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South Africa takes massive digital leap forward, says Ramaphosa (Engineering News)
Last week, government concluded the auction of high-demand spectrum for mobile telecommunications – a significant milestone in the reform agenda and one that is expected to drive growth and transformation in the country’s economy, President Cyril Ramaphosa writes in his weekly newsletter to the nation. “The licensing of spectrum is one of the major reforms that we are implementing to modernise and transform key network industries such as energy, telecommunications, transport and water provision.
BLSA wishes to see more regulatory change announcements at investment conference (Engineering News)
Business Leadership South Africa (BLSA) CEO Busi Mavuso says this year’s South Africa Investment Conference must be turned on its head and instead of the private sector announcing big projects, the organisation hopes government will announce regulatory changes that advance the case for investment. Investment conferences have historically seen private sector companies cajoled into announcing multibillion-rand projects, which are good and well, but these are not necessarily additive, since many of them would have happened anyway, she notes in her weekly newsletter.
SA exporters could profit from Europe’s war-affected pallet industry (TimesLIVE)
SA pallet exporters and packaging companies should be backed by the government to fill the gap in Europe created by the ongoing war in Ukraine. This is according to Mthobisi Zondi of PalletBiz, which produces 150,000 pallets a year, of which 40% is exported to Mozambique and other neighbouring Southern African Development Community (Sadc) countries. Zondi said countries such as Italy and Hungary are dependent on timber from Ukraine and the lack of supply presents an opportunity for SA’s pallet manufactures, timber suppliers and packaging companies as potential alternative suppliers to these countries. “The direct affect on SA supply of pallets and packaging is a positive one, depending on how swiftly local companies secure supply contracts with affected EU countries,” he said.
Inside the oil storage facility… interrogating the necessity of a billion-dollar project (New Era)
Namibia’s national oil storage facility, one of government’s biggest investment projects, hogged the headlines for a massive escalation of the cost of construction. Last week, New Era embarked on an exclusive site visit to see firsthand what the completed and fully operational multi-billion-dollar facility offers the nation. The National Petroleum Corporation of Namibia (Namcor) was appointed by government to manage and operate the national oil storage facility (NOSF) in Walvis Bay. Government constructed the facility to increase Namibia’s security of supply of fuel and petroleum products from a concerning seven to 10 days to a more manageable 30 days or more.
Initially estimated to require a capital investment of less than N$3.7 billion, the NOSF was finally constructed at a total cost of N$6.5 billion, to replace the old oil tanker berth in Walvis Bay, which is over 50 years old and has outlived its design life. This massive escalation in capital investment has raised eyebrows for which numerous variations to the initial project scope and drastic deterioration of the exchange rate have been accused of being the main culprits.
The old oil berth currently poses a serious fire and environmental hazard to the entire Port of Walvis Bay and any incident there would result in an acute shortage of fuel in the country, resulting in overly drastic price escalations. Unfortunately, an upgrade of the old oil tanker berth was not in accordance with the Namport’s approved port masterplan, which meant a new facility had to be built that would form part of phase 1 of the envisaged SADC gateway port.
Can Namibia Avoid the Resource Curse? (Foreign Policy)
As oil and gas prices surge following sanctions against Russia, Africa may be well-positioned to become a global energy production hub. But a large majority of African countries are feeling the economic pain as net importers. This has prompted governments to begin accelerating oil and gas exploration. One of the biggest oil and gas discoveries on the continent was made last month by TotalEnergies and Shell off the coast of Namibia. It is thought the offshore deposits could hold about 3 billion barrels of oil in total and provide an estimated $3.5 billion annually in royalties and taxes for the Namibian government. But Namibia’s energy ambitions clash with a global export market that is increasingly opposed to fossil fuel investments. In neighboring South Africa, legal action led to a temporary blocking of seismic hydrocarbon searches while activists lobbied against an East African crude oil pipeline that will run from oil fields in Uganda to a port in Tanzania.
However, the most controversial development is in the northeastern Okavango Basin, where Canadian firm ReconAfrica is in conflict with local communities that say they were not adequately consulted about exploratory drilling—claiming environmental damage.
Instability in oil-producing states like Nigeria, Angola, and Mozambique has contributed to human rights violations, theft, environmental devastation, and major security issues—a phenomenon Namibians fear. “Everywhere, there are minerals; there are wars,” Shikongo said, particularly when communities remain impoverished. Namibians hope that their government learns from the experience of Africa’s biggest oil producer, Nigeria, and ensures the entire population benefits rather than a small elite.
Inside new plan to put Sh32bn port terminal in private hands (Business Daily)
The Kenya Ports Authority (KPA) has settled on a Swiss firm to run Mombasa port Container Terminal 2 (CT2) to fulfill a loan facility requirement for the construction of the largest cargo handling facility. The Mediterranean Shipping Company (MSC), the second global largest shipping line after Maersk, is set to play a critical role in the running of the Sh32 billion CT2 through the Kenya National Shipping Line (KNSL).KPA, MSC and KNSL have made a request to the Common Market for Eastern and Southern Africa (Comesa) Competition Commission as they seeking regulatory approval for the transaction that they said would give MSC and KPA joint control of KNSL.
