tralac Daily News
A bold set of actions to grow industrial output and support greater economic inclusion was announced today by Minister of Trade, Industry and Competition, Minister Ebrahim Patel in Parliament, during his Department’s Budget Vote. It included a timeframe for a draft law to provide for worker participation in company boards, steps to achieve higher levels of local industrialisation, a draft roadmap for producing electric vehicles and working on green hydrogen opportunities, boosting investment levels, and strengthening export platforms through the new Africa-wide trade agreement.
Speaking at a press conference today with Deputy Ministers Nomalungelo Gina and Fikile Majola, Minister Patel unpacked the action plans of the Department for the next 12 months. Minister Ebrahim Patel outlined a series of key strategies to speed up economic recovery and ‘build back better’ in the wake of the COVID-19 pandemic. In doing so, deeper integration of efforts to galvanise inclusive growth and build local industrial capacity has been identified as key strategic focuses in achieving this. “We will achieve this by: uniting growth with transformation; boosting local production; growing exports; securing new investment, and expanding the green economy,” said Minister Patel.
The Department of Trade, Industry and Competition (the dtic) has released today a Green Paper on the advancement of new energy vehicles in South Africa as part of a series of policy papers accompanying the 2021 Budget Vote for the Department. The purpose of the Green Paper is to establish a clear policy foundation that will enable the country to coordinate a long-term strategy that will position South Africa at the forefront of advanced vehicle and vehicle component manufacturing. The strategy is complemented by a consumption leg, and a focus on increasing competitiveness in the global race to transition from the internal combustion engine era into electro-mobility solutions and technologies.
The main focus of the Department of Tourism during the current financial year will be on the implementation of the Tourism Sector Recovery Plan, Tourism Minister Mmamoloko Kubayi-Ngubane said during her department’s budget vote presentation to Parliament on Tuesday. The plan, which was developed with input from the private sector, has three main strategic themes, namely protecting and rejuvenating supply, reigniting demand and strengthening long-term sustainability. The total infrastructure commitment is just under R700 million over a five-year period. To date, an amount of R270 million of the funds has been made available to the Development Bank of Southern Africa (DBSA) which serves as the implementing agent for the department’s infrastructure programme. A further R222 million has been budgeted for this financial year.
Agricultural economists and analysts say the newly established African Continental Free Trade Area (AfCFTA) will provide agribusinesses in South Africa the opportunity for enhanced trade, cooperation and investment across borders. The Department of Agriculture, Land Reform and Rural Development (DALRRD) International Trade directorate, Sphamandla Mazibuko said the potential trade opportunities the AfCFTA would bring to the agriculture sector included expanding South Africa’s agricultural exports away from the SADC concentration and into the rest of the continent. The African continent accounts for 41% of South Africa’s agricultural exports of an average R131 billion a year. “For some years South Africa’s government and the business community have recognised the strategic importance of the African market for increased agricultural investment and exports. After all, the African continent accounts for 41% of South Africa’s agricultural exports of an average R131-billion a year,” said Wandile Sihlobo, Chief Economist for the Agricultural Business Chamber of South Africa.
Namibia has instituted a total ban on the import of live and raw poultry from South Africa, as the industry battles to contain the spread of a highly contagious avian flu that first broke out at a Johannesburg layer farm in earlier in April. Namibia first announced a partial ban of 21 days on poultry from South Africa on 15 April, restricting imports from one trading compartment. On Monday, its ministry of Agriculture, Water and Land Reform announced an immediate suspension of import and in-transit movement of live poultry and their raw products from South Africa. “All previously issued import and in transit permits to import poultry and their products originating from South Africa are hereby canceled and recalled with immediate effect. This measure will remain effective until further notice,” the ministry said in a statement. Namibia is one of several countries that now have trade restrictions placed on South Africa’s poultry. Lesotho, Swaziland, Mozambique, and Hong Kong are also rejecting some or all poultry products from the country.
For the financial year 2021/22, Namibia’s share of the Southern African Customs Union (SACU) receipts will decline by about 34% to N$14.8 billion, down from N$22.3 billion in 2020/21. The SACU decline was underpinned by the collapse in imports into SACU and mainly imports into South Africa, which fell to 2012 levels, and import duty collections were estimated to be as bad as in the worst year after the global financial crisis. According to the Bank of Namibia (BoN) governor Johannes !Gawaxab in the bank’s annual report for last year, the current account recorded a surplus balance of N$3.4 billion during 2020, translating into a surplus of 1.9% of gross domestic product (GDP).
