tralac Daily News
The agricultural sector made significant monetary gains between 2017 and 2019, with income rising by R37.4 billion in the period following a devastating drought. Data from Statistics South Africa (StatsSA) yesterday showed that the total income earned in the agriculture and related services sector rose by 5.8 percent to R351.4bn in 2019, compared with R314bn in 2017. South Africa views agriculture as one of the important sectors in its economic reconstruction and recovery plan, after the economy was severely affected by the Covid-19 pandemic. The plan entails the potential expansion of agricultural production, which will be carried out through master plans that are in the final stages of being drafted. South Africa views agriculture as one of the important sectors in its economic reconstruction and recovery plan, after the economy was severely affected by the Covid-19 pandemic.
Zim maize ban: ‘Stupid move’ set to affect trade relations with SA (Food for Mzansi)
An announcement by Zimbabwean authorities to suspend all maize and maize meal imports with immediate effect has Mzansi’s agricultural sector hot under the collar. Until recently, Zimbabwe was the single largest maize export market for South Africa in the 2020-2021 marketing year. Of the 2,6 million tonnes of maize that the country exported, about 20% went to Zimbabwe. However, Zimbabwe’s agricultural marketing authority has since announced a complete ban on maize imports. The sudden decision left industry role-players gobsmacked and concerned over what this will mean for South Africa’s maize export market. What’s even more concerning, is what this suspension might mean for trade relationship with Zimbabwe.
The Zimbabwe Digital Economy Diagnostic, a new report developed by the World Bank, finds that its digital financial services are the strongest foundation for the further development of the digital economy in the country. Among Zimbabwe’s key strengths is the widely used digital payment system, through which 96 percent of all transactions in the country are transacted, and which Government uses extensively for its core business. “We recognize the potential for digital technologies to help pave the way forward and are therefore focusing on development of the key digital pillars that will underpin the growth of our economy,” said Dr. Misheck Sibanda, Chief Secretary to the President and Cabinet.
The United States (US) government is ready to support American companies keen to invest in Zimbabwe and believes the country is poised for economic growth this year and going forward. US Ambassador to Zimbabwe, Mr Brian Nichols, said this on Monday in remarks to officially open the Post-Reconstruction Trade Mission to Zimbabwe and Mozambique, which was hosted virtually. While acknowledging strained bilateral relations between Harare and Washington in the past years, Amb Nichols, noted positive reforms and re-engagement progress outcomes under the New Dispensation led by President Mnangagwa, but said more loose ends need to be tightened. He described Zimbabwe as a “country with incredible untapped potential”, citing the abundant natural resources, vibrant and skilled human capital base, as well as favourable climate for both agriculture and tourism.
Kisumu traders relocated to new market in Sh3bn port expansion plan (Business Daily)
The national government and Kisumu County government have kicked off the resettlement of traders whose structures were brought down to give way for the expansion of Sh3 billion port. The initiative being spearheaded by the Ministry of Infrastructure, Housing, Urban Development and Public Works and that of Interior is targeting to relocate traders to Sh600 million market to be launched by President Uhuru Kenyatta on Saturday. “We aim to provide a long term solution to traders who will operate in a conducive environment, complete with proper sanitation and floodlight to promote 24-hour economy,” Acting City manager Abala Wanga said.
Nigeria partners Ghanaian’s shippers to promote trade in Africa (National Accord)
The Nigerian Shippers Council (NSC) is working with the Ghanian Shippers Authority (GSA) to further protect shippers and promote trade in Africa. Mr. Hassan Bello, the executive secretary / managing director of NSC, told reporters in Abuja on Wednesday that the collaboration would allow them to do more for the region. “The most important thing is that we need to unite consumers of shipping services through advocacy or regulation. We have to make sure there is a balance, there is a balance, we have to make sure there is a level playing field. Our economies must not be strangled; we must wean ourselves from the mono-economy of the oil sector and consider an alternative or an option. “And there is no more promising alternative than the shipping or transportation industry and that is why the shippers’ council has always played a role at every stage of the economic revolution not only in Africa but in the world,” Bello said.
