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South African chicken prices set to soar (IOL)
South Africa is facing a chicken price increase tsunami due to inflation, rising costs, supply chain disruptions and global economy risk to food security. So says the South African Association of Meat Importers and Exporters (AMIE), adding that it could be realised as soon as June this year.
The Department of Trade, Industry and Competition (DTIC) said it was monitoring prices through the Poultry Masterplan, but food price inflation was currently a global problem.
Association chief executive Paul Matthew said South Africa’s trade partners accounted for 14.9% of all chicken consumed in the country, and the (import) sector was critical in maintaining a healthy balance between availability and affordability. “The competition provided by a small import market has a material impact on keeping the price of chicken in check for consumers. “South Africa is currently only producing around 80% of the country’s overall poultry demand, and is specifically unable to meet demand in certain cuts, such as chicken wings and leg quarters. “Consequently, imports, even at such a low level, are essential and become even more critical when South Africa experiences frequent outbreaks of disease,” said Matthew.
South Africa recognises the need to strengthen trade relations with Spain - Deputy Minister Majola (the dtic)
The Deputy Minister of Trade, Industry and Competition, Mr Fikile Majola says South Africa is hoping for strengthened and deepened bilateral trade cooperation with Spain. This follows a meeting with his counterpart, Spain’s Secretary of State for Industry, Commerce and Tourism, Her Excellency, Ms Xiana Mendez. The two met at the Department of Trade, Industry and Competition (the dtic) offices in Sunnyside, Pretoria. The meeting was at the request of Spain, with the aim of discussing bilateral and Investment cooperation. The key focus areas on the agenda were localisation and industrialisation strategies in the steel, renewable energy and automotive sectors among other issues.
In 2020, Spain was South Africa’s fourth largest export destination in the European Union (EU), after Germany, Netherlands and Belgium, and fourth largest source of imports from the EU (after Germany, Italy and France). Spain is South Africa’s 20th largest export destination and 12th largest source of imports, globally. Bilateral trade between the two countries reached the highest peak in 2018, at R51.7 billion, before falling to R38.8 billion in 2019.
Raw materials imports dominate Zim’s imports – Zimstat (NewZimbabwe.com)
RAW materials dominated Zimbabwe’s import list in the first three months of 2022, a development signifying a revival of the manufacturing sector, latest data from the Zimbabwe National Statistics Agency (ZIMSTAT) show. The Zimstat’s monthly summary of external trade statistics for the period of March 2022 shows that mineral fuels and mineral oil products stood at 15,1% in January 2022, compared to 21,5% in December 2021.
the report shows that the export list is still dominated by raw minerals, semi manufactured gold (34,6%), nickel mattes including platinum group of minerals (PGMs) (14%), nickel ores and concentrates (10,7%), tobacco (21,6%), ferro-chromium (5,2%), platinum, unwrought or in powder form (2,3%) and cotton (1,6%).
“It was noted that major minerals produced in the country, such as nickel concentrates and nickel mattes, were exported in a semi processed form, while nickel ores (including PGMs) are exported in a raw form. During the month of January 2022, the country exported 3 310 kilograms of semi manufactured gold valued at US$188,3 million, compared to 4 417 kilograms valued at US$248,1 million in December 2021,” the report said.
Review of the Zimbabwe Biodiversity Economy study concluded (The Herald)
Experts have concluded a strategic review of the Zimbabwe Biodiversity Economy (ZBE) study that aims to document the country’s rich biodiversity and map out strategies to harness it for the benefit of the people and the country. The Ministry of Environment, Climate, Tourism and Hospitality Industry in collaboration with the African Wildlife Foundation (AWF) hosted a workshop recently to validate the findings and recommendations. It was agreed that comments from stakeholders must be incorporated into the ZBE Report and that a revised ZBE Study report be submitted to the Ministry of Environment, Climate, Tourism and Hospitality Industry.
“Stakeholders also agreed to mobilise additional resources for setting up the institutional framework and systems for Natural Capital Accounting, that is for actual implementation of NCA. “A phased approach on the NCA is roll out was agreed upon and initial focus will start with the accounts that are directly under the ministry of environment and other accounts related to other sectors such as mining would follow later.”
