tralac Daily News
A new report on ‘The role of gas in South Africa’s path to net-zero’ argues in favour of a pathway based on the importation of liquefied natural gas (LNG), which it describes as “optimal” because it minimises the risk of stranded assets and gas infrastructure lock-in post-2040. In addition, such a pathway is less complex and capital intensive than ones based on the possible exploration and development of domestic gas fields and/or the building of a pipeline to import gas from northern Mozambique.
Google Africa’s economic recovery initiatives aim to benefit SMMEs (Eyewitness News)
Google South Africa Director Alistair Mokoena said this week that Google was committed to partnering with the government and stakeholders to drive digital transformation and economic recovery.
A number of initiatives, programmes and business opportunities that will benefit SMMEs and start-ups in South Africa have been announced by Google. They are part of a slew of initiatives the multinational company has already committed to Africa to help boost economic growth. Google South Africa Director Alistair Mokoena said this week that Google was committed to partnering with the government and stakeholders to drive digital transformation and economic recovery. “Our goal is to help SMMEs recover as they are the drivers of our economy and help South Africa grow and thrive,” he said. Google’s investments in the country focus on education, non-profit organisations and small businesses. “Google has assisted over six million SMMEs across Africa to digitise through Google Business Profiles and other Google products.”
Dube TradePort opens mini factories for SMMEs (Engineering News)
The Dube TradePort Special Economic Zone (SEZ) has opened a R90-million mini-factory complex development aimed at supporting small, medium-sized and microenterprises (SMMEs) requiring light manufacturing, assembly and warehousing. The SEZ’s development team had identified an opportunity to enable small and medium-sized enterprises to access the world-class infrastructure and support services available within the SEZ, which had largely been reserved for established businesses.
A shrinking domestic market, declining production, weak production sales, a smaller contribution to the economy, increasing joblessness, cheap imports and low investment levels are just some of the issues faced by South African businesses in the metals and engineering (M&E) sector. The knock-on effects are felt throughout the economy due to its role as supplier and customer into the auto, motor, mining, construction and other manufacturing sub-industries, according to the Steel and Engineering Industries Federation of Southern Africa (SEIFSA)
“Manufacturing companies play an integral part in the supply chain of the South African economy and the sector will struggle to recover without support. The sector already relies heavily on demand from government projects to boost its production and sales, especially for products such as steel and other downstream products. This is why the government must speed up the implementation of its infrastructure investment plan and reforms across state-owned enterprises (SOEs) as the lack of progress on these and other projects is delaying the revival of our economy,” says Lucio Trentini, the CEO of SEIFSA.
Investigators at the US International Trade Commission (USITC) have found “reasonable indication” that imported SA lemon juice materially injures the US industry, the body said in a statement, opting to deepen anti-dumping investigations. If dumping is found in the US and duties are imposed, the excess SA volumes will be forced to move to smaller markets, further suppressing prices and increasing the probability of anti-dumping actions in those markets. Key markets for SA citrus include China, India, the Philippines, Japan, Vietnam and the EU. But the US is the biggest aggregate market for SA lemon juice. The initial investigation kicked off in December after US citrus juice giant, Ventura Coastal, one of only two US producers of lemon juice, alleged unfair competition. It called on authorities to impose anti-dumping duties, or protectionist tariffs, on imports of the product from SA and Brazil. After an exhaustive hearing in January and numerous consultations with the prices of individual suppliers and stakeholders, specialist investigators in a variety of fields, including the body’s commissioner, Jason Kearns, voted last week in the preliminary phase to go ahead with an anti-dumping investigation.
US lobbying: Kenya fights to preserve Trump’s trade deal (The Africa Report)
For all his protectionist tendencies and disparaging remarks about Africa, former President Donald Trump managed to raise hopes through his launch of trade talks with Kenya. The US leader announced his intent to negotiate a free trade agreement (FTA) in February 2020 following his White House meeting with President Uhuru Kenyatta. Six months later, America’s trade representative Robert Lighthizer and Kenya’s cabinet secretary for trade Betty Maina formally launched negotiations. The US was looking to move beyond its two-decade-old African Growth and Opportunity Act (AGOA) duty-free scheme.
Inside Kenya’s multibillion scrap metal underworld (Business Daily)
As Nairobi Expressway takes shape with finishing touches, a metal fence is being erected at sections of the Sh67 billion road; in what would be every scrap metal dealer’s dream if a ban on the trade was not in place. A lucrative scrap metal trade is funding vandalism that had become so daring the culprits are filling away at public roads and carting away anything made of steel including lampposts, road barriers and even a footbridge. A spot check by the Business Daily along the busy Haile Selassie Avenue near Muthurwa Market in Nairobi shows the barricade that separates lanes moving in opposite directions has been torn away, and now pedestrians cross the street at undesignated points oblivious of the dangers of speeding cars. The rods that would have acted as restraints are clipped from the root, it’s hard to tell there was ever a barrier in some sections. All that is left of a nearby footbridge linking Muthurwa Market to the opposite side of the road is an ugly skeleton –only with most of its bones missing.
