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The South African Revenue Services (SARS) on Wednesday issued the latest trade statistics for February 2021. The market consensus was for the surplus to expand from R11.8 billion to R18.8 billion. In a note issued before the data release, Investec economist Kamilla Kaplan highlighted that exports in February usually pick up, compared to the seasonal decline in January. February’s Purchasing Manager’s Index also indicated that global export demand picked up during the month. “Imports will continue to be tempered by weak domestic economic activity,” said Kaplan. According to SARS’ data, exports increased by R18.14 billion or 16.5% between January and February 2021. By comparison, imports increased by R1.6 billion or 1.6%. The trade surplus stands at R41.38 billion for the year to date, which is higher than the R10.28 billion surplus recorded for the same period last year.
Brics might offer agriculture markets SA needs (BusinessLIVE)
Despite a vibrant agricultural sector, there are a standard list of challenges that SA agribusinesses commonly cite — land-reform policy, droughts and infrastructure are among the most frequently cited. However, a growing challenge facing firms — particularly those in beef, wool, fruit and wine — is the need to identify new markets.
The need isn’t surprising given that SA’s agricultural sector is export-orientated, with exports accounting for about half of the production in value terms, about US$10,2bn (about R150bn) in 2020 (up 3% y/y). Ensuring supply and demand is matched is critical for the agriculture sector. On the supply side, the planned expansion in various subsectors in the coming years will result in increased production.
Kenya on Tuesday said it had put in place measures to facilitate safe trade of maize and other related food commodities from across its borders. The east African nation stopped importation of maize from Uganda and Tanzania in early March due to safety concerns. Peter Munya, cabinet secretary of the Ministry of Agriculture, Livestock, Fisheries and Cooperatives said the ministry has increased surveillance on maize imports from the East Africa region in order to address safety concerns.
Yatani seeks extension of public debt relief to 2022 (Business Daily)
The Treasury is seeking for an extension of public debt repayment moratorium from rich countries beyond the June deadline, arguing that poor nations are yet to recover from the Covid-19 pandemic. In January, Kenya secured deals to suspend debt service with the Paris Club of countries and other creditors, including China, covering the six months to the end of June this year. Now, Treasury Cabinet Secretary Ukur Yatani has asked richer nations to extend the relief for another year to ease budget deficits. Under those deals, which fall under the G20’s Debt Service Suspension Initiative (DSSI) to offer poor nations debt relief, Kenya is deferring payments worth $600 million (Sh65.4 billion) due in the period.
The deferred amount, which includes $378 million (Sh41.2 billion) to China alone, will be paid over five years after a grace period of one year.
Suez Canal blockage to have insignificant impact on Mombasa port (The East African)
Kenya has allayed fears of pronounced negative impact on operations at the Port of Mombasa as an aftermath of the Suez Canal crisis, with only exports mainly refrigerated avocados to Europe and America, expected to experience slight delays. The Kenya Ports Authority (KPA) Acting Managing Director Rashid Salim said the blockage by a Japanese ship Ever Given on both sides of the canal was cleared on time and the port management does not foresee much of an impact, given that imports are mainly from Asia. “With cargo from Europe and Americans accounting for less than 35 per cent of imports in Mombasa, we will experience very minimal impact from the Suez Canal blockage in terms of delayed container vessels. The blockade should be able to affect cargo from Europe and the Americas that are normally transshipped from the Gulf ports,” Mr Salim said on Wednesday.
Uganda seeks $130m for pipeline deal (The East African)
To fund its 15 percent share of the East African Crude Oil Pipeline, Uganda is opting to borrow Ush481 billion ($130 million) from the domestic market to financially back its shareholding with equity. The 15 percent is owned through the Uganda National Oil Company and the money is a precondition for the government to solidify its ownership in the project. The loan will also pay for “historical costs,” which international oil companies have been footing since 2017 on behalf of the government, such as the project’s design and environmental impact studies. After failing twice, parliament’s Committee on National Economy will now have the last say on whether the government gets the money in time for the final investment decision, (FID) to tie up its equity in the $3.5 billion pipeline project.
One Year After Lockdown: Trade, Budget Deficits Mar Nigeria’s Economic Outlook (Leadership Newspaper)
One year after COVID-19-induced lockdown, the nation’s economy is yet to fully bounce back to its pre-COVID state, LEADERSHIP learnt. To this end, economists say the harsh economic atmosphere will continue with the country currently witnessing trade and budget deficits. They, hence, advocate creative means through macro-economic instruments that could make life and living easier for Nigerians. The trade deficit, they said, arose from lack of or low Foreign Direct Investment (FDI) into the country and lessened activities in the export market compared to increased import activities. Trade deficit occurs when a country’s imports exceed its exports during a given time period. It is also referred to as a negative balance of trade (BOT).
