tralac Daily News
Inclusivity, resiliency focus of South Africa’s tourism sector recovery (Engineering News)
As South Africa rebuilds its Covid-19-devastated tourism sector, focus must be given to the development of an inclusive, resilient and transformed tourism industry and economy. Speaking to media prior to her Budget Vote on Thursday, Tourism Minister Lindiwe Sisulu said that as the Department of Tourism works to stabilise the sector and strategise for a path to recovery, it is engaging with stakeholders and drawing lessons on how to build a resilient and inclusive sector.
Steel Master Plan presents immediate opportunities for industry, govt (Engineering News)
There are a number of opportunities for both government and industry to capitalise on immediately while pursuing the implementation of the Steel Master Plan, speakers agreed during a panel discussion at the Mainstreaming the Steel Master Plan Conference on May 19. Manufacturing Circle executive director Philippa Rodseth mentioned municipal infrastructure as an example. As a result of the municipal infrastructure challenges facing the country, there is a lack of proper service delivery, impeding manufacturing.
With increasing opportunities for trade between the EU and South Africa opening up in South Africa’s food sector since the signing of the EU-South Africa Economic Partnership Agreement (SADC-EPA) in 2016, the EU is hosting day two of the seminar today (May 19) at a conference venue in Johannesburg. This interactive event – which is being streamed – will give South African food professionals a unique opportunity to hear first-hand from policy makers and industry experts as they uncover insights into how the safety, quality and sustainability of EU food and beverage products represent valuable opportunities for your business to win loyal customers in South Africa and beyond, according to an EU spokesperson.
Day one looked at ways to boost EU-South Africa agri-food trade, followed by presentations and breakaway sessions on the EU’s food safety and quality systems, including its Farm to Fork strategy to accelerate sustainability.
With the EPA also including the protection of 249 European Geographical Indications (GIs) covering foodstuffs, beer, spirits and wine, day two takes a deep dive into the opportunities of the GI system, using EU cheese as a case study.
The US Department of Agriculture (USDA) anticipated lower wheat output for the current crop season in its latest May 2022 report, owing to tiny crops from Ukraine, Morocco, Argentina, the EU and China. Consumption, on the other hand, is expected to climb due to population growth, with trade expected to reach new highs, fuelled by imports primarily from Africa.
In the midst of the current conflict in Ukraine, which has resulted in a limited supply of sunflower oil and wheat, India was seen as one of the saviours, sending much-needed wheat with Australia. This came amid projections of higher-than-normal export stock.
However, due to a severe heatwave that began in mid-March 2022 in India, wheat output forecasts have been lowered. The lowered output forecast and rising domestic wheat prices led India imposing embargo and restricting exports.
South Africa requires around 1.4 million tons for the 2012/22 market season, which concludes at the end of September 2022. South African consumers may witness an increase in wheat prices in the second half of 2022, although this will be in line with global trends and market pressures.
What China’s stark economic slowdown means for South Africa (Daily Maverick)
All eyes have been on China’s fast-deteriorating economy over the past week, with exports, retail sales, new home prices and industrial production all coming in way below expectations. “There will be a global impact, since China is still the world’s factory,” says Old Mutual Multi-Managers investment strategist Izak Odendaal. And, he adds, “China matters greatly for South Africa.” Not only is China South Africa’s main trading partner, but industrial commodity prices depend on Chinese demand and, while still elevated and good for South Africa, they have come off as a result of Chinese lockdowns in March.
In the immediate future, the likelihood of South Africa continuing to benefit from higher commodity prices will depend on whether the upward pressures on commodity prices – namely the Russia-Ukraine war and supply issues – outweigh a reduction in China’s appetite for commodities as its economy loses momentum. For now, it still seems the upward pressures on prices will prevail. On a longer-term view, however, recent World Bank in-depth research into “commodity markets and their evolution, challenges and policies” highlights how important it is that countries relying on commodities to underpin their economy, like South Africa, put in place policies that address the asymmetric effects that commodity price shocks have on commodity exporters.
Rich nations offer debt guarantees on South African climate deal (Engineering News)
A group of the world’s richest nations offered South Africa debt guarantees as part of a proposed $8.5-billion deal designed to cut the nation’s reliance on coal for power generation, people familiar with the talks said, potentially resolving one sticking point in the negotiations. The guarantees would enable South Africa or companies such as state power utility Eskom Holdings to borrow money needed to close down coal-fired power plants and enable the generation of renewable energy, one of the people said. The people asked not to be identified as the talks aren’t public.
