tralac Daily News: First edition for 2021
Malawi submitted its instrument of ratification of the African Continental Free Trade Area (AfCFTA) treaty today, becoming the 35th member state to ratify the agreement, said the African Union Commission (AUC). Ambassador Albert Muchanga, the AUC Trade and Industry Commissioner who made the announcement, said more member states were on track to submit their own documents soon. Following Malawi’s ratification, only 19 member states are left to comply.
Zambia has become the latest country to deposit its instruments of ratification for the Tripartite Free Trade Area (TFTA) Agreement with the COMESA Secretariat. This brings the number of countries that have ratified and deposited the TFTA instruments to nine. The Agreement needs a total of fourteen ratifications by Member States to enter into force.
Once operational, the TFTA will enable the free movement of goods, services and businesspersons all of which stimulate economic activity in the region thereby improving the lives of ordinary people. COMESA Trade experts say the Agreement will serve as an impetus for investment in Africa’s cross-border infrastructure. It is estimated that Africa needs to invest nearly $100 billion annually in infrastructure over the next decade. Less than half of this target is met currently. One of the reasons for the low level of investment has been poor coordination across the different trading blocs. Building infrastructure will also create additional jobs and foster the development of engineering services.
Export application under AfCFTA through ICUMS to start January 18 (Business Ghana)
Application processes through the Integrated Customs Management System (ICUMS) for export under the African Continental Free Trade Area (AfCFTA) is to commence on January 18, 2021. This was announced by Mr Fechin Akoto, Assistant Commissioner of Customs in charge of Tariff and Trade, and responsible for Free Trade Agreements including AfCFTA, in a media interaction. He indicated that the Customs Division of the Ghana Revenue Authority (GRA) was currently assisting the exporters on the necessary processes, as well as all key information regarding trading in the AfCFTA.
The Nigeria Commodity Exchange (NCX) is well-positioned to take advantage of the African Continental Free Trade Agreement (AfCFTA), through the implementations of several measures to ensure smooth export operations of Nigerian Commodities. This was disclosed by the Managing Director of the Commodities Exchange, Mrs. Zaheera Baba-Ari, in an interview on Sunday in Abuja. She added that the NCX had an established network of 20 warehouses across major production areas in the six geo-political zones of the country for efficient receipt and storage of agro-commodities to be traded on the exchange. The NCX boss said that AfCFTA would help Africa fight challenges that were caused by the pandemic in the continent’s economies through trade.
The Nigerian Office for Trade Negotiations (NOTN) Saturday said exporters or agents aspiring to move products to countries under the African Continental Free Trade Area (AfCFTA) must obtain permits, licences, certificates and other relevant documentation from appropriate government agencies. Nigeria was one of the last African countries to sign the AfCFTA with President Muhammadu Buhari raising concerns that goods produced outside Africa could be dumped in Nigeria through other (West) African countries who allow largely unrestricted imports. The president only signed it after a committee he set up advised him to do so.
Energy analyst and lead technical consultant to the Chamber of Petroleum Consumers (COPEC), Dr Yussif Sulemana says the African Continental Free Trade Area Agreement (AfCFTA) coupled with the establishment of a state-of-the-art refinery by Nigerian businessman Aliko Dangote stand the potential to significantly reducing the cost to refined crude products on the continent. He stated that “Nigeria is now looking straight, and they say they want to add value to their raw material base which is crude oil and so that is the cue and if they succeed, and we see that it is doable then Ghana just has to make its existing refinery vibrant. If we have a lot of finished products within the market, first of all, cost-wise, it is going to be competitive, and the cost will come down. So I see two things within the AfCFTA. It will break trade barriers, and it will bring about structural transformation in magnanimous proportions in the African continent and that includes intelligence sharing etc.”
Uganda’s President Yoweri Museveni secured a fresh presidential term in the elections held on January 14, amid complaints of electoral fraud by the leading opposition candidate, Robert Kyagulanyi aka Bobi Wine. The Economic Survey of 2020 shows that Kenya exported to Uganda goods worth Sh64.1 billion in 2019, accounting for almost half of the value of Kenya’s exports to the East African Community partner states.
The Kenya Revenue Authority surpassed its revenue collection target for the month of December 2020, the first positive and above target collection rate since the outbreak of Covid-19 pandemic. KRA Commissioner General Githii Mburu said a total of Sh166 billion was collected against a target of Sh164 billion representing 3.5 percent growth over the same period last year. The improved performance has been attributed to the economic recovery following the relaxation of the COVID-19 containment measures and enhanced compliance efforts by KRA in the month of December. Departments that boosted KRA’s performance in the month under review include the Customs and Border Control Department which recorded the highest ever monthly revenue collection in KRA’s history by collecting Sh60.777 billion, reflecting growth of 40.9 percent and registering a revenue surplus of Sh12.191 billion.
