tralac Daily News
The gradual loss of growth momentum in the South African economy, which resulted in a real per capita income decline since 2014, is threatening to endanger the country’s developmental aspirations and worsen the already glaring income and wealth inequality. From youth unemployment rates hovering well above 70% among the 15-24 age group to the inexorable decline in savings and gross fixed capital formation rates, most indicators of future economic performance are displaying red flags. Eunomix Research has recently projected that in the absence of a vigorous structural transformation of the economy, South Africa is at risk of falling back to lower-middle-income status by 2028.
While the structural aspects of the weak economic performance have been extensively discussed by various researchers and policymakers, the influence of economic policy uncertainty on the loss of performance has received much less attention. It is, for example, frequently reminded that the narrowness and shallowness of the structural foundation of the economy constitute a major constraint on its growth potential. They also underly the country’s inability to overhaul the exclusionary production and allocation system left in place by the apartheid regime.
Home Affairs Minister Aaron Motsoaledi says the newly-formed Border Management Authority (BMA) will not hinder any trade activities between South Africa and other African countries. Motsoaledi made the statement when he was responding to parliamentary questions from EFF MP Mgcini Tshwaku, who asked how the department, through its newly formed Border Management Agency, would ensure that there was free trade between South Africa and other African countries. He also asked how the agency would not act as a restriction, and there would be no stampede of truck traffic and/or of persons going in and out of Zimbabwe, Mozambique, and vice versa at the border gates, among others.
November manufacturing output down 0.7% y/y – FNB (Engineering News)
Total manufacturing output (not seasonally adjusted) declined by 0.7% year-on-year in November, after declining by 8.5% year-on-year in October, reports financial services provider FNB. Senior economist Thanda Sithole explains that the slip partly reflects the unfavourable base effects of the latter part of 2020 when the manufacturing sector ramped up production.
The fourth edition of Namibia’s International Energy Conference will be held from 20-22 April 2022 in Windhoek, Namibia, organised by Rich Africa Consultancy
Under the theme, ‘The Energy Mix: Positioning for Investment, industrialisation and Growth’, this thought leadership event will convene energy stakeholders with investors and international partners to drive industry growth and development as well as promote Namibia and Africa as the destination for energy investments. Participating companies, international investors, service companies and various international delegations, will share updates on exploration activities, green hydrogen and regional gas and other ongoing projects and announce future projects while highlighting upcoming business and investment opportunities.
Zimbabwe managed to significantly cut its trade deficit towards the end of 2021 after it registered an increase in the value of its exports and a decrease in the value of its imports. According to the Zimbabwe National Statistical Agency (Zimstat), the trade deficit went down from 177 million in October to 36 million U.S. dollars in November on the back of a 20.93 percent rise in exports and a 4.07 percent decrease in imports. A narrowing of the trade deficit means Zimbabwe was able to retain a sizable amount of physical U.S. dollar bills in the economy. The major contributors to the rise in exports were food and beverages and transport equipment which were valued at 19.7 million and 2.84 million U.S. dollars, respectively.
Kenya's active role in Global South agenda paying dividends (Capital FM Kenya)
The rise of the Global South has been attributed to increased trade and investment, accelerated regional integration, and enhanced sharing of knowledge and technology among the low and middle income nations of Africa, Asia, Latin America and the Caribbean. The most visible manifestation of this increasingly influential grouping of States is the South-South cooperation framework on tackling political, economic, social, cultural and environmental issues facing the countries that make up the Global South.
South-South foreign direct investment (FDI) flows have also expanded and are expected to account for one-third of global FDI flows. This impressive growth in the global South’s contribution to the world economy has been realized against the backdrop of declining North-South trade and aid.
Another critical pillar of Kenya’s renewed effort to tap into the South-South economic transformation is through the African Union’s 21st Century Pan-African agenda which includes the African Economic Community (AEC) and the African Continental Free Trade Area (AfCFTA).
