tralac Daily News
SA’s agricultural sector is arguably one of the most vibrant on the continent. This has largely been occasioned by technological adaptation, sound knowledge, regional and overseas market access, and logistical efficiency. Hence, the importance of trade and logistics to SA’s agricultural sector cannot be over-emphasised. This is because our agricultural sector is highly export-orientated, with roughly half of the produce in value terms exported each year. However, for the sector to remain vibrant, it will have to urgently and continually expand and diversify its markets beyond the traditional ones such as the Southern African Development Community (SADC), the European Union and several in Asia. This urgent matter came up sharply in a range of engagements my colleagues and I had with agribusiness captains in the Western Cape last week.
A new certification scheme launched by the South African Bureau of Standards (SABS) on October 14, intends to harmonise local content and local production for producers and manufacturers, levelling the playing field and cutting out those who seek to cheat the system. The SABS – a statutory body entrusted with developing, promoting and maintaining South African National Standards (SANS) – said the Local Content Certification Scheme seeks to address the shortcomings of its predecessor, the Local Verification Scheme. “Product certification is a large portion of our quality assessment business and our ability to [provide] domestic producers with a combined product and local content certification will enhance their selling opportunities in the public and private procurement system,” SABS said in a statement. “In turn, this will strengthen the quality of goods and products bought throughout the supply chain. This will increase the demand for quality locally-produced products.”
The Department of Trade, Industry and Competition (the dtic) has mandated the Industrial Development Corporation (IDC) to actively form partnerships with the private sector in funding opportunities to support the growth of the hydrogen economy. This is according to Deputy Minister of Trade, Industry and Competition, Mr Fikile Majola. He was addressing an online indaba held with the aim of promoting the hydrogen economy as a major opportunity for South Africa to address the challenges of developing an inclusive economy. The session took place under the theme: “Hydrogen Economy – An Opportunity for South Africa to Create an Inclusive Energy Sector with Significant Black Participation.” Majola said it was becoming clearer that the hydrogen economy is a potential “game changer” for the whole world and South Africa was well-positioned to capitalise on this rapidly developing global hydrogen economy.
“It is imperative that we promote public-private sector linkages that will be critical to the development of the entire green hydrogen value chain. These collaborative efforts are expected to accelerate the development of a sustainable and inclusive local green hydrogen economy. Government is committed to working with all stakeholders to create and advance an enabling environment for the development of this new industry as part of our re-industrialisation strategy and to become an exporter of cost effective green hydrogen,” said Majola.
He added that South Africa has an abundance of renewable energy resources, providing a significant opportunity to be a player in the global green hydrogen energy market and a leading role in the global energy transition towards a net carbon zero future.
Could the National Treasury’s decision to ban the use of imported cement for all government-funded infrastructure projects finally provide a happy ending for SA’s beleaguered cement industry?
The Treasury’s protectionist policy has been hailed as a big win for the local cement industry, which has been battling for survival since 2014 – a period in which cheap cement imports repeatedly flooded the SA market and ate into the profits of local producers. “Cheap cement imports from Pakistan, China, and Vietnam were already killing SA’s cement industry. Then the Covid-19 lockdowns arrived, which stopped construction projects. This was the final nail in the coffin for the industry,” Bryan Perrie, the CEO of industry body Cement and Concrete SA, told DM168. “There’s finally light at the end of the tunnel with the Treasury’s move.”
Lesotho has been struggling with the fallout from the pandemic and a sharp decline in revenues from the Southern African Customs Union (SACU); The authorities and the mission team made significant progress in their discussions on policies that could be supported by the IMF under a financial arrangement.
The authorities and the mission team had productive discussions on policies that could be supported by the IMF under a financial arrangement. The program under discussion would aim to support a durable post-pandemic recovery, restore fiscal sustainability, strengthen public financial management, and ensure the protection of the most vulnerable. Other key structural reforms to be implemented include strengthening governance and fostering private sector investment to spur inclusive growth and employment over the medium term.
“Lesotho has been experiencing twin economic shocks resulting from the pandemic and a decline in revenues from the Southern African Customs Union (SACU) that have proved to be highly volatile. Public expenditures have been increasing while SACU revenues were buoyant but have not adapted to their decline and the limited growth in other revenue sources. At the same time, the economy has been in recession since 2017. The resulting fiscal and external imbalances, if left unaddressed, would continue to put pressure on international reserves and lead to government payment arrears.
Covid-19 border closures hit Zimbabwe’s women traders hard (The Mail & Guardian)
For years, Zimbabwe’s female informal cross-border traders have been targeted for robbery, because they are assumed to carry suitcases of cash they use to purchase their stock in neighbouring countries.
When Covid-19 hit and borders closed, domestic incomes suffered, and with husbands and partners losing their work because of the closure of different sectors of the economy, the financial strain became an outlet for long-simmering household tensions, according to researchers. Since the emergence of the coronavirus lockdown measures, there has been a global surge of domestic and gender-based violence, raising concerns among campaigners about the enduring psychosocial effects of the pandemic that go beyond the economic.