“KNSL will, as part of the joint venture, become the new operator of the Mombasa Container Terminal 2 (CT2) at the port of Mombasa in Kenya and commence offering freight forwarding services and container liner shipping services,” said the Comesa competition watchdog in a call to the public to give comments on the transaction. It has given players up to March 22 to give submissions on the transaction.
Horticulture sector sets sights on nine new export markets (Business Daily)
Horticulture exporters are seeking new markets in nine countries as the sector aims to reduce its reliance on the European market and raise earnings. Through the National Horticulture Taskforce, exporters are targeting the China, Australia, US, Russia, Canada, UAE, Japan, Malaysia, and Turkey markets. The task force said it will also seek to increase the use of sea freight to supplement air freight amid logistical challenges and high rates charged by air cargo operators. “We are looking at diversifying because we believe as much as we need to maintain the European market we need to open up new markets,” said Clement Tulezi, CEO of the Kenya Flower Council (KFC) and chairman of the task force. “We have aligned our plans and identified nine countries where we need to engage and push our export volumes to diversify away from Europe. We are not saying we are leaving Europe. It remains our major market. We want to maintain it and also make inroads into other markets.” The task force includes producers of cut flowers, fruits and vegetables and herbs and spices, trade and agriculture ministries.
Higher production fails to tame high sugar prices (Business Daily)
The retail price of sugar remains high despite an increase in local production of the commodity and continued imports to cover the domestic deficit. Sugar prices on the shelves are retailing at between Sh250 and Sh260 for a two kilogramme packet depending on the brand, which is higher than the Sh230 that the same quantity fetched in December. Sugar production meanwhile jumped 11.7 percent to 64,839 tonnes in January compared to 58,044 tonnes in the same month last year. Imports in January stood at 18,000 tonnes, helping to supplement the increased local production. “In January 2022, total sugar production was 64,839 tonnes compared to 58,044 tonnes produced in January 2021, giving an increase of 11.7 percent attributed to improved availability of cane in all sugar zones,” the Sugar Directorate said in its January report.
The price of the commodity started rising in November last year when operations in a number of factories in western Kenya were disrupted. The rising prices come at a time when the country has limited cheap imports from Common Market for Eastern and Southern Africa (Comesa) to protect growers from the competition.
The National Treasury last year limited imports to 210,163 tonnes in the new quota rules to traders of the commodity from the usual 350,000 tonnes that the country is normally allocated under the Comesa window. Kenya is a sugar deficit country and relies mainly on imports to meet the local demand that has been growing over the years.
Treasury prepares to slash M-Pesa charges (Business Daily)
The Treasury is working on a proposal to cut M-Pesa transfer charges in a move that looks set to hurt Safaricom’s #ticker:SCOM revenues from a service that makes more money than voice. Treasury Cabinet Secretary Ukur Yatani told the Senate that there was need to make M-Pesa cheaper at a time when the mobile money platform has become deeply entrenched in Kenyans’ business and daily lives. The push to review the charges will add to the battles that Safaricom is facing over its dominance, including the move to cut calling rates and calls to have it broken up and forced to run M-Pesa as a separate business from the telecoms service. M-Pesa accounted for about 99.9 percent of the value of mobile money transactions, underlining the entrenchment of the platform in Kenya’s economy.
Trade deal to lift SMEs on Ethiopia, Kenya border (Business Daily)
Small-scale trade along the Kenya-Ethiopia border has received a major boost after the two countries agreed on a common list of products to be traded under the Comesa Simplified Trade Regime (STR). The negotiations that took place at the Moyale border post, addressed implementation of the STR between the two countries. The STR was launched in 2010 to enable small-scale traders benefit from Comesa trade liberalisation programme by simplifying and formalising trade. The meeting was part of the implementation of a 15 million euros Cross-Border Trade Initiative, financed by the European Union under the 11th European Development Fund (EDF). Its objective is to facilitate small-scale cross-border trade among the targeted countries. According to experts, effective implementation of the STR spurs growth, and enhances agriculture through value addition and processing, thereby creating jobs and increasing household incomes. Comesa director of trade and customs, Christopher Onyango said simplification and formalisation of cross-border trade will help the region empower women and youths, who make up 70 percent of the traders.
Ethiopia moves to allow entry of Kenyan banks (The East African)
Ethiopia has constituted a committee to liberalise the banking sector, taking a major step in opening the door for Kenyan lenders such as KCB Group to set up operations in the populous nation. The committee has already started work to amend Ethiopia’s half-a-century old financial code, local reports said meaning the long-awaited easing of restrictions on foreign banks making investments in Ethiopia has inched closer. A new code guiding the country’s banking sector will allow the opening up of the financial sector, the head of the committee was quoted saying. Business Daily learnt that the committee’s work plan states the first draft of the financial services code must be ready by December 2022.
