tralac Daily News
African Development Bank officials and representatives of the Zimbabwe government met on Wednesday to discuss the nation’s arrears clearance and ongoing partnership between the southern African nation and the development institution. They noted progress in Zimbabwe’s reform agenda.
The Zimbabwe government has lowered taxes on fuel, made changes to its land policy and is implementing a range of social protection measures while tackling the Covid-19 pandemic, Ncube said. Two projects in particular are going well. The first, is an agriculture-based programme which has given relief to two million households and the second is a cash transfer programme, targeting children from poor families. Other measures included subsidized medical care for elderly people and other vulnerable population groups, and a grain distribution programme for populations in drought-hit areas.
The governments of Zambia and Zimbabwe with support from COMESA Secretariat, the United Nations Economic for Africa (UNECA) and the African Development Bank (AfDB) are working on modalities to establish a Joint Agro Industrial Park. The proposed project is expected to increase the availability of industrial goods and services for the bilateral market and expand intra- regional trade in manufacturing. It will help develop industrialists that would acquire ownership and management of the industries, develop appropriate skills and knowledge in industries, strengthen collaboration and bolster networking among policy makers, regulators, industry and academia.
How tech helped firms blunt sting of Covid-19 disruptions (Business Daily)
When Covid-19 hit Kenya in March 2020, it forced almost every economic sector to quickly automate operations as organisations sought to weather the storms brought by the unprecedented level of disruptions witnessed during the pandemic. Even corporates and small and medium-sized businesses (SMEs) that had gone digital realised that the depth and scope of business disruptions were such that their existing Enterprise Resource Planning (ERP) software needed to be upgraded or entirely replaced. As the necessity for employees to work from home rose, software vendors bolstered their cloud storage and capacity, while companies increased the number of software users.
Summit to assess progress in Kenya’s ICT landscape (Business Daily)
Stakeholders in the information technology (IT) industry are set to review progress in the sector, including digital skills, infrastructure and regulatory environment, to develop a plan for economic development with tech-enabled services. The Connected Kenya Summit 2022 is also expected to chart the way for increased adoption of emerging technologies such as Blockchain, the Internet of things, Big Data and Artificial Intelligence in service delivery.
“Under the theme ‘Accelerating Digital Transformation”, a great deal of earnest discussion that will go under the summit will shape how the industry will provide viable ICT solutions to challenges facing the country especially after the Covid-19 pandemic negatively impacted the different sectors of the economy,” said ICT Authority.
Inside Uhuru’s last Sh3.3trn budget (Business Daily)
Treasury Cabinet Secretary Ukur Yatani on Thursday read the Sh3.31 trillion budget for the financial year starting July, two months earlier than traditional time, paving the way for lawmakers to approve expenditure before their term ends ahead of the August 9 general elections. The Treasury secretary informed the lawmakers that Kenya had received the green light from East Africa Community (EAC) partner states to read the budget ahead of the August elections. Mr Yatani said the Jubilee administration has refocused spending to sustain economic recovery from the Covid-19 pandemic and support social welfare programmes meant to benefit low-income and poor Kenyans.
Local manufacturing ”In order to promote local manufacturing of pharmaceutical products, I propose to introduce VAT exemption on inputs used in the manufacture of medical ventilators and breathing appliances.”
Kenya Pipeline ventures into internet business, launches fibre optic cable (The East African)
The Kenya Pipeline Company (KPC) on Thursday launched its fibre optic cable that will run from the Mombasa port through Nairobi to Kisumu and Eldoret in western Kenya. The state corporation is conventionally mandated to transport petroleum products from the Mombasa port to the hinterlands in Kenya, Uganda, Rwanda, Burundi, South Sudan, Eastern DRC, and parts of Northern Tanzania. But it is venturing into a new product line as it seeks to create a new revenue stream and improve the country’s internet connectivity.
KPC’s Managing Director, Dr Macharia Irungu, said, “We purpose to improve internal communication infrastructure for the country; diversify into the data communication sector to create a new revenue stream; and utilise technology as a business driver for both ourselves and our customers.”