Botswana to ban more veggie imports (The Namibian)
Namibian exporters of vegetables to Botswana, especially those along the fertile Zambezi region, might have it tough if that country effects its plan to expand its ban on vegetables. Despite being a subscriber to the African Continental Free Trade Area, which calls for the free flow of goods and services, the Botswana government says it has no plans to lift its current ban on vegetable imports either. In fact, it reportedly plans to expand its list, which comprises 16 vegetables, over the next two years. The country’s list of banned commodities includes tomatoes, carrots, beetroot, potatoes, cabbage, lettuce, garlic, onions, ginger, turmeric, chilli peppers, butternut, watermelons, sweet peppers, green mealies and fresh herbs. Namibia also restricts the importation of vegetables, including some on Botswana’s list. The Namibian Agronomic Board (NAB) controls the flow of imports and exports in Namibia, and measures this in relation to expected harvests and local demand.
Pakistan overtakes Uganda as top market for Kenyan exports (Business Daily)
Pakistan overtook Uganda as Kenya’s biggest export destination in the first quarter of the year, boosted by growth in tea exports. Exports to the Asian country rose by 21.5 percent to Sh16.86 billion from Sh13.87 billion in the corresponding period of last year. The value of exports to Uganda marginally rose by 0.4 percent in the period to Sh16.68 billion. Pakistan is the largest buyer of Kenyan tea, and volumes were expected to increase after the removal of the 0.5 percent attestation fee charged on tea export by Pakistan in August 2021.Tea stakeholders had for years lobbied for the removal of the levy, which made Kenya’s tea more expensive in Pakistan compared with beverage from other countries. Other top export markets included the Netherlands and USA which recorded purchases of Sh15.83 billion and Sh14.78 billion respectively.
During the period, however, the country’s trade deficit increased by Sh34.2 billion or 10.8 percent in the first quarter due to a surge in imports led by fuel and industrial supplies. The country’s import bill rose by 16.6 percent to Sh591.6 billion, widening the trade gap to Sh351.54 billion despite a 26.3 percent growth in exports to Sh240.1 billion.
Rwanda reviews restriction on Ugandan imports (The East African)
Rwanda says it is reviewing its trade list with Uganda before its goods can be allowed on its market, almost four months after opening its main border. While free movement of people between the countries has resumed, there is still restriction on imports from Uganda. This week, Rwanda’s Prime Minister Edouard Ngirente told a press briefing that the process of reviewing the trade list is almost complete and the goods will soon be allowed in the market subject to quality checks. The review was necessary because Rwanda wants to enforce quality as well as protect local manufacturers who had started producing some goods that were previously imported from Uganda, he said. Ugandan products, the PM said, must comply with the set standards on the Rwandan market.
Ugandan importers and exporters will be required to apply for a licence from the Rwanda Food and Drugs Authority (FDA) for industrial- manufactured products and Rwanda Inspectorate, Competition, and Consumer Protection Authority (RICA) for agricultural products.
Budget: MPs outline their priorities on govt spending (The New Times)
While presenting the proposed Rwf4.6 trillion national budget for the 2022/23 fiscal year to legislators, Ndagijimana said that the budget, which will start on July 1, will focus on the implementation of the government’s strategies meant to speed up economic recovery from the Covid-19 pandemic. It also emphasises continued implementation of the ambitious national strategy for transformation (NST1) – a seven-year government programme running from 2017 through 2024.
MP Ntezimana said that the Made in Rwanda programme is needed as it has proven to promote import substitution. However, he said that the prices of the products made in the country are still high, which threatens their competitiveness compared to imported products. “For this to be achieved, the local businesses should be supported, including reducing taxes on the locally made products so that they become affordable,” he said, calling for booting exports.
Govt cuts Mtwara, Tanga port charges (IPPmedia)
Prime Minister Kassim Majaliwa said in his question and answer session in the National Assembly yesterday that the ports can attract more traders in neighboring countries such as Malawi, Zambia, Mozambique, Democratic Republic of Congo and even South Sudan, when their competitiveness is aligned with the port of Dar es Salaam. The government had sunk billions of shillings in their rehabilitation, he said in responding to Abdallah Chikota (Nanyamba) who demanded what the government intends to do to attract more transit goods traffic from member countries of the Southern Africa Development Community (SADC) apart from neighbouring EAC members. All levies upon port users will be deducted, while the government plans to buy cargo loading and off-loading equipment to speed up work, noting that the levy deductions will not be applicable to other ports as it only seeks to enhance competitiveness in the two ports.