“This was partly due to the narrowing of the merchandise trade deficit on the back of lower imports as the Covid-19 pandemic resulted in reduced domestic demand. Although the value of merchandise exports also declined, as earnings from rough diamonds, food, and live animals, and manufactured products fell, the decline in imports was bigger, hence the improvement in the trade deficit,” he said.
Kenya keen on trade talks with US, says Uhuru (The Standard)
The government is keen on concluding negotiations for the free trade agreement with the United States, President Uhuru Kenyatta said on Tuesday. Talks on free trade agreements began in 2018 following a meeting between President Uhuru and former US President Donald Trump. However, it was not until July 8 last year that both countries announced the formal launch of talks, with July 31 this year set as the deadline for putting pen to paper on the deal. In April this year, US Trade Representative Amb Katherine Tai said further negotiations have to align to President Joe Biden’s Build Back Better Agenda, which could further delay the agreement. While underscoring the importance of the private sector in Kenya’s economic growth and job creation, President Uhuru Kenyatta said Kenya is keen on concluding negotiations for the free trade agreement with the US.
The central objective of the program, supported by arrangements under the IMF’s Extended Fund Facility (EFF) and Extended Credit Facility (ECF), is to gradually stabilize public debt. The budget deficit will be reduced overtime (as the COVID-19 shock eases) through a combination of revenue mobilization and spending rationalization measures. This gradual approach is needed to strike a balance between near-term support for the economy and laying the ground for durable and inclusive growth over the years to come. Absent such a strong multi-year approach to contain debt and debt vulnerabilities, there will not be sufficient resources in the near-term to support vulnerable groups or much needed higher spending in areas like health. The program also includes measures to promote greater transparency in public accounts, strengthen the anticorruption framework, and addressing weaknesses in some state-owned enterprises.
The Uganda Private Sector players have expressed satisfaction on the way matters are opening up with promising market access across the East African Community (EAC) partner states. With the new leadership at the helm of the EAC Secretariat and after swearing in of presidents of governments in most countries, changes are starting to be felt among traders in the positive node for intra-EAC business. The players are upbeat on prompt interventions on market access challenges for their goods and resolutions of persistent trade barriers across the region, EAC’s Secretariat decided to be proactive in clearing trade hurdles at borders. Also, it is in response to a decision to avail a trade hotline that will provide cross-border traders with a platform to register their challenges and get rapid feedback or solutions.
The European Union remains an important market for Namibian goods and the two entities continue to enjoy excellent relations in the areas of trade, investment, tourism and development cooperation, amongst others. This is according to Penda Naanda, Executive Director in the international relations ministry who at the recent Europe Day celebrations noted, “The EU market remains an important market for Namibian exports. In 2019, Namibia exported goods valued at over N$19 billion. Export products ranged from agricultural products to fisheries as well as mining commodities.” Naanda added: “The Economic Partnership Agreement concluded between the EU and the SADC EPA States, of which Namibia is a member, allows for duty free, quota free market access from Namibia to the EU with the exception of arms and ammunition.”
AfCFTA will aid Zim structural transformation: Prof Ncube (The Chronicle)
Finance and Economic Development Minister, Professor Mthuli Ncube, says embracing the African Continental Free Trade Area (AfCFTA) is critical in assisting Zimbabwe to structurally transform its economy. The desire for structural economic transformation is receiving a lot of attention in global policy debates with more urgency in developing countries like Zimbabwe, which have for years relied on production and export of primary commodities. With the country driving towards realising an upper middle-income economy by 2030, structural transformation is vital and this is espoused in the National Development Strategy (NDS1), which was launched by President Mnangagwa last November and runs from 2021 to 2025. As the Government forges ahead with investment reforms, Prof Ncube says the private sector must come on board and play its part by tapping into the opportunities being availed under the AfCFTA.
Speaking at a ZimTrade organised outward seller mission currently taking place here in Dubai, Mrs Mlambo said once Zimbabwean horticulture exporters penetrate the Dubai market, they have high chances of spreading to other United Arab Emirates countries. Zimbabwean companies should now focus on exporting value added products to augment mineral and raw products that are largely being exported currently, ZimTrade board chairperson Mrs Clara Mlambo has said.
