tralac Daily News
The outlook for South African banks is growing murkier amid the rising threat of a second coronavirus wave that could upend an improvement in economic activity. Africa’s most-industrialised economy is mired in a recession and unemployment is at a 17-year high. That follows restrictions in the second quarter that shuttered everything but essential services. “There remains considerable uncertainty and forecast risk,” Standard Bank Finance Director Arno Daehnke said on a call.
The presidential employment stimulus plan is on track to create thousands of job opportunities, the presidency says. President Cyril Ramaphosa announced the employment stimulus initiative earlier this year as part of an effort to create employment opportunities following many people losing their jobs due to the coronavirus pandemic. The move was announced as part of a broad effort to reconstruct the economy as it recovers from the pandemic, Ramaphosa had said.
Multiple levies and taxes by national and county governments are hurting businesses already reeling from effects of Covid-19, the Kenya Association of Manufacturers(KAM) has said. These include charges on agricultural produce headed to factories, mainly in Nairobi and supply of manufacturers goods across the country, where industry players have to pay in the inter-county movements. Nairobi is among counties that are making doing business hard, the manufacturers’ lobby group has said, citing the Nairobi City County Finance Bill, 2020.
Used car prices jump as shilling hits historic low (Business Daily)
The cost of second-hand cars has jumped by up to 12 per cent or Sh500,000 per unit over the past three months, propped up by the weakening of the shilling to historic lows against the dollar in the wake of coronavirus-related economic shock. The rise in car prices comes amid plunging purchase orders due to reduced cash flow from to the Covid-19 pandemic, which triggered layoffs and pay cuts as banks reduced credit lines in fear of defaults. Kenyans faced with Covid-19-linked hardships have gone slow on luxury spending.
The Capital Markets Authority (CMA), with the support of FSD Africa, has onboarded a consultant to review the Capital Markets (Collective Investment Schemes) Regulations, 2001 to make them more robust and facilitative to market dynamics. The CMA Chief Executive, Wyckliffe Shamiah, said that the proposed legal framework review is designed to address stakeholders’ concerns with the current framework and facilitate the development of a robust asset management sector, in line with the aspirations of the 10-year Capital Market Master Plan (2014-2023).
Kenya’s Year on Year Inflation Rises to 5.46 in November (Capital Business)
Kenya’s year-on-year inflation in November increased to 5.46 percent compared to 4.84 percent in October 2020. Data from the Kenya National Bureau of Statistics reveals that the Consumer Price Index in November was up by 1.19 percent from 109.60 in October 2020 to 110.91 in November 2020. During the period under review, the food and non-alcoholic beverages index increased by 1.54 percent while the year-on-year food inflation stood at 6.09 percent in November 2020.
Kenya drops IPPs for KenGen to generate clean and cheap energy (The East African)
Kenya dropped Independent Power Producers as private project partners in geothermal power production due to their perceived “sluggishness” in supporting government efforts to generate clean and cheaper energy. Energy Cabinet Secretary Charles Keter told The EastAfrican that the government will, instead, work with the state-owned power producer KenGen in the second and third phases of the 465MW geothermal power production at Menengai Geothermal fields, about 185 kilometres northwest of the capital Nairobi.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, says the National Gas Expansion Programme (NGEP) of the Federal Government will create two million jobs annually in the country. Sylva disclosed this at the inuaguration of the programme by President Muhammadu Buhari in Abuja on Tuesday. He said the introduction of gas for the powering of automobile and other engines was a step in the right direction, adding it remained a cheaper and cleaner source of energy.
Cordinator of the Comptroller General of Customs Strike Force Zone ‘A’, Ahmadu Bello Shuaibu, has said the Service’s four layer import counter-check system is to safeguard the economy and national security against acts of sabotage. This is coming on the heels of the recovery of a staggering N417million within three weeks crack down by his operatives, bringing the full force of its mandate to bear in the mop up of import leakages from all the entry points within its territorial jurisdiction.
The digitalisation of Nigerian ports, deployment of e-Customs, investment of over $300 million in inland dry ports and the overhaul of transportation logistics will position Nigeria to take maximum advantage of the African Continental Free Trade Area (AfCFTA), which will be operational January 1, 2021, the Executive Secretary/CEO of the Nigerian Shippers council (NSC), Mr Hassan Bello has said.
Zim scores high on debt management transparency (The Herald)
Zimbabwe has reasonably high ratings in the region in terms of debt management transparency according to the Open Budget Index (OBI). A country’s budget transparency score, reflected on the OBI, assesses the public’s access to information on how the central government raises and spends public resources. According to the Index, Zimbabwe is rated at about 48 percent, trailing behind South Africa and Namibia who are rated at about 87 percent and 52 percent respectively.
