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Government committed to transforming, developing financial services sector (SAnews)
The South African government remains unwaveringly committed to the development and transformation of the country’s financial services sector. This was reiterated by Finance Deputy Minister David Masondo during a cocktail dinner of newly launched mutual bank, Young Women In Business Network, on Tuesday. Masondo said government was committed to continuously introduce reforms that would assist the broader financial services sector to be able to grow and contribute positively and sustainably towards the inclusive growth of the economy.
Sars postpones SADC rules of origin decision (Freight News)
The South African Revenue Service (Sars) has bowed to pressure about an earlier decision that local traders exporting to Southern Africa Development Community (SADC) member states apply for the necessary SADC certification at their nearest Sars branches. A clearing agent explained that effectively it meant exporters could not receive their SADC certificates at the various land border posts any longer – a decision that met with much opposition among the ranks of intra-African traders. “The postponement will allow Sars to thoroughly consider some of the proposals made in your letter and, where necessary, hold further deliberations with the industry on the way forward.”
Streamlining processes benefit SA (SAnews)
The National Consumer Tribunal has significantly streamlined debt rearrangement applications to benefit South Africans. Advocate John Simpson, a full-time Tribunal member with the National Consumer Tribunal (NCT/Tribunal) recently discussed debt rearrangement applications at the Tribunal. One of the types of cases that the Tribunal hears is debt rearrangement/review applications (DRA). If a consumer is in financial trouble and cannot repay their debts, they can approach a debt counsellor for assistance. The counsellor can restructure the consumer’s monthly debt
Inequality and poverty will not be fixed by spending (Moneyweb)
High unemployment means higher inequality. High tax rates result in firms investing elsewhere resulting in even fewer jobs as the population grows. High taxes also often result in a small part of the population being paid well – the civil service. These economic indicators are not something mainstream commentators and leaders talk about either. South Africa has kicked the spending and deficit can far down the road, but the road has come to an end. The Covid-19 crisis has brought that end closer. The world became more unequal during the pandemic and nothing makes me think that will not be the case in emerging markets too.
Govt To Establish Forbes Border Dry Port In Marange (NewZimbabwe)
Government is in the process of establishing a dry port in Marange area to decongest and make Forbes Border Post outside Mutare more efficien in facilitating tradet, Finance Minister Mthuli Ncube has said. “So, it’s clear now that this border is operating from five different sites including a fuel storage facility away from the border due space constraints. It’s creating constraints here and for the efficiency of this border; that’s why we have located a place in Marange area, which will be a dry port. “This is how we want to redesign this border to become more efficient,” said Ncube.
Kenya Brings Lakeside Port Back to Life (The Maritime Executive)
Kenya’s determination to build a multimodal transport system to serve the east Africa region has been boosted by the launch of the Kisumu port that was refurbished at a cost of $30 million. President Uhuru Kenyatta said the port will facilitate the growth of economies in the region because it provides a holistic transport network for goods along the northern corridor from the port of Mombasa to countries like Uganda, Rwanda, Burundi, South Sudan, northern Tanzania and the Democratic Republic of Congo.
Kenya drops inspection fees for Tanzania food products (Nation)
Kenya has scraped inspection fees for Tanzanian importers of processed foods approved by the Kenya Bureau of Standards. This is just one of the decisions arrived at in a bilateral meeting between Kenya and Tanzania held in Arusha last week to thrash out trade barriers. The two countries also resolved to normalise maize importation from Tanzania to Kenya which had largely stalled over the past few months following Kenya’s ban on grain from that country and Uganda over concerns of contamination.
Business leaders optimistic about Kenya’s economic recovery: survey (Xinhua)
Kenya’s business leaders were optimistic that the country’s economy would bounce back in the next 12 months boosted by COVID-19 recovery measures, according to a survey released by the country’s central bank. The Central Bank of Kenya said its latest Monetary Policy Committee CEOs Survey showed that the optimism was mainly attributed to post COVID-19 bounce-back, companies shifting to more digitization, and anticipated increase in exports following improved relations in East African Community countries. The survey also showed that services and manufacturing sectors saw the strongest prospects for higher growth as respondents reported a general upward trend in business activity.
