tralac Daily News
South Africa’s National Department of Transport is working with all key stakeholders to bring about a “rail renaissance” in the country, which will position rail as a backbone of the transport system for both passenger and freight. “The government is putting efforts into replacing rail infrastructure damaged by large scale vandalism, and the work to develop rail infrastructure is ongoing while putting measures in place to secure new investment, said South Africa’s Minister of Transport Fikile Mbalula, briefing lawmakers at a parliament session in Cape Town, legislative capital of South Africa. A white paper on national rail policy, approved by the cabinet in March, will give impetus to the development of rail, especially the establishment of a central rail planning unit for the implementation of several rail intervention strategies, he said. Mbalula also said rail infrastructure development will be coordinated from the center and implemented simultaneously across the country in the strategic corridors.
PRAVIN Gordhan, South Africa’s minister of public enterprises, said the export of scrap metal ought to be halted for a period in order to stop criminal raids on infrastructure that is encouraged by the market. “It is my firm view that the export of scrap must be banned for a while. That will ensure that there is no market externally for the theft of infrastructure,” BusinessLive quoted Gordhan to have said during an economics cluster question-and-answer session in parliament on Wednesday. “The sooner we have a strong set of measures, I believe it will begin to change the face of theft of infrastructure as well,” the minister said. The department of trade, industry & competition is working on the issue, he said.
DP World Maputo says it has successfully handled its first citrus reefer export of the 2022 season. Through a combination of new solutions, including a direct sailing service, DP World hopes to position itself as the “ideal gateway” for the South African citrus industry exporting to the Middle East and Southeast Asia.
Supporting Botswana’s ambition to diversify its economy and accelerate its structural transformation towards sustainable and inclusive growth is the main objective of the African Development Bank Group’s Country Strategy Paper 2022-2026 (CSP 2022-2026) for the Southern African country. Approved in March 2022 by the Bank Group’s Board of Directors, the Country Strategy Paper sets out two priority areas of intervention for the next five years: building economic resilience through support to economic governance and private sector development; and developing quality infrastructure to increase competitiveness and productivity. Under the first priority area, the Bank Group will continue supporting key policy reforms to enhance fiscal performance, strengthen the country’s public financial management systems, and improve public sector efficiency. The Bank Group will also support ongoing efforts to enhance private sector participation in economic activity through enabling regulatory reforms and public-private partnerships. The Bank will expand its support to small and medium-sized enterprises by addressing existing bottlenecks, such as lack of access to finance, to stimulate women’s participation in high value-added economic activities.
Rwanda four-year energy project gets $180m boost (The East Africa)
Rwanda’s four-year energy project has received $180 million from the African Development Bank in a financing deal to raise the number of homes connected to electricity in the next two years. The money is in addition to the $84 million Rwanda received in May last year. Slightly over half of Rwanda’s 13 million population currently have access to electricity. The African Development Bank loan will finance the construction of more than 1,000 kilometres of medium voltage and 3,300 kilometres of low voltage lines to boost last-mile access. It will also build 137 kilometres of high voltage lines and six substations. It is expected to connect 77,470 households to the electricity network for the first time.
The Government of Ghana has pledged to protect Bilateral Investment Treaties (BITs) for countries that sign agreement with it for reciprocal foreign direct returns on the African Continental Free Trade Area (AfCFT).
The pledge comes in the wake of growing appetite for multilateral agreements. Ghana has ratified BITs with seven countries - China, Denmark, Switzerland, Germany, Malaysia, Britain, and the Netherlands, and looks forward to doing more on AfCFTA.
Kenya’s economy recovers to grow at the fastest rate in 11 years (Citizen Digital)
The Kenyan economy rebounded from COVID-19 led woes in 2020 to grow by 7.5 per cent in 2021 according to fresh data from the Kenya National Bureau of Statistics (KNBS). This to recover from a 0.3 per cent contraction posted in 2020 on the backdrop of the economic strife bought by the pandemic. This is the highest rate of growth for the Kenyan economy since 2010 when gross domestic product (GDP) improved by a record 8.1 per cent according to rebased economic data from the statistician’s office. During the year the economy was largely a beneficiary of low base effects with the reopening of various sectors after the pandemic led closure lifted activity.