“In launching our fibre optic cable, we are re-affirming our unequivocal commitment to revolutionising the delivery of data across the country,” Dr Irungu added.
Tanzania hosts IMF-led talks on cryptocurrencies (The East African)
Tanzania’s top financial sector officials on Tuesday called for a clearer global consensus on Central Bank Digital Currencies (CBDCs) and crypto assets as the country continues to contemplate the direction to take on the rapidly evolving concepts. Finance and Planning Minister Mwigulu Nchemba told a regional conference hosted by the Bank of Tanzania and International Monetary Fund that both topics needed more “thorough discussions” before the country could make commitments, a view that was echoed by Bank of Tanzania governor Prof Florens Luoga. The virtual convention, which continued on Wednesday, was called specifically for Anglophone countries in Sub-Saharan Africa to gain more insight on issues such as financial inclusion and integrity, digital and cybersecurity risks, legal issues and interoperability in relation to CBDCs and cryptocurrency dealings.
Deputy Minister for Livestock and Fisheries Abdallah Ulega said the government has taken measures to encourage value addition and attract local and foreign investors in the leather industry. The deputy minister said decisions to impose the 80 per cent export levy on n raw hides and skins and 10 per cent on wet blue exports was meant to encourage value addition by local industries.
“Countries within the East African Community (EAC) agreed to impose the export levies to protect local firms and enhance productivity in the leather industry. The decision was meant to ensure reliable availability of raw materials to local factories manufacturing leather products,” said Ulega. The 80 per cent export levy on the products is equivalent to US $ 0.52 per kilogramme, stated Ulega, adding that there are no levies charged on finished leather exported to various countries.
Improved infrastructure will boost cross-border trade – WAACBT (The Sun Nigeria)
As African countries push for implementation of African Continental Free Trade Area (AfCFTA) agreement, the President of West Africa Association for Cross Border Trade, Salami Alasoadua, has urged governments of the West African sub region to step up their infrastructure to boost trade in the region.
Alasoadua, who made the call in Lagos, noted that ‘Nigeria, Ghana, Togo and Benin Republic’ needed to develop infrastructure along the borders to improve trade.
“We need to develop infrastructure along our borders. We need lorry parks to ease movement at the borders. We need to involve the broader communities in terms of policy. By doing this, we can also resolve the issue of lack of information.”
The Nigerian Export Promotion Council (NEPC), Nigerians lead agency in the promotion of the non-oil export sector of the economy, has advised professionals, who render services abroad or to foreign nationals in the country to formalise their services to bring in foreign exchange and improve the country’s economy. Arnold Jackson, regional head, South-East region of NEPC, gave this advice Wednesday, while delivering a paper titled “Export of Nigerian services, at one-day sensitisation workshop on “Export of Services”, organised by the Aba Smart Office of the Council. He explained that the services sector is the easiest way to diversify the economy.
Business services in Nigeria include professional services in healthcare, information communication technology (ICT), transportation, financial services, entertainment and education, which it has comparative advantage.
Apart from preserving the culture and values of the society, the creative industry is adjudged to be a catalyst for the economic transformation of any country. In Nigeria, however, although the fame of the local movie industry, Nollywood transcends the boundaries, the full potential of the sector is believed to be largely untapped as the industry’s contribution to growth is rather negligible.
But as the federal government intensifies its drive towards economic diversification from oil, critical sectors including the creative industry, have been targeted, especially through the interventions by the Central Bank of Nigeria (CBN) in a conscious effort to reposition the sector.
Malawi has achieved significant progress in its agricultural sector, helped by a country strategy drafted by the African Development Bank. The 2018-2022 strategy also supported progress in the transport sector, according to the mid-term review approved on 4 April by the African Development Bank Group’s Boards of Executive Directors in Abidjan. The Country Strategy Paper, approved by the African Development Bank Group’s Boards of Executive Directors in June 2018, is based on two pillars: investing in infrastructure development through energy and transport, and investing in economic transformation by added value in agriculture and developing water infrastructure.
In terms of economic diversification and improving the business climate, by 2020 the strategy had resulted in training for 1,000 small farmers and provided agricultural extension services. It has also allowed over 2.28 million transactions to be processed through a digital payment platform and secured three VISA and Mastercard certifications.
