tralac Daily News
President Cyril Ramaphosa says that South Africa’s 13.5% rebound in GDP during the third quarter of 2020 shows that a strong recovery is possible, even as the economy remains below its pre-pandemic levels. However, he warned that a second coronavirus wave in the country could derail recovery efforts. Commenting on the data released by Stats SA on Tuesday (8 December), the president said that GDP growth in the third quarter surpassed even the most optimistic market expectations.
“The mining and agriculture sectors in particular have demonstrated robust growth in the context of favourable market conditions. As a result of large trade surpluses, a record current account surplus is anticipated. The strong rebound in GDP growth for the third quarter provides support for the approach that we have taken both to confront the pandemic and to protect the economy. Our task now is to ensure that this momentum is sustained, to enable a full recovery of the economy.
Poultry Industry Meets Government on Industry Master Plan Amid Optimism About Sector Performance (Department of Trade, Industry and Competition)
Poultry industry executives met with the Minister of Trade, Industry and Competition: Mr Ebrahim Patel and the Minister of Agriculture, Land Reform and Rural Development: Ms Thoko Didiza yesterday to review implementation of the Poultry Master Plan signed in November 2019. “In a difficult year, we have seen promising gains in the South African poultry industry. We have had more than R1 billion invested by domestic companies, resulting in nearly 1 000 additional jobs and an encouraging increase in production. The next year will require more work to open up export markets and further drive transformation across the entire poultry value chain,” said Minister Patel.
Kenya eVisa system to be extended from 2021 (Business Daily)
The Kenya eVisa is being extended to travelers from all countries as part of a shift towards digitalisation. Previously, the Kenya eVisa had been available to people from select nations only. From January 1st, however, all nationalities that require a visa will benefit from the electronic system. The Kenya eVisa will be a mandatory entry requirement for non-exempt passport holders and will replace other visitor visas for Kenya. Increased use of the electronic visa will also boost security. New, biometric technology is being introduced at airports in preparation for a full transition to eVisas.
Inadequate government support and limited financing from commercial banks, among others, are hindering the private sector from investing in renewable energy, a new report has revealed. Dubbed, ‘Financing Mechanisms for Private Sector Investment in Renewable Energy Access in Uganda,’ the report shows that renewable energy is a profitable venture for investors as well as saving the environment. However, it indicates that the government does not provide the incentives in form of taxes, electricity subsidies and other sources of financing to attract the private sector to invest in renewable energy sources.
Nigeria loses up to $1.95 billion USD in government revenue and $8.15 billion USD in private sector revenue annually due to corruption at the Nigerian ports. Money lost because of illicit financial flows at ports weighs very heavily on the economy of a country that as of May 2020 projects to borrow more than $14.1 billion USD to finance the 2020 budget. These losses severely constrict government programs and the capacity to develop and improve much-needed public infrastructure. At the same time, corruption at the ports can operate as a major deterrent to sustainable returns on foreign direct investment.
FG signs trade pact with Morocco, Singapore (Daily Trust)
The Federal Government of Nigeria has signed an Investment Protection Agreement (IPA) with Morocco and Singapore to raise investing confidence. Dr. Sani-Gwarzo said, “Efforts are being made to collaborate with the Ministry of Justice for the production of the Instrument of Ratification for the signature of Mr. President.” The permanent secretary revealed that the trade ministry had embarked on the review of the Industrial Policy of Nigeria, Nigeria Industrial Revolution Plan (NIRP) and the Trade Policy, while Investment Policy formulation was in progress with consultations with stakeholders.
Somalia making steps toward WTO accession (Trade 4 Dev News)
Becoming a member of the World Trade Organization (WTO) isn’t automatic – it’s a process that involves commitments and consensus, questions and responses, meetings and negotiations. Somalia started on its accession path in 2016 with an application to the WTO Director-General. Now, in 2020, the country has made some strides forward. This includes submitting in April the required Memorandum on the Foreign Trade Regime (MFTR), a document that outlines the country’s trade and economic policies as well as trade agreements with other countries. Based on the MFTR, WTO members have submitted over 150 questions to Somalia that the country will be responding to.
