Investing in African Mining Indaba (Mail & Guardian)
The local mining industry is thriving, but infrastructure needs to be improved and changes need to be made for the sector to reach its true potential. This was the message from President Cyril Ramaphosa, who addressed attendees on the second morning of the Investing in African Mining Indaba 2022. “Across the world, most industries have had to adapt to new circumstances, confront new challenges and also prepare to seize new opportunities,” he said. The mining sector in Africa is no exception. Couple this with the benefits and potential risks of rapid technological change, shifts in demand, stresses caused by climate change, as well as massive geopolitical uncertainty, and the industry has a fair amount of work to do to develop and grow.
Diversifying the country’s energy mix demands that the government puts legislation in place to support renewables, minimise the effects of climate change and boost investment in sustainable energy supplies such as wind and solar, he said. In this forward march towards a low carbon future, the president stressed that the country’s efforts have to be both realistic, sustainable and don’t leave anyone behind. “As our reliance on coal reduces over time, it is critical that we create pathways towards new economic activity for affected workers, communities and industries.”
“South Africa plans to focus on future strategic metals like copper, nickel and cobalt. And, as a global leader in platinum group metals, South Africa is perfectly positioned to take advantage of the massive growth in demand for these resources.” The country can also play a key role in the hydrogen economy, and there are plans for it to be an important hub for the production and export of green hydrogen.
But this doesn’t mean that the mining industry should simply say goodbye to many of the minerals that have been the sector’s bread and butter for decades, he cautioned, stressing that the continent should rather protect and preserve its valuable natural resources. “As a continent with such a rich abundance of mineral resources, Africa needs to beneficiate its mineral endowments for the benefit of current and future generations.”
South African wineries set eyes on exploring massive Chinese market (Global Times)
“As a fast-growing market, China can’t be neglected by any winery,” Henriëtte Jacobs, the international sales manager of Spier Wine Farm, told the Global Times, adding that the company’s exports to China have continued to grow exponentially during the recent years, and the Chinese market is becoming one of the company’s most important strategic markets. Jacobs’ remark speaks for multiple wineries from South Africa, who have been adopting various strategies and tactics in a bid to get a slice of the emerging Chinese market.
The exports of Australian wine plunged by 95 percent at the end of 2020 after China imposed anti-dumping measures on the country’s wine exports, causing Australia to forfeit its leading position for wine imports in the massive Chinese market. Industry insiders noted that this could be a potential opportunity for South African wines.
Ford added that China and South Africa are important economies in Asia and Africa with very warm trade relations, while the quality of South African wine enjoys acclaimed reputation in the Chinese market. He hoped that more Chinese consumers will be able to appreciate the unique and high-quality South African wine in the future.
SA facing a sugar shortage with mills unable to meet demand (IOL)
South Africa is facing a shortage of sugar, the new “white gold”, with local mills unable to meet the local demand, Chris Engelbrecht, the chairperson of the Association of Southern Africa Sugar Importers (Asasi), warned. This is a further blow to South Africans, who are facing soaring food prices, exacerbated by supply chain woes due to the war in Ukraine, which has seen countries banning the export of key crops such as palm oil in the face of rampant inflation.
Kenyans urged to tap their potential in online trading (Capital Business)
Kenyans have been urged to tap on their high knowledge levels in online trading to gain maximum benefits from both local and global markets. Speaking to Capital Business, Scope Markets Chief Markets Analyst, James Hughes noted that in his over 20 years experience in the trading industry the Kenyan market base knowledge level in markets is quite high. “The Kenyan retail market is one of the best for us globally with higher knowledge levels than even the United Kingdom for beginners,” he said. Hughes noted that Kenya’s great potential can be seen with the number of licensed online forex traders setting up in the country.
He further noted that the pandemic which saw many people stay at home created a huge appetite for the online trading.
Manufacturers protest new KRA fuel, beer tax powers (Business Daily)
Manufacturers want the proposed powers to exempt excisable goods like fuel, beer and bottled water from annual price raises due to inflation to be taken away from Kenya Revenue Authority to the lawmakers, citing conflict of interest. The Kenya Association of Manufacturers (KAM) in a memorandum to the National Assembly argues the Public Finance Act gives Treasury secretary Ukur Yatani the power to waive taxes with no legal provision to transfer them to KRA Commissioner-General Githii Mburu. The amendments to Excise Duty Act, through the Finance Bill 2022, empowers Mr Mburu to exclude some products from annual inflation tax adjustment based on prevailing economic conditions. “We propose that the power to exempt specific products from inflation adjustment be granted to the National Assembly instead [of KRA Commissioner-General],” KAM’s outgoing chief executive Phyllis Wakiaga wrote in the memorandum on the Finance Bill before the august House.
