tralac Daily News
South Africa has first quarterly primary surplus in three years (Engineering News)
South Africa recorded its first quarterly primary budget surplus since 2018 in the three months through June, a sign that the National Treasury’s efforts to bring spending in line with revenue are succeeding. The government’s primary balance swung to a surplus of R9.8-billion, or 0.6% of gross domestic product, in the first quarter of the 2022 fiscal year, compared with a deficit of 2.2% of GDP in the previous three months, according to the South African Reserve Bank’s Quarterly Bulletin published on Tuesday. A primary surplus, which excludes interest costs, suggests the state can extract resources from the economy necessary to service debt.
Oil industry one of key drivers of economic activity in SA - study (Engineering News)
The South African oil industry contributed R163 billion to the economy in 2019. A study commissioned by the South African Petroleum Industry (Sapia) showed that the oil industry remained one of the key drivers of economic activity and job creation. The oil industry accounted for 3.2% of the country’s GDP in 2019, while creating a quarter of a million jobs, representing 1.5% of total employment in South Africa.
Claire Lawrie presented the findings at a briefing on Monday: “And also in terms of investment, we often discuss in South Africa infrastructural and recovery of reinvestment. This is an industry that has had sustained capital investment in infrastructure and in the economy and indeed in 2019, the industry contributed R94 billion of capital investment.”
On expert advice, South Africa cuts its 2030 emissions cap by a third (Climate Home News)
Africa’s biggest polluter has significantly strengthened its climate targets, in light of the latest science and falling renewable energy costs. Coal-reliant South Africa’s has cut its emission cap for 2030 by nearly a third, from 614 million tonnes of Co2 equivalent to 420 Mt Co2e. The target was included in the country’s climate plan, which was submitted to the UN on Monday after approval by the cabinet last week. The document says South Africa “has warmly welcomed” the a special report by the Intergovernmental Panel on Climate Change (IPCC) on how to limit warming to 1.5C.
Campaigners told Climate Home News the target was a “step forward” and showed the value of official government climate advisory bodies like the Presidential Climate Commission (PCC). But they warned that the target was still not compatible with 1.5C of global warming.
IMF raises red flag over Tanzania’s bleak economic outlook (The East African)
Tanzania requires urgent financial support of $1.1 billion (1.5 percent of GDP) in the next 12 months to avert a potential economic fallout arising from the Covid-19 pandemic and the rising import bill linked to rising crude oil prices. The International Monetary Fund (IMF) says in its Country Report No 21/213, dated September 2021, that the country faces an urgent balance of payment (BOP) support as the government implements a comprehensive plan to tackle the Covid-19 shock in the wake of declining export receipts and rising import bill.” Emergency imports of medicines, testing materials, and protective equipment are urgently needed to respond to the third wave of the pandemic. Acquiring and distributing vaccines are top priority which also require an expansion of vaccine deployment infrastructure,” says the report prepared by the IMF staff.
Tanzania is among the top ten investment destinations in Africa, thanks to reforms and a conducive investment environment set by the government. The Rand Merchant Bank (RMB) ranked the country tenth in investment attractiveness, in the Where to Invest in Africa 2021 report released recently. The East African nation has been on a rapid path of development over the past few years, a feat which has also seen one of Africa’s fastest growing economies claim the third spot within the EAC.
Egypt comes first in the report followed by Morocco and South Africa at position two and three respectively, while Rwanda comfortably sits at number four. Kenya, another East African nation is at number nine, according to the Where to Invest in Africa 2021 report.
Analysts Seek Revamp of Nigeria’s Trade Policy to Unlock FX Inflows (THISDAY Newspapers)
The federal government has been advised to take urgent steps to overhaul the country’s trade policy in order to enhance foreign exchange (FX) inflow and achieve exchange rate stability.
Minister of Trade, Industry and Investments, Mr. Niyi Adebayo, had said his ministry was working towards producing an updated trade policy. But several attempts by THISDAY to confirm from the minister when the policy document would be ready were unsuccessful, as he did not to respond to enquiries. However, speaking in a chat with THISDAY, a former Director General, West African Institute of Financial and Economic Management, Professor Akpan Ekpo, stressed that trade policy was very crucial for any economy. Ekpo said trade policy helped in creating opportunities for entrepreneurs to manufacture and export non-oil products. He stated, “The country needs an updated trade policy as soon as possible. But one thing is having a trade policy, another thing is implementation. So, we need a trade policy that will take into account the present situation in the economy.”
