tralac Daily News
Transnet, South Africa’s state-owned logistics company, has experienced significant operational disruptions in recent years; from senior leaders plundering the businesses resources during the State Capture years under former President Jacob Zuma (2009-2018) to a significant cyber-attack in July 2021 that led to several ports to declare force majeure. One standout operational impediment has been the ongoing theft of rail infrastructure across the length and breadth of the country. Hundreds of kilometers of copper line, track, and other general infrastructure have been stolen, costing the state billions in potential revenue. While the government and Transnet have promised to address the challenge, the issue persists and is likely to continue to be a significant obstacle in the years ahead.
The mining industry is in an exceptional position to make a bold pivot to a sustainable future, and environmental, social and governance goals represent the most significant opportunity for the mining industry to create long-term value, trust and sustainable growth, says assurance and advisory multinational PwC South Africa energy strategy and infrastructure director James Mackay. “The mining industry has rebounded from the impact of Covid-19 and is in an excellent financial position. Operationally, it has never been in a stronger financial position and the conversations now should centre on how to repurpose and rebalance mining. “National and global narratives say that the industry must change, and partners are key to this. However, there are concerns that the world and the industry are not dealing with the pace of change, as a disruption becomes exponential once past a tipping point in terms of policy and global shifts in markets,” he says.
However, if South Africa cannot fix its energy challenges, other economic interventions and the green energy transition will not succeed, says Mackay.
South Africa will support proposals to address the issue of marine litter and plastic pollution at the upcoming 5th session of the United Nations Environment Assembly (UNEA 5.2). “South Africa supports the proposal to mandate the Executive Director of UNEP to establish an Intergovernmental Negotiating Committee (INC) under UNEA to negotiate an internationally legally binding instrument on plastic pollution given the environmental challenges faced as a consequence of plastic pollution,” Minister of Forestry, Fisheries and the Environment Barbara Creecy said on Thursday.
South Africa will also request the inclusion of the recognition of the special needs and circumstances of Africa and that any potential internationally legally binding global agreement on plastics pollution must include the principles of equity and common but differentiated responsibilities and respective capabilities, in light of national circumstances.
“We will also stress the need for new, additional and predictable finance, including technology transfer, develop and deployment as well as capacity building to support developing countries, in particular Africa for its implementation,” the Minister said.
Covid logistic hurdles lock seven countries out of tea auction (Business Daily)
Seven countries are yet to resume trading at the Mombasa Tea Auction after their supplies were cut short by logistical challenges brought about by the outbreak of the Covid-19 pandemic in early 2020. The auction manager East African Tea Trade Association (EATTA) used to trade tea from at least 12 African countries before the pandemic but the number of participating states has fallen to five. The teas from Zambia, Malawi, Madagascar, Zimbabwe and DRC Congo are among those that have not been trading at the Mombasa auction for the last two years. The pandemic has had a negative impact on the movement of cargo to and from the Port of Mombasa, keeping out the commodity from other regions.
Ethiopia, which is the only country from the Horn of Africa region that has been supplying tea at the Mombasa auction has been on and off in the weekly trading.
Stakeholders from different sectors have validated the Food Safety Bill 2021 that is aimed at safeguarding consumers’ health and increasing Kenya’s produce access to the world market. The food safety bill, if passed, will create the Office of Food and Feed Safety Control, which will ensure compliance with international standards. The Bill aligns with the tenets of the World Trade Organisation (WTO) and the Codex- the internationally recognised food production and food safety standards established by the Food and Agriculture Organisation and World Health Organisation. The chairperson of the Inter-ministerial Taskforce Patrick Amoth said inadequate food safety is a significant contributor to the burden of disease in developing countries including Kenya and should be addressed as the food system develops. “The heavy burden of foodborne diseases imposes substantial economic losses to the individual, households, health systems and entire nations. Economic losses as a result of rejected food exports due to shortcomings in food safety are also often very significant,” said Dr Amoth.
In Kenya, the nationwide food quality and safety systems are legally controlled by various government agencies under different ministries using separate laws.
Food safety regulation agencies work under the ministries responsible for trade, industrialisation, health, livestock, fisheries and agriculture. However, the new body to be created by this Bill will rest these functions to a single body, avoiding duplication of roles.