GIPC hosts Cocoa Value Chain Investment conference (MyJoyOnline)
The Ghana Investment Promotion Centre (GIPC) will today host a Cocoa Value Chain Investment conference to engender discussions on the exciting prospects of the country’s cocoa industry. Under the theme “Ghana’s Brown Gold: Sustaining Investments & Leveraging AfCFTA”, the event is purposed to highlight the opportunities along the cocoa value chain that can be leveraged by investors, as well as sensitize industry players on valuable commercial opportunities offered by the African Continental Free Trade Agreement (AfCFTA). By generating about US$2 billion annually in foreign exchange, cocoa continues to play an important role in Ghana’s economy, serving as a major contributor to government’s revenue.
Nigeria’s assumption of a leadership role in Africa has mainly been driven by the size of its population and, more recently, its economy. However, domestic problems have affected Nigeria’s interactions with African countries and influence the way it’s regarded by the continent, which has never really accepted its self-proclaimed leadership role. Nigeria needs to rethink its Africa policy to ensure mutual benefit to itself and the continent.
The planned review of Nigeria’s foreign policy must be evidence-driven. In 2020 the country enjoyed a trade surplus of about $4.6-billion from the continent. Africa takes up a 20% share of Nigeria’s exports. Economic links between Nigeria and the rest of the continent should grow under the African Continental Free Trade Area, and as the country charts a path away from its dependence on oil exports.
Agriculture Minister Jeanine Cooper says using agriculture as a business is important for Liberia to move beyond subsistence farming and fishing. According to Minister Cooper, agricultural must now shift from its current stage to a more advanced level that will promote human development. “The program is on track with discussion around the world on ensuring safe and notorious food,” Minister Cooper averred. However, she believes it is equally important to address challenges against achieving such a goal.
Seychelles begins programmes to boost natural export products, beginning with cinnamon (Seychelles News Agency)
The government of Seychelles has started a programme to diversify its economy by exploiting its natural resources for exportation as value-added products. The first step in the programme is the revival of the cinnamon industry as a new source of income for the country, a top government official said on Tuesday. The Minister for Investment, Entrepreneurship and Industries told a press conference that one of the ministry’s strategic objectives is “to increase the country’s revenue through increasing local production for exportation, reducing importation and reducing dependence on tourism.” Devika Vidot said, “The government has started a comprehensive programme to identify natural resources that we will promote for exportation, for private investors to engage in and promote the exportation of these natural resources.”
World Trade Organisations, WTO, Director General, Dr. Ngozi Okonjo Iweala and Rwandan President, Paul Kagame yesterday called on African leaders to show the political will and embrace increased cooperation to achieve the goals of the African Free Trade Continental Agreement, AfCFTA, which is necessary for the post pandemic development of the continent. Speaking at the 3rd annual UBA Africa Day Conversation, the two global leaders highlighted the importance of ensuring free movement of goods, services and people across the various African countries as a critical success factor for AfCFTA. They however noted that this however requires political will on the part of African leaders who have the power to make it happen.
AfCFTA is a Key Instrument in Post Covid 19 Recovery (The Department of Trade, Industry and Competition)
The Deputy Minister of Trade, Industry and Competition, Mr Fikile Majola says it is imperative for South Africa to look beyond its borders to accomplish the task of inclusive economic growth and job creation in the wake of the Covid 19 pandemic. He was delivering the main address at the virtual Africa Day commemoration of the National Council of Provinces (NCOP). Majola says it is critical to move with speed towards building a strong foundation for Africa’s inclusive economic growth and the African Continental Free Trade Area (AfCFTA) provides the platform to advance this core objective.
The importance of African trade in South Africa’s overall trade continues to grow. In 2019, 27% of South Africa’s world exports and 12% of world imports were intra-Africa. South Africa continues to record a large trade surplus with the rest of Africa, exporting mainly mineral products, machinery, chemicals and iron and steel products, which accounts for over 50% of its total exports to the rest of the continent. South Africa’s exports into Africa grew from about R 9 billion rand in 1994 to over R 340 billion by 2019. Considering that in 2019 Africa imported about R 8 trillion worth of goods, South Africa’s share of global exports into Africa is still relatively small. This is bound to change with the implementation of the AfCFTA.
