tralac Daily News
Digital economy is the biggest industry created during COVID-19: Economist (SABC News)
Economist Ntombana Mbele says the biggest industry that was created during COVID-19 in South Africa is the digital economy. Mbele’s comments come ahead of the virtual State of the Nation Address in Cape Town, which will be delivered by President Cyril Rmaphosa on Thursday evening at 7pm. The main industries in the country have always been mining, manufacturing, construction, construction, trade and transport. Mbele says there has been a lot of investment into the digital economy and inter-Africa trade has also accelerated.
Presidential Employment Stimulus making significant strides (SAnews)
President Cyril Ramaphosa’s ambitious drive to inject much-needed jobs into South Africa’s COVID-19 ravaged economy is beginning to bear fruit. This much is evident in the second progress report on implementation of the Presidential Employment Stimulus released by the Presidency on Tuesday. The stimulus, which targets the employment of 600 000 youths, was announced by President Ramaphosa during his address to a joint sitting of Parliament in October. As part of the Economic Reconstruction and Recovery Plan, the Presidential Employment Stimulus is designed to respond to the rise in unemployment caused by the Coronavirus pandemic.
Plans to reopen SA land borders at an advanced stage: Border Management Agency (Eyewitness News)
Plans to reopen South Africa’s land ports next week are at an advanced stage, according to the Border Management Agency. Parliament’s Home Affairs portfolio committee was briefed on preparations for the reopening on Tuesday. The plans were aimed at preventing a repeat of the massive congestion that occurred at some land ports such as Beitbridge, Lebombo and Maseru during December and January. Acting commissioner at the agency, Gene Ravele, told Parliament that the congestion at land ports of entry over the festive season was largely due to insufficient numbers of Health Department staff to carry out PCR tests for COVID-19. South Africa closed its land borders on 11 January and intended to reopen them on Monday, 15 February.
Tourism sector has lost billions of rands, shed more than 300 000 jobs: Deputy Minister (Engineering News)
South Africa’s tourism industry has lost billions of rand and more than 300 000 jobs due to the hard lockdown since the outbreak of Covid-19. Deputy Tourism Minister Fish Mahlalela said the impact of Covid-19, accompanied by the hard lockdown, severely affected the tourism sector both locally and internationally.
New SA tax law: a bold step for loop structures and exchange control (Business Day)
In line with the stated intention to modernise SA’s existing exchange control system, three tax laws were promulgated on January 20. SA tax law stepped boldly into 2021, firmly in line with the government’s stated intention to modernise the country’s existing exchange control system. In 2020, finance minister Tito Mboweni announced the Treasury’s intention to transform the current exchange control environment into a capital flow management framework. This was first announced during the 2020 national Budget Review, and essentially proposed an overhaul of exchange controls to take place over 12 months.
Agri SA calls for more commercial sector involvement in driving growth (Engineering News)
Industry organisation Agri SA says President Cyril Ramaphosa will have to spell out the role of the commercial sector clearly in his upcoming State of the Nation Address. The organisation also wants the President to highlight the factors that undermine this sector’s contribution to the economy and the country’s progress in general.
SA Canegrowers pleads for continued sugar masterplan commitment (Engineering News)
The South African Canegrowers Association (SA Canegrowers) has called on President Cyril Ramaphosa and relevant Ministers to fast-track the commitments under the Sugar Industry Masterplan. This is owing to sugarcane growers suffering from existing threats to the industry, including cheap sugar imports and the Health Promotion Levy, in addition to the economic effects from Covid-19.
Smoke and mirrors: UN data shows Ramaphosa’s investment drive is barely alive (Daily Maverick)
According to The United Nations Conference on Trade and Development (UNCTAD), foreign direct investment flows into South Africa in 2020 almost halved to $2.5 billion from $4.6 billion in 2019, which was a 15% decline from around $5.4 billion in 2018. The cumulative total over the three years amounts to $12.5 billion, which can seem like a really big number in rand terms. But President Cyril Ramaphosa in 2018 set an investment target of $100 billion over five years, and at an investment conference in Sandton in October of that year, no less than $55 billion in investment pledges were made by various titans of industry.
