tralac Daily News
Finance Minister Tito Mboweni says the National Treasury now predicts that the South African economy will return to pre-COVID levels only in 2023. He revealed this during a media briefing on Wednesday on government’s Economic Support Package in response to the impact of COVID-19 restrictions and the recent violent unrest in Gauteng and KwaZulu-Natal that saw businesses gutted and looted. The two events, he said, had “very serious” negative consequences for the South African economy.
As Tanzania’s tourism sector recovers from the harsh effects of the COVID-19 (coronavirus) pandemic on businesses and employment, the latest World Bank economic analysis says the country also has a unique opportunity to revamp the tourism industry to drive inclusive growth over the long term, and promote climate adaptation and mitigation. The 16th Tanzania Economic Update, Transforming Tourism: Toward a Sustainable, Resilient, and Inclusive Sector notes that the near-cessation of tourism activities globally due to the pandemic deeply affected Tanzania’s tourism sector. Economic activity in the sector contracted sharply in 2020, resulting in job losses and business shutdowns which has had negative knock-on effects for inter-related sectors. While partial recovery is underway, business revenues and derived taxes for government still remain below pre-pandemic levels.
The Republic of Burundi has launched her own Trade Information Portal which is meant to map out all her imports, exports and transit procedures, fees and time. The next step after mapping will be to simplify and remove unnecessary and redundant bottlenecks. Trade Information Portals (TIPS) have already been launched and operationalised by Kenya, Rwanda, Tanzania and Uganda. The publication of Trade Information is a good sign that Burundi is committed to facilitate trade by making trade information more transparent. “For the government, the benefits come in the form of increased tax revenues, better use of resources and improved compliance by business operators,” said Hon. Capitoline Niyonizigiye, Minister for Trade, Transport, Industry and Tourism
The COMESA Secretariat and the Government of Djibouti have signed an agreement that sub-delegates the implementation of coordinated border management activities at the Galafi border post, on the Djibouti-Ethiopia border. A total of EUR 2.5 million is allocated to this project under the European Union funded Trade Facilitation Programme (TFP). Activities will focus on automation of border processes and inter-connectivity of border agencies, upgrade priority cross-border infrastructure and procure equipment aimed to improve cross-border trade and transport facilitation at the Galafi border post between Djibouti and Ethiopia. The project will support capacity building of national stakeholders and the technical assistance to the Djibouti National Trade Facilitation Committee (NTFC) in border management and coordination.
Rwandan Economy: The Rising Phoenix (Devdiscourse)
Rwanda has come a long way, recovering from the massive economic impact of the genocide in a very short span of time, with the government showing unexpected resilience in the face of this national crisis. It has launched a series of measures to arrest the dwindling economy, and the positive effects are quite palpable at ground level.
The country has very few natural resources, with the economy mainly based on subsistence agriculture. Rwanda has a few deposits of gold, tin ore, tungsten ore, and methane. However, the government has not invested a lot in their exploitation since this would require a lot of investments and foreign partnerships for the minerals to be of greater value to the country.
Rwanda is one of the fastest growing African countries in ICT with internet penetration at 26 per cent in January 2020. There are several avenues for growth for the ICT sector – from e-commerce and e-services, mobile technologies, applications development and automation to becoming a regional centre for the training of top quality ICT professionals and research.
The Ghana International Investment Trade and Finance Conference (GITFiC) has advocated the urgent implementation of harmonized trade finance policy reforms across the Continent for effective implementation of the African Continental Free Trade Area (AfCFTA). Mr Selasi Koffi Ackom, the Chief Executive Officer of GITFiC, said an increase in trade finance would ease cross-border trade, enable capital and information flow, attract greater foreign and intra-continental investments and provide larger customer base for financial institutions to serve. He said lack of access to trade finance had been an impeding factor to trade, especially for Small and Medium Enterprises, across the African Continent, and called on Africa’s leaders to address the situation before the implementation of AfCFTA. Mr Ackom said the complete abolition of intra trade barriers and implementation of trade facilitation procedures under the AfCFTA were geared towards promoting regional markets as attractive export destinations, thereby enhancing the competitiveness of regional products.
The federal government has begun taking steps to resolve the obstacles of private sector stakeholders taking advantage of signed Trade and Investment Agreements. Dr. Nasir Sani-Gwarzo, the Permanent Secretary in the Ministry of Industry, Trade and Investment, stated this during a sensitization session in Enugu. The purpose of Nigeria entering into Trade Agreements with other countries, according to Sani-Gwarzo, is to facilitate and develop trade relations based on reciprocity, equality, and mutual benefit. The thrust of these Trade Agreements, according to the Permanent Secretary include the most favored nation treatment, expansion of volumes of trade, strict adherence to international rules and regulations on exports and imports, settlement of disputes, safeguard measures, among others.