Digital shilling to cut currency printing costs (Business Daily)
Kenya can make a significant saving in the cost of printing currency with the adoption of a virtual shilling, the central bank has said ahead of a public debate over the proposed rollout of its digital currency. The CBK’s most recent currency printing contract, awarded to British security printer De La Rue in 2018 for the new generation banknotes, was worth £85 million (Sh13.08 billion) over three years. The initial batch of the notes, delivered in 2019, cost the monetary regulator £19 million (Sh2.9 billion), with additional printing expected to fill the full quota and replace worn-out notes. The savings, the CBK added, would however be weighed against the additional administrative costs it would incur to manage the virtual cash, known as a Central Bank Digital Currency (CBDC).
Cash circulation hits record Sh253bn (Business Daily)
Cash circulating outside the banking system hit an all-time high of Sh253.4 billion in December last year as Kenyans went into the festive period. Data published by the Central Bank of Kenya (CBK) shows that the metric which is a blunt measure of the economic times of a country grew by Sh14.8 billion (6.2 percent) from Sh238.6 billion. The rising value of cash outside the banking system is an indicator of economic recovery as Kenyans increased their spending for December and reopening of schools for the third term. Improved consumption brought by increased confidence and income as a result of new hirings and removal of containment measures aimed at combating the pandemic have lifted the economy recover thereby increasing peoples’ disposable income. “There is continued optimism about business activity and economic growth prospects for this year attributed to continued recovery of key sectors supported by government stimulus programmes.” Said the Central Bank in the monetary policy committee statement.
Why the emissions trading system is crucial for Kenya (Business Daily)
The call to take action against global warming is only getting louder, driven by the havoc in countries that have been on the receiving end of erratic weather patterns that endanger human life as well as property and adversely impact economies. The clarion call is for all countries to join forces to reduce emissions and keep global warming below the 1.5 degree celsius target which portends catastrophic effects if exceeded. Kenya has heeded the call and ahead of the UN Climate Change Conference held in Glasgow in late 2021 (COP26) and submitted its updated national climate change action plan containing its Nationally Determined Contributions (NDCs). Kenya’s updated NDCs target abatement of greenhouse gas emissions (GHG) by 32 percent which is an increase from the previous 30 percent target by 2030 in the energy, transportation, industrial processes, agriculture, land use, forestry and waste sectors.
Uganda, Kenya set up depot to unclog Malaba border (The East African)
Kenya and Uganda will build a marshalling yard at Malaba border to decongest one of the region’s busiest transboundary crossings. This was announced by officials who admitted the congestion had become an added non-tariff barrier to trade between the two countries. Kenya Ports Authority (KPA), Kenya Revenue Authority (KRA) and Uganda Revenue Authority (URA) agreed to speed up construction of the yard to match improvement in paperless cargo clearance.
“URA is reviewing its processes to increase trade volumes and to achieve that, KPA and KRA remain critical partners by ensuring clearing agents within EAC have been granted the rights to relocate and carry out their duties in any of the partner states as part of a strategy to improve flow of goods and curb dumping,” said Mr Musingizi.
According to the Mombasa port and Northern Corridor service charter, use of the Single Customs Territory (SCT) system and adoption of paperless transaction as a result of Covid-19 pandemic, traders are saving up to $300 per transaction through joint clearance of cargo by EAC partner states at Mombasa port. KPA is already working on plans to speed up construction of the Malaba facility.
Uganda’s central bank on Monday said the country’s economy is on a strong rebound after the easing of COVID-19 restrictions that were closing out some sectors. Bank of Uganda in a monthly monetary policy statement for February said between the months of October 2021 and January 2022, high-frequency indicators showed that the economy was on a recovery trend. “Domestic demand is making a strong comeback as COVID-19 related restrictions are eased, adding to the gains of robust external demand,” the statement said. The bank said the outlook of economic growth is more positive than earlier projected since the recovery, and signs that the effect of the Omicron outbreak has been relatively small. Real Gross Domestic Product is projected to grow by around six percent as domestic demand recovery broadens.
Kenya Tanzania bilateral trade hit USD 905.5 million in 2021 for the period January – November 2021 according to the Central Bank of Kenya. This was highlighted during the EABC Trade Facilitation Forum at Namanga One-Stop Border Post. Speaking at the Forum, Mr. John Bosco Kalisa said “Kenya imports from Tanzania stood at USD 501. million and exports USD 403.9.” He applauded President Samia Suluhu Hassan and President Uhuru Kenyatta for resolving Non-Tariff Barriers resulting in better trade ties.
