tralac Daily News
AfCFTA holds opportunities for South African industry (Engineering News)
With progress being made on negotiations for the implementation of the African Continental Free Trade Area (AfCFTA), South Africa’s steel industry could capitalise on opportunities emanating from AfCFTA agreement, once it is implemented. Tralac Trade Law Centre executive director Trudi Hartzenberg told delegates attending the Mainstreaming the Steel Master Plan Conference on May 20 that 43 African States that have signed the AfCFTA agreement have now ratified it. She clarified, however, that this did not mean that trade could start under the agreement immediately, given that there were some outstanding issues that needed to be resolved first.
Trade would continue within the continent under agreements that were already in place, and once AfCTA becomes operational, would run parallel to these. However, once AfCFTA was fully implemented, this would change the dynamics in terms of how countries like South Africa would trade with other important economies on the continent, such as Egypt and Nigeria, Hartzenberg outlined.
She also noted that there would be distinct benefits for South African producers. Hartzenberg outlined that there was considerable scope to improve the country’s steel export performance on the continent.
IF the government does not understand the spirit of the Steel Master Plan, it will not succeed. For it to succeed, there are micro-actions that need to be addressed, according to Minister of Trade and Industry Ebrahim Patel. He said this week that the business environment - including the challenges of energy and transport logistics, stimulating the economy with an infrastructure roll-out, and the broader reigniting of private investment in mining and manufacturing property - needed to be addressed.
Trade, Industry and Competition Minister Ebrahim Patel told Parliament that South Africa could expect a draft policy to address the illegal trade of copper cable and scrap metal by the end of July. Patel tabled a R10.9 billion budget vote for the Department of Trade, Industry and Competition in Parliament on Friday. The government has been grappling with the illegal trade of scrap metal, which has largely been fed by the theft from the country’s freight and passenger rail network. Earlier this month, Public Enterprises Minister Pravin Gordhan called for a temporary ban on the sale of scrap metal in the country to eliminate the external market for infrastructure that has been vandalised and stolen.
On Friday, Patel told Parliament that he and Gordhan were working together to build support structures for industries to address challenges, including energy challenges and stopping scrap metal syndicates. He said a scrap metal policy was in the works and would be drafted soon.
“We are building an enabling environment for industrialisation [that] requires securing our key network infrastructure, such as energy and logistics, and protecting our electrical grid and rail network from the continued threat of scrap metal syndicates.
“By the end of July, we will have developed and tabled a draft policy on scrap metal, which will introduce a blend of domestic and export measures to address illegal trade in copper cable and scrap metal,” said Patel.
Speakers and exhibitors from various African countries will convene for the next three days in Swakopmund for the inaugural Discover Namibia Intra Africa Trade Expo and Africa Summit that will start today at the Swakopmund Hotel and Entertainment Hotel. The three-day Trade Expo & Business Summit is the brainchild of the Africa Economic Leadership Council (AELC), a pan African business organisation co-founded by Swakopmund local authority councillor Heinrich Hafeni and Percy Morapedi Koji from South Africa.
“The Summit aims to bring together political, business and economic leadership to discuss how best intra-African trade and business can be accelerated under the Africa Free Trade Agreement (AfCTA). The AfCFTA came into operation in January 2021 and promotes the formation of a single market for the free movement of goods across 54 African countries,” Hafeni explained.
The African continent has pronounced itself and is open for business. However, it is up to us entrepreneurs to take it further and create networks. We want to unpack opportunities that these networks create and tell Namibians and all other African entrepreneurs that there are opportunities outside their relevant countries,” Hafeni said.
Case for basic commodities imports (The Herald)
Following the announcement of import duty suspension on some basic commodities by the Permanent Secretary in the Ministry of Finance and Economic Development, Mr George Guvamatanga on May 16, there was a loud outcry from the expected quarters, who cited fears of the move affecting industry. The reaction demonstrated that those who cried the most did not have a full appreciation of the challenges that Zimbabwe is facing and were selfish or out rightly dishonest with the nation on the matter. The key basic products which resulted in the suspension of import duty were salt, cooking oil, rice, flour, sugar, margarine, mealie-meal, milk powder, infant formula, tea, petroleum jelly, toothpaste, bath soap, laundry soap and washing powder. People use these goods in their day-to-day lives. Among those organisations which were not happy with the move was Buy Zimbabwe, whose general manager, Alois Burutsa commented that the “development is likely to reverse the industrialisation gains that had been made by local industry in the supply of basic commodities.”
Other stakeholders questioned the rationale of Government opening the floodgates for imports at a time that products manufactured locally occupied 75 percent of the available retail space. It is only last week that the Confederation of Zimbabwe Industries (CZI) announced that last year the country’s capacity utilisation rose to 56,25 percent.