Nigeria’s payment system ready for AfCFTA – CBN (The Sun Nigeria)
The Central Bank of Nigeria (CBN) has boasted of having a resilient payment system that is more than ready for the African Continental Free Trade Area Agreement (AfCFTA). According to him, Nigeria plans to become the hub for payment in Africa, and it requires a resilient payment infrastructure, which Nigeria already has. He also stated that Nigeria was recently ranked first in terms of payment system among its African peers. To also enhance the competitiveness of the economies of State Parties within the continent and global market, promote industrial development through diversification and regional value chain development, agricultural development, and food security amongst others.
The Standard Organisation of Nigeria (SON) has disclosed that Nigeria needs to produce goods up to standard to enable Nigerian producers compete fairly and have an edge on the African Continental Free Trade Agreement (AfCFTA). Director-General of SON, Mallam Farouk Salim, said that as the AfCFTA commences, other African countries have set up standard protocols, which Nigerian producers need to comply with to make their goods favourable for exports, adding that it is the mandate of the SON to make it possible.
“This is very important because we have the new African free trade, where goods will be crossing borders without too much hindrances. So what that means for our country is, if our manufacturers are not producing standard goods, they will not cross over to the other countries, because other countries will set standards too and they will expect goods coming to their countries to be up to standard,” he added
In 2020, the Nigerian currency was devalued twice, as a means of realising convergence across the numerous forex windows. At the height of the coronavirus pandemic, oil prices fell to as low as $18 per barrel, putting enormous pressure on the Nigerian currency, business owners and manufacturers of sundry products. But in the last quarter of 2020, oil prices built steam as coronavirus vaccine rollouts began in parts of the world.
Data shows that the real GDP growth of the Nigerian manufacturing sector in the past five years has been quite poor, with only 0.8% growth recorded in 2019. Between 2015 and 2017, the sector recorded negative growths of -1.5%, -4.3%, and -0.2% respectively. Mansur Ahmed, president of the Manufacturers Association of Nigeria (MAN), said the lack of adequate forex has hindered manufacturers from purchasing raw materials and entering financial deals with foreign companies because they rely on forex from Bureau De Change (BDC) operators which comes at a higher cost. “The high cost import bill for the productive inputs decreases manufacturing working capital and feeds into manufacturing commodities prices, thereby making the sector less competitive,” he said.
While the covid-19 pandemic continues to ravage the world, distort economic principles, create a divergence in capital growth, ruin the lives of people and cause a steady global recovery from fiscal and monetary space, it is imperative that countries continue to implement sustainable and renewable measures that will propel economic and societal growth as well as combat the spread of the Covid-19 pandemic. As the Government of Ghana prepares to deliver its 2021 Mid-Year Budget Review, it is necessary to provide cogent and realistic policy directives that can help foster economic growth and development.
Egyptian Ambassador to Ethiopia and its permanent representative to the African Union Osama Abdel Khaleq signed Egypt’s joining the statute for establishing the African Medicines Agency (AMA). In a statement issued by the Egyptian Embassy in Addis Ababa, Abdel-Khalek said Wednesday, that “this new African body will have a pivotal role in promoting public health in Africa and in responding to diseases and epidemics in the continent.” He added that Egypt is at the forefront of the leading African countries in the field of pharmaceutical industries, including the localization of the manufacture of Coronavirus vaccines. “Egypt will continue to expand in this field in support of equal access to medicines and vaccines for African peoples,” he continued.
Covid-19, e-trade and gender predominate at tralac’s 2021 conference (African Newspage)
Deliberations at tralac’s 2021 Annual Conference centred on how Africa can build effective public health preparedness against Covid-19 and future pandemics as well as the role of women, youth and SMEs in the continent’s emerging digital trade space
As the third wave of the Covid-19 pandemic continues to ravage the African continent, tralac’s Annual Conference held virtually for the second time, last week, due to restrictions occasioned by the pandemic which has exposed Africa’s fragile healthcare systems. This has subsequently left the continent at the mercy of vaccine donations by developed countries of the world in an era of vaccine nationalism. This prevalent circumstance rationalizes tralac’s 2021 conference’s theme: ‘COVID-19 has changed Africa and the world. How do we respond?’ Thus, discussions at the 2-day convening centred on how Africa can build an effective public health preparedness system against Covid-19 and future pandemics; role of gender in trade; and the implications of the proposed AfCFTA Protocol on Women, Youth and SMEs as well as the Protocol on E-commerce (Digital Trade). The virtual convening also featured the launch of tralac’s: ‘Trade and Gender in Africa’s Trade Agreements’: a comprehensive review of all gender-related provisions in Africa’s trade agreements, including the AfCFTA.
