tralac Daily News
Zim only processing two percent tobacco (The Herald)
Zimbabwe has earned US$245 million after exporting 48 000 tonnes of tobacco, as the country is only processing two percent of the leaf. The country has a capacity of earning US$15 billion per annum from tobacco exports but is currently only getting US$900 million. According to the latest Tobacco Industry and Marketing Board (TIMB) statistics, 47 598 tonnes of tobacco have been exported to different regions with the Far East taking the bulk of the golden leaf.
TIMB chief executive, Mr Meanwell Gudu, said there was need to invest in value addition for the industry and country to fully benefit from the crop. He also expressed concern over sustainability issues which he said could affect the markets if not adhered to. “While the tobacco industry has a potential value of US$15 billion from cigarettes export, only US$0,9 billion is currently being realised from leaf export,” said Mr Gudu. “We want our growers to use renewable sources of energy for curing tobacco. Our growers should not cut down indigenous trees for fuel wood for curing tobacco. Doing so is like robbing from our future generations.
Govt to restore viability of metal casting sector (The Herald)
Government says it is fully aware of the need to restore the viability of Zimbabwe’s metal casting industry to its former glory, as the sector has potential to drive economic recovery and growth. Finance and Economic Development Minister Mthuli Ncube, in a keynote address at the Zimbabwe Metal Casting Summit in Harare last week, said through the National Development Strategy 1 (NDS1) the Government had embraced and supported all initiatives that seek to promote beneficiation of local raw materials and building domestic capacity through upskilling of local artisans.
tool making and die casting, which are at the core of industry, enable the industry to make tools and parts for machines and once there is strong capacity to make tools, machine components, and spare parts, they can easily transition to the manufacture of whole machines. “Once we move up that value chain and can build machines, we can easily transition further to make and build industrial manufacturing systems. So in my view this is the right way to go,” the Minister said.
Kenya, US set for agriculture trade deals (Farmers Review Africa)
Kenya and US are set for agriculture trade deals. President Joe Biden’s top Agriculture minister said the US government will dispatch top agricultural officials and farmers’ representatives for a week-long trade mission in Nairobi later this year to scout for trade opportunities for American farmers and exporters.
The delegation comprising businesses, farm organisations, and teams from various agriculture departments in the US government are expected in Kenya from October 31 to November 3. US Secretary of Agriculture Tom Vilsack said the trade mission will connect Kenyan exporters and farmers with their US counterparts with a view “to expanding and diversifying global market opportunities for US agriculture.”
US firm backs Kenya’s law on waste recycling (Business Daily)
US multinational Dow Chemical, which produces key materials for manufacturing plastic packaging, has backed a proposal to compel companies to recycle materials. This follows draft laws by the Ministry of Environment and Forestry which is seeking stiffer penalties for polluting the environment. Dow Chemical East Africa, the producer of polyethylene which is used to make plastic packaging products ranging from clear food wrappers and shopping bags, says the new rules which will privatise the collection of plastic waste are timely. “The regulations are timely because the reality is that, for the longest period, everybody in the (plastics) value chain has been working in a silo,” Dow Chemical East Africa MD Leonard Kareko told the Business Daily in an interview. “This means if I am a manufacturer, I produce the resin and give it to the next person in the value chain, the brand owner puts the product on the shelf, you as a consumer buys and that’s the end of your responsibility.” The Sustainable Waste Management Bill 2021 compels users of plastic materials to separate garbage into organic, dry and special waste ahead of collection, failure to which they will be slapped with a Sh20,000 fine or up to six-year jail.
Kenya mulls tax hike on clinker after trade malpractices by firms (The East African)
Kenya is set to increase duty on imported clinker to rein in on unscrupulous cement manufacturers involved in trading malpractices. Nairobi says some errant cement companies have been abusing the low tax regime of 10 percent in the region and wants to discipline them through an increase in tax for imported clinker, which is a key ingredient in cement manufacturing. The specific duty to be charged is still subject to discussion among the East African Community states within the broad framework of the Common External Tariff (CET) reform programme. This latest development comes after Kenya rejected findings of a regional study to determine the quantity and quality of clinker.
“Some of these cement companies are importing clinker and the same companies are mining clinker and exporting it to neighbouring countries. So we need to come out together to discipline that behaviour because you cannot import a raw material and still at the same time export the same raw material,” Kenya’s Trade and Industry Principal Secretary Johnson Weru told The East African in an interview last week.
Anxiety grips importers months to Kenya’s election (The East African)
Importers are worried political tension in Kenya ahead of the August 9 elections may disrupt the supply chain and raise cost of transport with some ships reportedly avoiding Mombasa port for Dar es Salaam. Now the Shippers Council of Eastern Africa (SCEA) wants authorities to step in before things get out of hand and assure importers of security. “We have seen a decline of transit goods by eight percent in the first three months while there has been increase in cargo throughput at Dar port. Last year, Kenya increased transit cargo to Rwanda by 85 percent but this year we have seen a 35 per cent decline and if the situation is not controlled, we might record a slump due to rising political tension,” said SCEA chief executive Gilbert Lagat.
East Africa is served by two major corridors with the main one being the 1,700 kilometre Northern Corridor that runs from Kenya, to Uganda, Rwanda, Burundi and Eastern Democratic Republic of Congo. Due to rising political heat, importers might opt to use the 1,300 kilometre long Central Corridor serving Tanzania, Rwanda, Burundi, Uganda and Eastern DRC, with an exit and entry point at the port of Dar es salaam. Most of the importers in the region prefer Mombasa due to its efficiency and reduced number of border points. Currently, Mombasa handles 40 percent of DRC cargo and ferries eight million metric tonnes of Uganda cargo. Dar es Salaam has been making heavy investment to attract more cargo to its facility with Tanzanian government trying to woo more traders to ditch Mombasa port in its favour.