The flower industry has raised the alarm over high freight charges and reduced cargo space that could deny them the chance to make money from the lucrative Valentine’s period. Kenya Flower Council (KFC) chief executive Clement Tulezi said the sector was heading to the peak season, especially in the month of February with the issues of cargo space being an Achilles heel. “The only alternative is to use chartered flights but the charges are prohibitive, leaving the sector players in a catch-22 situation,” noted Mr Tulezi. “Exporting flowers to Europe is not tenable. We are keeping our fingers closed hoping for the best,” he told Business Daily.
Debt servicing, weak shilling cut Kenya’s net foreign assets by $763m (The East African)
Kenya’s net foreign assets dropped by $763 million in the year to September, the biggest decline yet, indicating that local financial institutions liquidated some of their overseas portfolios. “Net foreign assets declined from $6.58 billion as at end of September 2020 to $5.81 billion as at end of September 2021,” the Kenya National Bureau of Statistics (KNBS) said in its third quarter GDP report.
Kenyan textile company eyes Zanzibar export market (The Citizen)
A Kenyan company is setting up a $51.3 million (about Sh115 billion) factory in Zanzibar as it targets to get a pie of the world’s $920 billion textile market. The global textile industry was estimated at around $920 billion in 2018, and it was projected to reach approximately $1,230 billion by 2024, available global data show. With its $51.3 million factory at Chunguni area in Zanzibar, Basra Textiles Limited is specifically targeting export markets across East and Central Africa, its company chief executive officer, Mr Ahmed Othman, said yesterday. It is hoped that the factory, which was launched by President Samia Suluhu Hassan yesterday, will give a new impetus to Tanzania’s textile industry, which has the potential to become a significant sourcing location for foreign buyers.
Tanzania, which also enjoys a duty-free market access to the United States through the African Growth and Opportunity Act (Agoa) as well as to the European Union, is unfortunately importing most of its textile requirements mainly from China, India, Pakistan and Korea among others, official data show.
A not-so-happy new year as food prices soar (The East African)
Cash-strapped families have little to smile about this new year as countries in the region battle high commodity prices following weather-induced food supply deficits. The East Africa seasonal monitor released on December 20 by the Famine Early Warning Systems Network (Fews Net) — a USAID platform providing early warning and analysis on food insecurity — shows that rainfall deficits were recorded over much of Uganda, eastern Rwanda and Kenya, eroding crops and livestock production prospects.
Port expansions could expose Kenya to more crime (ISS Africa)
Kenya’s US$3.6 billion ports master plan will transform the country’s sea, lake and dry ports over the next 30 years. Modern ports that comply with the International Maritime Organization (IMO) codes attract a greater shipping market, which could boost and sustain the economy of Kenya and the region. But with these expansions come security concerns, notably organised crime and terrorism.
The Kenya Ports Authority’s (KPA) flagship project is the new Lamu Port, which commands an initial investment of US$2.1 billion. It is one of the seven mega infrastructure development schemes under the Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) Corridor Project. This US$25 billion programme is part of Kenya Vision 2030, which aims to transform the country into a middle-income economy.
Traders bank on Naivasha-Malaba train to ease transport (Business Daily)
Traders and transport players are banking on the plan to kick off operations between Naivasha Inland Container Depot from the Standard Gauge Railway (SGR) to the old meter-gauge railway (MGR) to significantly ease transport of goods. Traders and players say the move will underpin seamless and efficient rail transport along the northern corridor. “The integration of the SGR and MGR lines will remarkably improve the flow of cargo right from the port to the hinterland serving Uganda, Rwanda, Burundi, South Sudan and parts of eastern Democratic Republic of Congo,” said KRC managing director Philip Mainga.
Kenya Railways Corporation (KRC) has already started trial runs for freight train services to offer seamless cargo transfer at the Naivasha Inland Container Depot from the standard gauge railway (SGR) to the old metre gauge railway (MGR).
Concerns As New Bill Grants Customs Exclusive Control Of Trade Policies (Economic Confidential)
There are concerns about the proposed Nigeria Customs Service (NCS) Reform Bill as stakeholders said it negates best practices on administration, control and management of trade/customs. They said there are conflicting clauses in the proposed reform to the Customs and Excise Management Act (CEMA), which is undergoing review at the National Assembly, that contradict international conventions on trade, import, export, transhipment, border among others. According to them, CEMA was established from international convention, treaties and protocols to ensure the preservation of international trade and trust of the international committee on investments as well as boost national and regional economies.