Kenya set to host 25 African coffee producing countries (Pulse Live Kenya)
The summit themed “Sustainable Development and Economic Growth in the African Coffee Sector,” will involve attendees discussing ways on how to boost domestic output and value-addition of the respective commodity. “The main objectives of the summit include marshalling consensus on a declaration to include coffee as an anchor commodity in the African Union in harmony with the AU Africa Agenda 2063,” revealed Inter-African Coffee Organisation (IACO). The summit which will be graced by President Uhuru Kenyatta will also see the attendees discuss on how to increase value addition and boosting domestic consumption and expanding coffee trading regionally under the African Continental Free Trade Area (AfCFTA) framework.
Kenya has been a member of the Inter-African Coffee Organization (IACO) since 1960 when IACO membership was 11 States, to 25 States today. According to the Kenya National Bureau of Statistics (KNBS) earned Sh24.2 billion (213million U.S. dollars) in the period January to November 2021, with the value surpassing the entire 2020 earnings that stood at 196million dollars.
Horticulture earnings fall Sh20 billion in first quarter (Business Daily)
Horticulture earnings dropped by Sh20 billion in the first quarter of this year on the back of low-quality avocados and a sharp decline in returns from flowers. The Kenya National Bureau of Statistics (KNBS) data indicates the export value of the produce declined to Sh26 billion in the period under review from Sh46 billion in the corresponding time a year earlier. Head of Horticulture Directorate Benjamin Tito said a good number of avocados that were exported were not mature enough, leading to low value and huge rejection of the produce in the world market, which would have lifted earnings.
However, Mr Tito said, export earnings for horticulture will pick from April going forward after the ban on harvesting of avocado was lifted in March. Flowers normally make the largest share of the total horticulture export earnings as they are high-value crops.
Cotton production hit as supplier of GM seeds pulls out (Business Daily)
An Indian firm contracted to supply genetically modified (GM) cotton seed to Kenyan farmers has stopped distribution of the planting material, dealing a big blow to President Uhuru Kenyatta’s manufacturing agenda. Agriculture Cabinet secretary Peter Munya said the Indian-based conglomerate Mahyco – the sole maker and distributor of the seed worldwide, has had running problems with supplying the product to local farmers. Kenya had in 2018 approved the cultivation of GMO cotton to boost production under the open field cultivation while commercialisation started in 2020 as the government sought to increase volumes of the crop to spur manufacturing, which is one of the items on the Big Four agenda.
“The challenge that we are having now is seed multiplication, a company that was given that role had some challenges but I think that is being addressed by the authorities,” said Mr Mugiira. Cotton production has been falling in the country since the 1980s with Kenya relying on imports to bridge the deficit.
High fuel, commodity prices dampen Museveni’s first year in his sixth term (The East African)
The high cost of living, a widening budget deficit, corruption and growth uncertainties continue to blot Ugandan President Yoweri Museveni’s sixth term in office. The president, expected to address the nation this weekend after the end of the first year of his current term, has been facing calls from businesses and the public to tame the escalating cost of commodities, especially fuel, whose retail price has risen over 70 percent in the past year.
Although the Bank of Uganda says the economy is recovering from the pandemic downturn, domestic growth weakened in March 2022 due to the rising prices of food and fuel. Juliet Najjinda, manager of tax services at PricewaterhouseCoopers Uganda, said it is time the government introduced a fuel subsidy to reduce pump prices, as the manufacturing sector is feeling the heat.
“The outlook of the country seems to indicate there are two countries in one; the greater North and South,” said Mr Kivumbi, the shadow minister of finance and economic planning. “If not addressed, it poses a threat to the security of and posterity of the country.”
Willis Bashasha, director of manifesto implementation in the Office of the President, said that they are facing challenges in carrying out their policies.
Kinshasa enters shipping business, set to rock EA boats (The East African)
The Democratic Republic of Congo is entering shipping business with eyes on East Africa’s two biggest ports in Kenya and Tanzania, signalling further intent by the bloc’s newest member to ease its importation channels. This week, officials from Kinshasa announced they had obtained yard spaces in Mombasa and Dar es Salaam to roll out offices for DR Congo’s new shipping line: The Lignes Maritimes Congolaises (LMC) that will start operations from June. The decision that came just about a month after the DR Congo was formally admitted into the East African Community reflects the country’s desire to tap into the benefits of being in the trade bloc, where it is now cheaper and easier to import as tariffs are headed for reduction.
The Kenya Ports Authority (KPA) is banking on the admission of the DR Congo to the East African Community to increase its business market in the region. LMC, the state-owned shipping line mandated with maritime transport and the operation of marine vessels in DRC, is targeting to channel more import-export cargo through the Port of Mombasa, as well as raise volumes in Dar.