Zim to ratify African Medicines Agency treaty (The Herald)
Zimbabwe will soon ratify the treaty to establish the African Medicines Agency (AMA) that will spearhead the production and harmonisation of pharmaceutical products on the continent. The AMA treaty was adopted by African Union’s Heads of State and Government during their 32nd Ordinary Session of the Assembly on February 11, 2019 in Addis Ababa, Ethiopia. Zimbabwe signed the Treaty in March this year to become the 19th member State. AMA will, among other functions designate, promote, strengthen, coordinate and monitor regional centres of regulatory excellence with a view to developing the capacity of medical products regulatory professionals.
Zimbabwe’s mega chrome project takes shape (African Mining Market)
The Government’s plans to grow mining to a US$12 billion industry by 2023 are taking shape with the rolling out of a new multimillion dollar steel and ferro chrome project by Afrochine. Construction of the country’s single biggest production operation in the country is now underway in Chivhu, 150 kilometers south of the capital city Harare in Mashonaland east province. The ferrochrome project is scheduled to commence in the second half of this year and it is expected to be the biggest operation of its kind in the country and probably in the SADC region. Speaking to journalists during the site visit, Minister Chitando said the implementation of the project will entail multi-stakeholder engagements as the project cuts across various Government ministries.
Suspension of maize imports saves US$300m (The Herald)
Zimbabwe will save over US$300 million following the move by the Government to suspend maize imports on the back of a bumper harvest the country has achieved this year. Owing to successive droughts in recent years, Zimbabwe has been importing an average of 100 000 tonnes of maize per month from the region and as far as South America. The Government lifted the ban on private grain sales in October 2019 and granted the nod to individuals and corporates with free funds to import quantities of their choice to complement Treasury’s efforts in ensuring adequate national grain reserves.
In an interview, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya confirmed the suspension of grain imports saying the bumper harvest meant the country would now save foreign currency and channel these resources to the productive sectors.
The Bulbula Integrated Agro-Industrial Park, which occupies 271 hectares of land in Western Oromia Regional State, has been inaugurated in the presence of Abiy Ahmed, Prime Minister of the Federal Democratic Republic of Ethiopia, Shimelis Abdissa, President of Oromia Regional State, and Melaku Alebel, Federal Minister of Trade and Industry. The Bulbula Integrated Agro-Industrial Park, strategically located between Lake Langano and Lake Abiyata in the heart the Great Rift Valley of Ethiopia, includes a bank, a waste treatment plant, a health clinic, a police station, training centres and managerial facilities.
Ethiopia’s debt: an economic and political liability (Ethiopia Insight)
Since mass protests began in 2015, a lot of analysis has focused on Ethiopia’s security challenges, with sustained unrest followed by momentous change and now a relapse into civil war in Tigray. But the economic headwinds are equally strong – and they have the potential to compound political dilemmas. As part of the state-led developmental project pursued by the Ethiopian Peoples’ Revolutionary Democratic Front (EPRDF), most intensively after 2010, the government invested big, both directly and through state-owned enterprises (SOEs). While the injected capital – mainly to finance infrastructure – produced impressive economic growth, the model was heavily reliant on debt. The sustainability of this formula depends both on realizing returns that are higher than the contracted interest rates and securing foreign exchange with which to repay interest and principal. Unfortunately, the first condition for success was undermined, as the implementation of many projects was riddled by waste and a lag in producing profits.
The process for the construction of a Joint Border Post between the Republic of Liberia and the Republic of Sierra Leone has begun. Accordingly, the President of the ECOWAS Commission, Jean-Claude KassiBrou, sanctioned a Mission for the physical inspection and verification of sites (land) at the Jendema-Bo Waterside land border between Liberia and Sierra Leone, proposed by the two ECOWAS Member States for the location of the new Joint Border Post to be constructed.
Trade deficit in the first four months of 2021 narrowed to 4,420.7 million dinars (MD) against 4,844.5 MD in the same period of 2020, an improvement of 423.8 MD, according to a note on trade at current prices of April 2021 released Friday by the National Institute of Statistics (INS). This improvement is explained by the increase in exports by 21.4% and imports by 13%.