China ready to suspend Kenya’s debt over COVID-19 pressure (Capital News)
China has indicated its willingness to suspend Kenya’s debt as part of measures to help developing countries weather the COVID-19 storm. The Embassy in Nairobi said China stands ready to strengthen coordination with Kenya in its efforts to address debt challenges. “Africa’s need is always China’s concern,” the Embassy said, “We stand ready to strengthen coordination with Kenya and assist Kenya in its efforts to address debt challenges.” It said: “Both sides are now keeping efficient communication through smooth channel.”
Rwanda’s horticultural exports meet demand in Dubai (The New Times)
Consumers flocking one of the biggest Carrefour outlets at the Mall of Emirates in Dubai appreciated new fresh products including avocado and passion fruits from Rwanda on Sunday. Speaking at the launch, Emmanuel Hategeka Rwanda’s Ambassador to the United Arab Emirates welcomed the move by Carrefour to open the gates to Rwanda’s quality fresh products following a supply of goods partnership agreement signed with Rwanda’s National Agricultural Export Board (NAEB) in November 2020. Under the deal, Rwandan exporters will be supplying to this wide UAE retailing company with passion fruits, apple banana, pineapple and avocado.
Cane growers raise alarm over sugar imports (The Standard)
Cane growers have raised alarm over the impending importation of 57,473 tonnes of sugar to cover a deficit of the commodity under the Common Market for Eastern and Southern Africa (Comesa) safeguards. They accuse the Ministry of Agriculture of failing to prevent the dumping of sugar into the country that is making local factories untenable, thereby impoverishing millions of stakeholders who depend on the sector. Kenya Sugarcane Growers Association Secretary General Richard Ogendo while terming the move a scheme to illegally bring in sugar into the country, pointed out that the Comesa quota for 2020 was already exhausted, citing an October 31, 2020 notice issued by Agriculture and Food Authority (AFA). “This is a very clear indication that some well-connected individuals have already been identified to flood the Kenyan market with duty-free sugar imports at the expense of the ailing industry,” he said.
AfCFTA: What are Rwanda’s export-ready products? (The New Times)
The Rwandan government has identified opportunities in several local products for exports under the recently launched Africa Continental Free Trade Area. Among the products that have been found to be market-ready, according to The Ministry of Trade and Industry include agro-processing products including tea, coffee, cereals as well as diary, animal and vegetable oil products. Other products that are export-ready according to the Ministry of Trade and Industry include products from mining operations including ores and base metals. Rwanda is also looking to export construction materials, agro-products, hides and skins and textiles.
Report Insight: How Tanzania economy closed off 2020 (The Exchange)
Tanzania central bank last week produced a monthly economic review for December 2020, which depicted rather a range of issues, for instance on revenue performance being broadly in line with the 2020/2021 target. This fruitful sector of the economy saw a mix of performances as some traditional exports did well compared to others. Cloves, nuts and cotton exports increased compared to tea and sisal – which declined due to the low price and volume of production. “The value of exports of goods and services amounted to USD 8,839.9 million in the year ending November 2020, lower than $ 9,460.8 million in the year ended November 2019, explained by the decline in services receipts. On monthly basis, the value of exports of goods and services was $836.5 million in November 2020 compared with $857.2 million in November 2019. The value of traditional exports increased to $ 826.1 million in the year ending November 2020 from $ 745.1 million recorded in the corresponding period in 2019, owing to an increase in export values of cashew nuts, cloves and cotton” the report noted. According to the report, imports bill for goods and services declined to around $8.9 billion in the year ending November 2020 from $ 10.5 billion in the corresponding period in 2019, which is largely by a decrease in imports of capital and intermediate goods. The report attributed the decrease to transport equipment and oil. “The value of oil imports, which accounted for 17.1 per cent of goods import declined by 28.8 per cent to $1.3 billion owing to a decrease in both price and volume,” the report noted. Tanzania economy is projected to grow at a pace of 5.5 per cent, slightly off the 7 per cent anticipated earlier, due to various reasons including COVID-19 shocks.
NBS Bank, a leading commercial bank in Malawi, launches its state of the art e-commerce platform, powered by Network International (www.Network.ae), the leading enabler of digital commerce across Africa and the Middle East. The implementation of Network International’s N-GeniusTM Online payment gateway will enable NBS Bank to offer Malawian small and medium enterprises (SMEs), large corporations, public institutions and individuals a fast and secure way to enter the rapidly growing e-commerce market in Malawi. With the capability to enable digital commerce transactions for merchants and public organizations through the N-Genius™ Online payment gateway, NBS Bank and Network International will help drive Malawi’s goal of becoming a cash-lite economy.
