tralac Daily News
Infrastructure investing, when done sustainably, can deliver significant economic benefits to a country and for generations to come, but fund managers have to take a holistic view to ensure they make investments into sustainable infrastructure projects, says financial services group Sanlam Investments head of credit Ockert Doyer. Sanlam Investments is convinced that allocating capital to sustainable infrastructure projects will continue to result in great risk-adjusted returns for investors, while having a big positive economic impact for the country - specifically as the economy is rebuilt after Covid-19.
South Africa can be grateful that it is the world’s largest producer of and has the largest deposits of platinum group metals (PGMs), according to data published in the SA Reserve Bank’s biannual Monetary Policy Review. The SA Reserve Bank’s Monetary Policy Review often contains nuggets that don’t directly bear on monetary policy, and the latest one, published on Wednesday, contained a couple related to the mining sector. “South Africa enjoyed one of the largest current account surpluses during 2020, with its ratio to GDP swinging from a 2.9% deficit in the second quarter of 2020 to a 5.9% surplus during the third quarter, a 32-year high,” it noted. “Within the South African context, current account surpluses do not occur often: the current account has been in deficit nearly two-thirds of the time since 1960 and 86% of the time since 1994.”
A related issue is a country’s terms of trade, and this has also been in positive territory, a reflection of the fact that more capital is flowing into the country from exports than is flowing out from expenditure on imports. This has been helped by the collapse in oil prices last year and a sharp fall in import consumption related to 2020’s massive, pandemic-induced 7% economic contraction.
South Africa’s BankservAfrica plans payments platform for SADC countries (The Africa Report)
The platform, which will allow payments to and from bank accounts and mobile money wallets, has been under preparation for over a year, Pilbauer says in Johannesburg. It will go live in a month with a first group of participants including ZB Bank in Zimbabwe, Virtual Technology Services in Namibia and Selcom Paytech in Tanzania. Initial payments will be in rand and US dollars. “Seamless payment systems can contribute to economic recovery” once the worst of the Covid-19 pandemic is over, Pilbauer says. “You can’t do it only on a domestic level.”
THE rapid increase in the price of fuel is putting pressure on agriculture input costs as South African farmers harvest last summer’s crop and prepare for the winter planting season. This trend is attributed to the global developments as Brent crude oil prices rose by 6,7 percent month on month in April 2021 to average US$64/ barrel.
“This comes at an unfortunate time with the onset of the winter crop planting season and summer crop farmers gearing themselves for the winter harvest,” said Paul Makube, Senior Agricultural economist at FNB Agri-Business. “The escalation in fuel costs does not bode well for producers as production costs are likely to escalate across the value chains, with varying impact on planting, harvesting, distribution and packaging.”
Grain producers and logistics companies in the agriculture value chain will bear the brunt as close to 80 percent of grain is transported by road.
ZimTrade extends market survey to Tanzania, DRC (The Herald)
TRADE development and promotion agency, ZimTrade, says increased engagement with regional markets is critical as the country explores opportunities for local products following the operationalisation of the African Continental Free Trade Area (AfCFTA).
In a latest update ZimTrade said it was conducting a market survey in Tanzania, while a pre-mission assessment of the Democratic Republic of Congo (DRC) market would be undertaken next week. “Following the commencement of trade under the African Continental Free Trade Area in January this year, ZimTrade is increasing its engagements with regional markets to explore opportunities for local products and services,” said the agency.
President Yoweri Kaguta Museveni has met the trade delegation from Kenya who are on a working visit to Uganda over efforts to revive the trade relations between the two countries. The officials from Kenya started their week-long trip to Uganda on Monday with a meeting with their Ugandan counterparts, before embarking on a tour of the sugar factories in the country. A source moving with the delegation said shortly after the meeting, they received a call informing them that the president would like to meet them during their stay in the country.
Johnson Weru, the Principal Secretary of State Department for Trade, Enterprise and Development in Kenya recalled that the issue of whether the quota of 20,000 metric tonnes of Ugandan sugar that was eligible to enter Kenya had been resolved. Uganda’s sugar production has increased to about 560,000 metric tonnes, out of a capacity of more than 600,0000, compared to a local consumption of only 360,000 tonnes per year. Uganda therefore has a surplus of 190,000 tonnes which can only be put out on the export market.
However, all the tradition export consumers of Uganda’s sugar have frequently blocked or restricted the entry of the commodity into their markets for various reasons. While Rwanda blocked Uganda’s products two years ago, Tanzania and Kenya have instituted on-and-off bans of the sugar, and other products like grain, poultry and beef.
