tralac Daily News
Mavuso stresses importance of implementing structural reform (Engineering News)
Everyone, from the South African Reserve Bank (SARB) to organised labour, can see what must be done to get the country back on a growth trajectory, but little seems to change, CEO Busi Mavuso says in the latest newsletter from Business Leadership South Africa. She welcomes SARB governor Lesetja Kganyago’s comment in a Monetary Policy Committee statement last week that a faster growth rate depends on implementing prudent macroeconomic policies and substructural reforms. “Organised business has been saying this for years. If you want investment, change the policies that are choking it off,” Mavuso asserts.
Govt has been open, transparent throughout pandemic – Ramaphosa (Engineering News)
President Cyril Ramaphosa reinforced, on Monday, the importance of keeping South Africans informed of vaccine acquisition developments, adding that government must be held to account for all decisions made around the vaccine. Ramaphosa wrote in his weekly column to the nation that South Africa will soon be receiving its first consignment of Covid-19 vaccines from the world’s largest vaccine produc
Mining underpins Nam exports (The Southern Times)
Mining remains Namibia’s cash cow and largest foreign currency earner, raking in billions despite disruptions in production inflicted by the COVID-19 pandemic. The latest official trade statistics show that the Southern African country increased its income from experts of non-ferrous metals, to Belgium, China and Germany by 25,5 percent in the last quarter. The Namibian Statistics Agency (NSA) says the Southern African Customs Union (SACU) was the largest source of imports for Namibia, accounting for 43,8 percent of all imported vehicles, beverages, essential oils and various manufactured goods
Ten ships docked at the Mombasa port on Thursday evening, giving port managers hope of a turnaround after the Covid-19 crisis impacted transshipment traffic. Before Covid-19 reached our shores last March, the same number of vessels had docked at the port in the first quarter. The Kenya Ports Authority is upbeat of a strong growth in the transshipment business this year. This is also attributed to an improved performance in the fourth quarter of 2020, with the average working time reducing by two days.
The government has embarked on dredging and expansion of the Kisumu port to ease navigation of big ships in Africa’s biggest inland dry port. Speaking during the launch of desilting exercise yesterday, ODM leader Odinga said that the port accommodates up to 10 big ships.
State mulls options to ease rising food cost, shield farmers (Business Daily)
The government is monitoring the current food price increases and will intervene if they go beyond the reach of ordinary Kenyans, Agriculture Cabinet Secretary Peter Munya has said. Mr Munya said that while they expect the price of items such as maize to go up in the coming days, there is need to balance between the interests of farmers and those of consumers. The price of basic commodities such as sugar, milk, wheat flour and bread have been on an upward trend, raising fears of high inflation.
He said the biggest challenge is to maintain favourable prices for each party and that whereas the farmers need good prices for their produce, the consumers too need prices that are pocket friendly.
Kenya joins Tanzania and Uganda in taxing digital transactions (The East African)
Kenya has joined Tanzania and Uganda in taxing digital transactions to support its depleted public coffers in an economy weighed down by slowing private sector activities, shrinking revenue collections, growing public debt and increasing expenditure pressures. The new tax has added more financial pain to households and businesses that started the year with tax relief measures rescinded by the National Treasury. The Digital Service Tax (DST) which took effect on January 1, was introduced by the Cabinet Secretary for the National Treasury Ukur Yatani through the Finance Act 2020.
LOCAL horticultural exporters have been urged to ride on the African Continental Free Trade Area (AfCFTA) tapping into low-hanging fruits like the US$39 million paprika market where South Africa is the crop’s top importer. The country’s trade development and promotion agency, ZimTrade in a statement has said because South Africa is Zimbabwe’s largest trading partner, this will make it easy for local farmers to tap into this market.
The trade development and promotion agency noted that the coming of the continental trade agreement raises an opportunity for Zimbabwean producers to target new markets such as Libya and Algeria who are second and third top importers of paprika in Africa.
Will Nigeria leverage AfCFTA to remake economy? (The Nation Newspaper)
Trading under the African Continental Free Trade Area (AfCFTA) agreement eventually commenced on January 1, 2021. The trade liberalisation deal potentially handed Nigeria the opportunity of boosting her competitiveness and remaking the economy. However, experts say that this will depend on the level of commitment of the government working with the private sector to address the supply side constraints of lack of infrastructure, including the provision of soft infrastructure. Assistant Editor CHIKODI OKEREOCHA reports.
