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SA gears up for 4th Investment Conference (SAnews)
As South Africa prepares to host its 4th Investment Conference later this month, Minister Ebrahim Patel has hailed this key event as a boon to the country’s target of netting R1.2 trillion in investment. “President Cyril Ramaphosa in 2018 committed to raising over R1.2 trillion worth of investments over a five-year period, and hosted three annual Investment Conferences, at which he set out the policy context and reforms, and the private sector provided feedback and made pledges to invest. “Pledges received in the first three Investment Conferences amounted to roughly 64% of the five-year Investment Mobilisation Drive target of R1.2 trillion,” said the Trade, Industry and Competition Minister at a briefing on Monday. Patel said at the third Investment Conference, pledges of about R774 billion had been made.
‘Increase beneficiation to reduce trade deficit’ (The Herald)
Zimbabwe needs to step up measures aimed at increasing the proportion of minerals that are beneficiated in the country to get better returns and address trade deficit issues.
This comes after the southern African country’s registered a significant increase in trade deficit from US$30 million in November 2021 to US$180 million in December 2021. Zimbabwe’s mining sector is highly diversified, with close to 40 different minerals. The sector accounts for about 12 percent of the country’s gross domestic product (GDP). The southern African country has the world’s second-largest platinum group metal (PGMs) reserves as well as billions of US dollars’ worth of copper, lithium, gold, diamond and nickel. Broadly, an estimated 30 percent of the global mineral resource is found on the African continent yet the continent continues to lag behind in terms of global economic development and poverty eradication.
Economist Dr Prosper Chitambara said, “Beneficiation and value addition of minerals before exporting is one of the key pillars of accelerating economic development. “The major challenge to value addition has been limited incentives to lure potential investors and incentives that can encourage miners to add value to their produce locally.”
Kenya’s exports to hit over Sh1trillion by 2030 (Capital Business)
Kenya’s exports are projected to grow by USD10.2 billion (over Sh1.1 trillion) by 2030, new research by Standard Chartered has revealed. According to the research, this will be driven by among others, output from the manufacturing sector, agriculture and food, textile and apparel, and metal and minerals. The research further projects that global exports will grow by 70 per cent from USD17.4 trillion to USD29.7 trillion over the next decade. The report reveals 13 markets that will drive much of this growth, identifies major corridors, and five trends shaping the future of global trade.
What national payment strategy seeks to achieve (Business Daily)
From the starting point of a simple money transfer innovation, an elaborate financial services ecosystem has emerged. More importantly, the payments system has provided the rails for Kenya’s financial inclusion journey. Over the last 15 years, access to financial services has tripled from 26 percent of adults in 2006 to 83 percent in 2021. Some of the key milestones in this journey have included, the rollout of mobile money, the implementation and continued strengthening of the Real-Time Gross Settlement System, and the establishment of regional payments systems in both the East African Community (EAC) and the Common Market for Eastern and Southern Africa (Comesa) regional blocs.
Undoubtedly, we have achieved a lot, but much more remains to be done. Whereas the Covid-19 pandemic on one hand accelerated the pace of digitisation, on the other, it had a scarring effect on lives and livelihoods globally.
we are launching the National Payments Strategy. It seeks to consolidate the gains we have made so far while illuminating the path towards a new chapter in Kenya’s payments journey. Accordingly, the strategy seeks to realise the vision of a secure, fast, efficient and collaborative payments system that supports financial inclusion and innovations that benefit Kenyans. This vision will be anchored on five core principles: trust, security, usefulness, choice, and innovation.
Costly imports as shilling hits new all-time low (Business Daily)
The Kenyan shilling is under fresh pressure against the dollar after it hit a new record low on Monday, setting up the country for more expensive imports and debt servicing distress. Central Bank of Kenya (CBK) data shows the Kenya shilling hit a record low to exchange at an average of 113.94 on Monday. Bloomberg quoted the shilling trading at 114 against the dollar at some point in the day.A spot check by Business Daily, also revealed a weakening of the shilling amid escalating sanctions between Russia and the US that promise to cause a further rise in the cost of goods in the country.
“The depreciation of the shilling is likely to reverse the six-month products for processing and capital goods for investment,” KAM CEO Phyllis Wakiaga told the Business Daily. “This, therefore, implies that as the Kenyan Shilling depreciates, importers have to pay more for raw materials and intermediate goods.”