Trade minister Lucia Iipumbu said micro, small and medium enterprises (MSMEs) are the roots of many economies around the globe and would play the same role in Namibia if supported and developed. She said these small businesses could eventually grow into larger enterprises that would contribute greatly to the country’s gross domestic product. Iipumbu made these remarks on Friday at the launch of the Know2Grow (K2G) initiative spearheaded by the Namibia Investment Promotion and Development Board (NIPDB). K2G is a regional knowledge dissemination initiative for MSMEs focussing on financing and market access for sectors such as agriculture, horticulture, and food processing. The trade minister noted the decision to start the K2G in the southern part of the country as key as the ministry had observed low participation by businesses in the southern regions (Hardap and Kharas) in funding and training initiatives rolled out in the past two years.
IFC and Zimbabwe’s insurance regulator, the Insurance and Pensions Commission (IPEC), today announced a partnership to create a market for agricultural insurance products in Zimbabwe to protect smallholder farmers from weather-related crop damage and other shocks. Through the partnership, IFC will assess the risks smallholder farmers face, how they are coping with those risks, and will gauge the farmers’ appetite for agricultural insurance to protect their livelihoods. IFC will also help IPEC develop a regulatory framework and enabling environment for agricultural insurance and determine the features of insurance products appropriate for Zimbabwe’s farmers
Agriculture is a significant contributor to Zimbabwe’s economy, employing almost two-thirds of the country’s working population and contributing about eight percent to GDP. However, there are currently no insurance products in the country specifically designed to protect smallholder farmers.
Nigeria’s population is expected to hit 264 million people in 2030 even as food inflation continues to rise and food prices skyrocketing. Gilbert Ekugbe writes on the need to address the challenges hindering the free flow of healthy food from farm to table. Apart from climate change and the prevailing COVID-19 pandemic that have ravaged the global economy, Nigeria’s agricultural value chain is currently hindered to meet the nation’s food needs. Poor farming conditions, lack of technical know-how, poor seedlings, insecurity, and absence of Good Agricultural Practices (GAP), are among the multiple factors that should be addressed if Nigeria would be liberated from food importation.
The APP (2016-2020) deliberately designed to end decades of failed policies and create a sustainable plan for the advancement of the agriculture sector has long expired. And with less than 18 months to be in office, the Minister of Agriculture needs to act swiftly to develop a new APP or have a consolidated APP for (2021-2024) as recommended by the National President, All Farmers Association of Nigeria (AFAN), Mr. Kabir Ibrahim. Ibrahim expressed doubts if a new APP would be developed due to the limited time the present administration has in office.
The International Finance Corporation (IFC) and the World Bank have begun to work with the Government of Nigeria to develop a domestic market for carbon capture, utilization, and storage for industrial emissions - an area that could accelerate the energy transition and help Nigeria reach its emissions targets. The initiative will produce a nationwide atlas of CO2 emissions sources and potential sites for underground sequestration. IFC will work with the government to identify the most promising sectors and private companies that can pilot new technologies for capturing, using, and storing carbon. In parallel, the World Bank will collaborate with the Nigerian Government to outline policies and regulations that can accelerate the technologies’ uptake while helping the local CCUS industry meet international standards. The project is funded by the World Bank’s CCS Trust Fund under the Energy Sector Management Assistance Program (ESMAP). The Trust Fund is supported by the Governments of the United Kingdom and Norway.
Biodun Dabiri is a titan in the Nigerian banking & finance sector and has worked as a chartered accountant, an investment banker, a corporate finance specialist, a stockbroker, as well as a pension fund manager. As a result of his extensive experience, he is an asset to many companies where he sits on their board. He is the Lagos State Government nominated director on the Lekki Port board where he serves as chairman. He spoke to Ugo Aliogo recently on Lekki Port. Excerpts
Before the Board of Lekki Port was constituted, I spent some time with the original promoters of the project (Tolaram) to understand the complexities of the project especially from the financing and stakeholder management perspectives. I could see that truly, this was a unique infrastructure development endeavor, the type of which rarely succeeds in developing countries from a financing and economic contribution perspective. Being one of the single largest infrastructure investments in Nigeria with State and Federal Government equity contribution, it was clear to us that it had to be financed on a non-recourse, project finance basis, with financing principally from the international market thus freeing both Lagos State and the Federal Governments from any addition to its foreign debt profile. We were conscious of this financing model in structuring the deal. The economic impact for Nigeria is significant with high employment potential (about 170,000 jobs will be created from port operations alone). Substantial revenues will be generated in local and foreign currency from taxes, royalties, and duties. All these, in addition to other direct and ancillary business employment and revenues, have been projected to be valued at more than $400 billion in the medium term, giving financial viability assurance throughout the 45-year concession. For Lagos State, Lekki Port is located strategically to also serve the Lekki Free Trade Zone, which is the flagship of the Lagos State Government’s industrial development initiative.
