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Port delays, slow vaccine rollout threatening to dent consumption – Naamsa (Engineering News)
New-vehicle sales increased by 20.2% in June, to 38 030 units, compared with the same month last year. According to Naamsa, The Automotive Business Council, an estimated 32 847 units of this number, or 86.3%, were dealer sales, with 7.6% going to the vehicle rental industry, 2.2% to government and 3.9% to corporate fleets. New-vehicle exports from South Africa jumped by 50.9% in June, to 28 384 units. To date, vehicle exports are up 65.8% on the first six months of 2020. Naamsa says the new-vehicle market is continuing its gradual recovery “in the face of a number of challenges, but also opportunities”, with ongoing stronger sales through the dealer channel signalling improved consumer and business sentiment.
SA working to shift economic power into hands of women: President (Devdiscourse)
President Cyril Ramaphosa says South Africa is committed to both supporting and implementing the actions contained in the Global Acceleration Plan for Economic Justice and Rights. “Our interventions must dismantle the systemic barriers that marginalise women and girls and perpetuate inequality in the global economy,” President Ramaphosa said. “Lack of access to financial services and products disproportionately affects poorer women working in the informal sector, those without income and those who are illiterate. “It increases vulnerability to economic shocks and may, in some cases, even increase exposure to gender-based violence.” Innovation in digital financial services in Africa offers an opportunity for rapid scale-up of financial services and products.
Tourism: SA will be among the hardest hit, says UN report – and it won’t be better soon (Business Insider South Africa)
The virtual disappearance of cross-border tourism will have huge economic effects across the world into 2023, according to a new report from the United Nations Conference on Trade and Development (Unctad). And few places will suffer those effects as badly as South Africa. Measured by both impact on gross domestic product (GDP) and the loss of unskilled labour, South Africa ranked a consistent third across simulations both optimistic and pessimistic. An aversion to travel, and higher costs, may last for some time, the report warns. In the meanwhile, it says, tourist will probably “hesitate to travel long-distance, preferring closer destinations with high vaccination levels.” Without tourists, upstream sectors such as agriculture also suffer, said Unctad. So, absent stimulus measures, lost tourist sales mean 2.5 times as big a loss to real GDP. For South Africa, that means a realistic best-case hit of 6.9%, and a pessimistic forecast of 8.1% of GDP lost.
SA must show ambition or risk not getting climate finance: Ramaphosa panel (Fin24)
A panel appointed by South African President Cyril Ramaphosa urged the world’s 12th-biggest producer of greenhouse gases to adopt more ambitious plans to reduce its environmental footprint and commit to generating zero emissions on a net basis by 2050. The consequences of not setting more aggressive goals would be less access to climate finance, the Presidential Climate Change Coordinating Commission said in its first report since Ramaphosa appointed its 22 members in December. It also warned that the nation’s export markets may shrink as countries impose tariffs on their carbon intensity.
Vaccine manufacturing hub will enhance SA’s local manufacturing capabilities (SAnews)
Higher Education, Science and Innovation Minister Blade Nzimande says the establishment of Africa’s first messenger RNA (mRNA) technology transfer hub for COVID-19 vaccines will ensure that South Africa’s local manufacturing capabilities of vaccines will be enhanced. “This means that South Africa will move beyond just fill/finishing of vaccines, into the manufacturing of the active component or drug substance of vaccine. South Africa’s local manufacturing will be ready to move into commercial scale manufacturing of the drug substance, with relevant equipment, facility preparation, staff training, and doing validation runs,” Nzimande said.
WHO is seeking to expand the capacity of low and middle-income countries (LMICs) to produce COVID-19 vaccines and scale up manufacturing to increase global access to the critical tools to bring the pandemic under control. During his visit to South Africa last month, French President Emmanuel Macron announced that France will support South Africa and Africa with regards to the local manufacturing of COVID-19 vaccines, through the establishment of the mRNA Technology Transfer Hub.