Border chaos cleared (The Herald)
BORDER authorities at Beitbridge have cleared last week’s congestion at the port of entry when South Africa had to temporarily close its side of the post and trucks experienced delays of between two and three days to access Zimbabwe and South Africa.
Commercial cargo started piling up at Sadc’s busiest inland port last Wednesday after South Africa temporarily closed its component of the border post due to a water supply challenge.
Long queues of commercial vehicles that had become common along the N1 highway in South Africa and the Beitbridge to Bulawayo Highway, were cleared over the weekend.
Kenya to import duty-free maize (Farmers Review Africa)
Kenya has announced plans to import duty-free maize following a decline in supplies from Uganda. According to the National Food and Nutrition Balance Security Report for March prepared by the Ministry of Agriculture, poor supply from the neighbouring country and delayed short rains could make it necessary for Kenya to import maize. The country may have to allow importation of four million bags of duty-free maize to bridge the deficit and check the high prices of the staple in the country in order to cushion consumers. “Poor regional imports or delayed rains may warrant the government to allow the private sector to import at least four million bags duty free maize outside the EAC and Comesa region Farmers in Uganda are hoarding their maize stock in anticipation of higher prices and we are getting less quantities from there,” reads the report.
EPRA to cut imports for marketers exporting more fuel despite shortage (Business Daily)
The Energy and Petroleum Regulatory Authority (Epra) has said they will reduce import allocations for oil marketing companies (OMCs) found to have increased their exports to regional markets in the past four weeks, subjecting Kenyans to a shortage of the commodity. The energy regulator said on Tuesday in a statement that their analysis of the daily petroleum loadings for the past four weeks shows that some oil marketers gave priority to export while the local market faced a shortage. According to Epra, the oil marketers who increased their exports in the period under review will be allocated lower capacity for the next three import cycles.
“EPRA hereby recommends that in the allocation of capacity for the next 3 import cycles, key consideration shout be given to the following: Reduction of capacity share for all OMCs who increased their transit volumes over and above their normal quota during the supply crisis period,’ EPRA said in a statement.
The oil majors have also been cautious to increase supply, uncertain about whether the State would compensate them for fuel not used to calculate the monthly price adjustments, which takes effect on April 15 and will stay in place for one month. 28 duplicates removed
Uganda says withdrawal from ICO will benefit coffee farmers, exporters (The East African)
Uganda’s coffee sector is shrouded in uncertainty and mistrust a month after the government withdrew from the International Coffee Organisation (ICO). The matter has been confounded by the entry of a new processing firm, which the government has given a number of subsidies, including priority access to the country’s top quality coffee beans. However, the Uganda Coffee Development Authority (UCDA) insists the withdrawal from ICO is good for farmers and exporters, and that the country is willing to rejoin organisation if its grievances are addressed. Uganda said it withdrew because of unreasonable articles in a new two-year draft agreement. The country says that it needs unconditional market access that allows for export of value added coffee, which carries a premium price, instead of beans as currently provided for by the agreement. Uganda also wants ICO to brand its coffee as Ugandan on the international market, especially robusta, so that it can attract premium prices and increase quotas exported to different markets.
UCDA managing director Emmanuel Iyamulemye told The EastAfrican that the withdrawal has no impact on exports or production.
Tax experts poke holes into Kenya’s budget (The East African)
Kenya’s budget for the next financial year, which was tabled in parliament on Thursday, has no allocation that will address the most pressing issues to Kenyans in the short-term, auditors have warned. Experts from audit and tax advisory firm KPMG said on Friday that although the budget heavily favours pro-poor sectors like education and healthcare, it did not pay attention to any measures that could solve current problems like the high cost of living and unemployment.
Kenya’s Budget proposes to raise debt ceiling to fund recovery (The East African)
Kenya’s Cabinet Secretary for the National Treasury Ukur Yatani tabled a Ksh3.3 trillion ($28.69 billion) spending plan for the 2022/2023 fiscal year with a focus on accelerating growth of an economy destroyed by Covid-19. The plan also seeks to ensure implementation of the Jubilee government’s legacy projects in agriculture, manufacturing, housing and health sectors. The budget, the last under President Uhuru Kenyatta’s administration, has been crafted with a view to improving the livelihoods of Kenyans weighed down by a high cost of living and create additional employment opportunities in an economy that lost over 1.7 million jobs to the pandemic in 2020. The ambitious spending plan that focuses on the enhancement of the Economic Stimulus Programme and implementation of the infrastructure projects under the ‘Big Four’ agenda calls for increased funding, with Yatani targeting Ksh50.4 billion ($438.26 million) in additional tax revenues and Ksh862.5 billion ($7.5 billion) in new borrowing during 2022/23.