Commendable Export Diversification Moves - EBR (Satenaw Ethiopian News)
For any developing country, foreign currency is a critical tool assisting not only with local grass-roots development but also contributing significantly to a nation’s overall economic health. For its forex flow, Ethiopia benefits tremendously from the support of its diaspora which contributed USD3.6 billion last fiscal year. Addressing the local business community recently, Prime Minister Abiy Ahmed (PhD) said “the crisis of hard currency will not be solved today, nor will it in the next 15 or 20 years.” The Premier pleaded for an urgent need for more cooperation with the private sector to find a solution, adding that remittances from the Ethiopian diaspora had reduced for political reasons.
He stated in his report that export trade earnings grew substantially—by USD37 million or 25Pct—but there’s still the need to diversify, especially into manufactured exports. Further, the country was able to save USD1 billion through import substitution by mostly reducing purchases of food, grains, and coal for cement manufacturers. Ethiopian export numbers are a mixed bag but far from fulfilling their promise.
Ivory Coast Leads West Africa’s Local Content Developments (Energy Capital & Power)
Historically, the Ivory Coast’s hydrocarbons industry has been a modest one with just 36,000 barrels of oil per day but with the 2021 discovery of two billion barrels of reserves and 57 cubic meters of natural gas by Italy’s Eni, a major mark was made for the future of the west African country. As its extractive industries ramp up, Ivory Coast’s newfound hydrocarbons wealth combined with its emerging economy, and important role in regional integration initiatives, may mean the right mix required for a powerhouse country in the making. With an average of 8% GDP growth for a decade, the country has been one of few sub-Saharan African nations to successfully maintain stable economic growth amidst the COVID-19 pandemic. The country is rated 110 out of 190 countries on the World Bank’s Ease of Doing Business index, ahead of almost every nation in the region. However, the Ivory Coast’s crucial strength derives not from its independent prowess but from its key participation in regional integration initiatives.
A new report launched today by the World Bank, the Government of Tunisia, and the Global Fund for Disaster Risk Reduction and Recovery examines ways to improve the capabilities of Tunisia’s National Meteorological and Hydrological Services with the aim of supporting socio-economic development to save lives and livelihoods. Tunisia is highly prone to climate-related disasters, such as floods, droughts, extreme temperatures, and sea level rise. The latest World Bank’s disaster risk profile of the country estimates that floods alone cause an average annual loss of US$40 million (or 0.1% of Tunisia’s 2018 GDP). Underlying factors, including climate change, population growth, land use changes, and urbanization, increase the severity and frequency of these events. The report, Strengthening Hydromet and Early Warning Systems and Services in Tunisia—A Roadmap, proposes three successive development phases designed to transform meteorological and hydrological service providers in Tunisia into technically sound and modern entities that can meet their public service mandates. It shows that the benefits of weather, climate, and hydrological (hydromet) services outweigh the capital and operational costs of providing them.
African trade news
This first African Trade and Investment Forum of UCLG Africa aims to become a matchmaking platform between local authorities in Africa and investors, to identify business opportunities and investment strategies. Local investment needs can be structured to match and attract national, regional, and international investments – through the definition of pipeline of projects. Challenges range from institutional constraints, limited capacities, and regulatory hurdles to looming debt burdens and re-payments following the expiration of the Debt Service Suspension Initiative. At the global level, the Secretary-General has been advocating for greater debt relief and liquidity to support countries across Africa.
Today, I see four priorities: First, local governments’ capacities need to be strengthened to fully play their role as catalyzers in mobilizing public and private capital for growing cities. Second, local policies should be implemented to create an enabling business environment to facilitate investments – including by providing targeted public investments and skilled human capital. Third, we must accelerate the implementation of the African Continental Free Trade Area (AfCTA) in African cities and territories. The AfCTA is the largest trade area in the world since the formation of the World Trade Organization and is expected to boost intra-African trades by 52 percent in the coming 5 years. And business and trade will happen at the level of cities and territories. And fourth, cities need to venture into national and international bond markets. At present, only a few African cities have done so.