Ethiopia to Attain Wheat Import Substitution Soon (Ethiopian Herald)
The summer wheat irrigation projects undergone in 12 woredas of Amhara state and 21 woredas of Oromia state are expected to realize import substitution soon, said Ministry of Agriculture. In an exclusive interview with The Ethiopian Herald, the Ministry of Agriculture Wheat Irrigation Project Coordinator Daniel Muleta (Ph.D.) said that in the highland parts of the country following the harvesting of rainy season’s crops, summer wheat irrigation projects are to be in effect. Currently the nation imports 17 million quintals of wheat from abroad and the nation has the potential not only to substitute but also to export as there is vast areas of land suitable for wheat production both in the high and low lands of the country.
After it has gone into effect earlier this month, the chief of the African Continental Free Trade Area (AfCTA) Wamkele Mene met with President Abdel Fatah al-Sisi in Cairo Sunday. The president affirmed Egypt’s full support to the activities of the AfCTA stipulating Egypt is ready to provide expertise needed for the work of the agreement. The president underlined that stability is crucial for creating a suitable environment for the success of the pact.
The International Islamic Trade Finance Corporation (ITFC) has agreed a new programme which will provide USD 1.1 billion to Egypt in the form of integrated trade solutions. The ITFC, part of the Islamic Development Bank Group (IsDB), previously provided USD 3 billion to Egypt in a programme that ended in 2018. That funding was intended for food commodities, crude oil and petroleum, as well as to strengthen value chains, help the growth of small and medium-sized enterprises (SME) growth and develop trade.
The sprawling metropolis of East London has a population roughly equal to the population of São Tomé and Príncipe – just above 200,000 in both cases. São Tomé and Príncipe (two islands, but one country) account for half the African countries with which the Southern African Customs Union has implemented the African Continental Free Trade Area. The other half is Egypt. Now this might be disappointing, given the exuberant media coverage saying we have implemented the African Continental Free Trade Area (AfCFTA). Fifty-four of the 55 African Union members have signed the agreement and, at last count, 34 have deposited their instruments of ratification. Although Minister of Trade and Industry Ebrahim Patel has “called on South African farmers and manufacturers to gear up for the new opportunities in export markets”, it is by no means clear which markets he had in mind when he made this statement.
UK-Africa conference to boost Zim industry (The Herald)
When President Mnangagwa announced on November 24, 2017 that Zimbabwe would pursue an engagement and re-engagement drive to establish and re-establish good relations with all countries of the world, many people thought it was empty talk. But the President said his administration would “hit the ground running”, and indeed, no time was wasted. The efforts to re-engage are already bearing fruit and the invitation to participate in the virtual Africa Investment Conference scheduled for this Wednesday is testimony to that. The conference is organised by the UK’s Department for International Trade and Zimbabwe joins 35 other African countries in the key conference that is expected not only to raise Zimbabwe’s profile on the international arena, but also expose captains of industry to potential markets and sources of funding.
Benin/Nigeria: Trouble continues at the border (The Africa Report)
Aurélien Agbénonci, Benin's foreign affairs minister, complained to his Nigerian counterpart, Geoffrey Onyeama, that goods are still being blocked at the border of the two countries, despite Abuja announcing its reopening almost a month ago. So far, no official complaint has been made. However, according to our information, Agbénonci used the opportunity of President Nana Akufo-Addo’s swearing in ceremony on 7 January in Accra to question his Nigerian counterpart Onyeama. Although the Nigerian authorities have announced the reopening of the borders with the country’s four neighbours (Benin, Niger, Chad and Cameroon), in reality, only pedestrians and light-duty vehicles can – legally – cross the border between Benin and Nigeria. The announcement of the closure, in August 2019, had been very badly received by the Beninese authorities, who had not been consulted beforehand. Once again, the reopening was decreed without prior consultation, according to Talon’s government.
Despite the COVID-19 impacts on Benin’s economy, Benin’s foreign trade volume in the third quarter of 2020 experienced a slight increase compared to the previous quarter, according to the quarterly bulletin of foreign trade statistics released on Saturday in Cotonou. Benin’s merchandise exports increased by 1.7 percent during the third quarter of 2020, valued at 114.70 billion CFA francs (abo
SA’s mining companies will support the government in the rollout of Covid-19 vaccines as the nation battles a surge in infections, the industry body said on Friday.