“Women informal cross-border traders support some of the most fragile and impoverished communities, and so any threat to [them] poses a threat to the most vulnerable and least resilient,” said Fadzai Nyamande-Pangeti, International Organisation for Immigration — Zimbabwe spokesperson.
“The Covid-19 pandemic exposed already existing structural problems and the lack of social protection for women is not a new thing,” Matekaire said. The unforeseen outcomes of the pandemic may have been exacerbated by informal cross-borders traders’ lack of access to information, which could have partly protected them from the shocks of the Covid-19 outbreak, according to an analysis by the Southern Africa Trust, conducted in conjunction with the Southern Africa Cross Border Traders Association. “Small-scale border trade plays an important role in contributing to poverty reduction and food security,” the trust said, adding that, in the absence of that ability to provide for their families, a powder keg has been set off.
Africa-wide trade fair will boost Zim exports (The Sunday Mail)
THE interest to venture into the export business is fast growing in Zimbabwe, and this is a positive development. This means, in a few years, the number of exporters will grow, which, in turn, will improve export earnings. Further to NGEP, ZimTrade — the national trade development and promotion agency — is running several programmes targeted at increasing capacities of businesses led by rural communities, women and young people so that they produce competitive products for export markets.
Although improving capacities of exporters is crucial, issues of access to markets are also important, and targeting easy markets should be a top priority.
The IATF holds great potential to accelerate Zimbabwe’s implementation and achievement of both the National Development Strategy 1 (NDS1) and the United Nations’ Sustainable Development Goals (SDGs) through increased trade and the resultant increase in foreign currency generation, improved livelihoods and economic growth.
The Kenya National Bureau of Standards (Kebs) will scale up certification of horticulture consignments destined for Europe to shore up exports and retain this lucrative market. Managing director Bernard Njiraini says they are seeking more investment in testing kits to ensure only certified horticultural produce accesses key international markets. Farmers have been advised to adhere to the minimum residue levels, which is required under the European Union (EU) regulations especially at the planting stage to help conform to global food safety standards across the whole production value chain. “We have the capacity to check mangoes and avocados going to Europe but we need more equipment to help on these checks,” said Mr Njiraini.
The MD urged growers seeking to export agricultural goods to the European Union to ensure that their produce complies with the market requirement in order to minimise interception by authorities.
Kenya’s horticulture exports to Europe have been facing phytosanitary challenges in Europe, a move that has seen some of the produce restricted from accessing the market. This comes at a time when Kenya is preparing to resume exports of mangoes to Europe after the country placed a self-imposed ban nearly a decade ago on the back of fruit flies that was present on Kenya’s fruits, risking a ban from the EU.
Kenya, Uganda set Nov date for sugar, milk trade talks (Business Daily)
Kenya and Uganda are set to take another stab at easing trade tensions between them amid jitters on whether the two countries would find a lasting breakthrough. Officials from Kenya are scheduled to visit Uganda next month to verify claims that sugar and milk imported from the landlocked neighbour originates from third-party countries -- a claim Kampala denies. Livestock Principal Secretary Harry Kimtai said the officials have settled for a November date after the initials plan was hampered by the third wave of Covid-19 in Uganda.
Ugandan High Commissioner to Kenya and the Seychelles Hassan Wasswa Galiwango last week in Nairobi extended an invite to Kenya’s delegation. “Uganda is supposed to export milk to Kenya but there is a problem that will be resolved soon. We have invited the government of Kenya to send a delegation to inspect Uganda milk factories, to ascertain Uganda’s capacity to produce [exportable] excess,” she said last week during Uganda’s Week in Nairobi.
Maize flour price crosses Sh100 on high costs of transport (Business Daily)
The price of flour has crossed a Sh100 mark on the shelves as millers blame the increase on rising cost of maize. Though the price of maize at the farm gate has dropped significantly, processors argue that the cost of transportation to Nairobi has made it expensive.
The rising prices will have an impact on inflation as food and energy are major drivers of high cost of living in the country. The Kenya National Bureau of Statistics (KNBS) report indicated that food prices rose 10.63 percent in September compared with a year ago. Mr Rajan said they have been witnessing a rising cost in price of maize in the last couple of weeks, which is now impacting on the cost of flour.
Dar Port makes yet another feat (Dailynews)
DAR ES SALAAM Port has yet again hosted a large vessel, Aquamarine ACE, carrying 3492 vehicles, signaling a continued trust in importers on the port after major expansion and improved services. This is second ship of that capacity after the port received another vessel of almost such size, the Tranquil ACE Panama, in last August. The Port Director, Elihuruma Lema, who spoke on behalf of the Director General of the Tanzania Ports Authority (TPA), Eric Hamissi, said the continued arrival of big ships resulted from improved efficiency, port expansion and marketing. “As we are today celebrating Nyerere Day, we are also celebrating victory of receiving another big ship which means a lot to port’s improved efficiency and expansion,” Mr Lema stated.
He said a good number of importers; mainly from neighbouring land-linked countries (Rwanda, Burundi, Malawi and DR Congo) have now increasingly started using the port.