Ethiopia’s Ministry of Trade and Regional Integration says it has generated $2.5 billion from export trade in eight months. Gebremeskel Challa, the Minister for Trade, said, as reported by state media, that the plan was to generate $2.77 billion and that 91 percent of the planned revenue is achieved from export trade. The bulk of it was generated from the export of agricultural products ( $1.75 billion). The Manufacturing sector generated $320.9 million.
The formal launch of the National Quality Policy in the Union of the Comoros is a significant milestone in the government’s overall strategy for economic and social development in the wake of the global pandemic health crisis. The National Quality Policy aims to strengthen the country’s quality infrastructure and establish a culture of higher standards both in public administration and in the private sector to ensure more inclusive and sustainable economic development in the Comoros.
The National Quality Policy is in line with the provisions of the World Trade Organization’s agreements on technical barriers to trade (TBT) and sanitary and phytosanitary (SPS) measures to which the Union of the Comoros has subscribed.
The introduction of a quality standards framework has been a key aspect of the ongoing work of the UK Trade Partnerships Programme (UKTP), an aid-for-trade initiative in selected African, Caribbean and Pacific countries funded by the UK’s Foreign, Commonwealth and Development Office.
African trade news
Preparations for the African Union Summit on Industrialization and Economic Diversification have officially kicked off. Touted as a highly anticipated timely gathering, the Summit is expected to offer various opportunities to member states, regional organizations, the private sector including Medium and Small Scale enterprises and start-ups, and the development partners, to unlock the continent’s potential to industrialize, particularly as the COVID-19 pandemic recovery action plans are being implemented and with the latest concerns on the impact of the Ukraine crisis on the African continent. The Summit’s outcomes are expected to be action-oriented, to accelerate industrialization and Economic Diversification in Africa. Niger, the host country of the Summit to be convened during the Africa Industrialization Week from the 20 - 25 November 2022, will be among the beneficiaries of the Summit deliverables as plans are underway, to establish a Special Economic Zone in the country.
The African Union Summit on Industrialization and Economic Diversification makes great recognition of the fact that sustainable success on the Africa-Industrialisation front will only be achieved with deliberate efforts to integrate and systemically address Africa’s underlying development features, such as the micro-small-medium enterprises and informal economy, the urban-rural transition, socio-economic diversity across the 55 AU member states, as well as linkages between education-skills development and industry. Cross-cutting issues such as gender, climate change, energy security, youthful population and growing unemployment, will facilitate the evolution of a sustainable and inclusive industrialisation pathway for the continent.
The 2022 edition of the AFRICA CEO FORUM, the largest annual event dedicated to private sector development in Africa, will be held on June 13-14, 2022, in Abidjan, Côte d’Ivoire. At a time when the world is recovering and rebuilding from COVID-19, and 10 years after its first edition, the event will focus on proposing new routes for African growth. Vaccine production, disruption of supply chains, digitalization of economies, energy transition and the health crisis brought on by COVID-19 have accelerated the transformation of economies towards new models.
Food items make up around 40% of the consumption basket in sub-Saharan Africa. This explains why high food prices directly impact inflation rates in the region. Using available data obtained from some countries in SSA, the IMF found that between 2019 and late 2021, there was a significant increase in inflation linked directly to higher food prices. “Food inflation increased throughout 2019, on average, across 20 countries in the region where monthly food price data are available. After remaining stable around 9 percent (year over year) since the beginning of the pandemic, food inflation started to rise again from April this year to some 11 percent in October. The chart below shows how food inflation is outpacing and contributing to the pick-up in overall consumer price inflation in sub-Saharan Africa, which rose to about 9 percent in October, up from around 6 percent in 2019,” said a part of the report which was seen by Business Insider Africa.