First-quarter statistics cast cloud over economic growth forecasts – experts (Namibia Economist)
The economy will likely not see a quick recovery as uncertainties persist and are likely to impact the economy negatively going forward. This is clear when looking at the first quarter statistics released by Namibia Statistics Agency (NSA) this week, which indicate that 13 of the 18 sectors recorded contractions in activity on an annual basis. According to the NSA, the country’s real GDP declined by 6.5% during the period under review, compared to a smaller contraction of 5.9% during the fourth quarter of 2020. “The 8% contraction in real GDP in 2020, which followed four years of economic stagnation, has resulted in real economic activity falling to levels last seen in 2013. The compound annual growth rate experienced between 2015 and 2020 was -1.7%,” IJG said in its responsive first-quarter report. “The general recovery in commodity prices and economic growth in the major economies observed in the first quarter of 2021 did not filter through to Namibia, due to the fact that Namibia’s main mineral exports (diamonds and uranium) did not benefit that much from these external improvements,” Du Plessis said.
China halts Kenya loans amid debt reprieve bid (Business Daily)
China has frozen disbursements of active loans to Kenyan projects in the wake of differences over Nairobi’s bid to extend debt repayment holiday to December. Chinese-funded projects are facing a cash crunch, with contractors reporting delayed payments from banks like Exim Bank of China. Executives at State-owned firms say the projects risk delays due to the funding hitch. China is one of Kenya’s biggest foreign creditors, having lent Sh758 billion as at April 2021 to build rail lines, roads and other infrastructure projects in the past decade. Yesterday, the Chinese embassy in Nairobi acknowledged the funding hitch, adding that the matter was being addressed by officials of the two countries.
Kenya’s Women Entrepreneurs Held Back from Corporate Procurement: IFC Study (IFC)
Women-owned businesses in Kenya face structural barriers that limit their ability to secure contracts with large companies for growth, according to an IFC study published today that recommends ways banks and large businesses can better support female entrepreneurs. Commissioned as part of IFC’s wider efforts to connect women entrepreneurs to new markets, the study, Sourcing2Equal Kenya: Barriers and Approaches to Increase Access to Markets for Women-Owned Businesses, found that women-owned businesses face challenges accessing finance, business networks, and market information, limiting their ability to take on large contracts. “For large companies, there is a business case for contracting with women-owned small and medium enterprises,” said Amena Arif, IFC’s Country Manager for Kenya. “A diversified supplier base is key to reducing the risk of supply chain disruptions and procurement costs.”
AfCFTA: Nigeria Won’t Be Dumping Ground For Unidentified Products, FG Warns (The Tide)
The Minister for Industry, Trade and Investment, Mr Niyi Adebayo, has assured that Nigeria would not be a dumping ground of unidentified products from other African countries when the African Continental Free Trade Agreement (AfCFTA) is activated. “As regards flooding of the market with substandard products, there are mechanisms in place in the agreement. The rule of origin is a criterion where participating countries must source their products locally. There is also a provision to guide against transhipment of products outside the African market,” he said.
Nigerian lawmakers pass historic oil overhaul bill (Reuters)
Both chambers of Nigeria’s parliament have passed a bill that overhauls nearly every aspect of the country’s oil and gas production, putting a project that has been in the works for two decades one step closer to presidential sign-off. The package also includes a string of changes sought by oil majors, including amended royalties and fiscal terms for oil and gas production, and the transfer of state oil company NNPC’s assets and liabilities to a limited liability corporation created by the bill. It also divided the stakes in the new NNPC Limited evenly between the finance and petroleum ministries, but would not allow for public share sales without further government approval.
UK government says it is working on making UK-Nigeria trade easier and cheaper (Nairametrics)
Ms Emma Wade-Smith, the U.K’s Trade Commissioner for Africa, announced the UK wants to facilitate easier, cheaper trade with Nigeria as the U.K Government plans more trade deals with African nations post Brexit. “Nigeria is such a vibrant, dynamic and very important partner to the U.K. COVID-19 pandemic impact is small compared to what we will get from climate change so we must do everything we can to limit the extensive climate disruptions. Those things include sustainable infrastructure, healthcare and water product and how it can reduce our carbon footprint to drive economic growth. We will also be utilising preferential trading agreement in increasing exports and imports between us and providing technical and other supports,” she said.