President Nana Addo Dankwa Akufo-Addo says Ghana's economy is on track despite the challenges of the COVID-19 pandemic. He said though the disease threatened to derail the gains made in the first three years of his administration, the proactive decisions are taken by the government to fight the pandemic, as well as revitalise and transform the economy with a hundred billion Cedis "anchor bright prospects for the medium-term."
He gave a strong indication that the government was on course with the policies and programmes to mitigate the effect of COVID-19 on the economy and livelihoods. "Government will continue to implement prudent fiscal measures to quicken the pace of fiscal consolidation," he said, adding that the Finance Minister would update the nation next March on measures to be taken to restore the country to the path of economic recovery.
The Ghana Revenue Authority (GRA) has set a provisional tax revenue target of GH¢60 billion for 2021, representing a 32.3 percent increase over the 2020 actual collection of GH¢45.338 billion. Rev. Owusu-Amoah said the GRA would step up efforts to tax players in the e-commerce market, which sector has been a challenge over the years, using staff with the requisite training to enable them to identify players in the sector for tax purposes.
On the African Continental Free Trade Area (AfCFTA), the Commissioner-General said AfCFTA trade through ICUMS commenced on the 18th of January 2021. Per the initiative, Customs will implement six of the agreements namely; Tariffs schedule, Rules of Origin, Customs Cooperation & Mutual Administration Assistance, Trade facilitation, Non-Tariff Barriers and Transit. He said although this might not have a direct revenue benefit, it was expected to create job opportunities through increased trade.
Nigeria wants ECOWAS restructured (Premium Times)
President Muhammadu Buhari has advocated for the restructuring of ECOWAS, saying that the organization needed to streamline its management to adjust to current realities. The Nigerian leader drew the attention of the meeting to the fact that at 45, ECOWAS was expected to be an accomplished regional organization, and for that reason, the right and bold decisions to enhance its performance must be taken.
”It is important for the region to evolve effective measures and avoid total lockdown at this critical time, that our economies are gradually recovering from the first wave of the pandemic”, he said, adding: ”The economic challenges that our region faces, because of the pandemic, will no doubt manifest this year, 2021.”
The President of African Development Bank (AfDB), Dr. Akinwunmi Adesina, has identified debt service as Nigeria’s greatest risk and urged the federal government to take steps to increase tax revenue in the face of dwindling oil income. He spoke virtually at the recently held First Annual National Tax Dialogue, according to the Director of Communications and Liaison of the Federal Inland Revenue Service (FIRS), Mr. Abdullahi Ahmad, in a statement yesterday.
Dr. Adesina was quoted as saying that due to the impact of the COVID-19 pandemic, Nigeria’s economy shrank “by 3% in 2020 on account of falling oil prices and the effects of the lockdowns on economic activities,” adding, “with shrinkage in oil revenues, debt service payments pose the greatest risk to Nigeria.”
He stressed further that for Nigeria to overcome the pandemic, “taxes must form a significant percentage of government revenue. Digitalization of tax collection and tax administration is critical to ensure greater transparency of the tax system, widening of the tax base, while mitigating compliance risks and encouraging voluntary tax compliance.”
The Congolese National Assembly was highly packed on Friday as legislators debated thoroughly on a bill introduced to create the African Continental Free Trade Area. After hours of lengthy back and forth debating, the bill was successfully adopted with an overwhelming majority. Details indicate that out of the 340 national deputies present during the plenary session, 330 voted for this bill and only 8 voted against while 2 deputies abstained. This project will therefore be made available to the upper house of parliament for the second reading before being promulgated by the President Félix Tshisekedi.
News from Africa
The most important initiative introduced by the African Union (AU) is the African Continental Free Trade Area (AfCFTA), Chairman of the Economic Community of West African States (ECOWAS), President Nana Addo Dankwa Akufo-Addo, has said. In January 2021, the trading phase under the AfCFTA
Goods exports by third-party non-African countries to African countries will not enjoy preferential treatments stipulated under the African Continental Free Trade Area (AfCFTA) trade pact. This is according to the Secretary-General of the AfCFTA Secretariat, Wamkele Mene. Addressing the issue of transshipment during the operation of AfCFTA, Mr Mene noted that although goods from non-African countries are welcomed into the continent, such goods or imports will not enjoy the incentives that bind the trade agreement between AfCFTA members.
