tralac Daily News
In our recent review of South Africa’s economy we explore how to raise growth, reduce inequality and unemployment, and bolster the economy’s green credentials and climate resilience. These challenges have been deepened by the pandemic, which exacerbated South Africa’s economic problems, including a decade-long stagnation of per-capita income, high unemployment, and vast income inequality. But the challenges can be met in a complementary manner.
The rebound from the crisis presents an opportunity. To seize on this, the government will need to address deep structural constraints that limit the durability of the economic recovery. South Africa’s ambition of achieving carbon-neutrality by midcentury requires a profound economic transformation built on significant green investments, in turn supported by a business-friendly environment, a labor market that makes it easier to create jobs, and improved governance and transparency.
While the civil unrest of July last year, Covid-19, heavy rains and cyberattacks have contributed to backlogs at South Africa’s ports over the last two years, it has also brought about more collaboration between the public and private sectors and resulted in record exports. South Africa’s agricultural exports hit a record high of $12.4-billion in 2021. In the last quarter of the year alone, agriculture, food and beverage exports increased by 18% year-on-year to $2.8-billion.
Kenya to Export Cars Under AfCFTA (Taarifa Rwanda)
Kenya will soon export cars to the rest of the continent after the East African Community met the minimum requirement to allow it to trade under the African Continental Free Trade (AfCFTA). The move will see countries like Kenya start selling products out of the bloc.
The partner states have adopted the EAC Tariff Offer for Category A products to reach a minimum of 90.2 percent or 5,129 tariff lines out of the total 5,688, which is a minimum threshold required before a region can be allowed to trade under AfCFTA. The goods under category A include agricultural produce, automobile and textile among other items. “The expanded opportunities include manufactured products, value addition, regional value chains, agro-processing, motor vehicle assembly, pharmaceuticals, auto spares industries and mineral processing among other areas,” said EAC Principal Secretary Kevit Desai.
Digital shilling risks harming price stability goal, says CBK (Business Daily)
The Central Bank of Kenya (CBK) has raised concerns that running a digital currency will interfere with its core mandates including stabilising prices, raising the possibility that it might allow banks to execute retail payments on its behalf. The regulator said in a discussion paper on the digital currency that its issuance will therefore require national and international consultations.”…a CBDC could potentially lead to major disruptions affecting monetary policy transmission, financial stability, financial sector intermediation, the exchange rate channel, and the operation of the payment system,” said the CBK. It added that while there will be minimal monetary policy impact of the actual issuance – which would mirror that of existing hard cash— the changes in behaviour of the public holding the digital coins might be significant, triggering a review of the monetary policy framework. The regulator is thus proposing alternative means of managing the digital currency which would involve banks as intermediaries to handle retail payments done using the virtual currency.
Horticulture earnings rise to record Sh158bn (Business Daily)
Earnings from horticulture exports hit a historic high last year at Sh158 billion to remain the leading foreign exchanger earner in the last two years by staying ahead of tea and tourism. Data from the Kenya National Bureau of Statistics indicate that earnings from fresh produce grew seven percent from Sh150 billion that it recorded a year earlier. Whereas tea and tourism were impacted negatively since the outbreak of Covid-19 in 2020, horticulture has been recording impressive earnings in the last two years. Tourism recorded Sh146 billion last year with tea earning the country Sh136 billion. “The good results were boosted by high demand of the Kenyan produce in the world market last year,” said the Directorate of Horticulture in an interview with the Business Daily on Monday.
The horticulture sector has been enjoying good earnings during the Covid-19 period. For instance, in 2019, income from the export of fresh produce declined to Sh144 but picked up during the first year of the coronavirus outbreak to Sh150 billion.
Munya triples import permit fees for livestock products (Business Daily)
Traders of livestock products are set to face higher charges following proposals to triple permit fees for import and exports. Agriculture Cabinet Secretary Peter Munya has, through a legal notice, asked Parliament to approve reviews to the charges that were last changed over 20 years ago. The ministry has proposed that Sh3,000 be charged per consignment (truckloads) of animal feeds, apiary products, egg products, meat and milk products against the current Sh1,000.” Adjusting the charges will improve the effectiveness and efficiency of delivery of veterinary services with the resultant improvement of livelihood and poverty,” said Mr Munya. Traders that will be affected by the reviews include livestock keepers, livestock importers, slaughterhouse proprietors, milk and meat exporters.