The Ethiopian Railway Corporation (ERC) is undertaking new studies to determine the feasibility of building railway networks linking Ethiopia to Berbera, Lamu, and Assab ports. It is a part of the country’s port diversification plan and surfaces three years after Prime Minister Abiy Ahmed (PhD) signed agreements with neighbouring countries, including Sudan and Somalia, to develop ports as a gateway for the Africa’s most populous landlocked country. While linking Ethiopia with more ports through railway expected to avert the overdependence of the country on ports of Djibouti, which handle over 80 percent of its imports, the corporation is undertaking the pre-feasibility studies using internal capacity.
According to Behailu, for the railway projects that will link Berbera, Assab and Lamu ports, diplomatic efforts are underway to secure consents of neighboring countries. “The railways will link the ports with major economic corridors in Ethiopia. Ethiopia has a big economy and cannot depend on one port. Ethiopia is also a huge market for the ports,” said Behailu, adding “The new cross border railway lines will focus on linking Ethiopia with the red sea, gulf of Eden and the Indian Ocean. All ports in this area will be linked to Ethiopia via a railway line. We have various sources of finance for the studies.”
Region starves as Tanzania seeks wider market for its surplus food (The East African)
As the African Union endorsed 2022 as the Year of Nutrition last weekend, seeking to strengthen the continent’s resilience in food security, the UN was waving the red flag about biting hunger in the Horn of Africa, where at least 13 million people are starving. In fact, 50 million people in the larger East African region are at risk of starvation, according to experts.
The UN agency noted that three consecutive failed rainy seasons in Ethiopia, Kenya and Somalia, “have decimated crops and caused abnormally high livestock deaths, while shortages of water and pasture are forcing families from their homes and triggering conflict between communities”. “Harvests are ruined, livestock are dying, and hunger is growing as recurrent droughts affect the Horn of Africa,” said Michael Dunford, regional director of the WFP Regional Bureau for Eastern Africa.
With the Zambezi region seen as a “Gateway to SADC” in unlocking the economic potential of the area, Zambezi governor Lawrence Sampofu has joined other voices for the Katima Mulilo Border Post to be upgraded to a One-Stop Border Post (OSBP). This would facilitate the free movement of goods to avoid bottlenecks at the border, he observed. Last week, international relations minister Netumbo Nandi-Ndaitwah said in order to facilitate trade between Namibia and Zambia, the government, through SADC programmes, recognised the Zambezi region as a gateway to the regional market through the Katima Mulilo and Ngoma border posts. The Zambezi region is the gateway to SADC countries such as Angola, Botswana, the Democratic Republic of Congo (DRC), Zimbabwe, Malawi and Tanzania.
As countries around the world are being urged to “build back better” from the global pandemic, one African country is embarking on an exciting modernisation journey, embracing digitisation and automation to improve the lives of its citizens and appeal to foreign investors. Ghana unveiled its recipe for success at the UN, where it was re-elected as a non-permanent member of the UN Security Council earlier this month. Ghana’s vice-president, Mahamudu Bawumia, delivered an address on combating the pressing matter of urban warfare and outlined a four-pronged approach to ensuring citizens get the best possible protection from the ravages of urban conflict. In addition to calling for increased collaboration between states and better contingency planning to fight terror groups such as Boko Haram in West Africa and Isis in the Middle East, he called on governments to use the power of automation and digitisation to improve citizens’ lives and enable them to resist being attracted to supporting such groups. Bawumia told the UN he and Ghanaian president Nana Akufo-Addo had both identified modernisation as the best way of improving rural opportunities and making urban areas safer.
Morocco – playing a key role in the region (EU Reporter)
All agree on the urgency for the African continent to address the multiple challenges it faces, taking full advantage of its potential and resources, and innovative partnerships with the EU in particular, in a common quest for shared prosperity.
Since the first Summit of 2000 in Cairo, the relationship between the two continents has continued to evolve. While the EU has expanded from 15 to 28 – and then 27 – members, Africa has also changed profoundly. It has become a crossroads of opportunities, making it necessary to recast the partnership between the two continents. A redesign in this case would be the name of a bold and ambitious change of paradigms, with the ultimate goal of moving away from the outdated and reductive “donor-recipient” and “student-prescriber” schemes. Among the countries most committed to this line is Morocco. Both in its closeness to the EU, forged over more than 50 years of cooperation and dialogue, and its commitment and anchorage in its African continent, Morocco is at the crossroads of all the paths of the EU-AU partnership. Morocco’s multi-faceted projection on the continent rightly presents a cutting edge and an innovative and pragmatic model on which the EU-AU partnership could usefully be built.
