tralac Daily News
Kganyago: Monetary policy entails trade-offs (The Mail & Guardian)
Demographically, the reserve bank has come a long way, the governor said. “But transformation is more than just about demographics. It’s about culture. And it’s about strategy. Building on what the 1999 executive team had done, we managed to strategically reposition the South African Reserve Bank in pursuit of its constitutional mandate and made it an institution that is focused on policy strategy,” said Kganyago. “That is fundamental. Because that repositioning of the organisation to focus on policy strategy didn’t go unnoticed.”
When the Covid-induced economic crisis hit, the reserve bank responded by cutting the repurchase rate by 300 basis points in 2020. This aggressive policy approach drove interest rates to historic lows. The reserve bank has forecast that economic growth will reach pre-pandemic levels in 2023. But even then, South Africa’s economy will probably still be in the doldrums.
At the heart of it is a series of structural reforms and policy changes that are needed to enable investment and other economic activity, with one such key area being that of energy security, especially as South Africa reels from more load-shedding, making the urgency “ever more apparent”. She notes that businesses have recommended that the threshold should increase to 50 MW if these businesses are to maximise the contribution of distributed generation, which could rapidly help to stabilise overall energy supply and set the groundwork for electricity trading in future.
South Africa’s economic growth is expected to have slowed in the first quarter of 2021 as lockdown restrictions and power supply challenges continued to plague activity. Statistics South Africa (StatsSA) will tomorrow release the results of the gross domestic product (GDP) for the first quarter of 2021 following significant growth in the last quarter of 2020. Real GDP increased at an annualised rate of 6.3 percent in the fourth quarter of 2020, driven by the manufacturing sector, as further easing of Covid-19 lockdown restrictions boosted consumer buying power.
FNB chief economist Mamello Matikinca-Ngwenya said economic growth, likely moderated in the first quarter relative to the fourth quarter, but most likely avoided a double-dip recession. “Economic growth in the first quarter was largely supported by the primary sector and the trade sector,” said Matikinca-Ngwenya. “Still, the economy’s real GDP is likely to have been around 4 percent lower in the first quarter of 2021, relative to the first quarter of 2020,” she said.
With economic growth fundamental to a brighter future for South Africa, Busines Leadership South Africa (BLSA) CEO Busi Mavuso suggests it is the “only way to turn the trajectory of government’s fiscal position as it will boost earnings” and, therefore, tax collection and start to get debt under control. She adds that it is also an important component to solving the unemployment crisis, which has been exacerbated by 1.4-million fewer people in employment, compared with before the Covid-19 pandemic.
The inclusion of ‘Rooibos’/’Red Bush’ on the EU register of protected designation of origin (PDO) list makes way for other indigenous species including Buchu and Aloe Ferox to also be indicated as PDOs and reap similar rewards. According to a statement released by the EU delegation to South Africa, Rooibos is the first African food to receive the status.
EU ambassador to South Africa, Dr Riina Kionka, said: “The Covid-19 pandemic has demonstrated that solid trade relations are critical to ensuring the continuous and uninterrupted supply of safe, nutritious, affordable and sustainable food as well as to providing essential income and jobs along food value chains. This is why South Africa and EU preferential trade relations are so important. “These relations include the protection of geographical indications which enable a stronger connection between unique local food products and European consumer tastes. Geographical indications offer a valuable competitive advantage that is difficult to erode.”
Zim classifies most food products sensitive (The Herald)
Zimbabwe has classified most food products as sensitive and will only be subjected to tariff reduction under the Africa Free Continental Trade Area (AfCFTA) after 10 years, according to the Competition and Tariff Commission. The majority of members have since submitted schedules of concessions and commitments but Zimbabwe is still in the process of finalising the market access offer. A market access tariff offer consists of lists of products the country will have to remove tariffs and duties on in the implementation of the continental free trade pact. Zimbabwe has made a commitment to gradually eliminate duties on 90 percent of its products in the first five years. A further seven percent of its products would be reduced after 10 years and this basket has been classified as sensitive basket.
Digital lenders call for laws that will spur sector growth (Business Daily)
Digital lenders have asked legislators and the Central Bank of Kenya (CBK) to enact non-restrictive laws that will spur the growth of the sector. This comes in the wake of the Central Bank of Kenya (Amendment) Bill, 2020 that seeks to curb high digital lending rates. The bill, set for debate before Parliament, will grant CBK powers to regulate digital lending rates in what is seen as a key step to tame an industry that has for years remained un-regulated. Online lenders will also be subjected to similar rules to commercial banks, including having to seek the CBK’s approval for new products and pricing if the Bill becomes law.