Delay expected as deadline looms for AfCFTA rules of origin talks (Global Trade Review)
Talks aimed at finalising key aspects of the new African Continental Free Trade Area (AfCFTA) are facing delays, as member countries work to reach an overarching agreement on rules of origin and tariff reduction schedules. As reported by Reuters at the start of the year, Silver Ojakol, chief of staff at the AfCFTA secretariat, said nearly 90% of the rules of origin had been agreed by that stage and that the remaining 10% would be completed by this month. However, the deadline for finalising the criteria is fast approaching and analysts say will likely be missed with countries still at odds over rules of origin on dozens of goods.
The Former President of Liberia, Ms Ellen Johnson Sirleaf, has said that the Africa Continental Free Trade Agreement (AfCFTA) provides a ready vehicle for countries in the region to start the process to move towards more self-reliance to regional cooperation and integration. She said that Africa might well be at the crossroads because the pandemic hit at a time when multilateral and global collective action was under threat due to nationalism, isolations and exclusion. “There is a call to ensure that as we respond to the pandemic there is national budgetary allocation so that we don’t use official development assistance (ODA) but national efforts should be excelled.” “What path does Africa follow at this cross roads? Should it continue with the status quo of trying to be strong advocates for the continuation of support, and how do we achieve that? She quizzed during the third African Transformation Forum (ATF) held virtually.
Current structure of AfCFTA payment platform can delay process – Bawumia (Business & Financial Times)
The Vice President, Dr. Mahamudu Bawumia, has said the current system adopted by the Pan African Payment and Settlement System (PAPSS) – wherein individual financial institutions are told to integrate directly into it – is inefficient and likely to impede trade. For him, it would be better and more efficient for the platform to be integrated with national payment switches across Africa, such as GhIPSS, rather than the current practice, as this will immediately bring along all the individual banks in Ghana and other countries. “If you look at the strategy and the mode that we are observing in implementation of the Pan African Payment and Settlement Systems, we are seeing that individual financial institutions are being asked to connect to the system. I think it’s a very inefficient way to proceed.
‘Funding Challenges Undermine SMEs’ Growth in Africa’ (THISDAY Newspapers)
Analysts who spoke at a recent webinar organised by the American Business Council in Nigeria, in collaboration with US Chamber of Commerce, Amcham Ghana and Amcham South Africa on the US-Africa relations, have identified lack of adequate funding as a major challenge to the growth of Small and Medium Enterprises (SMEs) in Africa. Citing the case of Nigeria, the analysts said: “Despite the significant contribution of SMEs to the Nigerian economy, challenges still persist that hinder the growth and development of the sector. In Nigeria, SMEs contribute 48 per cent of national GDP, and account for 96 per cent of businesses and 84 per cent of employment.” According to a recent PwC survey, a funding gap of about N617 billion for small businesses exists in the country, necessitating the need for development finance institutions (DFIs) and other stakeholders to reduce access barriers against businesses in the country.
ECOWAS seeks private sector partnership to check poverty, infrastructure deficit (The Guardian Nigeria)
Worried by the high unemployment, poverty and infrastructural deficit in the West African region, the Economic Community of West African States (ECOWAS) has advocated improved private sector collaboration to bridge gaps in the region. “The growing importance of informal trade compels the ECOWAS to create a framework expected to engender more availability and reliability of up-to-date information on informal trade,” said President, ECOWAS Commission, Mr Jean-Claude Brou. “The framework also seeks to implement reform that is essential to eliminate obstacles to informal trade among others. It is important to improve investment, particularly, private investment, in all sectors and I stress that digitalisation must be at the centre of activities for economic recovery. Infrastructural deficit must be addressed as well as sustainable and cheaper energy for the competitiveness of products.”
On 27 July 2021, Imani Center for Policy and Education, a Ghanaian Think Tank held a seminar, in Accra, on the topic: “The Imperative of Economic Recovery: How can the Resolution of the Sahara Issue Strengthen Africa’s Regional and Continental Integration?”.