“After a discussion on operational and logistics issues with KPA container terminal principal operations officer Michael Bokole and his team, we have agreed to start our operations from Mombasa starting next month. ‘‘This will help in creating more jobs and business opportunities not only for DRC but to Kenya,” said Dr Mulunda.
Opening address to EU-Zambia Economic Forum, Lusaka (European Commission)
Our Economic Partnership Agreement is a great tool. The Agreement removes trade barriers, encouraging healthy competition and lower prices for consumers. It can benefit both Zambia and Europe by helping our two regions to sustainably invest in each other and trade with each other, for improved food security and sustainability.
Another significant step forward in this direction is the African Continental Free Trade Agreement, which we fully support.
The Free Trade Agreement addresses a fundamental lesson we in Europe have learned through our historical experience: removing (some) tariffs alone does not guarantee the improved flow of trade. The trading partners must also harmonise their regulatory environment, allowing businesses to invest and trade across borders with a sense of legal certainty.
I am convinced that we can create a continent-to-continent free trade area between the European Union and Africa in the long-term, opening new perspectives for competitive businesses and healthy economies in both continents.
Dar port reaps from rising political heat ahead of Kenya polls (The East African)
The heat from Kenya’s campaigns ahead of the August 9 General Election is affecting the flow of goods on the Northern Corridor, with Tanzania benefiting from the windfall as more cargo destined for the Great Lakes region is diverted to the Dar es Salaam port.
With memories of the 2007/08 post-election violence that disrupted transport on the corridor still fresh — and a $63 million compensation award ordered by a Nairobi court still pending — many importers, especially Ugandans and Rwandans, are opting for the Central Corridor. Due to this cargo flight, transit volumes through the Dar es Salaam port to the Central Corridor have recently recorded significant growth as Mombasa registers plateaued or declining volumes of goods on the northern route. According to the latest Mombasa Port Corridor Community Charter report, transit volumes through the Dar es Salaam port grew at 21 percent in 2021 while those through the port of Mombasa declined 6.2 percent in the same period.
The decline is blamed on a move by importers in Uganda, Kenya’s largest transit market in the region, to divert more cargo to Dar es Salaam.
Strengthening Nigeria’s Border Policing, Mgt Mechanisms (Leadership News)
The federal government, in April, 2022, approved the reopening of Idiroko, Jibia, Kamba and Ikom land borders. This is coming three years after the government shut down the borders due to the incessant smuggling of arms and different contraband goods. Meanwhile, it has been noted that border closure control policy has not yielded the desired result. While the primary aim of the closures was to curtail food imports into Nigeria, they blocked other vital imports and exports from and to Benin, Niger, and Cameroon. Communities along the border and small and medium-sized businesses that trade over the boundaries lost their livelihoods overnight and saw their operations hampered by bureaucracy.
Stakeholders commended the reopening of the border, while calling for border policing and management mechanisms. To them, border management is a function of regime types in place for the purpose of maintaining border administration. It includes routine administration to be undertaken at the border and in border zones. Border management generally rests on governmental surveillance agencies like the immigration, customs and police forces to ensure a lawful movement of human and economic resources in the national interest.
Many small businesses depend on cross border trade for a living. Many manufacturers also leverage the ECOWAS Trade Liberalisation Scheme (ETLS) to boost their business. Many also source their raw materials from countries in the sub region.
“It is equally important to facilitate the competitiveness of products made in Nigeria. Huge disparities in operating and production costs relative to conditions in other countries of the sub region pose huge smuggling risks. We need to provide more incentives to Nigerian industries to achieve better competitiveness status,” said CEO of Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf.
The COVID-19 pandemic in 2020, and Bata explosions in 2021, struck Equatorial Guinea at a time when its economic vulnerabilities had already been aggravated by a prolonged period of depressed hydrocarbon prices, and seven consecutive years of decline in real GDP. As a result, the shocks further adversely impacted economic activity, the banking system, fiscal revenue, and social outcomes. While non-hydrocarbon GDP is estimated to have increased by 1.3 percent in 2021 due to a deceleration in COVID-19 cases and easing of pandemic containment measures, real GDP is estimated to have declined by 3.5 percent.
Despite recent negative shocks, the near-term outlook has improved considerably. Real GDP is projected to grow by about 6 percent in 2022 due to base effects from the lower-than-expected gas production in 2021, and the start of Bata reconstruction. The recent relaxation of pandemic containment measures and higher international oil prices are helping boost government revenues, along with export earnings, narrowing the external current account deficit. However, high non-performing loans (driven by the government arrears with construction firms) and undercapitalization in the domestic banking system, are a hinderance to private credit expansion, limiting further growth in private domestic investment and non-hydrocarbon sector.