The intra trade in Africa remains at 15 percent lagging behind Europe whose intra trade stands at 70 percent respectively. The AU High Level Representative on Infrastructure Raila Odinga, made the remarks in Kisumu yesterday during the first day of the 9th Africities Summit at a High Level Dialogue on Infrastructure and Urban Development on Wednesday. “Infrastructure development is a priority and key ingredient for economic development. The major reason for low intra trade in the continent is the lack of infrastructure to connect its countries. There is a need to come with the African infrastructure fund to be self-sufficient in terms of funding,” said Odinga, who is also the Kenyan presidential candidate. Danny Faure who is former President of Seychelles called upon the need for Africa to choose the right infrastructure that will have an effective impact on the continent, citing the case of Botswana, where a new bridge has been built with its length at 71 meters all the way to Zambia providing a hub to Zimbabwe and Namibia. “The infrastructure is strategic and Africa needs it,” said Faure.
Future Manufacturing Africa: Trade Fair and Summit 2023 (Engineering News)
Exchanging valuable industry expertise to increase investment prospects in the African continent’s manufacturing sector. The manufacturing industry is crucial to the success of companies and their countries, as it is responsible for creating many goods, giving employment to millions of people, and making goods more affordable. Moreover, the African continent boasts high levels of global opportunities for investment across the manufacturing industry. The manufacturing export market in Africa has been growing. According to the World Bank, much of this growth can be attributed to the increased number of African countries that are now in the manufacturing sector.
We see growth spurts in key economic manufacturing countries and product drivers. Egypt, the biggest exporter of petroleum and petroleum products; Nigeria, the biggest exporter of flexible metal tubing; Ghana, the largest producer of cocoa beans in the world; are amongst budding African countries ready for investment and innovation. Other countries but not limited of interest are South Africa, Morocco, Algeria, Congo DRC, Kenya, Cote d’Ivoire and Uganda.
The continent is rich with raw materials and has a high demand for manufactured products. This trade show is an opportunity for companies to come and explore the potential of Africa. The purpose of the trade fair is to provide a platform for new and existing companies to share ideas, technologies, and equipment. The FMA Trade Fair and Summit 2023 connects investors, entrepreneurs and key stakeholders in the hope to create investment opportunities for possible partnerships and projects on the African continent.
President Nana Akufo-Addo has urged African countries to integrate more closely through competitive business, political cooperation, and investment to establish an African Beyond Aid agenda. According to him, African countries should make the most of the African Continental Free Trade Area (AfCFTA) by adding value to their resources before exporting them, in order to accrue more revenue. Speaking at the Academy of African Business and Development’s 22nd Annual Conference, President Akufo Addo said African economies can be transformed through value added industrialisation. “African countries need to work more closely, deeply and competitively through trade to enhance initiatives. Together, we need to build our continent and hold each other up.” “That’s the only way we can grow organically”, he added.
Sixth GITFIC conference to leverage African development (Ghana Business News)
The Steering Committee for the sixth Ghana International Trade and Finance conference will map out strategies that will enhance African trade and leverage the development of the continent. The conference, which will take place in Ghana’s capital, Accra, on 23rd and 24th May, 2022, will seek to update the evidence base of what is currently available in terms of reviewing the AfCFTA, data on digital trade. A statement signed by Mr Selasi Koffi
In a report titled ‘Connecting Africa’, CNN Network featured Ali Al-Gamil — CEO of Cairo 3A Agriculture. The report focused on the amount of commerce in African markets as well as the aspirations of the most notable exporters for trade growth in the continent. Additionally, the research examined the most serious difficulties that two-way transactions face in Africa. The assessment also emphasised Cairo 3A Agriculture’s agricultural potential as a prominent player in the production of premium grade citrus that is sold internationally, as well as the company’s ability to manufacture a wide range of food products. According to Al-Gamil, Africa is the final frontier, and success in the continent now would decide the value of Egyptian produce in the next decades.
He added that the greatest impediment to mutual trade between African countries is a lack of infrastructure, which causes everyday logistical interruptions. However, current infrastructure projects may help to progressively increase mutual trade between African countries.
Regional Senior officials from Ministries and Agencies responsible for Trade and ICT, met remotely on the 12th of May 2022 to consider orientations for an ECOWAS E-Commerce Strategy. Mr. Mickson Opoku, Director for Bilateral, Regional and Multilateral Trade, Ministry of Trade and Industry, representative of Ghana, who served as the Chair of the meeting, noted the relevance of this next phase in preparing the ECOWAS E-Commerce Strategy. He noted how an E-Commerce Strategy for the region would allow ECOWAS Member States to better take advantage of the African Continental Free Trade Area (AfCFTA).