Intra-African and international trade
EAC short of trade finance (Dailynews)
Ground-breaking report has warned that on East African Community (EAC) Partner States and the horn of Africa a limited access to trade finance hinders the region from playing a significant role in global commerce. Whereas Africa comprises 17 per cent of the global population, it only accounts for just 1.8 per cent of global trade exports and 2.1 per cent of global trade imports as per 2018 data, reads the report. Of all sub-regions of the continent, East Africa continues to post the lowest total export trade in goods and services compared to other sub-regions, demanding concerted actions by all actors.
TradeMark East Africa (TMEA) in collaboration with FSD Africa launched the report titled ‘Trade Finance Landscape in East Africa and Horn of Africa: Barriers, Opportunities & Potential Interventions to Drive Uptake’. Speaking during the launch of the report, TMEA Chief Executive Officer (CEO), Mr Frank Matsaert noted that the report provided a good starting point in tackling key challenges limiting the region’s performance in global trade. “The low intra-regional trade in Africa is because trading activities across the continent are inhibited, for SMEs (Small and Medium Enterprises) in particular, by limited access to finance but also due to high export costs, political instability, poor infrastructure and high taxation,” he observed. The study focused on agriculture, construction, textiles and garments, finding key barriers to uptake existing both at ecosystem and trade finance provision level, underscoring the importance of holistic interventions for meaningful impact.
The pillars that will deliver trade dividends within EAC (Business Daily)
Peter Mutuku Mathuki took over as the secretary-general of the six-nation East African Community (EAC) bloc on April 25, pledging to deliver a “stronger and more formidable” trading bloc at the end of his five-year term. He spoke to Business Daily.
Q: One of the biggest threats to regional integration is on-and-off disputes among member states who sometimes resort to erecting tariff and non-tariff barriers (NTBs). How are you going to address this challenge?
A: My preferred approach would be to prioritise the full operationalisation of the EAC Elimination of Non-Tariff Barriers (NTBs) Act, 2017 and the establishment and full operationalisation of the EAC Committee on Trade Remedies to handle persistent trade disputes in the region. I will also focus on strengthening the capacity of the National and Regional Monitoring Committees on the resolution of NTBs to identify and resolve any imposed NTBs. The removal of NTBs is expected to drive intra-regional trade to at least 30 percent in the short-term from the current 15 percent. My target is to have it grow to more than 50 percent by the end of my tenure.
Q: What practical solutions are you bringing on board to unlock the long-standing stalemate among EAC members over the common external tariff (CET) for the bloc?
A: The finalisation and comprehensive review of the common external tariff and its uniform application in the bloc is long overdue. One of my priorities is to work with the Secretariat and partner States to fast-track the process by the end of this year. We will do this by ensuring that all member states focus on its conclusion for the purpose of promoting local industries and products in each of the partner states. Despite a legal framework for standards in place, there have been cases where goods from one member State has been subjected to double testing and standardisation, and that means increased cost of doing business.
The African Union Development Agency NEPAD (AUDA-NEPAD) and the Ecobank Group its strategic partner on the development of the 100,000 Micro, Small and Medium Enterprises (MSMEs) Initiative, are set to launch the financing component as from 27 May 2021. AUDA-NEPAD launched the 100,000 MSMEs Programme to accelerate African economic transformation, provide the needed skills, and build resilience against the economic shock triggered by the global pandemic. The ‘100 000 MSMEs’ initiative seeks to build the capacity of 1,000,000 enterprises in Africa through entrepreneurial and business training to improve access to finance and new markets while establishing networks for support and incubation to bolster their success. “Across the globe, MSMEs are the biggest and the best engine of innovation, social transformation and economic development and growth. AUDA-NEPAD is deeply convinced that Africa structural transformation will be driven by youth and women led businesses and innovations.,” said Amine Idriss Adoum AUDA-NEPAD, Director of Programme Delivery & Coordination Directorate.