Uganda Airlines to leverage on cargo for Dubai flights (The East African)
Uganda Airlines is planning to increase frequency on its Entebbe-Dubai route following impressive passenger traffic after the launch on October 7. Speaking at a launch ceremony in Dubai on October 9, the airline’s acting chief executive Jennifer Bamuturaki told The EastAfrican that they were seeking to gradually increase the frequency to at least five, from the current three times a week. “We are flying a 285-seater craft and on the first day, we flew just 80 people. The second day, we flew 220 passengers. You can only grow a route depending on the frequency you fly and the market reaction. “We will stimulate the route to about four or five times a week,” Bamuturaki said.
NPA to support digital revolution of African ports (The Sun Nigeria)
The Nigerian Ports Authority (NPA) has been working steadily to digitalise operations at all port locations in the country, towards optimal efficiency, elimination of corrupt practices and service excellence. The Acting Managing Director of the NPA, Mr Mohammed Bello-Koko, disclosed this in a statement signed by Mr Olaseni Alakija, General Manager Corporate and Strategic Communications, NPA in Lagos on Thursday.
Bello-Koko stated this when he received a delegation of the Ports Management Association of West and Central Africa (PMAWCA), led by the Association’s Secretary General, Mr Jean Marie Koffi. The PMAWCA delegation came to officially invite the acting Managing Director as a speaker at the forthcoming 41st PMAWCA Council Meeting, with the theme: “Digitised Port As A Model Of Port Efficiency”, scheduled for November in Douala, Cameroon.
The United Kingdom Prime Minister’s Envoy to Nigeria, Helen Grant and Nigeria’s Minister of Industry Trade and Investment, Mr. Adeniyi Adebayo, held the sixth bi-annual sitting of the UK-Nigeria Economic Development Forum (EDF), reiterating commitment to a partnership based on mutual economic benefit that will increase Foreign Direct Investment (FDI) in non-oil sector in Nigeria. A statement from the British Deputy High Commission through the Press and Public Affairs Officer, Ndidiamaka Eze, stated that the agenda outlined opportunities for a wider UK-Nigeria partnership as discussions centred on the state of bilateral trade; challenges and priorities ahead; opportunities to ‘build back better’ from COVID-19; the Nigeria Government’s preparations to attend the 2021 United Nations Climate Change Conference (COP26), and plans to implement the revised Nationally Determined Contributions (NDCs).
“They welcomed the continued efforts to encourage UK trade and investment into Nigeria resulting in a number of commercial wins for UK companies, including a £10.56m deal in the healthcare sector as part of a new build hospital project, and others in the pipeline (including more than £60m of potential FDI in the renewable energy sector,” the statement said. Speaking at the meeting, Grant said that the EDF remained crucial to the UK’s efforts to address barriers to bilateral trade and investment between the two countries.
Sudanese traders divert shipments to neighbouring countries (The East African)
Sudan’s main port, which consists of six specialised ports and the largest trader of Sudan’s exports and imports, has suffered the biggest setback in more than 100 years since its establishment during the period of English rule in Sudan. Businessmen and companies that deal with Port Sudan suffered losses as a result of their global commitments, traders have begun diverting shipments to neighbouring countries after anti-government protesters forced closure of the country’s main port. Some rerouted ships and containers to other maritime routes such as “Ain Al-Sokhna” in Egypt, a modern port known for the speed of handling and trading, and cheaper than Port Sudan by more than 30 percent.
Economist Abdul Wahab Juma told The EastAfrican that “This situation has cost the Sudanese Sea Ports authority millions of dollars in fees, as reflected in the lack of revenue for the Red Sea state, whose million residents depend on the port’s incomes”. He added “On average, Port Sudan port deals with 400,000 containers in the port designated for container shipping, meaning loss of docking fees, steering services, shipping, which will have a significant impact on the local population”.
Expo 2020 Dubai
The Women Traders in the AfCFTA, a partnership formed by ICC, UPS, Trade Law Centre (Tralac), and West Blue Consulting, met at Expo 2020 Dubai to support women-led SMEs in Africa. The one-day event brought together AfCFTA entrepreneurs, innovators and business leaders – both in-person and virtually – to discuss shared challenges, obstacles, and success stories. Taking place on October 16, 2021, the event offered a platform to celebrate inspirational development journeys, showcase innovative products and services, and create new network opportunities for upscaling businesses and entering new marketplaces.
“The AfCFTA is key to Africa’s post-COVID recovery and economic transformation. The Agreement addresses many non-tariff barriers, including cumbersome customs processes and regulations that impact women specifically,”said Trudi Hartzenberg, Executive Director, tralac. “The Protocols on Women and E-Commerce, which are still to be negotiated, are key to ensure that the AfCFTA trade governance agenda contributes meaningfully to women’s economic empowerment in a competitive digital economy. tralac, in partnership with West Blue Consulting, ICC and UPS, will continue to support Africa’s women entrepreneurs to achieve the development goals of the AfCFTA.”
