tralac Daily News
South Africa records FDI inflows in 2020; sales of bonds and equities soar (Engineering News)
South Africa recorded foreign direct investment inflows of R16.0-billion in the fourth quarter from outflows of R12.2-billion in the third, the central bank said on Tuesday. The South African Reserve Bank said in its Quarterly Bulletin that the inflows in the latest quarter were caused by non-resident parent entities increasing equity investments and granting loans to domestic subsidiaries. The country saw FDI inflows of R51.1-billion for all 2020, down from inflows of R74.0-billion in 2019.
Although the value of South Africa’s net gold and merchandise exports rose further to a new all-time high in the fourth quarter of 2020, the trade surplus narrowed from the record-high in the third quarter as the value of merchandise imports increased at a faster pace. The higher value of merchandise exports reflected further increases in the export values of mining and manufactured goods, supported by the continued recovery in global trade and the surge in international commodity prices. The increase in the value of merchandise imports reflected relatively firm domestic demand for manufactured goods and certain mining commodities to replenish low stock levels to facilitate increased production. However, despite a second consecutive quarterly increase, the value of merchandise imports contracted by 12.2% for 2020 as a whole – the largest annual contraction since 2009.
The smaller trade surplus, alongside a sizeable widening of the shortfall on the services, income and current transfer account, narrowed the surplus on the current account of the balance of payments from 5.9% of GDP in the third quarter of 2020 to 3.7% in the fourth quarter. The deficit on the income account widened significantly in the fourth quarter of 2020, mainly due to a marked increase in gross dividend payments from a very low base in the third quarter. On an annual basis, South Africa’s balance on the current account of the balance of payments switched from a deficit in 2019 to a surplus in 2020 in the midst of the COVID-19 pandemic – the first annual surplus since 2002.
Tuesday’s virtual meeting served as an opportunity for Minister Patel to meet Ambassador Tai for the first time, where a range of bilateral and multilateral trade issues were discussed. Trade, Industry and Competition Minister Ebrahim Patel has met with the newly-appointed United States of America Trade representative Katherine Tai.
Ghana government establishes special financing windows to support businesses in AfCFTA (Ghana Business News)
The Ministry of Trade and Industry will collaborate with financial institutions to establish Special Financing Windows for products of strategic sectors to harness the benefits of Africa Continental Free Trade Area (AfCFTA).
The Ministry said it would ensure that Ghanaian businesses benefited from the roll out of the proposed Pan-African Payment and Settlement System (PAPSS) by Afrexim Bank and the Africa Trade Insurance (ATI) to provide export credit, insurance and guarantees for businesses in Africa under the AfCFTA agreement.
this was contained in a speech read on behalf Mr Allan Kyeremanten, Minister of Trade and Industry, in Accra at the Graphic Business and Stanbic Bank Breakfast meeting on the theme: “leveraging AfCFTA: The Critical Success Factors”.
The SDG’s Advisory Unit of the Office of the President, in partnership with the United Nations Development Programme (UNDP), has launched a competition dubbed “Champions of Trade for the SDGs”. The competition is a unique opportunity for stakeholders especially young people and women from the 16 regions of Ghana to submit innovative ideas for making the African Continental Free Trade Area (AfCFTA) agreement a people’s movement towards the achievement of the Sustainable Development Goals (SDGs). The “Champions of Trade for the SDGs” competition is seeking ideas from young Ghanaian Innovators, Entrepreneurs, Agripreneurs and Startups, that will help activate grassroots sensitization, understanding and participation in AfCFTA. The challenge expects proposals on innovative ideas of how AfCFTA can be localized to promote continental trade among young African businesses to derive maximum benefits for SDGs attainment.