Kenya Expresses Keenness to Work with Ethiopia in Blue Economy (Walta Innovation center)
Kenya is keen to work with Ethiopia to sustainably utilize the potential of the blue economy to expedite the national development of the two countries, the Kenyan Blue Economy Sector coordinator Dr. Francis O. Owino said. The blue economy is the sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of the ocean ecosystem, according to the World Bank. Studies indicate that Africa is rich in oceans and seas resources that can be utilized to accelerate the economies of the continent. In this regard, Kenya is one of the eastern African countries that have better experiences in utilizing the sector, particularly for tourism.
Uganda import rule boosts Kenya car dealers (The Citizen)
Uganda has tightened import conditions for vehicles aged over nine years, a move that is expected to disrupt the automobile black market in Kenya. It will, however, translate to improved fortunes for local dealerships long inconvenienced by smuggled units from the neighbouring country. In a new directive by the Uganda Revenue Authority (URA), imports of vehicles older than nine years will from July 1, 2022, be cleared under the East Africa Community’s Single Customs Territory (SCT), which allows members of the bloc to jointly collect customs taxes.
Science, Technology and Innovation Policy Review of Zambia (UNCTAD)
The achievement of Zambia’s Vision 2030 will depend on spurring innovation in firms and industries, developing financial support for science, technology and innovation (STI) activities, and strengthening the education system. To effectively harness STI for development, Zambia will need to strengthen the implementation of STI policies and boost its STI capabilities. The key challenge will be to strengthen policy coordination and political visibility for STI, with particular emphasis on the innovation element of the science-technology-innovation triad. The COVID-19 pandemic has weakened Zambia’s capacity to respond to the pressing challenges in STI and in achieving the Sustainable Development Goals (SDGs) more generally. Recovery strategies will need to allocate resources and policy attention to nurturing and strengthening the actors in the national innovation system and enabling their interactions.
NEPZA Vows to Tackle Traffic Gridlock in Lekki Free Zone (This Day)
The Managing Director/Chief Executive, Nigeria Export Processing Zones Authority (NEPZA), Prof Adesoji Adesugba, has said plans have been concluded to address the emerging traffic gridlock arising from the operations of Pinnacle Oil and Gas Free Zone Enterprises (FZE) registered in Lekki Free Zone. The assurance came against the backdrop of concerns raised by the Nigeria Economic Zones Association (NEZA) over the increase in the movement of oil tankers in the Lekki axis after Pinnacle Oil commenced operations.
The association’s Executive Secretary, Mr. Toyin Elegbede, had expressed frustration over gridlock as efforts so far made by the association to get both Lekki Free Zone Development Company and the oil company to resolve the emerging traffic crisis had not yielded any results. He said, “This has led to scores of tankers parking on the road, effectively converting it into a truck park thereby affecting flow of traffic and throwing all stakeholders in the axis in a deep state of distress. The current shortage of fuel has exacerbated the issue as it has hampered the operations of other businesses operating from the axis. “This situation, if not tackled early enough, will render the whole axis not conducive for businesses, and this will negatively affect the country’s drive for economic development through the Free Trade Zone scheme. Moreover, it poses significant security and safety threats to the residents in and around these parked tankers.”
Customs reduces import duty for used and new vehicles to 20% (Nairametrics)
The Nigerian Customs Service has officially released a circular announcing the reduction of import duties on both used and new vehicles. In a statement by, Timi Bomodi, Customs National Spokesman, the service said the new duty rate for both used and new vehicles is now 20% as against the 35% usually paid. The statement noted that implementation will take effect immediately. The service revealed that on April 1, 2022, they migrated from the old version of the ECOWAS Common External Tariff (2017-2021) to the new version (2022-2026).
The statement noted that the reduction in import duties on new vehicles was as a result of a directive from the Federal Ministry of Finance
“The nation has adopted all tariff lines with few adjustments in the extant CET. As allowed for in Annex II of the 2022-2026 CET edition, and in line with the Finance Act and the National Automotive policy, NCS has retained a duty rate of 20% for used vehicles as was transmitted by ECOWAS with a NAC levy of 15%.
