tralac Daily News
Red tape is strangling small businesses (Mail & Guardian)
The fundamental impact of governance failure, overregulation, and burdensome taxation in South Africa is that productive entrepreneurship as well as innovation have been crowded out. For example, early-stage entrepreneurial activity declined from 7.8 percent in 2008 to five percent in 2009, significantly lower than countries with a similar GDP per capita — but interestingly, similar to the entrepreneurship rate in Russia, an economy resource-rich and struggling with rent-seeking and corruption and where innovation has, as in South Africa, declined during the commodity boom.
What is clear from the evidence is that South African entrepreneurship has been on a seesaw journey, but largely declining for a long time. This is especially troubling because entrepreneurship is an engine of economic growth. It promotes the innovation needed to exploit new opportunities, promote productivity and create employment, while also addressing societal challenges, which now include the economic shock wave created by the Covid-19 pandemic.
Public Works and Infrastructure Minister, Patricia de Lille, says recent flooding in the Eastern Cape and KwaZulu-Natal has highlighted the importance of building and maintaining public infrastructure with the mitigation of changing climate patterns in mind. The Minister was presenting the department’s budget for the 2022/23 financial year in the National Assembly on Tuesday afternoon.
“Recent events have again laid bare the importance of infrastructure and ensuring that we not only build new infrastructure but maintain existing infrastructure. We must build and maintain infrastructure taking the severe impacts of climate change into consideration,” she said.
The increased tourism activity appear to have been good news for sales in the food and beverage sector.
The data shows income generated by the food and beverage industry, led by takeaway and fast-food outlets was closely followed by restaurants and coffee shops increased by 13.6%.
Stats SA said positive annual growth rates were recorded for income from food sales and the sector saw a strong improvement in activity with seasonally adjusted income rising 5% month on month in March, after a small 0.3% fall in February.
The ministers have agreed to hold the joint committee between Egypt and South Africa once every two years alternately in the two countries, as well as mid-term reviews at the level of senior officials.
During the meeting, Shoukry and Pandor said their governments are determined to establish an Egyptian-South African business council and remove nontariff barriers undermining trade between the two countries. The council will aim at encouraging the business communities in the two countries to make use of the multiple opportunities for trade and investment in each country, the ministers noted. They also urged activating cooperation between the authorities concerned with investments and commerce chambers in Egypt and South Africa to encourage and facilitate the participation of the private sector in the two countries’ economies.
The ministers agreed on taking further steps to achieve economic integration in the continent, including through boosting cooperation among existing sub-regional economic groupings. This is in addition to activating the Tripartite Free Trade Area (TFTA) agreement between the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC) and therefore activating African Continental Free Trade Area (AfCFTA).
China’s economic slowdown could hurt Namibia – Analysis (Namibia Economist)
The World Economic Outlook 2022 report released by the International Monetary Fund in April predicted that China’s economic slowdown could set back the economic recovery in emerging markets and developing countries, especially commodity exporters like Namibia. According to Theo Klein, an Economist at Simonis Storms, the Chinese government has embarked on a journey of transforming the economy from an investment-driven, export-oriented growth model to a sustainable development model since last year. He stressed that any decrease in demand for commodities from China will have a negative impact on Namibia’s exports, as China is Namibia’s second-largest trading partner on average. Over the last 5 years, China’s share of Namibia’s exports has averaged 19.1%.
Namibia mainly imports capital, consumer and intermediate goods, as well as clothing and textiles. With regards to SACU revenue, China is South Africa’s biggest importer and second-biggest importer of Namibia. “So, any major decrease in trade with China as a result of an economic slowdown in China will reduce SACU receipts and add pressure on public finances,” Klein said.
Uganda – DRC trade (The Independent)
Private Sector Foundation Uganda representing private sector business associations in partnership with Government of Uganda will hold the first ever Uganda- DR Congo Business Summit between May 31 and June 8 in Kinshasa and Goma located in the Democratic Republic of Congo. The summit is expected to attract more than 200 participants from Uganda and DRC and will open up new business frontiers as well consolidate trade relations between Uganda and DR Congo through discussions of business linkages, trade fairs and engagements between governments and businesses.