Kenya to host one of Africa’s two giant data hubs (Business Daily)
Kenya will host one of the two mega data centres in Africa that will increase Internet speeds and make it harder for hackers to bring down websites. The new data centres, which will have multiple servers with a high bandwidth to deal with spikes in traffic, will offer the continent faster access and better protection from cyberattacks. The Internet Corporation for Assigned Names and Numbers (ICANN), the non-profit corporation that coordinates the domain name systems, announced on Monday that it will set up two Root Server (IMRS) clusters, one of which will be in Kenya. “The clusters ensure that Internet queries from Africa can be answered within the region, and not be dependent on networks and servers in other parts of the world, thus reducing latency and improving Internet user experience in the entire region,” the organisation entrusted with stewarding the Internet’s unique identifier systems in the world said.
Kenya commits to strengthening regional infrastructure to boost intra-Africa trade (CGTN Africa)
Kenyan president, Uhuru Kenyatta on Monday committed to strengthening regional infrastructure in order to boost intra-Africa trade. Kenyatta, in a speech read on his behalf by James Macharia, the cabinet secretary in the Ministry of Transport, Infrastructure, Housing, Urban Development and Public Works, told a continental forum in Nairobi, the Kenyan capital, that his government will continue to build road networks to link the northern transport corridor that connects landlocked countries in East Africa to Kenya’s port of Mombasa.
Kenya and Uganda revive talks on milk (The East African)
Trade talks aimed at resolving the outstanding issues on milk importation between Uganda and Kenya are set to start in March after many false starts. Kenya’s Principal Secretary for Livestock Harry Kimtai said Nairobi has already communicated to Kampala, through its foreign affairs office. Mr Kimtai, who is the head of the Kenyan delegation, said they are reviewing guidelines issued by Uganda. “We have agreed with Uganda that we will visit the country next month for a verification mission that will help us resolve the outstanding issues on milk once and for all,” said Mr Kimtai. Kenya wants to ascertain that the milk that comes from Uganda is produced by local farmers, following allegations that the product is imported from third-party countries as powder and reconstituted before it is exported as fresh. The meeting by the Kenya delegation to Uganda has been postponed four times in the past year, delaying the resumption of normal trade on dairy products between the two countries.
Kenya averted the ban on the export of its agricultural produce to Uganda after Nairobi agreed to lift restrictions on imports of poultry products from the neighbouring country at the end of last year.
Kenya Railways gets Sh300m to complete Kisumu-Butere line (Business Daily)
Parliament has allocated Kenya Railways Corporation (KRC) Sh300 million to complete rehabilitation works on the Kisumu-Butere line. The Finance and National Planning Committee reallocated the Treasury’s vote as contained in the Supplementary Budget to secure the money for the completion of works on the metre-gauge railway line (MGR).”The committee recommends the following reallocations - National Treasury: rehabilitation of the Kisumu-Butere rail: addition of Sh300 million,” the committee said in a report on the scrutiny of the Supplementary Budget I for the financial year 2021/22.
The corporation early this month announced that rehabilitation works that began in September 2021 are 90 percent complete. KRC plans to have the first train carrying both passengers and cargo on the line in June.
The Nakuru-Kisumu line was refurbished to ensure seamless cargo and passenger transport from the Mombasa-Nairobi-Naivasha standard gauge railway (SGR).The refurbished line once complete is expected to ease the movement of passengers and cargo from Mombasa to Butere.
Tanzania Has Much to Gain by Expanding Women’s Access to Opportunities (World Bank)
Tanzania stands to benefit enormously from expanding women’s economic opportunities, especially in terms of access to land and productive assets, according to the latest World Bank economic analysis for the country. The 17th Tanzania Economic Update, “Empowering Women: Expanding Access to Assets and Economic Opportunities,” shows that bridging the gender gap in agricultural productivity in Tanzania could lift approximately 80,000 citizens out of poverty every year while increasing annual agricultural output by 2.7 percent and boosting annual gross domestic product growth by 0.86 percent. Eliminating the gender wage gap could have significant effects on household welfare. “The expansion of women’s economic opportunities has contributed to Tanzania’s sustained growth over the past 20 years, which recently culminated in its transition from low-income to lower-middle-income status,” said Mara Warwick, World Bank Country Director. “However, more can be done to enhance women’s ability to realize their full economic potential and play a pivotal role in supporting an inclusive and resilient post-crisis recovery.”
