tralac Daily News
African Development Bank Group President Dr. Akinwumi A. Adesina has pledged his institution’s support for South Africa, announcing a $2.8 billion package for the country over the next five years. Some $400 million (ZAR 6 billion) will support South Africa’s Eskom and the country’s energy transition. Adesina was speaking at the opening of the South Africa Investment Conference in Johannesburg today
President Ramaphosa outlined measures his government has made, including social and economic relief packages, describing them as “difficult but necessary reforms” in energy, state-owned enterprises, and the fiscal and taxation sectors, to drive economic growth.
Adesina pledged $400 million from the African Development Bank in support of the country over the next three years, particularly for Eskom, as it transitions to renewable energy. He said the Bank was working with international partners, especially the G7 countries, to establish a just energy transition facility that will support South Africa in raising at least $27 billion.
South Africa’s strategic position within the African Continental Free Trade Area (AfCFTA), adds immense value to investors who want to benefit from improved access to large markets. This will be highlighted at the 4th South African Investment Conference (SAIC), which is currently underway at the Sandton Convention Centre, in Johannesburg. The conference brings together private and public sector decision-makers as they seek to showcase trade and investment opportunities in the continent. One of President Cyril Ramaphosa’s investment envoys, Jeff Radebe, highlighted that Africa offers investors access to a market of more than one billion people with a gross domestic product that exceeds $2.6 trillion. “Historic trade barriers are coming down and economic activities are increasingly conducted seamlessly across the continent. Africa is growing fast into an integrated investment destination,” Radebe said.
Zim-Rwanda trade and investment conference starts next week (The New Times)
A total of 60 Rwandan businesses are expected to participate in this year’s Zimbabwe-Rwanda Trade and Investment Conference, slated for March 28 through April 1.
Speaking to The New Times in an exclusive interview on Wednesday, Allan Majuru, Chief Executive of Zimbabwe’s export promotion agency, ZimTrade, said that preparations are underway and that 100 Zimbabwean companies are expected to participate.
Majuru added that the main purpose is to make sure that “we solidify and concretize some of the deals that were discussed in Rwanda and also pave the way for future trade and investment opportunities that are going to come through.”
During the conference a total of three agreements are expected to be signed as part of the efforts to further create market access. They include a memorandum of understanding on trade and investment, an implementation agreement between Zimbabwe Electricity Supply Authority (ZESA) and Rwanda Energy Group (REG) as well as a memorandum of understanding between Rwanda’s Private Sector Federation (PSF) and Zimbabwe National Chamber of Commerce (ZESA).
Trade between Rwanda and Zimbabwe has previously been on a small scale, and businesses are optimistic that with the conference on the horizon, more opportunities will be created.
Treasury revives LPG subsidy scheme as prices rise (Business Daily)
The Treasury has announced plans to revive the stalled subsidy scheme for affordable cooking gas from July, promising relief to families hit by record LPG price spikes following the Russian invasion of Ukraine. Treasury Cabinet Secretary Ukur Yatani has listed the cooking gas distribution scheme as a priority public investment under infrastructure development in the next financial year starting July. The cooking gas subsidy scheme initiated by the Ministry of Energy during the 2016/2017 financial year was aimed at cutting reliance on environment-unfriendly kerosene and charcoal, which are widely used in most rural and urban poor households.
The draft Budget Policy Statement for the year starting July now shows that the Treasury expects to fund the supply of at least 300,000 cylinders. This is, however, only a small percentage of the target of three million that was outlined in the initial plan.
The return of the subsidy comes amid the sharp rise in the cost of cooking gas that has piled pressure on families already struggling with daily bills due to job losses and drastic cuts in earnings in the wake of the Covid-19 pandemic.
Ethiopia moves to allow entry of Kenyan banks (Business Daily)
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 #ticker:KCB 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.
Uganda and Burundi have held their first ever business forum as one of the way to bolster relations between the two countries but also encourage trade.
Nabakooba said for many years, Uganda and Burundi have been engaged in trade amongst themselves but noted this was done at an informal set up. “It has been mostly done by individuals or firms who on their own, identified markets for their businesses or sources of the goods and services in each other’s countries. Business between Uganda and Burundi has been oscillating over the years. Sometimes it registers significant growth and at other times registers decline, depending on the prevailing situation in the two countries and the region,”Nabakooba noted.
Minister Nabakooba explained that in 2009 Uganda exported goods worth $82 million and this grew to $92million in 2012 whereas imports from Burundi grew from $0.8 million to $2.8 million between 2009 and 2012 and by 2021 Uganda’s exports were at $50 million from $37.03 million in 2019.
Angola is looking to revolutionise the landscape of Southern Africa. Using private investment, it wants to transform the port of Lobito into the gateway of this region. It is also planning to make the province of Benguela the epicentre of trade and development in southern Africa.