Policies need to balance short-term urgencies ¾ including to support food security and the banking system ¾ with long-lasting overarching reforms to ensure macroeconomic stability, improved social outcomes, and strengthened governance and transparency, delivering sustainable and inclusive economic growth.
African trade news
ECA launches Africa Trade Exchange platform to facilitate trading under AfCFTA (Ghana Business News)
The Africa Trade Exchange (ATEX), a business-to-business (B2B) e-commerce platform, was launched during the official opening of the 54th Conference of African Ministers of Finance, Planning, and Economic Development (CoM2022) on 16 May in Dakar, Senegal. The launch took place in the presence of Senegal’s president, Macky Sall, who is also the Chairperson of the African Union. The platform was developed by the Economic Commission for Africa (ECA) and the African Export-Import Bank (Afreximbank), in collaboration with the African Union and the AfCFTA Secretariat to serve as a B2B and business-to-government (B2G) digital marketplace. ATEX will enable pooled procurement of basic commodities to ensure countries have access to scarce supplies in a transparent manner. ATEX is connected to the digital ecosystem to support the implementation of the African Continental Free Trade Area (AfCFTA) Agreement and provide buyers and member States with quality products from verified suppliers in a more efficient way at average cost, thereby improving cross-border trade.
Local firms urged to tap into AfCFTA (Mmegi Online)
Local businesses have been urged to take advantage of the African Continental Free Trade Area (AfCFTA) to open themselves up to the opportunities available on the continent. Pan African Chamber of Commerce and Industry (PACCI) executive director, Kebour Ghenna told a Small Business Exporters conference this week that Africa should find another way of fostering prosperity by building economic solidarity that can become the base for progressive power needed to create a transformed African economy. “If we don’t get busy making the AfCFTA work and opening back up to the continent, we’ll be left on the outside looking in,” he said. “An AfCFTA that does not embrace solidarity is doomed to fail and fail swiftly. “An AfCFTA that expands inequality and only empowers the rich economies of the world should not be acceptable.”
Senegal’s Macky Sall: Multilaterals put Africa in ‘straitjacket’ (African Business)
Senegalese President Macky Sall has criticised the multilateral financial system and argued that the current deal for Africa is a handbrake on its development. “Explaining underdevelopment in Africa is very simple. The rules set up by international institutions have put us in a straitjacket… The rules are unfair, outdated, and need to be disputed,” he told delegates attending the ECA’s Conference of African Ministers of Finance, Planning and Economic Development in Dakar’s conference centre. “It is time for Africa to speak out. The voices should not just be those of leaders but of finance ministers and others affected by a system that works against the continent. We must look for innovative solutions.”
Africa not where it should be: Analysts (The Herald)
Advocates of pan-Africanism and decolonisation have urged African governments to invest in the creative industry and establish pro-African institutions to successfully defend the continent against neo-liberalism and its proxies coming in the form of non-governmental organisations (NGOs). The sentiments come after President Mnangagwa yesterday, writing in his column in The Herald’s sister paper, The Sunday Mail, warned the nation against a rising “new wave of fake nationalism” which is using all possible means to re-establish Western dominance in Africa. NGOs, mostly funded by Western countries, have been criticised for representing a continuity of the work of some of their precursors, the missionaries and voluntary organisations, that co-operated in Europe’s colonisation and control of Africa.
“Right now African borders are closed but there are three things that are supposed to move freely on this continent. The free movement of people, capital and goods and services was agreed in 1963 and there is no need for successive summits to implement these resolutions since 1963. We can defeat these NGOs and it is in our hands to do so. “Africa now needs to be more radical, courageous and unapologetic because we are not where we are supposed to be. We have Africans who cannot move freely on our continent with countries demanding visas while Europeans and Americans travel without any restrictions here,” said Ambassador Muzavazi.
“As a continent we need to acknowledge that the best way to have speedy growth in Africa will only be achieved through regional economic integration to achieve positive growth and development agenda. What African leaders need to work on is to invest in regional infrastructure, policy harmonisation and increased free movement of cross-border investments and labour. That will help us get where our founding fathers wanted us to be,” said Mr Muroiwa.
A new digital information system to monitor and speed up cross border truck movements and driver health checks at land borders in Eastern and Southern Africa was launched on 20th May 2022 at Tlokweng Border Post in Botswana. Part of the Team Europe’s Global Gateway initiative and response to the COVID-19 pandemic, the Corridor Trip Monitoring System (CTMS) was funded by a €1.6 million grant from the European Union (EU) and more than €500,000 from the Federal Republic of Germany. The CTMS has now been installed at major commercial border posts in Botswana, Namibia, Zambia, and Zimbabwe, along sections of three regional transport corridors, and will soon be installed in other Eastern and Southern African countries. The CTMS is spearheaded by the Southern African Development Community (SADC) on behalf of COMESA, EAC and SADC.