The new African Continental Free Trade Area is a chance to kickstart trade between the UK and Africa, delegates told a UK-Africa investment summit this week. “We need to look beyond the pandemic to the growth of the continent beyond pure development, and look to the private sector to be the driver of growth across the continent,” James Duddridge, the UK’s minister for Africa, told an online UK–Africa Investment summit on Wednesday (20 January) The summit, which drew together business leaders and development finance institutions, was the first major international investment event hosted by the UK since it left the EU’s single market on 31 December but it delivered much fewer promises of investment than last year’s inaugural Africa Investment conference. At last January’s UK-Africa investment summit, Prime Minister Boris Johnson hosted 16 African heads of state, resulting in commercial deals across the continent worth £15 billion. The UK has prioritised its main markets on the continent including Egypt, Ethiopia, Kenya and Nigeria.
On a three-country tour of East Africa, one year on from the UK’s Africa Investment Summit, Foreign Secretary Dominic Raab met with political leaders, NGO’s and civil society in Kenya, Sudan and Ethiopia for important talks on tackling shared challenges including COVID-19, security and climate change.
Speaking at the end of his visit, Mr Raab said: This trip has been an invaluable opportunity to strengthen key partnerships in East Africa, boosting trade, security and our ability to tackle global challenges including Covid-19 and climate change. We are committed to bringing the best of British expertise to the region, defusing tensions, doing business with integrity and forging strong partnerships on health, climate and other global challenges.
The UK aims to be Africa’s partner of choice, by growing investment relationships to deliver more exports, jobs and economic growth that benefit both African and British businesses as well as to help African countries recover and build back from the Covid-19 pandemic. The recent second UK–Africa summit aimed to revive foreign direct investment (FDI) to African countries, in a context in which the pandemic has already led to sharp declines in overall FDI flows (-28%), mergers and acquisitions (-44%) and greenfield projects announcements (-66%) in Africa during the first half of 2020 alone. This note aims to present the trends in UK FDI in Africa, how UK investors compare with other major investors (i.e. China and the US) in the continent and insights on constraints and recommendations to boost the role of UK in bringing quality FDI to Africa.
How Covid-19 did what poverty could not: Convince Africa it needs to manufacture (How We Made It In Africa)
Spared the worst medical effects of Covid-19 with among the world’s lowest virus infection rates and fatalities, Africa nonetheless suffered due to deep economic fallout. Declining world demand for commodities amidst general global slowdown and pandemic driven disruptions to supply chains have combined with Africa’s difficulty procuring PPE and securing vaccine supplies to create novel resolve to develop comprehensive domestic production capability.
Africa quickly learned how beholden it was to far-away supply chains – particularly in the healthcare sector. For a time African leaders were nearly impotent in their collective ability to source PPE and ventilators during a sudden worldwide frenzy during which these items became commodified and supply-constrained. More recently, concerns have emerged around African access to the various Covid-19 vaccines – underscoring the general paucity of locally manufactured pharmaceutical compounds. This new conundrum is emblematic of how the pandemic has crystallised policymaker focus on the need for Africa to get serious about manufacturing its needs.
Earth Observation (EO) is said to be one of the most valuable assets for the African continent as it can lead to increased fiscal revenues, the safeguarding of environmental resources, improved public health and the boosting of continent-wide agricultural productivity. This is according to the World Economic Forum’s 2021 insight report, Unlocking the Potential of Earth Observation to Address Africa’s Critical Challenges. The report was prepared in collaboration with Digital Earth Africa (DE Africa), a platform designed to catalogue large amounts of EO data used by policy makers, scientists and the private sector to address social, environmental and economic changes on the continent.
With the global Covid-19 crisis threatening the African economy and the livelihoods of its citizens, governments, industry leaders and NGO’s are called on to utilise all the available data to respond, recover and advance hindered efforts towards the achievement of global development priorities.
AfCTFA to help drive continent’s economic recovery from Covid-19 pandemic (Engineering News)
The African Continental Free Trade Area (AfCFTA) can help drive the continent’s economic recovery from the deadly coronavirus pandemic and spur transformation, says Economic Commission for Africa (ECA) regional integration and trade division director Stephen Karingi. He says that, given that Africa does not have the fiscal space for trillion-dollar stimulus packages as it attempts to ‘build forward better’ from the impact of Covid-19, the AfCFTA, driven by the private sector, is going to be key in unlocking Africa’s potential. Karingi stresses that Africa will have to look for innovative alternatives to push its recovery efforts, noting that quality infrastructure development is also crucial if the AfCFTA is to spur economic growth on the continent.
African countries' determination to induce access to mass production vaccines is finally gathering steam. It received new visibility on January 20, when Reuters reported the price breakdown and procurement motivations for nearly 270 million COVID-19 vaccine shots under the African Union (AU) vaccine plan – the first public details to prevail on the matter.