The Minerals Council, which represents mining firms, said its members are developing plans to use the sector’s health-care infrastructure and delivery capability to accelerate the vaccination programme, but did not provide further details. “While government is primarily responsible for funding the vaccine rollout and is the single buyer, the industry can play a material role in accelerating the vaccination programme on mines and in mining communities,” said Minerals Council CEO Roger Baxter.
News from Africa
On 1 January 2021, at the launch of the start of trading on the basis of the AfCFTA, the Pan-African Private Sector, under the umbrella body of the African Business Council (AfBC), issued a press statement in support of this initiative. In it, the AfBC acknowledged that the start of trading under the AfCFTA presents enormous business opportunities for the Pan-African Private Sector, SMEs, Women and Youths as the continent takes this bold move towards Boosting Intra-African Trade. “The AfCFTA gives us an opportunity to drive our agenda. For many years, the African business community has been individualistic in driving the continent’s agenda. It is an opportunity for us as the African Business Council to come together and support the implementation of the AfCFTA. We are a united voice, and we can do this together”, Dr. Amany Asfour, Interim Chair Person of the African Business Council.
“The proliferation of Non-Tariff Barriers in Africa has often hindered intra-Africa trade. It is difficult to move cargo among African countries, and the online system on the Monitoring, Reporting and Elimination of Non-Tariff Barriers (www.tradebarriers.africa) will assist in the implementation of the AfCFTA”, Ms. Amina J. Mohammed, Secretary General of the United Nations.
Trading under the African Continental Free Trade Area (AfCFTA) commenced just two weeks ago. Many academics, policymakers, and business leaders are hopeful that, if implemented appropriately, the landmark trade agreement could further bolster efforts toward regional integration and spur economic growth across the region more broadly. The region does enter the agreement with great momentum around trade: Exports have grown by nearly a factor of four since 1995. Notably, while South Africa and Nigeria remain sub-Saharan Africa’s largest exporters, the export landscape beyond these two countries has changed dramatically in recent years (Figure 1). As Africa begins the AfCFTA era, it will try to harness the momentum it has displayed in trade the last few decades, though bottlenecks around infrastructure and other nontariff barriers still threaten its overall success.
Trading under the African Continental Free Trade Agreement (AfCFTA), the ambitious continent-wide free trade agreement which has been signed by 54 of Africa’s 55 states officially began on January 1. But Pretoria says no goods have yet been exported or imported under its zero or reduced import tariffs. That is because all the necessary red tape has not yet been cleared away by all member states. There has been some confusion about this, with official indications that South Africa, Egypt and Ghana had begun trading. But it turns out that while these countries have put in place the necessary customs procedures to start trading, they have not cleared other bureaucratic obstacles to do so.
Although Sub-Saharan Africa requires massive investment, with over $73b needed on irrigation and storage infrastructure alone to unlock potentials of agricultural sector, some stakeholders, yesterday, said with the right policies, the African Continental Free Trade Agreement (AfCFTA) may address existing barriers to agricbusiness and limit the continent’s vulnerability from excessive import of agric produce. Currently, Africa barely trades with itself. Just 16 per cent of African exports are destined for other African countries, which is considerably less than 59 per cent of trade within Asia and 68 per cent within Europe, due to high tariff and infrastructure bottlenecks.
African Union offers region access to COVID-19 vaccine supply (Jamaica Observer)
The Caribbean Community (Caricom) has been offered access to approved COVID-19 vaccines from a shipment recently secured by the African Union. Barbados Prime Minister Mia Mottley announced Thursday that regional leaders will have two weeks to decide whether they will accept the offer. Updating the country on the COVID-19 situation, Mottley said the African Union recently secured 270 million vaccine doses from Pfizer, AstraZeneca, and Johnson & Johnson – which will be made available this year, with at least 50 million available April to June – for its member states to supplement the COVID-19 Vaccines Global Access Facility (COVAX Facility) that is also being used by Caricom nations. She disclosed that she was contacted by the coordinator of the African Medical Supplies Platform on Wednesday, with the news that some could be accessed by Caricom.
Zimbabwe can be said to have turned the corner, from a hopeless case three years ago, to one of the most promising economies in the sub-region. As confirmed by one of Zimbabwe’s leading economists, Eddie Cross in an interview on ZBC-TV, the Transitional Stabilisation Program (TSP) provided firm ground for growth through righting macro-economic fundamentals such as a stable exchange rate, receding inflation and much needed economic reforms like ease of doing business, consumer protection laws and more. With these fundamentals firmly in place, focus is now on consolidating these gains under the National Development Strategy One (NDS1). Thus, this submission proposes, if not already under implementation, a homegrown funding mechanism for Zimbabwean businesses based on co-operation and guided by the country’s national interest and vision which are tied to the United Nations Millennium Development Goals (MDGs) as well as the AU’s Agenda 2063.