Encouraging competition in AfCFTA: Govt waives import duties (Graphic Online)
The government has waived import duties on imported equipment, machines and raw materials for local manufacturing companies to enable them to become competitive in the global marketplace.
Since 2017, the government has also reduced some taxes, and in some cases completely removed them, provided some critical infrastructure and simplified some trade procedures to boost local production. The measures are part of a fiscal incentive framework under the Industrial Transformation Programme to empower the private sector to fully harness market opportunities such as the African Continental Free Trade Area (AfCFTA).
The Minister of Trade and Industry, Mr Alan Kyerematen, disclosed this in a keynote address delivered on his behalf at the Graphic Business/Stanbic Bank Breakfast Meeting in Accra Tuesday. The meeting was held on the theme: “Leveraging AfCFTA: The critical success factors”.
Government has been urged to use the African Continental Free Trade Area (AfCFTA) to explore new avenues of raising domestic resources to offset the financing gap created by the coronavirus pandemic. Dr Eric Oduro Osae, a Public Financial Management and Local Government EXPERT, said in the short-term, the AfCFTA had the potential of mitigating the effects of Covid-19 pandemic by deepening intra-African trade and accelerating the post-pandemic economic recovery. “Over the long-term, it will play an important role in building greater resilience and insulating the continent against future shocks,” Dr Osae said in his presentation at the maiden UPSA Global Alumni Symposium on the 2021 Budget and Economic Policy Statement of the Government in Accra.
Agricultural Non State Actors Forum (ANSAF) has called on the need to slash fees and charges in the agricultural sector that have been impeding its growth and contribution to economic development. A representative from ANSAF, Audax Lukonge said in Dar es Salaam recently that the fees and charges have been hindering efforts to attract new investment in the sector. Mr Lukonge pointed out that to attain this, there is a need to formalise and work on all the plans set and agreed by the Southern Africa Development Community (SADC) member states.
The Ministry Delegate to the Minister of Foreign Affairs, African Cooperation and Moroccans Residing Abroad, in charge of Moroccans Residing Abroad and the ECA office for North Africa held a joint meeting on Monday under the theme: “African Immigrant Women, entrepreneurs in the World”. The meeting took place under the chairmanship of ECA Executive Secretary Vera Songwe and Minister Delegate to the Minister of Foreign Affairs, African Cooperation and Moroccans Residing Abroad, in charge of Moroccans Residing Abroad H.E. Nezha El Ouafi, with a focus on expatriate, African women entrepreneurs and the support required to ensure their full participation in the economic development of both their native and destination countries.
A dynamic and inclusive labor market has been an elusive goal for Morocco. Although per capita income doubled between 2000 and 2018, and the poverty rate fell to one-third of its 2000 level, job creation has not kept up over the past decade. Furthermore, the labor market is now facing the shock of the COVID-19 pandemic. A new World Bank report, “Morocco’s Jobs Landscape,” provides a fresh, up-to-date picture of labor market trends and priorities for the future. The study represents the first stage of a partnership with Morocco’s planning agency, HCP (Haut Commissariat au Plan), focusing on diagnosing the country’s employment challenges. This is now being followed by an in-depth analysis and assessment of concrete policy options to address these challenges.
African regional and continental news
Work is going on assiduously to finalize all outstanding negotiations on the Africa Continental Free Trade Agreement before the end of the year. These negotiations which are part of necessary conditions to ensure the success of the programme has been facing challenges from member countries despite commencement of the agreement. Director of Services at the African Continental Free Trade Secretariat, Emily Mboru-Ndoria assured that the outstanding rules which includes protocol on trade in goods and services will be completed this year. ”Differences in interests for various member countries of the African Union has been a major challenge for the finalization of outstanding rules and negotiations for the continental free trade agreement. The development, although under control, can push back the objective of having a common Customs Union as Africa”, she disclosed at the Graphic Stanbic breakfast meeting in Accra under the theme, Leveraging AFCFTA, the critical success factors.
AfCFTA will deepen economic integration among African countries ― Minister (Nigerian Tribune)
The Minister of Industry, Trade and Investment, Otunba Niyi Adebayo, on Tuesday, said that the African Continental Free Trade Area Agreement (AfCFTA), would further deepen the economic integration amongst African countries. Adebayo represented by the Director of Trade at the Ministry, Mr Aliu Abubakar, stated this during a meeting with Governor of Ogun State, Prince Dapo Abiodun, as part of the nationwide sensitization and sub-national engagement on the National Action Committee on AfCFTA, at Oke-Mosan, Abeokuta. The Minister said AfCFTA would no doubt provide immense opportunities for Nigerian companies to expand Africa.
