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Country focus
Short-term low growth is ‘new normal’ (Moneyweb.co.za)
As the impact of the Covid-19 pandemic continues to ripple through 2021 and South Africa faces economic contraction and high levels of business risk, there are some positive signals that suggest business should be playing it safe for now while keeping an eye on the long game.
Covid-19 could not have happened at a less opportune time for South Africa, already suffering from high consumer, corporate and sovereign debt, with credit ratings below investment grade, low savings rates and high unemployment. Although they were necessary, economic support and stimulus measures dipped the country deeper into deficit and lockdowns amplified the economic woes but there are reasons for optimism despite this negativity, he said.
Economic growth crucial at this venture, says BLSA CEO (Engineering News)
The imperative of economic growth is now even more obvious than at the start of the pandemic, which was characterised by a period of rapid action by the government, Business Leadership South Africa (BLSA) CEO Busi Mavuso said in a weekly newsletter. She noted that, in March 2020, a state of disaster was declared and many emergency regulations were fast-tracked.
Citrus sector celebrates record export season (Engineering News)
Industry organisation the Citrus Growers’ Association of Southern Africa (CGA) says South Africa had a record-breaking 2020 export season that delivered 146-million cartons of citrus to the rest of the world. “These figures indicate phenomenal growth within the South African citrus industry, which remains the second-largest exporter of fresh citrus in the world after Spain.
South African wine sales boom in UK, US, Germany during pandemic (Quartz)
The latest in a series of bans on the sale of alcohol since the start of the pandemic has left winemakers with a surplus of 300 million liters (79.2 million gallons or around 400 million bottles) – nearly half of last year’s harvest – in storerooms, with the latest annual harvest about to begin, according to an industry trade group which is threatening legal action to invalidate the nationwide edict. The industry’s woes come amid a rise in popularity for South African wines around the world, including in the US, which in the past year has joined the UK and the Netherlands among top export destinations. South Africa is the world’s ninth largest producer of wine, which contributed almost $2 billion to the country’s $351 billion GDP in 2019.
Why Bots hasn’t ratified AfCFTA (The Southern Times)
Botswana says it will only ratify the African Continental Free Trade (AfCFTA) Agreement after it completes all attendant internal processes consistent with its own requirements for approval of international treaties. “However, this is a peculiar stance where tariff offers from negotiating partners were only received late in December 2020. We are currently analysing the offers in consultation with our main stakeholders (the private sector) who will be the main beneficiaries of the AfCFTA,” explained chief negotiator in Botswana’s Investment, Trade and Industry Ministry, Mr Phazha Butale.
Bots, Nam to co-operate on vaccine procurement (The Southern Times)
Botswana and Namibia have agreed to work closely in the procurement and distribution of COVID-19 vaccines, in the lobby for legalisation of controlled ivory trading, and in enhancing bilateral commerce. The agreements were sealed by Presidents Mokgweetsi Masisi (Botswana) and Hage Geingob (Namibia) after a meeting of the Namibia-Botswana Biannual Commission in Windhoek on January 29. “In terms of trade and investment, both sides exchanged views on their post-COVID-19 joint economic recoveries. The two countries agreed to leverage on the Trans-Kalahari Corridor to create value chains in agriculture, tourism and trade facilitation,” the communique added.
Botswana: An economy in need of a hope ‘transfusion’ (Mmegi Online)
Experts believe the economy is in desperate need of hope, a critical commodity to re-energise local companies, foreign investors as well as the innovative sector towards a clear strategy that kickstarts the country’s recovery from the pandemic’s impact. “Things look very gloomy now. The most important thing is the direction and the path of the economy and right now, it’s not clearly visible where we are heading.” On Monday, Finance and Development minister, Thapelo Matsheka will present the 2021-2022 budget, giving what is expected to be a bleak picture of the state of the economy and its prospects.