On the African side, the approach of this Summit is pragmatic. African countries, led by Morocco, argue that the partnership must go beyond meetings and political declarations to become more involved in concrete and tangible action that meets the expectations of citizens. The goal is to establish a Euro-African space of peace, stability and shared prosperity. It is in this spirit that Morocco, at the Kigali Ministerial Meeting of October 2021, supported the Rwandan proposal to create a Ministerial Committee to monitor the implementation of commitments. Whether it is renewable energy, industrialization, support for youth empowerment, or migration, it is not a matter of prioritizing objectives, but of pursuing them together.
The African Continental Free Trade Area is a game-changing development for Africa; it links an economy worth $3.3 trillion and a market of close to 1.4 billion people. The AfDB is strongly supporting that, says Akinwumi Adesina, president of the African Development Bank. “[But] I don’t want the African Continental Free Trade Area to just be an area for trade. And that’s because we’ve been trading forever, right? The issue is what are we trading? What value are we adding to what we’re trading? And how is that helping to increase economic growth and development? That’s why the African Development Bank supports the African Union Commission on industrialisation. We must develop regional value chains, whether it’s for cotton for textiles and garments or pharmaceuticals, electronics, automobiles, food and agriculture... The AfCFTA is an incubation zone for us to develop and industrialise. We must industrialise so that Africa’s share of trade globally is not just two percent. We want to play globally, so why not start with viable and competitive, well financed, and – with infrastructure and finance – value chains?
The African Union Commission (AUC) welcomes an $11.48 million grant from the AfDB’s African Development Fund to strengthen the delivery of Agenda 2063. Agenda 2063 is the African Union’s vision for “an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena.” The grant will contribute to the Institutional Capacity Building for the African Union project. A portion of the funds will be allocated to the AUC’s Disaster Risk Reduction practices, and Climate Change Adaptation mechanisms, while support for women will include developing the Commission’s Gender and Youth Mainstreaming Guidelines and Scorecard and related activities over and above the support towards the AU’s institutional reform. Approval for the grant, from the Fund’s regional public goods window, came a few days ahead of the 35th Ordinary Session of the African Union Assembly, which was held in Addis Ababa, Ethiopia.
The smooth movement of goods and people across countries’ borders is vital as it removes bottlenecks that hinder intra-regional trade. That is why the Southern African Development Community (SADC), together with its tripartite partners in the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC), is working flat out to have legally binding standards to be met in all Member and Partner States to ensure minimum disruption of movement of goods and people during COVID-19 period.
The COMESA, EAC and SADC Member and Partner States represent 53 percent of the African Union membership, constitute over US$1.4 trillion Gross Domestic Product (GDP) which is roughly 60 percent of African continental GDP and a combined estimated population of 800 million, making the tripartite region an important building block for the implementation of the Africa Continental Free Trade Area. Road transport agreements and model laws/principles are among the guidelines that have been developed and adopted to ensure a coordinated and harmonised transport system to ease the movement of people and goods across the regions. The COMESA-EAC-SADC model laws and regulations for Vehicle Load Management (VLMA), Cross Border Road Transport, Road Traffic, Road Traffic and Transport Transgressions and the Transport of Dangerous Goods by Road were developed and approved by Tripartite Committee of Ministers in June 2021. This means that transporters moving people or goods across the tripartite region have to recognise and abide by these laws to ensure their smooth movement. The model laws are coordinated and managed through the Tripartite Transport and Transit Facilitation Programme (TTTFP) funded by the European Union.
DR Congo on the threshold of entry as 7th EAC member (The Citizen)
Despite the security challenges in its eastern jungles, the DR Congo is set to become the newest member of the East African Community (EAC). The resource-rich country in the heart of Africa will join the six-nation bloc later this month: earlier than previously thought. The likelihood of the EAC becoming a seventh member came on the heels of the recent conclusion of detailed negotiations in Nairobi. “The negotiations were concluded and a negotiation framework matrix jointly adopted,” a source at the EAC said. Adoption of the matrix discussed for two weeks in Nairobi last month technically clears the road of the country’s entry into the bloc. Admission of a new member is the prerogative of the EAC Summit of Heads of State, the supreme organ of the Community.