Speaking ahead of the Summit on May 19 at a media conference in Kampala, the PSFU Executive Director, Stephen Asiimwe, said the entry of DRC into the East African Community now provides the Uganda business community with an opportunity to trade in a market that has a population of more than 90 million people. The Uganda business community, he said, was yet to take full advantage of the opportunities that arise out of DR Congo, noting that it is also important to engage in high levels of innovation and creativity to diversify exports beyond food commodities and informal cross border trade.
“We can maximise trade by developing deeper links between domestic producers and external markets such as DR Congo,” Asiimwe said. Uganda’s trade with DRC has been growing over the years, increasing by an average of 10% annually.
During 2017, for instance, Uganda exported goods worth $188.98m (Shs685bn) to DRC while imports from DRC to Uganda stood at $156.5m (Shs567bn). However, this has exponentially grown, with Uganda’s exports to DRC increasing to $338.56m (Shs1.2tn) in 2021. The DRC is one of Uganda’s biggest trading partners in East Africa, with Uganda exporting mainly cement, palm oil, beer, sugar, iron and steel, rice, iron and steel (scrap), cocoa beans and natural rubber.
Dar, Accra trade volume notches 47bn/- (Dailynews)
TRADE volume between Tanzania and Ghana stood at 20.2 million US dollars (approximately 47bn/-) between the year 2016 and 2021, in which the former exported 6,434 metric tonnes of manufactured goods to the West African country.
Tanzania’s High Commissioner to Nigeria, who is also accredited to 15 countries in West Africa including Ghana, Dr Benson Bana, explained during an interview that balance of trade was in favour of Tanzania, which exported goods worth 15.2 million US dollars (about 34.9bn/-). On the other hand, Ghana exports to Tanzania stood at 2,533 metric tonnes with a total value of 5 million US dollars (about 11.5bn/-) during the period.
a two-day high-level meeting to discuss the implementation of a common agro-industrial park (CAIP) between the two countries. The objective of the meeting was to update the two Permanent Secretaries on the progress on the implementation of the industrial cooperation programme between the two countries focusing on the common agro-industrial park; discuss the funding opportunities for activities in the park; propose a possible location of the park; review the draft harmonized policy, legal, regulatory, and institutional framework for the park and agree on a roadmap for the initiative’s subsequent phases.
In her official opening remarks, Ms. Chalwe Chuulu, PS Ministry of Commerce, Trade and Industry (Zambia) welcomed the signing of the MOU on the joint industrialisation programme between the two countries under which CAIP was being implemented noting that it reinforces bilateral ties and that the initiative cements the strategic partnership between the two states.
he alluded to the central role of ECA, COMESA, United Nations Industrial Development Organization (UNIDO), African Development Bank (AfDB) and Afreximbank in promoting agro-industrialization through the park observing that the park had a regional significance as a model for cooperation and industrial development.
Dr. Mavis Sibanda, PS, Ministry of Commerce and Industry, Zimbabwe, noted that the meeting provided an opportunity to achieve a common understanding of the findings and recommendations of the prefeasibility study and lead to the identification of a possible location for the park, “let us take advantage of the Joint Industrialization Cooperation Programme as we anticipate opportunities coming out of the AfCFTA. Pooling resources will ensure economies of scale and will enable the two neighbouring countries to compete favourably on the market”.
Ghana and Mozambique agree to cooperate (Ghana Business News)
Ghana and Mozambique on Monday signed a joint permanent cooperation agreement to boost cooperation between the two countries. The two countries are looking to collaborate in the areas of agriculture, tourism, oil and gas, energy, education, trade and industry, environment, science and technology.
President Akufo-Addo emphasized that the COVID-19 pandemic and the on-going Russian war in Ukraine had established the fact that African countries should collaborate, share ideas and trade more among themselves to withstand the shocks of such occurrences in future.
AfCFTA: Nigerian trade structure threatens $450bn potential (New Telegraph Newspaper)
Despite coming late into the regional trade pact involving 55 African countries, indications emerged yesterday that Nigeria is on the verge of losing out in the $450 billion African Continental Free Trade Area (AfCFTA) agreement. Emerging developments indicate that lack of preparedness and unnecessary tariff barriers are some of the factors already putting a wedge in the free run of the unprecedented trade fellowship aimed at boosting the continent’s Gross Domestic Product (GDP). Other foreseen challenges are general political instability, inadequate trade infrastructure, transportation, poor port facilities and inconsistent agreement among member states.