Even though a particularly disruptive global pandemic has had a negative effect on global trade, economic activity, and international cooperation, there is a bright spot shining from Africa. The continent is now on the verge of entering into a free trade regime that should stimulate intra-Africa trade and economic growth beyond its borders.
Our understanding is that there is a specific framework for the AfCFTA tariff reductions and eliminations. Specifically, Africa’s least developed countries (LDCs) will have ten years to complete the elimination of customs duties on 90 percent of their total products, while the more developed ones will only be entitled to five years. Overall, 7 percent of total African products will be classified as sensitive, with more extended tariff elimination transition periods, while 3 percent will be excluded from this exercise. For trading to effectively commence by January 1, 2021, the tariff schedules must be certified to meet the trade protocol’s liberalization requirements.
It was in a bid to promote intra-African trade and Pan African industrialization towards attaining the major objectives of African Economic Community (AEC), that the AU has continued to evolve various policy frameworks that will facilitate the successful realization of its vision “for an integrated, people-centred, prosperous Africa,” as enshrined in Agenda 2063: The Africa We Want.
Speaking on Africa’s journey towards industrialization, Mr Chizema said unlike other developing regions of the world, Africa had experienced what he called “a relative deindustrialization” with the share of manufacturing value added to Africa’s GDP falling from 12.8 percent in 2000 to 10.5 percent in 2016. “This does not mean that Africa’s industrial output is lower than 20 years ago but the pace of industrialization was slower than other sectors and far lower than that of other developing regions. For instance, Africa’s share in the global Manufacturing Value Added (MVA) has stagnated at around 1.5% between 2000 and 2013 while developing Asia’s share has almost doubled to 25% over the same period,” he add
In Africa, the renewed focus to raise additional financing for development and narrow the resource gap by accelerating Domestic Resource Mobilisation (DRM), has been at the center of the development strategy in recent years. However, to fully harness the potential in domestic resources, sealing existing loopholes associated with the Tax revenue under-collection remains a critical issue. Africa must address the structural issues such as tax loopholes; illicit financial flows and device innovative systems that facilitate trade and reduce the inefficiencies associated with cross-border payments and settlements.
COVID-19 Worsening Debt in Countries (COMESA)
Most countries in Sub-Saharan Africa which includes the COMESA region need to prioritize medium term policies such as structural transformation and economic diversification of individual economies, reforms in revenue mobilization and increase trade integration to deal with the worsening debt situation caused partly by the COVID-19 Pandemic. According to a special report authored by Senior Economist at the COMESA Monetary Institute, Dr Lucas Njoroge, the long term, policy priorities should be on ensuring that the debt plays a meaningful role and must be used for revenue generating activities that increase the productive capacity of the economies of the region.
The 2020 edition of the African Economic Conference (AEC) opened virtually on Tuesday with calls for the continent’s policymakers, researchers, development partners, and champions of policy change to design solutions to ensure Africa builds for the future in the aftermath of the Coronavirus pandemic. Speaking at the opening ceremony of the annual meeting, with the theme; Africa beyond COVID-19: acceleration towards inclusive sustainable development, senior officials from the United Nations Economic Commission for Africa (UNECA), the African Development Bank (AfDB) and the United Nations Development Programme (UNDP) agreed that Africa’s key challenge now was how to build better and return the continent to the path of sustainable development.
Experts agree that Africa’s governments will have to strike a balance between health, economic and social policy interventions in the coming months to mitigate the negative impact of the COVID-19 pandemic. Measures to prevent the spread of the virus have dampened prospects for economic growth on the continent, due to the prolonged impact of lockdowns and restrictions on travel and movement of goods. While Africa’s young population shielded it from the worst of the pandemic, countries now face weak growth and a diversion of resources that may aggravate the economic impact of COVID-19.