The Principal Secretary in the State Department of East Africa Community, Ministry of East African Community and Regional Development of Kenya, Dr. Kevit Desai said the EAC Partner States will soon adopt the EAC Pass to ease the movement of East Africans amid the pandemic during the EABC Trade Facilitation Forum held at Taveta/Holili One-Stop Border Post. Dr. Desai lauded the strong leadership of H.E. Uhuru Kenyatta, President of the Republic of Kenya and Chair of EAC Heads of State Summit for bolstering the EAC regional integration agenda for businesses and East Africans to actualize prosperity. Dr. Desai called for collective efforts towards trade facilitation & value addition to boost manufacturing and urged East African businesses people to boldly tap into the markets of the Democratic Republic of Congo and the African Continental Free Trade Area (AfCFTA). On their part, the chairpersons of women cross-border traders stated un-harmonized measures on COVID-19 increase the cost of business operations citing the USD.10 antigen test on the Tanzania side while on the Kenya side is free of charge. Women cross-border traders also elaborated that EAC Simplified Trade Regime is not implemented as envisioned.
Countries in East Africa have commissioned major infrastructure development projects, including the East African Crude Oil Pipeline, the Lamu Port-South Sudan-Ethiopia-Transport (LAPSSET) Corridor, the Northern Corridor Infrastructure Development Projects, Standard Gauge Railway Projects the Ethiopian Grand Renaissance Dam, among others. With substantial investments running into billions of dollars, these projects present an opportunity to foster the region’s economic development while also increasing youth employment.
The East African Community (EAC) Common Market Protocol emphasises free movement of labour as one of the pillars for realising regional integration. However, with different qualifications offered by technical and vocational colleges in each of the countries, movement of labour with vocational skills has been a major challenge.
Entrepreneurs on unleashing Rwanda and Africa’s SME potential (The New Times)
There is a need for innovative solutions to unleash the African economy by supporting the private sector, SMEs and young business owners to create more jobs, emerging entrepreneurs have reiterated. According to Gilbert Ewehmeh, the coordinator of Accelerate Africa (AA), a new Pan-African think tank created by African Young Entrepreneurs two months ago to unleash Africa’s growth and recently launched in Rwanda, Africa is still lagging behind in employment, job creation and business financing.
The African Continental Free Trade Area offers employment and entrepreneurship opportunities for youth, but policymakers and development organizations must take steps to ensure the agreement reaches its full potential, experts have said. The framework has the potential to create more than 14 million new jobs by 2025 in the manufacturing sector alone. “We have to unleash African Economy by supporting startups so that jobs are created by Africans in Africa,” he said adding the new Pan-African entrepreneurs’ think tank seeks to create a new generation of economic leaders in infrastructure sector, agribusiness, energy, digital transformation, industrialization across the continent.
The Common Market for Eastern and Southern Africa (Comesa) has recommended that the US$2 000 threshold being charged to businesses on every consignment under the regional Simplified Trade Regime should be maintained at that figure. A Simplified Trade Regime (STR) is an arrangement implemented by Comesa member States to formalise and improve the performance of the small-scale cross border traders enabling them to benefit from the regional preferential treatment when importing or exporting goods within the region. The current STR threshold was adopted by the Comesa Council of Ministers in 2014. Recently, the Comesa secretariat conducted a study to review the suitability of the existing STR threshold of US$2 000 per consignment per crossing within the trading bloc.
“The Comesa Secretariat has conducted a study to review the suitability of the current Simplified Trade Regime (STR) threshold, which stands at US$2 000 per consignment, per crossing. “Specifically, the study was commissioned to review the current STR threshold value with a view to establishing a suitable level that is capable of effectively facilitating intra-regional trade in member States already implementing the STR and those that will implement it in future,” said Comesa in a statement.
The Regional Infrastructure Financing Facility (RIFF), an investment financing arm funded by the World Bank to support infrastructure development in the COMESA region is set to roll out its activities for 2022. Recently, the Project Implementation Unit of the RIFF held a three-day orientation workshop in Siavonga south of Lusaka to discuss the work plan and review the guidelines, processes and procedures that apply to the World Bank and COMESA Secretariat. The objective of the interaction was to enable officers and partner divisions and units from COMESA Secretariat to have a common understanding of the RIFF implementation plan and the linkages. RIFF was launched in August 2020 and has three components which include a US$325 million credit facility for Project and Infrastructure Finance. This will provide long term finance to infrastructure projects that meet the development impact criteria and it will be administered by the Trade and Development Bank (TDB). The second Component is the COVID Infrastructure Sector Small and Medium Enterprise (SME) Response with US$75 million which will facilitate access to debt financing to renewable energy.