Goving indication to this effect yesterday in Lagos, a freight forwarder, Mr Francis Omotosho, said Nigerian economy was plagued by microeconomic challenged as a result of poor infrastructure, poor access to capital and increased contractions in the Gross Domestic Product (GDP) growth in the post- COVID-19 era. He said this had led to competitive devaluation, adding that trade barriers were posing great obstacles to AfCFTA implementation.
“Payment providers currently have difficulties providing services. They include trade barriers manifested in form of discriminatory regulations, treatment of foreign providers, requirements for local incorporation, licensing, prohibition on cross border services or limitations in the movement of capital as well as intra trade barriers, difficulty in transmitting money from one country to another due to cross-border connection or the payment systems in either country.”
President Muhammadu Buhari has urged executives of banking institutions in West Africa to forge a closer collaboration to tackle economic challenges confronting the sub-region. The president made the call on Tuesday while receiving a delegation from the West African Bankers Association (WABA) led by its President, Thierno Seydou Nourou Sy.
President Buhari, who said over time global trade had become more complex and organised, expressed confidence that the rollout of the African Continental Free Trade Area (AfCFTA) would be a turning point in how African countries traded with one another.
According to the World Bank Mali Economic Update 2022 entitled Resilience in Uncertain Times: Renewing the Social Contract, the country’s growing insecurity and socio-political crisis resulted in a timid, lower than expected, economic recovery in 2021. Growth prospect for 2022 has been further undermined by the economic sanctions, regional food insecurity, and the war in Ukraine.
The report points out that the Malian economy rebounded only slightly in 2021 (real growth estimated at 3.1% or 0.2% per capita) driven by the recovery in the sectors of agriculture and services, after the 2020 recession (-1.2%). The improvement in terms of trade during 2019-2020 as a result of the surge in gold prices, has considerably tampered in 2021 and removed one the main growth momentums.
African trade and economy news
Africa’s gross domestic product has recovered strongly in the last year, but the lingering effects of the Covid-19 pandemic, Russia’s invasion of Ukraine and the ensuing war could pose considerable challenges in the medium term. This is according to the 2022 African Economic Outlook, released by the African Development Bank on Wednesday.
Rising oil prices and global demand have generally helped improve Africa’s macroeconomic fundamentals, the report found. But growth could decelerate to 4.1% in 2022, and remain stuck there in 2023, because of the lingering pandemic and inflationary pressures caused by the Russia-Ukraine war. Both countries are major grain suppliers to Africa.
The theme of the 2022 African Economic Outlook is “Supporting Climate Resilience and a Just Energy Transition in Africa.” It highlights a growing threat to lives and livelihoods in Africa. The Bank launched the report during its Group Annual Meetings in Accra, Ghana.
The digital transformation of customs and borders in Africa could improve efficiencies in processes, such as administration at customs and borders, and yield trade gains on the continent of $20 billion a year. A new report by the World Economic Forum, Growing Intra-Africa Trade through Digital Transformation of customs and borders, launched today at the Annual Meeting 2022 in Davos, provides a pragmatic perspective on the non-tariff barriers in border and customs services that can be exponentially improved through digital transformation to increase intra-Africa trade.
Kavitha Prag, Africa Lead, Enterprise Technology and Performance at Deloitte Africa, said: “The African Free Trade Area agreement can be a great catalyst for Africa’s growth and development, but its full realization hinges on the introduction of efficiencies, including the improvement of customs processes. Digital transformation of border posts and customs is thus a crucial and necessary step in the implementation of the protocol, especially for many of Africa’s landlocked countries.”
The report highlights insights from the Logistic Performance Index as well as key insights from case studies demonstrating the quantifiable value of digital reforms in countries such as Ghana, Kenya and Uganda. The paper is a call to action for more integrated digital reforms that can drive higher impact through public-private partnerships that sets the course for Africa’s post-pandemic recovery and growth.
Lower trade barriers, Mpango tells Africa (Dailynews)
THE Vice-President Dr Philip Mpango has urged African governments to lower trade barriers and enhance infrastructure to benefit from the African Continental Free Trade Area (AfCFTA) opportunities. Dr Mpango further said that AfCFTA offers the continent’s countries a great potential for economic growth and development.
“Investing in technology that facilitates trade and financial transactions, as well as forming relationships with the private sector, international organizations and other governments is critical in increasing industrial productivity,” he said.
