has certainly shifted in the wake of Covid-19, world trade isn’t fracturing into isolationist deadlock as many feared at the beginning of the pandemic. Instead, the world trade puzzle is being re-arranged into huge regional pieces that will determine new trade gravities, from the EU and other countries in Europe with which it trades, to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and much speculated African Continental Free Trade Area.
With vaccines around the corner, there is increased hope that the pandemic could soon be under better control. That said, the need for cooperative efforts to work toward a better future has never been greater. An IMF report published ahead of the G20 leaders meeting argues that a synchronized infrastructure investment push could invigorate growth, limit scarring, and address climate goals. In fact, when many countries act at the same time, public infrastructure investment could help lift growth domestically and abroad through trade linkages.
For Most African Carriers, Next Year Will Be Precarious (Aviation Week Network)
All regions face a steep uphill climb from the COVID-19 crisis, but the starting point for African carriers is much further down the mountain. Most were loss-making before the pandemic and are ill-equipped for the tough journey that will continue through 2021. African airlines carry just 2.1% of world airline traffic. The high level of connectivity that other continents lost to COVID did not exist in Africa to begin with. IATA figures show African traffic was down 90.1% in August, causing load factors to fall 41 points to just 34.6%, the lowest of any region.
The State of Tax Justice 2020 (Tax Justice Network)
The State of Tax Justice 2020, a first-of-its-kind annual report by the Tax Justice Network, reveals for how much tax each country in the world loses to international corporate tax abuse and private tax evasion. While there have been estimates in the past about the tax lost globally to tax abuse, it has been difficult to determine how much each country loses individually – until now.
Global leaders called today for an urgent action to transform agri-food systems to make them more sustainable and resilient in the face of COVID-19 pandemic and other crises, and ensure that everyone has access to affordable, healthy and nutritious food. “The resources – intellectual, financial and material – are not lacking, but unless we are well-organized and coordinated, the probability is that we will be too late and too ineffective for too many people in the Least Developed Countries, the Land-Locked Developing Countries and the Small Island Developing States”, FAO Director-General QU Dongyu noted. He singled out three critical drivers.
The Enhanced Integrated Framework (EIF) launched a digital campaign in October aimed at encouraging businesses in least-developed countries (LDCs) to share how the COVID-19 pandemic is affecting their participation in global value chains. Twelve businesses from 12 LDCs have shared their experiences so far.
Negotiators at the World Trade Organization (WTO) are considering a proposal from Singapore that would ensure humanitarian food aid is exempt from export prohibitions and restrictions, ahead of the trade body’s General Council meeting on 16 December. Proponents say the move will make it faster and easier for the World Food Program (WFP) to provide urgently-needed assistance to save the lives of people in crisis situations – and ensure that trade rules support progress towards SDG 2, which commits governments to ending hunger and malnutrition.
‘Infodemic’ risks jeopardising COVID-19 vaccines (Eyewitness News)
Beyond logistics, governments must also contend with scepticism over vaccines developed with record speed at a time when social media has been both a tool for information and falsehood about the virus. “The coronavirus disease is the first pandemic in history in which technology and social media are being used on a massive scale to keep people safe, informed, productive, and connected,” the WHO said. “At the same time, the technology we rely on to keep connected and informed is enabling and amplifying an infodemic that continues to undermine the global response and jeopardises measures to control the pandemic.”
A report by the UN Conference on Trade and Development (UNCTAD) warns that, despite growing confidence that the end of the COVID-19 pandemic is near, the economic fallout will continue. The report projects that the global economy will contract by 4.3% in 2020. The report titled, ‘Impact of the Pandemic on Trade and Development,’ underscores that COVID-19 has hit vulnerable populations and sectors hardest, and that economic and social impacts have been felt most severely in structurally weak developing countries, with those in Africa, least developed countries (LDCs), and small island developing States (SIDS) grappling with the most drastic impacts.