IFC and World Bank Report: Mozambique can Strengthen its Private Sector for Growth, Jobs (IFC)
Mozambique could diversify its economy, build a broader base for growth, and create more jobs by promoting stronger private sector investment and development, especially in growing markets such as agribusiness and housing construction, according to a new World Bank Group report. The Mozambique Country Private Sector Diagnostic (CPSD) report, prepared by IFC and the World Bank, found Mozambique has an opportunity to spur more inclusive and sustainable growth by increasing productivity in key sectors, strengthening investment policy and promotion, and better integrating smaller businesses into the supply chains of big energy and infrastructure projects.
Finance organisations commit €600m for 100 km railway line in Ghana (Engineering News)
Development finance institutions Deutsche Bank and Investec, in partnership with Swedish Export Credit Agency (EKN), Swedish Export Credit Corporation (SEK) and Export Credit Insurance Corporation of South Africa (ECIC), have arranged for €600-million in financing for the construction of a 100 km stretch of Ghana’s Western Railway Line, from the Takoradi port to Huni Valley. “The Western Railway Line is key to the haulage of agricultural produce and minerals from the middle belt to Takoradi port in the south of Ghana. The corridor is home to key bauxite mines, which are the bedrock of the country’s integrated bauxite aluminium masterplan. “The completion of the line will boost economic activities along the corridor and will reduce the cost and time of transporting goods and passengers between the two ends,” says Ghana Finance Minister Ken Ofori-Atta.
Africa
Trade agreement brings new dawn of opportunity (Business Day)
Intra-African trade has historically been fairly limited at less than 18% compared to intraregional trade of more than 50% with Europe and Asia. AfCFTA aims to address this by creating the largest free trade area globally based on the number of participating countries. It plans to connect 1.2-billion people in 55 countries with a combined GDP of about $4-trillion and remove some of the main obstacles to intra-African trade, including weak productive capacities and limited economic diversification as well as remove – or at least significantly reduce – tariffs related to intra-African trade.
Regional economic recovery will take longer, experts say (Daily Monitor)
Progress made by the East African member countries is destined to slow further as the region is hit by a new Covid-19 wave. Economic growth in the East African Community (EAC) averaged 2.3 per cent in 2020 when the pandemic broke out a low performance compared to an average of 5.4 per cent recorded in 2019. Experts had anticipated the economic growth in the EAC region to recover in 2021, reflecting a resumption of global economic activity with the easing of containment measures. However, this may not come to fruition as the region is hit by the new pandemic waves that have seen member states locking their economies again.
“The pandemic on EAC partner states’ economies has been devastating to sectors like manufacturing and agriculture sectors because of the disruption in global supply chains and a fall in global demand for key export goods such as horticulture produce,” Mohamed said. Uganda’s industrial sector shrunk the most in region rating at 6.3 per cent. This was followed by Rwanda and Kenya whose industrial sector shrunk by 3.5 per cent, 0.5 per cent respectively.
Shrinking EAC budget worries legislators (The New Times)
The East African Legislative Assembly (EALA) has expressed concerns over the dwindling resource envelope of the East African Community (EAC). These concerns emerged on Wednesday as the lawmakers approved the Community’s $91.7 million budget for the fiscal year 2021/22, which represents a 6 per cent drop or $5.8 million compared to the previous year. “The Committee finds it ironic that while the Community continues to grow geographically and institutionally, the Council of Ministers has continued to clamour for a reduction in Partner States contribution towards the EAC budget,” Dennis Namara, the chairperson of the EALA’s Committee on General Purpose The expected contribution from member countries towards the EAC budget in 2021/22 will be slightly over $44 million compared to $46.8 million in the previous year.