The new African Continental Free Trade Area (AfCFTA) is not only a symbol of the continent’s business resilience but is rapidly reshaping global as well as intra-Africa trade to deepen the longstanding relationship between Africa and Dubai, top officials told the Global Business Forum (GBF) Africa. “The United Arab Emirates and Dubai, in particular, have long played a key role in linking Africa to the wider global economy. This interconnectedness has been mutually beneficial, and we wish to continue to deepen those collaborations,” Paul Kagame, the President of Rwanda, said during his special address at the Forum on Thursday. Held under the patronage of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, GBF Africa 2021 – the sixth edition in the series – was organised by Dubai Chamber under the theme ‘Transformation Through Trade’. The two-day event was hosted in partnership with Expo 2020 Dubai. In a recorded video message, Kagame stressed that while the global economy was slowly getting back on its feet, it would never revert to its former model. “No country or continent has been spared the damaging effects of the COVID-19 pandemic. Africa is no exception,” he said.
“Some of the changes will be profound and lasting. The crisis in international shipping and transportation is already generating new thinking. Manufacturing and supply chains will need to become more resilient to more local and more technologically advanced,” he added.
According to Wamkele Mene, the first Secretary General of the AfCFTA, the agreement has the potential to transform the entire global economy in the wake of the pandemic. “We have done very well despite the pandemic as we approach the first anniversary of the AfCFTA. There are very positive signals from the agreement, showing the way forward for Africa to recover from the pandemic,” Mene told the Forum in a virtual address.
Secretary General Chileshe Kapwepwe was one of the speakers at the Global Business Forum – Africa. Along with the Group Managing Director and Chief Executive of the Trade and Development Bank, Mr Admassu Tadesse, the two were among three discussants on the subject: Transformation Through Trade which is anchored on three pillars: RESET – RESTORE – RENEW. The Forum was part of the activities at the ongoing Expo 2020 Dubai. Their topic focused on the RESET pillar which explores policy and regulatory reforms and assess the economic implications of the COVID-19 pandemic for the region. It further explores how the continent’s countries can work together to deliver on the promise of the AfCFTA and enable sustainable growth. Madam Kapwepwe told the audience that the role of digital technologies in mitigating the effects of the pandemic had proved critical by providing alternative methods of doing business in an unprecedented environment.
She cited the COMESA Digital Free Trade Area as one of the initiatives that aims at transforming the business processes that impede the attainment of the desired levels of efficiency and reducing the cost of doing business.
Dubai South signs deal with Ghana investment centre (Trade Arabia)
Dubai South, the largest single-urban master development focusing on aviation, logistics and real estate, has signed a MoU with Ghana Investment Promotion Center (GIPC), the foremost investment attraction and promotion agency under the presidential office of the African nation, to promote all-round economic cooperation, bilateral trade and investment.
Through this agreement, the two parties aim to create an attractive environment for SMEs and encourage the exchange of trade missions with all-rounded preparation, including assistance with business programs, facilitating corporate networks and information exchange between the two authorities, stated Mohsen Ahmad, CEO of Dubai South, Logistics District
“The agreement comes on the heels of the mega event, Expo 2020 Dubai, which seeks to pave the way for resilient global economy and enable robust business connectivity,” he stated.
Ghana, has officially become the “Commercial and Trade Hub of Africa, as it hosts the Secretariat of the African Continental Free Trade Area - hailed as the world’s largest free trade bloc. The country ranks among the top in West Africa for ease of doing business, offering investors a conducive business environment bolstered by solid economic fundamentals, dynamic policies, and political stability.”
Africa to become world’s digital talent outsource powerhouse (Khaleej Times)
Africa is set to power the world’s digital transformation with its huge young talent base powering an offshore services export revolution with Egypt in pole position and Ghana set to lead on bridging the digital gender divide, day one Gitex Global Leaders Vision Summit in Dubai heard today.
Dr Amr S. Talaat, Egypt’s Minister of Communications and IT said the vision was already producing results with 3,000 software engineers now exporting services to Europe’s automotive industry with more to come. He told the audience that 2,500 electronic engineers were now working in government design hubs which are collaborating with 50 companies using the hub labs as talent incubators. “By 2030 Egypt will be a digital services export centre backed by available talent,” he said.
Al Olama said: “But we need to answer some questions. Questions of ethics, privacy, the distribution of this technology so everyone has access to it. Cities will benefit the most from AI, but it shouldn’t just be cities, it needs to be everybody. People in rural areas, people living in suburbs. Everyone should have access to this new technology if we are going to improve lives.”
Africa's economic trade-off (IPS Journal)
Africa’s marginalisation in world affairs is a familiar observation, one most evident when looking at statistics on world trade. Since 2005, the share of the continent in global trade has stagnated at 3 per cent according to the African Union. The decline in Africa’s global trade share is not the only negative consequence of a trade policy regime that has gone wrong. The continent’s role as the ‘hewers of wood and drawers of water’ has consolidated in the last three decades of non-strategic movement from close economies to open ones. Raw materials and commodities dominate exports more than ever. Basic manufactured goods – including those that the continent once used to produce at home – are now imported. The collapse of domestic production generated pernicious joblessness and sustained high levels of poverty.