Agribusiness, energy, housing investment can help Ugandan economy to grow (Engineering News)
Uganda could grow its economy, create jobs and strengthen its trade position in East Africa by increasing private sector investment in its agribusiness, energy and housing sectors, and by advancing business climate reforms, a report by the International Finance Corporation (IFC) and the World Bank has found. The ‘Country Private Sector Diagnostic’ (CPSD) report found that the energy, housing and agribusiness, namely fisheries, dairy and maize, sectors are among those that offer strong potential to address job creation and competitiveness challenges amid high population growth and urbanisation. However, to realise growth in these sectors, Uganda will need to continue advancing reforms and attracting private investment, the IFC and the World Bank say, while applauding Uganda for the progress it has made in liberalising parts of its economy.
Tanzania and the European Union (EU) have amicably resolved their differences and the latter would soon disburse €111.5 million ($126 million) in development financing for the country, President Samia Suluhu Hassan has said. Speaking yesterday during an interview on Deutsche Welle (DW) on Brussels, Belgium, President Hassan said the diplomatic relations between Tanzania and the EU date back to 1970s. She said the relations are now cordial. “It is true that our relations face some challenges during the past three or four years, but we have sat down and ironed out the differences. They [the relations] are now back to the same as they were before,” said President Hassan. She said with the relations back to normal, the EU has agreed to release €111.5 million in development funds that had been withheld during the period that the two parties had differed.
She said the EU was partly unhappy with Tanzania’s approach in a several areas, including in the Economic Partnership Agreements (EPAs) and the overall conduct of politics in the country at that time. “We had some differences in opinions. We were also looking at the EPAs and also some differences in ideology. Maybe, the EU had made a comment that we were not happy with but finally, we have ironed out and everything is back to normal,” she said.
How Tanzania can benefit from EPAs (The Citizen)
Tanzania needs economic intelligence and a large skilled negotiation team to ensure that the Economic Partnership Agreement (EPA) is concluded for mutual benefit, the business community and economists recommended yesterday. Those who aired their views were speaking to The Citizen ahead of a bilateral meeting between Tanzania and the European Union (EU) slated for the first week of next month to clarify and agree on the remaining contentious EPA issues under the EU-East African Community (EAC).The EPAs are trade and development agreements negotiated between the EU and African, Caribbean and Pacific (ACP) partner countries in an effort to boost trade by removing barriers to promote healthy competition in the EU market and lower prices for consumers. Economist and business expert Donath Olomi said Tanzania needed economic intelligence for it to come up with a thorough analysis on the country’s potentials and how to protect them. “We need to be very keen. Whatever decision we make today has an implication on our economy,” cautioned Dr Olomi.
Tanzania needs to upscale its production of strategic crops, such as soybeans, for the local and international markets - thus effectively making a headway into the lucrative Chinese market, former President Jakaya Kikwete (2005-2015) has said. Mr Kikwete challenged stakeholders to improve soybeans farming in Mbeya, Njombe, Ruvuma, Iringa and other parts of the southern highland regions to meet and expand the current annual exports of 300,000 tonnes to China.
“A hectare of soybeans yields up to one tonne, which means about 300,000 hectares could produce enough for the Chinese market. We need to work together to introduce more farmers into soybean farming,” he said, lamenting cases of agro-processing industries operating below capacity due to inadequate raw material supplies. Between 2017 and 2021, Agra worked with diverse partners to link farmers to input and output markets, increasing maize, beans and soybean production in Iringa, Njombe and Ruvuma Regions.
The chief executive officer of the Southern Agricultural Growth Corridor of Tanzania (Sagcot), Mr Geoffrey Kirenga, called on agricultural stakeholders to continue promoting the adoption of improved technologies to improve efficiency and quality of produce - and remain competitive.
Uganda has announced a two-year suspension of its membership from the International Coffee Organisation (ICO) in attempt to pressurise the organisation to address its concerns as a coffee producing country. Uganda has been trading its coffee under the 2007 ICO agreement, which stakeholders say does not favour farmers and other players. Some coffee producing countries have questioned the agreement, arguing that it only favours consuming countries with the interest of farmers, especially in regard to getting a premium price and obtaining better quotas, not catered for. Uganda Coffee Development Authority’s managing director, Mr Emmanuel Iyamulemye said: “Uganda does not support the two years’ extension of the International Coffee Agreement 2007, because Uganda’s concerns and interests have not been addressed in the new Agreement.” He said that suspending membership for two years will give Uganda a chance to use the resources to further enhance our coffee sector and focus on the aspirations of Coffee Roadmap to increase production to 20 million bags by 2025/30.”