EAC lawmakers seek harmonised Covid protocols, affordable tests (The New Times)
The high costs of Covid-19 tests is now becoming a hindrance to the free movement of people and goods in the East African Community (EAC). This is according to members of the East African Legislative Assembly (EALA), who are rooting for harmonised costs and to make them more affordable. “It costs an average of $100 to carry out a Covid-19 test of visitors in the six EAC partner States. The Committee finds this cost prohibitive and a challenge to the free movement of persons and goods in the region,” Dennis Namara, Chairperson of the Committee on General Purpose at EALA said. “The EAC region must cooperate to harmonise Covid-19 protocols and containment measures to reduce the cost of travel...while not undermining the safety of its citizens,” he said.
Trade Minister makes case for farmers following AfCFTA establishment (GhanaWeb)
The Minister for Trade and Industries Alan Kwadwo Kyeremanteng has charged the Food Trade Coalition for Africa to support farmers and other small-scale actors to ensure that they benefitted from increased trade opportunities. He noted that with the combined strengths of key stakeholders, the Coalition would build a stronger consensus on food trade policy, and increase policy coherence and predictability. “Throughout the COVID 19 pandemic, movement of trade hasn’t stopped but movement of people did. Therefore, the pandemic has taught us to start relying on our own local production. Thus, we are hoping to use this coalition as a platform to discuss issues of trade,” Alan Kyeremanteng made the call at a stakeholders meeting in Accra. “Increasing intra-African agricultural trade also has the potential to improve food security by moving surplus food to deficit areas and contribute to stabilizing local and regional food markets by making them less vulnerable to shocks,” he explained.
PACJA, Fairtrade Africa sign pact to build climate resilience in small holder farmers, agricultural trade (News Ghana)
The Pan African Climate Justice Alliance (PACJA) and Fairtrade Africa (FTA) have on Thursday signed a collaborative pact aimed at addressing the effects of climate change on trade from smallholder farming, and respective producer groups across Africa. Signed in Nairobi, Kenya the memorandum of understanding between the two leading coalitions on climate change and trade will seek to jointly build strong climate resilience among agricultural producer organizations, small holder farmers and workers linked to them, including addressing needs of other agricultural value chain actors across Africa. “As Africans, we realize that we cannot address climate change without seeking to offer solutions to our small holder farmers who are on the forefront of suffering from the impacts of climate change. We will jointly seek to develop the adaptive capacities of our farmers,” said Dr Mwenda.
What Financial Choices for Africa in the Face of Climate Change? (IMF)
We all agree that building resilience to climate change is of paramount importance in the region. Part of this resilience building involves investments in climate-resilient infrastructure – especially in agriculture – which will reduce the impact of climate shocks and provide a foundation for enduring economic growth. But climate resilience also requires social spending. All this, however, costs money, and with high debt levels, especially post-pandemic, many countries in the region lack the needed fiscal space. Some room can be generated by shifting the composition of spending – gradually reducing energy subsidies, for instance, could free significant resources while also supporting a greener economy. There is thus no doubt that mobilizing external public financing, as well as private-sector resources, will be a key priority for many sub-Saharan African nations. Let me highlight a few instruments or channels that I think are particularly important.
The beginning of the end for Africa’s COVID-19 vaccine struggles? (Devex)
African countries in the middle of their third – and potentially worst yet – wave of the COVID-19 pandemic may soon receive much-needed reprieve, as shipments of vaccines donated by the United States are scheduled to begin next week. “There is movement, but obviously... we have an extraordinary situation with the third wave,” he said, adding that U.S. President Joe Biden’s new administration “has really stepped up.” Masiyiwa added that shipments are set to begin in August for 400 million doses of the J&J vaccine that were purchased by the African Vaccine Acquisition Task Team on behalf of African Union member states.
