tralac Daily News
South Africa’s President Cyril Ramaphosa is Thursday evening expected to deliver the nation’s 2021 State of The Nation Address (SONA) to the first-ever Hybrid Joint Sitting of the National Assembly and the National Council of Provinces on Thursday, the event will for the first time be held virtually, due to the coronavirus restrictions. The president is set to talk about COVID-19 vaccines as a pressing priority as the cost of COVID-19 lockdown restrictions wreak havoc, with South Africa’s economy in the doldrums.
Nigeria justifies war on cryptocurrencies, takes tougher actions (The East African)
The Central Bank of Nigeria (CBN) has ignored the uproar over a crackdown on cryptocurrencies, giving several reasons for the move, ordering investigations and blocking all the accounts of companies trading in them. The apex bank on February 5 joined countries that have outlawed cryptocurrencies, asking banks and financial institutions to close accounts. Two days later, it opened investigations into the bank accounts and blocked those suspected to be used for fraud. The bank on Sunday explained that many other countries, investors and economists have warned against cryptocurrencies because of the “significant risks” in transactions. The risks, it said, include loss of investments, money laundering, terrorism financing, illicit fund flows and criminal activities. Defining cryptocurrencies as digital or virtual currencies issued by largely anonymous entities and secured by cryptography, the bank said cryptography is a method of encrypting and hiding codes that prevent oversight, accountability and regulation.
State plans to train more youth in blue economy push (Business Daily)
The government is seeking to have more trained personal in maritime in a bid to increase the sector’s contribution to the economy. Shipping and Maritime Principal Secretary Nancy Karigithu said the government plans to support young people to undertake studies in the maritime sector to enable them to work at home and abroad. “We are creating a very strong pillar for the development of the blue economy and the maritime sector,” said Ms Karigithu at the Kenya Maritime Authority (KMA) headquarters. The latest plan to encourage youth to undertake maritime training is the rollout out of a dedicated fund that will see students get loans to finance their education.
SMEs call for fund to boost exports in horticulture sector (Business Daily)
SMEs in the agribusiness sector have called on the government to help them establish external business links and set up a revolving fund to assist those looking to export produce. Participants at an exporters forum held in Nairobi Wednesday said that helping the small scale sellers could triple Kenya’s export earnings from horticulture. Local SMEs lack a seamless and well-funded platform to source produce and ship the same to foreign markets, putting them at a disadvantage compared to well-oiled multinational producers. “Our partner businesspeople pledge payments upon receiving the shipment but we lack funds to source, package and ship the consignments. Our buyers pay upon arrival and many are unwilling to take the risk of upfront payments,” said Nancy Wakaba, chief executive of Modest Exporters.
Truck drivers conveying food items, timber and other goods pass through a 93 checkpoint-hell through Taraba and Benue states to get to their destination, driving up food prices and subjecting the drivers to exploitation from corrupt law enforcement agents and thugs, as Daily Trust reports. A combination of extortion by security agents, multiple taxes and illegal checkpoints is forcing truck drivers conveying farm produce, cattle and timber to abandon parts of Benue and Taraba state roads.
Cabinet has given its approval for Air Namibia to be voluntarily liquidated. The intention is to register the resolution with Business and Intellectual Property Authority (BIPA) before 18 February so that Challenge Air (which took Air Namibia over unpaid dues) cannot attach any of the airline's assets. In leaked documents from a consultative meeting yesterday, Cabinet made the decision that the airline's workers will enjoy preferential treatment and receive their full severance packages from the liquidators.
In a communique yesterday, the Air Namibia management informed the public that all flights with the airline are cancelled and all aircrafts will return to the base. The reservation system for taking new bookings has also been suspended. “Affected passengers must register their claims for a refund,” the communique noted. A source close to the matter confirmed to The Namibian that it seems the government changed its mind regarding the appointment of the three new directors and have decided to rather appoint two government employees.
An organization working in the SADC region, Africa Trust Group (ATG), has partnered Enygma Ventures to financially support Malawian women who have existing businesses and those with business ideas. This is according to Lelemba Phiri founder of the ATG which is an operating partner of Enygma Ventures which focuses on bridging the gender gap in access to finance for early-stage women entrepreneurs in the SADC region. In an interview, Phiri told Malawi24 that they thought of extending their operations in Malawi because they have seen several women entrepreneurs that are already working hard to finding solutions to tough challenges through business. She, however, said that regionally, women still have less access to funding a development which she said has resulted into losing of up to $95billion in productivity every year just because women are not fully included in economic activities.