“The new code is necessitated to cope with the new direction the economy is going in. This includes a capital market and opening up of the economy for foreign players,” Mr Alemante was quoted saying by Ethiopian publication The Reporter.
Checkpoints increase to 80 on Tema-Paga corridor (Graphic Online)
It has emerged that attempts to stamp out red tapes and cut down illegal checkpoints on the country’s trade corridors are yielding less results than previously reported.
This is because checkpoints of the various security agencies on the 766 kilometres road have risen from 61 in November 2017 to 80 in the second week of March, this year.
A recent fact-finding and advocacy trip on the Tema-Paga corridor by the Ghana Shippers’ Authority (GSA) showed a rather disturbing springing up of checkpoints by Police, Customs, Immigration, Forestry and Axle Load officers.
Information gathered further showed the Police was leading with 56 stops, followed by Customs with 10 checkpoints, seven Axle Load stations, Immigration with four checkpoints and three Forestry barriers.
Nigeria eyes $2.6tr halal trade with product certification scheme (Daily Trust)
The federal government has inaugurated a committee that would create a process of certifying halal products made in Nigeria to reap from the $2.6 trillion global halal market. The Minister of State, Industry, Trade and Investment Amb. Mariam Y. Katagum, while inaugurating the technical committee yesterday in Abuja, said that was to allow Nigeria to benefit from the global halal global trade.
She stated that halal certificates would guarantee that products and services meet the requirements of Islamic law and are suitable for consumption.
Be abreast of trade terms to benefit from AfCFTA – AGI (GhanaWeb)
The operators of small-scale businesses have been advised to study the terms of trade engagements to enable them to enjoy the full benefits of the African Continental Free Trade Area (AfCFTA. Mr. Kwasi Nyamekye, the Association of Ghana Industries (AGI) Chairman for the Ashanti, Bono, Bono East and Ahafo Regions has advised. ‘‘As it stands now most of the local businesses have little knowledge on AfCFTA, so we need to sensitise them to understand the opportunities and dangers associated with the Trade Area because it is not all that rosy’’, he indicated.
COMESA boss tips Malawi over TFTA ratification (Zambia Daily Mail)
COMMON Market for Eastern and Southern Africa (COMESA) Secretary General Chileshe Kapwepwe has urged Malawi to expedite the process of ratifying the Tripartite Free Trade Area Agreement (TFTA). The trade agreement will facilitate free movement of goods, services and business persons among COMESA member states in a quest to stimulate economic activities. Zambia ratified the agreement last year but 14 endorsements are needed to enforce it. So far, 11 countries have ratified the agreement, which brings together 28 countries with a population of over 700 million and a combined gross domestic product of US$1.4 trillion. Ms Kapwepwe said Malawi signed the agreement on June 10, 2015 but has not completed the ratification process.
Cameroon Blames War Between Russia and Ukraine for Wheat Shortage (VOA)
Cameroon’s government says Russia’s war on Ukraine is responsible for a wheat shortage that has led to a 40 percent increase in the price of bread. The central African state is encouraging local substitutes like cassava and yams to replace the wheat usually imported from Russia and Ukraine. More than 40 consumers are waiting for bread Monday morning at the La Mama bakery in Mokolo, a neighborhood in Cameroon’s capital.
Youssoufa Daouda, who sells bread at the bakery, said in the past two weeks the bakery has served less than 200 of its usual 500 daily customers. He said importers informed bakers in the first week of March of a potential shortage of wheat in Cameroonian markets because countries that supply wheat to Cameroon were at war. Cameroon says 13 million of its 26 million citizens who consume bread daily no longer have a regular supply.
In CAR farmers plant maize and harvest peace (Trade for Development News)
In the Central African Republic (CAR), fresh maize cobs take on a deep yellow colour, almost orange. For farmers in a country plagued by conflict and food insecurity, these cobs are a ray of hope. Maize and other crops can only be grown in areas that are safe enough to farm. Elsewhere, armed groups often storm fields and burn them along with farmers’ granaries. Maize fields in communities less affected by conflicts are therefore treasured as they bring food, income – and peace. The district of Mboko-Landja in the south of the country is one such lucky area where communities can live off the land. This is a privilege in CAR which is currently facing a food crisis. According to the UN, humanitarian needs in the country are at their highest level in five years. The resurgence of armed violence and the recession of the economy have left six out of every 10 citizens, or 3.1 million people, in a state of great vulnerability. Supporting farmers and agricultural cooperatives in a post-conflict context is not what funders of international aid often consider a safe bet. But turning swords into ploughs can pave a sustainable path out of conflict for communities, as results from a project supported by the Enhanced Integrated Framework in four districts of the country show.