Africa’s miners and winemakers toast China’s row with Australia (Reuters)
Over the past three months, exports of South African wine to China jumped 50%, according to the Wines of South Africa trade body, and hopes are high for even more sales once Australian stocks are polished off during China’s Lunar New Year holiday. The lack of trade deals between China and countries in sub-Saharan Africa also means exporters may face an uphill battle. Despite its increasingly important role as an investor on the continent, China only signed its first free trade agreement with an African country, the Indian Ocean island nation of Mauritius, in January. So while some African products may leapfrog Australian goods in the pecking order, they remain at a disadvantage when competing against exports from countries with preferential Chinese trading terms such as Chile, Peru or New Zealand.
Mnangagwa places hope on AfCFTA, NDS1 (NewsDay)
President Emmerson Mnangagwa yesterday said the National Development Strategy 1 (NDS1), an economic blueprint that came into effect last month, will give fresh impetus to Zimbabwe’s economic recovery efforts. In his address to the Africa Reconstruction Global Summit, Mnangagwa also said the African Union Assembly held over the weekend declared 2021- 2031 the “Decade of African Roots and Diasporas”, an initiative which recognises that the African diaspora will be an important cog to the achievement of Agenda 2063. “The repercussions and impact on trade, investment and development [of the AfCFTA] will be far-reaching,” he said.
Rwandan Business Community Speaks Out Ahead of KPA Awards (KT Press)
Rwandans operating businesses through the Mombasa Port located on the Indian ocean in Kenya, stand a chance to win the second East Africa Maritime Awards (EAMA), officials of Kenya Ports Authority have said. The awards scheduled to take place on May 21, 2021 in Mombasa, Kenya, will recognize business operations in Kenya, Uganda, Tanzania, Rwanda, Burundi, South Sudan, and the Democratic Republic of Congo (DRC) which use the Port of Mombasa.
What Kenya should do to benefit from US free trade deal (Business Daily)
Kenya is currently negotiating a free trade agreement (FTA) with the United States of America. The timing of the negotiations could not have been more opportune given the expected expiry of the African Growth Opportunity Act (Agoa) in September 2025. Over 90 percent of the tariff lines under GSP qualify for duty-free preferences under Agoa’s eligibility provisions. However, if Kenya’s trade with the US was to be governed by GSP, the country would be unlikely to sustain or improve her export volume into the US since GSP only promises preferential market access for 4,800 product lines, which is not necessarily duty-free.
Chinese, Nigerian presidents exchange congratulations on 50th anniversary of ties (CGTN Africa)
Chinese President Xi Jinping on Wednesday exchanged congratulatory messages with his Nigerian counterpart, Muhammadu Buhari, on the 50th anniversary of the establishment of the two countries’ diplomatic relations. In recent years, the China-Nigeria strategic partnership has shown a sound momentum of development, and has effectively improved people’s well-being in both countries, Xi said.
Rabiu: With AfCFTA, Nigeria Must Avoid Becoming Dumping Ground (THISDAYLIVE)
The Chairman and Founder of the BUA Group, Alhaji Abdulsamad Rabiu in this interview spoke about a wide range of issues which included opportunities in the African Continental Free Trade Area agreement as well as the need to liberalise the cement industry so as to boost production and subsequently crash the price of the commodity.
Nigerian Business Steps In to Buy Vaccines While Government Dithers (Bloomberg)
Some of Nigeria’s biggest companies plan to raise as much as $100 million to purchase coronavirus vaccines as the government of Africa’s most populous nation is facing increasing criticism for not having secured deals with drugmakers. The Coalition Against Covid-19, led by top executives including Aliko Dangote, Africa’s richest man, and Herbert Wigwe, chief executive officer of Access Bank Plc, aims to purchase the 42 million doses allocated to Nigeria by the African Union’s vaccine procurement program, according to a statement Tuesday. It will start with a first tranche of 1 million doses worth $3.45 million, which should be ready for shipment within two weeks once a deposit is paid, the group said in the statement.