Africa and China have an “unprecedented” opportunity for collaboration through the African Continental Free Trade Area (AfCFTA) agreement, the AfCFTA chief has told Xinhua. Calling China “a strong partner to Africa,” Secretary-General of the AfCFTA Secretariat Wamkele Mene said that China has provided Africa with “significant development support and investment support” over the past decade. “We are now in a position to offer China, as a partner, an investment destination that is based on the free trade area,” he noted, adding that the scope for cooperation could be in intellectual property rights, manufacturing, and the services sector.
China’s lending to African countries fell nearly 30 percent in 2019, a new study conducted by the China-Africa Research Initiative (CARI) at Johns Hopkins University found, suggesting China has sharply curtailed lending to the continent due to debt sustainability concerns. The CARI’s database of China’s loans to Africa mainly collects data from media reports of China and recipient countries in Africa. Holding a relatively objective stance comparing with other Western research institutions, the CARI study may offer some local details of China-Africa cooperation. However, given the inherent flaws of scattered sources which make up its database, it may not be able to tell the whole story. According to China’s 2021 White Paper on International Development Cooperation published in January, China has steadily increased the scale and further expanded the scope of its foreign aid, giving high priority to the least developed countries in Africa.
The International Air Transport Association’s (IATA) outlined three priorities for African governments to ensure that the airline, travel and transport industry survives the COVID-19 crisis and is able to support economic recovery, growth and development throughout the continent. The three priorities are: Continued financial relief and the release of committed aid and blocked funds Safe reopening of borders Planning for the safe restart of operations
The third of six meetings to prepare for the ITU World Telecommunication Development Conference (WTDC-21) took place on 29 and 30 March, with a focus on digital challenges and opportunities for countries, the industry and citizens across Africa. Held virtually and co-organized with the African Telecommunications Union (ATU), the Regional Preparatory Meeting (RPM) for Africa gathered more than 300 delegates from 33 countries to ensure regional coordination ahead of WTDC-21, set to happen in Addis Ababa, Ethiopia, from 8 to 19 November 2021.WTDC-21 aims to highlight innovative approaches, encourage new models of collaboration, and promote connectivity and digital solutions, particularly in this final Decade of Action to achieve the Sustainable Development Goals (SDGs) adopted by the United Nations. ”For all of us to be ready, all African countries must be individually ready,” said the ATU Secretary-General, John Omo, encouraging ATU member states to participate actively in WTDC-21. “This is only possible through a demonstration of sober and visible efforts, especially in this preparatory phase.”
Mastercard is to invest $100 million into Airtel Africa's mobile money business. The transaction comes just weeks after The Rise Fund, the impact investing arm of TPG, invested $200 million in Airtel Mobile Commerce (AMC), at a $2.65 billion valuation. AMC is currently the holding company for several of Airtel Africa’s mobile money operations and is intended to own and operate the mobile money businesses across all of Airtel Africa’s fourteen operating countries.
AAAM hosts exploratory visit by component manufacturers in Ghana (Engineering News)
The African Association of Automotive Manufacturers (AAAM) in March hosted an exploratory visit by automotive component manufacturers to Ghana. The AAAM says the objective was to introduce potential investors to the Ghanaian automotive market. Executives from Maxe (a division of KAP Automotive), Supreme Springs (a division of Metair) and Hudson Rubber were involved in a week of back-to-back engagements with vehicle assemblers, local manufacturers, vehicle dealers, and spare parts importers, as well as the Ghana Standards Authority
The West African Development Bank will finance projects worth over 5 billion euros ($5.9 billion) in the period from 2021 to 2025 in the eight-nation monetary union, the bank’s president Serge Ekue said on Wednesday. The projects will focus on sectors including agriculture, food security, renewable energy and infrastructure, Ekue told an online news conference, adding that a quarter of the financing will go to private sector projects. Ekue said the development arm of the West African Economic and Monetary Union was in strategic discussions with its main shareholders to double its capital to 2,310 billion CFA ($4.2 billion) and add new shareholders.
Global economy news
The United Nations today warned that the devastating socio-economic impact of the COVID-19 pandemic will be felt for years to come unless smart investments in economic, societal and climate resilience ensure a robust and sustainable recovery of the global economy. In 2020, the world economy shrank by 4.3 per cent, over two and half times more than during the global crisis of 2009. The modest recovery of 4.7 per cent expected in 2021 would barely offset the losses of 2020, says the latest World Economic Situation and Prospects.