Kenya agriculture sector umbrella body, The Agriculture Sector Network, ASNET, has lauded the recently ratified Economic Partnership Agreement between Kenya and UK saying it will go a long way in boosting economic development and job creation. The trade deal allows tariff-free market access for Kenyan top agricultural exports to UK including vegetables, fruits, flowers, coffee and tea. Kenyan vegetable exports enjoy 43 per cent market share in UK while cut flowers command 9 per cent share. The trade pact also guarantees tariff free access for UK exports to Kenya among them electronics, technical equipment and machinery.
CS announces new sugarcane price (The Standard)
Agriculture, Livestock, Fisheries and Co-operatives Cabinet Secretary Peter Munya has announced new prices for sugarcane, Sh4,040 per tonne. The Cabinet secretary warned that millers who do not comply will face a fine of not less than Sh500,000 or a jail term of one year. The announcement comes after the interim sugarcane pricing committee reviewed the prices that had stagnated at Sh3,700 since 2018, to Sh4,040 per tonne, effective April 1, 2020. The CS said the country will bridge the deficit by importing the sweetener from the Comesa region. COMESA countries supplied 343,087 tones which is 78 per cent of the total imports in this period. All brown sugar originated from the COMESA region while the rest was imported from the rest of the world.
Uganda, AfDB in $229m Kampala-Jinja highway deal (The East African)
Uganda and the African Development Bank last week signed a $229.5 million financing agreement for phase one of the Kampala-Jinja Expressway, a project expected to cut travel time between the two cities and boost trade along the northern corridor which links the country with its neighbours. The money will finance expressway civil works whose contractor procurement is currently ongoing, for the 95km project whose total cost is $1.48 billion, to be executed under a Public Private Partnership (PPP) arrangement, Uganda National Roads Authority (UNRA) says.
Rwanda cushions ailing businesses with $350m economic recovery fund (The East African)
Rwanda has unveiled an additional Rwf350 billion ($350 million) stimulus plan for its economy to support businesses hard hit by the pandemic, boost jobs and reduce poverty. “Businesses negatively impacted by the restrictions put in place to prevent the spread of the virus, or exposed to consumer discretionary spending, and those with global supply chains that have been disrupted are eligible to apply for the support provided by the Economic Recovery Fund,” said Rwanda’s Prime Minister Edouard Ngirente, presenting the revised economic recovery plan in parliament on Thursday.
The funding, under the Economic Recovery Fund (ERF), was initially set up in June 2020 with an allocation of approximately Rwf100 billion ($100 million) for two years, targeting tourism and hospitality, manufacturing, transport and logistics as well as small and medium enterprises linked to domestic and global supply chains.
The Ministry of Trade, Industry, Regional Integration and Employment has asked importers of essential commodities in The Gambia to obtain licensing system it’s reintroducing to be able to continue importing commodities into the country. The ministry a dispatch stated that the essential commodity Act, enacted in 2015 is being brought into force, saying the act aims to regulate importation, distribution and retailing of essential commodities to ensure availability at fair and reasonable prices. “The Act requires importers of essentially commodities to obtain an import license from the Ministry to be able to import these commodities. The essential commodities in question are rice, sugar, edible oil, flour, chicken legs, whole chicken, onions and potatoes,” the dispatch stated.
It informed all importers of the above commodities to obtain an import license from the Ministry with immediate effect.
Zimbabwe’s once vibrant beef export industry is long gone, but the potential still exists to reorganise this big export earner. For most beef-producing provinces of Zimbabwe, commercial beef sales once accounted for about 80% of income. At its peak, post-independence in the late 1980s, the country used to export beef worth over US$35 million, with an annual beef quota to the European market of 9,100 tonnes. In current terms, this would translate to about US$400 million, had the industry remained vibrant. This would have meant that beef’s contribution to the economy would be at par with tobacco, which contributes about US$500 million annually. However, this has not been the case. By 2000, the beef industry had all but crumbled. To date, there is virtually no or significant recorded exports of beef from Zimbabwe.