IMF drops tough stance on Kenya’s fuel subsidy (Business Daily)
Kenyan officials resisted the push by the International Monetary Fund (IMF) to scrap the fuel subsidy programme that has seen the government spend Sh49.164 billion to stabilise the petroleum prices. Treasury Cabinet Secretary Ukur Yatani said they reached an agreement with the IMF to sustain the programme to cushion the economy from a sharp rise in the cost of living as a result of a global spike in oil prices. Kenya is on a 38-month IMF programme, which has seen the multilateral lender give the country Sh270.2 billion ($2.34 billion) in loans in exchange for a reform package that includes eliminating fuel and tax subsidies to improve revenue collection. IMF staff and the Kenyan authorities reached a staff-level agreement on economic policies to conclude the third review of the programme late last month.
Kenyan clearing firms risk closure as shippers consolidate business (The Star, Kenya)
More than 1,000 Kenyan based clearing and forwarding firms could close in the wake of a takeover by international shipping lines, players in the sector warn. This puts slightly over 10,000 jobs on the line where on average, a clearing firm employees at least 10 people according to the Kenya International Freight and Warehousing Association. There has been an aggressive move by global shipping lines docking in Mombasa to incorporate clearing and forwarding services within their freight packages, threatening to push out small local players. According to the Shippers Council of Eastern Africa (SCEA), the vertical integration model will see shipping lines handle freight, local warehousing, clearing and forwarding and last mile cargo delivery. This is a strategy that allows a company to streamline its operations by taking direct ownership of various stages of its production process rather than relying on external contractors or suppliers.
TPA signs USD 500 million agreement (Dailynews)
THE DP World, an Emirati multinational Logistics Company based in Dubai, United Arab Emirates, has signed a Memorandum of Understanding (MoU), worth USD 500 million, with the Tanzania Ports Authority (TPA) to finance various projects aimed at improving efficiency of the country’s ports. The company specialises in cargo logistics, port terminal operations, maritime services and free trade zones. The agreement for the grant was signed over the weekend at the ongoing Dubai Expo 2020 between TPA Director General Eric Hamissi and DP World Chief Executive Officer Sultan Ahmed Bin Sulayem.
Clearing agents have again abandoned vehicle clearance at the Tincan Island Port, Lagos State, due to confusion over the unresolved issue of the 15% National Automotive Council (NAC) Levy. The action, which will worsen the congestion problem at the ports, appears to be the escalation of the dispute between the clearing agents and the Nigeria Customs Service (NCS), which the former had described as an obnoxious policy. According to NAN, this disclosure is contained in a statement issued by the President of the National Council of Managing Director of Licensed Customs Agents (NCMDLCA), Mr Lucky Amiwero, in Lagos on Thursday. Amiwero revealed that clearing agents had suspended vehicle clearance at Port and Terminal Multiservices Limited as well as Five Star Terminal at the Tincan Island Port.
Amiwero said that there is confusion with regard to Nigeria Customs Service’s `shifting’ of the 15% NAC Levy to Common External Tariff (CET). He said, “Though the Federal Ministry of Finance changed the heading to Common External Tariff (CET), clearing agents still describe the new levy as illegal. It is not backed by law in Nigeria,”
“It also contravenes the World Trade Organisation under the Agreement on Trade Facilitation Agreement which core principle is predictability, consistency and transparency on trade information, fees and charges imposed in connection with importation and exportation.’’
Nigeria expects to become an African hub for transshipment with a new deep seaport set to open in the commercial capital of Lagos before the end of this year, its managing director said on Wednesday. Du Ruogang, managing director of Lekki Deep Sea Port -- owned 75% by China Harbour Engineering Company and Tolaram group with the balance between Lagos state government and the Nigerian Port Authority, said the port has reached 89% completion. The multi-billion dollar deep seaport which has been under development for more than a decade and is situated on the edge of Lagos is part of new infrastructure that Nigeria hopes it can use to boost trade.
“With this port, Nigeria will become a transshipment hub,” Information Minister Lai Mohammed said during a site tour.