Mauritius signs agreement with Dubai Chamber of Commerce to strengthen bilateral economic relations (ZAWYA)
Amid a successful presence of Mauritius in Expo 2020 Dubai, Economic Development Board (EDB) Mauritius has signed a Memorandum of Understanding (MoU) with the Dubai Chamber of Commerce and Industry to boost bilateral trade and investment opportunities across strategic sectors. As part of the agreement, EDB Mauritius will establish a representative office within the premise of Dubai Chamber of Commerce and Industry for an initial period of two years. The key objectives of the EDB Dubai Office will be to identify trade and investment opportunities which will benefit UAE and Mauritian businesses with a specific focus on the Financial Services, ICT, Manufacturing, Healthcare, Logistics, Ocean Economy, Renewable Energy and Property Development sectors.
Both parties have committed to establishing a framework for developing stronger business relations and cooperation procedures to enhance the achievement of their respective economic objectives and create new channels of business exchange. The MoU also aims to strengthen institutional relations and capacity building through cooperation, exchange of information and exchange of best practices.
The agreement lays the groundwork for developing stronger business relations and create new channels of business exchange, H.E. Al Ghurair explained, describing the strategic move and signing as important developments that will take Dubai’s trade relations with Mauritius to the next level and create many bilateral business opportunities.
African trade news
DRC finally joins EAC next week, three years after formal application (Business Daily)
The Democratic Republic of Congo will officially join the six-nation East Africa Community (EAC) Tuesday next week, adding its more than 90 million market population to the regional trading bloc. The EAC Secretary-General Dr Peter Mathuki confirmed that the populous country will be admitted into the bloc on March 29 after approval by Heads of State Summit, nearly three years after making a formal application in June 2019. “We are in receipt of a letter dated 18th March from the chairperson of the Council of Ministers informing the Secretariat of the convening of an extraordinary summit on the admission of the DRC into the EAC on 29th, March 2022,” said Dr Mathuki in a letter to ministers in charge of the EAC docket in member states.
The mineral-rich country already has established trade ties with most of the EAC member states through bilateral deals and at multilateral level where it is affiliated to Southern African Development Community (SADC) where Tanzania is a member. DRC is already a key African market for Kenyan firms with the latest official annual data showing exports earnings from DRC amounted to Sh14.3 billion in 2020 — only dwarfed by Uganda, Tanzania, Rwanda, Egypt and South Sudan.
“Its rich appetite for agricultural produce shall enable local manufacturers to expand their volume of exports to the country,” Mr Mucai Kunyiha, the chairman of the Kenya Association of Manufacturers, told the Business Daily earlier this month.
“With enhanced access to the DRC market, the volume of these exports is expected to rise in the near term, and pave way for more products.”
Decision on EAC common external tariff pushed to April (The New Times)
Top officials from regional ministries in charge of trade, industry, finance and investment on Monday, March 21, could not reach consensus over the EAC maximum Common External Tariff (CET) rate, sources say. The matter was thus forwarded to the six-member bloc’s Council of Ministers which, sources say, is set to be held sometime mid next month. The senior officials were meeting to deliberate on the analysis done by the EAC Secretariat on the implications of maximum CET rates of 30%, 33% and 35%.
Kenya and Tanzania propose the regional common external tariff rate be set at 33 per cent, while Rwanda and Burundi want 30 per cent and Uganda wants 35 per cent. South Sudan – which is not yet integrated into the bloc’s Customs Union – has not been involved in the discussion yet.
On Monday, John Bosco Kalisa, CEO of the EABC who attended Monday’s virtual meeting, told The New Times that: “EABC has also maintained its position of 35% in view of promoting industrialisation and growth of intra-regional trade as the only avenue to generate prosperity and create meaningful and sustainable jobs for our young generation.” “The meeting for the Council of Ministers didn’t happen because two partner states were not present. We only had senior officials and permanent secretaries.”
Pan-African payment will take maximum of 120 seconds – PAPSS CEO (Businessday)
Before the introduction of PAPSS, can you give some insight into how intra African payments were executed, the level of efficiency and challenges?
The payment landscape today and before PAPSS has been layered on the principle of correspondent banking. This means that every commercial Bank in Africa develops a correspondent banking relationship with a Bank in the USA and Europe.
Transaction costs will be at the minimum in PAPSS because Afreximbank is empowered to put in place a payment system to facilitate the growth of intra-African trade
Afreximbank estimates that the African Market spends an estimated $5Billion through the correspondent banking system in terms of charges. The saving is estimated in several ways; the direct charges that economic operators pay at every touch point, the instant payments that reduce the delays and the cost in soliciting for hard currency. PAPSS does this through the instant payment system that reduces the delay, the reduced costs, and the payment in hard currency as well.
The 15th EAC Sectoral Council on Agriculture and Food Security (SCAFS) is currently underway at the Four Points by Sheraton in Dar es salaam, Tanzania.
Among the items on the agenda of the 15th SCAFS are the consideration of the reports on; EAC regional Food and Nutrition Security; progress in the implementation of previous Council and Sectoral Council directives; implementation of the EAC CAADP programme as well as harmonization of farm inputs; livestock, fisheries and aquaculture development.