Why Tanzania is focusing on economy diplomacy (The Citizen)
The government said yesterday that it is furthering its economic diplomacy agenda to ensure that Tanzania reaps the benefits of cordial relations with other countries. Foreign Affairs and East African Cooperation Minister, Liberata Mulamula told Parliament that focus areas for the coming financial year include finding markets for Tanzania’s products. She said this when presenting her docket’s Sh192.26 billion proposed budget for 2021/22. Ms Mulamula added that considerable efforts would also be directed towards improving the investment climate to attract more investors.
UK Minister for Africa James Duddridge visits Tanzania (GOV.UK)
In his first visit to Tanzania following the inauguration of President Samia Suluhu Hassan, the Minister for Africa James Duddridge MP held high-level talks with the President and Foreign Minister Liberata Mulamula. In a joint meeting with the Minister for Industry and Trade, Kitila Mkumbo, and Minister for Investment, Geoffrey Mwambe, Mr Duddridge explored the potential for increased UK investment in Tanzania whilst seeking reassurances that improvements to Tanzania’s business environment would be implemented.
Egyptian textile businesses embrace agility in the face of COVID-19 (ITC)
In Egypt, the textiles and clothing sector is the second biggest industrial sector after the agro-industry. Exports consist mainly of ready-made garments and home textiles. The industry was among the most affected by the COVID-19 outbreak. According to the Apparel Export Council of Egypt, exports dropped by 29% in the first semester of the year, with a decline in production reaching 40%. Companies also faced severe financial issues as international companies started to cancel orders, delayed in payments and deliveries. By the fourth quarter of 2020, exports began to pick up, and the year closed with “only” a 14% decline in total exports.
Nigerian Vice-President bolsters Africa’s quest for a just and inclusive global energy transition (UNECA)
In the race to achieve net-zero emissions by 2050, the Nigerian Vice President Yemi Osinbajo, has called on developing countries to chart their own paths by embracing a just transition, climate action and future prosperity to power their development pathways. “The global energy transition must be inclusive, equitable and just, taking into account the different realities of various economies and accommodating various pathways to net-zero by 2050.” Osinbajo said. “So, what is the case for justice, social justice, fairness? What is often not sufficiently considered in thinking through the transition to net zero emissions is the critical role that energy, in our case gas, plays in catalyzing economic development and supporting people’s health and livelihoods especially in poorer countries.”
COVID-19 affecting Uganda-DRC trade (The Independent Uganda)
Informal cross-border trade, which includes smuggling, is hugely important for survival in, around and beyond border regions. Across the border between Uganda and Democratic Republic of Congo (DR Congo) informal trade pays the bills and puts food on the table. The COVID-19 pandemic has disrupted cross-border mobility worldwide and its policy consequences are therefore particularly visible around borders. But, what has been the impact of the pandemic on informal cross-border trade along the Uganda-DRC border? Our new research in a number of key border points found that cross-border trade has been severely affected, with knock-on effects on various aspects of lives far beyond the borderlands.
Seychelles, Angola sign agreements to launch partnerships, closer relations (Seychelles News Agency)
Seychelles and Angola will have more cooperation in tourism, agriculture, education and several other fields after the two countries signed their first bilateral agreements on Tuesday. The General Cooperation Agreement provides a framework for bilateral cooperation between the two countries and indicates in which sectors and areas. A bilateral joint commission will be established and will be responsible to discuss and monitor the implementations of specific cooperation between the two countries. “One area that the ambassador has shown huge interest in is that Angola would like to learn from Seychelles in the domain of entrepreneurship, especially how Seychelles encourages youth to kickstart their small businesses,” said the Principal Secretary for Foreign Affairs, Vivianne Fock Tave.
Cameroon-Equatorial Guinea: Regional Integration Allies (Cameroon Tribune)
Promoting sub-regional integration within Central Africa is a constant preoccupation for Cameroon and Equatorial Guinea. Both countries share ideas and cooperate on projects that foster regional integration. In a joint meeting with the Minister for Industry and Trade, Kitila Mkumbo, and Minister for Investment, Geoffrey Mwambe, Mr Duddridge explored the potential for increased UK investment in Tanzania whilst seeking reassurances that improvements to Tanzania’s business environment would be implemented.