Jobs in Rwanda: Sectors to watch in 2021 (The New Times)
The Covid-19 pandemic and its consequent effects have destabilized the employment industry across the world and have fast changed employment trends. Locally, the scene is likely to be disrupted in multiple ways given the trends seen in the previous year. As of October 2020, the unemployment rate was at 15 per cent according to the National Institute of Statistics of Rwanda’s (NISR) labour force survey, from 22 per cent in May. With the lockdown slowing down a number of economic sectors, experts say that economic growth and consequent job creation is likely achieved from adjustments of the agriculture sector.
Kenya: Unpredictable tax regime hurting economy – experts (Nation)
The government’s frequent introduction of new taxes and failure to develop a proper tax policy framework is hurting the economy more and risks raising inflation and driving away investors to neighbouring countries. This is according to players from the agriculture, manufacturing, finance and other economic sectors, who have criticised the state for coming up with taxes whose formulation is based on the shallow vision of merely netting in more revenue. They faulted several steps taken by the government to effect the raising of taxes for businesses and citizens, including the reversal of Covid-19 tax relief measures that had been placed last year.
Kenyan economy tipped to grow 5pc (Business Daily)
Global economists have marginally upgraded Kenya’s economic growth outlook for this year, citing debt reliefs and stronger capital expenditure. A consensus outlook from 15 global banks, consultancies and think-tanks shows that Kenya’s economy is likely to rebound from an estimated growth of 0.6 per cent to five per cent, an upward revision from 4.9 per cent a month ago. “Moreover, the vaccine rollout should start in February when the first doses arrive in the country, boding well for activity ahead, while debt relief should aid public finances and bolster stimulus to support the economy further.”
CBK gets bigger role on digital payment systems (Business Daily)
The Central Bank of Kenya (CBK) is set to tighten oversight of mobile money as the government moves to safeguard billions of shillings paid through its expanding digital service platforms. Treasury Cabinet Secretary Ukur Yatani said in his draft 2021 Budget Policy Statement (BPS): “Disruption of mobile services due to infrastructural challenges or cybercrime and fraud could lead to significant loss of potential Government revenue, customer deposits and market confidence… To mitigate against such threats, CBK is in the process of formulating a National Payments Strategy to address emerging risks and guide the payments ecosystem in Kenya.”
Dar, Addis trade volume soars (Dailynews)
The trade volume between Tanzania and Ethiopia has tremendously gone up from 1.5bn/- to 13.5bn/- in 2012 to 2019 respectively, as the two nations look for increased business ties. According to Foreign and East African Cooperation Minister Prof Palamagamba Kabudi, Tanzania would capitalise on the visit to exchange experiences and boost trade and investment opportunities, especially on revitalising the leather industry. Ethiopia is Africa’s leading country with the largest livestock, making the Horn of Africa country the powerhouse and best destination for leather and meat factories
‘Zim needs inclusive economic growth’ (The Herald)
Public Service, Labour and Social Welfare Minister Professor Paul Mavima, says Zimbabwe needs to work on urgent and robust measures that allow for inclusive economic growth and reduce the inequality gap. This, he said will ensure every Zimbabwean across the political divide benefits from the vast natural wealth available in the country, ranging from mineral deposits, tourist attractions and good weather favourable for agriculture production. This is in addition to skilled human resources. However, there are still economic injustices prevalent as there are extremely rich and poor people.
Zim targets UAE food export market (The Herald)
Zimbabwe is eyeing expansion of exports of value added agricultural produce as the country takes advantage of trade opportunities in the United Arab Emirates (UAE) to grow the economy, create more jobs, entrench entrepreneurship and sharpen innovation along various agriculture and food value chains. This comes as the UAE has expressed interest in partnering with Zimbabwe to explore and strengthen agri-business opportunities.
Zimbabwe sets aside $100 million to buy COVID-19 vaccines (CGTN Africa)
Zimbabwe has set aside $100 million to acquire COVID-19 vaccines but the government is still waiting for its scientists to recommend which type to buy, a state-owned newspaper reported on Sunday. George Guvamatanga, the ministry of finance secretary, told the Sunday Mail that the government would use funds from a 2020 budget surplus and reallocate some of this year’s budget to buy the vaccines. Finance Minister Mthuli Ncube said in November that a budget surplus was expected for 2020, although final figures have not yet been published.