Uganda Reassures Unhappy Coffee Farmers After ICO Exit (allAfrica)
Uganda has assured its coffee farmers and exporters that their prized cash crop will still be in high demand in the international market despite the country pulling out from an important coffee pact. Coffee farmers in Uganda are protesting the decision by authorities not to renew their membership to the International Coffee Organisation (ICO). They fear that they could lose premium markets - especially in Europe - to which the country exports about 80% of its total coffee produced, annually. The government maintains it is negotiating better terms. On February 17, 2022 the state-run Uganda Coffee Development Authority (UCDA), a national regulator of the coffee industry, announced that it had withdrawn from the International Coffee Agreement 2007, to protest what it called an unfair trading system in the international coffee market.
The coffee regulator protested the agreement, saying it had become incapable of addressing the challenges facing Uganda’s coffee producers. Now it is pushing for Uganda’s unconditional market access for exporting not only green beans but also processed coffee since selling value-added products can increase farmers’ incomes. But some importing countries have imposed additional tariffs and restrictions on the import of value-added coffee which has led to the authority calling for the removal of these barriers in their withdrawal statement. “Uganda needs unconditional market access that allows for export of value-added coffee, not only green coffee,” the UCDA said in a statement.
Ghana’s Food Systems Dialogues: Stakeholders committed to reduce food losses from 20% to 10% (GhanaWeb)
The Alliance for a Green Revolution in Africa (AGRA) has assured that it will play a key role to have Ghana’s Food Systems Dialogues document disseminated to all relevant stakeholders to ensure its intended purpose is achieved by 2030. Ghana is one of three African countries including Malawi and Rwanda selected after the United Nations (UN) Food System Summit Dialogues to pilot the Food System Transformative Integrated Policy (FS-TIP) programme after demonstrating courageous leadership in the development and implementation of an ambitious food system policy agenda. Ghana’s national FSSD process began with the establishment of a national FSSD secretariat which instituted coordinating mechanisms to steer the dialogue process; after months of engagement between the various agencies and stakeholders, AGRA on Thursday held a workshop for stakeholders to disseminate findings from Ghana’s Food Systems Dialogues by consultants.
PIA: Rising oil price a great opportunity for Nigeria, says Buhari (Daily Trust)
As crude oil prices continue to rise above $100 per barrel, President Muhammadu Buhari has said there is no excuse for Nigeria not to reap the gains, especially with the current Petroleum Industry Act (PIA). Buhari stated this on Monday at the opening ceremony of the 5th edition of the Nigeria International Energy Summit (NIES 2022) at the State House Abuja. He said, “Crude oil prices are on the rise again after turning negative in April 2020. It is a great opportunity for us as a country. With the Petroleum Industry Act (PIA) in place, there should be no excuses. The enabling investment environment which has been the bane of the industry has been taken care of by provisions in the PIA. “There is now a level of certainty for the regulatory, administrative and fiscal framework and the legitimate grievances of host communities most impacted by activities of the industry has been addressed by the Act,” said Buhari.”
‘Nigeria’s oil and gas industry facing liquidity crisis’ (New Telegraph)
Nigerian oil and gas sector is currently facing liquidity squeeze as global financial institutions are reluctant in providing funds for hydrocarbon and related projects, the Executive Secretary, Nigerian Content Development Monitoring Board (NCDMB), Simbi Wabote, an engineer, has said. He said the development was affecting production and exploration of oil and gas projects initiated by private companies and the Federal Government. This happens as many countries are soliciting for funds to finance their economies and also transit seamlessly from fossil fuels to zero-carbon based nations.
According to him, funds realised from the above-mentioned institutions, will help in financing activities in the oil and gas industry, especially local content programmes introduced by various governments in Africa. Still on funding, Wabote said that the agency had, in recent times, spent over $500 million on local contents programmes in Nigeria.
Helping Chad strengthen public debt management (UNCTAD)
Although Chad recorded relatively few COVID-19 cases, its economy was hit by the effects of the pandemic – especially when the price of oil, its major export, crashed at the beginning of the crisis. Some estimates show that, following years of growth, the country’s real gross domestic product (GDP) contracted by 0.6% in 2020 and 1.1% in 2021. The central African nation’s prospects for recovery are hindered by unsustainable external debt stocks, which reached $3.6 billion in 2020 – an amount equivalent to more than one third of its gross national income (GNI), according to World Bank data. “High levels of public debt can undermine the government’s ability to deliver essential services, such as health care and education,” said Gerry Teeling, chief of UNCTAD’s debt management programme. In a country where about 42% of the population lives in poverty – according to the latest data – using scarce public finances to service unsustainable debt will have dire consequences for years. An UNCTAD project financed by the European Union will help Chad’s finance and budget ministry manage the country’s public debt.