Information and communication technology (ICT) market research firm International Data Corporation (IDC) says there are positive opportunities in Ethiopia as the government focuses on liberalising the telecommunications sector and allowing for foreign investment. This move creates space for organisations and investors to explore opportunities in this changing ICT ecosystem, which will have long-term benefits for the country, the IDC says in its ‘Ethiopia ICT Landscape and Future Market Opportunities’ market perspective insight analysis.
The Nigerian Office of Trade Negotiations (NOTN) says trading has not begun under the African Continental Free Trade Area (AfCFTA) agreement because it is still in the process of domesticating the guidelines. Victor Liman, NOTN acting director-general and chief trade negotiator, told journalists in Abuja that the processes involved before implementation include the enactment of a law by the national assembly in line with the provisions of section 12 of the amended 1999 constitution. “You don’t just ratify an agreement and start implementation. You have to first of all address the domestic issues that would allow the implementation to kick-start. You have to put the right framework in place,” he explained.
The purchase of one million doses of COVID-19 vaccines has split leaders of Nigeria’s private sector with allegations of falsehood and insincerity being branded by top players. Top industrial firm, BUA Group, has accused the private sector-led Coalition Against COVID-19 (CACOVID), which it is part of, of mischief and spreading false information.
“BUA decided to secure these 1million vaccines by paying the full amount for the vaccines today (Monday) because these vaccines became available only last week through AFREXIM. We expect the vaccines to be delivered within the next 14 days and hope priority will be given to our frontline workers who have committed their lives to managing the pandemic,” a statement signed by BUA founder, Abdul Samad Rabiu, said.
CPI to Rise by 16.10% YoY in January 2021 (Proshare Nigeria)
As at December 2020, inflation in advanced economies had firmed up (US- 1.4% and UK - 0.6%) when compared to 1.2% and 0.4% in November 2020 respectively. Euro Area inflation remained unchanged at -0.3%. Clearly, at current levels it still lags the 2% target which could trigger a change in monetary policy direction. As the global economy recovers gradually, we expect that movement in energy prices will be a key driver of global inflation in the near term. Already, we have seen this play out in the past few months where inflation in many climes ticked higher following improvements in crude oil prices.
At 15.75% (as at December 2020), Nigeria's inflation rate sits at a three-year high and sufficiently above the 12% - 13% threshold that the CBN considers injurious to economic growth. While some of the pre cursors to the inflationary pressure have eased ( re-opened borders and electricity tariff hike roll back), we worry about the sticky nature of prices and the time horizon in which price adjustments can occur. On land border closure, we note that although the borders have been re-opened, importation of certain food items are still restricted. We therefore look to the rules of origin guiding the AfCFTA which is expected to have seen considerable progress by July 2021. Under the AfCFTA, tariff and non-tariff barriers to trade are expected to be eliminated. Thus, ensuring free movement of goods that pass the conditions of the rules of origin. Pending clear guidance on rules guiding trade under the AfCFTA, we expect local food supply capacity to remain stretched and food prices to remain elevated. In addition to these are security challenges which continue to plague the nation's food producing regions.
“Insufficient parking space for cargo trucks along the northern transport corridor trunk routes still pauses a safety challenge for the traders and border communities,” he said. The council has further urged revenue authorities to install cargo scanners at border points to facilitate trade.
In October last year, truck traffic snarl-up to the Busia border exceeded 15 kilometres, disrupting cross-border trade and escalating the cost of doing business. This saw EABC call for mutual recognition of Covid-19 tests across the region.
CEMAC: Cameroon repaid XAF382 bln to investors on the local money market in 2020 (MINFI) (Business in Cameroon)
During the 2020 fiscal year, Cameroon repaid XAF382 billion of loans raised on BEAC securities market. We gatherd that inorder to repay those loans, the country raised XAF413 billion by issuing treasury bills (short-term securities) on the same market. According to Finance Minister Louis Paul Motaze, during the period under review, Cameroon’s net borrowings on the CEMAC money market was XAF31 billion. The official disclosed the figure on February 9, 2021, during the presentation of Cameroon’s 2021 public securities issuance program in Douala.
"The funds raised through the issuance of treasury bills helped ensure better cash management by alleviating tensions related to the periodic decline in revenues. As for the funds raised through the issuance of treasury bonds, they contributed to the continuation and completion of many investment projects. These investments include XAF80 billion for road infrastructure, XAF70 billion for sports infrastructure, XAF45 billion for the Covid-19 response plan...," the Minister of Finance explains.