AfCFTA: Morocco In Position to Benefit From Intra-African Trade (Morocco World News)
Morocco’s strategic location and the competitiveness of its economy will see a lot of benefits from the African Continental Free Trade Area (AfCFTA) that was launched on January 1, 2021. Ezz El-Din Ghufran, Moroccan academic, made his remarks at a meeting organized by the Policy Center for the New South, a leading Moroccan think tank.
Tunisia, Morocco are digital economy standouts (Brazil-Arab News Agency)
An OECD report has shown that these are two North African countries, Tunisia and Morocco, best employ digital tools for economic purposes. According to the survey, 57% of businesses in Tunisia and Morocco have websites. The rates are 47% for small businesses, 67% for medium businesses, and 80% for large ones. The OECD notes that this indicates major digitalization, unlike in other countries.
Nigeria to leverage on public-private partnership with OneAgrix for better market access in agriculture and halal under AfCFTA (Salaam Gateway)
Nigeria is poised to leverage on the recent launch of the African Continental Free Trade Agreement (AfCFTA) for its Agricultural and Halal food products with its public-private partnership with OneAgrix, a global B2B Agriculture and Halal marketplace. This enables the country to gain better market access by using OneAgrix’s trading platform both regionally and globally. Food security is an issue that has been highlighted by the Covid-19 pandemic as more countries are looking to diversify their food sources.
AfCFTA: MAN asks FG to ensure strict compliance on anti-dumping laws (Vanguard)
The Manufacturers Association of Nigeria (MAN) has urged Federal Government to put in place effective monitoring mechanism to ensure that all countries operate based on the rule of origin that has been agreed on dumping. Speaking at the 2021 edition of the MAN Reporter of the year Award Ceremony/ Presidential Media Luncheon, the president of MAN, Engr. Mansur Ahmed said the dumping issue frankly requires political will.
How Cameroon plans to conquer the ECCAS and Nigerian pharmaceutical marketsx (UNECA)
With technical support from the United Nations Economic Commission for Africa (ECA), public and private sector representatives have consolidated a comprehensive framework to render Cameroon’s local pharmaceutical sector better structured, resilient, productive, competitive and viable in the short term. The Government of Cameroon hopes to steer local actors to capture a more sizeable part of the circa the FCFA 200 billion (US$ 369 million) local market for pharmaceuticals and make inroads into the ECCAS subregional and Nigerian markets. Currently, local production meets only 5% of the national needs, as Cameroon imports over 90% of its needed pharmaceuticals.
Shift focus from upscaling to upgrading – Ofosu-Dorte urges businesses (BusinessGhana)
Stakeholders in Ghana’s manufacturing sector are being encouraged to prioritize upgrading over upscaling when it comes to goods and services emanating from Ghana into other African countries as part of the African Continental Free Trade Area (AfCFTA). Speaking on the Citi Breakfast Show as part of the station’s Effective Living Series, David Ofosu-Dorte, the Senior Partner at AB and David Africa, said Ghanaian products will have to prioritize quality over quantity in order to boost demand from other parts of the continent.
Libya Keen on Rebooting its Engagement with COMESA (COMESA)
The State of Libya has renewed its commitment to COMESA and resolved to actively participate and implement regional integration programmes to make a more meaningful impact locally and in the bloc. A first of its kind two-day sensitization workshop was held virtually for the country on 25-26 January 2021 during which Libya’s Minister of Foreign Affairs His Excellency Mohamed Taher Hamouda Siala reiterated his government’s resolve to be more engaged in the activities and programmes of COMESA for the benefit of the country and the region.
News from Africa and Africa’s international trade relations
Teething problems slow AfCFTA take-off (The Guardian Nigeria)
On January 4, Ghana organised an event to commemorate its first export under the AfCFTA framework, setting a tall order for other countries. Ghana is reportedly one of three countries, including Egypt and South Africa that have fit for purpose border and custom facilities, aligning with AfCFTA’s trade terms. Nigeria, the regional bloc’s most populous country and biggest economy is yet to secure the required infrastructure to leverage the agreement.