Beyond the dark cloud of the COVID-19 pandemic is a silver lining of a more sustainably prosperous Africa. This was the message from the panellists who gathered virtually on the first day of the 2020 African Economic Conference. To emerge stronger from the pandemic, African governments were advised to put in place transparent and accountable governance structures, that would ensure inclusivity and fiscal sustainability. Dr. Hanan Morsy, Director of the Macroeconomic Policy, Forecasting and Research Department at the African Development Bank (AfDB), said the pandemic gives a “one-in-a-century chance” to build a better Africa going forward.
Kagame: Africans must connect easily despite Covid-19 pandemic (The New Times)
President Paul Kagame on Tuesday, December 8, made the case for continued collaboration among African countries, which he said will be critical for the continent to emerge from the current Covid-19 period in safety and prosperity. The head of state was speaking virtually at the Kusi Ideas Festival, 2020 Edition. Kagame noted that there has been a lot of speculation about why Africa is handling the Covid-19 pandemic better than expected. “What really matters is that lessons we have learned and the solutions we have applied will help us to recover together,” he said. “We will only get there if we harness the power of technology,” he added.
Skills development relevant to the digital economy “is one of the most critical investments that need to be made to ensure a sustained economic growth after the COVID-19 pandemic,” the paper states, calling for restrictions on internet freedom to be criminalized. The paper is loaded with sector-specific recommendations. For example, on the economic front, it demands immediate stimulus packages for young people who lost jobs as a result of the pandemic, as well as “increasing investments in youth entrepreneurship and innovation by financially supporting SMEs [small and medium-sized enterprises], by giving grants, loans, tax relief, payroll protection and loans.” Young people would like African governments to “adopt e-healthcare by engaging youth digital innovations to provide quality, affordable and timely health services,” according to the policy paper.
Ten years on – reviewing the trends driving Africa’s allure (Standard Bank Research)
In this report we continue our review of the five structural trends that we outlined, almost a decade ago, to be behind Africa’s underlying economic and institutional appeal. Thus far we have reviewed Africa’s demographic and income developments, as well as the opportunities and risks that emerge as a result of the continent’s rapid urbanisation. We now look to the ICT sector, considering how technological advancements in Africa continue to drive economic activity; attract investment; enable income and efficiency gains; and, in so doing, allow the potential for institutional and developmental leapfrogging in key economies on the continent.
African leaders commit to reduce internet cost by 50% (The New Times)
African leaders under the Smart Africa Alliance on Monday, December 7, committed to bring down the cost of the internet in their countries under an ambitious project that will be implemented starting next year. The alliance has 30 member countries, representing over 750 million people and over 40 private sector members committed to the advancement of Africa through digital transformation. Mauritania became the latest member of the alliance, bringing member countries to 31.
Nigeria is expected to drive the refinery capacity growth in Africa by 2024, contributing around 71% of the region’s total growth. Nigeria is likely to add 1.5 million barrels per day (mmbd) of refinery capacity by 2024, says GlobalData, a leading data, and analytics company. lobalData’s report, ‘Refining Industry Outlook in Africa to 2024‘, reveals that refining capacity in Africa is expected to increase by around 55% from 3.7 mmbd in 2020 to 5.8 mmbd by 2024.
The ECOWAS Commission has lamented the inability of the member countries of the Economic Community of West African States to access funds to tackle climate change. The regional body noted that the ratification of the Paris Climate Agreement by the ECOWAS member states in 2015 marked an important turning point in the process of combating climate change. Speaking at the opening of a four-day training for national experts in the development of climate projects to access Green Climate Funds in Abuja on Tuesday, the Director, Environment and Natural Resources, ECOWAS, Dr Johnson Boanuh, said despite the existence of several funds, difficulties in
The East African Business Council (EABC) is urging East Africa Partner States to harmonise investment incentives and market East Africa as a single investment destination. Speaking at the two-day Virtual Conference on Trade & Investment Opportunities in East Africa Beyond COVID-19, Nick Nesbitt, EABC Chair and the Chief Guest said: “We all have a responsibility to improve the investment climate in East Africa to attract more investments into the region.”