The Ghana High Commission to Nigeria, has on Thursday announces its readiness to boost business opportunities with Nigeria. There has been a fuss between the Ghana Government and the Nigerian traders in Ghana when the Nigerian traders were asked to register their businesses with a minimum of $1 million.
Despite these disagreements, the Ghana Nigeria Business Council, GNBC, and Ghana Investment Promotion Center, GIPC, in during the 2022 CEO forum, themed: “Ghana & Nigeria Stronger Together, held in Abuja, announced its willingness to collaborate with Nigeria on expanding business ties since both countries have the largest economies with thr West Africa.
The Minister of Land Transport and Light Rail, Minister of Foreign Affairs, Regional Integration and International Trade, Mr Alan Ganoo, chaired, today in Port Louis, the first Inter-Ministerial Committee Meeting on Monitoring and Implementation of Free Trade Agreements (FTAs).
In his opening remarks, Minister Ganoo recalled that, back in October 2021, Cabinet agreed to set up an Inter-Ministerial Committee under his chairmanship in order to monitor the various FTAs signed by Mauritius with a view to maximising their benefits. He informed that Mauritius is signatory to some 10 FTAs with, among others, the European Union, the Common Market for Eastern and Southern Africa, and the Southern African Development Community.
Minister Ganoo underlined that, last year, Mauritius signed FTAs with Africa, China, the United Kingdom and India. All these FTAs, he stressed, provide great opportunities for the country and there is thus a need to devise appropriate strategies so as to increase our exports of goods and services, while attracting foreign investment in productive sectors. This, he added, will generate more foreign currency revenue and create quality jobs for the population.
Furthermore, he underscored that Mauritius exports some Rs 70 billion under the different FTAs. However, he observed, Government intends to increase exports by two to three times with the help of the signed FTAs. As such, a Technical Coordination Committee has been set up so as to devise an action plan with the collaboration of all stakeholders both in the public and private sectors, and will report to the Inter-Ministerial Committee on a regular basis.
African trade news
After more than 50 years of cooperation between the African countries with a view to creating a common market, the African Continental Free Trade Area (AfCFTA) agreement was signed on 21 March 2018, making this day a memorable date in the history of the continent. The agreement entered into force on 30 May 2019. Phase I of the agreement, covering goods and services, was launched on 1 January 2021.
Phase II of the negotiations (which relate to IP rights, competition policy, and investment) is ongoing, while some important phase I issues (for instance, rules of origin) are still under consideration. At the end of phase II, an IP Protocol will be adopted, which will attract a great deal of attention because it is expected to solve most of the weaknesses in the IP regime in many African countries.
As highlighted by the United Nations Economic Commission for Africa’s 2019 report titled “Assessing Regional Integration in Africa IX“, three optional systems can be adopted by the member states: (i) a general cooperation, (ii) a regional filing system, and (iii) an implementation of one substantive law or unification of laws. These systems are well-known to the countries and the main characteristics of each are summarily exposed below.
At the margins of the EU-Africa Business Forum, the International Trade Centre (ITC) signed a partnership with the Africa Business Council (AfBC) to empower African enterprises especially women and youth.
Through this partnership ITC’s One Trade Africa programme will support the AfBC in its mandate to coordinate business support organisations across the continent and provide better services to the private sector. African enterprises will also gain access to practical information, knowledge and skills to improve competitiveness and their ability to access new opportunities using the AfCFTA among others.
During the signing ceremony, ITC Executive Director Pamela Coke-Hamilton underscored ITC’s commitment to enabling micro, small and medium sized enterprises (MSMEs) participation in the new single market.
Solving Africa’s infrastructure paradox (Business Day)
The Covid-19 pandemic not only revealed how critical Africa’s infrastructure is to the continent’s development, but also underscored how vulnerable it is. Even before the pandemic hit African governments were mapping new strategies to navigate the continent’s infrastructural needs against the development of an intraregional free trade area. The pandemic amplified the urgency to develop critical infrastructure to facilitate industrial development and intraregional trade. Many parts of Africa need to upgrade their economic infrastructure to facilitate movement in-country and around the continent. This includes the improvement of land, sea, air, and digital infrastructure.
How can an East African food and beverage producer best export their products to West or Southern Africa without experiencing these challenges? In addition, physical infrastructure is rendered useless without the human capital to complement it. What plagues the African continent is not a skills dearth but more a lack of experience. The lack of experience to build and use innovative and sophisticated infrastructure, the lack of experience to derive the most benefit from it and the lack of experience with synergies that can exist in different industries and sectors, let alone countries.