African shippers are currently experiencing challenges in liner services, with historic port bottlenecks now compounded by a surge in freight rates, making shipping operations difficult for many.
Diaspora remittances drop 5.1% in February on low season (The Star, Kenya)
Kenyans living abroad sent home $321.5 million (Sh36.6 billion) in February, 5.1 per cent lower compared to $338.7 million (Sh38.3 billion) in January. The Central Bank of Kenya (CBK) attributes the drop to seasonal factors. The weekly bulletin by CBK, however, shows the amount was 23.5 per cent more compared to the similar period last year where $260.3 million (Sh29.7 billion) was remitted back home. The cumulative inflows for the 12 months to January totaled $3.84 billion (Sh437.7 billion) compared to $3.15 billion (Sh359.1 billion) in the same period in 2021, a 21.4 per cent increase. The country has recorded the highest levels of diaspora remittances since last year despite the Covid-19 pandemic that has been crippling the global economy since late 2019.
Tanzania and the African Continental Free Trade Area: possible impacts, policy priorities and scoping of future support (ODI)
This briefing reviews how far Tanzania has come in the AfCFTA negotiation and implementation process, considers the possible impact of implementing the AfCFTA and suggests a range of measures to help with implementation and promote more beneficial impacts. It identifies key priorities and needs for Tanzania in the negotiation and implementation of the AfCFTA for possible support from the UK Foreign, Commonwealth and Development Office (FCDO), through donor support programmes such as Supporting Investment and Trade in Africa (SITA). The analysis underpinning this briefing draws on in-country consultations with agencies and organisations in the public and private sector in Dodoma, Dar-es-Salaam and Arusha, and secondary data and literature reviews.
Tanzanian govt: Improve cargo handling (Dailynews)
WORKS and Transport Minister Prof Makame Mbarawa has tasked the newly inaugurated board of directors of the Tanzania Ports Authority (TPA) to work on ‘unbearable’ delays in handling containerized cargo vessels by Tanzania International Container Terminal Services (TICTS). The vividly irritated minister used most of his address to the new board showing his dissatisfaction with the performance of the TICTS which has been contracted by the TPA as one of the institutions to handle cargo at the Dar es Salaam Port. “TPA contributes about 37 per cent of the revenues collected by the Tanzania Revenues Authority (TRA). We have made appointments of the new members of the board with huge trust that you are going to raise the revenues. “The number of ships at the port has increased but they wait for so long at the Outer Anchorage before docking at the TICTS’s berths for offloading cargo,” Prof Mbarawa stated.
United Nations advises Zambia on domestic resource mobilization and curbing illicit financial flows (UNECA)
The United Nations Economic Commission for Africa (UNECA), through its Sub-Regional Office for Southern Africa (SRO-SA), based in Lusaka, Zambia and its Macroeconomics Governance Division (MGD), based in Addis Ababa, Ethiopia is collaborating with the United Nations Department of Economic and Social Affairs (UNDESA) and the United Nations Conference on Trade and Development (UNCTAD) to implement a project titled “Towards an integrated national financing framework (INFF)”, funded by the UN Development Account (UNDA) 13th tranche. Zambia is among the 10 target beneficiary countries of the project along with Burkina Faso in the African region.
The project aims at strengthening capacities in a set of developing countries to address gaps in the costing and planning of their financing needs to achieve the Sustainable Development Goals (SDGs) and their national development objectives, in addition to mobilizing domestic and external finance within their INFF frameworks. Zambia is currently in the process of preparing its Eight National Development Plan (NDP). In this context, the issue of mobilizing finance to achieve its national development objectives is timely and relevant.
In her opening remarks at the workshop, Ms Eunice G. Kamwendo, Director, ECA Sub-Regional Office for Southern Africa said that Illicit Financial Flows are a huge barrier to the achievement of the SDGs and other national priorities. She cited evidence from the work of the United Nations Conference on Trade and Development (UNCTAD) that shows that illicit financial flows contribute US $ 88.6 billion of capital flight annually from the African Continent.
“By reducing these outflows, Ms Kamwendo added, the African continent can raise the stock of capital available for businesses to build productive capacities and create jobs, which will translate to increases in tax revenues and improve the fiscal space of governments”.
Why Nigeria Must Sustain Economic Diversification, Other Policies (THEWILL NEWS MEDIA)
The admirable drive to diversify Nigeria’s economy, which has remained built around oil revenue since the discovery of crude oil deposits at Oloibiri by Shell-BP in 1956, is a constant feature of the campaign manifestos of politicians during and after elections. Over the years till date, receipts from crude sales have largely accounted for about 90 percent of the country’s foreign exchange earnings. Yet, beyond the whims and caprices of the political class of the day, the very real need for economic diversification is as pertinent in our contemporary existence as it has ever been previously. Over-reliance on oil revenue is not only inimical to the need to become a self-sustaining nation, but also ties the progress or otherwise of the country’s development to the unpredictability of a highly volatile oil and commodities market that is prone to rising and falling based on circumstances often dictated by global events beyond our control.
Despite several bold-faced attempts to reduce Nigeria’s reliance on oil through campaigns of economic diversification, backward integration and industrialisation, which have been supported with targeted loans, numerous reforms and sets of policy initiatives, oil remains the mainstay. As a result, billions of naira that could have been ploughed back into the economy for expansion and growth have whittled away through imports that created jobs for other economies instead of ours and further impoverished our citizens.