ICT poised to oil regional integration (Times of Zambia)
According to the organised crime in Southern Africa report, which was published before the construction of the new Kazungula Bridge, speed boat owners on both the Zambian and Zimbabwean side have been assisting smugglers to load Zimbabwean Ivory, cigarettes, liquor and fish to sell to Zambians. Zambians in turn have been supplying Zimbabweans with the much needed foreign exchange such as United States dollars and other convertible currencies, foodstuffs and toiletries and the transactions which are usually carried out at night. Other goods that have also been smuggled are firearms, audio-visual pirated products, counterfeit medicines, cosmetics and cigarettes, fuel and counterfeit currencies as well as illicit drugs across borders of southern Africa. This tax evasion, which sometimes also involves under-invoicing, entails reporting a lower quantity, weight or value of goods to pay lower import tariffs, misclassification, in terms of falsifying the description of products so that they are misclassified as products subject to lower tariffs, improper declaration of the country of origin and bribing customs officials.
Prospects and challenges of de-dollarization in Africa (Businessday)
The crystal ball that foretold an eventual conglomeration of currencies in Africa into a single medium of exchange and store of value looks to now been accorded some attention. This is because some countries in the West African Monetary Zone (WAMS) – Gambia, Gambia, Ghana, Guinea, Liberia, Nigeria, and Sierra Leone have concluded a successful pilot scheme on the Pan-African Payment and Settlement System (PAPSS). Launched by the Afreximbank – the PAPSS has been around since July 2019 but was only recently commercially launched in Accra, Ghana on the 13th of January 2022. The interoperability of the PAPSS Platform is mainly focused on the promotion of trade within the continent especially with the existence of the African Continental Free Trade Area (AFCFTA) which has a market value of $3 trillion, there is a prospect for African countries to leverage the system to increase the demand for their local goods and services. This in turn will strengthen their respective currencies. The scheme will also bridge the gap in the erstwhile fragmented payments system that long existed on the continent with a renewed opportunity for deepened trade.
The Search for Sustainable Solutions to Debt Accumulation in Sub-Saharan Africa (Observer Research Foundation)
Like in some other regions of the world, the COVID-19 pandemic accelerated external debt accumulation in Sub-Saharan Africa (SSA). This could have massive, adverse impacts on growth as governments prioritise debt servicing commitments over key development expenditures such as healthcare and education. For the countries in SSA with relatively lower GDP, this could mean getting caught in a vicious cycle of low output and mounting debt. A path towards debt resolution, therefore, is important for long-run sustainable development. This paper examines the rise in debt in the countries of SSA and identifies trends, outlines drivers, and explores the impacts on development. Using the cases of Angola, Kenya, and Zambia, the paper evaluates the different triggers for debt accumulation and argues that immediate debt relief requires a heterogenous approach.
African and EU Businesses call upon the AU and EU Commissions to design programme aimed at promoting joint venture between African and EU businesses to transform African resources for continental consumption and exports. This would also include the development of an enabling environment, such as fast-tracking the conclusion of the AfCFTA Investment Protocol.
African and EU Businesses call upon EU and AU Member States to direct the AU and EU Commissions to design and implement robust programmes to strengthen the capacity of all the relevant institutions, in particular national, regional and continental levels private sector organizations, as well as in the education sector, involved in implementing recommendations emanating from the EABF.
The European Union (EU) is seeking to build strongly on its existing economic and trade relations with Africa. At the February 17 – 18th summit with African leaders, and the African Union, leading business enterprises and representatives from academic, civil society organizations and media will be present at the summit to discuss their ways of strengthening aspects of various issues relating to development in Africa. Long before this summit, EU members and business investors have been making consistent efforts at capitalizing on and exploring several emerging opportunities offered by the newly introduced African Continental Free Trade Area (AfCFTA), which provides unique and valuable access to an integrated African market of over 1.2 billion people.
Several reports indicate that the summit strives to bring Africa and Europe closer together through strengthening economic cooperation and promoting sustainable development, with both continents co-existing in peace, security, democracy, prosperity, solidarity and human dignity. It is against this backdrop that the two partners are determined to work together on a strategic, long-term footing to develop a shared vision for EU-Africa relations in a globalized world.
In the lead up to the sixth European Union – African Union Summit, small, rural farmers from umbrella organisations in Africa and Europe are calling for coherent policies that protect small-scale African and European agriculture. From climate issues to trade, Ibrahima Coulibaly, Morgan Ody and Sonia Vidal call for future relations to be built on mutual respect and societal needs.
The sixth European Union – African Union Summit will be held in Brussels on 17-18 February. On this occasion, as peasant farmers in Africa and Europe, we jointly express the urgent need to rebuild food sovereignty on our two continents. Today, people in Europe and Africa are still fed by peasant and family farming. Our small and medium-sized farms create jobs and provide a living for rural areas. When scientists agree on the urgency of a global agroecological transition to respond to the climate crisis and the collapse of biodiversity, it should be a shared priority to maintain large numbers of farmers practising diversified agriculture in all territories. However, for decades, deregulation policies and the opening of agricultural markets have weakened our farms.