AfCFTA loses us5bn yearly to third party payment systems (The Business & Financial Times)
Economies of the African Continental Free Trade Area (AfCFTA) lose US$5billion in transactional cost to third-party foreign payment systems each year, the African Union Commissioner for Economic Development, Trade, Tourism and Industry, Albert Muchanga, has disclosed. Mr. Muchanga, who was speaking to the B&FT at the 6th Ghana International Trade and Finance Conference (GITFiC) in Accra, said the continent has made the right choice in adopting the Pan African Payment & Settlement System (PAPSS) as solution to the challenge. “Each payment that comes from the continent has to go to New York for processing and this costs Africa about US$5billion in transactional fee each year according to data from the African Union (AU),” he said.
Mr. Muchanga, however, affirmed that PAPSS presents an opportunity to trade and make direct payments in local currencies without going through any intermediaries which would exert extra cost on businesses in Africa.
The date of May 25 has a double evocative power. On the memorial level, it takes us back to the youthful freshness of the first moments of the OAU. At the geopolitical and institutional level, it constantly questions our individual and collective capacity to build the Africa then dreamed of by our founding fathers.
for the past ten years, Africa has been confronted with the challenges of terrorism, violent extremism and transnational crime (human trafficking, drug trafficking, arms trafficking).
The Continent is also faced with the disasters generated by bad governance, which can no longer be concealed by the demand for transparency imposed by a population that is increasingly open to the world through the new information and communication technologies.
Massive youth unemployment and the persistent precariousness of the women of the Continent are other challenges that call for urgent responses, because this category of the African population no longer accepts to be a passive spectator of its destiny. In addition to all these constraints, there is the economic crisis which is burdened by the debt, the climate and energy crisis which, in turn, affects food prices through the exorbitant cost of transport, while the health crisis following the outbreak of COVID-19, weakens the production capacities of the various economic agents.
The most emblematic sign of these fragilities is the food crisis following the climatic disorders, the health crisis of COVID-19, amplified today by the conflict in Ukraine. This crisis is characterised by a shrinking world supply of agricultural products and a soaring inflation of food prices.
So, what to do in the face of all these challenges? There is, for example, the courageous Institutional Reform of the African Union undertaken since 2016 and whose aim is to improve the governance of the Institution and make it a key player in multilateralism. Then there is the African Continental Free Trade Area (AfCFTA), which entered into force in 2021, making Africa the largest common market in the world and accelerating Continental integration. It reinforces the measures taken in terms of free movement of persons and goods.
Use AU Day to remove hindrances to AfCFTA - Victor Yaw Asante (Graphic Online)
Governments, regulators and other relevant stakeholders in Africa have been asked to use the African Union (AU) Day to forge a fresh collaboration that will help remove all trade barriers from the continent. That will help further the African Continental Free Trade Area (AfCFTA) agreement.
“We believe that Africans have not been able to trade among themselves enough and this is the reason AfCFTA was designed to encourage intra-African trade, but more than a year after trading began, there are still challenges which need a collaborative approach from all stakeholders to address,” Managing Director (MD) of FBN Bank, Victor Yaw Asante stated.
Pan-African integration has made progress but need (Modern Ghana)
Africa Day 2022 (UNWTO)
Africa is endowed with 70% of arable land and agriculture is one of the most important economic sectors in the continent. To be sure, there are many challenges to address to transform the sector, to make it more sustainable and to secure food access and distribution. But we have good reason to be optimistic about the future. Africa is home to the fastest growing urban populations on Earth and its growth is being driven by a buoyant youth possessing incredible talent and ingenuity. Moreover, tourism is returning across Africa, and our sector has the power to deliver positive change and inspire transformation.
Africa is rich in immense natural and cultural resources and the diversification of the economy through tourism will be key to build resilience against external shocks and so build economic stability and greater food security. Domestic and regional intra and inter tourism are valuable sources of income and can boost infrastructures. The African Continental Free Trade Area (AfCFTA) and the Single African Air Transport Market (SAATM) are paramount for advancing Africa’s agenda on sustainable development.
Africa Day 2022 – Africa’s Year of Nutrition (African Business)
Africa Day is observed annually to commemorate the founding of the Organisation of African Unity (OAU), which was created on 25 May 1963. It was the precursor of the African Union (AU). Africa day provides an opportunity to celebrate the socio-economic achievements of the continent and in line with the African Union Theme for the year 2022 “Strengthening Resilience in Nutrition and Food Security on the African Continent”, the development agency of the African Union Auda-Nepad held an online celebration focusing on moving forward this agenda.