Therefore, to stem this tide, Nigeria must be serious with the implementation of the backward integration and diversification policies, as well as prioritise her structural industrialisation revolution.
How Nigeria Can Become A Leading Oil and Gas Supplier To The European Market (African Business)
Apart from retaining its position amongst the leading oil and gas producers in Africa in 2022, Nigeria, with over 37 billion barrels of crude oil reserves, has the potential to improve its energy exports to Europe and help address anticipated crude oil and natural gas shortages. With the European Union planning to ban crude oil imports from Russia by increasing trade with other non-Russian economies and the Russian government promising to cut gas supplies if sanctions from western countries continue, potential supply disruptions to Europe are anticipated. Accordingly, the west African country is expected to ramp up production in 2022 and retain its position as Africa’s largest crude oil producer, a development that will enable Nigeria to increase its energy capacity available for exports.
Nigeria’s annual crude oil production is expected to increase to 1.46 million bpd in 2022, following low production levels in 2021 that were driven by the COVID-19 pandemic. This will provide an opportunity for Nigeria to increase its exports to Europe, become a global energy hub and to fully make use of its hydrocarbon resources for economic growth. Nigeria heavily relies on its offshore projects to sustain crude oil production and supply, with 65% of the country’s total production in 2022 anticipated to come from such projects. However, this will change with Nigeria’s crude oil production anticipated to decline in 2023 onwards due to decreases in production in legacy fields. Nigeria will have to wait for deep water projects to come online to improve its production capacity, according to the African Energy Chamber’s (AEC) Q1 2022 Outlook.
Ghana Gas must sell LPG cheaper to help suffering Ghanaians – Energy Expert (3NEWS)
Energy Expert, Kwadwo Poku has urged the Ghana National Gas Company Limited to sell gas cheaper to Ghanaians in order to ameliorate their sufferings. In a statement, he explained that Ghana Gas gets the natural gas from Ghana’s Jubilee oil fields for free. Since 95% of this free product is sold to generate electricity, he said, one would expect the Liquefied petroleum gas (LPG) from Ghana Gas to be very affordable. This, unfortunately is not the case, Mr Poku stressed.
Debt to GDP crosses dreaded 80 mark (The Business & Financial Times)
The country’s public debt has now crossed the dreaded threshold of economies that can be classified as distressed, as data published by the Bank of Ghana shows debt to GDP is now 80.1 percent at the end of December 2021. According to the Summary of Economic and Financial data (March 2022), the total public debt has hit GH¢351.8 billion as of the end of last year, an increase by GH¢60.2 billion from same period in 2020.
Of the total public debt for December 2021, the external debt component is GH¢170 billion, which represents 38.7 percent of GDP, while that of domestic debt is GH¢181.8 billion.
Meanwhile, total revenue mobilised within the period stood at 15.4 percent of revenue, with tax rating registering a paltry 12.6 percent of GDP, far below the regional average. This essentially puts the country among others on the continent that is debt distressed, a situation the World Bank and International Monetary Fund (IMF) have, for some years now, warned will happen, if the right measures are not taken to deal with it.
Growing e commerce a catalyst for economic development (The Business & Financial Times)
The fourth industrial revolution, which is wholly anchored on technological advancement and innovation, opened up vast opportunities in different areas of economies around the world. Social, economic and commercial lives have seen remarkable developments with the rise of the Internet, technology and digitisation. In Ghana, the pioneering of mobile money in 2009 has been revolutionary in this regard.
The World Bank has recognised Ghana as the fastest growing mobile money market in Africa over the last 5 years. This growing trend of mobile money penetration has been a catalyst for a booming e-commerce industry in the country. The industry has been growing steadily over the past decade and has evolved over time to become the mainstay for many small and medium-scale enterprises (SMEs) in Ghana.
Aggregators will unlock agric’s potential under AfCFTA – Prof Asante (The Business & Financial Times)
The country can significantly maximise benefits under the African Continental Free Trade Area (AfCFTA) by promoting activities of agricultural aggregators – Professor Felix Asante, Pro-Vice Chancellor for Research, Innovation and Development-University of Ghana, has advocated. The country’s agriculture is predominantly small-scale in nature, with more than 60 percent of local food production coming from smallholder farmers. Despite this, farmers continue to face daunting challenges – ranging from lack of standards; lack of access to credit, machinery, among others, due to their smallholder nature.
However, to enable farmers overcome these challenges and take advantage of the AfCFTA arrangement, Prof. Asante is calling for efforts to promote aggregators – agricultural businesses or cooperatives of growers who consolidate and distribute agricultural products.
Egypt, Cameroon Discuss Economic Relations (See)
Egypt’s Minister of International Cooperation Rania Al-Mashat met Cameroon’s Minister of Economy to discuss economic relations and ways to enhance cooperation between the two countries. Al-Mashat said: “We are working to enhance joint cooperation and development between Egypt and the African Continent, by pushing for regional integration and stimulating the knowledge and expertise exchange.”
The meeting comes as part of Mey’s visit to Egypt to participate in the “The 3rd Meeting of Governance Council of Arab Africa Trade Bridges Program”. It also comes within the framework of strengthening economic relations with African countries, in light of the country’s 2030 development vision, where both ministers addressed ways to enhance bilateral cooperation across different sectors.
During the meeting, Al-Mashat explained that the Ministry of International Cooperation is working to promote joint development between Egypt and the African continent by pushing for regional integration, and by enhancing expertise and knowledge-sharing while spotlighting Egypt’s own development experiences with other African countries.