Whilst economic integration represents an emergency and a major milestone in the consolidation and development of Africa, it would be jeopardized should the AU not rationalize its institutional architecture. According to the debates, the consolidation of such architecture makes it imperative for the AU to complete its institutional reform and build its resilience against separatist and secessionist agendas, which are a real threat in numerous African countries.
Frustrated, now Africa proposes that vaccines be produced locally (The East African)
Details have emerged of continued frustration by vaccine manufacturers in sending Covid-19 vaccines to Africa, a crisis that has given the African Union the impetus to become autonomous by having vaccines manufactured on the continent. Even though the continent will only be involved in the last steps in the manufacturing process of the vaccines known as “fill and finish”, African Union Special Envoy for African Vaccine Acquisition Trust (AVAT), Strive Masiyiwa, said this would be a step towards ending the vaccine apartheid that has rocked the globe pitting industrialised nations against poor ones like Africa. AVAT too has now been institutionalised and made permanent by the AU with a mandate to purchase vaccines now and in future. It will henceforth be called the Africa Vaccine Acquisition Trust (and no longer merely a task force), as it moves away from solely relying on the Covax supplies.
Africa’s Covid-19 vaccine challenges have been a bitter pill for many governments to swallow as they watch developed countries race ahead with their vaccination programmes. “Vaccines are powerful and essential tools. But the world has not used them well. Instead of being deployed widely to quell the pandemic on all fronts, they have been concentrated in the hands and arms of the lucky few, deployed to protect the world’s most privileged people … while the most vulnerable remain unprotected,” said World Health Organisation (WHO) director general, Dr Tedros Adhanom Ghebreyesus, delivering the keynote address at the 138th International Olympic Committee Session on 21 July 2021.
Can Africa realise digital change? (Business Daily)
An article by Dr Vera Songwe, Under-Secretary General of the United Nations and Executive Secretary of the United Nations Economic Commission for Africa (UNCEA) in 2020, clearly brought out the importance of digital transformation in Africa. She emphasised that digitalisation was one of the most powerful tools for implementing the 2030 Agenda for Sustainable Development and Africa’s Agenda 2063. But the big question that everyone is still asking: Can digital transformation be realised in Africa?
One of the specific objectives of Africa’s digital transformation strategy is to create a harmonised environment necessary to guarantee investment and financing in order to close the digital infrastructure gap and achieve an accessible, affordable and to secure broadband, across demography, gender, and geography. The strategy has a target for an additional 300 million people in Africa coming online by 2025. It is expected that each member state will cascade the continental agenda nationally. The measure of progress towards meeting AU and Smart Africa objectives is the ICT readiness (access to ICT infrastructure), skilling and reskilling the workforce, cybersecurity resilience, and use of ICTs.
Digital currency is the way to go in boosting economic growth – Dr Bawumia (Ghana Business News)
Vice President Dr Mahamudu Bawumia says it is time African governments embraced digital currency (bitcoin) to facilitate trade and enhance other productive sectors of their economies. He, therefore, lauded the Bank of Ghana’s decision to pilot digital currency later this year towards its nationwide roll-out in the near future, saying that it would give it the needed credibility and legal backing for usage. The Vice-President believed that the Pan African Payment and Settlement System (PAPSS) – a central payment and collection infrastructure – would allow businesses on the continent to clear and settle transactions in their local currencies without depending on third-party currencies. He said it would also provide an alternative to the current high-cost and long correspondent banking relationships by facilitating trade and other economic activities across the continent through a single, low-cost, and risk-controlled payment clearing and settlement system.
US-Africa Business Summit
In her remarks, Ambassador Tai highlighted the Biden-Harris Administration’s commitment to rebuilding partnerships in Africa and supporting a robust global economic recovery that delivers equitable growth and shared prosperity. When President Biden addressed the 34 th African Union Summit in February, he made clear that the Administration was committed to both rebuilding our partnerships around the world, including in Africa, and growing trade and investment in a way that advances the prosperity of all countries.
Biden Administration Launches Initiative to Build US-Africa Trade (Voice of America)
The administration of U.S. President Joe Biden has kicked off the Prosper Africa Build Together initiative by requesting $80 million from Congress to build trade and investment between the U.S. and Africa. Dana Banks, U.S. senior director for Africa at the National Security Council, said Wednesday in an online news briefing that the U.S. was ready to do business with the continent. “The campaign is a targeted effort to elevate and energize the United States commitment to trade and investment with countries across the African continent under the Biden and Harris administration,” Banks said. “And our goal is to substantially increase two-way trade and investment between the United States and Africa by connecting U.S. and African businesses and investors with tangible deal opportunities.”