Rising African challenges prevent investment opportunities, says Fidic (Engineering News)
The growing challenges in Africa can be addressed through the availability of green and climate-resilience funding, as well as impact investment, if engineering solutions support sustainable, environment-friendly and climate resilient built environment and infrastructure development, speakers participating in global industry body the International Federation of Consulting Engineers’ (Fidic’s) Africa Infrastructure Conference, on May 18, have said. The Covid-19 pandemic led to a halt in construction worldwide and, in Africa, the industry looks set to remain stagnant this year. Low business profitability is expected for one to two years, while employment, liquidity, cash flows and margins remain under pressure, Fidic CEO Dr Nelson Ogunshakin noted.
The high cost of underrating Africa (Jordan Times)
In 2020, the COVID-19 pandemic caused Africa’s first recession in 25 years. The sharp tightening of global financial conditions triggered sudden stops in foreign direct investment and massive capital outflows, alongside one of the most dramatic global demand and supply shocks on record. The crisis intensified the continent’s liquidity constraints and compounded its existing macroeconomic management challenges. The pandemic-induced downturn has also amplified one of Africa’s biggest development challenges: the high cost of “perception premiums”. These premiums reflect the overinflated risks perennially assigned to Africa, irrespective of its improving macroeconomic fundamentals or the global economic environment. Fortunately, international leaders are finally discussing the problem.
Galvanised by strong economic performance in countries like Ethiopia, Rwanda, and Ivory Coast, Sub-Saharan Africa has consistently been one of the world’s fastest-growing regions over the last two decades. Underscoring their resilience, several African countries expanded their output even during the pandemic, and two – Ethiopia and Guinea – were among the world’s five fastest-growing economies last year.
But these successes appear to have had little to no impact on the dominant credit-rating agencies. They downgraded South Africa – which accounts for more than 20 per cent of total intra-African trade and is the continent’s leading driver of cross-border investment – and several other African countries to “junk” status at the height of the pandemic last year. The downgrades extended the already long list of African sovereigns deemed to be highly risky and subject to default-driven borrowing rates. Some of these assessments seem erroneous in light of many African economies’ encouraging performance.
Africa’s busiest ports (Nairobi News)
Over 90% of Africa’s imports and exports are transported by sea and so there is a need for innovation in the field of maritime. Thus, here is the lowdown of Africa’s largest ports as of the year 2020, based on improvement and investment plans, as well as the measuring unit which is a twenty-foot equivalent unit (TEU).
How Lamu port is angling for top spot in the region (Business Daily)
When the Port of Lamu becomes operational on Thursday, it will bring major changes on freight business along the Indian Ocean in regard to transshipment activities along the sea. Currently, the Port of Durban remains the largest in Sub-Saharan Africa, as it plays a major role in transshipment activities by feeding other small ports with cargo. The new facility, which is expected to become the largest port in sub-Saharan Africa, will target countries along the Indian Ocean Islands such as Seychelles and Comoros among others. “This port is going to be a game changer in the region, it will play a key role in handling the cargo that are destined to other countries, directly competing with the port of Durban in South Africa,” said Mr Rashid Salim acting managing director at the port.
To attract the traffic at the new port, Kenya is targeting to lower the cost of docking by making it slightly lower than what Djibouti is charging. “Incentives relating to fees and charges for using and clearing goods at the Port as requested by stakeholders – will be gazetted for at least a period of one year, in the next few days, to promote usage of the port by the business and logistics sectors,” said Treasury in a statement.
On Monday, 10 May 2021, the Kazungula Bridge Project was officially commissioned by the Presidents of Botswana and Zambia, who applauded the Bank for its work on this transformative project. The 923-meter bridge with two border facilities on either side, is not only a win for Botswana and Zambia, it also contributes to integration in the southern Africa region, and illustrates development cooperation. The bridge and One-Stop Border Posts will support trade and transport along the North-South Corridor, and indeed the Trans-African Highway on the Cape to Cairo route. The bridge also provides impetus to the recently launched African Continental Free Trade Area. “The Kazungula Bridge project was worth the effort,” said Zambian President Edgar Lungu. “Kazungula Bridge is a model and benchmark for the region and continent,” said President of Botswana, Mokgweetsi Masisi.