The International Renewable Energy Agency (IRENA) and the African Development Bank have agreed to jointly support investment in low carbon energy projects, a move expected to advance Africa’s energy transition. Francesco La Camera, IRENA Director-General said, “this agreement represents the type of coordinated international cooperation that is the cornerstone of the realization of sustainable development in Africa and the achievement of Paris Agreement goals. We will pursue an action-oriented agenda that puts African countries on a path to realizing their full renewable energy potential.”
Discussions between the Africa Center for Diseases Control and Prevention (CDC) and COMESA are on course to establish useful collaborations on healthy trade during and post Covid-19. The envisaged partnership will include provision of technical support on public health to trade facilitation initiatives to protect lives and livelihoods. The collaboration will be on trade related issues to ensure harmonized messaging across the region and capacity building on health. “As trade guidelines are developed and implemented across the region, Africa CDC would like to be involved to ensure public health measures are incorporated to prevent likelihood of possible diseases transmission through trade,” Dr Ouma said.
SADC MPs call for debt waiver (The Herald)
The 48th Plenary Assembly Session of the SADC Parliamentary Forum has adopted a motion exhorting the regional body to support an initiative by Speakers and heads of African national parliaments to call for total cancellation of the continent’s foreign debt. Speaker of the Parliament of South Africa, Honourable Thandi Modise said: “Well before the outbreak of COVID-19, most African countries were heavily indebted, with statistics showing that more than half of African countries spend more on debt servicing than they do on education or healthcare – sectors crucial to Africa and our region’s socio-economic development.”
Kenya seeks to cement UK market after trade deal (The East African)
Kenyan officials say the new trade agreement with the United Kingdom will protect an invaluable market for local producers, creating continuity after Brexit. On Tuesday, Kenya formally inked the deal with the UK, ending an era of doing business with Britain through the protocols of the European Union, which London will be officially exiting at the end of this month. “We have agreed on a comprehensive package of benefits that will ensure a secure, long-term and predictable market access for exports originating from the EAC free trade area,” Trade and Industrialisation Cabinet Secretary Betty Maina said in a statement on Tuesday. “This agreement is expected to drive growth & expand exports of priority sectors and value chains identified in the national export and development strategy, including in agricultural, manufacturing, fisheries, and livestock sectors.”
Mo Ibrahim: Why Africa must emerge more resilient from the COVID crisis (Atlantic Council)
The COVID-19 pandemic has stressed economies and societies around the world, and in Africa the crisis risks reversing the governance and development successes of the last few decades. That’s the message Dr. Mo Ibrahim, a Sudanese-British entrepreneur, philanthropist, and founder of the Mo Ibrahim Foundation, conveyed during an Atlantic Council Front Page event on December 8. A well-known Afro-optimist, Ibrahim has invested in the continent’s democratic progress and has focused on tackling practical governance issues. While the pandemic has exposed such problems across the world, he noted, one of its lessons is that Africa must be “more self-sufficient” and “resilient.”
On Monday, 30 November, Portulans Institute, in partnership with the UN Economic Commission for Africa (UNECA), hosted a virtual panel event focused on leveraging digital transformation in Africa in the post-COVID era. This special event complements the series of launches previously organized by the Portulans Institute in cooperation with UNESCO. The session targeted stakeholders involved in nurturing and building a digital ecosystem in Africa, in particular policymakers, entrepreneurs, financial leaders and academics. During the panel, Portulans Institute Co-founder Dr. Bruno Lanvin also presented regional data and insights from the 2020 Network Readiness Index.