“We have made a great stride in enabling good environment of the agricultural sector by ensuring availability and access to inputs; enhancing performances of agricultural value chains and agribusinesses and transformation of COVID19 lessons into opportunities”
EAC Deputy Secretary General (DSG) – Productive and Social Sectors, Hon. Christophe Bazivamo
The DSG pledged the commitment of the EAC Secretariat towards creating an enabling environment for development of the agricultural sector in the region, particularly catalysing increased agricultural production, and productivity to achieve nutrition and food security, to enhance performances of agricultural value chains and agribusinesses as well as promoting regional and international trade of agricultural produce.
The Africa Investment Forum: catalyzing financing for game-changing Abidjan-Lagos highway project (AfDB)
The construction of the 1,081-kilometer Abidjan-Lagos highway will have a significant impact on the economies of five West African countries - Côte d’Ivoire, Ghana, Togo, Benin and Nigeria. Valued at $15.6 billion and led by the Economic Commission of West African States, this transformative public-private partnership project was the largest investment opportunity showcased at the Africa Investment Forum virtual boardrooms held from 15 to 17 March 2022.
EAC takes over 25% of investment attracted at Africa Investment Forum (The New Times)
East African member states are expected to benefit from at least $8.77 billion worth of investments out of $32.8 billion drawn at the Africa Investment Forum. This is according to the President of the African Development Bank Group Akinwumi A. Adesina, who said that over 500 project sponsors, investors, deal brokers and government representatives had taken part in the three day event. In EAC, the deals range from transport, healthcare, energy, and agriculture among other sectors. In particular, 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.
East African member states are expected to benefit from at least $8.77 billion worth of investments out of $32.8 billion drawn at the Africa Investment Forum. This is according to the President of the African Development Bank Group Akinwumi A. Adesina, who said that over 500 project sponsors, investors, deal brokers and government representatives had taken part in the three day event. In EAC, the deals range from transport, healthcare, energy, and agriculture among other sectors. In particular, 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.
East African member states are expected to benefit from at least $8.77 billion worth of investments out of $32.8 billion drawn at the Africa Investment Forum. This is according to the President of the African Development Bank Group Akinwumi A. Adesina, who said that over 500 project sponsors, investors, deal brokers and government representatives had taken part in the three day event. In EAC, the deals range from transport, healthcare, energy, and agriculture among other sectors. In particular, 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. Adesina said that there is lot of political support and goodwill for the project.
“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,” He added.
Africa Oil Week and Green Energy Africa Summit returns in Cape Town in 2022 (Oil Review Africa)
Africa Oil Week (AOW), the continent’s one of the leading energy conferences, will run in Cape Town to bring leading energy stakeholders together from 3-7 October in Cape Town under the theme ‘Sustainable Growth in a Low Carbon World’
Annually, Africa Oil Week attracts more than 2,000 C-Suite executives, more than 50 ministers and government leaders and global energy leadership to drive transaction and investment with the African oil, gas and energy sectors.
“Africa Oil Week will continue to advocate and support the sustainable development of the continent’s hydrocarbon sector, whilst Green Energy Africa Summit will facilitate deals, transactions and partnerships across the African power sector to provide energy access for all. Our aim is to bring the right people together to facilitate Africa’s future economic prosperity and upliftment via the Hydrocarbon sector at Africa Oil Week and energy access for all at Green Energy Africa Summit,” said Paul Sinclair, vice-president energy.
“Africa needs mixed energy solutions to meet demand and improve the livelihood of millions of citizens. We foresee that hydrocarbons, as well as renewable energy solutions, will be a force multiplier for the continent. Hence Africa Oil Week and the Green Energy Africa Summit will be hosted alongside each other,” added Sinclair.
Adesina to Visit South Africa for Trade, Investment Talks (Business Post Nigeria)
When it comes to building the future of energy in Africa, the decisions facing the continent’s leaders today are nothing less than of historical importance. More than anything else, energy systems are the very fabric of business and society. Countries across Africa want to make good on their objective of building huge amounts of new generation capacity to anticipate vast increases in energy demand and set the continent on the path of growth and development it deserves. Africa knows where it needs to go. The big question is how. And more specifically: what is the most cost-effective energy mix that can be built to deliver all the new electricity capacity that is needed? Wind, solar, gas turbines, coal, gas engines… numerous options are available, but there is only one sweet spot.
When it comes to the choice of energy technologies, keeping an open mind, free from preconceptions, is paramount. Technologies that can be right for Europe considering its existing infrastructure, population density, or natural resources, can be wrong for others. Each country, each region, must find its own optimal way to build its energy system.
Many African countries have however one important point in common: maybe more than anywhere else, the models indicate that the best path to building the most cost-optimal energy system is to maximize the use of renewable energy.