The Kenya Private Sector Alliance and The Canada-Africa Chamber of Business are proud to announce collaboration to promote, support and facilitate bilateral trade and investment opportunities from Canada into Kenya. The first engagement will be a virtual trade mission to Kenya from Canada in May. The 3-year agreement MoU was signed today during the Second Session of the Binational Commission meeting between the Governments of Kenya and Canada – and is subject to ongoing renewal. “This MoU will solidify the existing trade relations between Kenya and Canada and establish strong bonds between the two countries that will go a long way to boost private sector trade and investment. The MOU will also enable us to exchange business information with CACB which is critical especially to our members who wish to expand their coverage to international market,” explained Ms. Carole Kariuki Karuga, KEPSA CEO.
Construction of Julius Nyerere Hydropower Station 45% complete (Construction Review)
The project is expected to enhance access to affordable electricity which will propel economic growth as well as attract investment in the country. It will also transform the country through generation and supply of reliable electricity for both domestic and industrial use. The project which is being undertaken by Arab Contractors and Elsewedy Electric is owned and will be managed by the government owned Tanzania Electric Supply Company (TANESCO).
State says there is enough maize, lorries carrying toxic imports intercepted (Kenya Broadcasting Corporation)
The Ministry of Agriculture, Livestock, Fisheries and Cooperatives has intercepted 39 lorries importing toxic maize from Uganda as it dispels fears over looming maize shortage. According to the ministry officials, intensive surveillance and tests have revealed that imported grain from Uganda and Tanzania contain high levels of myotoxins particularly aflatoxins and fumonisins which are carcinogenic. “Following the Government directive on stoppage of maize transfers from EAC partner countries, unscrupulous businessmen have tried to sneak in maize through non- gazetted border points. The law enforcement agencies have so far, napped 39 lorries ferrying maize from Uganda,” said the ministry. Similarly, the government has introduced measures that the ministry says are aimed at ensuring all food imports from the East African Community (EAC) conform to safety standards in order to protect consumers.
Stakeholders in Kenya’s travel and hospitality sector on Wednesday appealed for fiscal, regulatory and financing incentives from the government to enhance its resilience in the face of pandemic-induced shocks. Mohamed Wanyoike, chairman of the Kenya Association of Travel Agents (KATA), said that state bail-out is key to enable the sector to weather a downturn occasioned by new COVID-19 restrictions. “We call on policymakers to continue discussions and agree on coordinated measures that are necessary for the successful start of travel even as they strive to improve the country’s epidemiological situation,” Wanyoike said in a statement issued in Nairobi.
“Suspension of domestic air services, an extended nightly curfew and a lockdown of five counties dealt a major blow to the industry,” said Wanyoike. “In the meantime, the industry will need continued financial support to help weather the extended dry spell,” said Wanyoike.
MAJOR upgrades in ports in Tanzania are nearing completion to boost the country’s prospects of becoming a major regional transport and trading hub. The Prime Minister said in Parliament in Dodoma on Tuesday that upgrades for Dar es Salaam, Tanga and Mtwara ports were on final stages of completion as the country is focused to make optimal use of its strategic geographical location to enhance regional trade, stimulate economic growth and development and ease transportation.
“These projects will enable the nation to make the most of the geographical opportunities we have as well as stimulate economic growth and facilitate transportation,” said the Prime Minister while tabling in the House his office’s budget proposals for the 2021/2022 financial year.
The East African Business Council (EABC) has hailed the Government of the Republic of South Sudan and the Government of the Republic of Uganda for escorting truck drivers to Juba. A statement issued by EABC’s CEO, Dr. Peter Mutuku Mathuki, said: “This offers a quick solution to the cross-border trade impasse due to security concerns. As the apex body of the private sector in the East African Community, the East African Business Council has been following on the safety of truck drivers and the free flow of cargo and services into and out of the Republic of South Sudan along the Juba route.” It added that South Sudan offers an important and growing market; in 2018 South Sudan imported goods valued at approximately USD. 377 million from the EAC region and exported USD. 17.9 million into the bloc, according to EABC.
World Bank remains main source of Uganda’s loans (Daily Monitor)
The World Bank remains the biggest source of Uganda’s loans, according to details from the Ministry of Finance. The bank, which lends through the International Development Association, by February, had the largest share of approved loans followed by the African Development Bank (AfDB). At least, the Ministry of Finance, indicates 44 per cent of approved credit is sourced from the World Bank while 39 per cent comes from AfDB. However, the ministry does not indicate which other sources government draws credit.