The Namibian government says it recognises the importance of developing a fully-fledged automotive assembly industry to help boost the local economy. Last week, industrialisation minister Lucia Iipumbu, on the occasion of the national automotive assembly development policy framework (NAADP) 2019-2021, said the development aims to optimise contribution to the gross domestic product (GDP), employment creation, technology transfer, value addition, fostering of backward and forward linkages and the immersion of micro, small and medium enterprises (MSMEs).
Regionally, the sector major anchor programme, the automotive production development programme (APDP) is set to end in 2021 – and according to her, it could accentuate the policy vacuum more markedly. The Namibian masterplan is to be finalised at the end of 2021.
Nigeria’s move to develop its huge gas deposit was a step in the right direction, said Mohammed Barkindo, secretary-general of the Organization of the Petroleum Exporting Countries (OPEC) on Monday. “Gas is vital to Nigeria’s future, as is oil, and both will be fuels of choice globally for the foreseeable future and instrumental in facilitating the energy transition,” Barkindo told a pre-summit conference in Abuja on “The Decade Of Gas In Nigeria,” a plan aimed at developing the industry in the country in the next 10 years.
‘AfCFTA, WTO treaties’ll affect Customs revenue’ (The Nation Newspaper)
The Comptroller-General, Nigeria Customs Service (NCS), Col, Hamid Ibrahim Ali (rtd) has said the coming into effect of the African Continental Free Trade Agreement (AfCFTA) and the World Trade Organisation (WTO) free trade treaty may affect revenue collection of the service in the year. Ali, who spoke yesterday during the concluding hearing on the Customs 2021 budget defence before the House Committee on Customs and Excise, said the two agreements tended towards zero duty for goods imported from member countries who are signatories to the two agreements.
The Customs chief said the take-off of the AfCFTA and the WTO treaties of free, which took off on January 1, 2021, would, no doubt, affect revenue collection of the service as the two agreements are tailored towards zero duty on goods imported from member countries.
He, therefore, warned the National Assembly against increasing the revenue target given to the service from N1.4 trillion to N1.6 trillion, stressing that if the Service is able to surpass the target, it would, definitely, reflect on its collection for the year.
Ethiopia is executing due activities to re-access Eritrean ports of Massawa and Assab whilst the Eritrean side is currently renovating the ports facilities to handle Ethiopia’s shipment and provide seamless service for the future traffic, Ministry of Foreign Affairs (MoFA) said. Apart from sharing borders and communities, Ethiopia and Eritrea were one state that is believed to be the main factor for the unique cultural and social bonds the two states have enjoyed. “What owned by Ethiopia is lacked by Eritrea and what they have is not with us,” he said, adding that Eritrea’s extensive coastline avails a good opportunity to the land locked Ethiopia’s import-export trade.
Egypt eyes economic foothold in Djibouti (Al Monitor)
Sherif Issa, Egypt’s assistant foreign minister for African affairs, led a high-ranking delegation from various ministries and companies to Djibouti this month to discuss strengthening economic and other relations between the two countries. An Egyptian Foreign Ministry statement said the visit culminated in Djibouti’s approval to license an Egyptian company to operate flights between the two countries in order to facilitate the movement of passengers and goods. Djibouti also authorized an Egyptian bank to work in Djibouti, in addition to reaching agreement on cooperation involving the building of housing units, ports, logistical and industrial areas, in developing fish farming and on ways to remove informal settlements, the statement added. He said Egypt has realized that competition in Africa now has to more with development and economic presence rather than diplomacy and politics. He said the Egyptian presence in African markets “is not at the required level.”
Hassan also said many African countries see Egypt as being successful in developing the infrastructure they lack and seek to benefit from Egypt’s experience.