Both the International Monetary Fund (IMF) and the African Development Bank (AfDB) forecast a sharp decline in aggregate growth because of the global health crisis. Africa is set to experience its first recession in about two decades. When you take apart these aggregate forecasts and examine individual sectors, it becomes obvious why Africa stands to lose the most. Economies of the continent are heavily dependent on external flows that emanate from countries hit hard by the pandemic. Those flows include trade in oil and other commodities, foreign direct investment, remittances, development aid, and tourism. A more conducive international architecture of sovereign debt coupled with a shift in the governance system in Africa would not only help align debtors and creditors’ incentives to resolve debt problems. It may forestall any need to consider a debt jubilee down the road.
According to UNCTAD’s latest nowcasts (run on 8.12.2020), the value of global merchandise trade is predicted to fall by 5.6% in 2020 compared with last year. This would be the biggest fall in merchandise trade since 2009, when trade fell by 22%. This is a significantly more optimistic nowcast than only a few weeks ago when UNCTAD nowcasts were estimating a fall of 9%. The nowcasts – data-led projections for the immediate future – were published today as part of UNCTAD’s comprehensive annual Handbook of Statistics for 2020, which presents the statistical landscape for 2019 with nowcasts for 2020. The predicted decline in services trade is much greater, with services likely to fall by 15.4% in 2020 compared with 2019. This would be the biggest decline in services trade since 1990, when this series began. In 2009, following the global financial crisis, services trade fell by 9.5%.
Should trade continue to be global after the pandemic? (World Economic Forum)
Ten months in, the pandemic still poses a threat to lives and livelihoods in many parts of the world. Among its many impacts are the cracks in our international supply chains, which are crucial to keeping globalized economies ticking along. Continued globalization, with a focus on equitable distribution, and sustainable free trade are crucially important enablers on the road to collective recovery. Standard Chartered’s Trade Opportunity Report points to a combined opportunity of almost $40 billion for exporters to grow bilateral trade between India and 10 key markets, across multiple sectors.
China-Africa trade falls 10 per cent on pandemic, commodities slump (South China Morning Post)
Trade between China and Africa fell by 10.6 per cent in the first 11 months from a year ago amid the pandemic, but analysts expect a rebound next year as key commodities like oil and copper recover. Chinese customs data released on Monday showed two-way trade amounted to US$167.7 billion from January to November, driven down by lower commodity prices and a coronavirus-fuelled economic slump, according to analysts. China’s exports to Africa edged up by 0.6 per cent to US$101.47 billion in the period from a year earlier. But China’s imports from Africa plunged 23.6 per cent to US$66.3 billion.
UNDP is supporting 115 developing countries, to enhance their Nationally Determined Contributions (NDCs) – the specific steps that each country intends to take to help meet the goals of the 2015 Paris Agreement, which committed the international community to restrict global warming to “well below 2 degrees Celsius” and aim, if possible, for 1.5C. Signatories to the landmark Agreement are due to meet online for a Climate Ambition Summit on Saturday, marking the fifth anniversary of the pact, and to set out new and ambitious commitments for the next five years, which could provide a major boost for the next landmark meeting, COP26 in Glasgow, Scotland, next November.
Doctors Without Borders (Médecins Sans Frontières - MSF) is calling on governments to put lives before profits in ensuring that there is equitable access to the Covid-19 vaccine. The international medical humanitarian organisation is running a campaign ahead of the World Trade Organization (WTO)’s General Council meeting on 10 December to consider a proposal from South Africa and India. The proposal also seeks to increase the capacity of vaccine production in middle and low-income countries in order to improve the chances of accessing life-saving treatment. Moderna said that it can only produce between 100 million and 125 million doses available globally in the first quarter of 2021.
A videoconference between European Union and African leaders planned for Wednesday has been postponed at the last minute. With the 6th EU-African Union summit originally planned for this year postponed due to the COVID-19 pandemic, Wednesday’s meeting was billed by the EU as “an opportunity to build further momentum towards the upcoming summit and discuss the partnership between Europe and Africa.”