Funding Non-oil Export for Economic Growth (This Day)
The country’s low export capacity has been identified as one of the major problems bedeviling the Nigerian economy in recent times. This argument finds expression in the fact that domestic output had been low over the years while the country doesn’t even produce enough to export. Often times, the agricultural commodities, which are eventually exported overseas, got rejected for failing quality standards. And importantly too, the inability to add value to agricultural produce had further hampered export prospects.
Here is how the new Lekki Port will generate revenue for Lagos (Ventures Africa)
In a few months, Nigeria will roll out one of its new golden geese, the Lekki Deep Seaport – a $1.5 billion port facility situated at the Lagos Free Trade Zone (LFZ), along the Lekki Corridor. The Lekki Port project commenced in 2021 following a $629 million loan financing agreement, signed earlier, in Oct. 2019, between the Lekki Port LFTZ Enterprise Limited (LPLEL) and China Development Bank (CDB). A consortium of banks also contributed to funding the project. Although developers have slated the completion for the first quarter of 2023, a recent report by The Sun News indicates that the project is about 80 per cent completed. While the country anticipates the completion of this notable project, the host state anticipates significant earnings and job creation for its residents.
Ghana’s oil sector investments would continue to be constrained, if it does not focus on internal resources. According to Energy Expert, Dr. Yusif Sulemana, the world is nearing an era where oil firms will lose interest in hydrocarbon investments. This, he said, will increase the cost of hydrocarbons, translating into spike in oil prices.
“The narrative will not change, there will be some headwinds. The headwinds are that we will continuously have constrained investments into the world of hydrocarbons. As long as we have constrained investments into hydrocarbons, the cost of energy will continue to rise and that’s a fact.”
Will Ghana remain West Africa's investment hub? (Investment Monitor)
Ghana – seen by many investors as the economic gateway to West Africa and one of the region’s most stable democracies – is jeopardising its access to international capital markets due to its high level of public indebtedness and limited tax base.
The country – with 32 million inhabitants and a $82bn (506.37bn cedis) economy – has managed to attract a wide range of foreign investors during the past five years but has now run into a set of economic and political problems, partly down to the Covid-19 pandemic. The International Monetary Fund (IMF) estimates that the country’s economy expanded by only 0.4% in 2020 but rebounded by 4.7% during 2021. It forecasts it will jump by 6.1% in 2022. Economic growth averaged 5.2% a year between 2015 and 2019. Income per head is now $2,556 a year, up from $1,784 in 2015.
In 2019, Google opened its first AI centre in Africa in Accra, while in April 2021, Twitter set up its first African office in the capital, too. “The AfCFTA has the potential to be a game changer, not only for doing business across the continent but also for how the rest of the world thinks of Africa,” said Stephanie Sullivan, the US ambassador to Ghana, in a speech in December 2021. “It can truly make Ghana a gateway for the African market.”
Ghana's economy remains highly dependent on the export of primary commodities such as gold, cocoa and oil, and consequently is vulnerable to slowdowns in the global economy and commodity price shocks. In general, however, Ghana’s investment prospects remain favourable, as the government seeks to diversify and industrialise – in particular through agro-processing, mining and manufacturing – according to the US State Department. It has made attracting FDI a priority to support its industrialisation plans and overcome an annual infrastructure funding gap of at least $1.5bn.
Official Launch of Malawi’s National Export Strategy II (2021-2022) (The Commonwealth)
Today Malawi’s Ministry of Trade, in collaboration with the Ministry of Industry and in partnership with the Commonwealth Secretariat and the WTO’s Enhanced Integrated Framework (EIF) Project, has launched the National Export Strategy II (NES II) at Bingu International Convention Centre (BICC). The purpose of the launch was to disseminate the Strategy and its actions to all the sectors and actors in the economy so as to kick-start its implementation inclusively.