Kenya’s tax agency works to resolve LPG trucks snarl-up at Namanga (The East African)
The Kenya Revenue Authority has refuted claims that the snarl-up of trucks at the Kenya-Tanzania border town of Namanga is due to an increment of taxes on liquid petroleum gas (LPG), even as the agency as seeks to hasten the resolution of the impasse. The taxman said on Wednesday that the LPG tax was reintroduced by the Kenyan government in July 2021, after being zero-rated in 2016, but had not been increased. Some importers were, however, undervaluing their LPG products to evade tax and have since been issued with notices to comply after which their trucks will be cleared from the border post, KRA said in a statement. “It is also significant to note that the LPG products in question are not sourced from the East African Community Partner States as reported,” read the statement signed by KRA’s Deputy Commissioner for Customs Revenue and Regional Coordination. The tax impasse at the Namanga border post has caused a build-up of transit trucks, some destined for as far as South Sudan. Some of the LPG trucks have reportedly started leaking, endangering the safety of the drivers, residents, and workers in the area.
KRA said it is aware of the inconvenience and security risks caused by the LPG trucks, adding that it is working with the affected importers to resolve the issue.
Kenya moves to secure duty-free trade deal with EU after stalled EPAs talks (The East African)
Kenya has put in place temporary measures for its exports to the European Union after the implementation of a duty free-quota free trade agreement with other EAC member states stalled. Classified as a lower middle income economy by the World Bank, Kenya aims to protect its trade interests with the EU after Tanzania, Uganda and Burundi declined to sign the Economic Partnership Agreement (EPA) citing various economic and political interests. The agreement, whose negotiations were concluded on October 16, 2014, provides for duty free-quota free access for Kenyan and EAC products to the EU market.
“We have the highest decision making organ called the Summit. For the past five years, the Summit has given guidance on the application of the principle of Variable Geometry, which allows trading partners to make certain progress as long as there is concurrence that the others can catch up later,” Johnson Weru, Kenya’s Principal Secretary in the ministry of Trade and Industry, told The EastAfrican last week.
Although Kenya has signed and ratified the agreement, the pact requires all countries to sign and ratify it as a bloc for it to take effect. Uganda, Rwanda, Burundi and Tanzania, which are considered Least Developed Countries, enjoy a preferential trade arrangement with the EU under the Everything but Arms arrangement.
Kenya to import maize outside EAC as flour hits historic high (Business Daily)
Kenya plans to allow maize imports from outside the East African Community to mitigate the current spike in flour prices now at a historic high of Sh150 for a two-kilo packet. Agriculture Cabinet secretary Peter Munya said the imports, which are expected to give consumers a reprieve, will also force farmers hoarding their produce to release it to the market. He said the decision on when the imports would start and volumes to be shipped in would be made in the next couple of days with the consignment expected to arrive in 45 days from the date that the orders would be made. “We are going to run out of maize in the next few months and to control the rising cost of flour, we need to import the produce,” said Mr Munya. This will be the first maize imports from outside of the EAC bloc since 2017.
Besides China, Kenya has other big market options in the East (The Standard)
For the last forty years, China has been getting all the airtime in East Asia. Ever since opening up to the rest of the world in 1978, the country has been a swirling vortex sucking in foreign investors. But unlike a black hole where nothing escapes, China’s exports move all over the world. Did you see the recently released first-ever picture of a black hole? China quickly relaxed its image as a communist state and is now better known for unprecedented economic growth, as the workshop of the world and more recently as the epicentre of the deadly Covid-19. Intoxicated by China, we have forgotten that the East is much more than China. Beyond its popular locations such as the forbidden city, Beijing and Shanghai lie other East Asia countries. Three stand out; the Philippines, Indonesia and Vietnam.
Nigeria’s Foreign Trade Jumps to N11.7trn in Q4 2021 (Business Post Nigeria)
Data on foreign trade revealed that in the last quarter of 2021, Nigeria’s foreign trade stood at N11.7 trillion, 74.7 per cent higher than the value recorded in the same period of 2020. According to the National Bureau of Statistics (NBS) in its Statistics Quarterly Report released in Abuja over the weekend, export trade in Q4 of 2021 stood at N5.77 trillion, 12.27 per cent higher than the preceding quarter and the value in 2021 also grew by 80.52 per cent over the corresponding period of 2020. On the other hand, total imports stood at N5.94 trillion in Q4, 2021, indicating an increase of 11.33 per cent over the preceding quarter and 69.41 per cent over the corresponding period of 2020.
“Export trade by region in Q4 of 2021 shows that Nigeria exported most products to Europe with goods valued at N2,408.39 billion or 41.76 per cent of total exports. “Asia was N1,875.56 billion, or 32.52 per cent of total exports and Africa was N773.83 billion or 13.42 per cent of total exports, of which N250.52 billion worth of goods were exported to ECOWAS countries.
The report revealed that during Q4 of 2021, Nigeria imported goods mainly from Asia, valued at N2,743.76 billion or 46.19 per cent of total imports. “This was followed by Europe at N2,422.41 billion or 40.78 per cent, America at N571.70 billion or 9.62 per cent, Africa at N161.47 billion or 2.72 per cent and Oceania at N41.24 billion or 0.69 per cent.”