In January 2022, Chad became the first country to officially request debt restructuring under the debt reduction programme established by the Group of 20 major economies (G20) known as the Common Framework. During the pandemic, Chad had benefited from the G20’s Debt Service Suspension Initiative (DSSI), which froze debt repayments until December 2021.
African trade
ECA Unveils AfCFTA Country Business Index (ACBI) Report (UNECA)
The Economic Commission for Africa (ECA) unveiled today the African Continental Free Trade Area (AfCFTA) Country Business Index (ACBI) Report, which is a key instrument through which businesses in Africa can articulate to policy makers their main trade challenges under the free trade agreement in force across African countries.
In her opening remarks, the Deputy Executive Secretary and Chief Economist of ECA, Ms. Hanan Morsy stated that the AfCFTA Country Business Index (ACBI) should be duly considered as a means to uphold, encourage, and inform sound trade policy in support of pertinent activities of the private sector to develop market opportunities, drive job creation and strengthen resilient recovery.
Mr. Karingi summarized the recommendations of the ACBI survey results, which conclude that although scores vary across countries, in general, female-owned firms are disproportionately impeded by several aspects of the trading regime as compared to their male counterparts when investing and trading goods across African borders. “Therefore, it is critical to accompany women using specific policy measures to ensure their active participation in intra-African trade and investment,” Mr. Karingi stated.
Call for greater synergies and complementarities for effective implementation of the AfCFTA (UNECA)
An integrated support of the United Nations (UN) and non-UN agencies towards the implementation of an inclusive African Continental Free Trade Area (AfCFTA) that ensures economic opportunities and resources accessible to all, especially women is vital to the success of the AfCFTA. This has been highlighted during the virtual event under the theme: Towards enhanced partnerships to support an inclusive AfCFTA organized by the Economic Commission for Africa (ECA), United Nations Development Programme (UNDP) and the United Nations Conference on Trade and Development (UNCTAD) on the sidelines of the 8th session of the Africa Regional Forum on Sustainable Development (ARFSD) in Kigali, Rwanda. “AfCFTA is the people! AfCFTA will not succeed through UN bodies, Governments, African Union Commission (AUC) or AfCFTA Secretariat but can succeed through the private sector/people who need to understand and commit to its implementation “ said Stephen Karingi, Director of the Regional Integration and Trade Division of ECA emphasizing the work of ECA in advocacy and sensitisation efforts on the AfCFTA.
Invest in transport infrastructure and manufacturing - AfCFTA members urged (GhanaWeb)
Various heads of states under the African Continental Free Trade Agreement (AfCFTA) have been advised to invest in transport infrastructure in their countries. This is to allow free flow of movement among member countries, as well as, promote free trade. Investment in the manufacturing of products through the identification and value addition to raw materials will create access to credit for private businesses.
They were speaking on the theme ‘a year into the implementation of trade under AfCFTA, the way forward’. Mr Doni-Kwame indicated that the most important action for African countries to take is to develop transport infrastructure in their countries. “There is intra country connectivity; be it rail, airlines, shipping lines, and once you have that, people know they can move their goods from one country to the other,” he said. He stated that: “Once you do this, apart from your indigenes manufacturing, you can also attract the necessary investment.” He also lauded the establishment of the Secretariat for the Pan-African Payment and Settlement System (PAPSS). However, Dr Obeng, President of the Ghana Union of Traders (GUTA) said “We’re better with intra-Africa trade, but the means of transportation is a difficult challenge that should be dealt with.”
EAC Secretary General Dr. Peter Mathuki is urging African leaders to urgently implement the Single African Air Transport Market (SAATM) agreement, in order to lower the costs of air transport in Africa and in turn boost development. Speaking in Nairobi, Kenya, at the 7th Programme for Infrastructure Development in Africa (PIDA) week, Dr. Mathuki stated that air cargo currently accounts for only 2% of the global air cargo adding that air transport remains out of reach for both passenger and cargo haulage due to high associated costs. “These costs can be brought down if we have political commitment to implement the Single African Air Transport Market (SAATM) agreement,” he noted. The Secretary General noted that the region continues to ramp up investments in infrastructure to narrow the infrastructure gap and enhance intermodal connectivity.
