tralac Daily News
The Presidential Climate Change Commission convened on Friday at the Industrial Development Corporation Conference Centre in Johannesburg. Topical to the dialogue among policymakers, civil society groups, private sector businesses and academics was the theoretical nature of a net-zero future and the importance of choosing among the models presented to the commission on how to get there.
On the prickly issue of finance, Public Enterprises Minister Pravin Gordhan told the hearings that if South Africa wanted to be among the top 10 countries to lead in new green industries then bureaucratic blocks had to be avoided and frankness was needed about the trade-offs.
“Promises are easily made, the delivery takes a hell of a long time, and sometimes not delivered at all. So $100-billion a year was promised almost 10 years ago. As part of the climate process, it was never delivered on that scale at all in the multilateral forums … and then we come to the fiscus of South Africa, which has its own constraints that we are already familiar with and we will become more aware of when the finance minister delivers the budget on Wednesday.” He said there is a political economy around climate change and the risks would devalue the country in the eyes of investors.
Brian Mantlana, a commissioner and researcher at the Council for Scientific and Industrial Research, pointed out that net-zero was a climate change concept but was also the biggest development opportunity of our time.
The World Economic Forums’ (WEF) recently published Global Risks Report 2022 highlights the significant challenges facing South Africa. The annual report, which collates views and data from various experts and research institutions, offers an in-depth analysis of global economic, societal, and technological risks .According to the report, South Africa’s top five risks are economic stagnation, unemployment, state failure and weak institutions, and the proliferation of illicit economic activity. All identified risks feed into growing anxiety that the country is at risk of sliding into chaos if urgent preventative action is not taken. The sheer growth in illicit economic activity in South Africa over the past few years is alarming and has had a tremendously negative impact on the economy, taxes, and jobs.
The development of the Zambezi region, particularly Katima Mulilo as a major international border and logistics hub for the SADC region is critical to the promotion of deeper regional and infrastructure integration, trade and transport logistics efficiencies. In this light, the expansion and improvement of Katima as a distribution centre supports regional, continental and global value supply chains and thus promotes intra-African trade specifically to support the much-hyped Africa Free Trade Agreement.
“The region is a strategic inland hub, which will contribute towards Namibia’s vision of becoming the preferred logistics hub for the SADC region. The expanded Port of Walvis Bay is envisaged to generate increased cargo volumes for the hinterlands of Zambia, Zimbabwe, Botswana, the Democratic Republic of Congo, Malawi and Angola. Therefore, to absorb the increased throughput of cargo volumes via Katima Mulilo and Ngoma border posts in the Zambezi region, there is a need to give a facelift to the border infrastructure at Katima Mulilo border post,” said Eric Shimumbwe, a consultant for the Walvis Bay Corridor Group (WBCG) on the Walvis Bay-Ndola-Lubumbashi Development Corridor (WBNLDC) Cluster Secretariat.
INFORMAL cross-border traders in Victoria Falls have appealed to Government to introduce temporary border passes to allow them easy passage into Zambia for business. Victoria Falls in Zimbabwe shares the border with Livingstone in Zambia.
While Zambian traders popularly known as omzanga used to enjoy easy passage to Victoria Falls using temporary one-day border passes, the situation was different on the Zimbabwean side where one needs a passport to cross the border. The informal cross-border traders who specialise in selling curios, African attire cloths and other goods said it is not viable to have a passport stamped on a daily basis considering the cost of acquiring one.
“It is our appeal to Government to bring back border passes for locals here so that we are able to cross daily to sell or buy from Zambia. Many informal traders cannot afford to apply for passports and those who have the documents find it not worth it to have it stamped on daily as this wastes space.