Sh18bn Kibwezi-Kitui road opens up region for trade (Business Daily)
The 192km Kibwezi-Kitui-Migwani road is not yet complete but its benefits are already being felt. The Kenya National Highways Authority (Kenha) managing director Peter Mundinia says the Sh18.4 billion project, which is funded jointly by Kenyan taxpayers and the Chinese EX-IM Bank is more than 90 percent complete. However, the agency has opened up the road for use ahead of its commissioning. The class B road, which is part of the Mombasa-Isiolo-Addis Ababa Transport Corridor, will provide a direct link between Mombasa and Ethiopia through Isiolo and Moyale. It is meant to decongest Mombasa-Nairobi highway and open up Ukambani for development. Shipping and Logistics has established that plans to install a lorry park around Kibwezi Township are at an advanced stage.
Trade openness can empower women – Schultz (The Namibian)
The United Nations fifth Sustainable Development Goals call for gender equality and empowering women and girls, however, little has been said on how this can be done and with the new norms, the proposed solutions could be outdated. In their latest weekly Trade Talk, the Namibian Trade Forum roped in Beatrice Schultz – Future Females’ Ambassador and Akoma Trading co-founder. According to Schultz, one way to empower women and achieve the fifth SDG is to advocate trade openness, which involves tariff liberalisation and efficient operation at border posts. She said if that is achieved, women’s welfare would be enhanced. Schultz said the biggest challenge for women is paying the import duty when they import stock or goods for consumption. “As a result, tariff liberalisation would lower the costs for women consumers and improve their welfare,” Schultz wrote. She highlighted barriers that prevent women from exporting goods. These are logistical, domestic and foreign administration, border constraints, financial risk, market knowledge, financing and cash flow, intellectual property, and ownership of business.
Ghana has been chosen by the international community to serve as a case study for neighboring countries on safeguarding the use of online services to the benefit of all. To this end, the country has been sharing experience of some cybersecurity activities and initiatives to the world at the Freedom Online Coalition event in Accra hosted by the National Cybersecurity Centre. The Freedom Online Coalition event afforded Ghana the platform to explain some initiatives undertaken to safeguard the country’s digital space and also protect the human rights of online users and businesses. This is part of a four priority areas by the freedom online coalition to strengthen governmental engagements in combating cyber fraud.
Here Is The Technology Fuelling Africa’s Agricultural Revolution (CIO East Africa)
A year on from the emergence of COVID-19, Africa’s agricultural sector has proved to be more resilient than people feared. Despite the widespread devastation experienced around the globe, food production did not collapse and in fact, the South African citrus industry celebrated a record-setting season, with exports of 146 million cartons of fruit to the rest of the world. Agricultural production in Africa is still characterized by significant exports of unprocessed products, and significant imports of processed foods. Nevertheless, across the continent, a young and dynamic population is embracing agritech (agriculture technology) based on AI, drones and mobile platforms to change that dynamic and create a more balanced and resilient agricultural sector. During the time that the pandemic occupied everyone’s thoughts, the challenges posed by climate change took a back seat. But the prospect of rising temperatures, more droughts and floods and unpredictable weather patterns are a far greater long-term threat to food production than the pandemic. Technology cannot solve all problems, but it has an important role to play in the agricultural sector.
This May, the African Development Bank Group is launching a call for proposals for projects enhancing the viability and sustainability of women entrepreneurship enablers. “Women business enablers are critical to creating a viable enabling environment in which women entrepreneurs can grow and create businesses that generate jobs for the continent. Through the Affirmative Finance Action for Women in Africa initiative, the Bank is committed to supporting enablers to strengthen the business and financial skills as well as wealth-creating capacity of their members,” said Esther Dassanou, manager of the program, also known as AFAWA.
COMESA Fund Technical Committee met on 12th May 2021 to discuss the progress made in the implementation of various projects. The meeting was attended by delegates from, Comoros, Kenya, Malawi, Madagascar, Mauritius, Seychelles, Sudan, Swaziland, Uganda, Zambia and Zimbabwe. They noted the achievements attained through COMESA Adjustment Facility over the years, including the ongoing construction of the Manzini Trade hub in Eswatini and border export zone structures across four border markets in Uganda. This is in addition to supporting to the leather clusters in DR Congo, Eswatini, Madagascar, Malawi, Sudan, Zambia and Zimbabwe. “It is COMESA’s hope that given the years that have passed, and the opportunities missed, COMESA is now going forward to provide a framework that allows support at a large scale for its infrastructure development,” Assistant Secretary General in charge of COMESA programmes Dr Kipyego Cheluget said, adding that time was of essence to quickly position the Fund as a viable instrument.