“I would like to call on all of us to work together and do the right thing for the constituencies and people that we serve. We owe it to our constituencies and our people, explicitly the children – they are the future leaders of tomorrow. We cannot groom a leader that is malnourished and does not have the capacity to perform. We should talk less and do more,” said Boitshepo Bibi Giyose, senior nutrition office at Auda-Nepad.
The general objective of the AU Year of Nutrition for 2022 is to secure greater political commitment and investment in nutrition to address ongoing nutrition challenges.
On 25 May 1963, the Organisation for African Unity was established in Addis Ababa, Ethiopia to promote unity, solidarity, collaboration and development amongst African member states. To celebrate this important day, Baker McKenzie partners and its African Relationship Firm colleagues share some of their thoughts on the many opportunities that the continent offers.
“Recent developments across the African continent show that the idea of ‘Africa Rising’ remains true and alive. With trade liberalisation through the Africa Continental Free Trade Area Agreement (AfCFTA), a fast growing population and increased technology penetration, the opportunities in Africa’s key markets continue to expand. What many see as challenges in Africa, are in a manner of speaking, Africa’s greatest strength for investments and growth.” - Ijeoma Uju, Partner, Templars, Nigeria.
The ECOWAS Regional Competition Authority (ERCA) organized a meeting of a Working Group for the review of the Draft AfCFTA Protocol on competition, prior to the fifth meeting of negotiations between African Union States Parties that is scheduled to hold in Accra, Ghana from 30 May to 2nd June 2022 on the said draft. The meeting took place from 19 to 21 May 2022 at Hotel Flamboyants in Saly, Republic of Senegal. The purpose of the meeting was to bring together a number of ECOWAS Member States (Gambia, Nigeria, Senegal) and ERCA officials for a brainstorming on the draft AfCFTA Protocol on competition in order to ensure that all Member States adopt a common position on all the provisions of the draft AfCFTA Protocol to be shared with Member States’ negotiators and other regional organizations. During the opening ceremony and in welcoming the participants, the Executive Director of ERCA, Dr Simeon Koffi informed the delegates that the meeting was convened to consider the draft AfCFTA Protocol on Competition Policy and harmonise and coordinate the position of Member states on the Protocol.
Kagame pushes for AfCFTA full realization at WEF (The New Times)
President Paul Kagame has said that even with the current trading under the African Continental Free Trade Area (AfCFTA) agreement, there is need to tackle a number of things, especially non-tariff barriers. The head of state was speaking in Davos, Switzerland at a breakfast gathering of African leaders and friends of Africa on the AfCFTA and the bloc’s role in fast-tracking economic growth and transforming the continent. The ceremony is part of sideline events at the ongoing World Economic Forum (WEF) Annual Meeting that kicked off Monday, May 23.
President Kagame said that for so many decades in history, there have been African leaders who tried to unite Africa, and also making sure that the continent can also trade within itself and countries with each other among others.
However, President Kagame observed, with time, there was a huge improvement that Africa accepted reforms and also accepted that first, we need to have even private sector-led economies where the private sector started taking center stage.
The African continent’s priority today is to secure food security since its regions have enough fertile land to feed its people, President Mnangagwa has said. Speaking today at the ongoing World Economic Forum in Davos, Switzerland, during a discussion on the Africa Continental Free Trade Area (AfCFTA) running under the theme “Friends of the African Continental Free Trade Area”, which he was co-chairing, President Mnangagwa said to secure food for the continent, Africa has to adopt the “eat what you kill” philosophy as well as not to “reinvent the wheel.” This philosophy, according to President Mnangagwa, will work if there is cooperation from those who have developed, industrialised and mechanised agriculture and have access to technology. He added that Africa also has to put in place mitigatory measures against climate change, a key focus area at AfCFTA.
His comments come as the world is currently facing serious food shortages, brought by changing climate change and the supply chain disruptions brought about by the Covid-19 pandemic as well as the ongoing conflict between Russia and Ukraine.
The later has sent global food prices skyrocketing. Africa can, however, secure food security if there is cooperation among nations.
President Nana Addo Dankwa Akufo-Addo has challenged African nations and their financial institutions to come up with a new economic model that will serve the interest of their peoples and not profit advanced nations. That, he explained, was necessary because “profits from our resources have benefited foreign creditors for far too long, while we suffer abusive borrowing cost on the international capital markets”.