Speaking during a virtual press conference, recently, Secretary-General of the African Continental Free Trade Area Secretariat, Wamkele Mene, said: “It may take some time before each of us sees the direct benefit. We are not going to be deterred by our critics who say they don’t see evidence that trading has actually started.” Stakeholders are however worried that the processes are not taking shape fast enough.
UN vows to deepen Africa’s trade integration, implement free trade agreement (Macau Business)
The United Nations Economic Commission for Africa (UNECA) on Friday expressed its keen intention to deepen Africa’s trade integration and effectively implement the African Continental Free Trade Area (AfCFTA) Agreement. “The number of members that have ratified the African Continental Free Trade Area (AfCFTA) agreement is approaching 40 with the continent’s leadership showing immense political will towards achieving its aspirations,” the UN agency said in a statement on Friday.
African economies to watch in 2021 with Covid, debt impact (Quartz Africa)
Sub-Saharan Africa will see moderate but positive growth of 2.7% this year, a welcome rebound from the region’s first recession of 25 years in 2020 when the region shrank by an estimated -3.7%. But 2021 is probably going to be just as tough for African economies as it was in 2020. Last year, there was a 6.1% decline in per capita income in the region, the “deepest contraction on record,” says the World Bank in its latest global outlook. There’ll be a further 0.2% decline this year.
WEF eyes benefits of an accelerated free trade area (IOL)
African delegates at the World Economic Forum (WEF) on Friday agreed that the continent could accelerate the build-up of productive infrastructure through the African Continental Free Trade Area (AfCFTA). Ghana’s President Nana Addo Dankwa Akufo-Addo said it was crucial that Africa harnesses its own resources and deploy them as creatively as possible if it was to produce an inclusive, sustainable recovery from the Covid-19 pandemic. “The multilateral system is under strain, and we must do all that we can to generate the needed resources to achieve sustainable development,” Akufo-Addo said. “We in Africa should make every effort to generate for ourselves the additional funds we need to advance, and hopefully our external partners – private and public – will lend their backing to the priorities we set.”
African dealmaking decreases, the African Continental Free Trade Agreement expected to boost recovery (BusinessGhana)
Dealmaking activity in sub-Saharan Africa (SSA) dropped in the second half of 2020, when compared to the second half of 2019 and year-on-year, deals were also down in both volume and value when compared to 2019. As Africa gears up for its post-pandemic recovery, it appears that the opportunities presented by the recent launch of free trade across the continent, as well as foreign investment opportunities, due in part to new partnerships and trade relationships, could be a key factor in attracting much needed investment to the region.
Modern retail on the rise in sub-Saharan Africa, but traditional trade still rules (How we made it in Africa)
Africa’s modern retail development continues to grow and improve in quality but still lags traditional trade. A growing population and larger, more developed cities translate into vast opportunities for retail. Sub-Saharan Africa is made up of a combination of traditional and modern retailing channels. These channels vary by market and are influenced by factors such as the economy, state of development, consumer preferences, internet connectivity, availability and cost of labour and the local culture. All of these variables form a factor that puts different countries’ retail markets at different development stages. Consumer spending is mainly concentrated in the informal/traditional retail sector.
How Africa can benefit from the new commodity super cycle (Institute for Security Studies)
Lessons from the past decade can prevent the continent from bungling the opportunities now on offer. Since the dramatic worldwide 21-year low of April 2020, oil prices have recovered by almost 300%, copper prices have reached an eight-year high and liquefied natural gas prices have recovered by over 700%. This commodity rebound – supported by accommodative global monetary and fiscal policies, COVID-19 vaccine rollouts, and increased investor and market confidence – has significantly boosted prospects of a global economic recovery. This has implications for Africa, whose vulnerability to boom-bust scenarios is well documented.
African countries united in COVID-19 response: President (SAnews)
President Cyril Ramaphosa has described the COVID-19 pandemic as a health, humanitarian, social and economic crisis for African countries, most of whom are inadequately resourced to manage a health emergency of this size. However, African countries are responding to the crises collectively.