International Relations and Cooperation Minister Dr Naledi Pandor is set to preside over the 21st Extraordinary Session of the Executive Council of the African Union (AU) today. Pandor will preside over the session in her capacity as the Chairperson of the Executive Council of the AU. “The meeting of the Executive Council is held in preparation for the upcoming 13th and 14th Extraordinary Summits on the African Continental Free Trade Agreement (AfCFTA), and on Silencing the Guns in Africa, which will be held on 05 an 06 December 2020, respectively,” said the Department of International Relations and Cooperation (DIRCO) on Wednesday.
Cameroon’s decision comes after Lesotho and Tunisia submitted their own instruments on 27 November, leaving only 21 countries yet to ratify the treaty. They are Benin, Botswana, Burundi, Cape Verde, Central African Republic, Comoros, Democratic Republic of the Congo, Guinea-Bissau, Liberia and Libya. The others are Madagascar, Malawi, Morocco, Mozambique, Nigeria, Seychelles, Somalia, South Sudan, Sudan, Tanzania and Zambia.
The African Continental Free Trade Area (AfCFTA) is expected to open up Nigerian businesses to a market of over 1.2 billion people and a GDP of $2.5trillion. The Nigerian Government ratified the agreement on November 12, ahead of the December 5 deadline issued by the African Union to its 55 member states, as AfCFTA is expected to commence January 2021. Despite this welcome development, some stakeholders are still concerned with the border closure policy of the Federal Government and dumping of substandard goods in the Nigerian market, with the recent disclosure by the FG that the borders will be reopened soon.
In spite of the African Continental Free Trade Area (AfCFTA) starting in January, Nigeria has the right to restrict import of seven per cent of goods considered as sensitive for 10 years when the land borders reopen. The free trade pact also permits Nigeria to permanently deny tariff liberalization of three per cent of other goods from being imported.
The Executive Director, Trade Law Centre and member of the Committee for Development Policy (CDP), Trudi Hartzenberg, said the AfCFTA clearly made provisions for phased tariff concessions. Hartzenberg said all member states have agreed that 90% of tariff lines are to be liberalised. Under the free trade pact, a distinction is drawn between Least Developed Countries (LDCs) and non-LDCs for the tariff negotiations. LDCs have 10 years to achieve 90% liberalisation, while non-LDCs, where Nigeria falls in, have five years. The remaining 10% tariff line is split into 7% for sensitive products and 3% may not be liberalised entirely.
The African Continental Free Trade Area Agreement (AfCFTA) seeks to liberalize trade and services across the African continent, making it the largest free-trade area in the world. It will produce a single market of more than 1.2 billion people with accumulative Gross Domestic Product (GDP) in excess of US$3 trillion. While this will provide the continent with great opportunities, Mr. Azubike Obi,Group Head, Business Development at FBN Bank Ghana Limited believes that “the degree of success of any country with AfCFTA heavily depends on its financial services sector since it will serve as the engine that will drive the expected activities.”
The Manufacturers Association of Nigeria (MAN) has urged the Federal Government to review its stance on border closure, citing that the trade protocol is premised on liberalisation of intra-regional trade in the continent. Indeed, the border closure has created rancour between Nigerian and its neighbours, especially Ghana, while its economic impact has been severe for Nigerians that depend on imported food to address the shortfalls in local production, as well as manufacturers that exploit the West African markets for expansion.
National Action Committee on AfCFTA for Transportation is inking partnership with the Nigerian Shippers Council, NSC, to address deficits in transportation infrastructure in the country. Committee led by the Co-Champion, Mrs Funmi Folorunsho, paid a visit to the headquarters of NSC in Lagos. Some of these crucial factors as road infrastructure, railway connectivity to inland dry ports and hinterlands, speedy cargo evacuation, automation, single window platform at ports, availability of fleet for ships and aircrafts, among others. He said Nigeria could be ready for the AfCFTA take off in January 2021, adding that the port system would be fully automated in the first quarter of 2021.
Illicit Financial Flows (IFFs) have been at the centre of discussions in Africa due to their negative impact on development financing, sustainable development and growth. The emergence of the COVID-19 pandemic has exacerbated the fiscal deficit situation in some African countries, equally bringing to the fore, the urgency to address the vice of the illicit outflows. To enhance efforts to combat the scourge of IFFs on the African Continent, the African Union Commission through the Department of Economic Affairs, is scheduled to launch a Multi-Donor Action to add to the existing mechanisms established to stem the illicit outflows. The Multi-Donor Action will be launched during the African Union’s Specialized Technical Committee (STC) on Finance, Monetary Affairs, Economic Planning and Integration from 1st to 4th December 2020.