Nigeria generates N29.95 billion from electricity export in 12 months (Nairametrics)
Nigeria generated a sum of $72 million from electricity export in 2021, a naira equivalent of N29.95 billion, using the official exchange rate of N416/$1. This is according to data from the Central Bank of Nigeria. The amount generated in the review year represents a 14.5% decline compared to $84.26 million recorded in the previous year and 49.4% drop as opposed to the $142.3 million received as payment in 2019. In the past five years, Nigeria earned a sum of $543.11 million from electricity export to neighbouring countries, such as Niger, Benin, and Togo Republic. Nigeria continues to export power to neighbouring countries despite continuous power outages in the country as a result of recurrent grid collapses. It is worth noting that Nigeria’s electricity export in 2021 only accounted for 0.16% of the total $45.92 billion export earnings in the period under review. At $72 million, Nigeria recorded its lowest inflow from electricity export since 2010 (11 years) in the review year.
Nigeria and dwindling investment inflows (Businessday)
Most discerning Nigerians were not surprised when the 2021 capital importation report of the National Bureau of Statistics (NBS) was released recently. The report indicated that up to 24 Nigerian states did not attract foreign investments in 2021. It should be noted that it was not only in 2021 that some states failed to attract investments. The fast disappearance of investments correlate with the rising poverty and insecurity in the land.
In 2019, Nigeria attracted $23.99 billion worth of investments. 99.5 percent of the investments which translated into $23.88 billion went into Lagos, Nigeria’s commercial centre, and Abuja, the Federal Capital Territory (FCT). Fifteen states attracted just $108.91 million while 13 states did not attract a dime as investment. This is something of a perverse wonder.
In 2020, capital importation nosedived by 59.7 percent to $9.66 billion, partly due to the effect of COVID-19 lockdowns across the world. Out of the total capital importation, $9.55 billion, representing 98.9 percent were domiciled in Lagos and Abuja. Investors did not find 26 states interesting as they did not attract any amount in the form of capital importation.
In 2021, capital importation further declined by 30.6 percent to $6.7 billion. The bulk of the investments which amounted to 86.9 percent, or $5.82 billion came to Lagos State. Abuja only attracted $833.4 million or 12.5 percent of the total capital importation in 2021.
Morocco-US meeting explores joint business opportunities (The North Africa Post)
The huge business opportunities offered in Morocco thanks to the Free Trade Agreement (FTA) sealed with the United States and the African Continental Free Trade Area (CFTA) were at the center of talks held lately between Pdt of Moroccan Association of Exporters Hassan Sentissi El Idrissi and U.S. Consul General to Casablanca Lawrence M. Randolph. During the meeting, Mr. Sentissi said Morocco looks forward to benefiting from U.S. technology and know-how particularly in seawater desalination to meet the water needs of several regions in the Kingdom. He also called for the setting up a joint shipping company to increase further trade exchanges between the two countries and take advantage of opportunities offered by the FTA.
African trade news
The African Continental Free Trade Area (AfCFTA) will boost intra-African trade by around 40%, with substantial benefits to the transport sectors, according to the latest estimates by the Economic Commission for Africa (ECA). If fully implemented AfCFTA is therefore expected to significantly increase traffic flows on all transport modes: Road, Rail, Maritime, and Air. It will also increase transport equipment needs significantly for all modes of transport
“The price watch report has not only looked at the headline of inflation figures but also at the contributing factors to these inflation figures that will inform the policy elements to contain inflation on the continent,” said Vera Songwe, the United Nations Under-Secretary-General and ECA’s Executive Secretary. The transport sector she said is important for implementing AfCFTA but is affected by inflationary pressures that are compounded by the ongoing Ukraine crisis.