Building the Africa We Want: NEPAD Turns 20 (AUDA-NEPAD)
“An impressive accomplishment of NEPAD has been the strengthening of partnerships with the rest of the world. NEPAD has engaged the G20, G8, OECD, FOCAC, TICAD and the UN system on new development cooperation and aid architecture for Africa. Over its 20 years, NEPAD has promoted programmes in areas such as agriculture, health, education and training, the environment, information and communication technology and infrastructure development,” H.E Cyril Ramaphosa, President of the Republic of South Africa and Chairperson of the African Union stated at the NEPAD symposium.
African Union and UNDP launch “AU at 20” Study to review progress ahead of the AU’s 20th anniversary
The African Union (AU) Commission and the United Nations Development Programme (UNDP) today kicked off a year-long project, “AU at 20: A Renewed Call to Action for the 21st Century”, to mark the 20th anniversary since the establishment of the AU. Endorsed by the Chairperson of the AU Commission, His Excellency Moussa Faki Mahamat, the project will undertake a data-driven study to assess progress and chart a renewed call to action towards achieving Agenda 2063 (The Africa We Want) and the UN’s Agenda 2030.
African Development Bank backs young ‘agripreneurs’ to beat climate change (IOL)
The African Development Bank plans to deploy billions of dollars to help young people build a new digitally-driven model of agriculture that can feed the continent’s people and boost prosperity even as the planet heats up, its president said. At a global summit, the bank and the Global Centre on Adaptation announced an initiative to strengthen African efforts to become more resilient threats worsened by fast-accelerating climate change. The AfDB plans to put half of its climate finance towards the initiative – $12.5 billion (R189.29 billion) between now and 2025 – and raise an equal amount from donor governments, the private sector and international climate funds.
African development bank warns gov’t project delays could attract penalties (Independent)
The African Development Bank has threatened to withdraw funding for the project aimed at building the capacity of Ugandans for opportunities in the oil and gas sector, should the government fail to utilize the funds according to the stipulated terms and conditions. The Bank is funding the East African Crude Oil Pipeline (EACOP) Districts’ Micro, Small & Medium Enterprises (MSME) Business Linkage Project, to make the people along the pipeline corridor ready to access jobs and business opportunities the project is expected to create.
Sadc chair Nyusi calls for collective resource pooling (The Herald)
SADC (Sadc) leaders have recommended the pooling of resources in the region for the collective procurement and distribution of Covid-19 vaccines for member states. This was revealed by Sadc chairman and Mozambican President Filipe Nyusi yesterday in a statement on the Covid-19 pandemic, whose second wave has resulted in a spike in infections in the region. “In addition to health measures, we should continue to embark on common regional strategies, harmonised and synchronised initiatives; including electronic platforms to monitor the safe cross border movement of people, vehicles and goods, as well as implementing national action plans that address social consequences,” he said.
Region gets tough on smugglers (The Southern Times)
The lockdowns instituted by SADC governments have sparked a sharp rise in smuggling, prompting revenue authorities to step in with co-ordinated efforts to counter illicit trading. Lockdowns have been triggered by spiralling COVID-19 infections across Southern Africa. Last week the South African Revenue Service (SARS) said it had scaled up digital cargo inspection and tracking systems in response to increased smuggling, while law enforcement agents are upping border patrols to stop illegal border crossings. South Africa is the region’s manufacturing hub and is the source of most smuggled goods, many of which are sold on the black market in other SADC countries.
A Critical Lack of Covid Tests in West Africa (Medafrica Times)
During its 58th summit, held by videoconference this weekend, ECOWAS proposed measures to combat Covid-19. Starting with a harmonization of the price of PCR tests for travelers, in order to allow a better visibility for those who travel between the different countries of the sub-region. These disparities do not facilitate travel between countries, as ECOWAS would like, especially if one sample has to be taken at departure and another at arrival.