The Food and Agriculture Organization of the United Nations (FAO) Regional Office for Africa has launched a new brief that advocates for seizing the opportunities of the African Continental Free Trade Area (AfCFTA) for the economic empowerment of women in agriculture. The publication is launched today to coincide with the International Day for Rural Women which is celebrated every year on 15 October to honour women and girls living in rural areas. The AfCFTA holds the potential to contribute significantly to eliminating poverty, creating jobs, and improving food security. However, the new publication Seizing the opportunities of the African Continental Free Trade Area for the economic empowerment of women in agriculture warns that the AfCFTA could exacerbate existing gender disparities and discrimination and worsen the condition of women engaged in trade and agriculture if women’s inclusion is not prioritized.
The publication makes recommendations relevant to stakeholders across the trade sector, including: strategic partnerships to develop innovative solutions and policy recommendations to ensure that the implementation of the AfCFTA agreement will provide opportunities that benefit women; build the capacity of women and women’s organizations so that they are involved in Africa’s trade environment and understand what the AfCFTA agreement entails, including its opportunities and challenges; and engage the private sector to connect with women’s groups involved in agricultural value chains.
Opportunities galore for SMEs under key Africa trade deal (The Standard)
Companies can now take advantage of the AfCFTA by mastering the criteria for exports. The first is the Rules of Origin, where products must be wholly produced in Africa, significantly transformed within Africa or value-added up to 30–60 per cent within the continent. So companies wishing to export under the AfCFTA framework have to ensure the products meet the rules of origin and get a certificate.
Most countries that have signed on to AfCFTA have agreed on a gradual progression towards the zero per cent tariffs. Some will take five years and others 10, with preferential tariffs currently in place.
SMEs will be looking for affordable financing, allowing financial institutions to step in. The Africa Standards Organisation is also on the verge of harmonising standards across the continent. The sooner SMEs distribute their products into other African countries, the better placed they will be. We have seen the rush by global firms to set up in Africa so that their goods will meet the Rules of Origin criteria to trade under AfCFTA.
‘Quality freight services key to continental trade’ (The Herald)
Quality freight services will play an important role in the African Continental Free Trade Area (AfCFTA) as it link manufacturers to consumers across the continent, according to Standards Association of Zimbabwe (SAZ) director general, Dr Eve Gadzikwa. She revealed this in Harare yesterday during the ISO 9001 -2015 certification handover to Veer-Freight, a local warehousing, courier and freight forwarding company owned by Ms Lizwe Bunu.
“Freight is an important link in the entire supply chain of goods and a key sector in our Zimbabwean economy. Quality freight service providers through certification will gain a competitive advantage in the market. It links manufacturers to the consumers hence freight will play an important role in the African Continental Free Trade Area (AfCFTA).
“It is indeed an honour to hand over the ISO 9001-2015 quality management systems (QMS) to Veer-Freight Private Limited. The certification underlines the continued determination and commitment of management and staff to providing high-quality customer service,” said Dr Gadzikwa.
Since the start of this year, those countries whose parliaments ratified the African Continental Free Trade Area (AfCFTA) agreement and deposited a schedule of tariffs under which 90% of goods and services are traded freely have been permitted to trade under the rules of the agreement.
But as anyone who has followed the fallout from the UK’s exit from the European Union will know, there is rarely consensus on the value of free-trade agreements. In addition, research published by law firm Baker McKenzie and economic forecasting specialist Oxford Economics acknowledged that the agreement would unlock ‘uneven’ growth opportunities on the African continent. The Brookings Institution published a blog earlier this year by two World Bank economists that described the mix of exchange-rate regimes across sub-regional markets as an impediment to free trade in much of Africa, resulting in substantial misalignments and growth disparities.
The Covid-19 pandemic and the climate crisis are reversing decades of progress in the fight against poverty and inequality in Africa. They are both devastating people’s livelihoods. According to the African Development Bank, 250 million Africans already suffer from hunger, 333 million face severe food insecurity, and Africa’s yearly food import is nearly US$4 billion. As of 2021, 490 million people on the continent are living in extreme poverty, making up approximately 36 per cent of Africa’s total population. The longer we take to find solutions to climate change and Covid-19, the deeper the poverty and wider the inequality gap.
Africa is blessed with abundant natural and human resources. These resource could be used to kick-start the development process, but there is a fundamental policy problem in that most African governments focus on monetary policy when they should be focusing on industrial policy. Through industrialisation, Africa’s natural resources could be a base on which to transform our countries into developed nations. As the world prepares to commemorate the International Day for the Eradication of Poverty (17 October 2021), Africa must move decisively to address the paradox of being resource-rich, but with an extremely poor population. Without this fundamental change in attitude, it is practically impossible for the continent to attain the targets of the United Nation’s Sustainable Development Goals, particularly Goal 1 of Eradicating Poverty by 2030.
The transformation and development of the Southern African Development Community (SADC) economy rides on a strong industrialised and integrated Region in which intra-regional trade increases while the markets of the 16 SADC Member States are strongly interlinked. In this regard, Pillar I of the Regional Indicative Strategic Development Plan (RISDP) 2020-2030 on Industrial Development and Market Integration is directed towards realising an industrialised regional economy that utilises its natural resources sustainably. Industrial development focusing on the priority sectors of agro-processing, mineral beneficiation and pharmaceuticals is prioritised, alongside enhancing regional technological capability and capacity through science, technology and innovation. As part of the industrialisation agenda, SADC has begun the process of identifying potential value chains in the Region, which have a specific focus on how individual and regional strengths can be leveraged for optimal benefits from both regional and global value chains.