FG approves N375bn expansion grant for non-oil export exporters (Businessday)
The Federal Executive Council has approved the sum of N375bn export expansion grant (EEG) to boost non-oil export. Ezra Yakusak, executive director/CEO, of the Nigeria Export Promotion Council (NEPC), who disclosed this during the second edition of the Export4Survival walk at the weekend in Abuja, said about 285 exporters who applied for the EEG will benefit from the fund. According to Yakusak, the approval also means that the backlog from 2006 till date has been cleared and “exporters should expect the N375 billion approved by FEC. Right now, it would be taken to the national assembly for assent.”
In addition to the grant, the executive director informed that the NEPC will introduce some initiatives to also encourage non-oil export. He informed that the commission is about to set up a project called ‘exporters handholding’ aimed at conducting physical training for new non-oil exporters, who newly registered with no knowledge about export. “We are going to match-make them with exporters to train them on the physical aspect of non-oil export; the rudiments, the procedures, to ensure that they export,” he added.
Port development: NPA to revoke concession agreement of 5 terminal operators (The Sun Nigeria)
The Nigerian Ports Authority (NPA) over the weekend has threatened to revoke the concession agreement of five terminal operators over a lack of commitment towards the development of the port terminals they operate in, even as the ports are collapsing. According to the Managing Director of the NPA, Mr. Mohammed Bello-Koko, five terminal operators are being monitored to ensure they do the right things as regards their commitment and obligations under the Port Concession agreement.
Nigeria Spends 86% Of Revenue On Debt Servicing (Economic Confidential)
Nigeria spent 86 per cent of its revenue on servicing debt in 2021, but South Africa spent only 20 per cent of its receipts on the same purpose.
According to the International Monetary Fund’s 2021 Article IV estimates, Africa’s most populous nation spent 85.5 per cent of its revenue on servicing the debt in 2021. On the other hand, South Africa’s budget office, situated in the National Treasury, estimated its debt service-to-revenue in 2021 at 20 per cent, explaining that for every five rand raised by the government, only one rand was spent on servicing debt. Nigeria’s total debt by end of December 2021 was only 30 per cent of South Africa’s debt, yet the former’s debt service appears too expensive, according to analysts. Nigeria’s total debt as at December 2021 was $94.166bn, according to the Debt Management Office, but South Africa’s total debt at the same period was $261bn, according to the country’s National Treasury and Bloomberg.
Nigeria is the continent’s largest economy. Latest estimates by the National Bureau of Statistics put the nation’s economic size at $420bn. On the other hand, South Africa is second largest economy on the continent with an estimated size of $320bn.
Central African Republic Economic Memorandum: Paving the way out of fragility for a brighter future (World Bank)
The Central African Republic (CAR) is at a critical crossroads. Despite its significant natural resources’ wealth, it remains one of the poorest and most fragile countries in the world. Cycles of political instability and a heavy reliance on natural resources have left the economy poorly diversified and with a small private sector. Almost a decade after the 2013 civil war, the country remains caught in a fragility trap, facing episodes of renewed insecurity and a substantial state-citizen divide. Supported by the 2015 peaceful transition of power, the authorities implemented several reform programs that helped restore macroeconomic stability and steered the economy on to a relatively sustainable path to recovery over 2015–2019.However, the pace of growth has been below that of other countries in the region that have had civil wars and been threatened by overlapping crises since 2020This Country Economic Memorandum (CEM) aims to support policymakers and stakeholders in their efforts to pave the way out of fragility through accelerated and inclusive economic growth through four chapters providing:
Somalia govt requests three-month extension of IMF facility to August 17 (The East African)
The Somalia government has asked the International Monetary Fund to delay its cut-off deadline on a key credit facility after the country failed to conduct elections on time. Finance Minister Abdirahman Duale Beileh and Governor of the Somali Central Bank Abdirahman Mohamed Abdullahi asked the IMF to extend the deadline by three months to August 17.
On March 25, 2020, Somalia was granted the ECF, which the IMF Board routinely approves for countries with protracted balance of payments problems. It is meant to support low-income countries, especially those emerging from conflict but are heavily indebted. The programme was part of the Heavily Indebted Poor Countries (HIPC) Initiative, which would cut the country’s debt to $557 million from $5.2 billion, as long as it completed certain reforms including taming corruption, raising local revenues and passing laws on good governance.
The AfCFTA country business index (ACBI) report: summary report for Angola, Cote D’Ivoire, Gabon, Kenya, Namibia, Nigeria, and South Africa (UNECA)
The Agreement Establishing the African Continental Free Trade Area officially became operational in 2021, making it the cornerstone of trade integration in Africa. The objectives of the Area are to create a single, continent-wide market and to enhance competitiveness at the enterprise level. The African Continental Free Trade Area Country Business Index is the first comprehensive tool based on a robust methodological framework in which data are collected in a way that allows businesses to express their views on implementation of the Area. Following the launch of the Index in 2018, the Economic Commission for Africa began piloting and refining it as a tool to measure and compare the views of businesses across Africa on implementation of the Area. The figure below shows the countries selected for the three phases of the pilot study. After phase 1, which was conducted in Cameroon and Zambia, the methodology was refined and surveys were conducted in seven more countries: Angola, Côte d’Ivoire, Gabon, Kenya, Namibia, Nigeria and South Africa. The present report includes results from this second phase of the roll-out. In the third phase, the Index will be rolled out in the Democratic Republic of the Congo, Egypt, Morocco, Rwanda, Senegal and Tunisia.