AfCFTA national awareness, sensitisation tour begins (Nigerian Tribune)
The National Action Committee on AfCFTA flags off nationwide awareness and sensitisation tour in line with its mandate to prepare Nigeria to take advantage of the AfCFTA Agreement while mitigating its threats to the Nigerian economy. According to a statement by the Committee, Francis Anatogu, Secretary, the National Action Committee on AfCFTA said, “Our mandate at the National Action Committee is to coordinate the activities of private and public sector at Federal and Sub-National levels to implement AfCFTA for benefit of Nigeria and Nigerians. Our strategy is to work with the states based on their areas of comparative advantages and priorities as a way of building up our national export trade and creating jobs at grassroots level.”
Coastal rail line will boost AfCFTA gains, says Buhari (The Guardian Nigeria)
President Muhammadu Buhari, yesterday, said the Kano-Maradi rail line linking the Niger Republic will boost trans-Sahara trade and boost the gains of the African Continental Free Trade Area Agreement (AfCFTA). Describing the rail line as critical infrastructure, he said it would establish an end-to-end logistic supply chain in railway transport services between the North and Southern ports in Lagos and Warri, Delta State. Buhari said when completed, the project would serve the import and export needs of Niger Republic and other countries in the sub-region through Nigerian ports, insisting that the country would earn vast revenues through trade expansion, while Niger Republic would benefit from the ease of transportation logistics at an affordable cost in its import and export businesses.
Stakeholders brainstorm On Liberia’s AfCFTA Status (The New Dawn Liberia)
A major stakeholder’s workshop on the African Continental Free Trade Area (AfCFTA) Agreement has officially opened at the Ministry of Commerce and Industry in Monrovia, with stakeholders emphasizing the significance of the instrument in boosting trade for Liberia. The workshop, being held from February 9-10, 2021, brings together participants from the public and private sectors.
Freight forwarders want government action on ‘nuisance’ charges (Ghanaweb)
The Ghana Institute of Freight Forwarders (GIFF) wants the Ministry of Transport to set up a committee to look into what it describes as arbitrary fees and charges in the shipping business that could stifle the sector. The worrisome fees and charges include administrative or container release fee, container cleaning and detention fee, demurrage, and interest charges on delayed payment of duties. GIFF is also concerned about the mode of calculation of state warehouse rent by Customs. “That’s one very sour point in our business right now, and one thing we are going to do this year is to push for these fees and charges to be regulated,” said Eddy Akrong, president of the institute.
KAA revamps airstrips in fresh plan to boost tourism (Business Daily)
Kenya Airports Authority (KAA) has embarked on expansion and rehabilitation of airstrips and airports as it seeks to open up tourism, boost the movement of cargo and enhance mobility of passengers across the country. The expansion, especially at airstrips, is meant to increase the capacity of these facilities so that they can accommodate larger aircraft such as code C airplanes. “We want to use these airstrips to open up the country for so many things. For instance, the facilities in the North Rift will play a crucial role in evacuation of farm produce for export while those in other areas like Migori will be instrumental in promoting tourism,” said KAA.
Uganda to spend 97pc of domestic revenue on debt repayments (The East African)
Uganda will spend a bulk of its domestic revenue on debt servicing in the next financial year as the country works to resuscitate its Covid-19 battered economy. According to the National Budget Framework Paper 2021/2022 recently approved by parliament, the country’s budget is projected at Ush45.65 trillion ($12.38 billion), of which Ush20.9 trillion ($5.66 billion) will go to debt servicing, against total domestic revenue that is projected at only Ush21.69 trillion ($5.88 billion). This means that 96.7 percent of Uganda’s total domestic revenue – whose tax revenue is projected to be Ush20.13 trillion ($5.46 billion) – will be spent on debt servicing.