The official website of the Central Bank of Nigeria (CBN) digital currency is live, Nigerian publication THISDAY reported. Called the eNaira, the currency is slated to launch in a week. The site had more than 1 million hits in 24 hours, according to stats from the report, showing how much interest there is in the digital currency, the report stated. The website promises easier financial transactions, offers peer-to-peer (P2P) payments, allows users to check balances and view transaction history, and make in-store payments with an eWallet through QR code scans, according to the report.
“We are going to be the first country in Africa to launch a digital currency,” he said, per the report. “It is a novel idea because we think it will facilitate trade. Nigeria being the biggest economy in Africa, this will set the tone to tell Africa that we are ready to lead, and we would indeed lead in trade, and we would make sure that happens.”
CBN Governor Godwin Emefiele added that his hopes are that a digital currency could help cross-border trade, allowing more financial inclusion and helping to engender more affordable, quick remittances, according to the report. He also said there could be targeted social interventions and more effective monetary policy, payment systems and tax collection.
Munya seeks Sh1bn subsidy for KTDA farmers as fertiliser price rises (Business Daily)
The Treasury is processing Sh1 billion to offer fertiliser subsidy to farmers affiliated to Kenya Tea Development Agency (KTDA) following a sharp rise in cost of the commodity. Agriculture Cabinet Secretary Peter Munya said they requested the fund to help farmers afford the essential input. The local price of fertiliser, pushed by rising international prices, has risen to Sh3,073 for a 50- kilogramme (kg) bag, a 54 percent increment compared with the previous season. “KTDA through my ministry has requested the government for fertiliser subsidy amounting to Sh1 billion, which will reduce the cost by Sh600 to Sh2,473 per 50Kg bag,” said Mr Munya.”The request is currently being processed by the National Treasury,” added Mr Munya.
The small scale tea farmers had to content with the lack of subsidised fertiliser from KTDA last year after its importation was affected by outbreak of the coronavirus pandemic that impacted on global logistics chain that was characterised with a shortage of shipping containers.
Govt, EU partner to improve Ugandan exports (Daily Monitor)
Government has resolved to introduce a programme dubbed “farming for exports” through which farmers are to be sensitised on how to produce quality products that meet the European Union (EU) standards. This was revealed by the Agriculture minister, Mr Frank Tumwebaze, during the trialogue between government, Ugandan private sector, and the European Union (EU) which was aimed at boosting Uganda’s Agriculture Exports to Europe. The event was held at the ministry offices in Entebbe last Wednesday. ”We have resolved to work with exporters who already know the quality of products needed in the European market. They will help us to sensitise our farmers on how to improve the quality of their products straight from the garden because we have been told by the EU that low grade of our products starts from the garden,” Mr Tumwebaze said.
Mining industry still in slumber despite recovery in all sectors (Business & Financial Times)
Data published by the Ghana Statistical Service (GSS) have shown that the mining and quarrying sector contracted by 18.9 percent in the second quarter of 2021 – the highest to be recorded this year. This follows another contraction of 11.2 percent recorded in the previous quarter. What makes it more disturbing is that since 2020 the Mining and Quarrying sector has never experienced growth – making it the only industry to record contraction for four consecutive quarters, as the other sectors have slowly emerged from the economic quagmire and started recording growth; signifying they are gradually recovering from the pandemic’s impact.
What Sudan and South Sudan Stand to Gain By Reopening Their Border (The Conversation)
The border between Sudan and South Sudan is set to be reopened after 11 years. This follows the two countries reaching an agreement in August to end the decade-long impasse. The announcement reflects the inseparable interdependence of the two countries. Both have suffered economically as a result of the closure.
The closure was devastating for both countries. South Sudan is landlocked and depended on the exportation of crude oil through Sudan. For its part Sudan had relied on fees from South Sudan’s oil export and the export of consumable goods to South Sudan. Previous efforts to open up trade between the two countries failed. The difference this time was that the agreement specified which four border crossing posts would be opened.
The decision to allow cross-border trade is likely to be well received, particularly by the communities living along the borders. The opening of trade relations will bring economic benefits, such as creating jobs, supporting livelihoods and contributing to food security. It also expected to promote peace and social relations between communities living along the borderline. Nevertheless, cross-border trade faces immense challenges. This includes unnecessary taxes, administrative barriers and corrupt practices at the border. These will need to be addressed.