The vision of the NES II is: “Make Malawi a Competitive, Compliant, Diversified and Sustainable Sourcing Destination for goods and services for the Regional and Global marketplace, and to increase exports as a percentage of GDP from 14.6% to 20%”.
In order to achieve broad-based growth and job creation, the sustained implementation of a multifaceted and ambitious reform agenda will be essential, according to the World Bank’s Morocco Economic Monitor, January 2022: From Recovery to Acceleration. The report analyzes the growth performance of the Moroccan economy over past decades. Thus far, fixed capital accumulation has been the main driver of growth, with limited productivity gains and an insufficient contribution of labor despite a favorable demographic situation.
“Going forward, the Moroccan economy will need to diversify its sources of growth to continue creating jobs and reducing poverty,” said Jesko Hentschel, World Bank Maghreb Country Director. “As envisaged by the New Development Model, this may require the implementation of broad-based reforms effort to stimulate private investment, boost innovation, include women in the labor force and increase human capital.”
Belt and Road Deal: Morocco to Become China's Trade Hub in Africa (South Morning China Post)
The Chinese government has high hopes regarding cooperation with Morocco following the North African country becoming the first to sign into the Belt and Road initiative. An analysis in the South China Morning Post (SCMP) cited several Chinese observers who see Morocco as “an exception” when it comes to China-Africa cooperation.
The Finance Law 2022 “is not the best possible one,” Finance Minister Sihem Boughdiri admitted, adding, however, it was one of the finance acts that did not include any new tax measures burdening businesses. “In view of the economic difficulties faced by the country, the result is acceptable insofar as the government has not increased taxation on companies, with corporate tax at 15%,” she added. The minister was speaking at a webinar held Tuesday by Tunisia's Joint Chambers Council (French: CCM), on the “impact of the 2022 Finance Law and new Tax Provisions.”
Baker McKenzie partners in Johannesburg discuss key trade and investment trends in Africa, and what can be expected in 2022.
To-date, 38 countries in Africa had ratified the AfCFTA agreement and 54 countries had signed it, with only Eritrea outstanding. The first shipment of goods under AfCFTA took place in January 2021 and most signatories have now submitted their proposed rules of origin. The introduction of the African Virtual Trade-Diplomacy Platform allowed parties from across many different timelines to meet in a secure online environment - speeding up negotiations across vast regions, housing many cultures, languages and legal frameworks. The streamlining of cross border trade and the free movement of goods across the continent is expected to take off in Africa in the coming years.
Trade uncertainty in Africa was exacerbated by the impact of the pandemic, which resulted in a twin supply-demand shock - supply was affected by mass production shutdowns and supply chain blockages and demand for products from Africa decreased. For example, the global demand for commodities such as steel and copper from Africa was markedly reduced during the pandemic. As a result, financial institutions and traders had to adapt and restructure transactions, and there have been some casualties. Further, oil rich countries in Africa that were badly affected by the global oil price crash have not yet recovered. However, Africa is showing signs of revival, mostly due to international traders who have spotted opportunities in the continent.
There were massive breakages in key links in global trade supply chains in the last year, with issues including route congestion and blockages, manufacturing shutdowns, a deficit of skilled labour, a global shortage of key logistics components, a lack of space in warehouses, a spike in transportation costs and substantially increased demand for goods around the world, post-lockdown. As a result, countries have been looking at ways to relink broken chains. Last year, the African Union African Peer Review Mechanism 2020 highlighted Africa’s supply chain challenges and overreliance on foreign trade and suggested that the continent boost its manufacturing capacity to build a strong African supply chain that could not be weakened by global blockages.