Opening of Opportunities for Tamil Nadu Businessmen in Ethiopia (Devdiscourse)
Ambassador of Ethiopia in India Dr.TizitaMulugeta presents trade in Ethiopia The India Africa Trade Council-COMESA organized the India Ethiopia Trade Conference which was attended by the Business community in South India especially Tamil Nadu. The President of Indian Economic Trade Organization Dr. Asif Iqbal welcomed the Ambassador of Ethiopia in India HE Dr.TizitaMulugeta and pledged the commitment of support between the two nations for a robust partnership.
There is a huge interest in India for Ethiopia, a country with great scope for bilateral trading opportunities in Pharma, Medicines, IT development, Textiles, Garments and Industrial development by Indian companies.
India Africa Trade Council (IATC) is working on building bilateral trade relations by assisting Indian companies that are looking at various projects coming up in African region for promoting growth in commerce and trade, especially in Indian Pharma which likely to increase as the Ethiopia market
Milestones achieved in the continental integration agenda; latest African Integration Report shows (African Union)
The integration of the African continent is well above average with five Regional Economic Communities (RECs) demonstrating progressive efforts towards integration. The East African Community (EAC); Economic Community of West African States (ECOWAS); Common Market for Eastern and Southern Africa (COMESA); Economic Community of Central African States (ECCAS); and the Southern African Development Community (SADC) integration scores exceed 0.6 in a rating range between 0 and 1. The other RECs, the Intergovernmental Authority on Development (IGAD); Community of Sahel-Saharan States (CEN-SAD); and the Arab Maghreb Union (AMU) are just above the average of 0.5. The lack of defined plans or programmes in certain dimensions of integration such as free movement, financial and monetary integration are the causes for the poor overall performance of the three RECs. The latest pdf African Integration Report 2021 (3.71 MB) shows that ECOWAS, COMESA and EAC performed best in trade integration, with scores above 75%. The three have been able to implement essential steps for achieving trade integration such as the free trade zones and a common external tariff, among others. At the infrastructural level, the RECs have almost similar developments. This corroborates the general problem of infrastructure in Africa, which cannot effectively support the integration process. With an average progression of 63%, no REC stands out significantly in terms of the achievements and progress made.
The 2021 African Integration Report whose primary theme looks at the “Putting Free Movement of Persons at the centre of Continental Integration”, shows that the average progress of the RECs in the implementation of free movement of persons is moderate at 0.68 on a rating scale between 0 and 1. ECOWAS and EAC stand out from other RECs in the evaluations with respective ratings of ECOWAS (100%) and EAC (96%); all the other RECs score below 65%. This can be explained by the difficulties experienced in either implementing the regional free movement protocols or the abolition of visas in their Member States.
The African Union Commission Chairperson, H.E. Moussa Faki Mahamat commends the progress made in moving forward the continental integration highlighting the possibilities to foster regional integration for the continent’s socio-economic transformation. Some RECs have provided practical success stories based on strategies and initiatives that can easily be adopted by others. He stated “one of the important messages emerging from the 2021 African Integration Report is that while the pace of regional integration has been generally slow in some RECs, significant progress has been made in various thematic areas; such as the free movement of persons, customs unions, tariff and nontariff barriers, transport corridors and regional infrastructure.”
Africa: Trade finance and the efforts to boost intra-African trade (Baker McKenzie)
As stated by the President of the African Development Bank (AfDB), Akinwumi A. Adesina, “trade finance is an important instrument for influencing Africa’s long-term economic development and structural transformation”. According to a report by the AfDB and the African Export-Import Bank (Afrexim), Trade Finance in Africa: Trends Over the Past Decade and Opportunities Ahead, the region was one of the most integrated with the rest of the world in 2011. However, in the last decade, Africa’s trade growth has been one of the worst among the major regions of the world. This is as a result of a number of factors including falling commodity prices, competition, inadequate foreign exchange liquidity, regulatory challenges and access to trade finance, as banks have gradually been scaling back activities from riskier markets. The study showed that although trade finance remains a popular activity among banks in Africa, the participation rates continue to decrease, falling by 16% between 2013 and 2019. As a result, the trade finance gap in Africa averaged USD 91 billion for the period between 2011 to 2019. Furthermore, the trade uncertainty in Africa was exacerbated by the impact of the COVID-19 pandemic, which resulted in a twin supply-demand shock across the continent. Supply was affected by mass production shutdowns and supply chain blockages and demand for products from Africa decreased globally.
AfDB Mobilizes Funds for Projects Via Integrated Platforms (Business Post Nigeria)
The African Development Bank (AfDB), which sets its primary tasks of contributing to the continent’s economic and social development by providing the necessary concessional funding for projects and programmes, as well as offering and coordinating assistance in capacity-building activities, has now embarked on various post-COVID-19 initiatives throughout the continent, especially in the least developed African countries. In the latest was the mid-March event where potential investors have examined more than $50 billion of curated bankable projects in key priority sectors identified in the Africa Investment Forum’s 2020 Unified Response to COVID-19 initiative. The sectors include agriculture and agro-processing; education; energy and climate; healthcare; minerals and mining; information and communications technology and telecommunication; and industrialization and trade. Nine of these projects are women-led, with a potential value of $5 billion. The AfDB has secured $32.8 billion in investment commitments for projects in Africa. The largest deal secured at the three-day Africa Investment Forum was $15.6 billion for the Lagos-Abidjan mega highway of about 1,200 km (745 miles) will have four to six lanes, connecting West Africa’s two major cities in Nigeria and Ivory Coast, said AfDB President, Mr Akinwumi Adesina.