Mobile money uptake grows SMEs in Somalia (The East African)
Somalia’s largely unbanked population could still aid the growth of small and medium enterprises (SMEs) in the country, if they join mobile money service. A new study on Somalia’s business environment says use of mobile money services could plug the hole of financial inclusion, and dodges most of the barriers in Somalia, because it aids transactions, boosts traders’ access to credit and enables seamless transactions, even for people with no bank accounts. And the result is that the flow of the money can boost traders’ access to finances by up to 13 times. The study: “Assessing the Effects of Mobile Money Service on Small and Medium Sized Enterprises,” forms a paper published in the American Journal of Industrial and Business Management, a product of a joint study by SIMAD University in Somalia and Hormuud Telecom, Somalia’s largest telco.
Benefits under AfCFTA meaningless without local incentives (Business & Financial Times)
It is crucial for the government to provide the required incentives to allow local and small processors to enable them enter and trade in the African Continental Free Trade Area, Head of Agricultural Trade and Value Chains at AfCFTA Secretariat, Dr Komla Bissi has said. He said it is incoherent to push for opportunities under AfCFTA when government does not give incentives to local and artisanal processors to be able to take advantage of the regional market. “Without local incentives, small scale producers would still be disadvantaged despite the benefits of AfCFTA. For us at the secretariat, cocoa is a major priority and the emphasis is on value addition”, Dr Bissi told the B&FT at the 2nd African Cocoa and Chocolate Expo (ACCE) in Accra.
The Nigerian government assured that it will enable local demand for new made-in-Nigeria automobiles by 40% in the next five years, in a bid to take advantage of the African Continental Free Trade Agreement (AfCFTA). They also revealed that Nigeria’s strategic objective was to capture 10% of Africa’s imports, as well as to double the country’s export revenues by 2035. This was disclosed by Mr Francis Anatogu, Senior Special Assistant to the President on Public Sector matters and Executive Secretary, National Action Committee on AfCFTA, at a virtual seminar on Monday
“The country would leverage technology and a cluster development strategy to grow the capacity of MSMEs, reduce informal trade and aggregate them for export,” he said. He added that Nigeria was Africa’s largest market by GDP, accounting for 8.2% of Africa’s goods imports and 25.2% of services import, citing the need for proactive measures to grow local content of made-in-Nigeria products, to satisfy rules of origin, reduce unit cost, create new jobs and attract investments.
Implement gender-sensitive policies to hasten AfCFTA success – experts (Business & Financial Times)
The Africa Continental Free Trade Area Agreement (AfCFTA) Secretariat has been urged to implement gender-sensitive policies within its programmes as they are critical to hasten the success of the largest free trade area in the world. According to panelists at the Women in Trade Forum organised by the African Chamber of Trade and Investment, in partnership with the Centre for African Legal Studies at the University of Professional Studies Accra (UPSA) Law School, there are some gender-sensitive policies and programs in the AfCFTA document but its implementation has been a challenge so far.
Only a quarter of companies recently interviewed in francophone Africa have heard about the African Continental Free Trade Area (AfCFTA), according to a new report by the International Trade Centre (ITC). But of those who do, about 75% believe it will benefit their businesses. Promoting SME Competitiveness in Francophone Africa: From crisis to recovery through regional integration makes the case for investing in awareness, in addition to implementation, of the AfCFTA. The report is based on data from 2557 businesses in French speaking Africa surveyed by ITC and the Permanent Conference of African and Francophone Consular Chambers (known in French as CPCCAF) between May and July 2021.
Only 6% of surveyed firms export to other African countries, and just 12% import from other countries on the continent. The voices of these firms suggests that high logistics and transport costs, along with delays and uncertainty, are the most common export barriers within Africa. The implementation of the AfCFTA, powered by investments in trade facilitation and infrastructure, has the potential to tackle some of these issues and expand intraregional trade.
The Southern African Development Community (SADC) is a 16-member regional grouping aimed at transforming the livelihoods of the more than 360 million peoples of the Region through various economic, social and human development programmes. For these development efforts to bear fruit, there must be peace and security throughout the Region and this is one of the key priorities of SADC. The Region has come up with development strategies aimed at ensuring that its goals are met, namely the Regional Strategic Indicative Development Plan (RISDP) 2020-2030 and Vision 2050.