Faced with rising debts, Africa must look inwards, the Director-General (D-G) of the Debt Management Office (DMO), Ms. Patience Oniha, has advised. She spoke at the launch of the report of a Debt Sustainability study commissioned by the Open Society Initiative for West Africa (OSIWA) and the Nigerian Economic Summit Group (NESG) under the Debt Management Roundtable (DMR), in Abuja, yesterday. According to her, the stark realities confronting Sub-Saharan Africa were such that only a new focus on revenue generation from within; could save the region from a debt crisis. She said, “The timing of the launch of the report could not have been more appropriate with the global debt levels already rising pre-COVID-19 and still growing since the COVID-19 pandemic started in the year 2020. “Concerns around debt sustainability have expectedly heightened. According to the Word Bank’s World Economic Outlook, ‘Globally, sovereign debt grew from 49.1per cent of GDP in 2014 to 57.9percent in 2019. And in Sub-Saharan Africa, from 35.1per cent of GDP in 2014 to 55.4percent in 2019.’” The respective figures for 2021 were 66.7percent and 60.3percent.
NNPC Identifies Gas As Transition Fuel (The Tide)
The Federal Government has said that it was focusing on exploitation of gas to close the gap that can be created by less use of petrol, diesel and other fossil fuels, following the gradual exit from fossil fuels. The Chairman, Board of the Nigerian National Petroleum Company Ltd. (NNPC), Mrs Margrey Chuba-Okadigbo, stated this in her remarks at the ongoing Offshore Technology Conference (OTC) in Houston, Texas in United States, last Wednesday. The conference was anchored by the Petroleum Technology Association of Nigeria (PETAN), the umbrella body of all the indigenous oil services companies in Nigeria. According to Chuba-Okadigbo, gas as a transition fuel would not only bridge the energy gap to be created by exit of fossil fuels, but enhance economic development
The Head of the European Union (EU) Delegation to Nigeria, Ambassador Samuela Isopi has said the Union remains Nigeria’s strongest trade partner over the years. Isopi, who is also the head of the EU Delegation to the rest of the Economic Community of West African States (ECOWAS), while addressing a press conference in Abuja, on the forthcoming Europe Day 2022, and also provide information on several issues, including the European Union’s engagements with Nigeria and with ECOWAS, revealed that the total EU-Nigeria trade in 2021 stood at €28.7 billion. She put EU’s imports from Nigeria at €17.5 billion with exports to the country in 2021 at €11.2 billion. The EU Head disclosed that the trade balance in 2021 stood at €6.4 billion in favour of Nigeria, while the year-on- year change between 2020 and 2021 recorded a surplus of 25.8 percent.
The Minister of Foreign Affairs, Geoffrey Onyeama, has called for stronger ties between Nigeria and India.
This was even as Onyeama said the African Continental Free Trade Area (AfCFTA) is a “game-changer” that is going to be the largest free trade area in the world.
Onyeama made the call during the 7th Raisina Dialogue in New Delhi India where he took part in two-panel discussions with the themes “Out of Africa: Leading on Trade and Economic Integration,” and “Building the Gates of Globalisation: Investment, Infrastructure and Taboos.”
During the panel discussion, Onyeama spoke about the various partnerships for infrastructural development such as the Belt and Road Initiative (BRI) and other initiatives with India, the European Union, and other African countries, all of which he said, contribute enormously towards development.
The United States Agency for International Development’s (USAID’s) West Africa Trade and Investment Hub today convened representatives from large apparel companies to hear about opportunities to strengthen economic growth in Ghana and empower women and women-owned businesses. Three USAID co-investment partners working in the apparel industry shared their experiences working with the Hub. “Today’s event highlights the major shift underway in the structure of the global apparel industry. Buyers are actively diversifying their supply chains and seeking more competitive price points,” said Janean Davis, Acting Mission Director for USAID/Ghana. “This presents a tremendous opportunity for economic growth in Ghana, and for Ghanaian women who have proven to be integral to the success of apparel companies DTRT, Global Mamas and Ethical Apparel. USAID is proud to support them.”