The formation and implementation of a single market can change the economic game for African countries, providing solutions and improving socio-economic outlook on the continent. The initiative is focused on establishing a free market to influence the economy and foster prosperity. African countries can import and export goods without tariff and non-tariff barriers. This will enhance imports and exports, ensure benefits of economies of scale, and enable a wide array of commodity exchange and revenue generation.
The World Bank also notes that the African free trade agreement is a major opportunity for African countries to reduce poverty and raise the incomes of 68 million people who live on less than $5.50 per day. Trade facilitation measures that cut red tape and simplified customs procedures would drive $292 billion of the $450 billion in potential income gains. In addition to this, the implementation of the AfCFTA will see the increase of continental and foreign investments in Africa.
The United Nations Economic Commission for Africa (UNECA) has called for increase in the role of private sector for better outcomes in the African Continental Free Trade Area (AfCFTA) agreement. Mrs Ngone Diop, Director, UNECA Sub-Regional Office, West Africa said this at a virtual regional forum on Wednesday. The two-day forum is a West Africa Regional Forum of Intergovernmental and private sector organisations on the Implementation of the AfCFTA. Diop said increasing the role of the private sector would impact on the initiatives of the AfCFTA. The director noted that the sector’s role would harness demographic dividend, grow the middle class and increase the use of technology. She further said it would promote rapid urbanisation and increase opportunities for regional and global value chains for African businesses as strategic drivers of economic growth in Africa.
VP Bawumia Calls On AU Member States To Institute Supporting Measures For Successful Implementation Of AfCFTA (The Presidency, Republic of Ghana)
The Vice President, Dr. Mahamudu Bawumia, has urged member states of the African Union to institute complimentary measures for the successful implementation of the Africa Continental Free Trade Area (AfCFTA) The AU-backed AfCFTA, with its headquarters in Ghana, is aimed at boosting and accelerating intra-African trade and strengthening Africa’s trading position in the global market. Addressing a virtual UPSA Law School’s 1st African Trade Roundtable on Wednesday May 25, Vice President Bawumia highlighted the immense benefits the AfCFTA would bring to the African continent, but was quick to remind participants that the benefits would not be realised without the full commitment of African states. “No one needs a lecture on the immense benefits of continental free trade in goods and services and the movement of persons on the continent. The ultimate shared benefits are in boosting trade and industry, in job creation and increasing incomes, and in boosting the standards of living of our people,” Dr. Bawumia said. “But, the promised benefits of the AfCFTA would not be fully realised unless African Union member states buttress the Agreement’s implementation with complementary measures.”
Africa’s free trade area offers great promise. But only if risks are managed with resolve (The Conversation Africa)
For all its stutters and missteps, there can be little argument that the European Union (EU) has largely lived up to its ambitious billing: to create stability and growth on a continent that, for a period, was dangerously prone to nationalism and conflict. The question facing Africa is whether the continent’s free trade area can likewise mitigate conflict and forge a prospering Africa. The African Continental Free Trade Area is a project of the African Union (AU). Founded in 2018, it’s described as a framework through which to deliver “inclusive and sustainable growth”. By July 2019, 54 of the AU’s 55 member states had signed the agreement, with Eritrea the only holdout. While negotiations are still ongoing, the trade agreement officially commenced on 1 January this year. The idea is that it will be rolled out over three phases. The World Bank imagines it as a means “to lift 30 million people out of extreme poverty”. But will it? The experience of the EU could help show the way both in terms of the upside, as well as potential pitfalls.
The Ghana International Trade and Finance Conference (GITFiC) has called on government and stakeholders in the trade sector to implement enhanced trade finance support programmes. It said such programmes were necessary because they provided valuable credit and liquidity support for the intra-African trade. “In terms of opportunities, the elimination of inhibitive regulations under the AfCFTA is expected to ease cross border trade, enable capital and information flow, attract greater foreign and intra-continental investments, potentially increase capital funds, and provide a much larger customer base for financial institutions to serve,” Gerald Woode, Lead-Research Fellow (Policy and Advocate, GITFiC), said.