Ivory Coast cacao traders want bigger share of local market (Fin24)
Cacao merchants in Ivory Coast on Tuesday attacked a “monopoly” of the world’s major purchasers of the raw material for chocolate, and called for local traders to get a greater share of the national market. In Ivory Coast’s latest broadside at international players in the chocolate business, the Group of Ivorian Traders (GNI) said it was time to “end the monopoly” of six corporations who dominate purchases of locally-grown cacao.” The six multinationals who make purchases in Ivory Coast through their subsidiaries absolutely should be required to systematically allot 20% to 30% of their contracts to Ivorian processors and exporters,” said GNI spokesperson Fabien Guei.
News from Africa and Africa’s international trade relations
6 reasons why Africa’s new free trade area is a global game changer (World Economic Forum)
The arrival of COVID-19 in 2020 has rapidly reshaped countries, societies and communities. Our response to the pandemic has changed political and social systems and created new social norms. Now the world continues to face a plethora of challenges – including climate change, inequality, technological change, migration and displacement – that are both complex and evolving, and which demand collective action. Most pressingly, the full economic impact of the pandemic is still not fully understood: The IMF projected a historic global GDP contraction of 4.4% in 2020 and a partial and uneven recovery in 2021, with growth at 5.2%. And yet, despite these challenges, global leadership and cooperation have been woefully lacking since the beginning of the COVID-19 crisis. During this time, our rules-based international order became more fragile and even “disordered”. We saw a rise of populism, protectionism and nationalism, exacerbated by COVID-19. Citizens’ trust in governments across the world has been eroded, creating fragility in once-stable democracies. Events in the US Capitol last month simply highlight the fragility of the previously thought-to-be-most-stable of democracies. Enter the African Continental Free Trade Area (AfCFTA).
New Head of African Union Faces Daunting Challenges (IDN InDepthNews)
He’s been described as a “master strategist”, but can the incoming chair of the African Union beat the daunting challenges ahead? That is the difficult question facing Felix-Antoine Tshisekedi Tshilombo, president of the Democratic Republic (DRC) as he assumes the post just relinquished by South African leader Cyril Ramaphosa. Skeptics are already circling President Tshisekedi who has ambitious goals for the AU in 2021. But he faces serious fires burning at home as he ends a troubled alliance with former President Joseph Kabila and is easing out other holdovers from Kabila’s regime. Observers are already wondering how he will handle it all.
What Is Dr. Monique Nsanzabaganwa Bringing to AU? (KT Press)
Dr. Monique Nsanzabaganwa, 49, was elected this Saturday as Deputy Chairperson of the African Union Commission. She will replace Ghanaian, Quartey Thomas Kwesi, and assist Moussa Faki Mahamat who was also reelected as president of the African Union Commission (AUC) for a new term of 4 years. KTPress takes a look at the gap she will leave in Rwanda’s financial sector, and what Nsanzabaganwa could bring on board at the helm of the African Union especially when the continent needs strategic moves to implement the African Continental Free Trade Area (AfCFTA) agreement.
Covid-19: US$500b Needed To Jump Start African Economies (New Zimbabwe)
African Ministers for Finance have unanimously agreed that at least US$500 billion will be required to jump start their economies battered by the Covid-19 pandemic. This came out during a recent virtual meeting for the ministers, which was convened by the United Nations Economic Commission for Africa (UNECA) and the International Monetary Fund (IMF). The continental purse bearers were unanimous in their call for additional liquidity of US$500 billion in Special Drawing Rights (SDR), better market access, more concessional resources and an extension in the Debt Service Suspension Initiative (DSSI), given the prolonged nature of the pandemic.
A new future for Africa (Brand South Africa)
In the first diplomatic event of the new year President Cyril Ramaphosa attended the 51st World Economic Forum (WEF) virtually, under theme “A crucial year to rebuild trust”. The theme builds on the “Great Reset” that WEF founder Klaus Schwab and Prince Charles launched in 2021. The event took place two weeks before President Cyril Ramaphosa hands over the African Union Chairmanship, after a year of leading the continent through one of the most difficult years in human history. In his virtual address President Cyril Ramaphosa addressed the effects of the Coronavirus and the roll out of plan for the vaccinations in the African continent. He also talked to the progress and establishment of the African Continental Free Trade Area (AfCFTA).