The EU and Kenya agreed today to advance negotiations on an interim Economic Partnership Agreement (iEPA). This important agreement will enhance trade and investment opportunities and help boost sustainable economic growth and job creation. The iEPA will be complemented by binding commitments on environmental protection, climate and labour rights. It reflects the pending EPA initialled in 2014 between the EU and the East African Community (EAC). Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade, said: “On the day of the EU-African Union summit, we are delighted to announce our engagement with Kenya to boost our trade ties. We will now move forward with the Economic Partnership Agreement, and we will also negotiate the trade and sustainability aspects. Africa is much more than just our neighbour - it is our partner. The closer our economies, the greater the benefits for our people and businesses. This applies not just to our relations with Kenya, but to the entire Eastern Africa region and to Africa as a whole.”
The future EU-Kenya iEPA will liberalise trade in goods on mutual basis. It will give duty-free quota-free access to the EU market for all Kenyan exports and partial and gradual opening of the Kenyan market, including agriculture and fishery products. It will also set up trade-related rules on sanitary and phyto-sanitary measures, technical barriers to trade and customs and trade facilitation. This liberalisation will be accompanied by trade-related development cooperation with a view to boost sustainable economic growth and job creation.
World Bank, IMF lending to Nairobi rise as Kenya-China loan deals drop (The East African)
World Bank and the International Monetary Fund (IMF) have stepped up lending to Kenya over the past three years, which has seen Chinese loan deals reduce, firming the grip of Bretton Woods institutions on East Africa’s biggest economy. Data from the National Treasury show World Bank’s total lending rose by Ksh517 billion ($4.5 billion) from June 2019 to Ksh1.125 trillion ($9.8 billion) in December, with the bulk loans coming in the wake of Covid-19 economic hardships. The IMF lending grew from Ksh158.5 billion ($1.3 billion) to Ksh207.5 billion ($1.8 billion) in the same period while Chinese loans increased by Ksh125 billion ($1 billion) to Ksh786 billion ($6.9 billion).This is a departure from lending trends in the first term of President Uhuru Kenyatta’s reign when Nairobi was a major beneficiary of China’s loans for the development of mega infrastructure projects such as roads and a modern railway over the last decade.
Kenya-Tanzania trade marches towards $1 billion (The East African)
Kenya-Tanzania bilateral trade hit $905.5 million for January to November 2021, according to the Central Bank of Kenya. Kenya’s imports from Tanzania stood at $501 million, and exports at $403.9 million. “The bilateral talks between Kenya and Tanzania initiated by the two leaders have been the catalyst behind the improved trade figures across the border,” said Kevit Desai, Kenya’s Principal Secretary in the Ministry of EAC and Regional Development, citing the talks in May 2021 between President Samia Suluhu and her Kenyan counterpart President Uhuru Kenyatta. Tanzania’s major exports to Kenya include cereals, wood and vegetables and Kenya’s exports to Tanzania include soap, coated flat-rolled iron, and packaged medicaments.
Uganda and Tanzania bury the hatchet over border tariffs (The Exchange)
Ugandan milk and milk products are still suffering at the borders of Tanzania (and Kenya) leaving a sour aftertaste on said party relations.
According to Uganda, Tanzania was imposing unfair charges on its traders. Uganda complained that Tanzania was charging its truck fees way higher than it was charging other trucks using the same border and road. The allegations hold that Tanzania was charging Ugandan truckers up to $500 toll fees per truck yet it charged only $152 for Rwandan and other trucks. The road fees are not all. Uganda argues that its trade volumes are being affected by other non-tariff barriers including but not limited to restrictions on exports such as sugar and milk. That being said Kampala did not only file a complaint but also threatened to retaliate.
The sit-down was part of the fourth session of the recently formed Joint Permanent Commission (JPC) between Uganda and Tanzania. The two sides also agreed to appoint parties within all ministries, departments and agencies across the two countries to coordinate, follow up and ensure quick and full implementation of the resolution.
Other than the trade issues, the session examined and harmonized implementation of decisions across various sectors of bilateral cooperation including immigration, education, transport, communication, defence and security, energy and mineral development among others.
On 17 February 2022, Dr. Kunio Mikuriya, Secretary General of the World Customs Organization (WCO), met with H.E. Ms. Samia Suluhu Hassan, President of Tanzania, on the occasion of her visit to Brussels. During their bilateral discussions, the President expressed her appreciation for the WCO’s support with the process of modernizing the Tanzania Customs Administration and sought further advice on the way forward.