Summit on the Financing of African Economies
A Paris summit Tuesday (18 May) promised to help Africa overcome the COVID pandemic with a “New Deal” using global financial firepower to replenish depleted coffers and ramp up a sluggish vaccine rollout. The summit, which brought together African leaders and global financial institutions, launched “a New Deal for Africa and by Africa”, host French President Emmanuel Macron told a news conference. Africa’s populations have been less badly hit by the pandemic than other regions – with a total of nearly 130,000 dead compared with almost 3.4 million worldwide, according to the latest AFP tally from official sources. But the economic cost has been devastating, with the International Monetary Fund warning in late 2020 that Africa faces a shortfall of $290 billion up to 2023, undermining all efforts at development. “We cannot afford leaving the African economies behind,” said the summit’s final declaration.
Africa Financing Summit in Paris Ends With Calls for Funding, Vaccines (Voice of America)
Democratic Republic of Congo President Felix Tshisekedi, whose country holds the rotating African Union presidency, has praised the Paris financial summit as a “great opportunity” and said French president Emmanuel Macron was offering a “new deal”. “We will see to what extent we can raise funds to save Africa,” said Tshisekedi, adding that the pandemic “left our economies drained because we have had to spend all the little resources we had to fight the disease”. Leaders warned that the risk inequality could open even further as richer countries implement massive stimulus packages while leaving Africa without the financing to keep up robust pre-pandemic growth rates.
Team Europe mobilises to support African economies (The European Sting)
Working with African Partners, the initiative will mobilise substantial financing and technical expertise from the European Union and its Member States, under a Team Europe approach, to address key bottlenecks that hold back young entrepreneurs and small business owners across Africa from starting or expanding their businesses. European Commission President Ursula von der Leyen today announced a Team Europe initiative in support of Africa’s recovery from the COVID-19 pandemic, as she joined global leaders at the Summit on Financing African Economies hosted by French President Emmanuel Macron in Paris.
Unlocking digital connections in Africa: new EIB toolkit (European Investment Bank)
To speed up the digital transition, we need to offer more innovative financing and technical assistance that will help African countries overcome the many problems holding back Internet access and new technologies. The European Investment Bank’s Rural Connectivity Toolkit provides clear guidance to help African countries design financially sound, sustainable and inclusive digital connectivity projects. The toolkit’s goal is to improve digital connections in communities that are not or poorly being served by the market. Africa’s digital transformation is well underway, generating big changes and benefits for many parts of the economy and society. But there is a stark digital divide: out of a total population of 1.3 billion, an estimated 900 million people in Africa are not connected to the internet. For those who have access, affordability may be low and bandwidth severely limited.
Werner Hoyer, President of the European Investment Bank today outlined two new gender financing and digital initiatives to accelerate economic recovery from the COVID-19 across Africa and scale up targeted financial and technical support for high-impact investment. The strengthened support for gender focused and digital investment were outlined at the Summit on the Financing of African Economies convened in Paris by President Macron and attended by Heads of State and Government from across Africa and Europe. “Following last year’s record EUR 5 billion EIB engagement across Africa, driven by our rapid response to the pandemic that enabled African partners to continue to invest, together we can now look ahead to the future. Accelerating innovation across the board and supporting women’s entrepreneurship are is crucial for Africa’s development. EIB teams in Europe and in nine centres across Africa, stand ready to increase financial and technical support to private and public African partners during the recovery,” said Werner Hoyer.
World trade’s recovery from the COVID-19 crisis hit a record high in the first quarter of 2021, increasing by 10% year-over-year and 4% quarter-over-quarter, according to UNCTAD’s Global Trade Update released on 19 May. According to the report, the impressive rebound in Q1 2021 continued to be driven by the strong export performance of East Asian economies, whose early success in pandemic mitigation allowed them to rebound faster and to capitalize on booming global demand for COVID-19 related products. “Global trade has recorded a faster recovery from the recession caused by the pandemic than in the last two trade recessions,” said UNCTAD economist Alessandro Nicita, who worked on the report.
According to the report, import and export trends for some of the world’s major trading economies show that with a few exceptions, trade in major economies recovered from the fall of 2020. Trade recovery remains uneven, the report notes, especially among developing countries, with exports from East Asia rebounding substantially faster. The value of global trade in goods and services is forecast to reach $6.6 trillion in Q2 2021, equivalent to a year-over-year increase of about 31% relative to the lowest point of 2020 and of about 3% relative to the pre-pandemic levels of 2019.