African regional and continental news
Economic growth in Sub-Saharan Africa is estimated to have contracted by 2.0% in 2020, closer to the lower bound of the forecast in April 2020, and prospects for recovery are strengthening amid actions to contain new waves of the pandemic and speed up vaccine rollouts, according to the World Bank’s biannual economic analysis for the region. The latest Africa’s Pulse, The Future of Work in Africa: Emerging Trends in Digital Technology Adoption, notes that a slower spread of the virus and lower COVID-19-related mortality, strong agricultural growth and a faster-than expected recovery in commodity prices has helped many African economies weather the economic storm induced by the COVID-19 pandemic. The report notes that economic recovery hinges on countries deepening reforms that create jobs, encourage investment, and enhance competitiveness. The resurgence of the pandemic in late 2020 and limited additional fiscal support will pose an uphill battle for policy makers as they continue to work toward stronger growth and improved livelihoods for their people.
AfCFTA: Free trade bloc can be a game changer for African people and business (Namibia Economist)
Exploring strategies to deepen private sector participation in the implementation African Continental Free Trade Area (AfCFTA) was the highlight of a panel session during the 2021 WTO Aid-for-Trade Stocktaking meeting. The African Development Bank, the United Nations Industrial Development Organization (UNIDO) and International Trade Centre (ITC) organized the session held on Wednesday 24 March. “The success of the AfCFTA hinges on the ability of African firms to understand and capitalize on the trade related opportunities offered by the AfCFTA,” said Pamela Coke-Hamilton, International Trade Centre (ITC) Executive Director.
The Eastern and Southern African Trade and Development Bank (TDB) and OCP Group, the world’s largest phosphate mining and leading fertilizer company, announced $400 million-worth of fertilizer trade finance transactions executed via blockchain technology. Of the total value $270 million have already been completed, and the remainder to be executed in upcoming months. These transactions make OCP Group the first African company to execute an intra-African trade transaction using blockchain. Through dltledgers’ blockchain platform, OCP Group delivered phosphate fertilizers from Morocco to Ethiopia. The intra-African transaction initiative, as part of OCP’s digitalization strategy, aims to reduce the trade finance gap in Africa and boost trade between African countries, particularly in the fertilizer sector, through digital inclusion.
East Africa critically undermined by illicit trade - Report (The Star, Kenya)
East Africa, a key security partner in the war on terror is being critically undermined by illicit trade, a report has found. The report dubbed An Unholy Alliance: Links Between Extremism and Illicit Trade in East Africa says that terror groups , urban gangs, and international crime groups are increasingly targeting East Africa as a destination market for illicit trade. They also use East Africa as a transport hub for the mass import and export of illegal goods.
The SADC Committee of Ministers of Health has recommended that modern technology such as video-conferences, Webinars and Skype calls continue to be used when conducting meetings until the COVID-19 situation has been contained in the Region. This position was endorsed by the Council of Ministers which met on 12th March 2021 and directed the Expanded Technical Committee for Coordinating and Monitoring the Implementation of the SADC Protocol on Health to continue monitoring the COVID-19 situation and provide timely advice, analyse the current COVID-19 situation in the African context and provide home-grown solutions.
SADC put on hold the hosting of regional face-to-face meetings in March 2020 due to the outbreak of the coronavirus and instead recommended convening of virtual meetings . The Council of Ministers observed during its meeting that the COVID-19 situation in the SADC Region has been gradually deteriorating since September 2020 and that the numbers of cases and deaths have exponentially increased in all Member States.
COMESA Secretariat held a one-day consultative meeting with Member States and other Regional Economic Communities (RECs) on optimizing returns from intra-Africa trade in Animals and Animal products under the African Continental Free Trade Area (AfCFTA). The virtual meeting discussed many issues including reinforcing multi-lateral cooperation for disease prevention and control, integration of informal trade in animals and animal products into formal trade and access to information on available market opportunities and market potentials within the region. Other matters discussed included trade complementarity and the need for creating value addition opportunities to create diverse markets within Africa and financing the animal resources sector to boost productivity and development of the sector. The consultative meeting came up with a communique in which they called for integration of AfCFTA-animal resources development strategies into national AfCFTA strategies. This is in addition to identifying opportunities for investment along the value chains to enhance export capacity. They also called for the development of productive capacities in the animal resources sector to advance industrial competitiveness and economic transformation among several other recommendations.