Court rescues KRA in Sh569m sugar import compensation claim (Business Daily)
The taxman has been spared from paying a sugar importer more than Sh569 million for damages after changing dates for the importation of duty-free sugar in 2007, pending the hearing of its appeal.
In 2003, the Minister of Finance published a Gazette Notice domesticating the arrangements made between Kenya and Common Market for Eastern and Southern Africa (Comesa) in 2003, which provided for duty-free importation of sugar. The sugar importer accused KRA of pushing the dates from February 1, 2007, as earlier published by Kenya Sugar Board (KSB) to March 2007. “Firstly, the respondent has not rebutted the applicant’s contention that it may not be in a position to refund the Judgment sum if the appeal succeeded. Secondly, the Judgment sum is in no sense a small sum, it is a huge amount,” said justices Kathurima M’Inoti, Jamila Mohammed and Sankale ole Kantai. KRA appealed against the decision arguing that there is a real danger of the company enforcing the judgment, yet its appeal has high chances of success. The taxman says the importation was not within the period published for duty-free sugar.
EU extends sanctions against Zimbabwe over rights violations (The East African)
The European Union (EU) has renewed its two-decades-old sanctions against Zimbabwe, citing continued human rights violations and closure of the democratic space. Zimbabwe has been under EU targeted sanctions since 2002 after the late Robert Mugabe won a controversial presidential election. The EU recalls the purpose of its restrictive measures, which is to encourage a demonstrable, genuine and long-term commitment by the Zimbabwean authorities to respect and uphold human rights and the rule of law.”
Zimbabwe attributes its long running economic crisis to the sanctions by Western countries, but the EU said the measures “are targeted and very limited.” “They do not affect the people of Zimbabwe, its economy, foreign direct investments or trade,” it added. “Zimbabwe continues to benefit from duty free and quota access of its exports to the EU, while negotiations are ongoing to deepen the Eastern and Southern African (ESA) Economic Partnership Agreement.”
Kenyans brace for higher cost of living over Russia-Ukraine conflict (The East African)
Kenyan households are braced for higher energy and food costs as a result of the ongoing threat of war between Russia and Ukraine, which has sent global oil prices soaring and restricted wheat exports. A major risk event usually sees investors rushing back to bonds and the safest assets in what could hurt the flow of foreign investors to the Nairobi Securities Exchange (NSE) given the foreigners account for 58 percent of trading at the bourse. The Russian invasion of Ukraine risks further fanning oil prices – and therefore inflation through costly transport, electricity and other manufactured goods. Russia is the fourth-biggest buyer of Kenyan tea, having taken up produce worth Sh6.2 billion in the 11 months to November 2021.
Tanzania, Kenya, EAC integration to ease regional trade (The Exchange)
It is only through economic growth that the East African Community (EAC) can successfully realize its much-coveted regional integration. For this to happen, a delicate balance must be achieved between competition and cooperation; therein lies the dilemma, a race or partnership? As far back as two decades, in 2004, Kenya Uganda, and Tanzania, the founding partners of the East African Community, signed the Protocol for the Establishment of the East African Community (EAC) Customs Union that is known as the Customs Protocol yet to date bottlenecks remain.
Three years after the founders inked the Customs Protocol, the next parties followed suit, Burundi and Rwanda adopted the Customs Protocol in 2007. Yet they joined a protocol that is very much alive on paper but needs life support on the ground. As matters stand, numerous non-tariff barriers still remain even after the adoption of the Customs Protocol. The non-tariff barriers undoubtedly increase the cost of doing business and affect the growth potential of trade and cooperation. Again, the reason behind the persisting non-tariff barriers, despite the supposed political will, is the dilemma of competition vs cooperation.