When the World Health Organisation declared Covid-19 a pandemic in 2020, the world’s physical economy shut down. Since brick-and-mortar spaces are hotspots for the spread of the virus, business and productivity locations, such as shops, banks, schools, and other physical spaces were closed. A Covid-19 report estimated an export loss of N2.27 trillion to Nigeria, due to closed borders, social distancing, and lockdown in destination nations and Nigeria with a resultant decline in revenue, profits, and economic value. While some companies have responded tactically during this pandemic, this must be supplemented with a strategic business focus on improving resilience in operations, absorbing uncertainty, increasing agility, and incorporating lessons into the operating model quickly. Due to a mixture of resilience, digitized operations, and preparedness, many companies had unexpected growth, especially because of the pandemic, including Amazon, Microsoft, Apple, Tencent, and Zoom in industries as varied as communications services, IT, and healthcare and consumer discretionaries. These companies identified the opportunities Covid-19 provided to their businesses and took full advantage.
The Vaccine Investments and Trade Ecosystems in Africa (VITEA) project will strengthen the value chains of COVID-19 vaccines and related supplies. As a pilot project, it will focus on Nigeria. It will engage a whole range of Nigerian stakeholders from vaccine and related supplies manufacturers to research and development enterprises and business support organizations. This will strengthen the entire ecosystem of COVID-19 vaccine and vaccine component production and distribution. Beyond the immediate objective of improving the competitiveness of vaccine and related industries in the Federal Republic of Nigeria, the project will contribute in the long term to supporting the country’s economic recovery efforts by building a diversified industrial base in the aftermath of the pandemic, promoting human security through improved access to safe and effective COVID-19 vaccines, and achieving the United Nations Sustainable Development Goals.
Global economy news
Members considered, as a new standing agenda item, the timeliness of members’ TFA implementation based on the definitive dates each had respectively notified. Between 1 January and 31 December 2022, 31 members have implementation dates due for a total of 229 measures according to a report from the WTO Secretariat. Between 1 January 2022 and 31 December 2023, 47 members have 444 measures due for implementation. The most common include the establishment of a single window that allows traders to submit documents to one contact point, the publication of information on trade procedures on the Internet, measures relating to risk management, the measurement and publication of average release times for merchandise, and cooperation among border agencies.
About 1.1 billion people live in least developed countries (LDCs), which face daunting development challenges. The LDC group grew from an initial 25 countries in 1971 to a peak of 52 in 1991 and stands at 46 today. Only six countries have managed to graduate from the category. “The vulnerabilities of LDCs have evolved since the UN created the category five decades ago, but they continue to face major obstacles that block their sustainable development,” said Paul Akiwumi, UNCTAD’s director for Africa and least developed countries. These include soaring debt, export marginalization, energy poverty and climate vulnerability.
Low-income countries face fewer debt challenges today than they did 25 years ago, thanks in particular to the Heavily Indebted Poor Countries initiative, which slashed unmanageable debt burdens across sub-Saharan Africa and other regions. But although debt ratios are lower than in the mid-1990s, debt has been creeping up for the past decade and the changing composition of creditors will make restructurings more complex.
Improvements to the Group of Twenty Common Framework for Debt Treatments—from which the 73 countries that were eligible for the G20 Debt Service Suspension Initiative (DSSI) in 2020-21 can now benefit—could clear a path through this increasing creditor complexity.
So far only a handful of countries have requested to use the common framework, which was launched in November 2020, underscoring the need for change to build confidence and encourage participation at a pivotal moment for heavily indebted low-income countries.
Visa opens Nairobi innovation hub, the first in Africa (The East African)
The Nairobi studio is the first in Africa and sixth globally, after posts in Dubai, London, Miami, San Francisco and Singapore.
Global digital payments giant Visa has opened an innovation studio in Kenya, the first in Africa, to expand its reach in the region. The studio will bring together developers, Visa’s internal and external clients, and other partners to co-create payment and commerce solutions. Opening of the hub in Kenya is a strategy to capture market as consumers switch to new payment platforms and digital wallets that could bypass the card networks or slow their revenue growth.
Senior vice president and head of Visa in Sub-Saharan Africa, Aida Diarra said: ”Sub-Saharan Africa is a fast-growing region with a tech-savvy population and as we continue to grow digital payments adoption in the region, our aspiration is to deepen our collaboration with clients and partners in developing solutions that are designed around the unique needs of Africa.”