To encourage the creation of regional value chains and participation in global processes, SADC has identified six priority areas where the value chains are being established. These are in the areas of agro-processing, minerals beneficiation, pharmaceuticals, consumer goods, capital goods, and services.
The aviation sector is facing the most devastating crisis since World War 2 – and the most likely route to helping southern Africa’s regional airline industry survive is opening up the skies. This is according to Aaron Munetsi, new CEO of the Airlines Association of Southern Africa (AASA).
AASA’s airline members represent about 90% of all carriers based in the Southern Africa Development Community (SADC). Its associate members include airport operators, air navigation, commercial airliner and engine manufacturers, banks and fuel companies.
Munetsi believes the biggest opportunity for aviation in southern Africa is intra-regional air service connectivity. He says this is imperative for the SADC’s overall economic recovery and future growth – having a commercially sustainable air transport industry that can connect and carry people and products between the region’s markets and beyond. AASA is advocating for close coordination and cooperation between governments and industry - regardless of who owns the entities involved. Munetsi says a key challenge is that while demand is slowly returning, there is little pricing elasticity in southern Africa’s airline market, which means airlines have to walk a tightrope in a bid to grow market share, cover costs and eke out a slender margin.
The 27th Meeting of the Inter-Governmental Committee of Senior Officials and Experts (ICSOE) of Southern Africa was officially opened by the Minister of Finance of the Repubic of Malawi, Honourale Felix Mlusu, who called on member States to develop fiscal measures such as broadening the tax base that will help them to sustain debt. This will allow the Development Partners to supplement the member States’ budgets. Currently, member States are implementing budgets with large fiscal deficits averaging over 10 percent of Gross Domestic Product (GDP), to fight the pandemic and sustain aggregate demand. Further, the pandemic has impacted debt levels through widening fiscal deficits as revenues shrink due to disruptions of economic activity as well as contraction of export receipts. Therefore, to build back better from this pandemic, He urged that, “the central dimension is the need to develop a people-centered recovery plan that focuses on well-being, improved inclusiveness, and reduced inequality. This calls for an inclusive and sustainable growth model that promotes resilience to external shocks, reduces poverty and inequality on a larger scale, and makes decent job creation a priority to absorb Southern Africa’s youth population”
East African states entangled in lenders’ debt relief fiasco (The East African)
East African countries are facing more pressure to service their loans after the world’s richest nations executed a botched debt relief plan that has pushed over half of the world’s poorest countries in external debt distress. The Debt Service Suspension Initiative (DSSI) by the world’s 20 wealthiest economies commonly referred to as the ‘G20’ has not helped poor countries ward off the devastating effects of the Covid-19 pandemic as foreign creditors, particularly banks and pension funds, still demanded to be repaid their loans. Research by UK-based Jubilee Debt Campaign, a coalition of national organisations and local groups calling for the cancellation of unjust and unpayable debts of the poorest countries reveals that lower income ones which applied for debt relief ended up spending a massive $36.4 billion on external debt repayments compared to a paltry $10.9 billion, which was either suspended or cancelled.
Climate change presents yet another stumbling block to achieving development outcomes as floods, droughts, cyclones, and other natural hazards continue to ravage Africa, reversing the gains made over decades. For Africa that is already reeling in poverty, debt, crumbling health systems and a myriad of other problems, recovery from the dual crises of COVID-19 and climate change will prove to be an insurmountable task. As is the case for Africa, industrialization, increased urbanization, and population growth are driving a sustained demand for minerals, metals and coal globally. According to the UN, the number of people living in cities will increase from 4.2 billion currently to 7.3 billion by the end of the century. It is projected that Africa will have the world’s fastest urbanization rate by 2050, but perhaps the greatest demand for minerals is now driven by the quest for a green recovery. As we reboot our economies shattered by the pandemic it is important to adopt an economic development model that lessens environmental, climate and disaster risks and one where social and economic benefits trickle down to those at the bottom of the pyramid, the so called “inclusive, green and resilient recovery”.
Morocco is an emerging automotive manufacturing hub, while South Africa has a history of car making. But multinational vehicle manufacturers are also setting up production plants in Angola, Ethiopia, Ghana, Kenya, Namibia, Nigeria and Rwanda, and locally owned African producers are starting out on this road less traveled. Africa has more than a billion people, 17% of the world’s population, but accounts for only 1% of cars sold worldwide, compared with China’s 30%, Europe’s 22% and North America’s 17%, according to the Paris-based International Organization of Motor Vehicle Manufacturers (OICA). Africa has on average 44 vehicles per 1,000 people, compared with the global average of 180 and 800 in the United States, according to consulting firm McKinsey & Company.