Once fully operational, the system will minimise the need for paperwork and speed up border procedures, reduce waiting and transit times and allow trucks to deliver essential goods more quickly, while ensuring health and safety measures under COVID-19 protocols.
The system equips border agents with hand-held devices to check, validate and register the COVID-19 health status of truck drivers and their crews, as well as the compliance of their vehicles with cross-border regulations and road safety rules. Transport operators will use a custom-made app to upload vehicle and driver health information onto the CTMS website. This information can then be instantly accessed by authorised border and law enforcement officials in the country of destination and transit by scanning QR codes shown by drivers. The CTMS also allows authorities and operators to monitor driver trip progression and deviations against pre-approved routes and designated rest areas.
The system builds on the achievements of the €21 million EU-funded Tripartite Transport and Transit Facilitation Project (TTTFP). Key results of the TTTFP include the development of the Guidelines for Transit of Essential Goods during the pandemic state of emergency and the two Tripartite Multilateral Agreements (the Vehicle Load Management Agreement and the Multilateral Cross Border Road Transport Agreement).
Zambia weighs in on SADC Model Law (Zambia Daily Mail)
STANDING Committees of the SADC Parliamentary Forum and the Regional Women’s Parliamentary Caucus (RWPC) have unanimously endorsed a draft SADC Model Law on Public Financial Management (PFM) and will soon commend it to the highest decision body of the Forum, the Plenary Assembly, for adoption. The endorsement happened at the end of a two-day consultation over the draft Model Law on PFM that took place in Johannesburg, South Africa, recently.
The validation was the climax of a series of similar engagements with different stakeholders over several weeks, as the SADC PF sought buy-in and strengthening of the model law, the first of its kind in the world. The range of consultations gave rise to a wide range of improvements to the model law reflecting the perspectives and objectives of a wide range of public and private professionals with involvement or interest in public financial management.
Zambia’s Minister of Finance and National Planning Situmbeko Musokotwane was the guest of honour at the final validation meeting, which took place on April 28-29, 2022. In a keynote address, Dr Musokotwane said the impact of public finances spent on community projects is important to Members of Parliament (MPs) because they are the interface with the communities they represent.
ECOWAS Revenue decreases by 5% - Commissioner (Federal Radio Corporation of Nigeria)
The Commissioner for Finance at the ECOWAS Commission, Mrs. Halima Ahmed says there was a 5% deduction of the revenue of the Economic Community of West African States, ECOWAS, in 2022. She made this known in Lome, Togo, where she gave an overview of the Community’s 2020 Consolidated annual financial report at the delocalized meeting of the joint committees of the ECOWAS Parliament which includes Public Accounts/Administration; Finance and Budget; Macroeconomic Policies and Economic Research; as well as Trade and Customs. According to Ahmed, the revenue accrued to the Community from all sources decreased by about 13 million UA (Unit of Account), representing 5 percent, from 257 million UA in 2019 to 244 million UA in 2020.
The President of the African Development Bank (AfDB), Dr. Akinwumi Adesina, says that the financial institution would lend $500 million to women in 2022. This is as the bank’s Affirmative Action for Women in Africa (AFAWA) is raising the sum of $5 billion with the support of the French President, Emmanuel Macron and G-7. This disclosure is contained in a statement posted on Sunday, May 22, 2022, by Adesina on his official Twitter account, where he also added that the bank paid out $483 million to financial institutions to lend to women businesses in 2021. Adesina, whose statement is coming as the bank commences its Annual Meetings for 2022, is commending the Board of Governors, Board of Directors, management and all the hardworking staff of the bank for all their relentless work.
The AfDB boss said the board had approved a crisis response facility of up to $10 billion based on rigorous risk assessments when the COVID-19 pandemic struck, adding that it launched a $3 billion COVID-19 social bond on the global capital markets, the highest ever US dollar-denominated social bond in world history.
During the global SEforALL Forum in Kigali from 17-19 May 2022, Ministers and high-level representatives from the Democratic Republic of Congo, Ghana, Kenya, Malawi, Morocco, Nigeria, Rwanda, Senegal, Uganda, and Zimbabwe met to discuss the requirements for a just and equitable energy transition in Africa. The meetings were facilitated by the Rwanda ministry of infrastructure, SEforAll and ECA. The outcome of this Ministerial meeting was the Kigali Communique from the 10 countries that expresses seven key principles to address development gaps, and to put Africa on a pathway, aligned with the Paris Agreement on climate change, to economic prosperity and Net-Zero.
With the communique, Rwanda and the other represented countries call on partners to align with these principles of a just and equitable energy transition in Africa, to turn their commitments into action, and to join them in working towards meaningful progress on an energy transition that will benefit our future generations.