Africa's stated goal to scale inoculation to nearly two-thirds of its 1.3 billion population, is best served by a price distribution mechanism that operates relative to population density. Hopes of such a mechanism were repeatedly dashed when over $60 billion in monthly debt piled on Africa last year, once stringent virus containment measures were announced by governments. Compounding the task are the present timelines for some 600 million vaccine doses set to arrive to the continent under COVAX – still weeks away from a start.
The construction of the multinational Tanzania –Uganda Road Project of Masaka – Kyotera - Mutukula/ Mutukula – Kyaka and Bugene – Kasulo – Kumunazi is on the way after the conclusion of Feasibility Study and Detailed Engineering Design funded by the African Development Bank (AfDB) under the NEPAD-IPPF facility.
Speaking during the handover ceremony of the designs report, the EAC Deputy Secretary General in charge of Planning and Infrastructure, Eng. Steven Mlote thanked AfDB for the financial support that had enabled EAC to undertake the feasibility study and design of the multi-million-dollar road project between Uganda and Tanzania. The Deputy Secretary General said that the purpose of multinational road network is to facilitate the development of the regional road transport market in the East African region.
SADC dominates cane syrup market (The Southern Times)
Africa and Middle East Sugarcane Syrup Market size was US$1,864 million in 2017, and is expected to reach YS$2,074 million by 2023, registering a CAGR of 1,8 percent from 2017 to 2023. The Southern Africa Development Community (SADC) dominated the Africa and Middle East sugarcane syrup market in 2017, accounting for more than half of the total revenue.
2020 was a difficult year. It added an unprecedented health crisis, with consequent supply and demand complications, to the list of challenges faced by agricultural producers, including extreme weather patterns, pests and diseases, geopolitical tensions, and an increasing global population which needs to be adequately fed. It is estimated that global GDP declined by 4.2%(1), one of the largest declines in recent decades, plunging millions of people into poverty and undermining global efforts to meet the Sustainable Development Goals by 2030.
There are a few key lessons from the pandemic that should be borne in mind for the future by policymakers: First, keep markets open; Second, invest wisely: Third, assure transparency. WTO negotiations would greatly benefit the agricultural sector and support sustainable economic recovery.
The 1,000 richest people on the planet recouped their COVID-19 losses within just nine months, but it could take more than a decade for the world’s poorest to recover from the economic impacts of the pandemic, reveals a new Oxfam report today. ‘The Inequality Virus’ is being published on the opening day of the World Economic Forum’s ‘Davos Agenda’.
The report shows that COVID-19 has the potential to increase economic inequality in almost every country at once, the first time this has happened since records began over a century ago. Rising inequality means it could take at least 14 times longer for the number of people living in poverty to return to pre-pandemic levels than it took for the fortunes of the top 1,000, mostly White male, billionaires to bounce back.
Fairer economies are the key to a rapid economic recovery from COVID-19. A temporary tax on excess profits made by the 32 global corporations that have gained the most during the pandemic could have raised $104 billion in 2020
The upscaling of digital technologies presents a host of opportunities for small island developing states (SIDS) to diversify their economies, boost manufacturing, gain greater access to global value chains, and improve disaster preparedness. However, significant obstacles remain, including inadequate digital infrastructure, insufficient training opportunities for women and young people, a growing digital divide, and a lack of data and policy knowledge. That’s according to an expert panel convened for the Global Manufacturing and Industrialisation Summit’s Digital Series on the topic: “How Information and Communication Technologies can foster inclusive and sustainable industrial development in Small Island Developing States”.
Global foreign direct investment (FDI) collapsed in 2020, falling 42% from $1.5 trillion in 2019 to an estimated $859 billion, according to an UNCTAD Investment Trends Monitor published on 24 January. Such a low level was last seen in the 1990s and is more than 30% below the investment trough that followed the 2008-2009 global financial crisis. According to the report, the decline in FDI was concentrated in developed countries, where flows plummeted by 69% to an estimated $229 billion.
Although FDI flows to developing economies decreased by 12% to an estimated $616 billion, they accounted for 72% of global FDI – the highest share on record. The fall was highly uneven across developing regions: -37% in Latin America and the Caribbean, -18% in Africa and -4% in developing countries in Asia. FDI to transition economies declined by 77% to $13 billion.
South African investors, for example, plan to acquire stakes in healthcare providers across Africa and Asia. And Indian IT companies have announced a 30% increase in acquisitions, targeting European and other markets for information technology services.