The event, titled “Empowering Women in Ghana’s Apparel Sector: Challenges & Success Strategies,” featured first-hand accounts of the emerging opportunities for Ghana as a major sourcing hub for global apparel manufacturing. Representatives from the three USAID co-investment partners—DTRT Apparel, Ethical Apparel Africa, and Global Mamas—explained how women’s equity and empowerment are key business objectives for their companies and pay off in business production and growth.
The chairman of Platform Petroleum Limited, Chief (Barr.) Dumo Lulu Briggs, has admonished that cross-border service integration through the implementation of the African Continental Free Trade Area (AfCFTA) will boost the African oil and gas industry. Briggs, who spoke on the theme ‘AfCFTA: Cross-border Service Integration As Enabler of Project Delivery in the African Oil and Gas Industry’ at the African local content collaboration session at the 2022 Offshore Technology Conference in Houston Texas, United States of America, noted that AfCFTA represents a new optimism and the continental approach at comparable scale is expected to have greater success in Africa. “Hopefully, collaborations would improve the intra-Africa trade flows which is a poor 15% compared to North America (48%), Asia (58%) and Europe (67%). Although recorded trade underestimates the volume of actual trade and if proper account was taken of the size of the informal trades, the African numbers would not look so out of line. Nevertheless, this statistic confirms that Africa trades with the rest of the world, not with itself, a trend which the AfCFTA aims to revolutionise through the creation of a single market for free movement of goods, services, and persons,” he said.
Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB) Engr Simbi Wabote, has stressed that African countries must leverage on the robust platform and opportunities presented by African Continental Free Trade Area (AfCFTA) agreement, which according to him, is key to drive home the Local Content narrative to achieve sustainable growth and development in Africa.
Wabote made this clarion call while speaking during the African Local Content Collaboration Session at the ongoing Offshore Technology Conference (OTC) in Houston Texas, USA.
Speaking on the theme: ‘Cross-Border Service Integration As Enabler Of Project Delivery In The African Oil And Gas Industry’, the NCDMB boss noted that the AfCFTA is “Africa’s move to harmonize it’s markets for economic integration across all 55 member states with the objective of tapping into the Gross Domestic Product of over $3trillion.”
The Minister of Foreign Affairs, Geoffrey Onyeama has said the African Continental Free Trade Area (AfCFTA) would be a “game changer,” adding that the continental trade pact would emerge as the largest free trade area in the world. In addition, he said it would make doing business much easier for countries with seamless access to 54 markets which is a huge advantage. The minister who attended the 7th Raisina Dialogue in New Delhi India, where he took part in two panel discussions with the themes: “Out of Africa: Leading on Trade and Economic Integration,” and “Building the Gates of Globalisation: Investment: Infrastructure and Taboos,” called for stronger ties between Nigeria and India.
He said: “Why I say AfCTA is going to be a game changer is because it will make it easier for our political leaders and Africans to reach out to other African countries so what will come as a result or consequences will be infrastructure- the trans saharan highway and continental highway across Africa promoting connectivity and doing business. “That will be the natural result of pulling down all the barriers that are preventing this connectivity within the continent.”
Mohammed said Nigeria wanted to use the port investment to regain maritime business lost to ports in Togo, Ivory Coast and Ghana, adding that the new facility will give the country an edge on African trade.
Since 2014, the African Development Bank has provided leading research on the trade finance landscape in Africa. Its trade finance reports have surveyed and analyzed trade finance data for more than 600 individual banks in 49 African countries from 2012 to 2019. The studies have contributed to filling the knowledge gap on trade finance supply in Africa and put trade finance unmet demand on the agenda of policymakers globally (International Chamber of Commerce, 2020). Yet, the story has always been half told – using data only from the perspective of commercial banks that supply trade finance – with analyses of trade finance demand by firms completely missing from previous studies. Part of the reason for this incomplete picture is the lack of access to data on the trade finance activities of firms.
This report attempts to fill some of this knowledge gap. It presents the results of a comprehensive survey on trade finance demand in Africa, using the cases of Kenya and Tanzania as a deep-dive study. It is the first of its kind on trade finance demand in Africa. We focus on the cases of Kenya and Tanzania due to the relative openness of these economies. Firms in Kenya and Tanzania are active in international markets, with significant sectoral diversity. Close to 63 percent of firms in the two economies use material inputs and supplies of foreign origin. This is higher than the average of 58.6 percent for the sub-Saharan Africa region as a whole (World Bank, 2022). In addition, the total trade to GDP ratio, a measure of the relative openness of an economy, stands at about 22 percent and 23 percent for Kenya and Tanzania, respectively, higher than the sub-Saharan Africa average of 17 percent.