Kenya has overtaken Somalia as a source and destination of charcoal in the East Africa region despite a ban in its production in 2018, a new report shows. The report by Global Initiative Against Transnational Organised Crime (GI-ATOC) dubbed ‘Black Gold; The charcoal grey market in Kenya, Uganda and South Sudan’ shows that Kenya is now a major transit point of charcoal coming from the neighbouring Uganda and South Sudan for local market and shipment to the Middle East where it’s used to fuel hookah pipes.
“Kenya is also a destination country for timber from Ethiopia. Ethiopian timber is later made into charcoal for consumption in Kenya’s northern towns, with some of it reportedly reaching Nairobi,” the report adds. Corruption has been cited as the lead facilitator in charcoal transportation in the country, with law enforcement authorities taking bribes to facilitate the commodities movement into and across the country.
He adds that it is encouraging that most local manufacturing companies are not just supplying the Zambian market but also the Common Market for Eastern and Southern Africa (COMESA), the Southern African Development Community (SADC), and the Great Lakes Region.
The United Nations Economic Commission for Africa (ECA), in collaboration with the Government of Burkina Faso, is organising a workshop in Ouagadougou, from March 15 to 16, to validate the National Strategy for the Implementation of the African Continental Free Trade Area (AfCFTA) for the country. This meeting, which will be held in a context where African countries launched the first operational phase of the AfCFTA in July 2019, aims to serve as a presentation framework for discussion and validation of the National Strategy for the Implementation of this Agreement in Burkina Faso.
“The geopolitics of the economic and health response to the Covid 19 pandemic reminds us of the imperative of the industrialisation of Africa, which is one of the main aims of the AfCFTA. The development of the continent will be achieved through the AfCFTA”, added Director of the ECA Sub-Regional Office for West Africa, Ngone Diop
The food trade balance showed a deficit of 251.7 MD during the first three months of 2021, against a surplus of 176.7 MD during the same period of the previous year, the National Observatory of Agriculture (ONAGRI) said. The coverage rate of imports by exports stands at 84.9% in 2021, against 113.5% in 2020. In value, food exports fell by 4.7%, while imports rose by 27.5%.
African regional and continental news
African chief executive officers (CEOs) have prioritised digital transformation and operational efficiency for the next 12 months as part of measures to stabilise continental economies in the wake of the COVID-19 pandemic. The disclosure was contained in a survey titled “African Financial Industry Barometer”, conducted by Deloitte in partnership with the Africa CEO Forum and unveiled yesterday at the inaugural virtual Africa Financial Industry Summit.
The pan-African study highlighted the transformational efforts and goals of the industry, as business leaders grapple with the economic fallout of the virus in the face of pressing need to kick-start economic recovery. It said the digital age and huge participation of new comers have forced Africa’s financial institutions to review their business models, governance practices and risk management capabilities. To meet the demand of the day, the report said they have developed a tremendous appetite for innovation by embracing digitalisation initiatives, open banking, insurance or partnerships with fintechs and insurtechs, regarded as accelerators of financial inclusion.
E-commerce in sub-Saharan Africa: can Covid-19 growth be sustained? (Oxford Business Group)
The coronavirus pandemic triggered an e-commerce boom in sub-Saharan Africa, alongside the rest of the world. With a global recovery under way, the question now is: can that growth be sustained? There is no doubt that 2020 was a watershed year for the digital transition. Lockdowns around the world accelerated the deployment of digital solutions in most aspects of daily life: the expansion of e-commerce was one standout consequence. E-commerce companies and platforms enjoyed a rise in activity and profits, while retailers that had not previously developed their online presence found themselves obliged to do so in order to survive.
However, growth in e-commerce has been unevenly spread in global terms, being concentrated in wealthier countries and regions. Sub-Saharan Africa is particularly prone to the effects of limited ICT infrastructure: the International Telecommunication Union estimates that the proportion of individuals in the region who use the internet at least occasionally is 28.2% – considerably below the average of developing (47%) and developed (86.3%) countries. Other common barriers include the high cost of broadband; limited digital training and a lack of trust among citizens; a traditional preference for cash; and little government support.
Notwithstanding these considerations, however, e-commerce in the region saw significant successes last year, suggesting that growth in this field could be sustained going forward.