Covid-hit SMEs struggle to get back on their feet (The East African)
Africa’s smallholder businesses are taking longer to recover from Covid-19 blues because of the spending habits of their clients. The “Geopoll and Africa 118 Study of MSMEs in Africa” report notes that small businesses are struggling to get back on their feet because their clientele either changed habits, cancelled projects or ran out of money to continue paying for services. Seven in 10 businesses that thrived in Kenya, Nigeria and South Africa shut down at the height of the pandemic and just 17 percent of the businesses that were forcibly closed down have resumed normal operations, the report says. “The past two years have presented unprecedented challenges for SMEs – particularly in developing countries, including those in sub-Saharan Africa. Lockdowns, containment measures and demand shifts in response to Covid19 have pushed many SMEs to the brink,” said Fred Imbo, chief operations officer at Africa 118, a digital information services provider for small and medium businesses in Africa. “With less income coming in, many construction clients likely halted long term projects over short-term uncertainties. The survey consistently pointed to a shift in spending towards food and other essentials,” said Mr Imbo.
S.Sudan urged to fully embrace Single Customs Territory (The Star, Kenya)
The East African Business Council (EABC) has called on South Sudan to fully implement the East African Community Single Customs Territory to spur intra-EAC trade. The Single Customs Territory, which Kenya and other member states have adopted, is aimed at facilitating faster clearance and improvement in cargo movement along the two corridors serving the region. These are the 1,700 kilometre-long Northern Corridor that runs between Kenya, Uganda Rwanda, Burundi and Eastern D.R. Congo, with an exit and entry point at the Port of Mombasa. The 1,300 kilometre long Central Corridor serves Tanzania, Rwanda, Burundi, Uganda and Eastern D.R. Congo, with an exit and entry point at the port of Dar-es- Salaam. The two corridors facilitate export and import activities within the EAC region on a combination of rail, road and lake transportation networks. South Sudan is second after Uganda on the use of Kenya’s Port of Mombasa , accounting for 9.9 per cent of total transit volumes.
In 2020 South Sudan’s export to the EAC Partner States amounted to $ 87million while imports were valued at $573 million. In 2016 South Sudan export and imports to the EAC Partner States were $2.6million and $400 million respectively, indicating a drop.
The EABC urged the EAC Secretariat to mobilize more resources to support South Sudan to finalize the construction of the One-Stop Border Post (OSBP), and implementation of EAC protocols and commitments in order to facilitate trade.
African competition watchdogs plan to check digital markets (The East African)
Competition supervisory bodies from Kenya and four other African countries have formed an umbrella body to help them deal with challenges posed by digital markets, signalling a more concerted effort to enforce competition laws. The regulators from Kenya, South Africa, Nigeria, Mauritius, and Egypt, signed a memorandum of understanding in Johannesburg Friday to work together under the Africa Heads of Competition Dialogue (AHCD) to address emerging digital markets challenges. In a statement, AHCD said digital markets and services have transformed how traditional markets function, raising unique competition issues that necessitate collaboration in re-evaluating the approach to regulations in the markets. “Accordingly, as regulators on the continent, we are required to consider how digital markets impact on domestic participation in the local and global economy and the terms of that participation, beyond simply as a consumer of global tech firm services,” the regulators said. In their new arrangement, the regulators agreed to collaboratively assess the conduct in their digital markets, evaluate global, continental and regional mergers and acquisitions, and share information and knowledge, building capacity to deal with the challenges.
Here’s How Africa Could Be a Global Economic Game-Changer (Northeastern)
Business leaders representing the diverse resources throughout the continent of Africa gathered Wednesday morning to discuss the rapidly growing economies, global partnerships, and technological progress throughout Africa’s 54 countries. The forum, Northeastern’s inaugural African Business Conference, comes as the continent is set to emerge as a global economic force, according to the World Bank. “Africa is poised to become one of the world’s most important economic regions,” said Florie Liser, president and chief executive of the Corporate Council on Africa. The organization works to encourage trade and investment between the U.S. and the nations of Africa.
The question as to why Africa must produce its own vaccines has been persistent but it has not been decisively addressed. The result of this indecision is Africa’s disproportionately low quantum of vaccine manufacturing at the global scale. Only 1 per cent of the global vaccine manufacturing happens in the continent. The participation of the 10 African vaccine manufacturers involved in Covid-19 vaccine manufacturing has been limited to fill-and-finish processes with minimal participation higher up in the manufacturing pipeline. Africa’s bargaining power in acquiring these vaccines has as such been very low with much of the power centred around four companies that manufacture about 90 per cent of all Covid-19 vaccines.