Effective policy implementation to augment agricultural products’ export volume (Ethiopian Press Agency)
Currently, Ethiopia receives 76 percent of its export earnings from its agricultural products such as Coffee, Oilseeds, Chat, Pulses, Cut Flowers, Fruits, Vegetables, Dairy and meat among others. The export trend of the country shows that high-value markets are not significantly targeted as exporters target destination countries where import regulations are at ease. This is not always by choice but with the existing functionality of many agricultural value chains exporters that are not producing themselves have no or little control over the quality of the products they export. Experts emphasize that with agricultural export countries getting more competitive for a better position in the international market, addressing internal hurdles observed in the export sector to improve the quality control system of the country would encourage competitive spirits of the private sector along with ensuring higher value for exports.
Gender Equality: A Necessary Condition for Promoting Inclusive Growth in Mauritania (World Bank)
Despite a slowdown in economic growth in 2020 as a result of the coronavirus pandemic, Mauritania could increase its wealth by 19% if it was to place greater reliance on the economic potential of women by promoting gender equality and human capital. This is the conclusion of the Fourth Economic Update for Mauritania, released today by the World Bank. Titled “Accelerating Economic Recovery by Unlocking Women’s Potential,” the report notes that the health crisis brought on by the COVID-19 pandemic has led to a significant decline in growth from 5.9% in 2019 to -1.5% in 2020, which has had a particularly severe impact on households and urban workers in the service sector. The report argues, however, that emergency financial assistance provided by donors and improved terms of trade have eased pressures on the current account and the budget.
Africa
Six African countries join WLP to build back trade volumes (Engineering News)
Botswana, Burkina Faso, Ethiopia, Guinea, Mozambique and Zimbabwe have registered as gateway countries with freight loyalty programme World Logistics Passport (WLP). This is expected to reduce supply chain costs and improve speed to market for exports and imports from these countries, WLP CEO Mike Bhaskaran said on June 2. With countries looking to build back global trade volumes, WLP supports traders and freight forwarders. WLP notes that countries can expect to achieve a yearly average increase of 5% to 10% in trade volumes. WLP is designed to boost global trade and enhance the efficiency and resilience of global supply chains.
EAC explores potential of common digital cash (The East African)
East Africa Community member states will explore the potential of a central bank digital currency (CBDC) for their shared payment system to end reluctance by member countries to trade in each other’s currency. The bloc’s secretariat said advances in technology and innovation have created a potential for new forms of cross-border payments even as it moved to upgrade the struggling East African Payment System (EAPS), which was launched in May 2014. “Review recent advances in technology and innovations that have created the potential for new payment infrastructures and arrangements that could be applied to cross-border payments,” the secretariat said in a May 21, consultancy call for a feasibility study on the planned upgrade of the EAPS.
Sub-Saharan Africa most expensive globally to send and receive money (The East African)
The cost of remittances in sub-Saharan Africa was the highest, averaging 8.17 percent in the fourth quarter of 2020 compared with 4.9 percent in South Asia, the lowest average cost. The cost of diaspora remittances from Tanzania to Kenya and Uganda was among the highest in Africa in the past year, averaging between 17 percent and 21 percent per $200. These were some of the findings of a brief prepared by the Global Knowledge Partnership on Migration and Development for the World Bank. The report also said remittance flows to the sub-Saharan Africa region declined by 12.5 percent in 2020 – the biggest drop in over a decade – partly as a result of the global Covid-19 pandemic, but mainly attributed to a huge decline in remittances to Nigeria.
Insights into Africa’s infrastructure finance (IT-Online)
Infrastructure remains a top priority for economic and social development for Africa. The Africa Infrastructure Development Index (AIDI), which tracks the progress of infrastructure development across the continent, shows that sub-Saharan Africa has the lowest stock and poorest quality of infrastructure. Therefore, there is a compelling need to accelerate infrastructure development in this region, says Bahati Sanga, a University of Stellenbosch Business School graduate of the MPhil in Development Finance programme. “Africa’s poor infrastructure is a hindrance to inclusive growth, poverty alleviation, job creation, industrialisation, intra-regional trade and regional integration. Poor maintenance of existing infrastructure in Africa is also discouraging new investments,” he says. “A key constraint to Africa’s infrastructure development is the lack of reliable and sustainable funding.”