“Africa is a very bankable continent. We’ve gone through hard times because of the Covid-19 situation but here we are on a rebound,” said Adesina. “Africa is back for investments.” The projects, part of the bank’s Covid-19 response, touch on sectors including agriculture and agro-processing, education, energy and climate, healthcare, minerals and mining, and information and communications technology.
Africa Investment Forum Virtual boardrooms attract $32.8 billion in investment interest (AfDB)
The Africa Investment Forum boardrooms have drawn $32.8 billion in investment interest in bankable projects. Unveiling the results of the Forum’s virtual boardroom sessions on Thursday, African Development Bank Group President Dr. Akinwumi A. Adesina told the 500 project sponsors, investors, deal brokers and government representatives from around the world who took part in them: “In 72 hours, you all connected, you struck deals and you created success.”
Describing the mood in the boardroom sessions, Alain Ebobissé, CEO of Africa50, said: “There were real and exciting deals that were transacted during this forum. We’re seeing a lot of interest from the private sector in various sectors, including power – particularly renewables, the ICT and telecom sector, and healthcare. We need to make sure we speed up the implementation of that so that success will generate more success.”
The largest investment opportunity in the boardroom sessions was the Lagos Abidjan highway corridor project valued at $15.6 billion and led by the Economic Community of West African States (ECOWAS) Commission. Once completed, this public private partnership project will link Abidjan to Lagos via Accra, Lomé and Cotonou along the West African coast.
The highway will reduce travel times by 50%. It will give landlocked countries access to ports and “make a meaningful impact on the lives of over 500 million people in West Africa,” Adesina said. “The African Development Bank Group has provided more than $40 million for feasibility studies to prepare the project for investment.”
Sadc council deliberates on regional integration cooperation and economic development 2 (sardc.net)
The Southern African Development Community (SADC) Council of Ministers met in Lilongwe, Republic of Malawi on 18-19 March, 2022 to review the implementation of programmes aimed at promoting and deepening regional integration, cooperation and economic development. The meeting was preceded by the meeting of the SADC Standing Committee of Senior Officials which deliberated and cleared issues for consideration by the Council of Ministers from the 13th to 17th March 2022.
In her address, Honourable Nancy Gladys Tembo, Minister of Foreign Affairs of the Republic of Malawi and Chairperson of the SADC Council of Ministers highlighted the need for SADC Member States to sign and ratify key trade and industry legal and policy instruments to facilitate advancing of the regional integration and industrialisation agenda.
The SADC Executive Secretary, His Excellency Mr. Elias M Magosi expressed his gratitude to SADC Member States for the support and commitment to the SADC regional programmes and continued collaboration with the Secretariat in the implementation of priority areas outlined in the Regional Indicative Strategic Development Plan (RISDP) 2020-2030 and Vision 2050. The following are some of the key issues Council deliberated on during the two-day meeting.
EAC reviews Common Market Protocol ahead of DRC entry (The East African)
The East African Community is reviewing the Common Market Protocol to allow a smooth entry of the Democratic Republic of Congo (DRC) and spur intra-regional trade, which has stagnated at around 15 percent. The bloc’s highest decision-making organ, the Heads of State Summit, will review the protocol at the High-Level Summit Retreat on the Common Market before this year’s summit in April. EAC Secretary-General Dr Peter Mathuki confirmed the plan. The Common Market was adopted in 2009 and entered into force on July 1, 2010, with the aim of boosting the growth of the EAC through free movement of goods, services, labour and capital. Its introduction five years after the first pillar, the Customs Union (2005), required that it combine the region’s economies, create opportunities for the private sector and increase competitiveness. But, 11 years on, its requirements have been hampered by tariff and non-tariff barriers, red tape and noncompliance by the partner states. The other pillars, the Monetary Union and the Political Federation, are at various stages of implementation.
Now, with the expected entry of mineral and natural resource-rich DR Congo, which comes with a population of over 90 million people, Kinshasa offers a fertile consumer market and an important investment destination. Its EAC entry is expected to strengthen trade ties and expand the market for goods and services.
Bring down East African borders for trade to flourish (EABC)
The East African Business Council (EABC) Chairman Mr. Nicholas Nesbitt, EBS, OGW has called upon the EAC Partner States to bring down East African borders for trade to flourish. Speaking at the EABC Private Sector Pre- Heads of State Summit Engagement organized with support from GIZ, Mr. Nesbitt said, “EAC Partner States should fully operationalize the EAC Single Customs Territory and adopt technology to transform our EAC region to be borderless for goods and services!” The Chief Guest, Dr. Kevit Desai called for public-private dialogue and collective responsibility. He further said, “the expanding market, diversity of our people and the richness of our resources are key prospects for the economic growth and prosperity of our region.” Dr. Kevit Desai urged the business leaders to analyze EAC protocols and intra-EAC trade hurdles that need Presidential intervention to be resolved in a bid to reduce the cost of doing business in the region.