Africa’s precarious position has been compounded by vaccine nationalism. Some High-Income Countries (HICs) have over-procured and hoarded Covid-19 vaccines. This has resulted in some of the HICs having enough doses to vaccinate their populations five times over while several Low-and Middle-Income Countries (LMICs) cannot access enough vaccines to provide the first dose to their citizens. This has resulted in Africa falling behind on global vaccination targets. At the end of 2021, Africa had vaccinated only 10 per cent of its population of about 1.3 billion, yet 70 per cent of the developed countries had vaccinated over 40 per cent of their populations. Africa should begin to explore the possibility of manufacturing Covid-19 vaccines. Local vaccine manufacturing in Africa faces several challenges, primarily the lack of sustainable financing mechanisms and limited political and fiscal prioritisation. These challenges can be circumvented by leveraging several emerging solutions such as vaccine bonds.
The investment imperative in Africa is particularly strong given that the continent’s vaccine market is projected to increase dramatically from $1.3 billion today to between $2.3 billion and $5.4 billion by 2030 driven by population and economic growth.
The World Health Organization announced the first six countries chosen to receive the tools needed to produce messenger RNA vaccines in Africa: Egypt, Kenya, Nigeria, Senegal, South Africa, and Tunisia. These countries will receive training and technical know-how on how to produce this type of vaccine from the global mRNA technology transfer hub in Cape Town, South Africa, which was established last year with the aim of ramping up this type of vaccine manufacturing in low- and middle-income countries.
Globally, vaccine production is mainly concentrated in a few high-income countries, Dr. Tedros Adhanom Ghebreyesus, WHO director-general, said during a press conference on Friday. This has led to vast inequities in access to COVID-19 vaccines — more than 80% of the population of the African continent is yet to receive a single dose.
The African Development Bank Group and Africa50, in partnership with the African Union Commission and the African Union Development Agency (AUDA-NEPAD), are exploring collaboration with global partners to create an Alliance for Green Infrastructure in Africa.
The European Investment Bank, European Bank for Reconstruction and Development, the French Development Agency, AFD, and The Rockefeller Foundation have expressed their interest in joining the Alliance. And there is a strong push to attract more African and global partners.
The Alliance for Green Infrastructure in Africa will complement, enhance and partner with continental and global initiatives to crowd in private capital to fund green infrastructure projects. The idea is to bridge investment gaps and engender financing at scale and with speed.
The Alliance’s overarching goal will be to leverage the private sector to transparently develop transformative infrastructure that sustainably bridges Africa’s infrastructure deficit in a climate-resilient manner. It will do this by addressing universal energy access and strengthening Africa’s energy systems, while minimizing sovereign debt accumulation, especially during this period of limited fiscal capacity across Africa.
The East African Community (EAC) Conference to establish Regional Consultative Process (RCP) on Migration concluded in Kigali, Rwanda. The main objective of the conference was to consider and discuss the proposal for the establishment of the Regional Consultative Process on Migration for the EAC as a platform for regional information-sharing and policy dialogue dedicated to discuss specific migration issues in a cooperative manner among EAC Partner States.
Director General Immigration Services, State Department of Immigration and Citizen Services, Ministry of Interior and Coordination of National Government, Republic of Kenya, Mr. Alexander Imbenzi Muteshi noted that Intra regional migration is on the rise and prior to the advent of COVID-19 outbreak; there are long standing patterns of seasonal and circular migration; existence of refugees and migratory flows to the Middle East affecting migration among others. The Director General informed the Partner States that the establishment of regional consultative process is key for the EAC focusing on policy dialogues and information sharing.
The Deputy Secretary General further disclosed that the RCP will be used as a platform to bring together stakeholders and development partners to collectively mobilize resources for priorities set out from the RCP forums which will benefit Partners States’ efforts to facilitate governance of labour migration management, harmonization of labour migration policies, and capacity building initiatives, research and all initiatives geared towards, a united approach to safe, regular and humane labour migration management.
6th EU-AU Summit outcomes
Sixth European Union - African Union Summit: A Joint Vision for 2030 (European Commission)
EU and AU leaders agreed on a joint vision for a renewed partnership.
The aims of the partnership are solidarity, security, peace and sustainable and sustained economic development and prosperity for the citizens of the two Unions today and in the future, bringing together people, regions and organisations.