A giant step for Africa (The Southern Times)
The recently consummated African Continental Free Trade Area (AfCFTA) will need more than just the signatures of the continent’s 55 political leaders to work, Namibian political scientist and international relations expert Dr Ndumba Kamwanyah says. Speaking to The Southern Times this week, Dr Kamwanyah said while operationalisation of the AfCFTA was a historical moment for Africa, for it to be meaningful in the long run required better synchronisation of economic systems and a deliberate push towards value addition. He added that there African countries should urgently start diversifying their economic bases.
Why 2021 Could Mark the Dawn of a New Era for Africa (Foundation for Economic Education)
The African Continental Free Trade Area (AfCFTA) came into force on 1 January, 2021. Once it becomes fully implemented and operational by 2030, the AfCFTA could be the world’s biggest fully-realized free-trade zone by area. The bloc has a potential market of 1.3 billion people and a combined gross domestic product of $2.5 trillion. This moment should be celebrated as the AfCFTA could portend a new era of African openness, co-operation, trade, progress and innovation. According to the African Export-Import Bank, the AfCFTA could boost intra-African trade to 22 percent of total trade, up from 14.5 percent in 2019. If African countries are to step up the maturing of their industries and wider economies, they need more goods to flow – and the added expertise and insights of various businesspeople and manufacturers will also increase once it is easier for them to move between different countries. According to Alexander C. R. Hammond, “when African states trade with one another, the goods traded are almost three times more likely to be higher-valued manufactured products, when compared to the goods that leave the continent.” At the time of writing, all but one of the 55 African Union nations have signed to join the area, and more than half have ratified the accord. Through implementing the AfCFTA swiftly and effectively, the continent could set itself apart as a prime destination for investment and innovation.
Need to look at AfCFTA from a gender lens (Chronicle)
Little has been said about the implications of AfCFTA on men and women, bringing the need to look at it from a gendered lens. Women play multiple roles in economies as tax payers, traders, producers, workers and as providers of care for the entire labour force. The AfCFTA must not just be looked at as a trade agreement and something for corporates and industry, it must be viewed as an instrument for development intended to lift 100 million Africans out of poverty by 2035. The AfCFTA presents immense opportunities to tap into the talents of young Africans and women to ensure inclusive benefits. To ensure its success as one of the greatest developments of the 21st century on the continent, the AfCFTA must be inclusive in design and implementation.
AfCFTA: How Intellectual Property laws can help create jobs (Africa Renewal)
In international trade, the most-favored-nation (MFN) clause requires a country to provide any concessions, privileges, or immunities granted to one nation in a trade agreement to all other World Trade Organization member countries. Although its name implies favoritism toward another nation, it denotes the equal treatment of all countries. On the other hand, the national treatment clause forbids discrimination between a Member’s own national and also the nationals of the other Members Second, the IP protocol should leverage on already existing regional IP regimes, such as ARIPO and OAPI, in order to streamline the continent’s IP policies. [Africa has two regional patent systems, OAPI (Organisation Africaine de la Propriété Intellectuelle or African Intellectual Property Organization) and ARIPO (African Regional Intellectual Property Organization). Even though the larger African economies of South Africa, Nigeria and Egypt do not form part of the regional systems, the OAPI and ARIPO system provide a relatively cheap, easy and effective way of extending IP protection to a total of 35 African countries with a combined nominal GDP of $420 billion]. These institutions should be accorded support for effective implementation of the policies.
The economic impacts of Covid-19 for Africa are expected to cause the first recession for the continent in 25 years, threatening to undo years of economic progress. Government interventions to combat the virus have been effective from a public health perspective, but they are not economically sustainable. This column draws on the findings of a report authored by a team of researchers at Columbia University and the Brenthurst Foundation. The report identifies common successes and challenges in responses to Covid-19 in five African economic and cultural hubs – Egypt, Ethiopia, Kenya, Nigeria and South Africa; it also outlines optimal pathways for economic recovery and bolstering future epidemic preparedness in the five countries and Africa as a whole. The report’s findings were presented on 12 January at the Futures Forum on Preparedness, a two-day event focused on global health security hosted by the philanthropic organisation Schmidt Futures.
Coronavirus vaccine doses secured by the African Union (AU) will be allocated according to countries’ population size, President Cyril Ramaphosa said Friday, speaking in his capacity as AU chair. He said vaccines from Pfizer, Johnson & Johnson, and AstraZeneca would be available this year, but did not specify how much each African country would get. “The Africa CDC has already worked out the allocations that each country will be able to get, and the allocation is going to be worked on the size of your population,” Ramaphosa said, referring to the AU’s Centres for Disease Control and Prevention (CDC).