Afreximbank and Africa Finance Corporation sign agreement for vaccine (Naija247news)
The AFC has agreed with African Export-Import Bank to provide funding for a $430 million vaccine manufacturing plant in Nigeria that will help the continent deal with the virus, and now hopes to attract third-party investors to the project, according to Shenouda. Under the agreement signed in April, Afreximbank and AFC will identify and engage partners, and co-finance vaccine manufacturing projects in Africa. The two institutions will provide preparatory support to project developers and promoters whilst stepping up policy and advocacy efforts to unlock major market barriers. These cross-cutting barriers include border clearance, road and freight logistics, cold-chain and warehousing on the continent and access to market.
Standard Bank is in Blockchain agreement on Asia soft commodities trade with Africa (The Africa Report)
Standard Bank is in the process of concluding an agreement with Singaporean fintech Dltledgers to use Blockchain technology to improve soft commodities trade between Africa and countries of the Association of Southeast Nations (ASEAN), the bank’s head of trade Vinod Madhavan tells The Africa Report. The agreement, which will allow trade finance letters of credit to be issued via Blockchain, is set to become operative in the coming month, Madhavan says in Johannesburg. The potential exists to extend the accord beyond ASEAN, he adds.
The African Development Bank Group President, Dr. Akinwumi A. Adesina, joined French President Emmanuel Macron and others at the Generation Equality Forum taking place in Paris this week. He highlighted the role of the Bank’s Affirmative Finance Action for Women in Africa (AFAWA) initiative in growing the continent’s women-led businesses. AFAWA is a pan-African initiative whose goal is to unlock financing to bridge the $42 billion financing gap that women entrepreneurs face in Africa. “Women run Africa and they should run Africa… they create more businesses than men - but the problem they have is that they do not have access to finance,” Adesina said.
India expands its Africa outreach (Asian Lite)
India has always stood with Africa even if it formally announced its Africa policy only during the visit of PM Modi to Uganda in 2018. Prime Minister Narendra Modi outlined the Africa vision through his ten guiding principles which include: Africa is among top priorities for India and momentum of cooperation will be sustained through regular exchanges; development partnership as per African priorities; preferential access to Indian markets for African products; assist in harnessing digital revolution in Africa; improve Africa’s agriculture potential; fight climate change together; work together to keep oceans and maritime lanes free for all; Africa instead of becoming a theatre of competition should become nursery for its youth; and aspire and work together for a just, representative, democratic global order.
Global
Improving trade data for COVID-19 products key to better response policies: WTO (WTO)
Improving trade data on products needed to combat the COVID-19 pandemic – including vaccines and their components – is key to ensuring that the right policies are in place to facilitate their distribution, according to a new information note issued by the WTO Secretariat on 1 July. The Secretariat note points out that detailed trade data for these products are currently not available because the information captured at the time of importation is not sufficiently detailed. The two main problems are lack of detail at the six-digit Harmonized System (HS) tariff level and lack of standardization in national tariff subcategories beyond the standardized HS categories.
Patent waiver talks falter on developed nations’ hurdles (Times of India)
After showing some promise, the patent waiver talks at the World Trade Organization (WTO) have hit a hurdle due to a split between the developed and developing countries. India and South Africa have suggested that their proposal for Covid drugs, vaccines and aids – which is backed by 60 developing and poor countries, including Pakistan, Bangladesh, Indonesia and the African group – should be the basis for “line by line negotiations”. But the European Union has rejected several arguments put forward by the developing bloc and wants its proposal to be taken up on an equal footing. Its proposal calls for limiting export restrictions, supporting the expansion of production, and facilitating the use of current compulsory licensing provisions in the TRIPS Agreement, especially clarifying that the requirement to negotiate with the right holder of the vaccine patent does not apply in urgent situations such as a pandemic.