East African countries in $8b investment plan (The East African)
East African states will jointly benefit from at least $8.77 billion worth of investments in transport, healthcare, energy, and agriculture among other sectors, from deals made at the 2021 African Investment Forum concluded on Thursday. The three-day event was organised by the African Development Bank (AfDB) in partnership with other finance organisations including Africa Export-Import (Afrexim) Bank and African Finance Corporation among others, yielded a total of $36.2 billion from 43 investment deals for the entire continent, 37.5 percent short of the expected $58 billion. For East Africa, the largest deal inked during the forum is the $3.3 billion railway corridor that will run from Dar es Salaam through Bujumbura to Kinshasa in DR Congo, with an extension to Kigali, which will be done as a public-private partnership project. “There is a lot of political support and goodwill for this, I can’t wait to see this railway,” said Dr Akinwumi Adesina, AfDB president and chair of the forum that was attended by 11 heads of states, including Tanzania’s Samia Suluhu, Rwanda’s Paul Kagame, and DRC’s Felix Tshisekedi.
“This is all part of improving the regional integration, and also accelerating the Africa Free Trade Area. It is going to drive down the cost of moving things,” Dr Adesina added.
EA economies bank on digital tax to shore up budget funding (The East African)
East African countries are racing towards taxing digital services revenues in a desperate move to boost revenue collections, narrow fiscal deficits and tame excessive borrowing. Rwanda has announced plans to start taxing digital services such as Netflix and Amazon as the country looks to expand its tax base, but there are fears the decision could scare off investors from the budding digital services market. Details about which platforms will be taxed, the modes of taxing and projected amount that Rwanda looks to gain are still unclear since the proposal is still being reviewed by the Ministry of Finance and Economic Planning. Rwanda Revenue Authority (RRA) is expected to conduct an impact assessment before implementation of the policy. The taxman has been looking for ways to expand its tax base even as its collection exceeded targets by over $60.1 million in 2020/2021 despite disruptions.
Jean-Louis Kaliningondo, RRA’s deputy commissioner general said as the market for digital services in Rwanda grows, it is only fair that the country gains from it. “We have not laid out all the details yet but Rwandans who consume these services are using the money generated here. It is also unfair when we tax local digital companies that might not even have as many clients as these companies,” said Mr Kaliningondo
Rwanda follows other African countries including Nigeria, Zimbabwe and Kenya that have started taxing such services as companies like Netflix look to expand their footprint on the continent. But analysts say an increase in prices from the levy could interrupt uptake of digital services in Rwanda.
Uganda bids to host Africa drugs agency (The East African)
Uganda has the required capacity to host the African Medicine Agency (AMA) following its investments in developing and manufacturing drugs over the years, President Yoweri Museveni has said. According to the President, the country already has experience in making HIV/Aids drugs for the last 10 years under Cipla Quality Chemical Industries Limited. “For us, we are moving on with what we call the pathogenic economy. The issue is whether Africa will move with us. We started long time ago with Aids drugs. Why should foreigners make money out of our sicknesses and not us?” he posed.
Uganda is among the eight countries seeking to host the continental regulatory agency. They are Rwanda, Tanzania, Zimbabwe, Algeria, Egypt, Tunisia and Morocco. AMA will provide a streamlined regulatory authority to improve quality medicines access and combat substandard imports in the continent.
COMESA and Partners in Quest for Sustainable Fish Trade (COMESA)
COMESA in collaboration with IGAD, EAC, SADC, IOC, Lake Tanganyika Authority (LTA) and the Lake Victoria Fisheries Organisation (LVFO) have renewed their partnership of working together in implementing a programme on sustainable development of Fisheries commonly known as ECOFISH in the Eastern Africa, Southern Africa and the Indian Ocean Region. The partnership, started three years ago after a 28 million Euros finance agreement was signed by the Indian Ocean Commission (IOC), on behalf of COMESA, EAC, IGAD and SADC, with the European Union (EU). Over the years, the implementing partners have been steadily implementing the agreed programs amid the challenges brought about by COVID-19. In view of this, COMESA Secretariat hosted the 3rd Steering Committee Meeting on 17 and 18 March 2022 in Lusaka during which the teams could track the progress and performance of the program and make recommendations for implementation. Apart from COMESA Secretariat, fish experts from IGAD, EAC, SADC, IOC, LTA and LVFO participated in the meeting which was held both physically and virtually.
Assistant Secretary General for Programs Dr Kipyego Cheluget officially opened the meeting and urged the team to make recommendations that will help the fish and fish industry sector to grow and be sustainable. He pointed out that majority of fisheries value chain actors are small-scale and live primarily in coastal and inland lake areas in the region.
The meeting commended the development of the blue economy satellite account which was recently validated that it would play major role in complementing efforts in capturing the required data. Capturing of the data on ecosystem and fisheries habitat is expected to support evidence-based policymaking and monitoring of the marine as well as inland fisheries of the EA-SA-IO region.
Nigerian to Head Regional Maritime Development Bank | Business Post (Business Post Nigeria)
The headquarters of the proposed Regional Maritime Development Bank (RMDB) will be in Nigeria following the 12 per stake in the financial institution. RMDB is being proposed to replace the Maritime Development Bank of Nigeria (MDBN) and Nigeria is playing big in the process, with the presidency ceded to the self-acclaimed giant of Africa, supported by the 25 countries that make up the Maritime Organization for West and Central Africa (MOWCA). At the just-concluded public hearing on some maritime bills organised by the House of Representatives Committee on Maritime Safety, Education and Administration, the Director of Legal Services at the Federal Ministry of Transport, Mr Pius Oteh, said that the entire members of MOWCA in 2011 agreed to have a $1 billion as the capital base of the bank. Mr Oteh said that the establishment of a maritime bank in Nigeria would have sent a wrong signal to other countries that are already committed to the formation of the RMDB.