The AfCFTA Country Business Index Report: Summary report for Angola, Côte d’Ivoire, Gabon, Kenya, Namibia, Nigeria and South Africa
Africa must address its current socioeconomic challenges to achieve sustained poverty reduction: ECA’s 2021 Economic Report (UNECA)
The disruptions caused by the COVID-19 pandemic pushed an estimated 55 million Africans into extreme poverty in 2020 and reversed more than two decades of progress in poverty reduction on the continent. This is according to the Economic Report on Africa 2021 (ERA2021) launched today on the margins of the Economic Commission for Africa’s annual Conference of Ministers of Finance, Economic Planning and Development (CoM2022) in Dakar, Senegal.
Economic Report on Africa 2021: Addressing poverty and vulnerability in Africa during the COVID-19 pandemic
At CoM2022, experts address effects of Russia-Ukraine crisis on Africa
Commodities coming into African ports have little or no visibility (Logistics Update Africa)
The last week of April saw the Lagos-headquartered OnePort 365 raking in $5 million through its seed funding. The funds will be channelled to fuel OnePort 365’s plans to drive the end-to-end digitisation of freight management in Africa and support expansion into new markets across the continent. In OnePort 365’s own words, the company works to “leverage technology to drive your supply chain and business objectives.”
“What comes along with the expansion of e-commerce is a growing demand for distribution and warehouse management services. The service providers with a well-established local network will be particularly in need of facilitating last-mile delivery, which also provides local e-commerce marketplaces and retailers certain advantages in comparison with international e-commerce players. Furthermore, the expansion of the e-commerce market, especially cross-border e-commerce, can transform some areas into regional distribution hubs”
Citing a World Bank report, Upply comments, “According to World Bank’s analysis, the AfCFTA will boost intra-continental exports by over 81% and exports with non-African countries by 19% by 2035. In terms of sectors, manufacturing exports are anticipated to make the most gains: a 110% increase for intra-African trade and 46% for non-African trade. In contrast, service trade is envisaged to have the most modest rise (14% of intra-African trade).”
As for the digital enablement, an African Union report entitled,
The Digital Transformation Strategy for Africa (2020-2030)
, expresses optimism when it comes to Africa’s digital era, “Africa presents a sea of economic opportunities in virtually every sector.”
The biggest challenge in Africa in terms of air cargo is connectivity (Logistics Update Africa)
Swissport Kenya’s CEO, Racheal Ndegwa speaks with Zinal Dedhia of Logistics Update Africa.
Q: I would like you to briefly talk about the air cargo market in East Africa, particularly Kenya
A: Africa’s air freight market contributes 1.9% of the world’s air freight traffic, according to the IATA 2021 statistics. For me, this percentage represents a great opportunity for growth of Swissport in Kenya and beyond. I believe the challenge we are facing in Africa in terms of air freight is connectivity – we must increase intra Africa traffic to allow more efficient and fluent air transport. With the launch of African Continental Free Trade Area (AfCFTA) and new trade flows that have emerged since the onset of the pandemic (eCommerce, PPE movement, vaccines), Africa is primed for a “very high level of growth” within the coming years. This will enable the intra African markets to develop, as currently only about 30% of the continent’s trade is accomplished internally. The enhanced trade will have a positive impact on all industries, including aviation and specifically air cargo.
ICCI for focusing on Africa to promote trade and exports (The Nation)
Muhammad Shakeel Munir, President, Islamabad Chamber of Commerce and Industry (ICCI) said that Africa is a huge market, which still remains untapped and urged the government to focus on African countries to boost its trade and exports. He said this while exchanging views with the Deputy Head of Missions of Morocco, South Africa and Nigeria during their visit to ICCI. Muhammad Shakeel Munir said that Pakistan has formulated the ‘Look Africa Policy’ which should be fully implemented to improve trade relations with African region.
He said that Pakistan has good potential to export many products to Africa including rice, engineering goods, electrical appliances, textiles, apparel, pharmaceuticals, sports goods, surgical instruments, cutlery, furniture and many more. He said that Pakistan can import many products from African countries that offer competitive advantage for import.
African Development Bank Annual Meetings 2022: Time to tackle triple crises of food, energy and finances, says Ghanaian Finance Minister (AfDB)
Ghanaian Finance Minister Ken Ofori-Atta on Thursday emphasized the nation’s partnership with the African Development Bank in its development as he addressed journalists at a press conference to publicize the institution’s upcoming annual meetings. Ofori-Atta described the meetings as seminal, in the context of a world seeking to rebalance in the wake of Covid-19 and the war in Ukraine. “The hosting is long overdue. Forty-one African economies are severely exposed to at least three concurrent crises – rising food prices, rising energy prices and tightening financial conditions – what finance ministers now call the dreaded three f’s,” Ofori-Atta said. Throughout Africa food prices are currently around 34% higher, crude oil prices 60 % and global inflation is affecting all countries, the minister said, with inflation in Ghana standing at around 23.6%.