Until Africans get the Covid vaccinations they need, the whole world will suffer: Paul Kagame (The Guardian)
The current situation with regard to the access and distribution of Covid-19 vaccines vividly illustrates the decades-old contradictions of the world order. Rich and powerful nations have rushed to lock up supply of multiple vaccine candidates. Worse, some are hoarding vaccines – purchasing many times more doses than they need. This leaves African and other developing countries either far behind in the vaccine queue, or not in it at all.
In this context, the billions of dollars it would cost to distribute vaccines across the developing world is not particularly high, given the return on the investment. Doing so would unlock global commerce, which would benefit all trading nations during the long road to economic recovery that lies ahead of us. We need global value chains to be fully operational again and to include everyone.
Kenya’s President Uhuru Kenyatta prioritizes investing in women in tech (UNECA)
Kenyan President Uhuru Kenyatta says he is determined to double down on efforts to back women entrepreneurs in Africa. Speaking at the online Africa Business Forum, hosted by the Economic Commission for Africa (ECA), he insisted that “our girls are equal in every single manner to our boys” and was committed to “work together not only in Kenya but across the continent, to ensure that women are able to take their rightful place in society.” Asked whether he considered himself a feminist, the President responded positively saying “women have the same capacity, if not greater capacity, than their male counterparts”. He went on to commit himself “both as President and a politician, to do everything I can to ensure that the women in our country get the same, if not more opportunity than their male counterparts.”
EALA sittings impasse added on to Summit agenda (The East African)
The EAC Heads of State Summit may have to determine the regional Assembly’s sittings when they meet on February 27. This follows a lack of consensus among legislators on the number of sittings the East African Legislative Assembly (Eala) should hold in the remaining five months of the 2020/21 financial year. Under the 2020/21 budgetary vote of $97 million, the Committee on General Purpose realigned Eala’s activities in line with a budget allocation of $16 million, but the Council of Ministers called for the reduction of the number of Eala sittings from 21 to 14, a move the Assembly protested saying it was tantamount to micromanaging their activities.
Covax releases distribution plans according to requests by country (The East African)
East Africa will receive close to 10 million doses of Covid-19 vaccines from the Covax Facility, a global initiative aimed at equitable access to the highly sought after vaccines. In an indicative vaccine allocation plan released last week, the Gavi-run facility announced the exact doses of Pfizer-BioNTech and AstraZeneca-University of Oxford vaccines that countries signed up to that they should expect to receive in the coming months, starting now. According to the interim distribution plan, Kenya, Rwanda, South Sudan and Uganda are the only countries that will receive 9,690,960 doses, in proportion to their population size.
African banks may wait until 2024 to return to pre-crisis revenues – IFC (The Africa Report)
Pimenta is a keen observer of the world of African finance. In charge of a committed portfolio of nearly $18bn at the IFC, this Portuguese and French national, who holds degrees from top Paris universities (École Polytechnique and École Nationale des Ponts et Chaussées), Pimenta has spent nearly 25 years working his way up the IFC’s ranks. He talks here about the state of Africa’s financial industry amid the Covid-19 crisis and the challenges that await the continent.
Africa and the IMF – an unlikely duo (ISS Africa)
In the aftermath of the Great Lockdown, the International Monetary Fund (IMF) has been both proactive and relatively empathetic. The organisation has doubled the capacity of its two programmes meant primarily for disaster relief – the Rapid Financing Instrument and the Rapid Credit Facility – since the onset of the pandemic in March 2020. It has disbursed nearly US$90 billion, including more than US$16 billion to Africa. Of the 100 different programmes the IMF has funded over the past nine months, it’s attached just 13 conditionalities. Also, on 8 January the IMF announced it had secured enough funding to maintain its ‘lending capacity at about US$1 trillion for the coming years,’ signalling its intention to continue this aggressive lending. This is good news – Africa’s economic recovery promises to be long and arduous.’ However, it’s also raising eyebrows, as the IMF hasn’t been a frequent protagonist in Africa’s macroeconomic history.