Recycling grows jobs, small businesses in Africa (Dailynews)
As the world commemorates Recycling Day, more and more plastic waste is being diverted from landfills and into a circular economy that grows employment and entrepreneurship in African countries. Coca-Cola Beverages Africa (CCBA) Group Head of Sustainability Diana Sibanda said the company was developing increasingly sustainable ways to manufacture, distribute and sell its products. “We use our industry leadership to be part of the solution to achieve positive change in the world and to build a more sustainable future for our planet,” she said in a statement yesterday. Locally, in Tanzania, CCBA in collaboration with its recycling partner Sunda Chemical Fiber has recycled more polyethylene terephthalate (PET) than it produced, achieving a recycling rate of 113 per cent over the past two years. Food and beverage packaging is an important part of modern life, helping to ensure food safety and reduce food waste, yet the world has a packaging problem that requires a comprehensive response.
Ukraine conflict: The Africa trade balance (TFXF)
The impact of conflict in Ukraine on the world economy is not difficult to summarise: bad. In the case of Africa, it is much more complicated because of the continent’s diversity: good and poor agriculture, energy wealth and energy poverty. The impact on trade is similar but hard to quantify accurately. Statistics are always out of date but COVID-19 has meant that long term trends have been obscured by recent and country specific changes. But some things can be asserted. This is a crisis of primary trade (agri, metals and hydrocarbons) and its ancillaries (feedstock to fertiliser) and not primarily of manufactured goods. Nor does it necessarily mean an additional shortage of (or an additional risk to the availability of) trade finance from the traders and bankers who facilitated this open market dollar-based commodity financing. The complexities for Africa are both in terms of a geopolitical challenge as African nations weigh their historic relationships with superpowers, and of risk, in particular for those countries dependent on imports of soft commodities. Meanwhile, there is a delicate balance to be struck of potential opportunity for energy producing countries of energy security and of sustainability. Some of the biggest immediate effect on Africa trade is on soft commodities. How will different African countries be affected by sanctions on fertiliser, wheat and other food crops – and the cessation of Ukrainian soft commodity exports? While parts of the world have relied on Russia’s oil and gas, the world also relies on its cereal exports.
But some lessons can be drawn.
African Union and European Union step up digital cooperation following EU-AU Summit (African Business)
Digital cooperation is a cornerstone of the Africa-EU strategic partnership. This was underlined by representatives from the European Union and the African Union on the 18th of March 2022 at the Africa-Europe Digital for Development (D4D) Hub Multi-Stakeholder Forum. The event, which took place virtually, was co-hosted by the African Union Commission and the European Commission with the aim of promoting exchanges and collaboration with enterprises, civil society organisations, and experts in the digital field.
Ms Jutta Urpilainen, EU Commissioner for International Partnerships said: “today we kicked off a much-needed dialogue with our private sector and civil society partners in Africa and Europe to build a shared digital future that leaves no one behind. This is the first step in implementing concretely the deliverables of the recent EU-AU Summit. In line with the Global Gateway Strategy, the EU will scale up investments, support innovation, and promote digital rights. Bridging the digital divide is key in fighting inequalities. To achieve this, we must work together with all our partners in the digital ecosystem.”
Dr Amani Abou-Zeid, AU Commissioner for Infrastructure and Energy, commented: “The COVID-19 pandemic highlighted the importance of digital technologies to keep our businesses, healthcare, education and public services running. These exceptional times have also shown the urgency to invest in Africa’s digital infrastructure and build on Africa’s innovation potential. The African Union welcomes the partnership with the European Union and further engagement with African and European stakeholders to accelerate the digital transformation of our continent.”
Global economy news
UN prioritizing least developed countries in plans, investments and actions (UN News)
Developing countries need to invest in sectors that reduce poverty and increase resilience, such as job-creation, social protection, food security, universal healthcare, quality education and digital connectivity, said the top UN official. However, he added that LDCs are up against a “morally bankrupt global financial system,” designed by the rich and powerful to benefit themselves that sustains inequalities, rather than fostering development. “This must change,” upheld the UN chief, flagging that LDCs require “urgent debt relief, restructuring and cancellation, in some cases”. He said that they should be able to borrow at a low cost, be protected in times of crisis and receive more liquidity. “And we need to create a fair tax system and combat illicit financial flows to re-invest some of the massive pockets of global wealth into people and countries who need it most,” underscored Mr. Guterres.
OECD calls for well-targeted support to the vulnerable as war undermines global recovery (OECD)
Russia’s war against the people of Ukraine is a deeply distressing moment for the world. Thousands of people have been killed with millions fleeing from the war. Beyond the ongoing humanitarian disaster, the economic damage is already being felt worldwide and risks becoming increasingly severe. In its first assessment of the Economic and social impacts and policy implications of the war in Ukraine, the OECD says Russia’s invasion on 24 February 2022 has caused a humanitarian crisis in Ukraine, destroying lives, homes and infrastructure, while throwing the strong global economic recovery from the COVID 19 pandemic into doubt. Amid the uncertainty, the OECD estimates global economic growth will be more than 1 percentage point lower this year as a result of this conflict, while inflation, already high at the start of the year, could rise by about a further 2.5 percentage points on aggregate across the world.
DDG González: the trading system, a crucial ally in the fight against the pandemic (WTO)
Trade policy is health policy, and WTO members have a unique responsibility to leverage the full force of trade to achieve better health outcomes around the world, according to Deputy Director-General Anabel González. In an article published on 17 March in Think Global Health Trade, a multi-contributor website by the Council on Foreign Relations, DDG González points at the three main lessons which have emerged from the pandemic: global trade equals strength, a rules-based trading system matters in times of crisis, and better trade collaboration will improve health outcomes around the world.