East African Community (EAC) Ministers / Cabinet Secretary in charge of Trade and Finance have adopted 35 percent as the 4th Band of the EAC Common External Tariff (CET). The Ministers, during a retreat on the comprehensive review of the CET, held on 5th May 2022, in Mombasa, Kenya, decided that implementation of the reviewed EAC CET shall commence on 1st July, 2022. The meeting further agreed that there should be flexibility in implementation of the revised CET, particularly on products currently affected by the current global economic realities.
The Secretary General said the CET is one of the key instruments under the Customs Union pillar which justifies regional integration through uniform treatment of goods imported from third parties. “The move is set to spur intra-regional trade by encouraging local manufacturing, value addition and industrialization,” said Dr. Mathuki.
Among the tariff lines in this 4th band include: dairy and meat products, cereals, cotton and textiles, iron and steel, edible oils, and beverages and spirits.
You win some, you lose some in EAC (The Star, Kenya)
Kenya has been part of the East African Common Market since 2010. In a single market, countries win some and lose some. Kenyan workers are employed in all East African member states because they get automatic work permits and are hard-working and well-qualified. That is a benefit. However the import of cheap maize, eggs and poultry from Uganda and Tanzania is a cost. Their farmers can produce at a lower price than Kenya because land and labour are cheaper. But it is not a cost to all Kenyans because the import of cheaper food from neighbouring states brings down the cost of living for the wananchi. This is how a single market works. Over time, capital and labour are invested where they make the best return. That’s why farmers in Trans Nzoia are giving up growing maize in favour of raising chicken. That’s why the cost of eggs went up last year when Kenya temporarily blocked the import of Ugandan eggs. But, over time, everyone should be a winner in a single market. Each national economy will grow larger as it exports more and imports what is cheaper.
The Government of the Republic of Madagascar recently approved the move to sign the SADC Charter establishing the SADC Regional Fisheries Monitoring Control Surveillance Coordination Centre (MCSCC) on 28 April 2022. This paves way for Madagascar to join in the regional cooperation for combating illegal, unreported and unregulated (IUU) fishing and related fish crimes. The objective of the Charter is to provide a legal framework for the establishment and operationalisation of the MCSCC, which will coordinate measures relating to fisheries monitoring control and surveillance (MCS) in the SADC region.
Right policies can spur investment in African vaccines (Business Daily)
Inadequacies in drug production and challenges posed by counterfeit and substandard products have often crippled access to medicines in Africa. To tackle this, the African Union (AU) called for strengthened, improved and harmonised regulation of medicines, medical products and technologies across the continent. On February 11, 2019, in Addis Ababa, Ethiopia, heads of state and governments during their 32nd Ordinary Session adopted the African Medicines Agency (AMA) treaty to provide support for weak regulatory systems.
The new African Medicines Agency Treaty currently has 28 signatories, accounting for more than half of the African Union’s 55-member states.
Russia’s invasion of Ukraine has pushed up the cost of living in a host of North African countries, according to a report by Capital Economics. Egypt, Tunisia, and Morocco are all battling increases in inflation, at 10.5 percent, 7.2 percent, and 5.3 percent respectively, according to analysts. Increased public debt also has become a rising issue, with Tunisia incurring another loan from the African Export-Import Bank. The increasing prices have left these countries drowning in their accumulated debts, leading to a forced decline in their sovereign dollar bond and currency value. “Within the region, Tunisia’s public debt position is most fragile and the government now faces a ballooning subsidy bill. We think that a debt restructuring will ultimately be needed,” the report said, adding: “The devaluation of the Egyptian pound has coincided with concerns about the growing share of public debt that is denominated in FX.”