Prime Minister, Edouard Ngirente, has said that the government’s investments in rural areas were part of the drivers of rapid economic recovery from the Covid-19 effects. He was speaking during the presidential dialogue on ‘Africa’s Development Challenges and Opportunities’ at the opening ceremony of the 57th African Development Bank Annual Meeting in Accra, Ghana on May 24. “During the pandemic, cities were not working properly because of different lockdowns, but in some remote areas there were not many cases of Covid-19, so we decided to go and invest there,
He said that the overall process of economic rebound was driven by four key components of the recovery programme. These include; the Economic Recovery Fund— which was designed to help the most hit sectors such as hospitality, transport and other economic activities; the Manufacture and Build to Recover Programme; subsidies given to the agriculture sector; and an ongoing project to set up a bulk blending fertilizer and storage plant in Bugesera Industrial Park.
Digital connectivity an economic imperative for East Africa (The East African)
Digital connectivity provided by Telco’s and Mobile Network Operators (MNOs) is well placed to make a positive impact on the access to resources by women, ‘formalise’ informal employment and improve on the access to education for all. Communication and internet access are transformational, they empower citizens to meaningfully contribute to their countries’ economies, and shape sustainable economic futures. “The ever evolving supply of technology gives rise to life enhancing opportunities. The more technology penetrates into our communities, the more we can expect everyday problems to be resolved by its use. One fascinating example is of tele-medicine where patients need not travel vast distances to reach doctors, rather get to a connected centre and get consultations and in some cases, have surgeries performed remotely,” said Sitholizwe Mdlalose, Vodacom MD
African Union head to push Russia, Ukraine to unblock grain exports (Successful Farming)
Senegal’s president and African Union chairman Macky Sall said on Wednesday that when he visits Russia and Ukraine in the coming weeks he will push them to unblock exports of grains and fertilizer to avoid widespread famine. Africa is suffering from disruptions in food supply and soaring prices of basic goods and risks “disastrous consequences” if the situation endures, Sall said during a conversation with philanthropist Mo Ibrahim at the Ibrahim Governance Forum. Nearly half of Africa’s 54 countries rely on Russia and Ukraine for wheat imports, according to the United Nations Food and Agriculture Organization. Russia is also a major supplier of fertilizer to at least 11 countries. “We have pleaded for a ceasefire, for an end to the war and for the release of all food products ... so that the world doesn’t know a famine after two years of COVID and almost three months of war,” said Sall. Russia invaded Ukraine in late February.
“There are multiple initiatives to call on countries that have (grain) stocks to liberate them ... and to ensure that Russia can authorize the export of cereals from Ukraine and can also export itself. This is the African position,” he said.
The African Development Bank Group’s annual meetings officially opened on Tuesday with a ringing endorsement of the institution by the Ghanaian government and a call on member countries to back the institution as the main engine for the continent’s economic growth.
Speaking at the formal opening ceremony, Ghanaian president Nana Dankwa Akufo-Addo spoke of the continent’s ongoing fiscal and socioeconomic challenges and the importance of the African Development Bank to the continent’s development goals.
“What is clear is that the resulting damage cannot be cured so easily with the limited fiscal tools at our disposal and national policy adjustments. Therefore, I reiterate my call for an elevated role for Africa’s premier bank, the African Development Bank,” Akufo-Addo said.
Ghana’s finance minister, Kenneth Ofori-Atta, who is at the end of his term as current chairman of the African Development Bank Group’s board of governors, said the stakes were high and spoke of the risk of a lost decade. Africa’s economic growth contracted by 3.2% in 2020 and debt-to-GDP ratios edged up from 60% to 71.1%, Ofori-Atta noted. The minister said, however, that it was not all bad news.
The theme for the African Development Bank Group’s 2022 Annual Meetings is “Achieving Climate Resilience and a Just Energy Transition for Africa.”
Akufo-Addo, Adesina, others chart new path to Africa’s economic freedom (The Guardian Nigeria)
Prominent African leaders, yesterday, took turns to examine the continent’s development agenda, admitting the future is in danger if it does not take its affairs into its hand and chart a new course.
They warned that there is no better time to take proactive actions and secure long-desired economic freedom, noting that Africans could only turn to western countries for support at their own peril. They spoke at the opening ceremony of AfDB’s Annual General Meeting (AGM) held in Accra, Ghana, with a focus on the most troubling challenges facing Africa: climate change adaptation, just energy transition and food crisis.