“The newly poor in Africa has increased by 55 million and approximately 35 million formal jobs are at risk,” the minister said. “This toxic mix of challenges exist even as we try to recover from the Covid-19 pandemic.”
ICPC boss seek global action against illicit financial flows (Daily Sun)
The Chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), Prof. Bolaji Owasanoyejj, has rallied a global action against Illicit Financial Flows (IFF), including a call for a global framework on IFFs similar to corruption. Owasanoye made this call at a side event of the ongoing hybrid 54th Conference of the United Nations Economic Commission for Africa (UNECA) taking place in Dakar, Senegal.
“The challenge we found ourselves today is that the rules have always been skewed in favour of those who export capital and against those who import capital. Corruption is a global issue and we have a global framework on corruption.
Renewed push for use of Kiswahili by AU and UNESCO (Modern Ghana)
The renewed push for Kiswahili to become a lingua franca in Africa promises to benefit the continent and the world. The effort is set to reduce Africa’s reliance on foreign languages in official communications, lead to the recognition and spread of Kiswahili, and promote Pan-Africanism. The campaign, however, faces a number of challenges. According to experts, supplanting them could create diplomatic challenges.
For Kiswahili to gain acceptance and develop in such regions, adequate resources and political goodwill — including financial and economic inputs — are imperative to ensure it will serve people as well as, if not better than, the languages they speak today.
Commonwealth Africa Explores Ways of Combating Corruption (InDepthNews)
The 12th Regional Conference of Heads of Anti-Corruption Agencies in Commonwealth Africa convened in Kigali, Rwanda, from May 3-7 under the theme: ‘Combating Corruption for Good Governance and Sustainable Development in Africa’. The Conference was jointly organised by the Commonwealth Secretariat and the Government of Rwanda and brought together members of the Association of Anti-Corruption Agencies in Commonwealth Africa, senior government officials, relevant international organisations, policymakers, and development partners to address key priorities toward the achievement of Sustainable Development Goal 16. They shared knowledge and good practices and discussed the impacts of corruption on sustainable development in Africa and innovative approaches in the fight against corruption.
Over the years, corruption has been an unerasable characteristic feature of African politics and business, from the Maghreb down to the Southern African Development Community, from the East African Community and the Horn of Africa across the Sahel region to the Atlantic coastal West African States.
Most African countries have ratified African Union Convention on preventing and combating corruption and other international legal instruments on corruption. As required by international obligations, African countries have enacted national anti-corruption laws and established anti-corruption institutions. Almost every African country has a specialised anti-corruption agency to address specific crimes and malpractices including illicit flow, money laundering, embezzlement, and conflict of interest among others.
Africa needs tech, innovation to improve output (Monitor)
The Second Africa-wide Conference on Science, Technology and Innovation (STI) recently held in Kigali, Rwanda, concluded with an urgent call for African governments, regional economic communities and continental organs including, the African Union, African Development Bank, and United Nations Economic Commission for Africa to sustain the recognition of the role and importance of STI in socio-economic advancements.
The meeting also intensified calls for African states to ensure integration of STI in their respective development frameworks while reiterating the centrality of science and technology in socio-economic development including, transformation of rural livelihoods on the continent.
While African governments have often times reiterated the role of STI in the transformation of agricultural sector as an imperative engine to the continent’s survival and growth, the process has been slow amid continuous and emerging challenges. Post Covid-19 and out of these calls, evidence of new challenges have emerged and with them, opportunities to mitigate namely; efficiency, resilience, digitisation, agility and sustainability.
African technology startups scoop $2b funding (The East African)
Kenya ranks among Africa’ four biggest destinations for tech start-up funding after Nigeria, Egypt and South Africa. The African Tech Startups Funding Report (2021) shows that last year in the African tech start-up ecosystem, 564 businesses raised $2.14 billion in funding, the bulk of which took place in the “big four” markets – Nigeria, Egypt, South Africa and Kenya. According to the report the “big four” start-up destinations raked in a combined $1.97 billion over the course of the year, accounting for 92.1 per cent of the overall total funding. Ghana, Morocco and Tunisia start-ups secured more than 40 per cent of the remaining $170.6 million.
According to the report the number of investors in the African tech start-ups sector has been growing exponentially, with the number of new investors joining the business more than doubling to 771 in 2021 from 370 in 2020.
How Africa’s tech sector can thrive – and it’s not all about legalising Bitcoin (Euronews)
Speculation over which country would be the next to adopt Bitcoin as an official currency has largely centred on Central and South America, following El Salvador’s move seven months ago to become the first country to make the cryptocurrency legal tender. It would actually be the Central African Republic (CAR) that became the second country to vote in favour of adopting it – but it may be that the rest of the continent has the most to gain from cryptocurrency. One of the ways crypto can help CAR is that it can offer financial services to the vast majority of the population who are “unbanked”.
“The objective of Bitcoin and cryptocurrency is to cause disruption,” said Lacina Koné, Director General and CEO of Smart Africa, a pan-African institution endorsed by the African Union. The group works to enhance the digital landscape in Africa and works with the private sector and governments. It is also the brainchild of Rwanda’s president Paul Kagame.