Ministers from across Africa have called for accelerated fiscal decentralisation efforts to spur sustainable urbanisation as an enabler of inclusive growth and prosperity. This was the overarching message from their joint statement delivered by Malawi’s Minister of Land H.E Samuel Kawale at
The Chairperson of the African Union Commission, H.E. Moussa Faki Mahamat, has appointed two eminent experts to serve on the AU High-Level Panel on Emerging Technologies (APET). The High-Level Panel was constituted in recognition of the need of African Union Member States to harness both existing and emerging technologies for Africa’s socio-economic development. The announcement was made during the first statutory meeting of APET in 2022, held in Johannesburg from 25 to 29 April 2022. The objectives of the statutory meeting were to discuss strategies for a strengthened APET structure within the AU system and deliberate on strategies for the optimisation of the work of the Panel through engaging global and continental experts and platforms. The Panel also considered sustainable resource avenues for its secretariat through securing steady support for the next 10-20 years. Lastly, APET paid a courtesy visit to the outgoing CEO of AUDA-NEPAD, Dr Ibrahim Assane Mayaki.
COP27 presents a unique opportunity for Africa (Africa Renewal)
Talking about achievements, with regards to peace and security, it is important to note that as part of Angola´s leadership of the International Conference on the Great Lakes Region (ICGLR) for the second time, our President João Lourenço, in his capacity as Chair, briefed the UN Security Council in June 2021 at a meeting dedicated to the situation in the Central Africa Republic. He called for an end to the arms embargo imposed on the country. In addition, Angola continues to contribute and support a peaceful resolution of the conflict in Eastern Democratic Republic of Congo. Also in 2021, Angola presented for the first time its National Voluntary Review at the High-Level Political Forum on the implementation of the 2030 Development Agenda for Sustainable Development.
Our main priority for this year is to continue to focus on peace and security with particular emphasis on Africa, specifically our sub-region.
We will also continue to pay attention to programmes that foster humanitarian assistance to vulnerable groups, including women and children, environmental protection and sustainable development. 17 duplicates removed
In November 2021, stakeholders from around the world gathered in Kinshasa, Democratic Republic of Congo (DRC) for the DRC Business Forum to discuss moving Africa up the ladder in the battery, electric vehicle and renewable energy value chain and market. This event affirmed the continent’s ambition to harness its green energy potential and totally eliminate greenhouse gas emissions by 2050. The African Development Bank was one of the co-hosts of the DRC Forum, a clear sign of the Bank’s commitment to supporting Africa’s energy transition. The following projects supported by the African Development Bank symbolize the continent’s efforts to reduce greenhouse gases, even though it is only responsible for 3.8% of global emissions: The Noor Ouarzazate Complex, south-east of Marrakesh, had ushered Africa into a new era at the beginning of the 2020s. With a capacity of 580 megawatts spread over four power plants, the complex is one of the biggest solar parks in the world. More importantly, it supplies electricity to nearly two million Moroccans and prevents the release into the atmosphere of nearly one million tonnes of greenhouse gases every year.
The marine capture fisheries production of Africa currently stands at 7 million tonnes. It has increased in recent years thanks to the strong resurgence of West African small pelagic catches and a return to normality in the Indian Ocean following the end of Somalian piracy. The marine fish supply is increasing but the current positive growth is at a rate that cannot match the increasing population’s per capita consumption demands. With the African population expected to reach 1.7 billion in 2030 and 2.5 billion in 2050, feeding the population at today’s level of per capita consumption (7.5 kg/capita/year form marine fisheries), will require 13 million tonnes of marine fish in 2030 and almost 19 million tonnes in 2050. These figures provide an idea of the scale of the production gap: about 6 million tonnes in 2030 and 12 million in 2050. They also make it clear that much change is required in both ecosystem capacity enhancement and capture and valorisation method improvement to reach such targets. Fisheries policies, institutional structures and the skills base of fisheries agencies in many African countries have been heavily influenced by a historical focus on production and revenue maximisation year-after-year, driven by the need to generate cash for the national treasury, with little or no reference to resource productivity and sustainability. The approach has led to overexploitation of most of the major fish resources. 17 duplicates removed
Heads of anti-corruption agencies from the Commonwealth’s 19 African member states and stakeholders met yesterday in Kigali, Rwanda, for the 12th Regional Conference of Heads of Anti-Corruption Agencies in Commonwealth Africa. The five-day conference, which is being convened under the theme ‘Combating Corruption for Good Governance and Sustainable Development in Africa’, opened with a clarion call from delegates for the need to strengthen cooperation and collaboration among anti-corruption agencies in Commonwealth Africa to help address the gaps in fighting corruption.