It aims to promote common priorities, shared values, and international law, and preserve interests and common public goods. This includes the protection of human rights for all, gender equality and women's empowerment in all spheres of life, the rule of law, actions to preserve the climate, environment and biodiversity, but also sustainable and inclusive economic growth and the fight against inequalities.
European Commission President Ursula von der Leyen said leaders had had “an intense discussion on the TRIPS waiver”, and played down the difference in opinion between the two blocs, noting that “we have the same goals we just have different ways of going about it”. Ahead of the summit, the European Commission promised that €150 billion would be made available in financial support for Africa as part of its recently launched Global Gateway programme.
On Wednesday, meanwhile, at the BioNTech Vaccine Equity for Africa meeting in the German town of Marburg, the pharmaceutical giant announced that it would start building its first African factory producing Covid vaccines early next year. The EU has made a coordinated push to help support African states to prepare their health systems for the next pandemic, but without appearing to give any ground on the main short–term demand of African leaders to allow them to produce COVID vaccines.
Remarks by IMF Managing Director Kristalina Georgieva at the EU-AU Summit Roundtable on Financing for Sustainable and Inclusive Growth in Africa.
As the world emerges from an unprecedented crisis, all countries are struggling with challenges–but it is particularly true for Africa. Africa experienced a painful contraction in 2020. Since then, it has started growing again—but for many countries growth falls short of what is needed.
In both 2021 and 2022, Africa’s projected growth trailed the global average. And it ought to be the other way around. Africa should outperform the rest of the world—so countries can create jobs and lift up living standards.
It is in this context that we at the IMF have taken unprecedented action to support our member countries, especially on the African continent. I like to say: we are stepping up with and for Africa.
We also moved quickly for a Special Drawing Rights (SDR) allocation. As has been acknowledged, it has helped Africa—but it has not helped enough. In some countries, it amounted to as much as 6 percent of their GDP which is not at all trivial. But that said, US$33 billion for African countries out of a US$650 billion global allocation is clearly not where we want to be.
So, we are moving to the next frontier which is large scale on-lending of SDRs—from countries that got them but don’t need them as much, to countries that need them most.
Private sector investment across Africa is essential to tackle the impact of Covid-19 and unlock sustainable growth and development finance institution the European Investment Bank (EIB) Global will provide €62-million as part of six new partnerships that will support targeted private sector investment, including high-technology innovation, rural microfinance and business financing, from Cameroon to Malawi.
The partnerships provide new support for African technology startups, rural microfinance, agriculture and businesses in sectors impacted by the pandemic, the EIB says.
The EU “is there” for African farmers and food producers with development support should the increased European green agriculture standards create trade barriers, according to a Commission official. In the meeting of the EU’s and AU’s heads of states and governments that will close today (18 February), the EU is using the partnership to encourage African states to adopt the environmental policies in its Green Deal. The agri-food part of it, the Commission’s Farm to Fork (F2F) strategy – which aims to make the European food system more sustainable through a set of stringent targets – may have a spill-over effect on African farmers even if they do not adopt parts of it. African farmers fear that requirements to meet those targets to sell their products to Europe could quickly become a significant trade hurdle. “We do not, cannot and will not wish to impose our own system on any other country in the world,” said at a recent EURACTIV event John Clarke, deputy director-general at the Commission’s agricultural service (DG) AGRI) in charge of trade aspects.
But according to the Kenyan farmer David Ndegwa, who spoke at the same event, although the EU is not directly imposing standards on African growers, the request for higher environmental and sustainable standards to sell products in the European single market indirectly leads to a request for compliance.
Renewable hydrogen is one of the central discussion topics at the ongoing European Union-African Union summit. The EU has made its ambitions to import hydrogen from the African continent clear: in its 2020 Hydrogen Strategy, the European Commission foresees 40 GW of renewable hydrogen electrolysers in the EU neighbourhood, a large proportion of which are expected to be in North Africa, by 2030. Alongside EU plans to import renewable hydrogen from the neighbourhood, member states are setting up bilateral hydrogen initiatives with countries across the African continent. Germany is a frontrunner, having set up a global hydrogen import scheme and bilateral initiatives with African countries, including Morocco, Namibia and South Africa. EU interest in importing hydrogen from Africa is driven by the assumption that member states will require significant quantities of renewable hydrogen to decarbonise certain economic sectors (for example, the chemicals industry, steel industry and heavy transport sectors such as maritime and aviation) that exceeds cost-effective domestic potential.