The Secretary General hailed African leaders for prioritizing investment in One-Stop Border Posts (OSBPs), which have facilitated transboundary trade by enhancing border crossing efficiency.
TTTFP progress in the Eastern and Southern Africa regions (SADC)
The Tripartite Transport and Trade Facilitation Programme (TTTFP) has recorded successes in the initiation and progress towards the domestication of some of the provisions of the Tripartite Multilateral Cross Border Road Transport Agreement (MCBRTA) and Vehicle Load Management Agreement (VLMA),model laws and regulations by Angola, Eswatini, Ethiopia, Kenya, Lesotho, Namibia, Rwanda, United Republic of Tanzania, Uganda, Zambia and Zimbabwe.
The TTTFP is a €21,6 million programme funded by the European Union to develop and implement harmonised road transport policies, laws, regulations and standards for efficient cross border road transport, transit and logistics services, systems and procedures with a view to reduce transport costs across the SADC-COMESA-EAC tripartite region and facilitate trade. The programme was launched after a realisation that lack of an integrated and liberalised road transport market in the Eastern and Southern African region poses numerous obstacles to trade by causing severe delays and increased transport costs, as well as challenges to road safety and durability, the latter caused by excessive loading of vehicles. The TTTFP addresses these challenges through the implementation of harmonised road transport policies, laws, regulations, systems and standards that affect the cross-border operations of drivers, loads, vehicles and protects road infrastructure in the countries of Eastern and Southern Africa.
Kenya drops in ranking of Africa visa friendly States (Business Daily)
The government’s efforts to curb the spread of Covid-19 by restricting international travel saw Kenya lose its position as one of the most welcoming countries in Africa. Kenya slid 17 places to rank at 28 last year in the Africa Visa Openness Index (AVOI) which measures how easy it is for Africans to enter one of the 54 countries on the continent covered in the study. This is the lowest score for Kenya since the index, published by the African Development Bank (AfDB) and the African Union Commission (AUC) started in 2016.
The spread of the Covid-19 pandemic to Africa in early 2020 saw Kenya and other countries introduce travel restrictions in a bid to slow down the importation of the respiratory illness from countries deemed to have relatively greater infections.
ECA Affirms Commitment to Implementation of PIDA PAP 2 at 7th PIDA Week (UNECA)
The 7th Programme for Infrastructure Development in Africa (PIDA) Week kicked off today in Nairobi, Kenya under the theme “Putting Africa on a Firm Footing for Recovery, Growth, and Resilience through Infrastructure”. The 7th PIDA Week, which will be held from 28th February to 3rd March 2022, aims to mobilise project preparation resources and market priority projects to fast-track implementation of PIDA projects. PIDA provides a framework of engagement with investors and partners to develop regional and continental infrastructure. It combines continental infrastructure initiatives and regional master plans into a coherent infrastructure investment programme with an implementation strategy and portfolio of priority projects. The second phase of PIDA Priority Action Plan (PIDA-PAP II) covers infrastructure development in transport, energy, ICT, and Transboundary Water Resources (TWR) sectors.
How can EAC countries reduce intra-regional air transport cost? (The New Times)
The Secretary General of the East African Community (EAC), Peter Mathuki, has urged African leaders to urgently implement the Single African Air Transport Market (SAATM) agreement, which will lower the cost of air transport in Africa and in turn boost development. He said this on Monday, February 28, at the beginning of the Programme for Infrastructure Development in Africa (PIDA) week in the Kenyan capital Nairobi.
Mathuki stated that air cargo currently accounts for only 2% of the global air cargo and air transport remains out of reach for both passenger and cargo haulage due to high associated costs. “These costs can be brought down if we have political commitment to implement the Single African Air Transport Market (SAATM) agreement,” Mathuki said. The PIDA Week aims at bringing together international and regional expertise from multiple stakeholders to deliberate on the issues around infrastructure delivery in Africa, and those related to PIDA.