SADC welcomes AfCFTA launch (The Southern Times)
Southern African Development Community (SADC) members have welcomed the launch of the African Continental Free Trade Area (AfCFTA). AU Chairperson Mr Cyril Ramaphosa, who is the President of South Africa, said the AfCFTA heralded a new era of African integration, development and progress. “Importantly, it will enable African countries to benefit from their own natural resources and reduce their dependence on countries outside of the continent for manufactured goods and services,” he said. SADC Executive Secretary Dr Stergomena Tax said establishment of the AfCFTA was a key milestone in the integration agenda and was a huge step towards realisation of the founding forefathers’ dream of a united, and prosperous Africa. “As a regional economic community and one of the eight pillars of the African Union, SADC has made tremendous progress in its integration agenda and across all the eight dimensions of integration,” she said.
The Southern African Development Community (SADC) has adopted a new Labour Migration Action Plan (2020-2025) as part of efforts to promote skills transfer and match labour supply and demand for regional development and integration. The Action Plan, adopted through the Employment and Labour Sector in the Region, is in line with Article 19 of the SADC Protocol on Employment and Labour, which seeks to protect and safeguard the rights and welfare of migrant workers, to give them better opportunities to contribute to countries of origin and destination.
Africa is set to roll out its Single Passport this year (KeTurboNews)
African passport is the flagship project of the 2063 Agenda aiming to remove restrictions on Africans’ ability to travel, work and live within their own continent Single passport for all African nations is set to be introduced this year as the continent is forging its way to easing movements of people and goods within its internal boundaries. Single passport for Africans is a declaration of the Africa Union Agenda 2063 seeking to integrate the continent’s business and politics based on Pan-Africanism and the vision of Africa’s Renaissance.
The African Union Passport is currently available to government leaders, diplomats and AU officials only. Reports from South Africa said that the passport is set to be rolled out this year as an implementation of the African Continental Free Trade Area (AfCFTA).
AfCFTA has awarded President Buhari alongside other African leaders for their contributions to the success of the agreement. President Muhammadu Buhari was awarded for his contributions to the start of the African Continental Free Trade Agreement (AfCFTA), alongside 9 other African leaders including Nigeria’s Dr Akinwumi Adesina, President, African Development Bank (AfDB). The awards were presented by the African Union in a virtual event held at the Union Headquarters in Addis Ababa, Ethiopia on Friday.
The economic shock associated with the COVID-19 pandemic struck when the economic outlook for the region was improving. Tight regional policies helped maintain an improved external position in 2019. The current account deficit shrank to 2.5% of GDP, and external reserves increased. Fiscal balances remained broadly unchanged from 2018 at -0.3 percent of GDP, bringing public debt to 52 percent of GDP. Overall regional growth was 1.9 percent in 2019. While the pandemic seems to be under control in the region at the moment, the related oil price shock led to a sharp deterioration of fiscal and external balances in 2020. CEMAC is expected to experience a 3 percent recession in 2020. The current account deficit is expected to worsen to 6.5 percent of GDP, and external reserve coverage to remain at 3.5 months of imports of goods and services. The fiscal deficit would deteriorate to 3.8 percent of GDP, and public debt increase to 57 percent of GDP. The shock is set to have long-lasting effects on the economic outlook for the CEMAC. With lower medium-term oil prices, the outlook projects that CEMAC’s fiscal and external adjustments will be slower than previously envisaged, and risks are tilted to the downside. Growth is expected to rebound in 2021 to 2.7 percent and continue to pick up gradually to around 3.5 percent in the medium term, as reforms to improve governance and the business climate are assumed to slowly take hold. The region is at a critical juncture, as the second phase of the regional strategy is about to begin. CEMAC’s regional institutions and the national authorities should aim to radically transform the region by implementing governance, transparency and business climate reforms that will lay the basis for a diversified, inclusive and sustainable growth.
This document analyses the impact of COVID-19 and the restrictions measures that were put in to place to contain the pandemic, in the ECOWAS region. It is based on a review of the epidemiological and the socioeconomic analysis of primary and secondary data (implemented through a household web-survey covered 15 countries). The current report will demonstrate how the rate of the spread of COVID-19 and the restriction measures taken, are straining the economic and social system of ECOWAS States. Several factors of vulnerability and socioeconomic fragility facing the region could exacerbate the effects of the health crisis. In particular, the region is characterized by: (i) poorly diversified economies focused on exports of primary products; (ii) limited fiscal space; and (iii) a large informal sector. The region is strongly affected by the contraction of world trade, causing a sharp fall in the prices of several export products such as oil, minerals and some agricultural products. In 2020, although still subject to strong uncertainty, forecasts predict a sharp deterioration in the current account deficit for ECOWAS as a whole, which is expected to stand at 4.3% against 2% in 2019.