A memorandum of understanding was signed virtually between 12 Automotive Associations within the ambit of the EU – Africa Business Forum 2022 on 16 February with the aim of driving the development of the Automotive Industry in Africa. The Automotive sector whilst key for the industrialisation of Africa is often associated with several challenges including, persistent market fragmentation, lack of regulatory alignment between African countries and the two continents, industrial and trade policies not conducive to local and foreign investment, lack of access to finance for consumers, local suppliers, and affordability. However intra-African trade can be bolstered and diversified by developing a Pan African Auto Pact, which aims to expand the African new vehicle market from 1 to 5 million units and connecting African regions for the common good. A “coalition of the willing” will see the development of manufacturing sites and allied industries and services – both for the OEM and supplier sector - and thereby laying the foundation for Pan-African integrated automotive value chains which will incorporate neighboring countries, thus building a regional and continental production network
The German government hopes the two-day EU-Africa Summit that ended on Friday (18 February) will mark a new beginning in Africa policy, with development and energy policy, in particular, being at the forefront.
In the press conference following the summit, German Chancellor Olaf Scholz stressed the importance of close collaboration with African states.
Germany is one of Africa’s largest donors and investors, and its colonial legacy in the region is relatively small compared to France and several other EU states. German MEP Udo Bullmann, development policy spokesman for the socialist S&D group in the European Parliament, told EURACTIV that “in this respect, German involvement has never been tempted to be as one-sidedly territorial as it has been in the UK or France along linguistic borders or former colonial zones”. Around €8.5 billion in foreign direct investments from Germany flowed to various African states from 2016 to 2018, according to a report by consulting firm EY. This makes Germany one of the major investors on the continent, though it still only invested half as much as France, the EU’s largest investor in Africa.
Africa-EU trade in goods: €4 billion surplus (Eurostat)
In 2021, there was an increase in goods exported from the EU to Africa (+€21 billion compared with 2020) as well as an increase in goods imported to the EU from Africa (+€41 billion compared with 2020). Thus, the EU recorded a trade in goods surplus with Africa of €4 billion, which was the lowest since 2014.
Since 2014, the EU has had a trade in goods surplus with Africa, peaking at €33 billion in 2016. However, this surplus fell to €8 billion in 2018 and 2019. In 2020, due to the COVID-19 pandemic, exports fell by €20 billion while imports fell by €35 billion, which increased the trade surplus to €24 billion.
The WTO Secretariat presented the latest trends in trade in goods and services for LDCs, noting that the COVID-19 pandemic caused a 35 per cent decline in LDC services exports and a 12 per cent decline in their exports of goods in 2020. LDC exports of goods and commercial services declined more sharply than the world average, falling from a 0.96 per cent world share in 2019 to 0.91 per cent in 2020.
Speaking on behalf of the WTO’s LDC Group, Chad expressed concerns over LDCs’ dwindling share in world trade. The delegation noted that the target of the Istanbul Programme of Action of doubling their share in global exports by 2020 has not been met and that the pandemic has reversed the economic progress achieved during the previous ten years. Chad called on development partners to provide support to help LDCs recover from the pandemic and build resilient economies.
US co-sponsors India’s proposal on managing WTO trust funds (Third World Network)
The United States on 12 July co-sponsored a proposal from India to bring greater transparency in the use of voluntary contributions/trust funds by the World Trade Organization’s director-general Ms Ngozi Okonjo-Iweala, said people familiar with the development. At a meeting of the Committee on Budget, Finance, and Administration (CBFA), India explained the salient features of its proposal (outlined in restricted document WT/BFA/W/564) on the proposed regulation of voluntary funds/trust funds provided by members and observers to the DG. The proposal underscores the need for a transparent review process to ensure that the use of the proposed trust funds remains consistent with the WTOs overall objectives, policies, and guidelines. It calls for a separation in the use of regular budgetary funds from the activities funded by voluntary funds/trust funds. The Indian proposal has suggested that a standard charge of 13% may be levied on direct expenditure incurred by trust funds to reflect the supporting services provided by the WTO secretariat.
Who are the World Trade Organisation’s (WTO) competitors? Apparently, this question was posed by the McKinsey and Company (M&C) to the WTO’s staff. The M&C was commissioned to carry out the structural review and reform of the WTO’s Secretariat.