Ministers of industry from the 21 COMESA Member States have approved the implementation strategy of the regional local content policy framework and the management of the Special Economic Zones and Industrial Parks. The COMESA Local Content Policy Framework is aimed at helping to transform the region’s low productivity economies, from overreliance on export of unprocessed primary commodities with either little or no value addition, to competitive economies that produce, and export value added products. With the approval, Member States will formulate similar policies to maximize local benefits from industrialization. Equally, the adopted framework of managing special economic zones (SEZ) and industrial parks will guide Member States when domesticating SEZ strategies and industrial parks at the national level.
A five-day meeting of the Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) is currently underway at the EAC Headquarters in Arusha, Tanzania. The SCTIFI meeting started with the Session of Senior Officials that started on Monday and ends today, Wednesday, 26th May, 2021. The Coordination Committee or the Session of Permanent/Principal/Under Secretaries is slated for Thursday, 27th May, 2021 and the Ministers’ session on Friday, 28th May, 2021. Among the items on the agenda of the SCTIFI are the: Status of Implementation of the Previous Decisions of SCTIFI; Report of the Ministers /Cabinet Secretary of Finance; Report of the Sectoral Committee on Customs; Report of the Sectoral Committee of Trade, and; Implementation Of The Summit Decision on the EAC-EU EPA.
EACs 2021-22 Budget Cycle – The Role of Debt (The Star, Kenya)
The East African Community’s (EAC) 2021/22 budget cycle is fast approaching with the respective Cabinet Secretaries/Finance Ministers expected to read the 2021/22 budget in June 2021. This will provide a clear picture of the EAC governments’ priorities in the 2021/22 fiscal period, keeping in mind the region’s post-COVID economic recovery initiatives, infrastructure development ambitions, recurrent expenditures and debt servicing commitments.
Culture is the flower of the human being – the fruit of our minds, the product of our traditions, the expression of our yearnings. Its diversity is wondrous, part of the rich tapestry of civilization. Culture is also a powerhouse – an employer of millions, an engine of economic progress, a force for social cohesion. Aspiration 5 of Africa’s Agenda 2063 envisions a continent with a strong cultural identity, common heritage, shared values and ethics. It is a call for using the continent’s rich and diverse cultural and natural heritage as a catalyst for Africa’s growth and transformation. It is the right appeal at the right time.
These are needed more than ever as the continent works to overcome the disruption of the COVID-19 pandemic and pursue peaceful, sustainable development. We need to move towards sustainable economic growth that protects the environment, promotes human rights and strengthens the social contract. And we need a stronger sense of solidarity and multilateral cooperation to achieve the Sustainable Development Goals and leave no one behind. Now for that to be possible, we also need to express a very clear solidarity with the African continent in this dramatic moment in which we are still under the terrible impact of the COVID-19 pandemic.
Southern African Development Community (SADC) Member States have agreed to work together to address policy challenges affecting funding for regional energy infrastructure projects and to find innovative ways to unlock projects from a funding and compliance point. This came out of a virtual workshop held by SADC Secretariat, in collaboration with the Southern African Power Pool (SAPP) through the ‘Accelerating Regional Energy Projects’ (SAPP AREP) programme on 27-28 April 2021 to validate the findings of a Report on policy related critical Gaps, Risks and Challenges affecting development of regional energy infrastructure projects.
The SADC SAPP AREP aims to establish a sustainable framework of designing, preparing and financing regional generation and transmission infrastructure projects in SADC Member States that would increase the number of projects undergoing construction phase with clear targeted commissioning dates.
The Sustainable Energy Fund for Africa (SEFA) has extended a $1 million grant to help accelerate African countries’ transition to flexible green grids and other clean power solutions ahead of the 2021 United Nations Climate Change Conference, COP26, scheduled to be held later this year. The technical assistance grant, sourced through a SEFA Rapid Response Facility, will enable up to five African countries participating in a COP26 Energy Transition Council process to assess potential gaps in policy, regulatory and institutional frameworks; develop approaches to increase the contribution of grid-connected renewable energy generation; as well as identify financing mechanisms.