In the aftermath of the COVID-19 pandemic, world hunger increased substantially – estimates from the State of Food Security and Nutrition around the World (SOFI) reveal that as many as 161 million people fell into hunger between 2019 and 2020, bringing the world´s total to 811 million people facing food insufficiency. In other words, about one in 10 people in the world went to bed without enough nutrition in the first year of the COVID-19 pandemic.
Africa has been particularly vulnerable: about 21% of people on the continent suffered from hunger in 2020, a total of 282 million people. Between 2019 and 2020, in the aftermath of the pandemic, 46 million people became hungry in Africa. No other region on the world presents a higher share of its population suffering from food insecurity. Also, African households spend a large share of their income on food. According to a recent note in the Financial Times, citing estimates from the IMF, food represents 17% of expenditure in advanced economies, in sub-Saharan Africa the figure is 40%.
The stress signals are present, but the challenge of growing hunger in Africa does not need to become a worse tragedy: the world has learned from past experiences, and the sooner national governments and the international community act, the better the results.
Some actions have already been taken – others not taken. For example, food trade has not been severely halted as it was during the 2007-2008 food price spike. This is a good start. However, a complex problem with multiple causes and consequences needs a battery of policies and interventions, many of which have proven effective in the past.
The ability to access food via trade, production, work, or transfers change in time of crisis, especially for some vulnerable groups. Mr. Sen´s insight is so powerful because it recognizes that issues of hunger, starvation and malnutrition go well beyond food systems and depend on social arrangements (including the markets for food and labour, for instance), the economy, and the functioning of the state and governments.
Amid a looming food crisis, Ethiopia has emerged as an African country that has taken significant steps to achieve self-sufficiency in food production. With support from the African Development Bank’s agricultural Technologies for African Agricultural Transformation program, Ethiopia has not imported grain in 2022, African Development Bank President Akinwumi Adesina emphasized during a meeting with G7 development ministers meeting on Thursday. This comes as Africa faces a severe shortage of at least 30 million metric tons of food supplies arising from the Russia-Ukraine war. The war has especially affected wheat, maize, and soybeans imported from both countries.
Ministers from several African states, including Senegal, South Africa, Tunisia and Zambia attended the meeting, convened by Germany, which holds the current presidency of the G7. The African ministers played an active part in discussions on the core subject matter: “Response to Multiple Crises on the African Continent – focusing on Food Security.” Representatives of the African Union Commission, the International Fund for Agricultural Development, the International Monetary Fund, the United Nations Development Programme, the World Bank Group and the World Food Programme also took part in the meeting.
Albert Muchanga, commissioner for Trade and Industry of the African Union Commission, said despite efforts across Africa to resolve food production, Africa remained a net importer of food, and stressed that the time had come to end this.
The African Development Bank Group’s Board of Directors on Friday approved a $1.5 billion facility to help African countries avert a looming food crisis. With the disruption of food supplies arising from the Russia-Ukraine war, Africa now faces a shortage of at least 30 million metric tons of food, especially wheat, maize, and soybeans imported from both countries. African farmers urgently need high-quality seeds and inputs before the planting season begins in May to immediately boost food supplies. The African Development Bank’s $1.5 billion African Emergency Food Production Facility is an unprecedented comprehensive initiative to support smallholder farmers in filling the food shortfall. The African Emergency Food Production Facility will provide 20 million African smallholder farmers with certified seeds. It will increase access to agricultural fertilizers and enable them to rapidly produce 38 million tons of food. This would be a $12 billion increase in food production in just two years.
China’s months-long lockdowns of Shanghai and other major cities amid a Covid-19 outbreak has sparked global logistics delays feared to last months, as well as concerns of a slowdown in the world’s No 2 economy. But there will be minimal impact on Chinese imports from Africa, especially of agricultural goods and industrial raw materials, even though exports to the continent will be hit, according to observers. Shanghai, home to the world’s busiest container port, has been under near-total shutdown for almost eight weeks. This has caused a huge backlog of cargo vessels offshore, with importers expected to face further delays after prolonged factory and port closures.
Most African countries are heavily dependent on China trade, with the resource-rich among them exporting most of their oil, minerals and metals to the country, while Chinese exports to the continent include electronics, machinery, fabrics, clothing and home appliances. “Given that Shanghai and the surrounding region is a major production hub of electronics, exports of these products to Africa will be heavily disrupted, possibly through the second and third quarter of this year,” said Tommy Wu, Hong Kong-based lead China economist at Oxford Economics.
China has promised to grow imports of African agricultural products, to offset the heavy domination of metals and raw materials, and improve the trade balance.
Why export to the UK (GOV.UK)
The UK and some African countries have trade partnership agreements, providing preferential trading terms. The UK government also funds various schemes to encourage businesses from Africa to export to the UK.