ACTING Launches African Gas 2021 Report, Forecasts Rapid Growth of Gas-to-Power (Africanews)
The African Coalition for Trade & Investment in Natural Gas (ACTING) is pleased to announce the release and publication of its inaugural “State of Play: African Gas” report, providing the most comprehensive resource on Sub-Saharan Africa’s natural gas markets. Low gas penetration rates in sub-Saharan Africa contrast with the vast amount of natural gas reserves found onshore and offshore from Senegal to Mozambique and whose development could lift millions out of poverty and provide the resource the continent needs to industrialise.
The New Creative Sector Workspace – Adapt, Innovate and Thrive Creative Africa Nexus Virtual Event (Afreximbank)
The Creative Africa Nexus (CANEX), a programme put in place by the African Export-Import Bank (Afreximbank) to support Africa’s creative and cultural industries, announces a series of virtual forums in the lead-up to the Intra-African Trade Fair 2021 (IATF2021). Designed specifically for African creatives looking for ways to monetise their content across the digital landscape, the forum will be a space to share, discuss and create solutions that will encourage creatives to find innovative ways to use existing technology to increase their remuneration and thrive in their careers.
Ngozi Okonjo-Iweala poised to become first woman to lead WTO (Aljazeera.com)
The incoming chief of the World Trade Organization has a reputation for shaking up the guardians of wealth and power that will come in handy in her new role. Now, with President Joe Biden’s administration’s blessing after the only other candidate withdrew, Ngozi Okonjo-Iweala of Nigeria is poised to become the first woman and the first African to lead the WTO in its 25-year history. She will also be the first American citizen to hold the organization’s top job.
The WTO badly needs to be shaken up. All three pillars of the Geneva-based trade body’s work are under threat. Its usefulness has been called into question as China’s brand of state capitalism increases its footprint on the global economy, fomenting criticism from Brussels to Brasilia. The WTO plans to hold a meeting in the coming days where its members will consider a final decision on Okonjo-Iweala’s candidacy. If none of the WTO’s 164 members oppose her, she will be appointed for a four-year term, with a possible four-year extension in 2025.
Comment: Reviving world trade amid COVID-19
More info: WTO Director-General selection process
East Asian economies drive global trade recovery | UNCTAD
Led by trade in goods, global trade recovered in the last quarter of 2020, reducing its overall decline for the year to about 9%, according to UNCTAD’s new Global Trade Update published on 10 February. But while imports and exports of goods grew by about 8% in the fourth quarter of last year, trade in services stagnated as measures taken in the global fight against COVID-19 continued to affect sectors such as travel. The report also finds that COVID-19 has affected countries’ competitiveness in global markets, with some economies gaining market share in certain sectors while losing it in others.
DDG Wolff: WTO must demonstrate soon it can deliver (WTO)
The WTO must demonstrate soon and visibly that it can deliver on subjects relevant to all those who engage in international trade or are affected by it – which is pretty much everyone. This is a political challenge that must be taken seriously. There has to be more than just talk. It is not enough for government leaders to say that they favor multilateralism and then fail to invest enough to attain results.
What should the centerpieces be of the WTO Agenda going forward? I suggest ten: 1) WTO Members must not fail to address Trade and Health; 2) WTO Members must not fail to address Trade and Economic Recovery; 3) WTO Members must not fail to address Trade and the Environment; 4) WTO Members must not fail to address trade in the Global Digital Economy; 5) WTO Members must not fail to provide trade with a Level Playing Field; 6) WTO Members must not fail to make Agricultural Trade less distorted. This is in the best interests of all; 7) WTO Members must not fail to address the central role of trade as a driver of Economic Development; 8) WTO Members must not fail to address Trade and Peace; 9) WTO Members must restore Balance to the world trading system; 10) WTO Members must not fail to address the Governance of the trading system.