Dr. Mikuriya also highlighted the need to apply technology to facilitate paperless trade, while ensuring interoperability with different IT systems. This could be achieved through the use of the WCO Data Model, a tool that supported cross-border data exchange. He went on to underline the importance of training and human resource development as an enabler to implement tools and technology.
Through the approach described above, Customs could enhance its professionalism and integrity which would in turn contribute to developing trust across the supply chain. This enhanced trust, especially with compliant businesses, would ultimately form the basis for developing an Authorized Economic Operator (AEO) programme.
Uganda looks to Kenya, Jamaica for its digital currency (The East African)
Uganda is considering a Central Bank Digital Currency (CBDC) in a move that has drawn policy attention to the large investments required for a successful trading ecosystem and crucial mileage offered by digital payments systems such as mobile money services and internet banking. Whereas the actual cost of issuing a government-owned digital currency remains unclear, the costs surrounding this venture are reflected in the development of software tools, improved electricity generation for running high energy consuming block chain technology platforms, and recruitment of specialist personnel. Implementation timelines are yet to be confirmed.
“We are studying the idea of a Central Bank Digital Currency with the aid of case studies developed by peer central banks in Jamaica, Nigeria, Ghana and Kenya among others. The law does not accommodate digital currency use in Uganda but we are exploring legal options for future amendments in financial laws that will facilitate circulation of digital currency denominations.
Uganda: The Mining and Minerals Bill, 2021 (The Independent)
Parliament has passed the Mining and Minerals Bill, 2021 which will see the establishment of the Uganda National Mining Company which will manage the government’s commercial holding and participating interests in mineral agreements. The Bill that was passed on 17 February 2022 mandates the National Mining Company to hold 15 per cent free equity in all large and medium mining ventures as well as have the right to pay up 20 per cent extra shares in the mining ventures at the commercial rate. The Chairperson of the Committee on Environment and Natural Resources, Hon Emmanuel Otaala who presented the report on the bill said that the mineral agreements and Production Sharing Agreements will apply to highly capitalised investment and complex mining.
Nigeria has topped the chart amongst African countries importing from China in 2021 with imported goods valued at $23 billion (about N9.6trillion) or 16 percent of total continent’s imports from China.
But the country did not feature on the top 5 African countries in exports to China in the same period, as it recorded only $3 billion (about N1.3trillion) exports in the year. Data from the National Bureau of Statistics (NBS) also shows the bilateral trade deficit against Nigeria is widening in favour of China, with a steady increase in Nigeria’s importation from the Asian country from 2019 to 2021.
Faced with spiraling inflation, a weak currency due to a high import bill incurred by Nigerians and low non-oil export, the Nigerian government for decades has resorted to an import substitution policy geared primarily towards curtailing a dependency on foreign products using a host of restrictive policy tools like tariffs, bans and quotas – still – the manufacturing sector that should lead Nigeria’s industrialization strategy remains handicapped and largely unable to take up this role in a renewed drive for self-sufficiency and foreign exchange revenue generation that is desperately required to enable the country rub shoulders with emerging economies like China and South Korea.
According to the National Bureau of Statistics (NBS), Foreign Trade Statistics report, the import spend of the country has been on the rise for the past 6 years despite the host of protectionist policies and trade barriers that have been mounted by the government in a bid to reduce the dependence
President Wavel Ramkalawan also took the opportunity to have an exchange with the Director General of the World Trade Organization, Dr. Ngozi Okonjo-Iweala, in the margins of the Summit where he congratulated her on her latest appointment at the helm of the Organization. She is the first African woman to assume such a position. Since Seychelles will this year have its WTO Trade Policy Review in December, the President solicited the support of the organization and its members for a swift and very conclusive review, that takes into context the specificities of SIDS and the issue of Special and Differential Treatment. During their discussions, they touched on the issues of fisheries subsidies and the TRIP waiver for the production of vaccines by other WTO members. President Ramkalawan reassured her of the full support of Seychelles.