João Fernandes, the Coordinator of the Lobito Port Evaluation Commission, says that the Ministry of Transport’s master plan “is closely linked to the Port of Lobito and the Lobito Corridor” and they expect with the participation of foreigners they can improve the infrastructure and efficiency as well.
Pinzon also sees great potential for Lobito. He thinks it has a great infrastructure and that “it has the potential to become the gateway to the Southern part of Congo and also to Zambia”. That’s certainly what drove the builders of the Benguela railroad more than a century ago. Now, work is concentrating on bringing the Lobito corridor further into the 21st century with more private investment. Lobito is already geared for larger shipments from the mines with a new terminal to load from trains to ships.
Some maritime stakeholders on Thursday said the economic benefits derivable from the Lekki Deep Seaport were enormous and would boost the country’s Gross Domestic Product (GDP). Buhari, while inspecting progress of work at the port, directed the Minister of Transportation to consult and bring up a memorandum to the Federal Executive Council (FEC) to link the facility with the railway network The President, Nigeria Private Sector Alliance, Mr Adetokunbo Kayode, said the Lekki port, being one of the biggest in Africa, would be of huge benefit to the nation’s economy.
Kayode, a former Attorney General and Minister of Justice, said upon its completion, the project would result in better efficiency in the import and export of goods in the country.
The Democratic Republic of Congo (DRC) recently hosted the 12th Walvis Bay-Ndola-Lubumbashi Development Corridor (WBNLDC) Tripartite Meeting.
Speaking during the official opening ceremony, Governor of Haut Katanga Province in Lubumbashi, DRC, Jacques Kyabula Katwe, underscored the development of mining and the local market for goods and services, which saw an increase of volumes from Walvis Bay via Zambia to DRC. He emphasised that the revitalisation of the WBNLDC was necessary for the DRC, as it brings access routes via Zambia to DRC. This revitalisation was also imperative for regional cooperation and trade between DRC and Namibia. Recent developments in the member states and regional economic communities pertaining to trade facilitation matters along the corridor were highlighted. The tripartite indaba discussed the urgent need to harmonise transit fees and cross border charges as recommended by the various regional economic communities, the extension of border operating hours, and the need for ratification of the WBNLDC tripartite agreement by the Republic of Zambia.
Furthermore, the need to find an urgent solution to parking space for truckers and migration to the One-Stop Border Post framework, which is a relevant ingredient for enhanced regional integration through trade. With regard to immigration matters, the meeting recommended that Namibia should open a diplomatic consulate in Lubumbashi to ease trade and the issuance of visas.
National Policy Dialogue on the Manufacturing Sector aims at strengthening resilience (Government of Mauritius)
A two-day National Policy Dialogue on the Manufacturing Sector, aiming at assessing the present situation of the manufacturing sector in the light of new challenges, kickstarted this morning at the Maritim Resort and Spa, in Balaclava.
In his address, Minister Bholah stated that the organisation of this policy dialogue at this stage is crucial for the development of the manufacturing sector to reassess the current situation within which it is evolving in a bid to come up with a transformed business ecosystem for a new impetus and greater resilience for the manufacturing enterprises. It will help us together to probe deeply into our respective roles and functions as business operators and Government agencies, added the Minister.
The Minister observed that the ramifications of the Covid-19 pandemic on all aspects of life have provoked for more dialogue, and stressed for the need of common efforts, to reach consensus on policy solutions for the construction of a prosperous future. This sector is an important pillar of the economy and has successfully graduated from being a low-cost producer of basic products to higher value added and more sophisticated products, he pointed out.
African trade news
African Development Bank Group President Dr. Akinwumi A. Adesina told women at a conference in Pretoria on Wednesday that they are part of a revolution that is building across Africa. The head of Africa’s premier development lending institution was speaking at the virtual Women Heads of State Initiative, a new cross-media initiative organized by Africa.com in partnership with Coca Cola Africa. The summit recognizes serving and past women presidents and prime ministers in Africa. One of its highlights is strengthening capacity for emerging female leaders on the continent. Adesina lauded the accomplishments of women in Africa. He said that unlike women in other parts of the world who have had to break through glass ceilings, “women in Africa have had to break through male-dominated concrete ceilings.”
Free movement key to trade within Africa (China Daily)
Free movement of people should be reinforced in Africa to boost economic integration of the continent for common prosperity, according to a report released by the African Union last week. Despite aspirations of African nations to foster closer connections to facilitate trade, lower transaction costs and improve production efficiency, many obstacles still hinder integration within the continent, such as strict restriction of intracontinental movement, stated the 2021 African Integration Report: Putting Free Movement of Persons at the Center of Continental Integration. In addition to the free movement of people, free movement of goods, services and capital are also essential for African integration and should be collectively reinforced.