With the rollout of COVID-19 vaccines, the world is eager to return to normal. However, the complexity of the challenges Africa was already facing—including poor infrastructure, high youth unemployment, rapidly increasing debt, and climate change—means that the region’s recovery is likely to be uneven and far behind much of the rest of the world. Moreover, of its 1.3 billion people, less than 8 percent of Africans have been fully vaccinated. Despite these obstacles, the region’s future remains bright: Its innovative youth are creating and utilizing technologies to improve livelihoods throughout the region, and leaders are using the economic recovery to rethink and reset development strategies instead of returning to the status quo. At the same time, Africa’s women and girls have emerged as influential and aspirational leaders not only within the continent, but for the world. Also, Africa is actively looking to leverage its collective power and impressive growth potential to collaborate with emerging external partners. In this way, this year’s Foresight Africa report will examine the most pressing issues facing the region in 2022. This year’s panel will feature high-level global experts to discuss critical issues for the region’s recovery, including policies for economic recovery, shoring up Africa’s public health systems, empowering African women and girls, addressing the impacts of climate change, harnessing technology for improved livelihoods, and exploring partnerships with emerging global players.
AfCFTA on track to lift 100 million Africans out of poverty by 2035 (The East African)
The AfCFTA market comes with many opportunities, some of which are highlight in this article: Consumer welfare gains; Attract investments; Job creation; Eliminate poverty; Income distribution.
What you need to know about the African Continental Free Trade Area (African Business Magazine)
The AfCFTA aims to reduce tariffs among members and covers policy areas such as trade facilitation and services, as well as regulatory measures such as sanitary standards and technical barriers to trade. As of 9 September 2021, 38 of the 54 signatories had deposited their instruments of ratification with the chair of the African Union Commission, according to the Tralac Trade Law Centre. The AfCFTA Secretariat, an autonomous body within the African Union based in Accra, Ghana, and led by secretary general Wamkele Mene, is responsible for coordinating the implementation of the agreement.
Understanding the AfCFTA: Guide for Small and Medium-Sized Enterprises in the ECOWAS Region, was created to help small business owners, traders and producers, especially women, in the Economic Community of West African States (ECOWAS) region understand how the African Continental Free Trade Area (AfCFTA) works so that they can be in a position to make the best use of the business opportunities that can be found within the AfCFTA, including trading more easily across the continent and adding value to goods and services. The guide was produced by the ECOWAS Commission with support from UNDP.
International trade experts, Appiah Kusi-Adomako and Dode Seidu, have called on the private sector to familiarize themselves with the rules of origin regime under which AfCFTA trading is permitted. According to them, adequate knowledge of the rules of origin would help manufacturers and traders in the private sector position themselves adequately to benefit from the free market. Rules of origin are, in international trade, legal standards supporting the differential treatment of some products based on their country or region of origin. In the case of the African Continental Free Trade Area, because party states have made substantial tariff concessions that hitherto, were key contributors to national revenues, the experts say rules of origin are of utmost essence for intra-regional trading.
“AfCFTA has allowed us to export to a wide market duty-free, quota-free. When you learn and understand the rules and their dynamics, it would help you know where you source your raw materials from, and what kind of processes you need to add to it to qualify for export under AfCFTA without
How does the East African region achieve a full economic recovery from the impact of the pandemic while also building toward a more globally-competitive and sustainable future? As the only region in Africa to avoid a recession in 2020, East Africa is poised for strong growth despite ongoing disruption from the pandemic. While the exact level of threat posed by the newly-discovered Omicron variant of COVID-19 remains to be seen, the reaction from the global community – travel restrictions, potential lockdowns – could have a severe impact on the region’s economic fortunes. For organisations and business leaders in the region, the emergence of new unknowns and potential disruptions should not distract from the urgent task of recovery following an immensely difficult near-two year period. In particular, four key priorities could enable businesses to accelerate their recovery and achieve greater resilience against future disruptions:
Since the 2008/2009 global financial crisis, industrial policy has been widely celebrated as having become fashionable again.
Four industrial policy regimes have been applied across most African countries at different points since independence. The first was the import substitution. This refers to trade and industrial policies that encourage domestic production to reduce dependence on foreign imports. The second is a market-led regime. Here policies ranged from currency devaluations, privatisation, trade liberalisation to financial sector liberalisation. This regime brought about a decisive shift of power from ‘spending ministries’ to ‘budgetary ministries’. The third regime was the export-first industrial policy. This has been dominant over the past two to three decades. It has been most visible through special economic zones and the encouragement of firms in Africa to link up to high-end global markets. This linkage was most pronounced in the apparels sector. The fourth regime was the domestically-oriented industrial policy. It has become increasingly visible over the past decade. It involves protection of domestic producers and the use of public procurement. Public procurement is used to encourage domestic consumption of locally procured goods (through Made In Campaigns).