Central African bank regulator reminds states of crypto ban (Reuters)
Central Africa’s regional banking regulator sent out a reminder on Friday about its ban on cryptocurrencies, weeks after the Central African Republic, a member state, made bitcoin legal tender. The Banking Commission of Central Africa (COBAC), which regulates the banking sector in the six-nation Economic and Monetary Community of Central Africa (CEMAC), said the prohibition was meant to ensure financial stability. The announcement came as cryptocurrencies nursed large losses on Friday after the collapse of TerraUSD, a so-called stablecoin, rippled through markets.
The Central African Republic’s presidency announced on April 27 that bitcoin had been made legal tender, making it only the second country to do so after El Salvador. read more At the time, analysts and crypto experts said they were puzzled by the move in one of world’s poorest nations where internet use is low, conflict is widespread and electricity is unreliable. The government has provided few details about its reasoning and questions remain about implementation.
Food insecurity becoming more prevalent in African countries, according African Union (SABC News)
The African Union Peace and Security Council (AUPSC) says it is concerned about the increase in food insecurity in Africa, especially in countries where conflict persists. The AU says prolonged fighting is affecting food production and many countries are failing to effectively feed their citizens. The situation has also been worsened by the effects of climate change. The African body says starvation levels on the continent are on the rise. The United Nations Food and Agriculture Organisations says there are over 280 million food-insecure people in Africa. The AUPSC is concerned that conflicts in parts of Africa are becoming a major root factor of starvation in the continent.
A report by the Food and Agriculture organisation, the World Food Programme identifies Ethiopia, Nigeria and South Sudan at high alert levels of food insecurity. Part of the reason for insufficient food supply in these countries is conflict.
Statement from the Joint Meeting of Sadc Ministers Responsible For Agriculture And Food Security, Fisheries And Aquaculture (SADC)
The Joint Meeting of Ministers Responsible for Agriculture and Food Security, Fisheries and Aquaculture from the Southern African Development Community (SADC) was held on 13th May, 2022 at Bingu International Convention Centre (BICC) in Lilongwe, Republic of Malawi.
The objective of the meeting was to consider and review implementation of policies and strategies aimed at advancing the agriculture and food and nutrition security, fisheries and aquaculture production and productivity in the Region. The meeting took place against the backdrop of excess rains, which caused heavy flooding in some parts of the Region, cyclones and drought in others; outbreaks of transboundary animal and plant pests and diseases; major disruptions to supply chain and services due to the COVID-19 pandemic, rising inflation and record public debt that is constraining many countries’ ability to address the current socio-economic challenges and also the global food insecurity situation caused by the conflict between Russia and Ukraine.
Africa roundtable unites with European allies (DW)
Politicians from African and European countries gathered in Berlin on Thursday for The Africa Roundtable to discuss strategies to cope with common challenges. “We are in times of multiple crises and partnership in these days is more important than anything else,” said Ingrid Hamm, cofounder and CEO of event organizer Global Perspectives Initiative (GPI), in her opening remarks.
In his televised opening speech, Germany’s food and agriculture minister, Cem Özdemir, mentioned some of the current challenges facing Europe and Africa as a result the war in Ukraine — especially a lack of wheat imports from Ukraine and Russia. Shortages of food are happening at a time that ”around 280 million people in Africa are already undernourished today especially in the Sahel and the Horn of Africa due to severe draught and conflicts,” explained Özdemir.
Senegal’s economy minister, Amadou Hott, said in his keynote address that some African nations are not in a good position to deal with some economic challenges because of international issues. For example, he mentioned some of the bottlenecks faced by Africa in raising money from the capital markets in order to deal with the COVID pandemic and the war in Ukraine.
“Our economies together in terms of GDP we are the eight largest in the world, thus we deserve the seat at the table specially to give inputs when decisions are made that will impact Africa,” said Hott. The idea of including African countries at the G20 table was echoed by Professor Jaffrey Sachs, president of the UN Sustainable Development Solution Network. “Africa needs to be at the table and not as an invited guest politely present, but as G21st country,” said Professor Sachs.
Global economy news
DG Okonjo-Iweala shares views with international agency heads on key issues ahead of MC12 (WTO)
The Director-General attended the spring session of the United Nations Chief Executives Board (CEB) for Coordination in Vienna on 12 May 2022. This is the first time that the UN Secretary-General, António Guterres, who chairs the Board, convened an in-person session of the CEB since the start of the COVID-19 pandemic. The CEB meeting in Vienna was an opportunity for the DG and her counterparts to exchange views on global challenges and their possible solutions. During a conversation on the state of the world, DG Okonjo-Iweala pointed to the ongoing crises in international security, food, environment and climate, public health, and the world economy. She noted that the WTO had had to downgrade its trade forecast, with merchandise trade volumes now projected to grow 3% in 2022, compared to the 4.7% forecasted last October. Despite the economic and political headwinds facing trade, the DG said that “trade is very much part of the mix of policy solutions required to deliver the equitable growth, job creation, and environmental sustainability people around the world need.”