How Tanzania’s economy faired in the 2021/22 second half (The Exchange)
Tanzania economy is recovering from the gruesome impacts of the pandemic. According to the recent Monetary Policy Statement, Mid-Year Review for 2021/2022 analyzes global and domestic economic performance. The review took a profound take on the performance of the exports sector. Whereby, exports of goods and services amounted to $5.735 billion in July to December 2021 compared with $4.598 billion in the corresponding period in 2020 – service receipts and non-traditional goods accounting for the largest share of 87.5 per cent. “Services receipt increased by 78.5 per cent, owing to a significant rebound in tourist arrivals to 543,644 from 262,093. Exports of goods amounted to $3.85 million, dominated by non-traditional goods at 81.4 per cent.” However, the review noted that good performance was recorded in exports of manufactured goods, horticulture, fish and fish products. Meanwhile, exports of gold amounted to more than $1.3 billion compared with around $1.6 billion.
However, the review noted that the imports of goods and services were around $6.5 billion from July to December 2021, compared with $4.699 billion in the corresponding period in 2020. The rise in price and volume effects of oil affected oil imports (increased by 76.7 per cent, which is more than $1.1 billion) which accounted for about 21.4 per cent of goods imports. “Furthermore, imports of machinery and building and construction rose by 16.3 per cent, and 41.5 per cent, respectively and altogether accounted for 28 per cent of goods imports. Services payment amounted to $1.035 billion.”
Tanzania is growing its network infrastructure and effectively lowering freight costs, increasing exports and growing investment all along the railway line. In the most recent development, an additional 282km of the railway are being constructed to connect Tanzania and Burundi giving the latter access to East Africa biggest and busiest port. The construction is an extension of the already laid down Standard Gauge Railway (SGR) in Tanzania. The two governments have signed an agreement that paves way for new rail to be laid at a sum of US$900 million. What does this extension mean for Burundi and how will it benefit Tanzania?
Rwanda’s agriculture exports rose by 39% to Rwf543bn in 2021 (The New Times)
Rwanda earned over $543 million (about Rwf543 billion) in agricultural export revenues from January to December 2021 against over $390 million of the same period in 2020, representing an increase of 39 percent. These export statistics are contained in the National Agricultural Export Development Board (NAEB)’s December 2021 and Quarter Two Report 2021-2022, which was published early February this year.
According to the report, both export and re-export increments were related to the economic recovery from the Covid-19 pandemic, where most of the economic activities resumed with more movement of people and goods in the region and abroad. The report indicated that tea, coffee, flowers, fruits and vegetable unit prices were also showing positive trends, thus contributing to the realized good export performance compared to the same period of 2020.
The Ghana Union of Traders Association (GUTA) has said it is poised to support local manufacturing companies by exporting their goods to other countries. According to the Chief Executive Officer of the Association, Dr Joseph Obeng, their move is to support government’s One District-One Factory (1D1F) initiative. This, he said, will help stabilize the local currency - Cedi - which has in recent times witnessed a free fall. In an interview with the Ghana News Agency on Friday, Dr Joseph Obeng said, “We want to do what we call the income in-income out programme to export goods from Ghana to the destinations that we go and import the goods.”
Manufacturing trade sectors inspire hope in economy’s recovery (The Business & Financial Times)
The Business Tracker survey has revealed that the country’s manufacturing and trade sectors, which were hit hard by the pandemic, have almost fully recovered as both saw an appreciable increase in activities during the third wave of the pandemic (from January to September), thereby inspiring hope that the economy is getting back on track.
According to data published by the Ghana Statistical Services (GSS), the manufacturing sector’s recovery during the third wave of coronavirus disease that swept the country has hit 96.9 percent; the highest recovery in all sectors of the economy. This is higher than the 80.2 percent and 88.9 percent recovery recorded in the first and second waves of the pandemic respectively. The same trend is also observed in the trade sector, as it saw 96.3 percent of firms fully recovered; up from the 79.9 percent and 90.4 percent recorded in the previous two waves.