The Fitch report, a copy of which was obtained by Business Insider Africa, explained that the widening would be caused by sluggishness in the West African country’s oil and cocoa production. Also, an expected increase in local demand for imported goods would lead to a narrowing of Ghana’s goods trade surplus from $1.8 billion in 2021 to $1.0 billion in 2022.
But Ghana’s situation is not hopeless. Fitch Solutions noted in its report that the country will be be able to manage the challenge thanks to an expected increase in remittances, earnings through tourism and portfolio inflows.
East African Community Partner States have adopted the EAC Tariff Offer for Category A products amounting to 90.2 per cent (5,129 tariff lines out of the total 5,688 lines) to be liberalised in 10 years after the start of trading under the African Continental Free Trade Area (AfCFTA). The EAC is now among the State Parties that have met the minimum requirements for Category A to start trading on a provisional basis under AfCFTA. The EAC is negotiating the AfCFTA as a bloc. An EAC Extra-Ordinary Meeting of the Sectoral Council on Trade, Industry, Finance and Investment (SCTIFI) held on Friday further directed the EAC Secretariat to submit the EAC Tariff Offer for Category A to the AfCFTA as soon as possible.
The AfCFTA has so far verified 29 tariff offers to ensure that they meet the modalities and this will increase to 34 once the EAC Partner States offers are verified.
The Vice President, Dr Mahamudu Bawumia, has called for a robust regulatory environment and strong financial compliance system to prevent activities of money laundering and terrorist funding activities in the sub region. “Our continent has been denied funds of up to about $88 billion through illicit financial flow, as reported by the United Nations Conference of Trade and Development (UNCTAD) in 2020, largely through financial institutions, multinational companies and high net worth individuals who do business in Africa,” he added. He said these outflows, if curtailed, could be channelled into developmental projects and rebuilding economies.
Dr Bawumia stressed the need to strengthen collaboration among member states to counter money laundering and terrorist financing. He said the region was endowed with enormous resources and “our ability to harness same in an effective manner will go a long way in enhancing the socio-economic well-being of our people.” “We have the responsibility to stop the flow of illicit finance, which will cut down the outflow of funds to these group instead, channelling same into our development and recovery, ‘’he added.
‘Africa has found a new voice’ (SAnews)
President Cyril Ramaphosa says the experiences of the COVID-19 pandemic has breathed new life into the cause for African unity.
“Our experience of managing COVID-19 has emboldened the nations of Africa. It has shown us that resources and capabilities exist across our own continent to deal with emergencies of this magnitude. It has reminded us that we have world-class institutions like the Africa Centres for Disease Control and Prevention that must be supported and capacitated to fulfill their mandates. It has given renewed momentum to the project of political and economic integration, which has been strengthened by the advent of the AfCFTA,” the President said.
President Ramaphosa highlighted that the establishment of the mRNA technology transfer hub based in Cape Town is a vital step for the continent to manufacture vaccines for its own people. “We will continue to make the case for building Africa’s capacity to produce its own vaccines, including through a temporary waiver of the Agreement on Trade Related Aspects of Intellectual Property Rights at the World Trade Organisation (WTO). “Without being able to manufacture our own vaccines, an equitable recovery will not be possible,” he said. President Ramaphosa emphasised that the continent is determined to solve its own challenges. “We must uplift ourselves by making our own medicines to treat our people and save lives. We must develop our own economies through the African Continental Free Trade Area (AfCFTA), promoting investment and tourism within Africa, accelerating industrialisation, and driving green growth and low-carbon development. We must end all conflict and entrench democracy and good governance. “Africa has found a new voice. It is bold and unapologetic in its expectations of our partners. At the same time, we are determined that Africa’s challenges must be, are being, and will be, solved by Africans themselves,” he said.