African countries need to diversify their economies by replicating East Asia’s aggressive focus on manufactured exports rather than remain trapped in their colonially defined role as producers and exporters of raw agricultural or mineral products used in industrial production in Europe, America and other continents. This was one of the central ideas recommended by economic experts during the recent Adebayo Adedeji Memorial Lecture, an annual event set up to honour the late Adebayo Adedeji, a Nigerian economist and longest serving executive secretary of the Economic Commission for Africa (ECA), held in Addis Ababa, Ethiopia. Rob Davies, erstwhile South African minister of trade & industry and chief speaker at the event themed “Towards a Developmental Approach to the AfCFTA”, noted that the global race for a vaccine highlights the perils of African countries being consumers and not producers of medical supplies.
How Africa digital Covid passport will ease travel (Business Daily)
As international travel transitions to the use of Covid-19 passports, African airlines have teamed up to use a shared digital passport system developed by the African Union (AU) in partnership with the Africa Centres for Disease Control and Prevention (Africa CDC).A vaccine passport portal for Africa means passengers from the continent can travel within and outside their countries, while encouraging tourists to resume trips, providing a massive boon to an air industry that has been crippled by the pandemic to post historical losses.
The Travel Pass, developed by the International Air Transport Association (IATA), is a digital platform to help passengers easily and securely manage their international travel in line with any government requirements for COVID-19 testing and vaccine information.
The Economic Community of West African States (ECOWAS) comprises eight Francophone, five Anglophone, and two Lusophone countries. These countries were categorized into two zones namely; the WAEMU (West African Economic and Monetary Union) formed as an African Colony of France during the colonial era, and the West African Monetary Zone (WAMZ). The WAEMU comprises seven francophone countries and one Lusophone country, and the WAMZ comprises five Anglophone countries, one francophone country, and one Lusophone country. Comparatively, the WAEMU uses the CFA (XOF) as a common currency, and the WAMZ uses its sovereign currencies. Also, the WAEMU is macroeconomic fundamentally stable than the WAMZ due to the stringent monetary policy practices and laid down macroeconomic convergence criteria. Additionally, the WAEMU intra-trade averages 13.7% above the overall average for the ECOWAS although the WAMZ is the economic hub of the sub-region. Therefore, the use of sovereign currencies by countries in the WAMZ could be a barrier to trade.
ECOWAS organises workshop on anti-money laundering in Accra (Ghanaian Times)
The Minister of Works and Housing, Francis Asenso-Boakye, has called for a concerted effort among stakeholders in the security and real estate sectors of the country to combat money laundering. “Given the advancement in technology and the borderless world, which is making it increasing difficult to track money launders, there is the need for collaboration among experts, to fight money laundering,” he added.
The three-day programme is aimed at enhancing the capacity of participants on current and emerging money laundering risks. It also seeks to promote cooperation, coordination and engagement amongst relevant competent authorities and real estate sector professionals on how to effectively implement strategies for anti-money laundering and combating terrorism financing.
The ECOWAS Commission has asked Community stakeholders to play an active role in the development and the implementation of the ECOWAS Vision 2050 document and its frameworks for the West African Region. This call came in a two-day consultation workshop, organized by ECOWAS 29-30 March 2021, in Abuja. A similar consultation workshop was held with women and youth organisations across West Africa, last week. This workshop aimed to consult specifically with the decentralized stakeholders from Member states because in most West African States, governance is decentralized to the subnational level for increased participation of the citizens in decision making and promote the wider spread of socio-economic development at the sub-national level.