India, South Africa and other countries that have co-sponsored a deal to boost supplies of life-saving drugs and vaccines for covid-19 will soon clarify on the scope and tenure of the suggested waiver through an amended version of the proposal. This is expected to expedite text-based negotiations of the proposal at the World Trade Organization (WTO) following support by the US government. “Co-sponsors will soon issue an amended version of their waiver proposal with the objective of moving text-based discussions forward. The amended waiver proposal seeks to further clarify the scope of the proposed waiver, while also addressing the period during which it will apply. We believe that this phase of discussion should be concluded as soon as possible given the very serious situation that we still face with covid-19. Continuous mutations and emergence of new variants of SARS-COV-2 highlight the significant uncertainties and complexities of controlling SARS-COV-2 and underscore the urgency of this proposal. A failure to respond in a timely manner on the waiver proposal undermines the legitimacy of WTO,” the co-sponsors said in a joint statement. The co-sponsors also confirmed that they will engage in this process with flexibility to ensure a swift outcome.
Helping pandemic-hit developing countries – Opinion (Busines Recorder)
To help developing countries grappling with the Covid-19 crisis, official donors increased foreign aid to an all-time high of $161.2 billion in 2020, up 3.5% in real terms from 2019, boosted by additional spending, according to preliminary data collected by the OECD. “Governments globally have provided $16 trillion worth of Covid stimulus measures yet we have only mobilized 1% of this amount to help developing countries cope with a crisis that is unprecedented in our lifetimes,” Gurría said. “This crisis is a major test for multilateralism and for the very concept of foreign aid. We need to make a much greater effort to help developing countries with vaccine distribution, with hospital services and to support the world’s most vulnerable people’s incomes and livelihoods to build a truly global recovery.”
This year we are celebrating the international year of the creative economy for sustainable development. Yet, many are unaware of what encompasses the creative economy and its importance for prosperity. The “creative economy” is not a concept that can be easily defined as human ingenuity can be at the source of any economic activity. This is why UNCTAD and the United Nations Development Programme (UNDP) consider it as an “evolving” concept based on creative assets with a potential to generate economic growth and development. It comprises a diverse set of knowledge-based economic activities, such as advertising, architecture, arts and crafts, design, fashion, film, video, photography, music, performing arts, publishing, research and development, software, or broadcasting. It thus lies at the interface between human creativity, ideas, culture, IP, knowledge and technology.
With approximately 75% of the global infrastructure that will exist in 2050 not yet built, there is a clear opportunity for growth in sustainable infrastructure. But attracting private finance to those projects – particularly in low-income countries – remains challenging. Among the key barriers for low-income countries are a lack of bankable projects, poor government capacity and processes, a lack of standardization, and higher levels of risk. But a number of initiatives are underway to tackle some of those challenges, including the Global Infrastructure Facility and the Finance to Accelerate the Sustainable Transition – Infrastructure initiative, or FAST-Infra.
This paper analyzes sovereign debt vulnerabilities across 120 developing economies. Country results are summarized and ranked using five vulnerability indicators; credit-ratings, liquidity-risk indicator, solvency-risk indicator, growth in external debt-service burden, and share of external debt owed to private creditors. In total 72 countries are identified as vulnerable, 19 of which severely so. Total external debt service at risk is estimated at a minimum of $598 billion for 2021-2025, $87 billion of which in 2021. One-third of vulnerable countries holding two-thirds of total external debt service at risk are not eligible for the Debt Service Suspension initiative (DSSI) nor for debt treatment under the Common Framework (CF).
The World Bank (International Bank for Reconstruction and Development, IBRD, Aaa/AAA) priced a 2.5 billion 5-year Sustainable Development Bond maturing in July 2026. The deal attracted a wide variety of investors with more than 75 orders and an order book reaching over $3.1 billion with strong demand from central banks and official institutions. Investors included those integrating Environmental, Social and Governance (ESG) criteria in their investment process, as well as those seeking to achieve positive impact through the selection of issuers, like the World Bank, that incorporate climate action and sustainability throughout their operations.