Global conference in Accra: Making the shift to sustainable trade (ITC)
Trade and investment promotion organizations around the world will meet in Accra on 17-18 May to explore Bold Solutions for Resilience and Recovery, the theme of this year’s conference. Firms that are more resilient to crisis often tap the services of these national trade bodies to build resilience to carry them through challenging times. The 2022 World Trade Promotion Conference (WTPO) will be hosted by the Ghana Export Promotion Authority (GEPA) and the International Trade Centre (ITC), a development agency of the United Nations and the World Trade Organization that connects small business to global markets. It brings together 200 leaders of national trade promotion organizations from around the world.
‘Good trade can drive socio-economic recovery that is inclusive and sustainable,’ says Pamela Coke-Hamilton, ITC Executive Director. ‘Trade promotion organizations can make all the difference in helping companies achieve good trade. They must help businesses to mitigate risks and embrace opportunities of a green transition. They must help women, youth and vulnerable groups join global value chains, and overcome systemic barriers that keep them from developing their businesses for export.’
India says open to exporting wheat to poor nations despite ban (Premium Times Nigeria)
The world’s second largest producer of wheat, India, has banned wheat exports, at a time the Russian invasion of Ukraine crippled the supply of the crop across the globe. India announced the ban on Saturday saying it exempted exports backed with letters of credit and countries requesting on the basis of food security. The ban is aimed at controlling rising domestic prices. The government was targeting record shipments this year, but heatwave reduced output and caused a rise in domestic prices. On Sunday, India’s Commerce Secretary B.V.R. Subrahmanyam said the government will allow private companies to meet previous commitments until July and will keep a window open to export wheat to needy countries, the Times of India reported.
The country initially planned to export 10 million tonnes of wheat this year. India exported a record 1.4 million tonnes of wheat in April and was set for another 1.5 million tonnes in May.
Global diamond trade fractures under the weight of Russia sanctions (Moneyweb)
Russia’s invasion of Ukraine is fracturing a billion-dollar trade that spans the permafrost-laden diamond mines of Siberia, secretive trade houses in Antwerp, dusty polishing powerhouses in India and New York’s glittering designer jewelry stores.
“Diamonds are not like oil, where some other country can jump in to make up for a shortfall,” Shah said. “No new mines are coming up elsewhere. Our dependence is huge.” Gems and jewelry are India’s third-largest source of export revenue, pulling in about $39 billion for the fiscal year that ended in March.
A delegation from Alrosa visited India last month and met customers and trade groups to discuss selling diamonds using that workaround, people familiar with the matter said. But talks were inconclusive, the people said, and officials remain sensitive to provoking the US, which sees India as a regional check on China’s power. Alrosa declined to comment. Amitendu Palit, a senior research fellow in South Asian studies at the National University of Singapore, said India faces a “tough, complicated balancing act” in managing “pro-Russia and pro-rest of the world stances.” American commerce secretary Gina Raimondo has likened a ruble-rupee arrangement to “funding and fueling and aiding President Putin’s war.” “Challenges are likely to increase if the conflict continues for a long time,” Palit said. “There will be tacit pressure on India to shift away from Russia for its trade.”
COVID-19 Challenges Highlight the Need to Revive Economic Integration: APEC (Tempo)
There is no better time than now for APEC members to revive work on integrating the Asia-Pacific and bringing new energy to the long-term prospect of a Free Trade Area of the Asia-Pacific (FTAAP).The APEC Policy Support Unit made the statement in a new policy brief. “The pandemic and the aftermath of COVID-19 have only stressed the significance of regional economic integration,” director of the APEC Policy Support Unit, Denis Hew, said, according to a release issued by the APEC Secretariat and received here on Saturday. “APEC policy makers need to address emerging trade-related issues and challenges in order to realize deeper regional economic integration,” Hew argued.
“Most importantly, any regional integration scheme, including free and/or regional trade agreements, could assist to overcome pandemic-related challenges,” Kuriyama added. The report identifies six main challenges affecting trade that are deemed most critical, namely disruption in accessing essential goods, disruption in trade in services, difficulties in supply chain logistics, digital transformation, transparency, and regulatory bottlenecks affecting trade in essential goods. While some of these disruptions were far more severe during the first stage of the pandemic, the challenges persist.
COP15: Global GDP could gain $140 trillion a year, if we achieve the objectives of the UN Convention to Combat Desertification (AfDB)
The global economy could increase by more than $140 trillion a year, or 1.5 times the annual global GDP, if the objectives of the United Nations Convention to Combat Desertification (UNCCD) are achieved, participants heard during a side-event at the 15th summit of the UNCCD. Camilla Nordheim-Larsen, Senior Partnerships and Resource Mobilization Coordinator at the UN Convention, noted that action in the land sector has the potential to generate up to $140 trillion a year and create 400 million new jobs, while failure to act can result in losses in the range of $44 trillion. The Sustainable Development Goal for Life on Land is least funded, but can contribute most to resilience, she said, speaking at an event on innovative finance mechanisms for sustainable landscapes, hosted by the African Development Bank and partners.