Participants considered the presentation by UNCTAD and provided their feedback on the orientations for the e-commerce strategy. Member States noted the proposed areas for intervention, which centred on the need to; i) Strengthen and coordinate actions of trade ministries of Member States to make e-commerce a contributor to national and regional industrial efforts; ii) Enhance trust of potential e-commerce actors through the harmonization and update of the legal framework; iii) Monitor, follow-up and accompany the e-commerce sector; and iv) Adapt the strategic framework to priorities, objectives and targeted actors (including women and youth).
In the context of its African Ministers of Finance conference, CoM2022, the United Nations Economic Commission for Africa (ECA) has given the details of a path for African international sovereign debt liquidity and sustainability – the Liquidity & Sustainability Facility (LSF) it established and with the support of BNY Mellon and Amundi.
In an environment characterized by increasing debt burdens, historically high cost of borrowing, difficult post- Covid recovery, climate change related issues and energy and food shortages, there was a consensus among participants at the conference that tackling debt sustainability was a key issue.
Finance and development ministers from throughout the continent, together with the ECA, have been at the forefront of discussions on innovative mechanisms that can be added to the mix of tools used to address their various financial challenges. Private sector demand for investment products that promote sustainable development has been rising steeply in recent years. These “sustainability-themed products” were worth $3.2 trillion in 2020. Despite the vast green resources of Africa and increased investor demand for sustainability-themed products, the continent accounts for less than 1 per cent of global green bond issuances.
The African Union is convening a High Level Retreat to evaluate and explore avenues to enhance the financial sustainability of the African Union, following the adverse effects of the COVID-19 pandemic and the Ukraine crisis on the economies of its member states. Convened under the theme “Beyond COVID-19 pandemic and Ukraine Conflict: Enhancing the Resilience of African Economies and Financial Sustainability of the African Union”, the meeting will consider a raft of issues, among them; the financial status of the African Union following the impact of COVID-19 and the Ukraine crisis on the national economies of Member States and the implications on their capacity to honour financial obligations to the Union. Relatedly, the Ministers will also review the implementation of the nine Golden Rules for financial management and accountability principles and other decisions adopted on Financing the African Union.
The retreat will also evaluate the implementation status of the 0.2 percent import levy that was adopted in July 2016 in Kigali, and intended to facilitate the sustainable and predictable remittance of Member States’ assessed contributions, towards the gradual financing of 100% of the operational costs of the Union, 75% of the program budget, and 25% of peace support operations. As at December 2021, seventeen (17) countries were at various stages of domesticating the Kigali Decision on Financing the Union. Read the Status Report on “Towards the Financial Autonomy of the African Union.”
For one week, aviation experts from Africa and Indian Ocean (AFI) region met in Abuja to brainstorm on how to revive air transport system in Africa, which has been devastated by huge losses incurred due to coronavirus pandemic and its attendant lockdown.
African Union Commissioner for Infrastructure, Dr. Amani Abou-Zeid, kicked off discussion on the COVID-19 pandemic, which he said has caused devastating impacts on the lives and livelihoods of countries all over the world and the aviation industry, leading to deep losses and reductions in GDP, jobs, access to finance, and industry revenue.
“In Africa, the total estimated amount of the financial relief measures provided to airlines in Africa was only $2,721,539,647 (almost $2.7 billion) by end of 2021. This included the government support in the form of providing loans, guarantees, wage subsidies, and direct cash injections to airlines: $2,638,765,827 (almost $2.6 billion),” Abou-Zeid said. He noted that the economic and social impacts of the pandemic on African countries and the industry become more severe such that waiting for a full vaccine roll out is not a sustainable option.
After a successful project launch event in March 2022 and a Technical Committee Meeting held on 21 April 2022, the first Steering Committee Meeting of the Institutional Support to ECOWAS (ISE) Programme was held virtually on 17 May 2022. The meeting was co-chaired by Mrs. Halima Ahmed, Commissioner of Finance, ECOWAS Commission and Mrs. Cécile Tassin-Pelzer, Head of Cooperation, European Union Delegation to Nigeria and ECOWAS.
Mrs. Cécile Tassin-Pelzer indicated that ECOWAS is well on its way to achieve ‘‘the main objective of the programme which is to contribute to the transparent and accountable management of both donor and ECOWAS internal resources, through compliance with international standards’’. She also encouraged the ECOWAS Commission to integrate the activities of the RAO Support Unit within its structure.