Africa goes digital (IMF)
To generate economic growth that leads to sustainable development, Africa must shift its focus to retaining and creating wealth, better managing its resources, fostering inclusiveness, moving up on global value chains, diversifying its economies, optimizing the energy mix, and placing human capital at the center of policymaking. For this to happen, African policy must foster investment in research, development, and innovation (R&D&I) to reboot the continent’s economic structures and catch up technologically with the rest of the world. Innovation, and the digital information technology that accompanies it, has become a necessary component of any effort to address such challenges as food security, education, health, energy, and competitiveness. The world is driven by innovation: unless African policymakers reap the potential benefits of R&D&I, the global divide will keep growing. The problem is that innovation is talked about and debated, but not strategized.
Illicit gold markets in East and Southern Africa (Global Initiative)
Today, the artisanal and small-scale gold mining (ASGM) sector is governed by increasingly comprehensive legal and regulatory frameworks, and is reliant on transnational supply chains that connect rural mining operations to international gold hubs. However, the increase in illicit activities in gold-rich markets has undermined the potential for this precious commodity to be a catalyst for development in these regional African markets.
Corporate Council on Africa (CCA) will hold the 13th U.S.-Africa Business Summit virtually on July 27-29 to build sustainable partnerships and opportunities between key government and private sector decision-makers across America and the African continent. With participation from over 2,000 U.S. and African business executives and government leaders, this year’s CCA Summit will feature senior U.S. Government officials as they explain the Biden Administration’s priorities for Africa, including details of new programs to support development in the Information Communications Technology sector, environmentally smart infrastructure and sustainable energy, and what to expect on trade and investment, including prospects for the U.S.-Kenya Free Trade Agreement, updates on Prosper Africa and the future of the African Growth and Opportunity Act (AGOA).
European and African Leaders Call for a New Deal for Africa (Project Syndicate)
Africa has everything required to overcome the pandemic crisis and lead the world toward a new cycle of sustainable growth: enterprising and innovative young people, natural resources which can supply a local industrial base, and a highly ambitious continental integration project. But Africa does not have the instruments to recover from a crisis as huge as it was unexpected.
International solidarity began yielding results soon after the pandemic began. Debt-service payments for the poorest countries were suspended under the G20, and exceptional financial assistance from the IMF, the World Bank, and other donors, including Europe, was made available. But the institutions that have underpinned international solidarity for decades are now reaching their limits. They have been weakened in the short term by huge inequalities in vaccine access. They are weakened, too, by major economic divergences, which no emergency measure seems capable of stopping. That is why a new framework, an ambitious and bold New Deal, is needed.
Sub-Saharan African entrepreneurs to benefit from €100m partnership (Engineering News)
Sub-Saharan African entrepreneurs and businesses most impacted by the economic, health and social challenges triggered by Covid-19 will be able to benefit from a new €100-million private sector financing initiative backed by the Development Bank of Austria (OeEB) and the European Investment Bank (EIB). “Improving access to finance for small and medium-sized enterprises (SMEs) – particularly in sub-Saharan Africa and the world’s least developed countries – has been one of our core goals for many years. Especially now, in light of the ongoing Covid-19 pandemic which hits SMEs hardest, it has become even more important,” comments OeEB executive board members Sabine Gaber and Michael Wancata.
Enhancing unity and cooperation with Africa has always been high on China’s diplomatic agenda. China and Africa fought shoulder to shoulder in the great struggle to win independence and uphold dignity. We have partnered with each other in pursuit of economic development and better lives for our peoples; and we have supported each other on issues that are important to our core interests and are of major concern to us. Despite rapid changes in the international landscape, China-Africa friendship has remained rock-solid and as strong as ever. China and Africa have pressed ahead in pursuit of cooperation despite difficulties caused by the virus. Even with COVID-19, China has remained Africa’s largest trading partner for 12 consecutive years. Direct Chinese investment in Africa has been steady, reaching US$3 billion in 2020 alone.