Oquaye woos Ghana’s rich to show interest in Free Zones Scheme, AfCFTA (Class FM Online)
The Chief Executive Officer of the Ghana Free Zones Authority (GFZA) Mike Oquaye Jnr has said “the business of Ghana Must be driven and led by Ghanaians”. An informal business interaction saw Mr Oquaye talking through the need for Ghanaian investors and entrepreneurs like the members of the East Legon Executive club to take advantage of the scheme, in line with the Authority’s vision to assist Ghanaian businesses to “achieve more exports, beyond the horizon – into Africa and the rest of the world”.
Mr Oquaye informed the group that contrary to the perception that the Free Zones Scheme is an area fully dominated by foreign companies, available figures show; 31 per cent of businesses are wholly owned by Ghanaians, 33 per cent jointly owned by Ghanaian and foreign interest, and 36 per cent wholly foreign owned. The interaction formed part of the “Ghanaian Entrepreneurs for Export” programme.
‘Ghana in economic crisis but not broke’ – Adei (Class FM Online)
Ghana is in a short-term economic crisis but the country is not broke, former Rector of the Ghana Institute of Management and Public Administration (GIMPA), Prof Stephen Adei, has said.
“I think that Ghana, we have a good country with a good future but we have a short-term challenge; it is quite obvious. We know that at the end of last year, the fiscal deficit was 12.1 per cent, inflation has started climbing up to 12.6 per cent; the currency, which was quite stable – in fact, two years ago, we were the best-performing currency in Africa,” Prof Adei told Kofi Oppong Asamoah. “It is a short-term economic crisis... Nobody should deny that one. It is a fact”. He warned: “If we don’t manage it well, it can lead us into trouble but I don’t think that we can say that the country is broke”. In his view, “It is a matter of economic crisis which has to be managed”.
Boosting the non-oil exports (Daily Sun)
Neglected for decades in favour of crude oil as the major revenue earner for the country, hope is now rising as the non-oil sector is receiving new impetus to drive economic growth and make the country less dependent on oil. Undoubtedly, this is the path to go, with the Central Bank of Nigeria (CBN) charting the way forward for non-export revenue with the recent unveiling of “RT200FX Programme.”
With a capital outlay of $200billion, the aim of the new imitative is to drive non-oil revenue for the next five years. The policy is hinged on five major planks: Value-adding export facility, non-oil commodities export facility, non-oil foreign exchange rebate scheme, dedicated non-oil export terminal and biannual non-oil export summit. Each of the components is designed to boost local production that will add value to non-oil natural resources that abound in many states of the country. These include gold, zinc, bauxite, copper, cocoa, cashew, sesame seed, lead, palm oil, sorghum, peanuts, cassava, millet, among others.
This book explores possible solutions for a more intensive use of digital technologies, especially by small and medium enterprises, to increase their productivity and create more quality jobs. The report will contribute to helping women and young people in particular to gain access to decent work and therefore reduce their exposure to poverty. Appropriate use of this report will make it possible to succeed in the challenges of digital transformation, especially in the context of a relatively young population that is more open to innovation and change.
African trade news
The East African Business Council is urging the Republic of South Sudan to fully implement the EAC Single Customs Territory to spur intra-EAC trade. Speaking at the EABC -TMEA Public-Private Dialogue at the Elegu/ Nimule One-Stop Border Post, transporters, clearing and forwarding agents and traders explained that delayed implementation of the EAC Single Customs Territory by South Sudan causes delays in the clearance of cargo at the border. The transporters reported that occasionally trucks await clearance for 2 days in the parking yard. South Sudan join the East African Community in April 2016. In 2020 South Sudan’s export to the EAC Partner States amounted to USD 87million while imports USD 573 million. In 2016 South Sudan export and imports to the EAC Partner States were USD 2.6million and USD 400 million respectively. Uganda imports from South Sudan amounted to USD.86 million in 2020 while exports USD 357 million (International Trade Centre).
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. The One-Stop Border Post (OSBP) concept is not operational due to the delays in the construction of the OSBP facility on the South Sudan side.