CSOs called upon to promote the AU’s Free Movement Protocol (African Union)
African Civil Society Organizations (CSOs) have been urged to support and promote the implementation of the African Union’s Free Movement Protocol (FMP) and the Migration Policy Framework for Africa (MPFA). This clarion call to CSOs was made during the opening of the Regional CSO Sensitization Forum on the Continental Free Movement Protocol
The FMP and the MPFA have been established by the AU as the primary policy frameworks to address, manage, and promote migration and mobility on the continent. The FMP, in particular, aims to curb and eventually eliminate barriers to regional border migration (to work, visit, trade, live, etc.) within the continent. Eliminating these barriers translates to economic growth on the continent as well as improved migration procedures for African citizens. Unfortunately, despite the existence of these migration policy frameworks, policy uptake among AU Member States and their popularization within African civil society remains low and has not achieved the desired impact.
The United Nations Economic Commission for Africa’s (ECA) Ms. Edlam Yemeru has told the first International Migration Review Forum yesterday that using high-quality data is critical to fostering inter-regional cooperation on the implementation of the Global Compact for safe, orderly and regular Migration (GCM).
British International Investment (BII), the UK’s development finance institution (DFI) and impact investor, has signed a $100-million risk-sharing facility for supply chain finance with Citi, a global leader in trade and supply chain finance solutions. The new facility will provide systemic liquidity and help Citi grow its supply chain finance product across Africa.
The facility will be targeting SME suppliers and those underserved or excluded businesses. It will boost Citi’s annual supply chain finance volumes in Africa by up to $400-million, with amplified capital support that will enable businesses to better manage cash flow and onboard new suppliers to the supply chain, ensuring the continued flow of goods and services. This will help expand the scope of local businesses and ensure productive and inclusive economic opportunities for diverse groups and communities.
EAST African Community (EAC) partner states are working to come up with a common blue economy strategy that will align all the key sectors to boost its contribution to the Gross Domestic Product (GDP). This follows a move by the African Union (AU) to prepare a draft strategy on the blue economy, a programme which is overseen by experts in the fisheries sub-sector who are meeting in Dar es Salaam to discuss and improve the document before coming up with a final copy.
They are also discussing how to improve awareness on the potential of the sub-sector in Africa, identify policy and knowledge gaps among Regional Economic Communities (RECs) as well as how partner states will implement the blue economy strategy.
CORAF and the International Food Policy Research Institute (IFPRI) launched the fifth phase of the Agricultural Science and Technology Indicators (ASTI) program; Funded by the United States Agency for International Development (USAID), the fifth iteration of the program will provide actionable data on agricultural research and development in the twenty-three (23) countries in West and Central Africa (WCA), covered by CORAF; Policymakers and other stakeholders are expected to base their decision-making on the data generated through the program, to foster food systems transformation in WCA. CORAF and the International Food Policy Research Institute (IFPRI) officially launched the fifth phase of the Agricultural Science and Technology Indicators (ASTI) program on May 12, 2022.
“The ASTI program aims to provide information to stakeholders and generate knowledge on the inputs, performance and outcomes of agricultural research and development systems in low and middle-income countries. It builds a solid foundation for long-term monitoring of agricultural research and development investments and capacities,” said Dr. Gert-Jan Stads, Senior Program Manager at IFPRI. The ASTI program is an initiative of IFPRI that was launched in 2001.
Remarks by Managing Director Kristalina Georgieva
The war in Ukraine is gravely impacting Africa—and vulnerable people will suffer the most. The main transmission channels are well-known:
Sharply higher food and fertilizer prices are putting significant pressure on households—especially the poorest, for whom food accounts for 40 percent of consumption. And this is exacerbating the significant food security challenges that many countries in the region already face. Higher fuel prices will boost the import bill for oil importers. And this will make an already delicate fiscal balancing act even more difficult.
Together, these shocks will worsen external and fiscal balances—already strained by the pandemic—across many African countries.
Our projections show that the impact of the war in Ukraine on food and fuel prices threatens progress made by African economies in recovering from the pandemic. We expect growth in sub-Saharan Africa’s to slow to 3.8 percent in 2022 from 4.5 percent last year.
We know hunger is the world’s greatest solvable problem. Africa has tremendous potential to be a part of the solution. This requires progress on reforms that could rapidly and sustainably boost food production, including wheat, rice, and other cereal crops. These reforms would significantly help African economies become more resilient to shocks, more peaceful, and more prosperous—our common goals.