G7: FAO puts forward proposals to address current and future food shortages (FAO)
The head of the Food and Agriculture Organization of the United Nations (FAO) today called on G7 nations to help anticipate future food shortages, as the war in Ukraine squeezes supplies, pushes prices to record highs and threatens already vulnerable nations across Africa and Asia.”We need to actively identify ways to make up for potential future gaps in global markets, working together to foster sustainable productivity increases where possible,” Director-General Qu Dongyu told G7 Agriculture Ministers meeting in Stuttgart, Germany.
“It is in this dramatic context that we now face the war in Ukraine,” Qu said.Russia and Ukraine are important players in global commodity markets, and the uncertainty surrounding the conflict has caused prices surges, particularly of wheat, maize and oilseeds, as well as fertilizers. These increases come on top of already high prices driven by robust demand and high input costs as a result of the COVID-19 pandemic.
Countries that are heavily reliant on wheat imports include Egypt and Turkey, but also a number of Sub-saharan countries such as Congo, Eritrea, Madagascar, Namibia, Somalia and Tanzania. Meanwhile, countries that are heavily dependent on fertilizers imported from Russia include key cereal and high value commodity exporting countries like Argentina, Bangladesh and Brazil.
Climate-vulnerable countries gain resilience through disaster risk finance and insurance (UNDP)
In 2021, economic losses from disasters caused by natural hazards totalled almost US$270 billion. The impact of disasters can significantly undermine development progress and push communities deeper into poverty, making them less resilient to the next disaster shock. Recognizing the importance to plan and finance disaster response, UNDP’s Insurance and Risk Finance Facility (IRFF), a flagship initiative within its Sustainable Finance Hub, we are working together with our government partners to better protect vulnerable communities from socio-economic, climate and health-related disasters by significantly increasing the role of insurance and risk financing in development.
Yet, for many Least Developed Countries (LDCs) and V20 climate-vulnerable countries, insurance solutions remain out of reach. Mechanisms to rapidly mobilize finance for disaster response are often not integrated into budget processes and development plans, insurance companies are deterred by restrictive legislation, demand for insurance is also low due to a lack of awareness and/or trust in the insurance sector, there are also issues related to affordability of premiums. Together, these challenges result in a large protection gap, leaving vulnerable communities exposed to disaster risks and their lives and livelihoods unprotected.
Global GDP could gain $140trn if ... – UNCCD (Tribune Online)
The global economy could increase by more than $140 trillion a year or 1.5 times the annual global GDP, if the objectives of the United Nations Convention to Combat Desertification (UNCCD) are achieved, participants heard during a side – event at the 15th summit of the UNCCD.
Camilla Nordheim-Larsen, Senior Partnerships and Resource Mobilisation Coordinator at the UN Convention, noted that action in the land sector has the potential to generate up to $140 trillion a year and create 400 million new jobs, while failure to act can result in losses in the range of $44 trillion. Speaking at an event on innovative finance mechanisms for sustainable landscapes, hosted by the African Development Bank and partners, she said, the Sustainable Development Goal for Life on Land is least funded, but can contribute most to resilience,
“The benefits of taking action against land degradation largely outweigh the costs of sustainable landscape management. In Sub-Saharan Africa, it is by at least seven times. Inaction costs Sub-Saharan countries $490 billion per year, while according to the Economics of Land Degradation Initiative, action to reverse land degradation could generate benefits worth up to $1.4 trillion,” said Luc Gnacadja, former Executive Secretary of the UN Convention to Combat Desertification and former Minister of Environment of Benin, currently acting as a Co-Chair of the Adaptation Benefits Mechanism Executive Committee.
Rishabh Khanna, Chief Impact Officer at Earthbanc and a steering committee member of the Initiative of Land, Lives and Peace, presented a new initiative launched together with the UN Convention at the summit — digital sustainable land bonds, which allow carbon buyers to purchase at an earlier stage of development. The Adaptation Benefits Mechanism, piloted by the African Development Bank between 2019 and 2023, certifies and monetizes the environmental, social, and economic benefits of adaptation actions, including sustainable and resilient landscapes.
The impact of Russia’s invasion of Ukraine on food and energy supplies will be long-lasting, experts say (Business Insider Africa)
In the months since Russia ordered troops into Ukraine, a flurry of sanctions issued by Western countries has failed to curb the military assault. With a drawn-out conflict appearing more likely, the political determination to punish President Vladimir Putin’s nation suggests a prolonged period of sanctions lies ahead. Some experts say that the prospect of continued disruption to food and energy supplies as a result of the war will trigger a search for long-term alternatives to Russian imports. While the price shock of the conflict is felt globally, the disruption to energy supplies is most keenly felt in the European Union (EU), which sources a quarter of its oil imports and 40% of its natural gas from Russia (the US, by comparison, got about 3% of its crude oil from Russia in 2021). In its sixth round of sanctions against Moscow, the EU announced plans for a total ban on Russian oil and refined product imports by the end of the year.
While shifting away from Russian oil may prove difficult, Europe’s reliance on Russian natural gas provides policymakers and central bankers with a much bigger headache. In a recent round of sanctions, theEU continued to exclude any embargo on natural gas, although it has aired proposals to cut demand for Russian imports by two-thirds by the end of 2022.