The African Union (AU) has noted the clear impact of infrastructure deficits on African competitiveness, recognising this as “a continental problem that requires a continental solution”. Regional integration through infrastructure programmes is expected to overcome constraints imposed by scale and location, and improve the competitiveness of African producers, connecting consumers and enhancing intra- and inter-regional trade. African leaders have consistently expressed their desire to support Africa’s economic development through a common market for goods and services. A 2016 report by McKinsey projects that Africa’s manufacturing “output could expand to nearly $1 trillion” by 2025 if Africa’s manufacturers upscaled to meet domestic consumer and business demands. This will require inter-sectoral collaboration between business and governments to address obstacles to production and exporting of goods.
Recognising these and other market opportunities, aspirations for Africa’s development have begun to translate into policy-making: The African Free Trade Agreement underscores regional policy efforts towards this goal; the AU’s Programme for Infrastructure Development (PIDA) is an outcome of a coordinated policy effort to unlock competitive opportunities; and, in South Africa, the recent adoption of the District Development Model shows a localised shift, mirroring intra-regional policy trends.
Governments around the world are mandated to provide basic services such as clean water, sanitation, housing, immigration documents (passports), security, and health services, among others, for their citizenry. It remains crucial for governments to efficiently provide these services sufficiently and cost-effectively. These basic services should also closely correlate with the socio-economic activities of the population to accomplish the aspirations of the African Union’s Agenda 2063 and the United Nations’ Sustainable Development Goals (SDGs). The AU aspirations are to ensure a better and more sustainable future for all Africans.
There are efforts among African countries to utilise Information and Communication Technologies (ICT) tools to enable and improve governments’ service delivery across the continent. In this way, African governments are progressively adopting digital and electronic government operational mechanisms in the form of e-government service delivery. Notably, e-government systems are utilising ICT tools such as digital technologies and internet-based applications to enhance access and delivery of basic services to citizens and businesses across all governmental departments.
As part of its mandate to deliver on Agenda 2063 and SDGs and operationalizing of the African Continental Free Area (AfCFTA) by translating ideas into action and in line with its commitment that private sector and public sector dialogue yields tangible outcomes, the United Nations Economic Commission for Africa (ECA) and its partners (IGAD, AUC, AUDA-NEPAD, UN Family) are facilitating the establishment and operationalization of the AfCFTA-anchored Pharmaceutical Initiative (Pharma Initiative)’s Centralized Pooled Procurement Mechanism (CPPM) on the Africa Medical Suppliers Platform (AMSP). Further, the high-level Stakeholders Meeting to deliberate on regional database and regulatory affairs for select maternal, neonatal and child health medicines will be held on 24-25 February 2022, Nairobi, Kenya.
African countries should leverage domestic financing options in order to hasten their transition to green and resilient economic development in the face of dwindling external support, experts said at a virtual forum in Nairobi, the Kenyan capital, Monday. Jean-Paul Adam, the director for Technology, Climate Change and Natural Resources Management at the UN Economic Commission for Africa (UNECA), stressed the need for the continent to mobilize resources internally in its quest for green growth. “Climate financing which is a critical pillar of Africa’s resilient growth should be pegged on resources that are mobilized internally as pledges made by major economies take longer to come through,” said Adam.
The need to finance more environmental projects in Africa is driving two entrepreneurs to start the first exchange dedicated to green bonds. The Green Exchange, to be based in Ghana’s capital Accra, aims to enable companies to issue billions in green bonds and for investors to trade the debt in a secondary market, said Orla Enright, its chief executive officer. So far Africa has missed out on a global boom in borrowing to fund projects that help mitigate climate change. “The reaction from companies in the region to the opportunity to issue a corporate green bond has been highly positive,” Enright said in an interview in Accra. “They’ve seen the potential of green bonds and that the time is now.” Sub-Saharan Africa urgently needs to mobilise $50 billion annually to address climate adaptation in agriculture, power and urban infrastructure, and green bonds offer part of the solution, the Overseas Development Institute said in a research note. The continent is among the most at risk from climate change yet suffers from a high cost of finance.