But the Digital Lenders Association of Kenya (DLAK) proposes to add provisions concerning the non-applicability to digital lenders of other provisions of the Central Bank of Kenya Bill (“Bill”) than those indicated in the regulations. This is because digital lenders use their own capital as they are non-deposit-taking institutions, and have a limited scope of activities such as granting small loans.
Fish farming is a major economic activity in the western Kenya region thanks to the presence of Lake Victoria. The lake is a source of sustenance for tens of thousands of Kenyan fishermen, most of whom venture out into the deep waters each night to obtain the fish. Over time however, the fishing business in Lake Victoria has lost much of its viability, attributed to depleted fish stocks and the availability of cheap imported seafood. In response, various business minds have sought other means of ensuring constant supply of quality fish.
Without Uganda’s backing, Kisumu is a dormant ‘great port’ (The East African)
There was euphoria in Kenya this past week during the 58th anniversary for attaining self-rule as the country’s leadership commissioned the refurbished Kisumu Port, billed as a game-changer in regional logistics. This, coming weeks after the commissioning of the Lamu port – a planned transhipment hub – was timely as hopes of a cross-border standard gauge railway (SGR) network continue to fade out due to financing challenges.
For Kenya, establishing Kisumu as a regional logistics hub makes economic sense. Nairobi has long touted Lake Victoria’s huge potential in cargo and passenger transport. The port is thus a major link between Kenya and its neighbours, and is designed to facilitate easy transportation of petroleum products to Uganda, Rwanda, parts of the DR Congo, Burundi and South Sudan.
Tanzania is today joining the rest of the world to commemorate World Food Safety Day calling for collaborative stakeholders efforts in ensuring what is consumed is safe and contribute to a healthy body. Maintaining food safety is not a one-man show but should involve stakeholders’ contribution covering the whole production chain.
“Food should be transported most safely. For example for those needed to be transported or conserved in cold facilities should strictly be observed so that the quality of food remains for the safety of the users,” TBS Senior Food Safety Officer, Immaculate Justine said. She added the facilities used to transport and carry food items from one place to another should be of high standards so that the quality of food remains intact.
The new measures on pre-packaged products imported into Angola will come into force next week, which will allow Angolans to buy cheaper foreign products on domestic markets, the Ministry of Industry and Commerce (MINDCOM) said in a statement on Saturday. According to the new measures, the import of pre-packaged basic basket products will be mandatorily made in large packages. These products include sugar, rice, wheat and corn flour, beans, powder milk, cooking oil, animal feed, coarse and refined salt, wheat semolina, pork and beef, margarine and soap, earlier media reports have said, quoting official figures. The measures will allow products to be imported at lower prices, and give stimulus to small and medium-sized packaging and logistics industries, boosting employment.
Senegal could begin producing COVID-19 vaccines next year under an agreement with Belgian biotech group Univercells aimed at boosting Africa’s drug-manufacturing ambitions, a source involved in funding the project told Reuters. On a continent of 1.3 billion, only about 7 million have been fully vaccinated. The collaboration highlights the opportunities created by a global push to channel money and technology towards production on a continent that makes only 1% of the vaccines it requires. Africa’s struggles to secure vaccine supplies exposed its vulnerability to health crises and pushed governments to find ways to boost medicine and vaccine production. Those efforts are now gaining traction with wealthy countries.
The African Development Bank Group has approved a $1 million grant to boost local content and development of Small and Medium-Size Enterprise (SME) initiatives in the southern African nation of Mozambique. The grant, from the Youth Entrepreneurship and Innovation Multi-Donor Trust Fund (YEI MDTF), will provide technical and institutional assistance to the Instituto para a Promoção das Pequenas e Médias Empresas, or IPEME, for the direct support of start-ups and SMEs, with a particular focus on youth-led and women-owned in business.
In today’s information society, digital payment is an indispensable enabler of trade. This is precisely why experts have more or less hinged the success of the African Continental Free Trade Area agreement on the success of digital payments. “We need to put as much effort as we are putting into getting the operational blocks of the agreement and secretariat going into getting the African payments regulatory landscape similarly integrated. Payments across the continent could probably be made seamless today. The technology is there,” says Dr. Augustina Odame of the Ghana Chamber of Technology.
Cross border trade holds incredible potential. It can also be opportunities for the continent; opportunity to build new and enduring infrastructure, boost e-commerce and fast-track digital payment. Existing players in this space would provide the requisite leadership to drive digital payments across Africa thereby boosting trade. Interswitch, for instance, is providing leadership here.
The continent must yet deal with the perennial issues of ICT infrastructure deficit, the growing digital divide, regulatory inadequacy and gaps in the policy framework. For trade to thrive across borders, initiatives such as AfCFTA are invaluable. AfCFTA is not an end in itself. It would help to flip the switch to turn things around. But it is only a start. It would need plenty of support to remain sustainable.