At the invitation of the African Union (AU) Commissioner for Trade and Industry, H.E Albert M. Muchanga, the WCO Secretary General, Dr. Kunio Mikuriya, spoke at the AU Sub-Committee of Directors General of Customs Meeting held online on 27 November 2020. The Meeting listened to a WCO presentation on the role of Customs in mitigating the impact of the COVID-19 pandemic and considered the draft AU Guidelines on Trade and Transport Facilitation for the Movement of Persons, Goods and Services across Africa during the COVID-19 Pandemic.
African Export-Import Bank (Afreximbank) today in Cairo officially launched the operations of ‘MANSA’, a pan-African customer due diligence repository for financial institutions, corporate entities and SMEs, developed to address the perceived risk of doing business in Africa and with Africans. The Platform will also serve to address key trade related challenges facing the continent, including, the lack of market information, the high cost of doing business in Africa and discovering African counterparties
What reforms does Africa need going forward? Much-needed reforms on the continent must be guided by two main streams. The first stream is governance that is more open to local communities, to civil society and to the private sector. And by the private sector, I do not mean big multinationals. I am referring to MSMEs. A governance system that is open to these actors will ensure that Africans’ interest is defended. The second type of reform is to have leaders who think regionally because national solutions are not optimal solutions.
The Sixth Meeting of the Regional Committee of the United Nations Global Geospatial Information Management in Africa (UN-GGIM: Africa) opened Tuesday with the Director of the African Centre for Statistics at the Economic Commission for Africa (ECA), Oliver Chinganya, emphasizing the importance of solid, reliable and accurate ‘place-based’ information for informed decisions needed to tackle Africa’s greatest challenges.
South Africa should use lessons from the pandemic to focus on ensuring that it can manufacture vaccines in future, rather than just advocating that these should be made freely available to all, International Relations and Cooperation Minister Naledi Pandor has said. Pandor on Tuesday night told a Zoom lecture organised by the South African BRICS Think Tank, made up of researchers and academics: “There’s no better lesson than the pandemic towards the importance of research development and innovation and I believe, if there is anything South Africa should give attention to, it is that. If we don’t, we remain vulnerable.”
While US companies began the year with uncertainty over continuing tensions between China and the United States, by March a new, wholly unexpected series of challenges emerged as a result of COVID-19. As we look ahead to a new year, the question on many businesses’ minds will be how to build greater resilience and where to look for growth opportunities that position them strongly for the future. However, entering a new market is never an easy undertaking. Cultural differences, contrasting operational styles, and mismatched regulatory expectations often present significant challenges.
Transition 2020 | Biden and Trade: Africa Policy Shifts Back to Traditional US Engagement (The National Law Review)
President-Elect Joe Biden’s campaign platform pledged the US would renew a “mutually respectful engagement toward Africa with a bold strategy.” His immediate focus, however, will be to tackle domestic matters like COVID-19 and the economy. Initial engagement with Africa may therefore be conducted through combatting the pandemic, bilaterally and multilaterally, and via the Global Health Security Agenda, as the new administration further refines its Africa strategy. The incoming administration will likely seek initially to “restore and reinvigorate” diplomatic relations with African governments and the African Union with respect to combatting the pandemic. Biden officials will focus more on multilateral trade relationships, and less on bilateral trade talks.
China’s African engagement? (The Express Tribune)
With China-Africa trade crossing $200 billion, China has become the largest trading partner in Africa and currently more than 10,000 Chinese firms are working across the continent. China’s commitment also reflects through Belt and Road Africa Reconstruction Fund amounting to $1 billion and African Aid Package of $60 billion. China helped Africa build some mega-infrastructure projects, which include a $12 billion coastal railway in Nigeria, $4.5 billion Addis Ababa-Djibouti Railway, and $11 billion port and economic zone at Bagamoyo.
China has slapped import tariffs of between 107% and 212% on Australian wines from this weekend, as part of a tense – and growing – trade war between the countries. In recent months, China also banned exports from some Australian beef facilities, launched a crackdown on coal imports from that country, and imposed an 80% tariff on Australian barley. China says the barley and wine tariffs are anti-dumping measures, but commentators believe it has more to do with Australia’s call for an investigation into China’s handling of the coronavirus pandemic, as well as its decision to exclude Huawei from the development of Australia’s 5G network.