Panelists at the European Union-Africa Business Forum 2022 in Brussels called for more strategic cooperation between Europe and Africa to address trade and economic imbalances between the two continents. Recent statistics show that Africa’s participation in global value chains remains low at 3%.
Albert Muchanga, Commissioner for Trade and Industry at the African Union Commission, said Africa can improve its stake in the global value chain with the help of a strong EU partnership in a win-win formula. “Rather than relying just on exporting raw materials, integrating EU-Africa value chains should aim to process goods within Africa. This is where jobs are created and poverty reduced.”
Thierry Breton, EU Commissioner for the Internal Market, called for a more robust economic integration between the two continents. “It is extremely important that we continue, from both sides, to break the barriers to integrating our markets as a very strong booster for our economies,” he said. “We are trying to put the tools together from our side with our new global strategy. We will dedicate €150 billion to Africa. We will, of course, support massive infrastructure in Africa, which we know is extremely important and we will help improve the investment climate and support sustainable development.”
AU-EU Summit: private sector partnerships are where real change can happen (The Conversation)
Five years since the African Union (AU) leaders and their European Union (EU) counterparts held their 5th meeting in 2017, the two regional organisations have met again. The February 2022 meeting – 16 months overdue because of COVID – was significant given the actual and potential size of the two blocs. The relationship between the two continents has been tested in recent months. The current dialogue between the two blocs is about priority areas of economic cooperation, job creation and climate change. Others are migration management, investment in youth, and peace and security.
Europe remains Africa’s largest foreign aid provider. The flow of trade and investments between the two continents is high. Africa’s exports to the European Union, for instance, totalled US$146 billion in 2021 compared to its imports of US$142 billion.
Strengthening of intercontinental value chains (step-by-step activities that transform raw material or ideas into products) is a priority area for the partnership between Africa and Europe. Functioning value chains could have spillover effects on the domestic industrial sector, and help boost national self-sufficiency. This is particularly critical for sectors such as pharmaceuticals where the COVID pandemic has exposed weakness.
The continental project for free trade is an essential component for the growth and industrial transformation of Africa. Its building blocks are the various regional economic communities that currently exist across Africa. The cooperation between Africa and Europe needs to strengthen these groupings.
In a strong endorsement of the work of the African Union Development Agency-NEPAD (AUDA-NEPAD) to strengthen medicines regulators and improve health security on the African continent, the European Union (EU) – including the European Commission, the European Medicines Agency (EMA), and EU Member States Belgium, France and Germany – and the Bill & Melinda Gates Foundation (BMGF) will mobilise more than 100 million euros over the next five years to support the recently established African Medicines Agency (AMA) and other African medicines regulatory initiatives at regional and national levels. This support to strengthening regulatory capacity will improve health security in Africa, including through the expansion of local manufacturing of quality, safe, efficacious, and affordable medicines, vaccines, and other health tools.
The commitments announced today will support the first stages of the continent-wide African Medicines Agency and the further development of African medicines regulatory capacity at regional and national levels. This funding intends to foster collaboration and sharing of technical expertise between the EMA and the AMA and support several African national regulatory authorities (NRAs) to achieve the minimum WHO requirements for effective regulatory oversight for quality local vaccine production.
AfCFTA offers terrific opportunities, both for Africa and the United States and we look forward to engaging the African Union Secretariat and countries in Africa, on how we can make US companies come in an engage Nigerian companies. The Biden-Harris administration is ready to held harness economic gains that we see from the AfCFTA and we are committed to providing technical assistance to support cross-border trade and investments, whether at the country level, at the regional, economic or communities level, working with the AfCFTA secretariat.
The Prosper Africa is a commitment to strengthening mutually beneficial relationship towards trade and investment. This includes trade and investment flows from the United States to Africa and also includes from Africa to the United States. So, we are trying to provide more competitive and comprehensive packages and support to both US and African companies. Particularly, we are helping African companies to attract investments.