Skills development body Digify Africa, in collaboration with Facebook, will host the Youth Digital Skills Forum on 11 June. The Forum aims to bring together youth industry leaders to inspire and demonstrate the importance of digital skills in contributing to youth development and the economy. “As we celebrate Youth Month in June, it’s a timely reminder that developing digital and technology skills among the continent’s young people is key to igniting economic recovery,” says Nomonde Gongxeka-Seopa, Facebook SADC’s head of public policy. “We remain committed to investing in Africa’s young people and helping to close the digital divide between and within countries.”
Trading commenced under the African Continental Free Trade Area (AfCFTA) agreement in January. However the journey to increased intra-African trade will be a long one, and some key protocols are still being negotiated. As Africa pursues trade-driven industrialisation, the process must be as inclusive as possible. One of the major criticisms levied against the deal is that gains will accrue disproportionately across Africa. This could happen between countries, within countries, between firms and among people. Pre-existing inequalities mean that more advanced countries, cities, manufacturing firms and the African economic elite could benefit the most from the trade increase.
Another issue is the documented link between import exposure and a rise in protectionism and xenophobia. An eventual flooding of African markets with South African goods could harm local industries and affect employment. This could grow resentment against the AfCFTA and negative sentiments about its promised gains.
The high cost of transporting goods within Africa means that higher trade volumes will reduce the unit cost of transportation. Large firms like the Dangote Group of Companies could more affordably expand production and export their goods across the continent. SMEs may also find it harder to meet the AfCFTA’s rules of origin requirements.
The Minister of State for Industry, Trade and Investment, Mrs. Mariam Katagum, has emphasised the need for the harmonisation of standards among member countries of the Economic Community of West African States (ECOWAS). This, she said would help strengthen industrialisation process and enhance quality culture as well as improve intra-regional competitiveness in trade. The minister noted that ECOWAS had over the years made considerable achievements towards the establishment of a common market, especially in the areas of free movement of persons and goods as well as harmonisation of policies. She also lauded the regional institutional arrangement to boost trade, harmonised standards, regulations on implementation of standards and ECOWAS certification mark as well as ECOWAS post COVID- 19 industry recovery programme.
The minister said: “Undoubtedly, the instruments being considered will promote trade and mitigate the impact of the pandemic on our economies, especially for SME’s.”
Togbe Afede XIV, Agbogbomefia of Asogli State has called on African Countries to encourage trading among themselves to enhance living standards across the continent. He said Africans must redirect spending to the continent to help foster stronger continental integration, the prime objective of the Africa Continental Free Trade Area (AfCFTA). “It’s sad that trade among African countries accounts for only about 16 per cent of all of Africa’s trade, whereas the situation in Asia is significantly different. “We believe that if Africans can trade among ourselves, it means that our spending that creates income abroad would tend to create income here. We would therefore be able to grow our industries, provide jobs for the youth and of course provide enhanced living standards for our people,” he said.
NEXIM Bank To Address Dearth Of Bankable Projects (Leadership)
Managing Director, Nigerian Export-Import Bank (NEXIM), Mr. Abubakar Abba Bello, has said that the bank is set to address the dearth of bankable projects and to increase flow of funds to small and medium enterprises (SMEs). To achieve this, he stated that NEXIM is partnering with African Export-Import Bank (Afreximbank) to establish a Project Preparation Fund (PPF), through which both institutions have agreed to raise an initial amount of $50million dollars to support the pre-investment phase in a project preparation circle, adding that it is expected that the fund would address the dearth of bankable projects and increase the flow of funds to SMEs.
Why Africa’s drive to industrialise will work this time (The Nation Newspaper)
Africa is poised to finally deliver on its industrialisation ambitions, thanks to the African Continental Free Trade Agreement and African industrialists who are upending the status quo, writes Adam Molai. While China has been quick to shake off the impact of Covid-19, the rest of the world has not – and the global pandemic (just the first of many, according to experts) has reinforced the dangers of the world’s over-reliance on one source of production.
So, China’s recovery has not negated the desire by the world for an alternate source or sources of production but has highlighted the need for it. And Africa, with its young population, abundant raw materials, low cost of labour and an ability to scale quickly, is in pole position to take up the mantle. But how can Africa – which almost consistently fails to live up to its promise – do it? On the back of industrialisation.
Govt to link Covid-19 vaccination data across EAC (Daily Monitor)
The Ministry of Health has said it plans to link its vaccination data to the rest of East African Community (EAC) region system to allow easy verification of vaccination certificates. During the launch of Covid-19 resurgence plan, Dr Allan Muruta, the commissioner for Integrated Epidemiology, Surveillance and Public Health Emergencies at Ministry of Health, said: “When you are vaccinated from here, you can be able to produce an electronic certificate that can be recognised within this region.” The Ministry of Health says due to the evolving nature of the Covid-19 pandemic, use and adaptation of technology will support timely and appropriate response as well as sharing of information.