Across China and around the clock, furnaces fuelled by Australian iron ore pump out the steel the country needs to build its way out of the coronavirus downturn. But as China’s trade war with Australia has become louder, working its way from unofficial stoppages to swingeing tariffs on barley and wine, so too have rumblings that the country may slow or end its use of Australian ore. For Australia, a lot is at stake.
Scientific and trade cooperation between China and Africa (Modern Diplomacy)
Africa, as China’s economic and trade partner, has brought huge mutual benefits. Africa has the 53 most important minerals on the planet and some rare strategic resources, but the rate of development and use of arable land is lower than 30%. Although China is the world’s richest country for mineral resources, its per capita share is less than half of the world’s level. Hence, together with the regular distribution of mineral resources, it is also necessary to establish greater China-Africa relations to broaden the trade channels for these resources.
Egypt’s capital, Cairo is Africa’s leading Fintech Ecosystem and the only African Ecosystem listed among the world’s top “Ecosystems to watch” in 2020. This is according to the Global Fintech Ecosystem Report (GFER) produced by Startup Genome LLC. The ranking is based on a mix of quantitative (e.g., funding, exits, talent, focus and legacy) and qualitative factors (founders, experts and policymakers in the ecosystem).
Legal services experts from the UK and Africa will be brought together for a landmark virtual trade mission, hosted by the Lord Chancellor Robert Buckland QC. Part of the Ministry of Justice’s Legal Services are GREAT (LSAG) campaign, it will promote the UK’s prestigious legal sector to some of the fastest growing economies in the world.
Nine countries oppose move to waive Covid vaccine patent rights (The East African)
A waiver on patents and other intellectual property-related rights to Covid-19 drugs, vaccines, diagnostics and other technologies – lasting the duration of the pandemic – has been delayed by at least nine developed countries. The waiver, proposed at a World Trade Organisation meeting on November 20, will suspend various provisions of the body’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement to combat the Covid-19 pandemic. The intellectual property waiver would allow all countries to choose to neither grant nor enforce patents and other IPs related to Covid-19 drugs, vaccines, diagnostics and other technologies, until global herd immunity is achieved.
Mark Lowcock said that the global health crisis had impacted dramatically people already reeling from conflict, record levels of displacement, climate change shocks. He said that “multiple” famines are looming. The situation is “desperate” for millions and has left the UN and partners “overwhelmed”, he added. “The picture we are presenting is the bleakest and darkest perspective on humanitarian needs in the period ahead that we have ever set out. That is a reflection of the fact that the COVID pandemic has wreaked carnage across the whole of the most fragile and vulnerable countries on the planet.”
“The Compact reflects a growing global understanding of the great benefits of human mobility. But it also recognizes that, if poorly managed, migration can generate huge challenges, from a tragic loss of life to rights abuses and social tensions”, said Secretary-General António Guterres, launching his biennial report on the Compact’s implementation. Mr. Guterres outlined three key recommendations, the first of which is to embrace the spirit of collaboration “no country can address migration alone.”
This year’s Atlas is a web publication that guides readers through the Sustainable Development Goals (SDGs) using interactive storytelling and innovative data visualizations. The Atlas aims to expand understanding of key SDG indicators and trends, which is important for measuring progress and directing action. The 2020 edition seeks new and creative ways to expand understanding of each of the 17 goals.
Challenges and Opportunities From COVID‐19 for Global Sustainable Development (Wiley Online Library)
We live in unprecedented times, faced with a pandemic of monumental proportions. COVID‐19 not only has wreaked havoc across the world, it has exposed fundamental weaknesses in the healthcare systems and capabilities in a number of countries, both rich and poor. Against this backdrop and addressing the systemic nature of the pandemic and related effects, we identify challenges and opportunities that COVID‐19 presents by linking the immediate need to curb the spread of the disease to the SDGs.
It is especially important to zero in on corruption in the midst of this crisis – the worst health and economic crisis of our lifetimes. There is so much suffering that every penny counts towards saving lives and protecting livelihoods. And it is also a time when if people don’t trust government, they will not follow the recommended health and containment measures. Corruption corrodes this trust and it weakens the impact of policies and public spending.
The prospect of a number of COVID-19 vaccines becoming widely available next year has lifted hopes for a faster recovery, but policymakers will need to retain both public health and fiscal support while acting decisively for the momentum to pick up, according to the OECD’s latest Economic Outlook. Global GDP in the fourth quarter of 2020 is expected to be 3% below the same quarter last year, while for the Euro area and the US the decline is projected to be 7.3% and 3.2%, respectively.