The Prosper Africa Initiative brings together the full suit of the US government trade and investment support services and it has added new and improved areas. So, the Prosper Africa Initiative is private sector led and it is to respond to the needs of the private sector by providing things like market insights, technical assistance, financing and more. So, it is different from previous initiatives in that we are taking a continent-wide approach, so that we can engage with companies and investors who are looking for viable sectors across countries.
Export oriented policies toward Asia could support faster economic growth – Albert Zeufack (The Business & Financial Times)
The World Bank Chief Economist for Africa region, Albert G. Zeufack, has called on policymakers to develop policies that are export-oriented toward Asia to support faster economic growth and transformation. This call comes amid the turbulent times of the coronavirus pandemic; as global competition has seen the gradual restructuring of international trade policy.
Available data point to an increase in trade between sub-Saharan Africa and Asia – from 13 percent in 1997 to 26 percent in 2016 for exports, and from 20 percent to 36 percent for imports. This has largely been on the back of intensified trade relationships with China and India. The composition of Africa’s exports to Asia is primary commodities related to energy, metals and minerals, and agricultural raw materials. Africa has also diversified its sources of imports over the past decade.
Presenting on the prospects of trading with East Asia during the launch of the World Bank book dubbed ’Africa in the New Trade Environment’, the Chief Economist indicated that assessment of the changing demand patterns of Asia’s growing middle-class informs of export diversification options for sub-Saharan African countries.
‘Working Relations Key to Continued Africa-Latin-America Ties’ (African Union)
The African Union (AU) Pavilion in collaboration with the Argentine and Mexican Pavilion at Expo 2020 Dubai rubberstamped the South-South strong influence on the Agriculture, Food security and Climate change sphere, as experts from both the African continent and Latin America (LATAM) convoked to share and report on projects currently employed in the field.
The event rounded off Expo’s ‘Food, Agriculture and Livelihoods’ week. A period that was dedicated to exploring how the global community can sustainably grow foods to meet future demand whilst ensuring agriculture works in harmony with ecosystems, promoting responsible consumption habits to reduce food waste.
“We have Agenda 2063 as our united common cause for the African people and to have our Latin-American sisters and brothers, commit to continue the exchange of not only resources but the scientific IP (intellectual properties) will help safeguard the Africa and Latin-America we want,” concluded Dr. Bissoonauth.
The current reading of 98.7 is below the barometer’s baseline value of 100 and down slightly from last November’s reading of 99.5, indicating a loss of momentum in trade at the start of 2022 following last year’s strong rebound in trade volumes. However, the index also shows signs of bottoming out, suggesting that merchandise trade may turn up soon even if it remains below trend in the near term. In addition to ongoing supply chain disruptions, the barometer’s weakness is partly explained by the introduction of health restrictions to combat the Omicron wave of COVID-19, which some countries are now scrapping since the new variant’s health impact has turned out to be relatively mild. Relaxing these measures could boost trade in the coming months, though future variants of COVID-19 continue to present risks to economic activity and trade
In 2020, the share of Least Developed Countries (LDCs) in world trade remained at just 1%. Although the Istanbul Programme of Action (IPoA) for LDCs and SDG target 17.11 both sought to double LDCs’ share of global exports by 2020, the world’s 47 LDCs missed the target. While this could be regarded as a “lost decade” for gains from trade, the performance of the Commonwealth’s 14 LDCs tells a more promising story: their collective share in global exports was 1.27 times higher in 2020 than in 2011 and two LDCs – Rwanda and Tuvalu – almost doubled their share of world exports.
Before the COVID-19 pandemic outbreak, Commonwealth LDCs’ GDP grew at an average annual rate of 5.5% between 2011 and 2019, compared to an average global growth rate of just 2.2% and 4.2% for all 47 LDCs combined. Commonwealth LDCs relied heavily on intra-Commonwealth trade during this period, which grew significantly despite the 54-member body not being a trading bloc. In 2019, the Commonwealth absorbed one quarter (USD 19 billion) of their total goods and services exports (USD 79 billion). During the pre-pandemic years (2011-2019), the share of Commonwealth LDCs in intra-Commonwealth goods exports climbed from 2.18% to 3.4%. Over the same period, the share of LDCs in world trade stagnated at 1%
A significant and growing ”Commonwealth advantage” in trade has driven this increase in exports, helping to build, strengthen and sustain trading relationships between Commonwealth LDCs and other member countries. Historical ties, familiar legal and administrative systems, the widespread use of English and the presence of large and dynamic diasporas, mean bilateral trade costs are around 21% lower, on average, for Commonwealth country pairs compared with the cost of trading with non-Commonwealth countries.