The Economic Community of West African States (ECOWAS), in partnership with the UN Development Programme (UNDP), is delivering a series of capacity building workshops in Ghana and Cote d’Ivoire for women traders and producers in the ECOWAS region with the aim of guiding them on market entry and operations under the African Continental Free Trade Area (AfCFTA).
Dr. Bolanle Adetoun, Acting Director of the ECOWAS Gender Development Centre, who represented ECOWAS Commissioner for Social Affairs and Gender, Dr. Siga Fatima Jagne, said women traders “play critical roles in African economies.” The capacity building programme, she continued, “is intended to highlight opportunities within the AfCFTA for ECOWAS traders, especially women, and contribute to an understanding of strategies and approaches to enhance value addition for goods and services within the framework of the AfCFTA.”
Min. Kemayah underscores Women Empowerment at ECOWAS summit (The New Dawn Liberia)
Liberian Foreign Minister Dee-Maxwell SaahKemayah, Sr. has disclosed that President George Manneh Weah is exerting frantic efforts to making gender mainstreaming a matter of urgency in the formulation and implantation of policies and programs to enhance greater participation of women in national leadership. Foreign Minister Kemayan added that Mr. Weah would like to see a sense of belongingness of the women of Liberia in all spheres of public life, in accordance with the Flagship National Development Plan of the Government of Liberia – The ‘Pro-Poor Agenda for Prosperity and Development’ (PAPD).
The Dean of the Cabinet made these remarks at the Fifth Legislature Delocalized meeting of the joint Committee on: Social Affairs, Gender and women empowerment, education, science, culture and health held on Tuesday, April 13, 2021 at the Ministerial Complex, Congo Town.
According to a Foreign Ministry release, the Fifth Legislature Delocalized meeting of the joint Committee will run from 13-17 April 2021 under the theme: “Empowerment of Women in the ECOWAS Region”. “To this end, Liberia takes pride for producing the First and only African Female President of the United Nations General Assembly, Her Excellency the Late Ambassador Angie Elizabeth Brooks-Randolph; as well as Africa’s First democratically elected Female President, Her Excellency Madam Ellen Johnson Sirleaf, and the First Female and current Vice President of the Republic of Liberia, Hon. Chief Dr. Jewel Howard Taylor”, he emphasized.
When the World Health Organization initiated its anti-smoking campaign over a decade ago, tobacco-growing countries became increasingly concerned about the economic challenges they would face. Tobacco production in Africa dates to the 1900s. The main exporters of tobacco in East Africa in 2019 were Zimbabwe, Malawi, and Mozambique, according to data from Statista. The export value of tobacco in Zimbabwe was $783 million; in Malawi, it was $500 million; and in Mozambique, it was $252 million, per the data.
Betchani Tchereni, an economics professor at Malawi Polytechnic, believes that by failing to diversify its economy, Malawi is treading on dangerous ground. He claims the most influential people cultivate the crop, a situation that makes it difficult for advocating an end to tobacco production. “As we speak, demand for tobacco at the world market continues to dwindle, which results in low exports, thereby breeding high-interest rates and inflation on our part,” he said. The government should explore other options, such as industrial hemp production, mining, and manufacturing, among other options, to reboot the economy.
MoU to Support Smallholder Farmers-PAFO, AGRA (East African Business Week)
The Pan-African Farmers Organization (PAFO) and the Alliance for a Green Revolution in Africa (AGRA) have signed a cooperation and partnership agreement to strengthen the capacities of African farmers’ organizations to ensure that they provide effective services to smallholder farmers, especially women and youth.The agreement will see AGRA supporting Farmers’ Organizations to drive policy advocacy around common areas of interest.
Thanks to this partnership, PAFO and AGRA have a framework of cooperation capable of facilitating collaboration between the two organizations, on a non-exclusive basis in areas of mutual interest. The partnership marks a major step forward towards building an inclusive, more resilient, and sustainable food system for African smallholder farmers, especially women and youth,” Dr. Kalibata noted
The Secretary General of East African Community today joined more than 150 African business leaders, financial experts and diplomats in the Nairobi EU-Africa Green Talk to share investment best practice and outline how to mobilise private sector support for sustainable development across Africa.
“Recent innovative investment across East Africa has transformed access for millions of people to clean water, renewable energy and finance essential for a better and more sustainable future. Today’s Nairobi Green Talks allow innovative solutions and technical best-practice to be shared with the rest of Africa and the world. The East African Community commends the Portuguese Presidency of the European Union and the European Investment Bank for their engagement with East African partners to further strengthen sustainable investment in the years ahead.” said Dr Peter Mathuki, incoming Secretary General of the East African Community.