Uganda, Rwanda and Kenya recently increased import duties on used clothes and then banned their imports. Other African countries have been using public procurement to secure domestic markets.
Top Five Infrastructure Projects Underway in West Africa (Energy Capital & Power)
Over the course of 2022-2023, west African countries are aiming to consolidate a post-COVID-19 economic recovery on the back of stronger energy prices and increasing flows of Foreign Direct Investment. But in order to meet robust growth forecasts and the demands of a young and rapidly growing middle class, various countries throughout the region are investing in major infrastructure upgrades to boost connectivity and further improve the overall competitiveness of each country’s economy. There are significant projects taking place in west Africa in established oil and gas producing markets such as Ghana and Nigeria, as well as emerging producers from the MSGBC Basin.
China helps advance technology in Africa (Global Times)
China has set a milestone in its technological commitments to Africa, with tech giant Huawei working with Zambia's mobile telecom operator MTN in a pilot program to roll out the African nation's first 5G network. Chinese technology offerings have played an indispensable role in developing the digital economy in the Africa, observers said, citing decades of sound China-African friendship as underpinning the popularity of Chinese-developed technologies in the continent.
Technologies and services that are crucial for digital prowess will be a pivotal area of cooperation between China and African countries, as the COVID-19 pandemic has impeded trade flows and increased the need for digital services. For Africa, this means an urgent push to upgrade its digital infrastructure, Song said, and China-Africa ties, adding to Chinese tech firms' established presence in the continent, makes Chinese offerings prioritized choices in the local markets.
Strategy and ambition: In Wang Yi visit, China’s long Africa game (The Indian Express)
When Chinese Foreign Minister Wang Yi visited Eritrea, Kenya, and Comoros in the first week of January as part of a five-nation tour that also included Maldives and Sri Lanka, he was observing a 32-year-old Beijing ritual of visiting Africa at the beginning of every year. In fact, China’s links with the continent go back farther than the last three decades.
For a dozen years, China has been Africa’s biggest trading partner. Two-way trade in 2020 was $ 187 billion, according to the ‘China-Africa Annual Economic and Trade Relationship Report 2021’, released last September. The balance of trade is heavily in favour of China.
According to the report, China invested $ 2.96 billion in Africa in 2020, an increase of 9.5 per cent over 2019, making it one of the largest investors in Africa. Data collated by the China-Africa Research Initiative of the Johns Hopkins School of Advanced International Studies shows Chinese FDI stock in 2019 totalled $ 44.4 billion, ahead of the United States.
When he was running to win the White House, President Joe Biden’s campaign committed to implement a “bold strategy” toward Africa, and one that would be based on a “mutually respectful engagement” and a reinvigorated diplomacy, if elected. Indeed, the campaign was the first ever to outline how it would promote the interests of the African diaspora in the United States.
The November visit by Secretary of State Tony Blinken to Kenya, Nigeria, and Senegal advanced an important set of priorities for Biden’s Africa policy: COVID-19 recovery, combating climate change, support for democracy, and greater trade and investment. Blinken’s announcement of an African leaders’ summit in late 2022 will help to galvanize progress on implementing the Biden Africa agenda.
Important trade and investment issues remain to be addressed. Negotiations on the U.S.-Kenya free trade agreement, started under the Trump administration, should be resumed given the significance of Kenya to the United States as a commercial and strategic partner. This issue went unaddressed when presidents Biden and Kenyatta met in the Oval Office in October, and during Blinken’s November visit to Kenya.