In 2018, Morocco overtook South Africa as the biggest African exporter of passenger cars with exports in 2019 at $10 billion (€8.5 billion). The two countries mainly make cars for foreign markets, but also have relatively large domestic markets. VW, Mercedes-Benz owner Daimler and BMW are among the biggest car companies in Africa, making up over 90% of all passenger cars produced and a third of the cars sold in South Africa in 2019. Meanwhile, about 80% of the 400,000 cars produced in Morocco are sold to Europe, with France, Spain, Germany and Italy the main destinations. Perhaps the main reasons Morocco has been a success story are its location close to European markets and the free trade agreements it has signed with Europe, the US, Turkey, the United Arab Emirates and elsewhere. Locally based suppliers and staff and supplies are also important.
China, Africa and the 3 years since Xi promised to rebalance trade (South China Morning Post)
When dozens of African leaders gathered in Beijing three years ago, Chinese President Xi Jinping promised change. To help rebalance the lopsided trade relationship, Xi said China would encourage Chinese companies to invest in Africa, upgrade economic zones on the continent and increase imports of African non-resource products.
Xi also pledged US$60 billion to African countries in the form of loans and aid as well as investment for three years. The various efforts were meant to expand Africa’s exports away from commodities and diversify China’s interests in the continent.
How the world stays open for business (Financial Times)
For generations after the second world war, it was a safe assumption that globalisation would continue unabated. The opening of economies, technological advances, cultural exchange and political engagement ushered in one of the most expansive periods of global interconnectedness in history. Despite recent gloomy warnings, there is scant evidence that this trend will reverse. Data from the DHL Global Connectedness Index (GCI), produced by NYU Stern’s DHL Initiative on Globalization, indicate that the movement of goods, services, capital, information and people across borders has grown steadily since the 1940s and by more than a quarter this century. Given the disruption of the coronavirus pandemic and rising nationalist and populist movements around the world, many have opined about the imminent rise of autarky and the end of globalisation as we know it. But we have yet to see a turning point. Despite a slowdown after the 2008-09 financial crisis and a brief sharp drop in the aftermath of the pandemic, the GCI and other indexes point to a rebound in globalisation’s flows. The volume of world trade in goods is 5 per cent above pre-pandemic levels, and most other flows are recovering swiftly, apart from movements of people, muted by travel restrictions.
This paper considers whether trade in regional trade agreements has shown more resilience during the COVID-19 downturn. Using an econometric approach where a set of fixed effect controls for countries’ specific characteristics, idiosyncratic shocks and policy responses, this paper finds that trade within trade agreements was relatively more resilient against the global trade collapse of 2020. The analysis also finds that the level of integration matters. Deep regional trade agreements have provided relatively better stability against the global shock. Importantly, the results show some heterogeneity across developing and developed countries as well as across the developing countries’ regions.
Members appreciated the opportunities provided by recent small group and bilateral meetings to discuss issues related to the scope and implementation of the revised TRIPS waiver proposal first put forward by South Africa and India as well as the proposal for a draft General Council Declaration on the TRIPS Agreement and Public Health in the circumstances of a pandemic from the European Union, particularly with regards the use of current TRIPS compulsory licensing provisions.
Co-sponsors of the TRIPS waiver proposal reiterated that this initiative should be an integral part of any successful MC12 outcome and urged members to move beyond the binary approach between the two proposals on the table and engage constructively to secure consensus. Members also underlined the importance of aligning the facilitation process under Ambassador David Walker of New Zealand and the work by the TRIPS Council chair, so that a comprehensive package on trade and health leading to a multilateral and horizontal response to the COVID-19 pandemic can be achieved.
The United Kingdom is a strong supporter of the Moratorium on imposing customs duties on electronic transmissions and supports the position that it should be made permanent. The increasing uncertainty on the moratorium being extended at MC12 has resulted in an uptick of concerns from stakeholders. We therefore call on members to productively engage in discussions on extending the moratorium at MC12. Thank you. The UK remains alive to the challenges Least Developed Countries face to their graduation efforts and remains committed to working with LDCs to ensure they have the tools necessary to integrate into the rules-based international trading system. The UK believes that graduation from LDC status is a positive development and that further integration into the multilateral trading system through taking on increasing commitments helps developing countries improve their domestic economies. Like other members, we would therefore like to see more evidence of why the proposed blanket 12-year period of continued access to LDC provisions is necessary.
WTO Director General Ngozi Okonjo-Iweala is scheduled to meet top Indian Ministers, including Finance Minister Nirmala Sitharaman and Commerce Minister Piyush Goyal, later this week in New Delhi to gain support for a successful 12th WTO Ministerial Conference (MC 12) next month. The WTO is hopeful of reaching agreements on curbing harmful fisheries subsidies and pruning domestic farm subsidies at the MC 12 in Geneva during November 30-December 3; but India wants to provide consent only if the pacts are balanced and developing country sensitivities are recognised, an official tracking the matter told BusinessLine. “The fact that the WTO DG is visiting India before the WTO MC 12 shows the important position India holds in the ongoing negotiations, especially as a champion of interests of developing countries and LDCs. In the on-going negotiations in Geneva, India has put forward some proposals to protect the livelihoods of poorer nations that urge rich members to end their harmful fisheries and farm subsidies. Indian Ministers will ask the DG to ensure that the proposals are given due consideration,” the official said.