Ukraine war threatens food crisis and political upheaval across Africa, warns top economist (AfDB)
The war in Ukraine threatens to lead to food riots, political upheaval and turn back the clock in years of progress in Africa, the continent’s top economist told The Telegraph. “This war has to come to an end. It’s not just a war in Ukraine. It’s a war that has global ramifications,” Dr Akinwumi Adesina, President of the African Development Bank, told The Telegraph. “The price of wheat has gone up by 62 per cent [since the beginning of the war]. The price of maize has gone up by 36 per cent. The price of soya beans by 29 per cent. Now the price of fertilisers, which are very, very critical for food productions, has gone up by 300 per cent – that’s three times.” “And when you couple that with energy prices that are also rising in many African countries, you can see that this is driving inflation. If urgent action is not taken, it could lead to a food crisis in Africa.”
Dr Adesina said that Covid-19 lockdowns across the continent and a climate change-induced drought across eastern Africa had already severely damaged food production and that the rapidly rising food prices were throwing regional governments a curveball. Ukraine and Russia export about 25 per cent of the world’s wheat, while together, both countries make up about 80 per cent of the world’s sunflower oil trade. Africa relies heavily on both countries for food imports – countries like Benin, Somalia, Tanzania, Sudan, Democratic Republic of Congo and Egypt get more than 50 per cent of their wheat imports from Russia and Ukraine.
AfDB Group Approves New Strategy for Addressing Fragility and Building Resilience in Africa (Proshare Nigeria)
The Board of Directors of the African Development Bank Group has approved a new strategy for addressing fragility and building resilience in Africa for the period 2022-2026. The strategy offers a roadmap for building more resilient institutions, economies, and societies across the continent over the next five years. This is the Bank’s third fragility and resilience strategy, built upon previous strategies in 2008 and 2014. It draws on lessons learned from the Bank’s 20-year engagement on fragility in Africa and its increasingly sophisticated understanding of its drivers. The strategy has been informed by extensive consultations with partners and stakeholders, and identifies three interconnected and mutually reinforcing priorities, namely: strengthening institutional capacity, building resilient societies and catalyzing private investment. “These priorities have clear synergies with many of the Bank’s existing sectoral and thematic strategies, including the Strategy for Economic Governance in Africa, the Private Sector Development Strategy, and all the High 5 priorities”, said Dr. Yero Baldeh, Director of the Transition States Coordination Office.
Mobile commerce in Africa: Growth, opportunities and challenges (African Business)
A report by the UK’s Department for International Trade (DIT) has highlighted the immense potential for mobile commerce in Africa and its ability to contribute to the economic transformation of the continent. The report Towards A Flourishing Digital Economy for All – A Spotlight on Africa, which was launched at a thought leadership breakfast on the sidelines of the 2022 Mobile World Congress in Barcelona, was prepared in partnership with Mobile World Live and examines the various challenges and opportunities around the sector in emerging markets, particularly in Africa.
The UK is keen to work with countries across Africa to boost digital trade and in 2019, set out a broad range of shared priorities with the African Union. Since then, the UK has supported projects in countries such as Côte d’Ivoire and Uganda to the tune of some £2bn ($2.6bn) to enhance digital trade.
At the UK-Africa Investment Summit in 2020, the UK further committed to building a business support trade to boost trade between it and Africa. It has built a digital gateway to connect UK and Africa and also provide support in terms of trade, finance and investment.
Presenting an overview of the report, Mike Short, chief scientific adviser at the UK’s Department for International Trade, revealed that the volume of e-commerce is expected to rise from $3.3 trillion as at 2019 to $7.4 trillion by 2025. Of this, only $180bn was generated in Africa, which shows that there is room for growth on the continent.
Council Post: New Opportunities In Africa For European Businesses (Forbes)
At the recent European Union meeting in Brussels with African leaders, the mood was optimistic. While accusations of unfair vaccine distribution linger, the overall mood was dominated by the European Union’s new Global Gateway patchwork of initiatives. These lavish funds on long-term issues for the EU, including a better relationship with the African continent. While pledging various things to Africa is as much a staple of Western politics as kissing babies, there is every reason to be cautiously optimistic regarding the trajectory of relations, including business opportunities. In particular, trade relations may see their own heyday, which may translate into significant business opportunities for the EU.
The reasons optimism may be warranted can be boiled down to three factors. None change the tide in and of themselves, but in aggregate, they may precipitate an underlying phase shift in relations that brings new opportunities.
IFC, African, European institutions Launch AforE to support private sector growth in Africa (Ahram Online)
AforE aims to support the private sector, entrepreneurship, and the growth of small- and medium-sized enterprises (SMEs) across the continent, the IFC said in a press release. The alliance was first announced at the Summit on Financing of African Economies in Paris that was held in May 2021. It will combine and focus technical and financial tools with a mission of improving Africa’s business environment as well as shoring up the growth and success of SMEs, women in business, and young entrepreneurs, according to the IFC. AforE’s core members include the African Development Bank (AfDB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the European Development Finance Institutions (EDFI), the French Treasury, the IFC, and Proparco — the private sector financing arm of Agence Française de Développement Group (AFD Group). “The launch of the alliance comes as African economies recover and rebuild from the effects of the COVID-19 pandemic, with small businesses seen as important drivers of job creation, innovation, and the delivery of essential goods and services,” said the IFC.