Railways: Tracking East Africa’s trade renaissance (The Africa Port)
Years ago, the governments of Addis Ababa, Nairobi and Dodoma pitched Beijing about rail corridors to tie together the region’s economies with new standard gauge railways (SGRs). But after the profitability of the Kenyan line raised questions about the viability of connections farther inland, governments are working on other ways to raise the share of freight transported over rail, which has dropped from 70%-80% in the 1970s to 5% in 2019.
A two-day summit of African Heads of State and Government on Cybersecurity ended on 24 March in Lomé , Togo, with the adoption of the Lomé Declaration on cybersecurity and the fight against cybercrime in Africa.
President Gnassingbe said the initiative was about “developing synergies to fight crime in the digital ecosystem, a revolution of our time that opens remarkable opportunities for humanity.” He urged other African countries to ratify the African Union Convention on Cybersecurity and Personal Data Protection adopted in Malabo, Equatorial Guinea on June 27, 2014. Ratifying the Malabo Convention, he noted, will enhance cooperation between African Union member states on the protection of personal and state data.
Ms Songwe noted that “Africa offers a wealth of economic opportunities in virtually every sector,” and that the digital economy represents a key asset to unlock these opportunities by accelerating development outcomes through Africa’s demographic dividend.
The Common Market for Eastern and Southern Africa (COMESA) has held an engagement session with various business communities in Kenya to discuss the application of the COMESA competition laws in the business environment. The competition and consumer protection law is important for the promotion of trade liberalization as it will curb incidents of illegal practices and provide equity in the business environment. Ministry of Industrialisation, Trade and Enterprise Development Cabinet Secretary Betty Maina said the implementation of any legal instruments such as the competition and consumer protection law is vital for the management of a business. “As Kenya we are interested in ensuring that anti-competitive practices do not create participation barriers to trade,” said Maina. ”This is even more important for businesses as they recover from the Covid-19 pandemic,” she said.
The ECOWAS Commission has signed a protocol agreement with the African Development Bank on a project to support the development of the pharmaceutical industry in the region. The signing ceremony, which took place at the African Development Bank (AfBD) headquarters in Abuja, had in attendance representatives from both institutions.
In his welcoming remarks, Mr. Lamin Barrow, the Director-General of the African Development Bank (AfBD) said the agreement was for the provision of a $3.56 Million grant to support West Africa’s pharmaceutical industry. He stated that “the bank has been a key partner of the ECOWAS Commission, providing financial and technical assistance to Member States to support the implementation of ECOWAS’ regional integration agenda”. He added that the bank’s active portfolio in West Africa consists of 350 projects for a total commitment value of $15.5 Billion.
$338.7m ECOWAS off-grid electricity project takes off in Abuja (The Guardian Nigeria)
The Project Management Unit (PMU) for the $338.7 million Regional Off-Grid Electricity Access Project (ROGEAP) has officially commenced activities from the Economic Community of West African States (ECOWAS) Department of Energy and Mines in Abuja. At a cost of $690 million, the project covers Cote d’Ivoire, the Gambia, Guinea Bissau, Mali, Niger, Senegal, Togo, and Mauritania.
Wole Adeniyi, Chief Executive, Stanbic IBTC Bank Plc, said multiple studies have shown that increase in trade has a direct impact on reducing unemployment and poverty in societies. He noted that the AfCFTA agreement presents numerous trade opportunities that are both exciting and promising, not just for the continent but also for the Nigerian market.
Delivering welcome remarks in a video message, DDG Paugam said: “Providing practical support through the STDF to farmers, producers, traders and governments in developing countries is now more important than ever in overcoming supply chain disruptions, keeping trade flowing and ensuring that countries can continue to compete in global markets.” The STDF is a global multi-stakeholder partnership, housed at the WTO, that supports developing and least developed countries in complying with the WTO SPS Agreement and expanding market access. The partnership has supported more than 65 national and regional projects in Francophone Africa since its creation, representing around 30% of all STDF-funded projects and 34% of total resources.
Global economy news
Prime Minister Mottley outlined the major trade obstacles facing exporters from small island developing economies, such as the digital gaps, shortage of supporting financing mechanisms and discriminatory standards. “These, not tariffs, not genuine competitiveness and comparative advantages, are the obstacles to today’s international trade. They will be an obstacle too to the efficient and fair prosecution of climate mitigation through the global transfer of capital, technology, and opportunity,” she said.
She concluded: The new global order “requires a next generation WTO committed to calling out obstacles to equitable trade, committed to being even more representative, acting as a countervailing, reforming force against the tendency to narrow, exclusive trade relationships, with a seat at the highest tables to promote the international trade dimension to the world’s problems.”