Japan, Africa look to deepen trade ties (Africa Times)
Japan is looking to expand its presence on the African continent, with trade and investment taking center stage during the Japan-Africa Public-Private Economic Forum held in Nairobi. The event attracted seven ministerial-level leaders and over 200 participants from 15 countries, according to the Kenyan trade ministry. Among them was Takako Suzuki, a Japanese state minister of foreign affairs who attended the event while on an African tour that also took her to Rwanda. Suzuki’s presentation, above, offered a look at what to expect in August when Tunisia hosts the Eighth Tokyo International Conference on African Development (TICAD). Suzuki said Japan is looking to invest in startup firms and seeks to boost climate-friendly, sustainable business development in Africa.
Global economy news
Speaking to heads of WTO member delegations, the Director-General observed that ministers would gather at WTO headquarters next month against a backdrop of the COVID-19 pandemic, rising food and energy prices, debt distress, and war. “This is not an ordinary Ministerial Conference,” she said. The difficult context made reaching agreements both harder and more urgently necessary, she noted, urging delegations to be open-minded and flexible on substance and in how they engage with each other.
Describing her wish for a “streamlined, business-like” MC12, DG Okonjo-Iweala said delegations need to achieve clarity about how they want to use the meeting. She urged them to finalize outcomes ahead of time so that ministers can “bless” them and focus on providing guidance for future work. “MC12 should not simply be a talk shop,” she said.
The war in Ukraine could bring economies of poorest countries on brink of catastrophe (Trade for Development News)
The impact of the war in Ukraine on food and fuel prices will weaken economies already battered by the COVID-19 pandemic and climate-related disasters. We live in an interconnected world where the impact of missile strikes on a Ukrainian city can be felt as far away as in Ouagadougou, the capital of Burkina Faso in West Africa, through price hikes on a bag of wheat or at a fuel pump. In its April World Economic Outlook update, the International Monetary Fund (IMF) has slashed the Global growth forecast by 0.8 per cent to 3.6 per cent in 2022 compared to the January forecast with the economic impact of the war in Ukraine reverberating globally through the commodities market, trade and financial linkages. Much has been made of Europe’s heavy dependence on Russia for its energy needs. Less visible – but no less important – is the pain of higher fuel and food prices across many parts of the world due to supply disruptions from the world’s second-biggest oil exporter – Russia – and the world’s fifth-largest exporter of wheat – Ukraine – caused by the war and related sanctions.
Least developed countries (LDCs) have been vulnerable and in dire need of support in the best of times. With the triple onslaught of climate change, COVID-19 and the war in Ukraine, we are facing a potential human catastrophe.
As the Director-General of the WTO stated, the current system “was not built for a world where a climate disaster can interrupt factory operations worldwide, or a microscopic virus can upend the movement of goods, services and people almost overnight. This is no case for a retreat from trade, which helps us adapt to those and other shocks.”
The war in Ukraine and sanctions on Russia are causing substantial economic spillovers, notably for energy. Oil prices have climbed, but increases have largely been contained thanks to spare production capacity in some countries and strategic petroleum reserves in others.
Brent crude, the global oil benchmark, rose to a seven-year high around $100 before the invasion sent it surging to more than $130. It has since pared gains amid pandemic lockdowns in China, the biggest oil importer, that may weigh on economic growth there. Memories of the high inflation and slow growth that followed—known as stagflation—have fueled concerns about a possible repeat. Importantly, though, times have changed.