Mr. Adnan Amin, the director-general of IRENA, says a lot of countries in Africa are increasingly embracing renewables as an enabler to leapfrog to sustainable energy future. “As a promising sign of things to come, several African countries have already succeeded in making steps necessary to scale up renewables, such as adoption of support policies, investment promotion and regional collaboration,” Mr. Amin said at the 9th Session of the agency’s Assembly, held in Abu Dhabi last year. According to the International Renewable Energy Agency, countries like Egypt, Ethiopia, Kenya, Morocco and South Africa have shown firm commitment towards accelerated use of modern renewable energy and are leading energy transition efforts, while some of Africa’s smaller countries including Cape Verde, Djibouti, Rwanda and Swaziland have also set ambitious renewable energy targets. Others are following suit, and renewable energy is on the rise across the continent.
The world’s biggest shipping company demanded a more effective military response to surging pirate attacks and record kidnappings off the coast of West Africa. The number of attacks on vessels globally jumped 20% in 2020 to 195, with 135 crew kidnapped, the International Maritime Bureau’s (IMB’s) piracy reporting centre said in a January 13 report. The Gulf of Guinea accounted for 95% of hostages taken in 22 separate instances, and all three of the hijackings that occurred, the agency said. “It is unacceptable in this day and age that seafarers cannot perform their jobs of ensuring a vital supply chain for this region without having to worry about the risk of piracy,” said Aslak Ross, head of marine standards at Copenhagen-based Maersk. “The risk has reached a level where effective military capacity needs to be deployed.”
The BRICs at 20 | by Jim O’Neill (Project Syndicate)
Much has happened in the two decades since the BRICs (Brazil, Russia, India, and China) became a group to watch in the twenty-first century. While some of them have surpassed expectations, others have fallen short, as have the relevant global-governance institutions. This November will mark the 20th anniversary of the BRIC acronym that I coined to capture the economic potential of Brazil, Russia, India, and China. Many commentators will be revisiting the concept and assessing each country’s performance since 2001, so here are my own thoughts on the matter. What the world really needs is what we called for back in 2001: genuinely representative global economic governance. Let us hope there is a renewed desire to take this path under the new US administration.
China’s Debt Grip on Africa | by Paola Subacchi (Project Syndicate)
The pandemic is confronting highly indebted poor countries with a fateful dilemma. As Ethiopian Prime Minister Abiy Ahmed, a Nobel Peace Prize laureate, lamented last April, leaders have been forced to choose whether to “continue to pay toward debt or redirect resources to save lives and livelihoods.” And when they choose the latter, it is often China – Africa’s biggest bilateral lender – to which they have to answer. According to Ahmed, a moratorium on debt payments was essential to enable Ethiopia to respond to COVID-19. Such a moratorium would save Ethiopia – one of the world’s poorest countries – $1.7 billion between April 2020 and the end of the year, and $3.5 billion if extended to the end of 2022. An effective COVID-19 response, he noted, would cost $3 billion.
China’s financial aid to Africa switches focus to grants, white paper shows (South China Morning Post)
A new white paper released by the State Council Information Office in Beijing provides a glimpse into Chinese aid to Africa and other emerging economies. According to the report, titled “China’s International Development Cooperation in the New Era”, Beijing has “steadily increased the scale and further expanded the scope of its foreign aid”. The last such paper was published in 2014 and covered the 2010-12 period. “The establishment of such a specialised agency represents a milestone in China’s foreign aid journey,” the report said, adding that Beijing would “give US$2 billion of international aid over two years to countries hard hit by Covid-19, especially developing countries, to support their fight against the virus, and efforts to resume economic and social development”.
Global Trade’s Annual Logistics Planning Guide Can Put You In The Power Position Again (Global Trade Magazine)
For a supply chain to truly function well it needs to be flexible, operating under a ‘bend but don’t break’ principle that allows it to scale to needs and to be maneuverable enough to escape blockages and delays along the route. Much like a muscle, however, this is fairly unlikely to simply come naturally. It takes preparation, training, and stretching to build a muscle into something with the capacity and flexibility to go through rigorous moments of endurance or sprinting. This analogy begins a follow-up report on the Supply Chain USA Virtual Summit 2020 by Alex Hadwick, editor-in-chief for Supply Chains with Reuters Events, which presented the online event in partnership with ABBYY, a digital intelligence company.