World Bank commits $12bn for vaccinations in Africa (Engineering News)
The World Bank has committed $12-billion to African countries to support vaccination programs, the South African Presidency said in a statement on its website on Saturday. The World Bank money will be in the form of grants or on “highly concessional terms,” South African President Cyril Ramaphosa said in the statement.
Biden: Africa shouldn’t hold its breath (The Southern Times)
Experts on the continent are sceptical over whether US President Joe Biden will entirely overturn the approach taken by the Donald Trump administration. Speaking to Anadolu Agency, Iqbal Jassat, an executive at the Johannesburg-based Media Review Network (MRN), said in the wake of Biden administration’s goal to reassert America’s superiority in global affairs, there is little room left for South Africa and other developing countries to manoeuvre. Jassat said the balance of bilateral trade with South Africa is heavily tilted towards the US, pointing to Biden’s background as vice president for eight years under Barack Obama. “Looking at America’s foreign policy, you can’t take it for granted,” Kakuba told Anadolu Agency. “America’s interest comes first when relating with other countries.”
Biden repairs US damaged relations with Africa (Caj News Africa)
The new United States (US) government is mending relations that were strained with Africa under the previous administration of Donald Trump. The revival of relations would entail an expansion of economic, social and political ties with the natural resource richest continent in the world.
Towards a ‘healthy’ India-Africa partnership (BusinessLine)
The Covid-19 pandemic’s impact on India has been especially grim. Given the interconnectedness of world systems, it is crucial to examine how partnerships can be built around the process of recovery, especially with countries in Africa. While Africa was one of the last regions to be hit by the virus, and with deaths over 35,000, it has reported lower case numbers than Asia and even Europe in terms of containing the spread, likely due to its young demography.
Challenges of using the Madrid Protocol in Africa (Inventa International)
The Madrid Protocol 1989, allows applicants to directly file trademarks in several countries with a single application and set of fees, through a centralised bureau that forwards them office actions. In total, the Madrid Union covers about two-thirds of the continent. Notably, Angola, Ethiopia, Nigeria, South Africa and Tanzania do not belong to the Madrid Union. Since these five countries are among the top 10 largest economies in Africa, this has a significant impact on international filing strategies, as applicants are forced to file directly at the national IP offices of these regions. This reduces the cost-effectiveness of the Madrid Union for companies that are most interested in protecting their trademarks in the top African countries by market value.
Global economy
Rwanda named among top 10 countries that responded best to Covid-19 outbreak (The New Times)
Rwanda ranks sixth among the countries that handled Covid-19 outbreak best, according to a new analysis. The COVID Performance Index, by the Lowy Institute, a think-tank based in Australia, ranked 98 countries and found that smaller populations and capable institutions were the most important factors in managing the global pandemic Levels of economic development and differences in political systems between countries had less of an impact on outcomes than other indicators, the analysis concluded. Instead, smaller populations, cohesive societies and capable institutions were the most important factors in how countries confronted the pandemic, it added.
DDG Wolff urges WTO ministers to address the pandemic and make 2021 a year of action
Speaking to ministers from a cross-section of the WTO membership on 29 January, Deputy Director-General Alan Wolff urged them to make 2021 “a year of substantial accomplishments” at the WTO by taking action on health, sustainability issues, and the joint statement initiatives. He urged that concluding agreements not be put off to the WTO Ministerial Conference later this year, particularly for an agreement to curb fisheries subsidies, which should be concluded in the next few months.
Biden administration joins call for ‘swift appointment’ of new WTO head (Politico)
The United States supports quickly ending the impasse the Trump administration created over the selection of the next director general for the World Trade Organization, a top Swiss official said Friday. “Members stressed the urgency of the swift appointment of a new WTO director general, as well as the confirmation of the date and venue of the 12th Ministerial Conference,” Swiss Economic Affairs Minister Guy Parmelin said in his closing statement at virtual meeting of senior trade officials from 29 WTO members, including the United States. “Ministers reiterated their determination to maintain a credible multilateral trading system and to restore a climate of mutual trust.”