Trade agreements between 2 countries or groups of countries enable importers and exporters to trade under preferential terms, which reduces costs. For example, 2 countries may agree to charge each other low or zero tariffs on specific types of goods, or to recognise each other’s product standards. The UK currently has trade agreements, called Economic Partnership Agreements (EPAs), with these countries in sub-Saharan Africa:
The UK government has proposed new trading rules for developing nations under the Developing Countries Trading Scheme (DCTS). The DCTS aims to grow free and fair trade with up to 70 qualifying developing nations, supporting jobs and growth.
As well as supporting trade between the UK and Africa, the UK is looking for exports in sectors where economic development can have the greatest development effect in Africa.
Global economy news
To prevent the acceleration of acute food insecurity trends in the coming months and years, the United Nations has stressed the importance of expanding food production at the country-level by providing cash and critical inputs for cereal and vegetable production, as well as protecting livestock with treatments, vaccinations, feed and water.
This was emphasized at a United Nations Security Council meeting, held in New York, and chaired by the U.S. Secretary of State Antony Blinken.
“Agrifood supply chains and value chains must be strengthened with the engagement of the public and private sector in support of smallholder farmers and households,” Director General, FAO, QU Dongyu said.
The pandemic has had far-reaching consequences, with unprecedented disruptions, including to the global economy and world trade. Talk us through the impact on global trade. Ngozi Okonjo-Iweala: We’ve seen the most visible kind of form of impact on global trade, which is the supply chain issues that we’re facing now. I can start there. I think when the pandemic struck, many investors, many businesses, perhaps decided that there was going to be a long or deep recession and pulled back on investment plans. Shipping companies left containers in the wrong places. They didn’t know that anything other than a deep recession would follow. And what happened is that with the massive amounts of fiscal stimulus we saw—particularly in the developed countries, particularly in the US, $26 trillion worth of fiscal stimulus—and monetary policy easing, money in the pockets of households and easing for businesses have led to unprecedented demand for goods. That was also heightened by the digital access to online or digital trading, to e-commerce. And so we have a supply-demand mismatch that has led to the kind of supply chain issues that we’ve seen.
Amid the severe crisis in global trade came another major catastrophe on both the humanitarian and economic levels — the Russian-Ukrainian War, which continues to rage and shows no signs of ending any time soon.
The World Trade Organisation (WTO) has some solutions in response to the need for international cooperation and fruitful coordination between the countries of the world and dealing with export restrictions with some caution in order to alleviate the impact of these crises worldwide.
Global trade has been impacted significantly. Supply chain problems have worsened. Our economists have issued their trade forecast for 2022 and 2023, taking into consideration the war in Ukraine. They predict that global trade growth this year could be cut by one third, from the 4.7% the WTO forecast last October to 3%. Some regions will be more strongly affected by the conflict than others. Europe is the main destination for both Ukrainian and Russian exports and will likely experience the brunt of cuts in supply. But it is Africa and the Middle East that will likely suffer the most from reduced shipments of grains and other foodstuffs. This trade disruption will boost prices of agricultural goods and bring negative consequences for food security in poorer regions.
A Threat to Global Innovation at the WTO (Alice Echo News-Journal)
The World Trade Organization recently announced that the United States, European Union, India, and South Africa had finalized a proposal to waive intellectual property protections for Covid-19 vaccines. Soon, all 164 WTO member nations will vote on whether to implement the proposed waiver. The terms it outlines would be revolutionary — that is, in undermining the rules for intellectual property protection. The bedrock of this system is the Agreement on Trade-Related Aspects of Intellectual Property Rights, known as the TRIPS Agreement — which since 1995 has established explicit minimum standards WTO members must meet in respecting one another’s patents, trade secrets, trademarks, and copyrights.
Yet some nations in the developing world have long bristled at TRIPS and sought to modify it. This has especially been true in the case of medicines.
But the TRIPS Agreement includes a provision that addresses this concern. When a country is facing an “extreme urgency” — say, a public health crisis — and is unable to secure the medicine it needs or negotiate a voluntary license with a patent holder, it can issue a “compulsory license” to authorize local manufacturers to produce the needed medicine for its own population. But this safety valve does not invalidate the ownership of the patent-holder — thus preserving the core of IP protection.
Pandemics and epidemics pose risks to lives, societies, and economies, and their frequency is expected to increase as rising trade and increased human interaction with animals leads to the emergence of new diseases. The COVID-19 pandemic teaches us that we can and must be better prepared, with scope for much greater global coordination to address the financing, supply-chain, and trade barriers that amplified the pandemic’s economic costs and contributed to the emergence of new variants. This paper draws seven early lessons from the COVID-19 pandemic that could inform future policy priorities and help shape a better global response to future crises.