Challenges of regional integration of West Africa (Punch Newspapers)
Taking a step back into a historical journey, the concepts of “multilateralism” and “regionalism” have increasingly taken the centre stage in global politics. The European Union and the North American Free Trade Agreement, African Union and ECOWAS have emerged and are growing. Also, the fate of the African Continental Free Trade Agreement is also being rethought. Based on our recent research on “The “Isms” of Regional Integration: What Do Underlying Interstate Preferences Hold for the ECOWAS Union?” we argue that ECOWAS may not have lived up to its mandate after four decades of its existence. While some success in regionalism may have been achieved, such success appears to be limited in scope. The critical challenges include member states internal insecurity, crime, illicit trading and smuggling across the borders. Also, ECOWAS security apparatus suffer from financial burden and political interference. ECOWAS forces receive insufficient training, lack of preparation and inadequate military equipment. These produced weak interventions and “seriously weakened” the external and internal security of the region and ability to overcome the activities of Boko Haram terrorist group. More so, ECOWAS has been struggling to bring about the radical integration of the region with other economic blocs.
Regionalism presents unique opportunities to drive Africa’s transformation, economic development, and territorial advancement. Whether viewed with optimism or scepticism, global trade has become a critical focus of world leaders but regional integration, governance of treaties and policies remain contentious areas. Considering these concerns, this article draws insights from the regionalisation of the ECOWAS and treaty implementation. Despite the portrayal of Africa as the most underdeveloped continent in the world, the emergence of ECOWAS and the African Union is a manifestation that Africa is taking responsibility for its affairs.
ECOWAS in collaboration with the European Union, Expertise France and the Government of Burkina Faso will on Tuesday, March 30, 2021, hand over equipment to the Digital Investigation Laboratory of the BCLCC of Burkina Faso. An awareness workshop for digital hygiene will also be launched on the same day. The Information and Communication Technologies (ICT) revolution has radically changed the world through the automation of tasks. They have become de facto essential for sustainable development, especially in the productivity of the economy. However, they have also given rise to the emergence of new forms of criminality linked to their uses. According to several studies, cybercrime costs the global economy more than 500 billion dollars each year.
With a view to providing a response to the strong growth of cybercrime in its area and to support its member countries, the ECOWAS Commission initiated the project “Organized crime: West Africa’s response to cybersecurity and the fight against cybercrime” (OCWAR-C). This project aims to contribute
Nigeria Seeks Integrated, Coordinated Approach against Hunger in Africa (THISDAY Newspapers)
The federal government has called on the global community to adopt an integrated, targeted and well-coordinated approach to combat hunger in Africa. Speaking at a roundtable in the ongoing virtual World Bank-IMF 2021 Spring Meetings on ‘Food Security in Africa: A Resilient Food System Beyond COVID-19’, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed called on the international community, particularly the multilateral institutions and the private sector to assist Africa to build food resilience. She said: “We invite the international community, particularly the multilaterals and the private sector to key in and to assist Africa to build food resilience and pursue the attainment of the Sustainable Development Goals (SDGs) number two and the goals of African Union (AU) Agenda 2063.” In her opening remarks, Ahmed noted that a robust and secured food system is central to the health of both humans and the economies of nations, adding: “As the main source of nourishment and jobs for millions of the population, the conversation around the topic is critically well set.”
Efforts to improve the productivity and resilience of pastoral production systems in the Sahel get a strong boost with a $375 million new IDA* financing, approved by the Board of World Bank’s Executive Directors today, to support the implementation of the second Regional Sahel Pastoralism Support Project, known by its French acronym PRAPS-2 (Projet regional d’appui au pastoralisme au Sahel-Phase 2). Pastoralism is a key driver of growth that provides livelihoods for more than 20 million people in the Sahel. The new project will support this important activity to improve the resilience of pastoralists and agro-pastoralists in selected areas of the Sahel region, including in Burkina Faso, Chad, Mali, Mauritania, Niger and Senegal.