“In absolute terms, over 25% of intra-African trade gains in services would go to transport alone; and nearly 40% of the increase in Africa’s services production would be in transport,” said Robert Lisinge, Chief, Energy Infrastructure and Services Section in the Private Sector Development and Finance Division of the Commission
Trade logistics and infrastructure key to unlock Africa’s trade potential (UNECA)
Transport in Africa takes much longer and is more expensive than other parts of the world. Improved trade logistics and infrastructure will unlock Africa’s trade potential, says transport and logistics experts. Factors such as landlockedness, requiring modal changes and several transit countries add to the assessment of time and costs for different potential target markets The experts from across Africa, Europe, and the USA, in the fields of transportation, infrastructure, logistics, trade, and economic development, met virtually to validate the logistics hypotheses for member countries of the Economic Community of Central African States (ECCAS) in the Decision Support Model (DSM), a model which identifies new export opportunities on 30 March.
Discussions focused on infrastructure and logistical routes in Central Africa, data initiatives, as well as the need for new strategic thinking in formulating infrastructure investment plans for the sub region.
Joint Approach to Underpin Regional Industrialization (COMESA)
Industry experts from COMESA region are meeting this week to consider a concept paper on strengthening industrial integration in the region. This initiative aims at attaining comprehensive industrial integration taking into account continental programmes such as the African Continental Free Trade Area (AfCFTA) and ‘Made in Africa’ initiative by the government of Egypt. The concept is expected to provide a roadmap for the implementation of the COMESA Industrial Strategy and its attendant Action Plan, which Member States undertook to integrate into their National Industrial Development Plans for implementation. In a meeting of the Ministers of industry conducted in May last year, countries were required to allocate budgets to implement their industrial development plans in synergy with regional activities and in line with the Third Industrial Decade for Africa (IDDAIII).
However, the level of implementation of the Action Plan both at regional level has been minimal and varied at national level. The concept paper is therefore an attempt to strengthen the efforts of the Egypt initiative and COMESA Members States focusing on activities that will contribute effectively to implementing the COMESA Industrial Strategy and raising the economic growth rates of the COMESA region
The Democratic Republic of the Congo (DRC) has formally joined the East African Community (EAC) after the signing of the Treaty of the Accession of the DRC into the EAC in Nairobi, Kenya. DRC now has up to 29th September, 2022 to undertake internal and constitutional processes to ratify the Treaty and deposit the instruments of ratification with the Secretary General.
President Kenyatta said that the region has already began realising the promise of the EAC including the free movement of people, goods and services across the Community that has boosted trade and strengthened people-to-people ties thereby enabling East Africans to harness the comparative strength of each member state for the benefit of all and to confront and solve problems together.
“The accession of DRC as a member state of EAC will even more elevate these gains and strengthen our economic muscles and competitiveness in the continent and globally,” said the Chairperson of the Summit.
East Africa Chamber of Commerce Launches Global Hub Business Network (EIN News)
The EACC began in 2005 with a group of American investors and business leaders and has served the East African Community (EAC) over the past seventeen years successfully providing international trade and investment opportunities through our annual conference attended by Ambassadors, Parliament Members, Governors and prominent business leaders from the EAC and around the world. By 2013 annual trade and investment conferences began featuring global industry leaders highlighting sustainable solutions across major industries such as mobile finance, agriculture, manufacturing, telecommunications, energy, education, healthcare, women’s leadership, real estate and clean water. Also featured were business-to-business and business-to-government networking, deal flow, investments, trade and mentoring. It is an understatement to view the organization as a “chamber of commerce” as so much more value is conveyed throughout the international community. The EACC continues to host investment and trade conferences in North Texas while introducing virtual attendance models for those who are unable to travel. 2022 marks a major milestone as the EACC has partnered with HungryGenius® Holdings, LLC to launch the East Africa Business Network (EABN).
EAC economies exposed to Russia-Ukraine war spill – UN (The Star, Kenya)
The East African economies, struggling to recover from the Covid-19 hit, face another crisis arising from the war in Ukraine, the UN has cautioned. The United Nations-Economic Commission for Africa (ECA) estimates that the Covid pandemic led to the contraction of Africa’s real GDP by three percent (3%) in 2020 and Africa’s debt-to-GDP ratio increased by 10 to 15 percentage points by 2021. This is from about 60 per cent in 2019 as governments borrowed to mitigate the socio-economic impact of the pandemic. Over the pandemic period, Kenya borrowed about Sh1.06 trillion during to mitigate its effects and budgetary support, pushing the country’s public debt to Sh7.34 trillion. It has since grown to Sh8.2 trillion, Central Bank of Kenya data shows. “Africa’s recovery has been hindered by higher inflation, tighter global financial conditions, rising interest rates and the Ukraine crisis further compound the situation,” said Mama Keita, Director ECA Sub-Regional Office for Eastern Africa, in a statement yesterday. This was after the ECA-East African Business Council meeting on financing recovery from Covid-19 and status of the African Continental Free Trade Area (AfCFTA) negotiations and implications to the private sector in the EAC.