Last month, the Brookings Africa Growth Initiative (AGI) released its annual Foresight Africa report, which explores top priorities for the region in the coming year. This year’s edition examines some of the most pertinent issues facing the continent in 2022, including its economic recovery from the COVID-19 pandemic, public health, the empowerment of African women and girls, climate change, technological innovation, and the region’s external relations. In the Chapter 5 essay, “Harnessing technology and innovation for a better future in Africa: Policy priorities for enabling the ‘Africa we want,’” AGI Senior Fellow Landry Signé argues that the COVID-19 pandemic has contributed to the acceleration of technological innovation, adoption, policy, and regulation in Africa. However, as he notes, supportive policies aimed at promoting technological innovation alone are not sufficient for ensuring their ability to promote economic growth. Government policy, Signé urges, should also support the adoption and use of transformative digital technologies.
Natural gas will outpace oil and coal by 1.6% in five years (African Mining Market)
Over the next two decades we will see a significant growth in Africa’s oil and gas sector, with population growth, urbanization, and the emergence of a wealthier middle class in Africa driving demand. Prashaen Reddy, Partner at global management consultancy Kearney and an expert within the Energy and Process Industries within Africa explains that the recent oil discovery off the coast of Namibia and gas finds in South Africa and Mozambique, could create a greater interest in oil and gas exploration within the Southern Africa region while attracting billions into the Southern African Customs Union (SACU). A white paper released by Kearney last year outlines the overarching strategic considerations for African utilities to forge a path to sustainability amidst the backdrop of this global paradigm shift. The paper also unpacks the broader macroeconomic trends that are shaping this transition.
According to the International Energy Agency (IESA) over the next five years natural gas will outpace oil and coal by 1.6%. Therefore, a bigger conversation must be had as the availability of power is essential for economic growth, and, even more importantly, for social development.
Fundamental to providing reliable, affordable and sustainable electricity access to all, renewable investments at scale can contribute to supporting Africa’s sustained economic growth, strengthening local value chains and promoting the creation of local jobs. In order to deepen this topic, RES4Africa Foundation, the International Renewable Energy Agency (IRENA) and the United Nations Economic Commission for Africa (ECA) developed their first joint report Towards a prosperous and sustainable Africa: maximising the socio-economic gains of Africa’s energy transition, presented today in occasion of the European Union-Africa Business Forum. Building on the knowledge and experience of the three organisations, the study is a comprehensive analysis of the job and socioeconomic impact of clean energy investments in the African continent, combining the views and experiences of leading international institutions active in supporting development, sustainable economic transition and renewable energy development in emerging economies.
United Nations Under-Secretary-General and Executive Secretary of the ECA, Vera Songwe, stated that “Our energy transition goals in African must be aligned with the development aspirations of member States. We must ensure investment in infrastructure that allows for manufacturing and value creation in green energy technologies, while availing de-risking instruments to member States to mitigate the cost of investment in energy projects.”
The Eighth Session of Africa Regional Forum on Sustainable Development (ARFSD-8) will be held in Kigali, Rwanda on March 3 – 5, under the theme, Building forward better: A green, inclusive and resilient Africa poised to achieve the 2030 Agenda and Agenda 2063. The theme is aligned with the 2022 High-level Political Forum on Sustainable Development (HLPF) on Building back better from the coronavirus disease (COVID-19) while advancing the full implementation of the 2030 Agenda for Sustainable Development.
The ARFSD-8 will conduct a regional follow-up and review of the implementation of the selected SDGs and Agenda 2063 goals; focus on identifying ambitions strategies and policy actions to build back better from COVID-19 and to dramatically scale up implementation in 2021-2030; facilitate learning, including sharing approaches, experiences and lessons learned from VNRs, VLRs and implementation efforts; deliberate and agree on Africa’ regional input to the 2022 meeting of HLPF to be held in New.
he United Nations Economic Commission for Africa (ECA), through its Sub-regional Office for West Africa (SRO-WA/ECA), organized on February 16 in Lome, Togo, a dialogue with members of the West African Economic Journalists Network. This meeting, which was held in a context where Africa’s financial needs are enormous ($256 billion per year before the Covid-19 pandemic) due to the development deficit, is part of a series of dialogues initiated by the ECA/SRO-WA as a prelude to the Fifty-fourth Session of the Conference of African Ministers of Finance, Planning and Economic Development (COM2022) of ECA, scheduled for March 2022 under the theme: “Financing Africa’s Recover: Breaking New Ground”.