Drop the “e” – let’s think about the future of digitally enabled trade (ICC)
Speech by ICC Secretary General John W.H. Denton AO to the World Customs Organization’s 2nd Global Online Conference on Cross-border E-commerce. Customs united effort on Recovery, Renewal and Resilience for a sustainable e-commerce supply chain
“I believe we owe it to our respective stakeholders to do all we can to maximize the benefits of cross-border commerce for the businesses, workers and families looking for relief in the wake of the Covid-19 pandemic. Governments and business need to meet this challenge together. I want to start by placing my speech today in the context of what we see happening more broadly in the global trading system. In my view, the rapid digitalization presaged by the Covid-19 pandemic means that it’s highly likely that we won’t talk of e-commerce in 2030. Perhaps not even by 2025. That’s to say, we won’t talk of digital trade – just trade.”
The proposed General SDR allocation will provide some relief but fall far short of the ambition the world should have to ensure a green and inclusive recovery, the policy brief says, unless a large portion of these resources is redirected to support the many developing countries struggling to manage the ongoing crisis. As the pandemic rages on in developing countries, limited resources are stretched thinner, debt vulnerabilities are intensifying, and governments are in acute need of liquidity support to manage the crisis. The SDR allocation will send about US$55 billion directly to 82 highly debt-vulnerable developing economies, which is equivalent to only about 1.8 percent of their gross public debt stock. In other words, the allocation would not cover even a year’s worth of interest payments for most countries.
$1 billion fund for renewables among key energy commitments made during UN ministerial forums (UN News)
Some 50 ministers outlined their plans to reduce emissions and ensure that all people have access to electricity and clean cooking fuels, as the world transitions away from fossil fuels, towards renewable energy. UN Secretary-General António Guterres told the Forums: “We are running far behind in the race against time to achieve Sustainable Development Goal 7 by 2030, and net-zero emissions by mid-century. He called on “every country, city, financial institution and company to raise ambition and submit ‘Energy Compacts’” for the High-level Dialogue. Globally, nearly 760 million people lack access to electricity and 2.6 billion continue to cook with traditional fuels like wood that not only contribute to carbon emissions but also causes 4 million deaths each year from indoor smoke.
Chair introduces revised fishing subsidies text to facilitate 15 July ministerial meeting (WTO)
“The purpose of this draft text is to serve as a basis for the ministerial level meeting on 15 July. This means that it is meant to be a genuine reflection of the whole group, one that is conducive to attracting convergence,” the chair said in his presentation to the Negotiating Group on Rules at the level of heads of delegations. The revised draft text is available here. View the chair’s statement here. Director-General Okonjo-Iweala affirmed at the meeting that the text reflects the chair’s best judgement on changes that can help members narrow the gap in their positions. The revision, she added, can be a good basis for the more detailed work members have ahead of them to conclude negotiations.
130 countries and jurisdictions join bold new framework for international tax reform (OECD)
130 countries and jurisdictions have joined a new two-pillar plan to reform international taxation rules and ensure that multinational enterprises pay a fair share of tax wherever they operate. 130 countries and jurisdictions, representing more than 90% of global GDP, joined the Statement establishing a new framework for international tax reform. A small group of the Inclusive Framework’s 139 members have not yet joined the Statement at this time. The remaining elements of the framework, including the implementation plan, will be finalised in October. The framework updates key elements of the century-old international tax system, which is no longer fit for purpose in a globalised and digitalised 21st century economy.
Nigeria abstains from signing global tax deal
Opinion: How to forge supply chain resilience (Devex)
Before the COVID-19 pandemic, few people spent much time thinking about global health supply chains. Suddenly, many found themselves worrying about when the next stocks of toilet paper, hand sanitizer, and face masks would arrive in stores. But aisle shelves soon filled up again, and any thoughts of supply chains evaporated from people’s minds as quickly as a squirt of antiseptic spray. But the global health supply chain hadn’t merely suffered a minor bump. It was an earthquake whose aftershocks would be felt for years to come in low- and middle-income countries, further highlighting their need for more resilient supply chain systems to both recover from this shock and shoulder the next one – whether an epidemic, pandemic, earthquake, hurricane, or blocked shipping lane.