Developing countries saw a less severe contraction at 2.5 per cent, with an expected rebound of 5.6 per cent in 2021, according to the estimates presented in the report. However, economic contraction among developing nations, falling exports and local consumption rates as well as high levels of public debt will significantly increase poverty levels, says the report. African countries are experiencing an unprecedented economic downturn with major adverse impacts on development. Lower commodity prices, the collapse of tourism and lower remittances – exacerbated by much-needed domestic lockdowns and other measures to control the spread of the pandemic – have caused a severe and widespread deterioration of the economic situation. Limited fiscal space, challenging financing conditions and rising public debt have increased the risks of debt distress.
The meeting was called by General Council Chair Ambassador Dacio Castillo (Honduras) to initiate a process of consultations on the nature of the prospective outcome document for the Twelfth Ministerial Conference (MC12), which will take place in Geneva the week of 29 November.
Members “may wish to start thinking about what type of outcome document we might realistically envisage for MC12, including its structure and elements,” the General Council Chair added, announcing he would begin consultations on these issues with interested delegations. He cautioned that this process should not divert attention from ongoing substantive negotiations.
With only seven working months until MC12, DG Okonjo-Iweala called on members to “create a recipe for success upfront,” starting with “two or three or four concrete deliverables” in areas such as fisheries and agreeing on work programmes for other items where differences remain.
Trade growth should then slow to 4.0% in 2022, and the effects of the pandemic will continue to be felt as this pace of expansion would still leave trade below its pre-pandemic trend (Chart 1).
The relatively positive short-term outlook for global trade is marred by regional disparities, continued weakness in services trade, and lagging vaccination timetables, particularly in poor countries. COVID-19 continues to pose the greatest threat to the outlook for trade, as new waves of infection could easily undermine any hoped-for recovery.
“The strong rebound in global trade since the middle of last year has helped soften the blow of the pandemic for people, businesses, and economies,” WTO Director-General Ngozi Okonjo‑Iweala said. “Keeping international markets open will be essential for economies to recover from this crisis and a rapid, global and equitable vaccine roll-out is a prerequisite for the strong and sustained recovery we all need.”
Ever Given, the massive container ship that blocked the Suez Canal for seven days, captured the attention of news media around the world as estimates claimed it was holding up $9bn each day in global trade, straining supply chains already burdened by the pandemic. The Suez Canal separates the continent of Africa from the Middle East and Asia and is one of the busiest trade routes in the world, handling about 12% of all world trade. However, a much larger proportion of world trade is impacted every day by the inefficiency, risk and unnecessary costs involved in antiquated trade finance processes. Human error might have been the cause of the Ever Given’s grounding, but it is humans’ adversity to change that is perhaps global trade’s biggest obstacle.
“Trade ministers will discuss the impact market-distorting practices, such as harmful industrial subsidies, including those causing excess capacity in some sectors, are having on our economies and chart a way to address these collectively,” the joint statement said.
Tariff tensions unaddressed: There was no mention of the tariffs that former President Donald Trump imposed on steel and aluminum imports from several G7 member countries. That remains a major point of friction between the U.S. and the EU. But since many blame subsidies by China and other governments for global overcapacity in those two sectors, joint action on that front might provide a path toward tariff relief.
How Europe can rebuild multilateralism after covid-19 (European Council on Foreign Relations)
The covid-19 pandemic has brought a changing international order into focus. As the virus swept the globe, it highlighted both the interdependence of today’s world and the obstacles to international cooperation. Now that the world is moving into a new phase of the fight against the virus, there is a chance to work together better – both on the recovery from covid-19 and on other transnational challenges in its aftermath. The European Union could do much to set the frameworks through which the world deals with these issues. But, to play that role, Europe will need a strategy for multilateralism that is adapted to a newly competitive world.
As the world looks beyond the first phase of covid-19, a new multilateral agenda focused on global public goods is taking shape. The pandemic brought home the need for global cooperation on public health. It reinforced the idea that health is an essential component of security, and demonstrated that multilateral action is inseparably connected to the well-being of people in every society. At the same time, the impact of covid-19 threatens to increase inequality around the world. The quest for economic recovery needs to be conceived on a global scale. As the world starts to rebuild, the goal of deepening cooperation on climate, technology, and trade will also feature prominently on the EU’s foreign policy agenda.
The problem for multilateralism is that the domains of health, finance, climate, technology, and trade – where the world’s societies are deeply interconnected – are increasingly sites of geopolitical competition between powers with very different political and economic models and values.
With countries across the world having agreed through the Paris Agreement to a goal of limiting temperature increases to 1.5 degree Celsius above pre-industrial levels to mitigate global warming, Deputy Secretary-General Amina Mohammed spelled out at the Climate and Development Ministerial Meeting: “We now need to spare no effort to achieve it in this ‘make-or-break year’”.