Funding for Africa’s startups is at a record high – this is where it’s going (World Economic Forum)
AfricArena has released a new report using Partech data which has forecast that venture capital funding for African startups will amount to between $2.25 billion and $2.8 billion this year, a record high for the continent. Africa’s VC investments reached an all-time high in 2019 when 234 tech companies raised $2.02 billion in 250 equity rounds, a 74 percent increase on the $1,163 recorded in 2018. While the pandemic resulted in major setbacks in 2020 with growth declining 29 percent, the good news is that major improvements are expected. In 2022, VC investment is expected to climb sharply to between $3.8 billion and $4.7 billion while the upper range is expected to be $6.8 billion by 2023. By 2025, VC investment in Africa is forecast to exceed $10 billion.
Overcoming Africa’s debt challenges will not only benefit the continent, but profit its partners in Asia, and the world economy as a whole, participants heard at a webinar to promote the 2021 African Economic Outlook among Asian audiences. Dr. Jingying Sun, Deputy Chief of Staff at the National Institute for Global Strategy at the Chinese Academy of Social Sciences said China has been actively engaged in international debt relief efforts, such as the G20 Debt Service Suspension Initiative and the Common Framework. The total debt service payments suspended by China amount to $1.35 billion, with 23 countries benefiting from the initiative. She further explained that because “not more than 5 % of special drawing rights of the International Monetary Fund is currently allocated to Africa, the continent could recycle that of rich countries, including Asian economies.”
Forge ahead together to deliver a brighter future for China and Africa (The Point)
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. 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. Many Chinese engineers and technicians chose to stay at their posts in Africa despite the pandemic; and over 1,100 cooperation projects have maintained operation, providing strong support to economic reopening in Africa. Solid progress has been made in China-Africa cooperation under the Belt and Road Initiative (BRI). Forty-six African countries and the AU Commission have signed cooperation agreements with China under this initiative.
Multilateral Trade Agreements Should Constitute the Cornerstone of Biden’s US-Africa Policy (Centre for Global Development)
On November 24, 2020, in her nomination acceptance speech to become the United States Ambassador to the United Nations, former Assistant Secretary of State for African Affairs Linda Thomas-Greenfield declared, “America is back. Multilateralism is back.” President Joe Biden echoed these remarks at the 2021 Munich Security Conference, proclaiming “America is back. The transatlantic alliance is back.” While this recommitment to multilateralism is welcome, it is imperative that the Biden Administration’s conception of ‘transatlantic multilateralism’ not be limited to that of relations with Western Europe.
Aside from the benefits of streamlined intra-African trade for American firms operating in the region, growing and increasingly connected markets on the continent as a result of the AfCFTA will spur demand for more advanced American products, allowing the US to embrace its competitive advantage to export tech products to Africa, a key area of competition with Chinese firms, such as Huawei and Tecno Mobile, that dominate the sector on the continent. Additionally, Africa’s manufacturing boost – which according to World Bank estimates comprises the majority of the projected $560 billion increase in African exports – will provide the US the opportunity to start diversifying its sources of imports and reduce overreliance on existing supply chains.
A US-Africa summit done right (Atlantic Council)
From Asia to Europe, the last few decades of global Africa policy can be defined in a single word: summitry. For five years now, the United States has been completely absent among the high-profile Africa summits. Given the lack of presidential engagement with African nations that characterized the Trump era, the Biden administration has made the need to convene a US-Africa summit known and Washington is in early days of planning.
While the United States’ competitors show off their strengths, the United States has largely sat on the sidelines. The Biden administration, with an expressed interest in bringing back a US-Africa Summit, now has the opportunity to learn from past failures and do it right. In shaping the future of the US-Africa Summit, the administration should take cues from the Summit of the Americas (a summit among the leaders of Western Hemisphere nations every three years) and adopt three key elements: a long-term commitment, involving African nations and the diaspora in planning, and continued connectivity and engagement.