DR Congo brings unmatched resources, untapped potential to the EAC table (The East African)
The East African Community (EAC) has finally granted Democratic Republic of Congo’s (DRC’s) June 2019 request for admission, at the Extraordinary Heads of State Summit. Reception to DRC’s entry into EAC has divided opinion in recent times. For regional integration supporters in general, and DRC in particular, it is a long overdue but welcome move that holds the promise of opening up the bloc to more integrated development. For integration opponents, the admission of yet another ‘problem child’ into the Community (in addition to South Sudan that joined EAC in April 2016) is premature. A third group is neutral, watching how things are shaping up.
To leverage the additional resources that DRC brings to the EAC table for the accelerated socio-economic development that the bloc absolutely needs to sustain its peace and security, EAC member states are best advised to embrace DRC wholeheartedly.
32nd Session of the FAO Regional Conference for Africa (FAO)
More than 50 government ministers from African member countries are taking part in the hybrid conference, as well as representatives from observer countries, the African Union, donor organizations, civil society and the private sector.
29m people face hunger as drought ravages eastern Africa (The East African)
At least 29 million people in eastern Africa are currently facing high levels of food insecurity due to prolonged drought as rains are projected to fail for a fourth consecutive season in the region, the Inter-Governmental Authority on Development has warned. Analysis by IGAD’s Climate Prediction and Applications Centre (ICPAC) shows that the first month of the March to May (MAM) 2022 season was dry, projecting that the entire period will generally be dry, with high temperatures and less than normal rainfall. The prolonged drought, added to conflicts in the region and in eastern Europe, and the impact of Covid-19, has led to acute levels of food insecurity across the entire IGAD region, the bloc said in a statement on Monday.
How the EU spent billions to halt migration from Africa (DW)
Faced with hundreds of thousands of refugees arriving in EU countries in 2015, policymakers from member states felt the pressure to show a quick reaction. Convening with the leaders of several African countries in the Maltese capital, Valletta, they decided to fill a pot of money. This money was not dedicated to helping integrate the thousands of people who had arrived in the European Union. Instead, the so-called EU Emergency Trust Fund for Africa (EUTF) was supposed to “address the root causes of irregular migration” so that fewer Africans might try to make their — often dangerous — way to Europe.
Was this goal reached six years and €5 billion later?
Global economy news
Russia-Ukraine conflict puts fragile global trade recovery at risk (WTO)
The organization now expects merchandise trade volume growth of 3.0% in 2022—down from its previous forecast of 4.7%—and 3.4% in 2023, but these estimates are less certain than usual due to the fluid nature of the conflict
The most immediate economic impact of the crisis has been a sharp rise in commodity prices. Despite their small shares in world trade and output, Russia and Ukraine are key suppliers of essential goods including food, energy, and fertilizers, supplies of which are now threatened by the war. Grain shipments through Black Sea ports have already been halted, with potentially dire consequences for food security in poor countries.
“The war in Ukraine has created immense human suffering, but it has also damaged the global economy at a critical juncture. Its impact will be felt around the world, particularly in low-income countries, where food accounts for a large fraction of household spending,” Director-General Ngozi Okonjo-Iweala said. “Smaller supplies and higher prices for food mean that the world’s poor could be forced to do without. This must not be allowed to happen. This is not the time to turn inward. In a crisis, more trade is needed to ensure stable, equitable access to necessities. Restricting trade will threaten the wellbeing of families and businesses and make more fraught the task of building a durable economic recovery from COVID‑19,” the Director-General went on to say.