Chinese Now Influential Players In Illicit Gold Trade: Study (New Zimbabwe)
Chinese nationals are now “prominent and influential actors” in Zimbabwe’s lucrative gold sector and have formed questionable partnerships with the elite in Zanu PF and senior law enforcement agents. This is part of the findings from a recent study carried out by the Global Initiative Against Transitional Organised Crime (GI-TOC) on; “Illicit Gold Markets in East and Southern Africa” published last month. According to the study, the presence of Chinese nationals in the gold mining sector in Zimbabwe has become a “hot political potato” as they were also involved in the smuggling of the precious mineral.
“From regional trade and transit hubs, most gold moves by air, legally and illegally, to global hubs such as Dubai. Moving gold by air often requires the influence of political elites or bribing airport officials. For smaller quantities of less than 10 kilograms, smugglers may directly pay security officials at checkpoints. Alternatively, gold can be made into jewellery which is then worn by passengers on flights out of the country, mainly to India, the UAE, and to a lesser extent Russia.”
The PAC-DBIA was created in August 2014 when President Obama directed the Secretary of Commerce to establish the Council to connect U.S. businesses with African partners, support existing and new U.S. investment in Africa, expand access for U.S. businesses to finance their exports to Africa, and reduce barriers to trade and investment in Africa. In short, PAC-DBIA was born to support the U.S.-Africa trade relationship and to develop and nurture ways to invest in Africa’s growth.
Today’s roundtable offers the opportunity for PAC-DBIA members to discuss and evaluate progress made on the goals of the MOU; learn how the pandemic has affected the MOU; and learn about priority and strategic projects in Ghana in which U.S. companies may participate by providing products or services, or as investors.
As we emerge from the tunnel of masked meetings and postponed events and the world economy revs back up, it’s exciting to think about the enormous potential for increased trade and investment between the United States and Ghana and the next steps for continuing our mutual efforts under the MOU.
Speaking to Express.co.uk DUP MP Sir Jeffrey Donaldson spoke of how Brexit had allowed the UK to re-establish itself on the world stage. Highlighting the opportunities to promote Global Britain, he said Egypt’s geographical attributes made it an ideal place to increase links with. “Our trade teams in Cairo are working very much on the basis that it is the gateway to North Africa and indeed down east Africa as well,” he told this website. “The Suez canal economic zone presents a terrific opportunity for UK companies where a company can export across North Africa and the Middle East and the Gulf regions. “I am confident in a post-Brexit environment we are going to be an even greater trading partner for many African countries, not least of all Egypt. “Africa is undoubtedly a major target for the UK in terms of increasing its trading potential.”
During the last decade, a greater share of the global population gained access to electricity than ever before, but the number of people without electricity in Sub-Saharan Africa actually increased. Unless efforts are scaled up significantly in countries with the largest deficits the world will still fall short of ensuring universal access to affordable, reliable, sustainable, and modern energy by 2030, according to Tracking SDG 7: The Energy Progress Report.
According to the report, significant progress has been made since 2010 on various aspects of the Sustainable Development Goal (SDG) 7, but progress has been unequal across regions. While more than one billion people gained access to electricity globally over the last decade, COVID’s financial impact has made basic electricity services unaffordable for 30 million more people, the majority located in Africa. Nigeria, the Democratic Republic of Congo and Ethiopia had the biggest electricity access deficits, with Ethiopia replacing India in the Top 3.
“The well-being of people is dependent upon the well-being of our planet, and trade can play an important role here,” DG Okonjo-Iweala said. “By connecting people and markets, trade helps lower costs and disseminate new environmental technologies. Trade can make resource use more efficient, reducing the strain on our ecosystems. New trade rules can help our economies become greener, cleaner, more prosperous, and more inclusive.” “A key WTO priority is therefore to conclude an agreement this year to protect our oceans by ending harmful fisheries subsidies. WTO members are also discussing new initiatives to improve trade’s contribution to environmental sustainability, including the liberalization of trade in environmental goods and services, fossil fuel subsidy reform, the transition to a circular economy, plastics pollution and sustainable supply chains,” she said, noting the importance as well to collaborate on this year’s UN Climate Change COP26.
They stressed that “digital rights” must be a top priority as countries rebuild civic space both during and after the crisis. “Despite the instrumental role of the internet and digital technologies, which have provided new avenues for the exercise of public freedoms and access to health and related information and care in particular during the COVID-19 pandemic, States continue to leverage these technologies to muzzle dissent, surveil, and quash online and offline collective action and the tech companies have done too little to avert such abuse of human rights,” they said.