The UN’s trade and development body has downgraded its global economic growth projection for 2022 to 2.6% from 3.6% due to the Ukraine war and to changes in macroeconomic policies made by countries in recent months. In an update to its Trade and Development report published on 24 March, UNCTAD says that while Russia will experience a deep recession this year, significant slowdowns in growth are expected in parts of Western Europe and Central, South and South-East Asia.
“The economic effects of the Ukraine war will compound the ongoing economic slowdown globally and weaken the recovery from the COVID-19 pandemic,” UNCTAD Secretary-General Rebeca Grynspan said.
“Many developing countries have struggled to gain economic traction coming out of the COVID-19 recession and are now facing strong headwinds from the war. Whether this leads to unrest or not, a profound social anxiety is already spreading.”
The financial fallout from the war in Ukraine could widen the already huge gap in financing needed to achieve sustainable development goals (SDGs) and lead to cascading credit downgrades and debt defaults in developing countries, UNCTAD said. The gap in financing needed to achieve SDGs, such as ending poverty and halting climate change, now sits at $17.9 trillion for the 2020-2025 period, new UNCTAD estimates show. This puts the current annual gap at $3.6 trillion – more than $1 trillion wider than before the COVID-19 pandemic – without even factoring in the effects of the Ukraine conflict. “We risk going from having a gap to achieve the SDGs to having an abyss,” UNCTAD Secretary-General Rebeca Grynspan said on 21 March as she opened a meeting on financing for development convened by the organization.
Ministers, policymakers, heads of international organizations and leading experts will examine how science, technology and innovation can help the world recover better from the COVID-19 pandemic during 25th session of the UN Commission on Science and Technology for Development from 28 March to 1 April in Geneva and online. The sessions will focus on the themes of “Industry 4.0 for inclusive development” and “Science, technology and innovation for sustainable urban development in a post-pandemic world”.
She added: “Developing countries need more opportunities to participate in international research networks, increased funding for research and more support for technology upgrading and transfer, particularly in support of post-COVID-19 recovery efforts.”
South-South knowledge sharing is one of the best approaches we have at our disposal to build capacities, as it draws on what has proven to work in improving people’s lives, for the benefit of others. China’s experience of eradicating extreme poverty, which is the fastest poverty reduction in human history according to the World Bank, offers inspiration to all developing countries. Leveraging digital economy has been an important element leading to that success. This is because E-commerce has been associated with the expansion of employment opportunities, particularly for micro, small and medium enterprises (MSMEs), women and youth, with transformative impact to all sectors including the informal sector. This became more relevant than ever during the COVID-19 pandemic. Indeed, amid the COVID-19 crisis, e-commerce is on the verge of exponential growth in most countries in the Global South. There are also signs that the platform economy has already taken root in low-income countries.
Mobile data costs have increased, making internet connectivity unaffordable for many (World Wide Web Foundation)
According to an analysis conducted by the Alliance for Affordable Internet (A4AI), 1GB of mobile broadband data became less affordable in 2021 than the previous year. Between 2020 and 2021, the median cost of 1GB of data as a percentage of average monthly income increased 13% in the 93 countries studied by A4AI in both years.
The economic crisis triggered by Covid-19 reduced gross national income in many countries around the world. This reduced the affordability of 1GB of mobile broadband in 2021. Affordability is expressed as the price of data as a share of gross national income. In 2021, the change in income outweighed the price change. Suddenly, customers in low and middle income countries had less income available, making the prices less affordable.
The International Trade Centre (ITC) and the International Islamic Trade Finance Corporation (ITFC) hosted a joint event at Dubai Expo 2020 in March 2022 to explore possible solutions for closing the gap in access to finance for women entrepreneurs in developing countries. In her opening remarks, Pamela Coke-Hamilton, Executive Director of the International Trade Centre (ITC) said that investing in women is essential to supporting global recovery efforts. “According to the International Finance Corporation, more than 70% of women-owned small businesses do not have access to financial services, and the existing gender capital gap is estimated to be $300 billion,” she said.
“Over 50% of women in developing countries seek entrepreneurship as a path to a better future, compared to about 25% in high income countries,” said Iva Hamel, World Bank Resident Representative to the United Arab Emirates.
For this reason, several initiatives to support women’s access to finance were launched, such as the Women Entrepreneurs Finance Initiative (We-Fi) managed by the World Bank, that scales up women’s access to financial products and services, builds capacity, offers networks and mentors, and provides opportunities to link to domestic and global markets.
The chair reported on her recent consultations with WTO members. With the clarity provided by the new dates for MC12, and bearing in mind the continuation of the COVID-19 pandemic and the conflict in Ukraine, she asked members to reassess the format and substance of the negotiations in preparation for the work ahead. “Preserving a well-functioning rules-based multilateral trading system and finding ways to make a meaningful contribution to agriculture and food security is more important than ever,” said the chair.
Domestic support to the farm sector remains a high priority for the membership, and many trade officials renewed calls for addressing trade-distorting domestic support.