Trade is a well-established driver of growth and poverty reduction. But changes in trade policy also have distributional impacts that create winners and losers. It is vital to understand and clearly communicate how trade affects economic well-being across all segments of the population, as well as how policies can more effectively ensure that the gains from trade are distributed more widely. This book provides a deeper understanding of the distributional effects of trade across regions, industries, and demographic groups within countries over time.
Asian container ports are the most efficient in the world, dominating the Top 50 spots according to the new global Container Port Performance Index (CPPI) launched by the World Bank and IHS Markit. The report scored ports against different metrics, making the efficiency ranking comparable around the globe by assessing and standardizing for different ship sizes and container moves per call. The CPPI is intended to identify gaps and opportunities for improvement that will benefit stakeholders from shipping lines to national governments to consumers.
“The development of high-quality and efficient container port infrastructure is a key contributor to successful, export-led growth strategies both in developing and developed countries”, said Martin Humphreys, Lead Transport Economist and Global Lead for Transport Connectivity and Regional Integration in the World Bank. “Efficient ports also ensure business continuity and improve the resilience of the maritime gateways as crucial nodes in the global logistical system.”
The call for tackling climate change is gaining momentum among citizens, investors, companies and countries around the world. US Climate Envoy, John Kerry, recently announced that the US is joining international efforts to achieve zero emissions from international shipping by 2050. And the maritime industry wants to play its part. Shipping connects the world by supplying essential goods that society needs to thrive. Whilst this is done with the lowest carbon footprint of any mode of transport per ton transported, shipping is still emitting significant amounts of greenhouse gases. With a sizeable carbon footprint that only shows signs of growing, and a decades-long investment horizon, shipping cannot afford to wait. For the world to decarbonize, shipping must decarbonize.
A lack of transparency in COVID-19 vaccine trials and secrecy over deals between governments and drug companies risks the success of the global pandemic response, new research from Transparency International Global Health and the University of Toronto warns. For Whose Benefit? is an in-depth study of the development and sale of the world’s top 20 COVID-19 vaccines, including those developed by AstraZeneca, Moderna and Pfizer/BioNTech. Through detailed analysis of clinical trial data and nearly 200 contracts for vaccine sales up to March 2021, the report reveals a pattern of poor transparency and a disturbing trend of governments censoring key details of their orders from drug companies.
Global Debt Spiked During COVID, Leaving Some Countries on Shaky Ground (Voice of America)
In the year since the COVID-19 pandemic threw the global economy into a tailspin, the level of global debt – money owed by governments, businesses and households – has jumped by 12% to $289 trillion. And while some countries appear to have begun the task of reducing overall indebtedness, many governments in countries transitioning to full market economies are finding it difficult to do so. While many advanced economies are finding their footing again, with vaccination rates rising and infection rates falling, the progress against the pandemic in countries not yet fully integrated into the global economy – known as “emerging markets” – is highly variable. This means that in some countries that borrowed heavily during the past year, interest payments on debt have increased, even as tax revenue and other income have been slashed by lower economic output. Across the 31 emerging market countries tracked by the Institute of International Finance data, government debt increased by 15% between the end of 2019 and the end of the first quarter of this year.
Every country should have the right to make its own vaccines during a pandemic. That’s the principle underpinning the campaign to temporarily waive intellectual property (IP) protection on coronavirus vaccines. The campaign was initiated by India and South Africa, and is being backed by more than 100 countries, along with international organizations including the World Health Organization and the United Nations AIDS charity, UNAIDS. The goal is to reduce the barriers to countries producing their own vaccines – particularly for the lowest-income nations. At present, the proposal does not have the support of the pharmaceutical industry, nor that of most high-income nations. Instead, these countries are pledging to share more of their own vaccines with low-income nations and to provide more funding to charitable vaccine-provision schemes such as COVAX. However, in a surprising and welcome move earlier this month, the United States, Russia and China came out in support of an IP waiver on vaccines.