COVID-19 and the Sustainable Development Goals: Reversing progress towards decent work for all (ILOSTAT)
In 2019, 2 billion people worldwide worked in the informal economy, performing jobs that are characterized by low job quality and lack of social protection. In the early stages of the pandemic, informal employment (in countries with dual labour markets) often did not play its traditional countercyclical role of absorbing workers displaced from the formal sector. New evidence from 29 countries with available data indicates that informal employment was disproportionately affected by job losses in 2020 in some regions. In the Americas, which experienced the largest employment decline of all regions, informally employed workers were almost twice as likely to lose their jobs as their formal counterparts. This may be ascribed to several factors. First, there is widespread informality in the hardest-hit sectors, where lockdowns and containment measures prevented informal workers from going about their work, and where the scope for telework was limited. Second, it is relatively easy to terminate informal employment relationships. Third, informal workers are often employed in smaller enterprises, which have struggled to survive after long periods of inactivity and have had more limited access to support measures, including worker retention schemes.
As economic activity gradually picked up again, informal employment, especially self-employment, experienced a strong rebound in some regions, and many informal workers have returned from inactivity.
Trips waiver compromise draws mixed response (Devex)
A potential waiver of some intellectual property restrictions on COVID-19 vaccines negotiated by South Africa, India, the United States, and the European Union leaked last week to mixed reactions. The potential deal has been celebrated in some corners for finally breaking through negotiations that have been gridlocked for months and delivering a Trade-Related Aspects of Intellectual Property Rights, or TRIPS, agreement that has the potential to at least ease access to vaccines for the global south. But critics said what has emerged bears little resemblance to the proposal South Africa and India tabled in front of the World Trade Organization in October 2020, which also called for IP waivers on COVID-19 therapeutics and diagnostics.
Pandemic’s E-commerce Surge Proves Less Persistent, More Varied (IMF Blog)
There’s no doubt that e-commerce helped many navigate the pandemic, from online shopping to curbside pickup to food delivery. But as we slowly emerge from lockdowns and other restrictions, it’s less clear how this shift to digital commerce may evolve across economies and industries.
This raises questions about how much digital consumption increased, whether the crisis widened the digital divide or spurred economies with little e-commerce to catch up, how permanent the shift to online sales will be, and what factors explain deviations between economies and sectors.
We investigated these questions in new research that uses a unique database of aggregated and anonymized transactions through the Mastercard network from across 47 countries from January 2018 to September 2021. We found that the share of online spending rose more in economies where e-commerce already played a large role—and that the increase is reversing as the pandemic recedes.
This research, a new partnership between Mastercard, the International Monetary Fund and Harvard Business School, shows how private-sector data can help advance empirical economics and will be the first in a series of such studies.
DG Okonjo-Iweala hails achievements of Agriculture Committee following its 100th session (WTO)
At a special event on 17 March to mark the 100th session of the Committee on Agriculture, Director-General Ngozi Okonjo-Iweala praised the achievements of the Committee over the past 27 years and highlighted its important role in overseeing implementation of the WTO Agreement on Agriculture. “The Committee has played a crucial role in improving how markets function, strengthening transparency, and enhancing the predictability and stability of global trade in food and farm goods,” she noted.
“Today’s event marks an important milestone. It’s an opportunity to take stock of our achievements, and also to look ahead at the next quarter-century of work,” said DG Okonjo-Iweala in her opening remarks. The DG stressed that the Committee on Agriculture was set up to allow WTO members to exchange views about compliance with rules in the Agreement on Agriculture. It also provides a forum to address disagreements about members’ agri-food trade measures and to help “nip trade irritants in the bud”, she added. The Committee has also proved it can adapt to changing times, the DG said, pointing to its active role in implementing the Nairobi Ministerial Decision on eliminating agricultural export subsidies and in addressing export restrictions during the COVID-19 pandemic. DG Okonjo-Iweala said she is confident that the Committee will help members address new challenges in the future and work towards achieving the UN Sustainable Development Goals. She encouraged members to build on past experience and continue strengthening the Committee’s work through active participation and enhanced transparency regarding their trade measures.
Agriculture Committee’s 100th session discusses food security, farm policies, Nairobi Decision (WTO)
Improving timber supply chains will help unlock sustainable production and consumption this International Day of Forests (Wildlife Trade News)
It is critical for climate change mitigation and a vital habitat breaming with biodiversity, of approximately 10,000 species of tropical plants, of which 30 percent are unique to the region. Timber trade in the Congo Basin is an essential source of income, integral to national economies, and provides a livelihood to local communities. Ensuring the sustainable production and consumption of timber in the Congo Basin, therefore, is paramount. Yet a surging demand for tropical wood, primarily from Asia but also from Europe and America, exacerbated by corruption, resource mismanagement, and ineffective regulation, is making it all too easy for criminals to harvest and trade in threatened timber illegally.
Since 2009, the volumes of Central African timber exports to China have increased by 60%. The country is now the top export destination for the Congo Basin timber. Beyond the international demand for tropical timber, there are additional challenges of domestic markets within the countries in the Congo Basin. For example, artisanal logging to support the local demand for house construction and furniture is not regulated and this use of timber contributes to the pressures of international trade.
This ever-increasing demand has put the Congo Basin rainforest and its vibrant species under threat from unsustainable and illegal logging. It is possible that without tackling the already prevailing unsustainable harvest and trade, the increasing demand for tropical timber could eventually lead to the disappearance of species. To stand a chance in countering this threat, first, we need to better understand the three pillars of the timber supply chain: the source countries, the transit of timber and who is buying it.