“Partnership between Africa and Europe is key to increasing investment essential to combat climate change and create new opportunities. The Portuguese EU Presidency and European Investment Bank are pleased to join forces with East African business, political and conservation partners to learn from each other and ensure that lessons learnt in East Africa can make a enhance sustainable development around the world. The impressive examples of successful sustainable investment from across this region will be shared with Africa, European and global green leaders in Lisbon later this month.” said H.E. Luisa Fragoso, Ambassador of Portugal to Kenya.
KAS Africa secures $10m investment for growth (Engineering News)
Personal care products manufacturer KAS Africa has secured a $10-million investment from Mauritian investment company TRT Investments for the acquisition of a new plant and equipment to build capacity and capability. TRT has acquired a 49% stake in KAS Africa, which also now has access to working capital facilities put in place by TRT Investments with support from the African Export-Import Bank. The transaction will enable KAS Africa to ramp up capital investment in line with its plan to grow aggressively in South Africa and across the continent. Among other plans, KAS Africa will enhance its product range, grow its client base and build state-of-the-art, world-class manufacturing facilities across the continent, it states in a media release.
Calls to beat vaccine hesitancy as African Union drops AstraZeneca (Thomson Reuters Foundation)
Wariness about taking AstraZeneca’s COVID-19 vaccine in Africa could be compounded by the African Union’s decision to halt plans to procure the shot, health experts said on Friday, calling for public awareness programmes to fight misinformation. The African Union (AU) said its announcement was not related to recent findings by European and British medicine regulators that there are possible links between the vaccine and extremely rare blood clots, but rather a case of diversifying options. Still, experts said the timing of Thursday’s announcement could fuel vaccine hesitancy.
COULD goings-on in Mozambique and elsewhere on the continent not undermine economic development strategies such as the much-heralded African Continental Free Trade Area (AfCFTA)?Those troubled countries are not as far away as some might believe, yet they are natural trading partners.
In contemporary times the main motivation for migration was economic and lifestyle. People emigrated in search of jobs and a better quality and standard of life. Economic advancement remains a human migratory enticer and some countries still use immigration as a strategy to develop their economy.
Trade and Investment will play a critical role in the COVID recovery and has the potential to concretise the EU’s ambitions to deepen EU-Africa partnerships, write Barry Andrews, Soraya Rodriguez, and Charles Goerens.
One striking element of the EU’s new trade policy is its emphasis on a renewed partnership with the African continent. The Commission’s communication published in February, which outlines this new strategy, makes 29 references to Africa compared to just 11 references to China, two to the US and one single reference to the UK. The EU already has strong trading relations with the African continent, which stem from our historic links. The EU is the largest export and import partner for trade in goods with Africa, accounting for 31% of exports and 29% of imports.
Others benefit from unilateral schemes, which give privileged access to the EU market such as the Generalised System of Preferences (GSP), GSP+ and the Everything But Arms (EBA) scheme. Finally, in December of last year, negotiators reached a political agreement on the new Partnership Agreement that will replace the Cotonou Agreement. This EU-Africa partnership will be more important than ever in the post-COVID context.
Why we chose Ghana over Nigeria for Africa office, by twitter (The Nation Newspaper)
Microblogging and social networking service provider, Twitter, has explained why it chose to locate its Africa office in Ghana and not Nigeria. Twitter has recently announced its Africa office will be located in Accra, capital of Ghana. It however clarified Nigeria remains its target market though the office will be in Accra.
Amid reactions from Nigerians that the continent’s biggest market was snubbed, Twitter said it chose Ghana as the country is a champion of democracy. It said its decision was informed by Ghana’s “support for free speech and online freedoms.” It added that Ghana’s recent appointment to host the Secretariat of the African Continental Free Trade Area (AfCFTA) also influenced its decision.
EACJ registrar calls for expanded court sittings as region’s cases soar (The East African)
The East African Court of Justice (EACJ) wants its sittings to be conducted throughout the year as opposed to the current four months annually in order to address all the arising issues effectively. “Our mandate runs across the six East African countries and the four months that we sit are not enough at all. A national court here in Kenya, which only deals with internal cases seats for a whole year, what about the EACJ that has to manage six states in the region? EACJ registrar Yufnalis Okubo posed.