Global progress to reduce gas flaring, the wasteful industry practice of burning natural gas during oil production, has stalled over the last decade. Globally, gas flaring resulted in nearly 400 million tonnes of carbon dioxide (CO2) equivalent emissions in 2021, further underscoring the urgency to accelerate the decarbonization of the world’s economies, says a new report from the World Bank’s Global Gas Flaring Reduction Partnership (GGFR). Satellite data compiled and analyzed for GGFR’s 2022 Global Gas Flaring Tracker Report shows that 144 billion cubic meters (bcm) of gas was flared at upstream oil and gas facilities last year. Ten oil-producing and flaring countries accounted for three-quarters of all gas flaring, seven of which — Russia, Iraq, Iran, the United States, Venezuela, Algeria, and Nigeria — have remained the top seven consistently over the last ten years.”Climate change is one of the defining development challenges of our time. Ending the polluting and wasteful practice of gas flaring and decarbonizing oil and gas production, while also accelerating the transition to cleaner energy, is fundamental to mitigating climate change,” said Demetrios Papathanasiou, Global Director for the Energy and Extractives Global Practice at the World Bank.
The pandemic’s impact on trade and supply chains was significant and in turn, also impacted economic growth and well-being. At the same time, the crisis led to an acceleration in the digitisation of business models, including cross-border business-to-business (B2B) e-commerce as a response to disruptions in supply chains. From the onset of Covid-19, fintech startups emerged to help businesses fund global partnerships and secure digital trade financing through game-changing non-recourse factoring.
According to an Asian Development Bank (ADB) study, rejection rates for trade finance reached record highs in 2020, with the gap between demand and supply currently at $1.7 trillion – a 15 per cent rise compared to the previous estimate of $1.5 trillion in 2018. The impact on supply and demand gap is particularly pronounced as the nature of the crisis continues to cause a negative ripple from downstream customer firms to upstream supplier firms. The ADB’s latest research reiterates findings from previous studies that the trade finance gap disproportionately affects smaller enterprises, which are also strongly affected by supply chain disruptions. Approximately 40 per cent of rejected trade finance requests were from startups and small and medium-sized enterprises (SMEs) compared to a rejection of 17 per cent for multinationals. The survey covers more than 300 firms in almost 70 countries, beyond 112 banks, 50 export credit agencies, and 39 forfeiters around the globe. The lack of creditworthiness and lack of ability to provide financial statements are among the most prominent reasons to reject requests from businesses seeking trade finance.
Fintech companies are uniquely positioned to fill the gap and help startups access flexible injections of liquidity exactly when they need it, as well as set up digital processes that allow them to successfully trade internationally. Many fintech companies are able to offer cheaper, and better trade finance and other export solutions to startups. Since their due diligence is primarily technology-driven, they are usually less persistent on collaterals and more reliant on technology solutions to identify credit-worthy borrowers.
Despite progress made since the adoption of the 2030 Agenda for Sustainable Development and its 17 Goals (SDGs), OECD countries have met or are close to meeting only a quarter of the targets for which performance can be gauged, according to a new OECD report. Virtually all OECD countries are already securing basic economic needs and implementing the policy tools and frameworks mentioned in the 2030 Agenda. But progress towards 21 targets on issues such as ensuring no one is left behind, restoring trust in institutions and limiting pressures on the natural environment are still way off track. The Short and Winding Road to 2030: Measuring Distance to the SDG Targets says that while OECD countries have eradicated extreme poverty, most of them need to do more to reduce deprivation more broadly. Women, young adults and migrants face greater challenges than the rest of the population, and despite some progress, women’s rights and opportunities are still limited in both private and public spheres. In addition, unhealthy behaviours such as malnutrition and tobacco consumption, which appear to be more common among low socio-economic groups, and disparities in education from early years of life, tend to exacerbate inequalities.
The World Trade Congress on Gender is part of the research agenda undertaken by the WTO Gender Research Hub and the WTO Trade and Gender Unit. It will draw attention to the findings of published or soon-to-be published research conducted by trade and gender experts and promote innovative research in this field. Submissions are open for both members and non-members of the Hub. The theme of the Congress intends to highlight the trade and gender issues related to the recovery from the COVID-19 pandemic. It also provides an opportunity to deepen understanding of how women’s empowerment can help countries overcome future crises, whether environmental, financial or food security related — and how trade can contribute to this. The Hub further invites participants to reflect on the extent to which trade can accelerate recovery and help rebuild a gender-responsive economic environment after crises.