Consultancy firms like McKinsey are hired to help organisations like companies, governmental bodies and non-profit organisations. They are known to ask difficult questions for providing guidance to organisations, says a former McKinsey employee Paul Mainwood. Invariably, reports of private consultancy firms seem to have resulted in privatisation as well as fundamental changes in non-governmental organisations ostensibly to bring about efficiency. An elusive concept like efficiency has become the benchmark for maximising profits for the shareholders with drastic labour retrenchment. Perhaps, it may be the intended goal at the WTO. However, the moot issue remains whether a member-driven, rules-based, multilateral trade organisation’s Secretariat can be subjected to a structural reform for unknown efficiency and other gains. That too by private consultants who seem to possess little or no knowledge about the WTO. Also, it raises questions whether the audit by M&C complies fully with the WTO’s procurement rules.
A senior WTO official informed the recommendations of the McKinsey report towards the end of 2021. However, the full report has not been shared with the WTO members until now for inexplicable reasons. There are also doubts whether the disclosure of the full report to members could withstand a scrutiny by members. Questions are also asked to whether the commissioning of the report violated the WTO’s procurement rules.
As pandemic eases, LDCs face a long road to recovery (Trade for Development News)
As the worst effects of Covid-19 begin to wear off, the World Bank has warned that output in emerging and developing countries will remain substantially below pre-pandemic levels in the near future.
Global growth rebounded to 5.5% in 2021 – the strongest post-recession pace in 80 years – as easing of pandemic-related restrictions unlocked pent-up demand. However, it is expected to slow to 4.4% in 2022 and to 3.2% next year due to weakening demand, the risk of new variants emerging, and supply bottlenecks, the Bank said in a new report. Richer countries are projected to bounce back faster and the Bank warned that recovery will be slower in low-income countries, especially small, fragile and conflict-affected states. This is due to lower vaccination rates, tighter fiscal and monetary policies, and more persistent scarring from the pandemic. Growth in low-income countries rose to 3.3% in 2021 but domestic demand remains subdued due to job losses from Covid-19, limited resources by governments to support incomes, and conflict in Ethiopia, Afghanistan, Burkina Faso and other countries.
incoming economic indicators point to weaker growth momentum in 2022 due to the emergence of the Omicron variant and supply chain disruptions that are more persistent than previously anticipated. At the same time, inflation readings remain high in many countries, financial markets are more volatile, and geopolitical tensions have sharply increased.
Strong international cooperation and extraordinary policy agility will be crucial to navigate a complex ‘obstacle course’ through 2022.
Let me focus on three policy priorities.
First, we need to broaden efforts to combat what might be described as ‘economic long COVID.’ Second, many countries will need to navigate a tightening monetary cycle. In the context of a high degree of uncertainty and significant differences across countries, macroeconomic policies need to be carefully calibrated to individual country circumstances. Third, countries need to give greater priority to fiscal sustainability.
Digital transformation can still benefit unconnected farmers (World Economic Forum)
Globally, technology has been advancing fast. The COVID-19 pandemic only accelerated the shift in digital transformation, seeing more companies, governments and civil society carry out remote training, using digital tools to boost the effectiveness and scale of delivery. These advancements have profound implications for access to skills and capacity building. But what of the farmers and coffee growers in Benin, Nigeria and Central America, for example, who may not have smartphones or access to the internet? Is there still a way to reach them with accessible content and training on the latest agronomic practices for cashew or good farming techniques?
While farmers themselves may not have access to a smartphone, the teams who train them often do. Traditionally, extension agents and other field teams receive training in person and when these trainers need a refresher or need to learn a new addition to the curriculum, they have to attend another physical session. However, by building a digital training course for trainers, we can see greater consistency, with field teams refreshing their knowledge on the go. They can easily hand over the training programmes to government extension workers, cooperatives, buying organizations and others when they end, supporting sustained impact.
Blog: Enhancing Access to Finance for NDC Implementation (The Commonwealth)
At the heart of the Paris Agreement are the Nationally Determined Contributions (NDCs), which are country-specific climate targets to reduce greenhouse emissions and adapt to climate change. With nearly 160 countries having submitted revised or updated NDCs, 46 of which are Commonwealth member countries, there is strong political will to address climate change. Support in ensuring member states can access and secure the required finance to meet these targets is a fundamental mandate of the Commonwealth Secretariat Climate Programme.
Efforts to effectively access and deploy climate finance resources is often strengthened when accompanied by strategic policy and institutional frameworks. Climate finance landscape and mapping exercises provide a foundation for understanding a country’s financing needs as well as all the relevant stakeholders including challenges and opportunities with new and existing sources. These are instrumental in guiding the development of climate finance strategies which assist policy makers in employing more targeted approaches for delivery of finance towards enhanced climate change mitigation and resilience actions.