The liberalisation of investments opens the door to massive land and water grabbing by multinational organisations or hedge funds against small producers.
Instead of supporting young people who would like to settle in the profession, governments promote false technological solutions like GMOs, digitalisation or robotics. The Economic Partnership Agreements between the European Union and the African Union countries are primarily responsible for this situation.
Europe Must Be Africa’s Partner of Choice | by Josep Borrell (Project Syndicate)
How trade facilitation can support supply chain diversity in a post-pandemic world (World Economic Forum)
After two years of a global pandemic, international trade is bruised and battered. The carefully tuned machinery we call the supply chain has become erratic, impacting all parts of the world. We overestimated the sturdiness of the system and underestimated the costs of dysfunction. While international trade remains resilient, its recovery will probably take an adjusted form. Emerging economies are bearing the brunt of the pandemic inflicted trade disruption. Countries that painstakingly invested in joining the international value chain producing textiles, machinery parts, electronic components and agricultural produce are feeling the pinch.
Stretched supply chains threaten job stability, downsize business expansion plans, reduce investment, and undermine government tax revenues in the very countries that can least afford to cushion the blow by supporting the private sector through to recovery.
We can counter this disruption by increasing our efforts to cut the unnecessary delays and red tape at borders that continues to cause frustration, generate unnecessary costs and affect livelihoods. What used to be considered an inconvenience, or the cost of doing business, risks terminally damaging developing nations competitiveness in supply chains. But a crisis can also be a catalyst for change and the sheer scale of this pandemic presents an unprecedented opportunity for reform. Large enterprises, realising the fragility of their production processes, are scrambling to rethink their operations. Boardroom executives are considering spreading risk among multiple production plants, multiplying component suppliers, shortening the distances between production and assembly facilities, and bringing their manufacturing closer to their customers.
As pandemic eases, LDCs face a long road to recovery (Trade for Development News)
Like many patients dealing with long-Covid, the road to recovery from the pandemic for low-income countries is long and arduous, but it is not insurmountable. The economies of LDCs are projected to grow at a higher rate of 4.9% in 2022 on the back of higher commodity prices and recoveries in agriculture and mining – but this is below the annual average growth rate of 5.5% seen between 2000 and 2019. Emerging market and developing economies need to reduce their reliance on commodity exports by diversifying their export and national asset portfolios. Low-income countries need policy measures to facilitate cross-border trade and investment which, combined with reforms “to improve business climates, human and physical capital, can help these countries generate the productivity growth needed to catch up to advanced-economy per capita incomes,” the World Bank notes. LDCs will also need help from the outside. Exploring trade financing opportunities to reduce the cost of doing business and boost exports will speed up recovery.
In an interconnected world, a pandemic can be overcome only when it is overcome everywhere – no one is safe until everyone is safe. Vaccination delays and supply shortages in protective equipment and treatments increase the possibility of the virus mutating. This undermines our ability to control the pandemic, even in highly vaccinated countries. And yet two years into the pandemic, vaccine doses are highly concentrated in rich countries. As of October 2021, only 0.7% of all manufactured vaccine doses had gone to low-income countries. Manufacturers had delivered 47 times as many doses to high-income countries as they had to low-income countries. Since its inception, COVAX, the UN-backed initiative dedicated to promoting access to Covid vaccines, has struggled to obtain doses. It recently passed the 1 billion doses delivered – half way to its goal of delivering 2 billion doses by the end of 2021. Indeed, AstraZeneca, Pfizer/BioNTech, Moderna, and Johnson & Johnson have delivered between 0% and 39% of their already inadequate commitments to COVAX in 2021. The Global Commission for Post-Pandemic Policy, meanwhile, estimates that while Asia and Europe will be able to fully vaccinate 80% of their populations by March 2022 and North America by May 2022, Africa will not reach 80% at current rates until April 2025.
A virtual workshop jointly organized by the World Intellectual Property Organization (WIPO), the World Health Organization (WHO) and the WTO on 28 February will provide an overview of particular COVID-19-related information resources. The workshop aims to enhance understanding of the characteristics, potential uses and limitations of particular information sources related to COVID-19. The workshop responds to the needs of policymakers and other stakeholders working on health, intellectual property and trade issues related to the pandemic, and is specifically targeted at them.
Speaking at the “Climate Change Priorities on Trade and Investment” webinar hosted by the government of Bangladesh on 14 February, Director-General Ngozi Okonjo-Iweala outlined her views on how climate priorities can be addressed through trade actions which prioritize the specific challenges faced by least developed countries and small island developing states. The WTO can play a key role in providing the support these countries need for a successful green transition, she declared.