“Ensuring the socio-economic inclusion of women and youth in all development programs in the Sahel is key”, said Ms. Soukeyna Kane, World Bank Country Director for Burkina Faso, Chad, Mali and Niger. “PRAPS-2 will contribute to this goal by stepping up interventions towards vulnerable women and youth from pastoral households by increasing their access to training, including functional, digital and financial literacy, as well as business skills. It will finance income generating activities to support their self-employment initiatives and will improve access to social and civil registries, a strong demand of pastoralists’ organizations in the Sahel region”.
Global economy news
The event, entitled “Accelerating Trade Digitalization through distributed ledger technology”, reviewed the latest developments in blockchain and how digital technologies such as distributed ledger technology (DLT) can help address the risks and inefficiencies in global supply chains to the benefit of all. A distributed ledger is a digital list or database shared among nodes in a distributed network. Blockchain is one type of distributed ledger. More details on the event is available here. In his opening remarks, Deputy-Director General Xiaozhun Yi said: “The pandemic has brought to the fore the archaism of trade processes still largely based on paper, with dire consequences on business operations in times of lockdowns. It has brought into sharp focus the need to urgently digitalize these outdated paper-based processes. The last 12 months have shown that going digital is no longer optional. It is a matter of survival for many companies, in particular the smallest ones who have been hit very hard by the current crisis.” DDG Yi’s full remarks are available here.
“Accelerating Trade Digitalization to Support MSME Financing”, launched today, seeks to identify some of the most pressing challenges related to trade financing for micro, small and medium-sized enterprises (MSMEs) and explores the potential application of digital technologies to address these challenges. The publication is based on interviews and surveys with experts in the field of MSME financing, including trade financing, and explores the ways that technology can be used to enhance access to financing.
PwC report identifies payment as a core digital economy value proposition (Engineering News)
Digital payments, and the ecosystem partnerships required to enable them, are a cornerstone of the new digital economy and customers and businesses are increasingly relying on digital options to buy and sell goods and services, says advisory multinational PwC Strategy& Payments Transformation lead Chantal Maritz. Some of the biggest players in the payments industry are creating value by offering a multitude of payment solutions, least-cost routing options and value-added services that can cater to the needs of small merchants and global multinational companies alike, she illustrates
How the Suez Canal blockade affected global trade (World Finance)
Between March 23-29 a 1,300ft-long container ship, named Ever Given, blocked traffic at Egypt’s Suez Canal entrance. It was finally freed yesterday (March 29) after six frantic days, but the blockade left over 200 ships stranded at either end of the canal. This has mounted further pressure on global trade during a period when it was already feeling the strain due to the economic effects of the COVID-19 pandemic.
Even though the vessel is now free, and trade has resumed, there is a massive backlog of vessels trying to pass. The level of disruption cascaded every 24 hours over a period of six days as more vessels joined the line of transit. There could be congestion at some ports and further exacerbation of supply chains which were already reeling from container shortages. As a result, assembly lines could be left idle as ships will not arrive in time. Another area of trade loss is the re-routing of some ships that are being asked to travel via the Cape of Good Hope in South Africa, which could see a delay of another eight days. This could potentially add more than £18,000 a day in fuel costs.
Egypt’s Sisi promises investment to avoid Suez closure repeat (Eyewitness News)
The promise came a day after the refloating of the giant container vessel MV Ever Given, which hit the eastern bank of the narrow shipping lane last Tuesday and became wedged diagonally across its span for nearly a week.
In the early hours of March 23, the container ship Ever Given was blown off course by high winds on its way through the Suez Canal. At 400 metres long, the Ever Given is longer than the canal is wide, and the ship became wedged firmly in both banks, completely blocking traffic. Coming on top of the COVID-19 pandemic, this event has highlighted the fragility of global supply chains – and is likely to accelerate changes in the world economy that were already under way. Advances in technology associated with digitisation and automation are making manufacturers less dependent on large skilled workforces found only in certain parts of the world. Production is becoming more mobile and therefore able to locate closer to the markets served.