Zim's Yearly Exports Grow To US$4.4b (New Zimbabwe)
ZIMBABWE’S annual exports for 2020 defied Covid-19 pandemic and grew to a record US$4.4 billion on the backdrop of a raft of economic reform measures, the country’s trade facilitation body, Zimtrade has reported. Predictions by the World Trade Organization (WTO) last year had projected “world trade is expected to fall by between 13 to 32% in 2020 as the Covid-19 pandemic disrupts normal economic activity and life around the world”. However, based on the Zimbabwe National Statistic Agency (Zimstat) data, the trade facilitator said exports grew by 2.7% in 2020. The growth coincides with increased foreign currency availability on the Reserve Bank of Zimbabwe (RBZ) foreign exchange auction system coupled with stable exchange rates, which have spurred businesses. “In terms of monetary value, the nation’s exports stood at US$4.39 billion, up from US$4.28 billion recorded in the same period in 2019,” Zimtrade said. “Although this falls short of the 10% export growth set under the National Export Strategy, it reflects on the commendable efforts that went to ensure the country retains a positive export growth.”
News from Africa and Africa’s international trade relations
AfCFTA could be ‘jackpot for SA farmers’ (Food for Mzansi)
Bearing in mind that Mzansi is a major exporter of food products to the rest of the continent, there can be no doubt that the African Continental Free Trade Agreement (AfCFTA) will boost local farmers. This is the view of Dr Sifiso Ntombela, chief economist of the National Agricultural Marketing Council (NAMC), about AfCFTA, which came into effect on 1 January 2021. The agreement, he believes, presents an opportunity to boost intra-African trade and farmers will benefit from new open-trade opportunities.
Africa business leaders optimistic of swift economic recovery in 2021 (The Guardian, Nigeria)
Business leaders in Africa have expressed the hope that economic prosperity and increase in trading activities would return to the continent from 2021. Their optimism is sequel to the outcome of a survey of more than 150 chief executive officers (CEOs) in the continent released by the Africa CEO Forum, and Deloitte.
According to the survey, 95 per cent of the CEOs said the Covid-19 crisis has had negative consequences in Africa across all sectors, and sub-regions with much impact on business activities. Although the consumer business, financial services, and energy sectors were the most optimistic prior to the crisis, at the moment, they are the most concerned about the future. However, the morale of stakeholders from the food, health, and education industries is the least impacted. The survey states, “Across all sectors, the sense of resilience is striking, as 80 per cent of survey respondents exhibit a high degree of confidence about the continent’s long-term outlook compared with just 73 per cent one year earlier. This is illustrated by the fact that 60 per cent are confident that business will ‘return to normal’ in 2021. Respondents are also pleased about current and future developments in terms of increasing local production, but above all in terms of digitalisation for which they expect significant support from public authorities.”
Agribusiness investment is currently the most exciting venture for Africa. Africa’s food import bill-estimated by the African Development Bank annually at $43 billion in 2019, should both be a source of worry and energise the continent into self-sustenance. Food imports create dependency and outflow of much needed foreign exchange. These food imports do not mean the continent’s land is unproductive, but rather a combination of factors including limited intra-continental trade and entrepreneurs’ inability to see agribusiness as a goldmine.
The start of trading under the African Continental Free Trade Area (AfCFTA) agreement on 1 January 2021 marks the dawn of a new era in Africa’s development journey. Over time, the AfCFTA will eliminate import tariffs on 97 per cent of goods traded on the continent, as well as address non-tariff barriers.
African countries have also been trapped in the lower levels of the global economy by selling low-value raw materials and buying higher-value manufactured goods. This is seen as one of Africa’s major challenges for development. The free trade agreement seeks to reverse this.
Increased production for exports cannot happen in a vacuum. The agreement attempts to solve demand issues by creating a single African market, but there are reasons that countries haven’t been able to scale up production to match the consumption of their citizens.
There will be several other barriers to trade including the deficit in hard and soft infrastructure, certification requirements, bureaucratic red tape and rent-seeking by government officials. A mechanism has been set up for reporting and addressing non-tariff barriers.
The East African Legislative Assembly has urged the EAC Council of Ministers to cause Lake Victoria Basin Commission (LVBC) to embark on the process of harmonization of Partner States’ policies and laws appertaining to the Lake Victoria Basin.