African experts call for adaptation financing to tame climate crisis (China.org.cn)
The next phase of climate change fight in Africa should focus on robust financing toward grassroots-led adaptation initiatives in order to boost the continent’s ability to withstand shocks like droughts, heatwaves, wildfires and the spread of vector-borne diseases, experts said Monday. Speaking during the launch of the sixth assessment report of Intergovernmental Panel on Climate Change (IPCC) report on the sidelines of the resumed fifth session of UN Environment Assembly (UNEA-5) underway in Nairobi, the Kenyan capital, the experts said that securing a resilient and green future for the continent hinged on scaling up adaptation financing. “Access to adaptation funds is one of the most effective ways to ensure climate resilience in Africa remains on track,” said Youba Sokona, the IPCC vice-chair and a Malian climate scientist.
UK Gov, GSMA Unveil Analysis into Digital Trade in Africa (TechEconomy)
Today at the Mobile World Congress in Barcelona, a new white paper titled ”Towards A Flourishing Digital Economy for All – A Spotlight On Africa” was published – and discussed for the first time by a panel including senior executives from Vodacom, SafariCom, Smart Africa and the World Bank. The paper was commissioned by the UK’s Department for International Trade and conducted by GSMA’s Mobile World Live team of analysts.
The report examines how the mobile industry and its partners are working to open up a $180bn market opportunity by 2025. “Towards A Flourishing Digital Economy for All – A Spotlight on Africa” explores the progress made in building Africa’s mobile driven digital economy and discusses how mobile commerce is booming across the continent with four nations that are leading the way – Nigeria, Egypt, Kenya and South Africa. It examines how a growing cohort of dynamic businesses are adapting their services to address the specific challenges of the African mobile commerce market including unbanked customers, the lack of reliable identity credentials and last mile delivery issues.
African states need a vision for relations with the Indo-Pacific (The Conversation Africa)
This year sees the 25th anniversary of the Indian Ocean Rim Association. Nine of the organisation’s member states are African, ranging from Somalia in the north west to South Africa in the south. It also includes islands, such as Mauritius, off the western seaboard. It brings together governments, business and academics and researchers across the Indian Ocean Region. Set up to strengthen regional cooperation and sustainable development, the association has grown from 14 member states initially in 1997 to 23 in 2022. It has adopted the ‘Blue Economy’ as a focus area. It is also increasingly paying attention to climate change and environmental issues as well as the regulation of fishing and other threats of growing importance to the maritime realm. In recent years the organisation’s member states have increasingly been confronted by the geopolitical rivalry between China and the US in the mega-region, referred to as the Indo-Pacific.
For the US and its allies, who have largely appropriated the Indo-Pacific concept, the region is first and foremost of geo-economic concern. The economic interaction is crucial, as seen by the Build Back Better World initiative, although it remains vague on practicalities.
A developmental agenda remains important, yet there is an increasing realisation that there is no escaping the reality of an increasingly politicised and militarised region.
Modernizing Monetary Policy in Sub-Saharan Africa High-Level Conference (IMF)
Opening Remarks by Abebe Aemro Selassie, Director, African Department, IMF
This is an important and timely conference to take stock of the progress made by central banks in Sub-Saharan Africa. And this progress is impressive! Over the last three decades preceding the COVID-19 pandemic, the region’s average inflation declined by about 30 percentage points. In the mid-90s, up to 30 countries in the region had double digit inflation. In 2019, the region counted only 6 such countries, and most of them were grappling with conflict or a natural disaster. This improvement in price stability contributed to less volatile economic outcomes, higher growth, and better living conditions for the region’s populations. It is also an important factor behind the foreign direct investment flowing to the region to develop its potential.
The commitment of sub-Saharan African policymakers showed in the courageous reforms they undertook. These reforms aimed for more price-based monetary policy frameworks and more flexibility in exchange rate regimes. They were combined with bold moves on governance to make central banks more independent and accountable. The result was a drastic reduction in monetary financing of deficits and in most countries in the region. The governance reforms enabled more transparency and improved communication of central banks’ assessments of the economic outlook and the rationale of their policy choices. These reforms helped bolster the credibility of the region’s monetary institutions and explain a great deal of the achievements on price stability
Sustaining this reform momentum is critical for the region’s future. First, the projected modest recovery from the COVID-19 pandemic will be put further at risk if policy frameworks are not further bolstered to ensure an appropriate response to the tightening of monetary and financing conditions in advanced countries. Second, and more importantly, achieving the long-term potential of the region will require staying the course on nimbleness, accountability, and integrity of monetary policy frameworks and central banks. This is a big challenge, considering the flurry of innovations, such as digital money and big data, which are bringing to the fore new stakeholders. The challenge is more daunting when you think of the ever-larger shocks we will face, including through pandemics, climate change, and armed conflicts.