Pandemic Drives Need for Technology among SMEs but Barriers Remain (World Economic Forum)
A survey by World Economic Forum indicates that the COVID-19 pandemic has increased demand for more adoption and integration of digital technology among small and medium sized enterprises (SMEs). However, they face numerous barriers to adopting technology at a critical time of need. While 97% of global companies have accelerated adoption of technology to get through the pandemic, according to Forbes, Forum’s survey indicates that only 23% of SMEs were able to dedicate resources to new digital tools. SMEs are still scrambling to meet mandated health and safety measures, threatening their ability to stay operational.
“Having a better understanding on how COVID-19 is impacting SMEs is critical to the world economy,” said Lucas Camara, Executive Director of the Centre for the Fourth Industrial Revolution, Brazil.
Climate Failure and Social Crisis Top Global Risks 2022 (World Economic Forum)
Climate risks dominate global concerns as the world enters the third year of the pandemic. According to the Global Risks Report 2022, while the top long-term risks relate to climate, the top shorter-term global concerns include societal divides, livelihood crises and mental health deterioration. Additionally, most experts believe a global economic recovery will be volatile and uneven over the next three years.
Pandemic has accelerated air transport digitalisation tech investment (Engineering News)
Multinational air transport information technology (IT) provider SITA’s ‘Air Transport IT Insights 2021’ report states that 84% of airlines and 81% of airports expect to spend the same or more on technology this year, particularly on automation of passenger processing. Despite IT budgets having been largely flat in 2021, airport and airlines executives are betting on technology to support their recovery from Covid-19, with spending on digitalisation and sustainability as key priorities to 2024.
What It Means to Support a Waiver of COVID-19 Vaccine Patents (The Regulatory Review)
The Biden Administration should exert international and domestic pressure to waive COVID-19 vaccine patents. “We can no longer rely on these big superpowers to come in and save us.” These words of biotechnologist Emile Hendricks capture the sentiment of countries unable to pay for the same quantities of COVID-19 vaccines as wealthier countries. In Africa, Hendricks and others are currently working, with backing from the World Health Organization (WHO), to reverse-engineer the Moderna COVID-19 vaccine because the pharmaceutical company has not released the intellectual property rights for its vaccines.
The Office of the United States Trade Representative (USTR)—the executive office that negotiates international trade and investments—has not pushed for an internationally proposed waiver of vaccine patents. South Africa, India, and other countries proposed such a waiver in 2020 at the World Trade Organization (WTO)—an international body that regulates international trade—but the USTR has yet to support the patent waiver as it was initially proposed. Nor has the office engaged in negotiations with the waiver’s opponents, such as the European Union.
Although the WTO conference was postponed, the Biden Administration can still push for a virtual general-member meeting at the United Nations (UN). General members at the UN can pass non-binding international recommendations by majority vote. The UN general members cannot waive the vaccine patents like the members of the WTO can, but a UN meeting could highlight the waiver debate and increase international pressure on countries that oppose the waiver.
The start of a new year is often a time to reflect and reassess. As the pandemic stretches into its third year, apprehension over the health crisis and the associated economic uncertainties is proving hard to shake.
Notwithstanding the impressive efforts of the Institut Pasteur, for now, Africa remains reliant on COVID‑19 vaccine imports and donations. The most immediate priority must be to guarantee predictability in vaccine deliveries—including through COVAX and the African Vaccine Acquisition Trust (AVAT). Funding will also be needed to ensure that Africa’s health systems can vaccinate the local population swiftly as new supplies arrive, including through outreach efforts to reiterate the importance of vaccines and reduce misinformation and vaccine hesitancy. Beyond vaccines, the region requires access to tests, treatments, and protective equipment.
But we must not let efforts to meet urgent needs come at the expense of future needs. Boosting resilience for the future is also a priority—including the region’s capacity to provide for itself, against COVID‑19 or any other disease that may arise in the future. Without predictable and reliable vaccine supplies, for example, health authorities are often forced to react at short notice to accept doses, often with limited shelf lives, greatly complicating delivery logistics for already-stretched health systems. In short, true resilience in Africa cannot depend on the repeated generosity of the international community. It requires scaled-up local manufacturing capacity and strengthened regional supply chains.
Africa vaccinating Africa is necessary—and it is achievable.