The Senior Director of the African Development Bank’s Africa Investment Forum, Chinelo Anohu, praised the Biden administration’s efforts to channel investment into Africa, and singled out Prosper Africa as illustrative of a deepening commitment to Africa.
Prosper Africa, a U.S. government business initiative, and Hardaway Wire, a political intelligence company, sponsored the roundtable, which provided U.S investors an opportunity to learn more about the investment and trade tools the U.S government offers. Prosper Africa, launched in 2019 across 17 U.S. agencies, provides U.S businesses and investors with market insights, deal support, financing, and solutions to strengthen business climates. Cook said: “President Biden has made investing in Africa a priority as he—and his Administration—see the importance of global investment in all corners of the globe. We have made reducing both the perceived risk and actual risk of doing business in Africa a top priority at the State Department and Prosper Africa in order to facilitate the level of investment needed to support Africa’s economic growth.”
“Prosper Africa is a one-stop shop so companies don’t have to spend valuable resources navigating Washington in order to do business,” said Leslie Marbury, Acting Chief Operating Officer of Prosper Africa.
Even as the global economic recovery continues, its pace has moderated. Three weeks ago, we downgraded our global forecast to a still-healthy 4.4 percent – partially because of reassessment of growth prospects in the United States and China.
Since then, 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.
The Council today approved conclusions on 'EU climate diplomacy: accelerating the implementation of Glasgow outcomes', which stress the key importance of climate diplomacy and of EU outreach to third countries to accelerate the implementation of the COP26 outcomes in 2022. The conclusions set out that the EU and its member states, in a joint Team Europe approach, will engage with partners around the world to address the challenges linked to such implementation, and will actively work on the various COP26 sectoral initiatives and calls.
The Council also stresses that the lack of at-scale finance for resilient and just energy transitions in middle and low-income countries remains a barrier for green and sustainable development. Therefore, the EU will continue to provide a sustainable, green and positive offer to partners for the
Despite the countercurrents of protectionism and unilateralism, China has been consistently committed to promoting win-win cooperation and common development through its opening-up drive and has injected confidence and momentum into a world afflicted by uncertainties.
In less than nine years since then, over 140 countries spanning different regions, cultures and stages of development, as well as more than 30 international organizations, have signed BRI cooperation documents with China.
How to empower women to take advantage of the opportunities of trade (World Bank Blog)
Poor labour force participation rates for women have been the dominant trend across South Asia. Where women do work, they have been constrained to low-skilled or unskilled labor within the informal sector. A recent World Bank Paper insists that a targeted inclusion of women in the workforce would advance economic growth and trade outcomes by 26 percent of the global GDP by 2025 and holds potential for the region as well. The COVID-19 pandemic has impacted economic growth across South Asia, highlighting the urgent need to foster growth, especially when the indicators for women’s employment, income and wealth which have suffered. However, governmental, local and international initiatives targeting economic empowerment for women have historically failed to leverage international trade and development opportunities as a potential area for expansion.
In many developing countries, tax revenues remain far below levels needed to provide citizens with basic services or fund extra spending to minimize the impact of COVID-19. But as governments look for ways to strengthen tax collection systems, they must take a holistic approach to tax reform that includes building citizens’ trust, says a new World Bank report.
“The report offers feasible, clear-cut paths to putting trust building into practice,” said Edward Olowo-Okere, Director of the World Bank’s Governance Global Practice. “With detailed information on successful initiatives, it urges reformers to focus on how to more effectively tailor strategies to local contexts and constraints. In Freetown, Sierra Leone, for example, successful property tax reform followed significant public education programs and new forums for engagement between taxpayers and the city.”