The long lasting economic shock of war (IMF)
Russia’s invasion of Ukraine is an unmitigated catastrophe for global peace and particularly for peace in Europe. But the war also greatly compounds a number of preexisting adverse global economic trends, including rising inflation, extreme poverty, increasing food insecurity, deglobalization, and worsening environmental degradation. In addition, with an apparent end to the peace dividend that has long helped finance higher social expenditures, rebalancing fiscal priorities could prove quite challenging even in advanced economies
For the global economy, fuel and food shortages caused by the war are exacerbating post-pandemic inflation that had already reached multi-decade highs in most of the world. Supply chain disruptions have also been a major contributing factor to inflation, although some of the strain on supply should really be traced to the sudden surge in demand. Across advanced economies, more than half (including the United States and the euro area) had inflation rates of over 5 percent even before hostilities, so that the war made an already difficult situation worse. Prior to the conflict, Russia and Ukraine combined accounted for a quarter of global wheat exports, and Russia is a major supplier of fossil fuels, especially to Europe. Disruptions to supplies of these commodities are driving up prices.
WTO Secretariat note examines impact of conflict in Ukraine on global trade and development (WTO)
“The brunt of the suffering and destruction are being felt by the people of Ukraine themselves but the costs in terms of reduced trade and output are likely to be felt by people around the world through higher food and energy prices and reduced availability of goods exported by Russia and Ukraine,” according to the Secretariat note. “Poorer countries are at high risk from the war, since they tend to spend a larger fraction of their incomes on food compared to richer countries,” it continues. “This could impact political stability.”
Using a global economic simulation model, the Secretariat projects that the crisis could lower global GDP growth by 0.7-1.3 percentage points, bringing growth to somewhere between 3.1 per cent and 3.7 per cent for 2022. The model also projects that global trade growth this year could be cut almost in half from the 4.7 per cent the WTO forecasted last October to between 2.4 per cent and 3 per cent.
FAO Food Price Index posts significant leap in March (FAO)
World food commodity prices made a significant leap in March to reach their highest levels ever, as war in the Black Sea region spread shocks through markets for staple grains and vegetable oils, the Food and Agriculture Organization of the United Nations (FAO) reported today. The FAO Food Price Index averaged 159.3 points in March, up 12.6 percent from February when it had already reached its highest level since its inception in 1990. The Index tracks monthly changes in the international prices of a basket of commonly-traded food commodities. The latest level of the index was 33.6 percent higher than in March 2021.
A new global food crisis is building (World Bank Blog)
The war in Ukraine has triggered an alarming global surge in government controls on the export of food. It’s critical for policymakers to halt the trend, which is making a global food crisis more likely. In the space of a few weeks, the number of countries slapping on food-export restrictions jumped by 25%, bringing the total number of countries to 35. By the end of March, 53 new policy interventions affecting food trade had been imposed—of which 31 restricted exports, and nine involved curbs on wheat exports, according to the latest data. History shows that such restrictions are counterproductive in the most tragic ways. A decade ago, most notably, they exacerbated the global food crisis, driving up wheat prices by a whopping 30%.
Food crises are bad for everyone, but they are devastating for the poorest and most vulnerable people. This is because of two reasons. First, the world’s poorest countries tend to be food-importing countries. Second, food accounts for at least half of total expenditures of households in low-income countries. In 2008, the food crisis brought on a significant increase in malnutrition, particularly in children. Many households pawned family valuables to buy food. Some studies showed school drop-out rates of as much as 50% among children from the poorest households. Social and economic damage of that kind cannot be easily reversed.
In pursuit of an inclusive energy transition (UNCTAD)
For over two centuries fossil fuels have literally fueled the world’s economic expansion. But this prosperity has left a trail of CO2 gases in its wake and global warming now threatens to derail the very prosperity achieved so far. This is our prosperity paradox: the more we grow, the more CO2 we emit and the more we compromise our future. Decoupling economic growth from CO2 emissions is a top priority for many but efforts and pledges to do so have fallen short. In the last six decades, while global GDP per capita has nearly tripled, CO2 emissions have quadrupled. Not everyone has emitted equally. Developed countries account for a whopping 58.6% of emissions, developing countries contribute 40.9% and least developed countries (LDCs) only 0.5%. But the most severe economic consequences of climate change are expected in the tropics, the home of the developing world.
Working group hears updates on work related to small business (WTO)
Mexico informed the group that the Trade4MSME platform is now available in French and Spanish, and that outreach was made to international and regional organisations to invite them to become partners to help make the platform as useful as possible for MSMEs and policy makers. Trade4MSME was launched in December 2021 to help small companies find trade-related information that improves their ability to trade internationally.