US firms freeze Kenya expansion in Biden trade review (Business Daily)
US firms have frozen investment plans in Kenya due to uncertainty about a new free trade deal between the two countries. Many American firms had already begun investing in Kenya, spurred by the prospects of a fresh bilateral trade and investment pact between Washington and Nairobi. “Many companies had begun investing in Kenya in the wake of the Trump administration’s talks with Kenya on a bilateral free trade agreement, but that those plans were on ice until the Biden review of that policy was completed,” he was quoted by Reuters as having said. Talks for the free trade deal between Kenya and the US took a major hit this month following the expiry of a key law known as Trade Promotion Authority (TPA) that would have expedited its approval by Congress.
President Biden’s administration on Tuesday announced a new push to expand business ties between US companies and Africa, with a focus on clean energy, health, agribusiness, and transportation infrastructure on the continent. Kenya is keen on signing a new trade deal with Washington before the expiry of the current arrangement under the Africa Growth and Opportunity Act (Agoa), which allows sub-Saharan African countries to export thousands of products to the US without tariffs or quotas until 2025.
WTO Director-General Ngozi Okonjo-Iweala says there is a “pathway” for a global agreement to provide more COVID-19 vaccines to developing countries, even though governments are deeply divided over an effort to endorse a temporary waiver on some of the organization’s intellectual property (IP) rights provisions. South Africa and India, backed by many developing country members, want a temporary waiver of IP rights on COVID-19 vaccines as well as diagnostics, therapeutics, and medical devices. They argue that scrapping these protections will enable poorer countries to manufacture more vaccines, treatments, diagnostics, and other vital medical tools needed to battle the coronavirus – and address the extreme inequity in access to vaccines. The idea for a waiver also benefits from support from the United States, as well as some other advanced economies, though they are still discussing differences on details.
Jointly published by ITC, WTO and UNCTAD, this annual report presents tariff-based market access conditions for goods applied by more than 170 countries and territories. The report contains aggregated product statistics; tariffs imposed and faced by each economy; and an overview of non-tariff measures. The special topic of this year’s edition explores the use of non-tariff measures (NTMs) in international trade through the lens of three conventional indicators (frequency, coverage and prevalence) based on the global inter-agency dataset of NTMs.
The WTO and the International Renewable Energy Agency (IRENA) have launched a new booklet highlighting the need for open trade policies and harmonized product standards to support the deployment of solar photovoltaic (PV) technologies. By assisting an expansion in solar energy, trade can contribute to environmental goals and support economic recovery in the aftermath of the COVID-19 crisis, the booklet titled “Trading into a bright energy future: The case for open, high-quality solar PV markets” states.
Eco-growth and new normal post-Covid (Business Daily)
Globally, Covid-19 pandemic has caused a temporary reduction of human impact on the environment. It is expected, however, that a return to normalcy or adoption of the new normal will result to increase of environmental burdens exceeding levels recorded before the scourge. To address the above concerns, a new strategy for action has been identified, the so-called Green Growth Strategy. Green growth focuses on accelerating investments and innovations that will underpin sustainable development and provide new economic opportunities. This strategy will provide a cost-effective way of reducing pressure on the environment thus allowing for transition to new models of development. This will in turn will avoid crossing critical local, regional and global environmental threshold.
More than 500 delegates from 108 countries attended in-person, while thousands more joined virtually. Participants included government officials, smallholder farmers, producers, indigenous people, women and youth. “This meeting has shown us that there’s a silver lining to this COVID crisis: Food systems are a priority area for transformative investments, that can lead the transitions that we need to make,” said Ms. Mohammed. “Only by working together – as one people, in solidarity – can we have a sustainable and prosperous planet for all.” The Rome gathering paves the path to the UN Food Systems Summit in September, where countries will underline the need to transform how the world produces, consumes and thinks about food.
Stepping Up to Meet Low-Income Countries’ Pandemic Recovery Needs (Inter Press Service)
Low-income countries have been hard hit by the pandemic. Their large financing needs are only likely to grow as they deal with the crisis and its economic aftermath. The International Monetary Fund (IMF) has approved a far-reaching package of support that would expand their access to financial assistance at zero-interest rates, while providing stronger safeguards against taking on debt they cannot handle. For these efforts to succeed, economically stronger member countries will have to play their part.
Looking ahead, low-income countries will continue to require exceptional levels of external financial support as they recover from the pandemic, and boost investment to build more resilient and inclusive economies. Against this backdrop, the IMF has approved a package of far-reaching reforms to the PRGT to allow it to better respond to the financing needs of low-income countries over the next few years.