Lake Victoria Fisheries Organization project aimed at promoting Fish Farming launched (EAC)
The Lake Victoria Fisheries Organization (LVFO), a specialized institution of the EAC based in Jinja, Uganda, has unveiled a 10 million euros project that seeks to promote aquaculture (fish farming) in East Africa. EAC Secretary General Hon. Dr. Peter Mathuki, said that the True Fish project was designed to address or remove impediments to growth in aquaculture faced by investors, for instance, lack of technical skilled operators, lack of investment finance and business planning and incomplete networks. “The second objective of the TrueFish project is to address identified threats which could undermine the sustainability of aquaculture development, or could impact negatively on the environment, food security or livelihoods especially biosecurity risks such as fish diseases and introduction of non-native species that has led to the loss of biodiversity,” said Dr. Mathuki.
Global
Members discuss possible MC12 deliverables on trade and environmental sustainability (WTO)
WTO members taking part in a new initiative on trade and environmental sustainability continued their discussions on possible outcomes to be agreed at the WTO’s upcoming 12th Ministerial Conference (MC12) during the second meeting of the Trade and Environmental Sustainability Structured Discussions (TESSD) on 26-28 May. The first two days of the meeting were dedicated to exchanges with representatives from civil society groups, international organizations, the business community and academic institutions on a variety of topics that may form part of the future TESSD work programme.
New $50 billion health, trade and finance roadmap to end the pandemic and secure a global recovery (WTO)
In a statement published by newspapers around the world, the leaders of the International Monetary Fund, World Bank Group, World Health Organization and World Trade Organization [Kristalina Georgieva, Tedros Adhanom Ghebreyesus, David Malpass and Ngozi Okonjo-Iweala] said governments must act without further delay or risk continued waves and explosive outbreaks of COVID-19 as well as more transmissible and deadly virus variants undermining the global recovery. Leaders of the four agencies said: “By now it has become abundantly clear there will be no broad-based recovery without an end to the health crisis. Access to vaccination is key to both.”
The joint statement draws on a recent IMF staff analysis, which stated that $50 billion in new investment is needed to increase manufacturing capacity, supply, trade flows, and delivery, which would accelerate the equitable distribution of diagnostics, oxygen, treatments, medical supplies and vaccines. This injection would also give a major boost to economic growth around the world.
A G7 trade and investment plan to promote prosperity (ODI)
As chair of the G7, the UK has promised to promote prosperity by ‘championing free and fair trade’ at the summit. Professed support to international trade is welcome. However, if the sum of the G7’s ambitions to promote prosperity is to simply reduce barriers to trade, then the summit will be a major opportunity missed. As a vision for supporting a global recovery, it pales in comparison with China’s Belt and Road Initiative, which aims to increase economic integration, value chain growth and market creation through trade, but also significant public and private investment. G7 countries should be considering how both trade and investment can support recovery.
Emerging economies press for COVID-19 vaccine supply in poor nations (The Japan Times)
Five of the world’s biggest emerging economies on Tuesday called for the development and delivery of COVID-19 vaccines to be sped up, reiterating that measures such as waiving intellectual property (IP) rights over the shots could help poorer nations battle the pandemic. The joint statement by the so-called BRICS group – Brazil, Russia, India, China and South Africa – followed an online summit chaired by India’s Foreign Minister Subrahmanyam Jaishankar. The foreign ministers said “extensive immunization” would help bring the pandemic to an end, highlighting the “urgency for expeditious development and deployment of COVID-19 vaccines, especially in developing countries.” They also expressed support for the global campaign led by South Africa and India at the World Trade Organization to temporarily waive IP rights for COVID-19 vaccines. Sharing vaccine doses, technology transfers, developing local production and supply chains as well as price transparency would also boost the fight against the infectious disease, the statement added.