G20 Finance Ministers and Central Bank Governors Meeting Communiqué (US Department of the Treasury)
The global economic recovery is continuing. However, new waves of COVID-19 infections and the emergence of new variants are impacting the pace of recovery. Recovery is expected to be asynchronous, partly due to uneven access, delivery and uptake of vaccines, therapeutics, and diagnostics, with an increased likelihood of narrower and uneven macroeconomic policy space. Supply disruptions, supply-demand mismatches, and increased commodity prices, including energy prices, have also contributed to rising inflationary pressures in a number of countries and pose potential risks to the global economic outlook. We will continue to strengthen the resilience of global supply chains. We remain vigilant of the impacts of these challenges on our economies. We will also continue to monitor major global risks, including from geopolitical tensions that are arising, and macroeconomic and financial vulnerabilities. We will undertake a more systematic analysis of macroeconomic risks stemming from climate change and of the costs and benefits of different transitions. We reaffirm the importance of open and fair rules- based trade in restoring growth and job creation, reiterate our commitment to fight protectionism, and encourage concerted efforts to reform the World Trade Organization. We confirm our April 2021 exchange rate commitments.
The COVID-19 pandemic has widened inequality for the most financially vulnerable and underserved groups especially women, youth, and Micro, Small, and Medium Enterprises (MSMEs). We reaffirm our commitment to bring forward the financial inclusion agenda and we look forward to the Global Partnership for Financial Inclusion (GPFI) developing a financial inclusion framework on harnessing the benefit of digitalization, with the objective of boosting productivity, and fostering a sustainable and inclusive economy for women, youth, and MSMEs, building on the G20 2020 Financial Inclusion Action Plan.
How the Global Pandemic Widens the Gap between the Poor and the Rich (Politics Today)
According to Oxfam, a UK-based international NGO, the 10 richest people on earth have doubled their wealth, while the rest of the world and, in particular, 99% of humanity has been worse off during the pandemic. Global inequalities have overall increased twofold between 2019 and 2022.
The need for more equitable and inclusive development and a more balanced distribution of income flow between land, labor, and capital is more evident today. There is an ever-greater need for re-organization of the roles and income flows amongst all production factors. Meanwhile, the world is moving towards a new era where state capitalism is also more evident. Governments play a central role in new multinational corporations. In particular, the rise of China (and Asia broadly) with its own socialism and state capitalism is a new eye-catching case not to be missed. New measures are needed to ensure inclusive development. Social, psychological, human, and democratic capital accumulation processes and economic transformations remain as the challenges of this new era.
Before the Next Shock (Foreign Affairs Magazine)
During the coming decade, the world economy will confront a crisis. This forecast may sound rash, but the past half century revealed that disasters occur regularly. In recent times, policymakers have faced not just the COVID-19 pandemic and its economic trauma but also various eurozone crises. These dramas followed the global financial crisis of 2008 and the consequent recession, which were in turn preceded by the shock of 9/11.
Whatever its origins, the next crisis will strike an economic system already under strain. People around the world are frustrated and restless. Leaders everywhere, attentive to domestic politics, are turning toward national industrial policies and hardening their borders. Geopolitical competition has bred mistrust among major economies, and the world seems to be fragmenting into regions pulled by economic gravity toward local poles of power.
The legacy institutions of earlier economic orders are struggling to adjust to these changes. The International Monetary Fund (IMF) and the World Bank have to add climate and pandemic policies to their development missions. The World Trade Organization has been unable to modernize its rules.