RISDP 2020-2050 provides a guiding framework for the implementation of SADC’s regional integration and developmental agenda and programmes for the next 10 years. It is the product of consultative processes involving key stakeholders from Member States, including the private sector, civil society, research institutions, and think-tanks, as well as international cooperating partners (ICPs).
A growing body of evidence demonstrates that digital technologies can enable economic transformation in Africa and help create more jobs for its people. Digital technologies do so by helping all people, and especially lower-income and lower-skilled entrepreneurs and employees, work better and learn better, catalyzing adoption and productivity of complementary technologies. World Bank country-level studies, on Nigeria, Senegal, and Tanzania, have analyzed the impact on jobs of mobile internet availability (3G or 4G coverage), including the poor and most vulnerable.
Although mobile internet availability has increased, Africa’s internet coverage still lags behind other regions—with digital divides in availability still an issue in remote and poorer areas in all countries. Yet uptake is a bigger problem today than coverage. Africa’s uptake gap has widened, both relative to other regions and relative to availability: while 70 percent of Africa’s regional population have availability of mobile internet, less than 25 percent are using it—resulting in an average uptake gap of almost 50 percent. This uptake gap is highest in rural areas and informal enterprises; it is also high for older and poorer women and rural households. There are growing digital divides in use between richer, urban, literate, and better educated households with electricity and poorer households without electricity.
Three World Bank country-level studies, on Nigeria, Senegal, and Tanzania, have analyzed the impact on jobs of mobile internet availability (3G or 4G coverage). Better jobs and earnings for some people, though not all, are also associated with large effects on total household consumption and poverty reduction. One key takeaway is that the more digital access Africans have, the more likely they are to reduce poverty over time.
African countries are spending large sums of money to import medicines and medical equipment, while populations on the continent continue to die from preventable diseases. African countries have therefore been called upon to increase the production of medicines and medical equipment on the continent.
“We are losing too many children to diseases due to lack of vaccines, which could be manufactured in Africa, UN Under-Secretary-General and Economic Commission for Africa (ECA), Executive Secretary, Vera Songwe said at the Africa Investment Summit on Health (AIS) held on the sidelines of the 76th United Nations General Assembly September 20. She explained that manufacturing vaccines on the continent will save lives and ensure that more children go to school every day and grow healthy. She also indicated that there are enormous business opportunities in Africa’s healthcare market.
“Imports of medicines and medical equipment rose from $4.2 billion in 1998 to $20 billion in 2018 for example. Africa’s private sector can and should be a part of Africa’s health security solution. This will create jobs, build capacity, grow imports and potentially reduce health care costs.”
Africa needs $2tr for green manufacturing, McKinsey says (Engineering News)
Africa’s lack of industrial development puts it in a strong position to develop low-carbon manufacturing without the costs of transitioning from fossil fuel-based factories, McKinsey & Co. said. In the process of striving toward net-zero emissions by 2050, the continent could create a net 3.8-million jobs, McKinsey said in its Africa’s Green Manufacturing Crossroads report, which was partially funded by the UK government and released Monday. However, to hit that level would require investment of $2-trillion in manufacturing and power.
African cities need billions to fight climate change (CGTN Africa)
Billions of dollars are needed to prepare Africa’s cities for climate change and to turn urban centers into engines of green growth, a report released Monday by the Coalition for Urban Transitions and FSD Africa said. The report, which is based on an analysis of cities in Ethiopia, South Africa, and Kenya, which combined represent 18 percent of Africa’s urban population, notes that investing in climate readiness in African cities will have immense economic gains. “Economic analysis commissioned for the report shows that across the 35 major cities in the three countries, delivering more compact, clean and connected development would require an additional investment of 280 billion U.S. dollars but would produce a return of more than four times that, with total benefits worth 1.1 trillion by 2050, equivalent to 330 billion in today’s terms (net present value),” the report notes.
Now it takes only 14 hours for Kenyan fresh flowers to reach the Chinese city of Changsha, and young Africans can get various Chinese products with just a few clicks on keyboards at home. At the opening ceremony of the Beijing Summit of the Forum on China-Africa Cooperation (FOCAC) held in September 2018, Chinese President Xi Jinping proposed that China would launch eight major initiatives in close collaboration with African countries, including a decision to open a China-Africa economic and trade expo in China. To fully implement this decision, the first China-Africa Economic and Trade Expo (CAETE) was held in 2019 in Changsha, the capital city of central China’s Hunan Province, which turned out to be a great success. And the second CAETE, which opened Sunday in the same Chinese city and has attracted nearly 900 enterprises from 40 African countries and China, will not only show the world how Xi’s proposal has facilitated bilateral trade, but also unleash new potential for cooperation between the two sides.