“Small businesses and entrepreneurs in Africa are drivers of inclusive growth, economic stability, and resilience. Supporting their growth will be critical to creating jobs and helping Africa recover from the COVID-19 crisis. And the Alliance for Entrepreneurship in Africa stands ready to do that.
Arab-Africa Trade Bridges (AATB) Board of Governors Meeting Concludes with Way Forward to Drive Trade and Investment Flows (African Business)
The 3rd Annual Board of Governors (BoG) Meeting of the Arab-Africa Trade Bridges (AATB) Program recently held in Cairo, Egypt, chaired by Dr. Hala ElSaid, Minister of Planning and Economic Development, convened all partners, strategic stakeholders, and public and private sector players in the Program to reinforce the role of regional value chains across Arab and Africa states in support of the AfCFTA. The landmark event included a round table discussion on the role of the AATB Program in the implementation of the AfCFTA across both regions. Notably, a memorandum of understanding was signed by the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) and Afreximbank. This agreement lays out a dedicated program that will focus on risk sharing, credit enhancement for export and import financing, supporting the bank’s digitalization transformation, capacity building and marketing.
“A vital role of the AATB Program is promoting regional and continental trade and investment cooperation between Egypt, Arab countries, and African countries. The Program promotes critical areas such as capacity building programs to support women in trade, supporting SMEs, and exporters, while addressing the negative effects of the corona virus on Arab and African economies through vital interventions in health and food security.”-said H.E. Mrs. Nevin Gamea, Minister of Trade and Industry of the Arab Republic of Egypt.
Promoting Economic Diversification in Africa Through Commercial Investment (Energy Capital & Power)
Towards the end of 2021, China offered insights into the future of its position on the African continent, illustrating significant shifts in its planned activities in agricultural assistance, climate initiatives, health services, peace and security incentives, trade promotion, and, most notably, infrastructure investment. Having reduced the number of committed projects from 50 in 2018 to 10 by 2021 – representing an 80% decrease – the shift from infrastructural development represents one of the most significant changes in China’s engagement with Africa in the last decade. Beijing, however, has been notably vocal with regards to the immense trade deficit in Africa, and has sought to increase trade with the continent, with aims to increase imports from Africa to $300 billion over the next three years.
Empowering the Pan-African Parliament to amplify the voices of the African citizens: PAP Day commemoration (African Union)
The Pan-African Parliament (PAP) commemorated 18 years since its inauguration as the first legislative body of the African Union on the 18th of March 2004. The commemorative event was held during the “PAP Day”, a day marked on every 18th March to serve as a reminder to African citizens of the potential of the Parliament, intended as a platform for people from all African states to be involved in discussions and decision-making on the problems and challenges facing the continent. The day is also meant to reminder African leaders of their commitment to empower the continental representation of the peoples of Africa. The 2022 PAP Day commemoration was convened under the theme: “Empowering the PAP to amplify the voices of the African citizens”.
Global economy news
WTO offers unique forum for dialogue on global supply chain issues — DG Okonjo-Iweala (WTO)
The WTO can play an important role in strengthening global supply chains and helping promote economic recovery from the COVID-19 pandemic and other global challenges, WTO Director-General Ngozi Okonjo-Iweala said at a Global Supply Chains Forum held virtually on 21 March. The Forum brought together WTO members and representatives from shipping, trading, express delivery and logistics companies to share perspectives on the causes of continued supply chain disruptions and to work together on ways to mitigate their impact on global trade and post-pandemic economic recovery.
Suez Canal says transit fees for ships will increase in May (AP News)
Egypt said Tuesday it will increase transit fees for vessels, including oil-laden tankers, passing through Suez Canal, one of the world’s most crucial waterways. The Suez Canal Authority said on its website it will add 15% to the normal transit fees for oil-laden and petroleum products-laden tankers, up from current 5%. It said the increases will take effect starting May 1, and could later be revised or called off, according to changes in global shipping. The new increase are amendments to surcharge hikes imposed in March on vessels passing through the waterway, the canal said. The canal said surcharge fees for chemical tankers, and other liquid bulk tankers will be hiked to 20% up from 10%, while laden and ballast dry bulk vessels will have their surcharges increase to 10%
About 10% of global trade, including 7% of the world’s oil, flows through the Suez Canal, which connects the Mediterranean and Red seas. For Egypt, the canal — which first opened in 1869 — is a source of both national pride and foreign currency. Authorities said 20,649 vessels passed through the canal last year, a 10% increase compared to 18,830 vessels in 2020. The annual revenues of the canal reached $6.3 billion in 2021, the highest in its history. The shipping industry is still under pressure from the pandemic, and Russia’s war on Ukraine also added to global economic concerns.