Several heads of state and government, the United Nations and heads of multilateral development finance institutions on Monday called for expansion of the Debt Service Suspension Initiative, under which low-income countries have suspended paying down debt during the Covid-19 pandemic. The initiative should be widened beyond low-income countries and its current expiration extended to offer much-needed fiscal space, panelists urged in a discussion of international debt architecture and liquidity. The meeting also called for Special Drawing Rights to be reallocated to poorer countries.
This paper is the sixth in a series that examines macroeconomic developments and prospects in low-income countries (LICs). LICs are defined in this report as the countries eligible to PRGT facilities (69 countries). The first section of the paper discusses recent macroeconomic developments and trends across LICs. The second section estimates LICs’ financing needs up to 2025 to resume and accelerate their income convergence with advanced economies (AEs). It does this by estimating the additional financing that would enable LICs to step up spending response to COVID, including vaccination needs, while rebuilding or keeping external buffers to enhance resilience, and then the paper considers the financing needed to allow LICs to accelerate convergence with AEs. The paper then discusses a mix of financing options, including concessional financing from the international financial institutions, grants and loans from bilateral donors, private financing and debt operations, but also domestic reforms within LICs themselves as a key component to foster growth, enhance private investment, raise public revenues, and increase efficiency of spending.
Nearly nine in 10 leading global climate economists think climate change will deepen income inequality between rich and poor countries, with most calling for urgent action to cut planet-warming emissions, a survey showed on Tuesday. According to the research by New York University’s Institute for Policy Integrity, the impacts of rising temperatures could create “enormous difficulties” for nations already burdened by economic challenges and high rates of poverty. In the largest ever global expert survey published on the economics of climate change, nearly three-quarters of the more than 730 respondents said “immediate and drastic action” was needed to cut emissions.
Here’s how to propel a green recovery for the poorest (Thomson Reuters Foundation)
The International Monetary Fund (IMF) announced at the recent Climate Adaptation Summit its intention to place climate change at the heart of its work – recognising the natural world and the economy are no longer at odds. With the growing climate stress and depletion of ecosystems, it is imperative that the renewed efforts are launched to propel a green recovery from the pandemic, preserving nature for future generations and giving it much needed economic value. As climate scenarios are integrated within economic frameworks climate-vulnerabilities will be more evident across the globe and strain the medium-term economic scenarios. Climate shocks could chop off up to 5% of gross domestic product (GDP) per year by 2030 in some vulnerable countries. This also means debt distress will limit the fiscal space to support an inclusive and effective green recovery post COVID.
he global economy and multilateral order will benefit immensely from China’s domestic reforms and opening up of its economy to foreign investors, Cavince Adhere, an international relations expert told Xinhua during a recent interview in Nairobi, capital of Kenya. Cavince Adhere hailed the ongoing policy, institutional and regulatory reforms in China saying they will revolutionize Beijing’s interaction with the world and unleash shared prosperity. “I think it is important to appreciate that China is continuing with its reforms and opening up, we have seen the latest announcement from the two sessions that China intends to derisk some of the sectors that for long have been out of reach to foreign investors,” Adhere told Xinhua.
In February 2020, the Maritime Silk Road Trade Index (STI) released by the Ningbo Shipping Exchange showed that the import and export trade index was 145.91 points, up 40.96% year-on-year; the export trade index was 162.54 points, an increase of 60.33% year-on-year; the import trade index was 129.00 points, up 22.06% year-on-year. From January to February, China total import and export trade value was US$834.5 billion, a year-on-year increase of 41.0%. The total export trade value was US$468.8 billion,a year-on-year increase of 60.3%;the total import trade value was US$365.6 billion, a year-on-year increase of 22.1%.
From January to February, the import and export trade value between China and Africa was US$34.0 billion, up 27.6% year-on-year, accounting for 4.1% of China’s total import and export value. The export trade value was 20.7 billion U.S. dollars, up 50.7% year-on-year; the import trade value was 13.3 billion U.S. dollars, up 3.1% year-on-year.