The East African Court of Justice, which was inaugurated on November 30, 2001, is one of the organs of the East African Community established under Article 9 of the Treaty for the Establishment of the EAC. Among its key responsibilities is to ensure adherence to law in the interpretation and application of and compliance with the Treaty.
BRICS is bringing the power of choice to Africa (PR Newswire)
Aside from traditional cooperation areas, such as security, weapons, and mineral resources, Russia is now taking its technologies to the continent: digital, agricultural, medical and educational solutions. African leaders have expressed enthusiasm about it at the Russia-Africa summit that took place in 2019, says Dr Eric Edi from Thomas Jefferson University (USA).”In terms of relations with Russia, China and India, and comparing to the EU, it has been more about technology transfer than resources extraction,” says Dr Eric Edi. Possible cooperation areas, as experts say, are yet to be explored, but it’s already clear that multilayer joint activities would be beneficial not only for their own sake, but also as a factor giving additional negotiation power in Africa-EU relations.
Global economy news
Speaking at the conclusion of the WTO-organized meeting “COVID-19 and Vaccine Equity: What Can the WTO Contribute?”, the Director-General said that statements from government ministers, vaccine manufacturers, civil society advocates and leaders of international organizations had identified problems and pointed to potential solutions. “This is a problem of the global commons, and we have to solve it together,” she said. She expressed hope that the meeting, which included roughly 50 speakers, would serve as the basis for continued dialogue aimed at delivering results in terms of increased vaccine production volumes in the short-term as well as longer-term investments in vaccine production and enhancing the trading system’s contribution to pandemic preparedness.
The large number of trade-related concerns expressed during the meeting, from the importance of open cross-border trade for access to vaccine raw materials and inputs to differences over the role of intellectual property protections, indicated “that the WTO must play a central part in the response to this crisis,” she said. “This is something in members’ control.”
The US remained non-committal on the move by India and South Africa to get Trade-Related Aspects of Intellectual Property Rights (TRIPS) waiver for COVID-19 vaccine before the WTO so that the doses are accessible and affordable to low- and middle-income countries. The move by India, South Africa and several other countries has been supported by more than 60 top American lawmakers, most of whom are progressives.
S Trade Representatives Katherine Tai, in her address to the World Trade Organisation (WTO) virtual conference on COVID-19 vaccine equity on Wednesday, however, did not weigh in on the request made by India and South Africa. The virtual conference was attended and addressed by her Indian counterpart Piyush Goyal, Executive Vice President Valdis Dombrovskis of the European Union, and Minister Ebrahim Patel of South Africa on Wednesday.
The COVID-19 pandemic has brought social and economic disruption worldwide, but is also providing governments with the opportunity to put economies on a more sustainable and inclusive growth path while addressing the underlying challenges, according to the OECD’s Going for Growth policy report. Going for Growth 2021: Shaping a Vibrant Recovery analyses pre-existing weaknesses as well as those brought on by the pandemic, and offers policy makers country-specific advice to seize the opportunity for a fundamental reset. OECD Secretary-General Angel Gurría and Italian Minister of Economy and Finance Daniele Franco launched the report shortly after the second meeting of G20 finance ministers and central bank governors under the Italian Presidency on 7 April. Its recommendations provide a basis for G20 discussions on strategies to push forward a vibrant economic recovery and promote higher-quality growth.
A debt pandemic is engulfing the Global South (IPS Journal)
Without a doubt, the Covid-19 pandemic represents the most severe developmental setback in recent history. But while it’s still ravaging across the Global South, the spread of the virus is not the only pandemic currently engulfing developing countries. In fact, a debt pandemic threatens to prevent them from achieving a meaningful — let alone sustainable — recovery. Between 2010 and 2020, public debt of developing countries has increased from an average of 40.2 to 62.3 per cent of GDP. More than one third of the increase, equal to 8.3 percentage points, took place in 2020 alone. This figure is equivalent to a staggering $1.9 trillion – the size of US President Joe Biden’s recovery plan.
As public debt increased, so did the resources allocated to meet creditor claims. The share of government revenues in developing countries used to meet external debt service increased threefold from 6.6 to 17.4 per cent between 2011 and 2020. In at least 32 countries, governments are now allocating more than 20 per cent of government revenues to debt service.
International private sector investment flows to developing and transition economies in sectors relevant for the sustainable development goals (SDGs) fell by one third in 2020 because of the COVID-19 pandemic. The value of newly announced greenfield investments in relevant sectors shrunk by 33%