Their ability to respond to and recover from crises such as COVID-19, and to advance towards sustainable development, is dependent on increasing production capacities, UNCTAD’s Least Developed Countries Report 2021, released on Monday notes, calling specifically for increased investment in State and productive capacities for the Least Developed Countries (LDCs) grouping. “Today LDCs find themselves at a critical juncture,” said UNCTAD Secretary-General Rebeca Grynspan. “They need decisive support from the international community to develop their productive capacities and institutional capabilities to face traditional and new challenges.”
UNCTAD defines productive capacities as “the productive resources, entrepreneurial capabilities and production linkages that together determine the capacity of a country to produce goods and services and enable it to grow and develop.” Developing production allows the world’s LDCs to foster structural economic transformation, which will in turn help reduce poverty and accelerate progress towards the UN Sustainable Development Goals (SDGs). The report warns that reaching SDGs will require massive investment and spending, which go well beyond LDCs’ own financial means.
New index suggests productive capacities should be priority at LDC5 (Trade for Development News)
Civil society organizations should play an active role in forging a new path forward from the COVID-19 crisis, one in which everyone must feel empowered to help and contribute, participants heard during the UNCTAD15 Civil Society Forum held from 22 to 24 September. “Because if we want new solutions we need new voices, new perspectives and new debates,” UNCTAD Secretary-General Rebeca Grynspan said while opening the forum, held ahead UNCTAD’s 15th ministerial conference (UNCTAD15), which will take place online from 3 to 7 October and is hosted by Barbados.
Ms. Grynspan said the COVID-19 crisis is not over, and many developing regions are seriously facing the prospect of another “lost decade”, exactly at the time when efforts towards achieving the 2030 Agenda should be coming into full gear. “The work ahead is great,” Ms. Grynspan said. “We are witnessing a very divergent global recovery, with advanced countries growing and vaccinating at rates that are multiples of those in the developing world.”
As most people know, cross border payments today are often slow, expensive, opaque, cumbersome, and for some people inaccessible. Those who need them the most—the poor—are worst affected. The good news is technology has ushered in a new era of innovation in payments. And the international community is coming together to help ensure we can all benefit from this innovation. New technology will shape more than just money and payments. Financial systems more broadly will be affected, with implications for macro-financial stability, monetary policy, growth, and the international monetary system.
On 24 September 2021, the Secretary General of the World Customs Organization (WCO), Dr. Kunio Mikuriya, together with Ms. Sabine Henzler, European Commission Director, Directorate-General for the Taxation and Customs Union (DG TAXUD) of the European Commission, inaugurated an online event on “Women in Customs” hosted by DG TAXUD.
Through its two high-level panel discussions on the topics of “Core Values for Effective Leaders” and “Transforming Organizations through Equality and Inclusion”, this event provided an opportunity for Customs representatives to share their views on the importance of implementing gender equality and inclusion.
This forum, which brought together approximately 200 representatives from Customs around the world, is the first to be organized in the context of the Network for Gender Equality and Diversity in Customs. This Network, which is yet to be officially launched by the WCO, aims at providing a high-level platform for sharing inspirational experiences on how to drive this agenda forward in an effort to make Customs more inclusive.
On September 22, 2021, the European Commission (“Commission”) published a proposal for a new regulation (“Proposal”) on the generalized scheme of tariff preferences (“GSP”).1 The Proposal anticipates the upcoming expiry of the current GSP Regulation on December 31, 2023.2 Through the GSP, the European Union (“EU” or “Union”) provides preferential access to its market for imports from eligible developing countries (“Beneficiary Countries”). The Proposal retains the overall architecture of the current GSP while enhancing the powers of the Commission to suspend or withdraw preferential tariffs in cases of non-respect of the objectives of the GSP or when the Union’s interest so requires.
WHAT IS BEING PROPOSED? 1. Changes to GSP+ access while the overall architecture of the GSP remains the same; 2. Increased possibilities for the withdrawal tariff preferences; 3. Lower thresholds for EU protective measures (safeguards); 4. A new process regarding requests for cumulation