Of all continents, Africa is least responsible for climate change. It has contributed only a minute part of the Greenhouse gas emissions that are responsible for the climate emergency the world faces today. Yet, Africa faces the same arduous battle as the rest of the world to tackle the impacts of climate change, and to make itself resilient to climate change. Today, Africa remains one of the most vulnerable and the least climate-resilient regions in the world. This is manifest across all corners of the continent. In the Horn of Africa, millions are threatened as a historic drought looms. In the Sahel, climate change is fueling insecurity because of increasingly scarce resources. And Southern Africa is experiencing lethal rain and floods. Action has never been more urgent. These climate change-induced challenges cut across many countries and subregions of the continent. With improved regional integration and deeper regional cooperation, African countries could rally around collective climate adaptation solutions and accelerate a just energy transition. The regional approach would elevate the individual voices of countries and facilitate access to increased global climate finance.
The regional energy market has immense potential in strengthening and deepening regional integration but for many COMESA countries, the generation capacity is not enough to cover the nations own needs and allow for cross-border trade. According to the Chairperson of the Regional Association of Energy Regulators for Eastern and Southern Africa (RAERESA) Mr. Daniel Bargoria, plans are underway to improve the transmission capacity across borders, but the same is not enough to secure unimpeded trade across the countries and regions. He said better energy infrastructure facilitates relations between countries, stimulating integration of the productive sectors as it brings close together economic spaces, reduces and/or eliminates the physical barriers to trade and transport costs and expands the market size.
In his statement, COMESA Assistant Secretary General for Programmes, Dr Kipyego Cheluget observed that trade in energy was as critical and beneficial as trade in goods and other services. “Energy trade allows all nations to benefit from their comparative and competitive advantages and from the advantages of the economies of scale and scope,” he said. “The power sector should be open for the private sector investment and ownership.”
Global economy news
Ahead of a key ministerial meeting of the World Trade Organisation (WTO) next month, 30 members of the agency, including India, have begun text-based negotiations to also cover diagnostics and therapeutics in a decision that seeks to waive patents on Covid-19 vaccines. The Trade-Related aspects of Intellectual Property Rights (TRIPS) Council met informally on Thursday to take stock of the talks on a proposal floated by India, South Africa, the US and EU to waive patents on Covid-19 vaccines.
According to a Geneva-based official, differences remained among delegations on the first two days of the talks, with the EU insisting that there is a “delicate balance in the text which should not be upset” in the current outcome document on vaccine patent waiver, while the African Group emphasised on diversified production not only of vaccines but also of therapeutics and diagnostics for at least five years.
Thinking About Current Views on Trade (American Enterprise Institute)
Over the past few years, the world has experienced an escalating series of trade disruptions — the US-China trade war, the Covid-19 pandemic, supply chain disruptions, Russia’s war with Ukraine, dueling sanctions and export controls. The cumulative effects of these crises are driving a deep rupture between free-market democracies and Chinese/Russian-style authoritarianism that’s dividing the global economy along geopolitical fault lines. “Fragmentation is going to stay,” says Bob Koopman, chief economist of the World Trade Organization, the Geneva-based institution formed 27 years ago to ensure nations abide by the rules of international commerce. ”What we’re going to see is this reorganized globalization.”
The international production footprint of digital multinational enterprises (MNEs), which was already expanding, has grown even faster during the COVID-19 pandemic. UNCTAD’s Global Investment Trends Monitor published on 27 April unveils new rankings of the top 100 digital MNEs, whose total sales were almost 160% higher in 2021 than in 2016, with an average increase of 21% per year. Their net income grew by over 60% between 2020 and 2021, in contrast to a flat trend for the traditional top 100 MNEs, excluding those in the technology sector. The top 100 digital MNEs include leading players such as Uber, Twitter and Meta. The report also looks at the impact of the world’s largest digital MNEs on trade and investment. “Digital MNEs can provide a boost to competitiveness across all sectors, new opportunities for business and entrepreneurial activity and new avenues for market access and participation in global value chains,” said James Zhan, UNCTAD’s director of investment and enterprise development.
As financial markets have taken a hit in recent weeks, cryptocurrencies have especially been under fire since their values appear to have devalued faster than traditional assets. In this context, some have dismissed cryptocurrencies as a speculative investment; however, the underlying blockchain technology upon which many of them are based should not be conflated with cryptocurrency and its perceived flaws. Worldwide, companies have experienced widespread sourcing disruptions since the start of the pandemic, and increasingly, actors along the supply chain are embracing blockchain and similar technologies in order to facilitate compliance, transparency, and efficiency in cross-border transactions and to alleviate some of the ongoing disruptions.