The Minister of Trade, Industry and Competition, Mr Ebrahim Patel, yesterday called for a global partnership to expand production of Covid-19 health supplies, establish a more sustainable and balanced global fishing rights regime, and reform the World Trade Organisation (WTO) to underpin industrialisation and development. The call was made at the G20 Trade and Investment Ministerial Meeting in Sorrento, Italy. Addressing the meeting, Minister Patel highlighted the importance of African industrialisation and development in ensuring that “shared prosperity moves from slogan to reality”. He proposed a package of measures to address the challenges with supply of Covid-19 vaccines across many developing countries.
“There are five practical steps that can assist developing countries: i) a temporary Trade-Related Aspects of Intellectual Property Rights (TRIPS) waiver covering Covid vaccines and essential diagnostics and therapeutics; ii) diversifying production locations and scaling up production capacity and access on the African continent and across the world; iii) protocols covering transparency, equity in vaccine supply contracts and pricing; iv) a meaningful commitment to keep supply chains open; and v) a forward-looking TRIPS provision to address future pandemics by providing automatic rights of use that obviates the need for special arrangements and waivers,” said Minister Patel.
Ensuring a Strong Recovery for Developing Countries (World Bank)
The global economy is experiencing an uneven recovery, with the risk that it will worsen inequality and leave low- and middle-income countries behind. The path of the COVID-19 pandemic remains uncertain, with obstacles to vaccination in many countries. Developing economies face challenges that could slow their recovery for years to come. To help, the World Bank Group has mounted the largest crisis response in its history, and it is uniquely positioned to help ensure that all countries can participate in a green, resilient, and inclusive return to stability and growth.
These were key messages from the Development Committee, a ministerial-level forum that represents 189 member countries of the World Bank Group and the International Monetary Fund, in a communiqué issued at the institutions’ Annual Meetings. The committee noted that the pandemic has compounded long-standing development challenges; low- and middle-income countries face acute vulnerabilities and need stronger policies, institutions, and resources to bolster resilience.
Speaking at the UN General Assembly (UNGA), India’s First Secretary Sneha Dubey said that it is important that development activities revolve around national ownership and leadership, and give due consideration to national development priorities. “The UN system must focus on those tasks it is uniquely qualified to deliver. And these should be supported with adequate and predictable volume of flexible resources,” she said. Stressing on the need to enhance support for South-South cooperation, the Indian diplomat said the UN must ensure that it must ensure that resources meant for core development programmes are not re-purposed.” UN Development System needs to amplify its impact while working to enhance support for South-South cooperation. If we are to be on track to achieve 2030 Agenda, it must be ensured that resources meant for core development programmes are not re-purposed. If so, they need to be brought back on track,” she said.
The global economic recovery continues. But divergences between economies persist, reflecting stark differences in vaccine access and policy support. The emergence of virus variants has increased uncertainty, and risks to the recovery are tilted to the downside. The crisis is exacerbating poverty and inequalities, while climate change and other shared challenges are becoming more pressing and require our urgent attention.
We will work together to accelerate transformational reforms to help build a more resilient and sustainable global economy. We look forward to the outcomes of COP26 and commit strongly to further accelerate climate action in line with the Paris Agreement, taking into account country specific factors. In this context, we will utilize policy mixes based on all effective tools, ranging from fiscal, market, and regulatory actions, including efficient policy instruments to reduce greenhouse gas emissions, while protecting the most vulnerable. We will also collaborate to unlock the potential of the digital economy aiming at benefits reaching all countries, while managing associated risks. We will implement a more robust international tax architecture. We reaffirm our commitments on exchange rates, excessive global imbalances, and governance, and our statement on the rules-based trading system, as made in April 2021.
Low-Income Country Debt Rises to Record $860 Billion in 2020 (Modern Diplomacy)
Governments around the world responded to the COVID-19 pandemic with massive fiscal, monetary, and financial stimulus packages. While these measures were aimed at addressing the health emergency, cushioning the impact of the pandemic on the poor and vulnerable and putting countries on a path to recovery, the resulting debt burden of the world’s low-income countries rose 12% to a record $860 billion in 2020, according to a new World Bank report.
Even prior to the pandemic, many low- and middle-income countries were in a vulnerable position, with slowing economic growth and public and external debt at elevated levels. External debt stocks of low- and middle-income countries combined rose 5.3% in 2020 to $8.7 trillion.
New report reveals how infrastructure defines our climate (UN Environment)
A new report, published ahead of the 2021 United Nations Climate Change Conference (COP26) has called for a radical change in how governments plan, deliver and manage infrastructure - emphasising the often-overlooked role infrastructure plays in combating climate change, mitigation, and adaptation efforts. The new report, Infrastructure for climate action, is co-published by UNOPS, the UN Environment Programme (UNEP) and the University of Oxford. The research looks in detail at the influence of infrastructure on climate action across energy, transport, water, solid waste, digital communications and buildings sectors. The findings highlight that infrastructure is responsible for 79 per cent of all greenhouse gas emissions, as well as 88 per cent of all adaptation costs and therefore the sector is centrally important to achieving the Paris Agreement and the Sustainable Development Goals.
The report calls on governments to treat infrastructure as a priority sector for climate action. It also calls for unified planning to tackle emissions from infrastructure.