Sub-Saharan Africa: Building Resilience to Climate-Related Disasters (IMF)
This paper assesses the impact of climate-related disasters on medium-term growth and analyzes key structural areas that could substantially improve disaster-resilience. Results show that (i) climate-related disasters have a significant negative impact on medium-term growth, especially for sub-Saharan Africa; and (ii) a disaster’s intensity matters much more than its frequency, given the non-linear cumulative effects of disasters. In sub-Saharan Africa, electrification (facilitating irrigation) is found to be most effective for reducing damage from droughts while improved health care and education outcomes are critical for raising resilience to floods and storms. Better access to finance, telecommunications, and use of machines in agriculture also have a significant impact.
Global economy news
DP World’s offer to acquire 100% stake in Imperial successfully concluded (DP World)
Imperial Logistics Limited (‘Imperial’) and DP World Logistics FZE (‘DP World’) are pleased to advise that all conditions precedent regarding DP World’s offer to acquire a 100% stake in Imperial, including regulatory approvals, have been fulfilled. The transaction is now unconditional and will be implemented on 14 March 2022. “We are excited about concluding this transaction, which will be value-enhancing for our people, clients and principals, for our service offering across the markets we serve, and for our other key stakeholders who will benefit from DP World’s leading technology, capabilities, global networks, scale and key trade-lane volumes, while enabling us to build on our ‘Gateway to Africa’ strategy and growth ambitions,” says Imperial’s Group CEO, Mohammed Akoojee.”Combining DP World’s world-class infrastructure, specifically its investment and expertise in ports on the African continent, with Imperial’s logistics and market access platforms will enable us to offer integrated end-to-end solutions along key trade lanes into and out of Africa, also driving greater supply chain efficiencies, and ultimately enhancing value for all stakeholders.”
Suez Canal toll hike: ‘Global trade just got more expensive’ (FreightWaves)
The Suez Canal Authority has released a new set of canal tolls on all vessels traveling both north and south. The increase for both full and empty vessels will be either 5%, 7% or 10%, depending on carrier type, and become effective Tuesday.
This is the second toll increase on all vessels, with the exception of LNG and cruise ships, in the last month. Those two vessel classes were spared when the Suez Canal Authority (SCA) announced in early November that it would increase transit tolls through the canal by 6% beginning in February. Xeneta Chief Analyst Peter Sand told American Shipper, “This new toll announcement is substantial for a container ship that already pays $500,000 to $600,000 per transit.”
The SCA makes its money on container shipping and continues to see record volumes. According to Sand, for a large container ship, this hike means a one-way transit goes from $625,000 to $675,000. “Global trade just got more expensive,” he said.
Sustainable Finance in Emerging Markets is Enjoying Rapid Growth, But May Bring Risks (IMF Blog)
Most of the activity in the rapidly growing world of sustainable finance has been previously concentrated in advanced economies, but emerging markets, while still a small share of the total, saw a surge last year. As a result, their market share has increased for the first time since 2016, underscoring the growing investor appetite for environmental, social, and governance (ESG) products, but this growing opportunity also poses new risks.
Sustainable finance incorporates ESG principles into business decisions and investment strategies, covering issues from climate change to labor practices. It has become more mainstream in emerging markets in part because of pandemic-related financing needs, such as healthcare, as well as Latin America’s surge in climate-related borrowing.
Recent gains in ESG markets may be an important opportunity for emerging markets to access more stable funding sources and develop a broader and more mature sustainable finance ecosystem. With many of these nations highly exposed to climate hazards and already facing related transition challenges, private finance will play a crucial role in mitigating these risks and strengthening the financial sector.
UN Environment Assembly opens, sets sites on ending plastic pollution (UN News)
Ministers of environment and other representatives from over 170 nations will take part in the three-day hybrid Assembly (UNEA-5), which is meeting under the theme Strengthening Actions for Nature to Achieve the Sustainable Development Goals, which highlights the pivotal role nature plays in our lives and in social, economic, and environmental sustainable development. With action on a globally binding agreement on plastic pollution at the top of the agenda, UNEA-5 participants are also set to take up a host of other pressing issues dealing with the planet and its inhabitants, including the thematic areas: nature for climate; nature for human and ecosystem health; nature for poverty eradication, jobs and economic prosperity; and nature for sustainable food systems.