A report of the Committee on Agriculture, Tourism and Natural Resources (ATNR) on the On-Spot Assessment of the Lake Victoria Basin, presented yesterday to the House by Hon. Mathias Kasamba (on behalf of the substantive Committee Chair, Hon. Dr. Abdulla H. Makame), also tasks the region to make every effort to safeguard LVBC’s mandate, by strengthening its capacity, inter alia through enhanced funding and provision of requisite human resources.
The International Organization for Migration and COMESA will review their current memorandum of understanding (MoU) to incorporate emerging issues on movement of people particularly in the implementation of the African Continental Free Trade Area (ACFTA) as well as the COVID-19 pandemic. Priority issues to be addressed are those relating to free movement of people under the ACFTA framework now that majority of the African Union member States have endorsed the free movement of goods and services. Also notable during the COVID-19 pandemic, has been an upsurge of non-tariff barriers affecting free movement or people, goods and services as countries strive to contain the spread of the pandemic
Electric vehicle battery manufacturing: Why SADC needs to act now (Mail & Guardian)
The pandemic has highlighted a number of systemic problems in the Southern Africa Development Community (SADC) region, the major one being the high rate of unemployment and poverty. Even prior to the pandemic, the region’s unemployment rate was hovering around 11%, with a youth unemployment rate of about 25%. Unemployment directly affects the levels of poverty in the region. Instead of lamenting how our lives have changed since the advent of Covid-19, we should use the pandemic to look at new ways of doing things, such as fast-tracking initiatives to improve the livelihoods of everyone in SADC. An opportunity staring us in the face is the electrification of transport; in other words the transition from petrol and diesel vehicles to electric vehicles. A report titled Jobs in green and healthy transport states that the Electric Vehicle (EV) industry is set to create at least 10-million jobs worldwide. What can SADC governments do to make sure that the region gets a share of those job opportunities?
The President of the African Development Bank, Dr. Akinwumi A. Adesina, has called for fair access to COVID-19 vaccines for Africans and said debt relief would help African economies recover faster and better from the pandemic. Speaking on 8 February at a virtual event held in his honour as the outgoing African of the Year of African Leadership Magazine, the Bank President warned that so long as the coronavirus was unchecked in any part of the world, no one would be safe. “There is light at the end of the tunnel – it just happens to be a very long tunnel. I am very positive that African economies will bounce back over the next two years, but the speed of recovery will depend on ensuring that Africa gets enough vaccines for its population,” Adesina said. “The world must not short-change Africa on access to vaccines,” he added.
He also said significant debt relief would be key to accelerating African economies’ recovery from the COVID-19 crisis. “To recover faster, Africa will need significant debt forgiveness from bilateral and official creditors,” he said during the virtual event attended by Douye Diri, the Governor of the Nigerian state of Bayelsa, and Benoy Berry, Chairman of Contec Global Worldwide.
Given the cross-border nature of IFFs, action is needed at the global level. In 2019, the UN launched the High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (FACTI). This panel has been tasked to review current challenges and trends related to financial accountability, transparency and integrity, and to make evidence-based recommendations on making systems more comprehensive, robust, effective, and universal in approach. Their first report with their findings is due to be launched on 25 February.
The 34th Session of the African Union Summit ended on 7 February 2021 with the new Chair, President Felix Tshisekedi of the Democratic Republic of the Congo (DRC), outlining an ambitious agenda for the year.
Addressing a virtual gathering of fellow heads of state and government at the two-day summit, President Tshisekedi said his priorities would be tackling the COVID-19 pandemic, accelerating the operationalization of the African Continental Free Trade Area (AfCFTA) and fostering peace and security on the continent.
Combating climate change, expediting regional integration, investing in human capital, promoting Africa’s culture and empowering women and youth will also get his attention.
The Secretary-General of the African Continental Free Trade Area (AfCFTA) Secretariat, Wamkele Mene, has, since assuming office in March 2020, persistently hammered on the urgent need for effective implementation of the trade pact to stimulate Africa’s recession-threatened economy. Mene reiterated that theme on 3 December at the virtual launch of the Futures Report: Making the AfCFTA Work for Women and Youth. Produced by the UN Development Programme (UNDP) and the AfCFTA Secretariat, the 100-page report details challenges and opportunities in intra-African trade, and reflects the views of some of Africa’s leading development experts, policy makers and business leaders, as well as the lived experiences of traders, including women and youth.
The economic damage wrought by the coronavirus will probably lead more African nations to seek debt restructuring, the head of the United Nations Economic Commission for Africa said.