Container ships spend 20% more time in ports (Sunday Observer)
If you’ve never lived near a port or worked in one, you may be unaware of the vital role they play in our lives. Most of the products we consume daily travel through ports, making them a key link in the global production and supply chains we rely on. “Our livelihoods – food, jobs, energy – depend on functioning and resilient supply chains,” UNCTAD Secretary-General Rebeca Grynspan said. How ports are managed has implications for economic growth, crisis response efforts, environmental protection and gender equality, placing them at the heart of sustainable development. The efficiency of a port directly affects the economies of the countries it serves, since more than 80% of global trade is carried by sea. The percentage is even higher for many developing countries.
The World Economic Forum announced today the theme and details of its Annual Meeting 2022, to be held 22-26 May in Davos-Klosters, Switzerland. The theme is, History at a Turning Point: Government Policies and Business Strategies. After a two-year hiatus, the meeting will bring together nearly 2,500 leaders and experts from around the globe, all committed to the “Davos Spirit” of improving the state of the world. A list of confirmed public figures can be found here. Against the backdrop of deepening global frictions and fractures and a once-in-a-century pandemic, the unprecedented global context calls for purpose and resolve, and the meeting’s ambition is to rise to these challenges. Over the past two years, the World Economic Forum has strengthened its impact initiatives, which deal with issues ranging from COVID-19 and climate change to education as well as technology and energy governance.
With the world at such a critical turning point, global business and government leaders need to work together to develop long-term policies and strategies that will revitalize the hard-hit global economy, strengthen the progress made to advance the Fourth Industrial Revolution and tackle the single greatest threat to humanity, climate change.
Namibia joins 2022 World Economic Forum in Davos (Namibia Economist)
DDG González highlighted that trade is critically important for countries in Latin America and the Caribbean to access the goods, services and technologies needed to adapt to climate change and decarbonize their economies, adding that trade officials need to take a serious look at the barriers that may hinder the emergence of an efficient, globally integrated market for the clean technologies of today and tomorrow.
“We must make sure that trade and climate policies pull in the same, not in opposite, directions, because the wrong trade policies can set back efforts to achieve climate and other environmental goals,” she said.
If climate adaptation and mitigation measures aren’t taken seriously, the United Nations Conference on Trade and Development (UNCTAD) 2021 report puts developing countries in danger. Many developing nations, especially least developing countries (LDCs) and small island developing states (SIDS), will confront major hurdles in maintaining production, related employment, and export levels in these sectors in the future, according to the report. “Unless developing countries enhance their trade resilience ex-ante through adaptation measures and actions that reduce exposure and risk, they will export substantially less in climate-sensitive sectors ex-post as climate change impacts accumulate over time. When adaptation is neither possible or cost-effective, diversification within the sector, or economic restructuring to move resources to other less climate-sensitive sectors, can be pursued,” the report said.
The Director-General of the Food and Agriculture Organization of the United Nations (FAO), QU Dongyu, today made an urgent call for the transformation of agrifood systems, to make them more inclusive, economically viable and resilient to multiple shocks, as well as to produce better and more with less negative impact on the environment. Qu was addressing a ministerial meeting held at the United Nations in New York entitled “Global Food Security Call to Action.” Cumulative effects of multiple shocks related to conflicts, the climate crisis, the COVID-19 pandemic, economic downturn, rising food prices have increased people’s vulnerability and pushed hundreds of millions of more people to the brink of hunger, the Director-General said. According to the Global Report on Food Crises released earlier this month, in 2021 193 million people were acutely food insecure and in need of urgent assistance across 53 countries/territories. Projections point to around 329 000 people reaching catastrophic food insecurity (IPC 5) in Somalia, South Sudan and Yemen by the end of 2022.
At the Sustainable Energy for All Forum in Kigali, Rwanda, and amid increased pressure from the climate crisis and the war in Ukraine on the world’s energy systems, the UN Development Programme called for vastly increased public and private investment to transform energy systems in support of a just energy transition. “We are in a moment of profound global upheaval. The war in Ukraine has caused immense human suffering, and the ripple effect of that war – on our finance, food, and energy systems – threatens to tip millions more people into poverty and hunger,” says Achim Steiner, UNDP Administrator and Co-Chair of UN-Energy in his message at the closing plenary of the Forum. “The current geopolitical situation reminds us just to what degree energy underpins our aspirations for a more sustainable future for all. There are still viable pathways to reach a net-zero global energy system while finding solutions to vulnerable communities, but the window is narrowing fast. It requires an unprecedented transformation of the energy sector. All countries must now reset their energy systems and put people into the center – ensuring that these systems are cleaner, more secure, more resilient and totally inclusive.”