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Media statement: Meeting of the BRICS Ministers of Foreign Affairs/International Relations (MFA)
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BRICS call for reforming United Nations, IMF, WTO and WHO (Mint)
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BRICS supports proposal by India, South Africa to temporarily waive patents on COVID vaccines (Mint)
Big, Rich, and Powerful Subsidizers to Benefit from WTO Fisheries Subsidies Talks (Solomon Times)
Negotiations are taking place at the World Trade Organization (WTO), in Geneva with a view to reaching an agreement at a virtual Ministerial meeting on July 15th. Global talks to reign in global fisheries subsidies are failing to hold big, rich and powerful subsidizers accountable while unfairly shifting the burden onto vulnerable fishing communities. Negotiations have run into deep trouble with the release of the latest version of the Chair’s text. Some developing country members say they cannot accept the text as a basis for future negotiations, objecting to the chair-driven decisions for the text’s content and the opaque process for further negotiations.
UNIDO convenes experts to consider manufacturing responses to COVID-19 and lessons to be learnt (UNIDO)
The United Nations Industrial Development Organization (UNIDO) believes that the COVID-19 pandemic brings an opportunity to glean lessons and present feasible solutions to improve the governance of global manufacturing in the face of this and future crises. Opening a virtual high-level expert consultation, “Manufacturing responses to COVID-19: Lessons for governance and policy coordination in the face of global disasters”, UNIDO Director General, LI Yong, said, “This is a chance not be missed.” The consultation with the 12 eminent experts on economic development is part of UNIDO’s ongoing research work for the Industrial Development Report 2022, entitled The Future of Industrialization in a Post-Pandemic World.
OECD Ministers launch new initiative for safe international travel (OECD)
OECD Ministers have endorsed a new initiative to promote safe international travel during the COVID-19 pandemic at the OECD’s annual Ministerial meeting in Paris. The Initiative involves a safe travel blueprint and a temporary international cross-sectoral forum for knowledge sharing. The forum will allow governments and stakeholders to share information in real time on plans and approaches facilitating travel. The blueprint promotes greater certainty, safety and security in travel as reopening takes place. It builds on existing initiatives and aims to increase interoperability amongst travel regimes. It will be used by countries on a voluntary basis.
Growth in cashless payments reshaping payments infrastructure – PwC (Engineering News)
Payments are increasingly becoming cashless and, as digital money draws stronger interest, the financial services industry must recognise the entire infrastructure of payments is being reshaped, with new business models emerging, advisory multinational PwC says. Given the key role digitisation plays in the financial lives of more of the world’s population, electronic payments are at the epicentre of this transformation, and the financial services industry’s role in fostering inclusion has become a significant priority, the firm states.
Building back broader: a new approach to fiscal and monetary policy (World Economic Forum)
The pandemic-induced lockdowns and the ensuing global recession of 2020 which followed have created a highly uncertain global economic outlook and had dramatic social consequences. Globalization is stalling, social cohesion is being eroded by unrest and political polarization, and the still unfolding economic crisis is threatening the livelihoods of those at the lower end of the income spectrum. As existing temporary support measures begin to expire in several countries, it will be of paramount importance to put in place the structural reforms that will help to build back not only better but also broader. The Global Future Council on the New Agenda for Fiscal and Monetary Policy identified three policy pathways for the transformation of fiscal and monetary policy which could foster a fairer, greener and more inclusive post-pandemic world:
Carbon emissions anywhere threaten development everywhere (UNCTAD)
The economic progress achieved in the past six decades, along with a rapid expansion of global population, has come with a colossal environmental cost. While global GDP per capita has nearly tripled since 1960, CO2 emissions have quadrupled during the same period. Roughly two-thirds of this increase has occurred during the last three decades. However, total emissions do not tell the whole story. A per capita view offers an important perspective on the global CO2 challenge.
New World Bank report covering 10,000 cities shows shape of urban growth underpins livability and sustainable growth (World Bank)
A first-of-its-kind World Bank analysis, of the shape and growth of nearly 10,000 cities between 1990 and 2015, finds that the most successful urban areas are those that connect their growth to economic demand and then support this with comprehensive plans, policies and investments that help avoid uncontrolled sprawl. The new report, Pancakes to Pyramids – City Form for Sustainable Growth, analyzes the dynamic, two-way relationship between a city’s economic growth and the floor space available to residents and businesses. It finds that a city is most likely to be its best version when its shape is driven by economic fundamentals and a conducive policy environment – namely, a robust job market, flexible building regulations, dependable public transit and access to essential services, public spaces, and cultural amenities.