Hadwick discovered that numerous experts from across the supply chain space agreed that critical lessons must be learned from the disruption of 2020 as well as broader industry trends. Pery, the process intelligence expert at ABBYY, contributes the summit follow-up’s conclusion: “It’s evident no matter which stage of the supply chain logistics providers serve, having good process workflow and visibility into the specific events, activities, and people involved with each step is critical to successfully completing the last mile and delivering a positive customer experience.” He and Hadwick before him take deeper dives into each of the sections presented above. If you would like to read their full report, visit https://1.reutersevents.com/LP=29531.
The International Civil Aviation Organization (ICAO) said on Friday, that as seating capacity fell by around 50 per cent last year, that left just 1.8 billion passengers taking flights through 2020, compared with around 4.5 billion in 2019. That adds up to a staggering financial loss to the industry of around $370 billion, “with airports and air navigation services providers losing a further 115 billion and 13 billion, respectively”, said ICAO in a press statement.
Closing the Infrastructure Gap (Swiss Re)
COVID-19 is exposing the urgent need for better health infrastructure in EMDEs
after the worst subsides, it will be vital that governments work to close their infrastructure investment gaps. The lesson from previous crises is that governments must guard against rushing to build lower-quality, more expensive, higher-carbon, and less resilient infrastructure assets. Instead, they have an exceptional opportunity to launch green stimulus packages that prioritise sustainable infrastructure designed to mitigate the next public health crisis, bolster long-term economic growth after COVID-19, and adapt to the effects of climate change.
as countries scramble to find new partners and new trade pacts in the wake of Covid, India is looking at a future where there is no China because of border tensions, and instead has lined up a few minilaterals whose outcomes are unknown. It seems that China is able to impose itself as a critical business partner even at a time when countries have been grouping up against its increasing belligerence under the Xi Jinping administration. India has been a rare exception in maintaining a consistent stance against China in terms of trade, blocking Chinese investment in April last year and walking out of the RCEP in November 2019. This stance has been bolstered by the Ladakh standoff. What it means is that while leading countries that are part of the large-scale and complex global value chains and supply networks have begun to find ways to do business with China, India will be the only country to be left out of all such trade and economic blocs or groupings.
The global economy is expected to expand 4% in 2021, assuming an initial COVID-19 vaccine rollout becomes widespread throughout the year. A recovery, however, will likely be subdued, unless policy makers move decisively to tame the pandemic and implement investment-enhancing reforms, the World Bank says in its January 2021 Global Economic Prospects. “While the global economy appears to have entered a subdued recovery, policymakers face formidable challenges—in public health, debt management, budget policies, central banking and structural reforms—as they try to ensure that this still fragile global recovery gains traction and sets a foundation for robust growth,” said World Bank Group President David Malpass. “To overcome the impacts of the pandemic and counter the investment headwind, there needs to be a major push to improve business environments, increase labor and product market flexibility, and strengthen transparency and governance.” Sub-Saharan Africa: Economic activity in the region is on course to rise by 2.7% in 2021.
WTO, OECD launch dataset on bilateral trade in services (World Trade Organisation)
The WTO and the Organisation for Economic Co-operation and Development (OECD) on 13 January jointly launched a new dataset covering bilateral services trade of over 200 economies from 2005 to 2019. The WTO-OECD Balanced Trade in Services (BaTIS) dataset, which provides detailed data for 12 services sectors in addition to total commercial services, offers a complete and balanced matrix that reconciles previously asymmetrical export and import data. At present, bilateral data are available for less than 70% of world trade in services. For individual services sectors, data coverage can be much lower. The BaTIS experimental dataset, which uses both official statistics and estimates for missing data, provides users with a complete and balanced matrix covering virtually all economies in the world.
After a year of pandemic-induced lockdowns, there couldn’t be a better time to appreciate the creative economy. The United Nations is doing just this as it marks 2021 as the International Year of the Creative Economy for Sustainable Development. As the coronavirus pandemic closed traditional areas of life, many people took up a craft, read books, watched endless series and films, connected to digital concerts, or shopped online for the latest fashion. They helped sustain the creative economy, which is finally having its day – or more accurately, year – in the sun.
India and South Africa’s proposal for a temporary waiver in Trade Related Intellectual Property Rights (TRIPS) provisions to ensure free flow of medicines, vaccines and medical equipment between countries during the ongoing Covid-19 pandemic will come up for discussion once again at the World Trade Organisation (WTO) this week. “The General Council of the WTO could not arrive at a decision on a waiver before the year-end break as many countries opposed it while several others wanted it to be implemented. It will hopefully be able to take the matter forward now given the fact that the proposed waiver has been supported by several civil society and intergovernmental organisations,” an official tracking the development told BusinessLine.