On monitoring trade results in the least developed countries (Trade for Development News)
Monitoring, evaluating and learning, or MEL, is the bedrock of a results-driven and adaptive programme. For trade development work, there are specific considerations and complexities. Add to that the capacity constraints in least developed countries (LDCs), and such monitoring must be robust, yet context specific. Effective monitoring enables work that is focused on delivering impact. Having worked across the complex trade environments of 51 least developed and recently graduated countries for more than a decade, the Enhanced Integrated Framework (EIF) has continued to take the lessons learned from this partnership to better address what LDCs need. In this light three core areas can be drawn from this experience.
World economy will lose trillions if poor countries are shorted on vaccines: OECD (Financial Post)
As the Trudeau government is forced to explain delays rolling out COVID-19 vaccines, some of the world’s economic and health leaders are warning of catastrophic financial consequences if poorer countries are shortchanged on vaccinations. At a video meeting convened by the Paris-based Organization for Economic Co-operation and Development (OECD) on Monday, Secretary-General Angel Gurria predicted that rich countries would see their economies shrink by trillions of dollars if they don’t do more to help poor countries receive vaccines.
Debt sustainability and financing for development: A key post-COVID challenge (Brookings Institution)
One of the key challenges and priorities for policymakers in 2021 will undoubtedly be sovereign debt sustainability and the broader issue of financing for development. To be sure, even prior to the COVID-19 pandemic, sovereign debt across sub-Saharan Africa had been increasing due to growing financing needs against the backdrop of insufficient domestic resource mobilization. The 2008-2009 global financial crisis resulted in ultra-low global interest rates and facilitated access to capital markets for many countries that took advantage of investor reach for yield to issue sovereign debt on international capital markets.
With COVID-19 blamed for surge in food prices, can trade facilitation efforts help? (Devex)
The COVID-19 pandemic has disrupted agricultural output and supply chains globally, exacerbating food price increases at a time when economic contraction and rising unemployment have also hit family incomes in low- and middle-income countries. While this threatens to push the 2030 SDGs on food security further out of reach, trade facilitation efforts such as the African Continental Free Trade Area, or AfCFTA, could help. The Food and Agriculture Organization Food Price index surged again in January, climbing 4.3% from December to its highest level since 2014. Sub-indices for cereals, sugar, and vegetable oil – all key for meeting basic food needs – experienced the strongest gains, with meat and dairy prices also increasing by a smaller percentage.
Biden treads carefully around Trump’s combative trade policy (Associated Press)
Biden and his team are tiptoeing around one of Donald Trump’s most divisive signature legacies: His go-it-alone moves to start a trade war with China and bludgeon some of America’s closest allies with a gale of tariffs on their steel, aluminum and other goods. In upending seven decades of presidential support for free trade, Trump vowed to shrink the U.S. trade deficit and restore millions of lost American factory jobs. Yet for now, the Biden administration seems intent on approaching trade with caution and deliberation.
Covid-19 and food security: can emerging economies mitigate rising prices? (Oxford Business Group)
An increase in food prices following the coronavirus pandemic has intensified concerns related to global food security. For emerging markets, this has further underlined the importance of regional cooperation and innovative solutions to help overcome the challenges. The Food Price Index, established by the UN’s Food and Agriculture Organisation (FAO) to track monthly changes in international food prices, rose for the eighth consecutive month in January, primarily as a result of Covid-19. More broadly, the World Bank recently reported that global food prices rose by nearly 20% in the 12 months from January 2020.
Digital Economy Agreements: The New Phase in Economic Alliances (Valdai Discussion Club)
During the crisis year of 2020 a new trend has set in the formation of international economic alliances that was to a significant degree expedited by the unprecedented challenges posed by the pandemic. The emergence of digital economic agreements (DEAs) was a response to the need to forge ahead with opening markets amid the excesses of protectionism, while at the same time addressing the rising demand for digital services and international cooperation triggered by the Covid crisis. The propagation of digital economic accords may deliver a crucial contribution to bolstering the dynamism of the global economy in the face of a massive economic downturn.