The technology can also help make trade less paper-intensive, as well as more compliant, inclusive, and socially responsible, thereby reducing costs. This is especially good for small businesses, which are disproportionately affected by red tape at the border, and for government agencies seeking to improve reliability and facilitate trade.
At the WTO’s Cotton Days meetings on 11-12 May, the Cotton-4 (Benin, Burkina Faso, Chad and Mali) and other cotton-producing developing countries repeated the call for cotton trade reforms and an outcome on cotton at the 12th Ministerial Conference (MC12), scheduled for 12-15 June. WTO members were also updated on preparations for World Cotton Day 2022 and a Partners’ Conference in July. An information session shed light on supply chain disruptions and ways to build a more resilient cotton industry post-pandemic.
The G7 Development Ministers of Canada, France, the EU, Germany, Italy, Japan, the United Kingdom, and the United States of America convened in Berlin on May 19 under the theme “Response to Multiple Crises on the African Continent – focusing on Food Security”.
Participants reiterated their commitment to protecting open, inclusive, and rules-based international cooperation that leaves no one behind, and emphasized that a rules-based multilateral system is key to the solution of global challenges such as food insecurity and malnutrition, climate change and a just energy transition, land degradation and biodiversity loss.
The G7 Development Ministers and International Organisations called on their African partners to take full advantage of the African Continental Free Trade Agreement (AfCFTA) in order to increase food security and nutrition on the continent. Participants welcomed the upcoming meeting of African Ministers of Agriculture and Ministers of Finance on the African Emergency Food Production Plan organised by the African Union Commission and the AfDB. Participants furthermore welcomed the formation of the Coordination Group of the United Nations Economic Commission for Africa, Afreximbank, the African Union Commission and the AfCFTA, which aims at pooling procurement for food, fertilizers, and agricultural chemicals that will allow African economies access to items of first necessity at a lower cost.
Last year, most of the 140 million people suffering acute hunger around the world lived in just ten countries: Afghanistan, the Democratic Republic of the Congo (DRC), Ethiopia, Haiti, Nigeria, Pakistan, South Sudan, Sudan, Syria and Yemen – eight of which are on the Council’s agenda. “Let there be no doubt: when this Council debates conflict, you debate hunger. When you make decisions about peacekeeping and political missions, you make decisions about hunger. And when you fail to reach consensus, hungry people pay a high price,” Mr. Guterres spelled out. Though pleased to announce that the Central Emergency Response Fund is releasing $30 million to meet food security needs in Niger, Mali, Chad and Burkina Faso, he said sadly: “But it is a drop in the ocean”.
Chair’s Statement: Roadmap for Global Food Security – Call to Action (United States Mission to the United Nations)
We call on all United Nations Member States, international organizations, the private sector, and civil society and academia to urgently support the emergency response to address humanitarian needs and to also focus on building resilient and sustainable food systems particularly for those most vulnerable to food insecurity and malnutrition. We issue this Roadmap for Global Food Security–Call to Action to affirm our commitment to act with urgency, at scale, and in concert to respond to the urgent food security and nutrition needs of millions of people in vulnerable situations the world.
The World Bank today announced actions it plans to take as part of a comprehensive, global response to the ongoing food security crisis, with up to $30 billion in existing and new projects in areas such as agriculture, nutrition, social protection, water and irrigation. This financing will include efforts to encourage food and fertilizer production, enhance food systems, facilitate greater trade, and support vulnerable households and producers. “Food price increases are having devastating effects on the poorest and most vulnerable,” said World Bank Group President David Malpass. “To inform and stabilize markets, it is critical that countries make clear statements now of future output increases in response to Russia’s invasion of Ukraine. Countries should make concerted efforts to increase the supply of energy and fertilizer, help farmers increase plantings and crop yields, and remove policies that block exports and imports, divert food to biofuel, or encourage unnecessary storage.”
The World Bank is working with countries on the preparation of $12 billion of new projects for the next 15 months to respond to the food security crisis.
Mr. Guterres was addressing the official opening of a meeting to review progress towards implementing the Global Compact for Safe, Orderly and Regular Migration, adopted by governments in 2018. The first International Migration Review Forum will also examine the interplay between migration and broader concerns, including the pandemic, conflict, development finance, and the climate emergency. “The COVID-19 pandemic has painfully demonstrated how far we still are from realizing rights-based, child-sensitive, and gender-responsive governance of international migration for all,” he said.