With government revenue taking strain because of the slowdown in economic growth, some countries are less equipped to meet the demands of their citizens, Uneca Executive Secretary Vera Songwe said in an interview. She didn’t specify which nations might seek relief, but said it would be those made most vulnerable by the crisis. “African countries don’t have the resilience buffers that we had in 2020,” Songwe said. “There probably will be more countries that will opt for the G-20 debt framework,” because they need additional fiscal space to purchase vaccines, she said.
The G-20 framework aims to bring creditors including China into an agreement to rework the debt of countries in danger of defaulting. China is Ethiopia’s biggest bilateral creditor, accounting for 23% of its total public debt burden of $27.8 billion, according to World Bank data.Under the G-20 program, debtors are committed to seek similar terms of the resulting bilateral restructuring with private creditors. It’s unclear what that will mean for Eurobond-holders, said Songwe, who spent more than a decade at the World Bank before being appointed head of the UN body in 2017.
“We’ll get better clarity as one or two countries take it and start doing it,” she said. “But essentially when you restructure your debt, you put everything in the basket.”
Notwithstanding that there is no vaccine with 100% efficacy in preventing Covid-19, global efforts at developing a vaccine have reached encouraging levels.
The development and approval of the vaccines is the biggest hope in the fight against a resurgent Covid-19
The rollout of vaccines across the world has just begun with many countries, mainly in the Western world, already taking deliveries. However, there is concern at what is being referred to as “vaccine nationalism”, as developed countries hoard vaccines while many other countries, mainly in Africa and the developing world, are left without.
Meanwhile, in a memo to the AU, the International Commission of Jurists (ICJ) has recommended the African Union acknowledge that Covid-19 vaccines are a “public good” and that all states must ensure access to these vaccines in order to realise the human rights of their inhabitants. The vaccine deficit has become all the more apparent for Southern Africa, where the current second wave of the pandemic has led to more cases and fatalities, as well as reports of the overwhelming of medical facilities in countries like Malawi and Zambia, leading Gavi, the Global Vaccine Alliance, to suggest that Covid-19’s impact may be “vastly underestimated” in African countries.
Climate Adaptation Summit Launches Adaptation Action Agenda 2030 (IISD Reporting Services)
The Climate Adaptation Summit (CAS) 2021 launched the Adaptation Action Agenda 2030 and Decade of Action, establishing practical climate adaptation solutions and plans leading to 2030. The Adaptation Action Agenda 2030, which will guide the Decade of Action towards 2030, joins over 50 partners to establish initiatives aimed at concrete actions and partnerships to increase climate resiliency. The Action Agenda is designed to complement the SDGs and promote progress towards the adaptation and resilience goals of the Paris Agreement on climate change, and encourages partners to collaborate to deploy knowledge tools, technical assistance frameworks, digital innovation, financing solutions, and youth empowerment programmes to support adaptation projects.
The Earth’s changing climate is already having major consequences for the environment and society. While these impacts highlight the need to cut greenhouse gas emissions, they also show that communities around the world will need to adapt to manage the changes around them. But agreeing on and implementing adaptation decisions can be complex, requiring careful consideration of multiple factors and perspectives, plus balancing different priorities over different timescales.
But there are no blueprints for this learning process. Instead, we have to make progress through trial and improvement. In this article, we unpack insights from a new open-access book on building adaptation and resilience in Africa.
Half of British exporters to the EU are facing difficulties with mounting Brexit red tape and border disruption after a month of the new rules, according to one of the most comprehensive business surveys since leaving the bloc. The British Chambers of Commerce (BCC) said that 49% of UK-based exporters in a survey of 470 firms had suffered problems with post-Brexit arrangements since the start of the year, as companies struggled to adapt and faced higher costs due to extra border checks and paperwork. Little more than a month into the UK’s new relationship with Brussels, the leading business lobby group warned that urgent action from both the British government and the EU was necessary to solve severe issues with cross-border trade. It said UK companies were facing extra costs, delays in shipments to and from the continent, mountains of new paperwork and were often confused about whether particular rules applied to them or not.
At the first meeting of the year on e-commerce negotiations, held on 5 February, co-convenor Ambassador George Mina (Australia) commended WTO members for finalizing a clean negotiating text on the issue of unsolicited commercial messages, otherwise known as spam. Ambassador Mina said that 2021 is a critical year for the e-commerce initiative and stressed that members need to intensify the pace of talks to deliver on the goal of substantial progress by the 12th Ministerial Conference (MC12) due to take place this year.