World leaders met during the first Davos Agenda (WEF)
The first virtual Davos Agenda closed today following calls from more than 24 heads of state and government and over 1,700 participants from business and civil society to address the crucial challenges facing us all. Sustainability and support for the vulnerable were emphasized. Special addresses and active participation from heads of state, government and international organizations discussed the importance of containing COVID-19 and working quickly to mitigate further fractures in society. Business leaders echoed these calls and urged cooperation and innovation to address crucial economic, social and environmental challenges in the year ahead.
Fair Finance: The women entrepreneurs lifting communities out of poverty (UN News)
Moroccan-born Ms. Gardner, is one of the most prominent senior women in the financial sector, and has been an industry leader for over two decades, as president of a multi-billion dollar New York-based global alternative investment fund. She has pledged to use her new role as the first-ever UNCDF Goodwill Ambassador to promote opportunities and resources for women business owners, and improve living standards for underserved communities.
Financial Perils in Check for Now, Eyes Turn to Risk of Market Correction (IMF Blog)
“The vaccines are here!” – the cry heard and welcomed the world over – has boosted hopes of a global economic recovery in 2021. Yet until vaccines are widely available, the market rally and the economic recovery rest on continued monetary and fiscal policy support. While there is for now no alternative to continued monetary policy support, there are legitimate concerns around excessive risk-taking and market exuberance. Financial stability risks have been in check so far, but we cannot take this for granted.
How common metrics can drive long-term value creation (EY)
The World Economic Forum’s International Business Council (WEF-IBC) has proposed a set of common metrics to spur sustainable value creation. It’s a positive step – if we grasp it. At their essence, the metrics are designed to help guide the business community’s transition from a primary focus on short-term, quarter-to-quarter financial performance toward a broader focus on long-term value across human, consumer, societal and financial outcomes. Ultimately, they provide a tangible way for companies to better serve their communities and become engines of broad-based prosperity. That’s good for society, but it’s also good for our companies.
Developing countries could raise much-needed public revenues, while cutting emissions and air pollution, by making better use of energy taxes and reducing energy subsidies, according to a new OECD report. Taxing Energy Use for Sustainable Development: Opportunities for energy tax and subsidy reforms in selected developing and emerging economies finds that well-designed energy and carbon taxes can strengthen efforts to improve domestic revenue mobilisation. While the revenue potential varies across countries, the report finds that, on average, the countries could generate revenue equivalent to around 1% of GDP if they set carbon rates on fossil fuels equivalent to EUR 30 per tonne of CO2.
Things looking good for mining sector (The Southern Times)
After a turbulent 2020, recent reports show analysts are optimistic that the mining sector will rebound this year. For Africa, the positive outlook would mean increased revenue from the sector as some other sectors are likely to be severely affected by the pandemic. Gold and platinum witnessed significant price increases from mid-2020 to the end of the year owing to a mix of market-based cutbacks, unexpectedly buoyant demand, and pandemic-driven closures. S&P analysts say while the COVID-19 pandemic has highlighted many risks, it has also created new opportunities.
Earnest & Young (EY) noted that the sector will face increased production cost due to the COVID pandemic. “The impact of the crisis has been mixed. Process changes and restrictions have imposed new, unforeseen costs, but some measures taken in response to the virus have removed silos that previously hindered productivity. Over the longer term, we believe that tackling this issue effectively requires true end-to-end focus on costs and productivity across the value chain. “The pandemic has increased costs but created opportunities for innovation “, stated EY in its risk analysis report.
Greater push for extractives to lift veil of secrecy as corruption bites (The East African)
So far, only 55 out of the 193 UN member states have committed themselves to the Extractive Industry Transparency Initiative (EITI) Standards. In eastern Africa, only Ethiopia and Tanzania have committed themselves to EITI standards. Uganda joined EITI in August 2020 and is required to publish an EITI report by February 2022. In Africa – with a huge amount of natural resource deposits – the extractive industry has remained in the hands of a few politically-connected elites with the contracts and the income largely opaque. “Extractive sector transparency is essential in the recovery from the pandemic, especially for countries that depend on resource revenues,” said Helen Clark, the board chair of the EITI.