Building better apparel value chains in least developed countries (Enhanced Integrated Framework)
Apparel is a conventional starter industry for least developed countries (LDCs) that are working toward export-oriented industrialisation. However, LDCs that integrate apparel global value chains often fail to sufficiently develop backward linkages to the textile sector and create local value addition, moves that could spur economic, social and environmental improvements. In addition, the COVID-19-induced health and economic crises have led to one of the most challenging years on record for the global fashion industry and its supply chain, leaving vulnerable garment workers and firms in LDCs highly exposed to shocks. Building on an analysis of industry trends and three country case studies, this brief explores how LDCs can best reap the full and fair benefits from participation in apparel value chains as the global fashion industry recovers and evolves.
Promoting use of technology to tackle urban problems (UNCTAD)
More than half of the world’s population live in urban areas. By 2050, that figure is expected to rise to 6.5 billion people – two thirds of all humanity. The COVID-19 pandemic has exacerbated the sustainability challenges facing urban areas. For instance, the use of masks and other disposable plastics has significantly increased urban plastic pollution and inappropriate waste management practices. But rapid technological change opens new possibilities for innovatively addressing urban problems, at a lower cost and more sustainably. The 25th session of the UN Commission on Science and Technology for Development (CSTD) slated for 28 March to 1 April in Geneva and online will examine how to leverage science, technology and innovation for sustainable urban development in a post-pandemic world, among other topics. UNCTAD serves as the CSTD secretariat.
The OECD has released a proposal for a prototype of the Blue Dot Network certification framework for infrastructure projects that are economically, environmentally and socially sustainable, resilient, open and transparent. The prototype for the certification framework will be piloted on a number of infrastructure projects across different regions and sectors. The Blue Dot Network, founded by the governments of Australia, Japan and the United States, aims to support and attract quality infrastructure investment to help bridge the estimated USD 2.5-3.5 trillion infrastructure investment gap, accelerate the transition to global net-zero emissions, and optimise the strength and the quality of future growth.
“The world needs not just more infrastructure, but better infrastructure,” said Jose W. Fernandez, Under Secretary of State for Economic Growth, Energy, and the Environment, U.S. Department of State. “It must be transparent, inclusive, and sustainable to bring the economic benefits that our citizens deserve.”
Leading Innovation in Investment Dispute Resolution (World Bank Blog)
Foreign investment has long been recognized as a factor that catalyzes economic and social development. By bringing capital, technology and know-how across borders, foreign investment contributes to more productive and dynamic private sectors that create jobs and reduce poverty.
The World Bank supports its client countries to attract and retain foreign investment by advising on policies to expand investment opportunities, unlock private sector-led growth, and connect foreign and domestic investors. These efforts work in concert with the innovative financial products, political risk insurance and credit enhancement, and international dispute resolution services provided by the IFC, MIGA, and ICSID. Together, these institutions have served an extraordinary role in supporting a robust and engaged private sector in developing countries.
This focus on the private sector is especially critical today as countries recover from the pandemic. While foreign direct investment rebounded strongly in 2021, flows to developing countries—and particularly the poorest countries—have been more modest.
Rising prices increase alarm for food security and political stability (UNCTAD)
Prices for agricultural commodities were following an upward trend as a result of governments response to the Covid-19 crisis, e.g., fiscal stimulus in some nations, loose monetary policies, coupled with stockpiling and export restrictions by some countries. But the current conflict has sent prices up to new and perilous heights, even exceeding those observed at the beginning of the Arab Spring and the food riots that resulted in significant casualties in 2007-2008. The new price spike is a collateral damage of the ongoing war, which can compromise political stability and food security anywhere in the world.
Plastics dialogue launches three workstreams to advance discussions (WTO)
Participants in the Informal Dialogue on Plastics Pollution and Environmentally Sustainable Plastics Trade (IDP) launched on 18 March discussions in three new workstreams to advance work on reducing plastics waste. This marks the first step in implementing the IDP Ministerial Statement announced in December 2021, said Australia, co-coordinator of the IDP.
The three workstreams, outlined in the IDP’s latest work plan, are intended to advance work on implementing the IDP Ministerial Statement, which sets out a roadmap for supporting global efforts to reduce plastics pollution and environmentally sustainable plastics trade. Each workstream will entail informal discussions and workshops to address specific topics in the Ministerial Statement.
Airlines revival gathers steam as more countries open skies (Business Daily)
The world is now largely open for travel with the countries relaxing Covid-19 restrictions as the virus moves into endemic stage as opposed to pandemic, coming as a major boost to airlines. The latest survey by International Air Travel Association (IATA) indicates that 25 of the top 50 countries for air travel, representing around 38 per cent of 2019 markets, were now open to fully vaccinated travellers without any quarantine or testing requirements. This is an increase from 18 markets that were in the same position in mid-February in an earlier survey done by the association. “About 38 markets representing 65 percent of 2019 international demand are open to vaccinated travellers with no quarantine requirements—up from 28 markets (50 percent of 2019 international demand) in mid-February,” said Willie Walsh, IATA’s director-general.