After the opening ceremony, the leaders dissolved into a presidential dialogue where they debated extensively on the overwhelming challenges facing the continent: rising sovereign debts, narrowing financing options, energy shortage, low infrastructure, climate change vulnerability and food crisis.
Akufo-Addo, the chief host of the AGM, sought the collaboration of African leaders to expand the role of AfDB in the development agenda of the continent and warned that the skewed global financial system cannot support its aspiration for economic emancipation.
The Ghana International Trade and Finance Conference (GITFiC) has organised its 6th conference in Accra with a call on participants to use the knowledge gained to make positive impact on the Africa continent.
“We are in the face of transition towards a brighter future for Africa, towards deepening relationships, towards fulfilling intra-Africa trade and transition from the pandemic.”
Mr Tsonam Cleanse Akpeloo, Chairman, Association of Ghana Industries (AGIs)
Said. The transition signified hope and potential for tremendous change and that the AGIs held the key to transforming Africa continent by impacting the lives of ordinary African, nations and generations.
The two-day conference would have panel discussions on the first day on the topic: “Towards an Effective and Efficient Mobile Money Transactional Penetrations in Africa; A Catalyst to solving Cross Border Payment and Settlement, an Anticipated – Barrier within the AfCFTA; – The Role of Financial Regulators and Stakeholders.”
“Measuring the Acceptability and Adaptation Level of the AfCFTA on the African Continent a Year after Implementation of the 1st Phase; – Where do we stand in terms of Trade in Goods, Tradce in Service, and Dispute Resolution Protocol (Policy Direction) with focus on the Role of Africa’s Local Governance Structures in preparing their various Business Communities to take advantage.”
The COVID-19 pandemic led to a great disruption of lives and livelihoods, and therefore a substantial economic shock globally. This was especially true for the countries of Africa, many of which had very low institutional capacity to deal with a sudden public health crisis, and low budgetary capacity to fund a pandemic recovery stimulus thereafter.
But one way of thinking about a recovery from such a sudden and multidimensional crisis is to treat it like a model, or bridge, to building resilience for the future effects of climate change. The impacts of climate change are expected to be much more considerable (albeit unfolding at a slower pace) and certainly more long-lasting. Only a small share of the fiscal stimulus packages is explicitly green. Yet recent global economic studies suggest that green spending can secure both greater growth and a greener future.
Without this, the stakeholders who gathered at the second Refining & Specifications Virtual Workshop organised by the African Refiners and Distributors Association (ARDA) noted that achieving net-zero, Paris Agreement and other agreements targeting cleaner environment may remain elusive.
With growing divestment and capital reallocation away from hydrocarbons and into renewables/energy transition, the stakeholders noted that consideration for Environmental, social, and governance (ESG) is the downstream segment of Africa’s petroleum industry now remained a key leeway to the over $15.7 billion required for the continent to improve its refineries.
Regional business community upbeat about CHOGM (The New Times)
Rwanda’s High Commission in Tanzania and the East African Business Council (EABC) and other stakeholders on Tuesday, May 24, organised a roundtable with regional business executives in Dar es Salaam in preparation for the upcoming Commonwealth Heads of Government Meeting (CHOGM) slated for June 21 to 26, in Kigali.
John Bosco Kalisa, CEO of the EABC added: “The major outcome is the commitment of the CEOs to participate in the event and share insights and knowledge on the doing business in the region as well as at continental level taking advantages of the EAC Customs Union and Common Market [protocols] as well as the AfCTA. And building synergies and partnerships in areas of trade, technology, energy, environment as well as regional and continental value chains.”
The EAC is negotiating AfCFTA as a bloc and, the latter on February 18 made a huge step forward by adopting the bloc’s tariff offer for Category A products amounting to 90.2 per cent to be liberalised in 10 years after the start of trading under the continental trade deal.
In a new report, the United Nations Development Programme (UNDP) warns of the direct and indirect impacts of the war in Ukraine on the African continent, which could further stall the continent’s development trajectory already significantly jeopardized by the COVID-19 crisis. This report, entitled “The Impact of the War in Ukraine on Sustainable Development in Africa”, reinforces findings of the Global Crisis Response Group (GCRG) that the war in Ukraine is pushing the 2030 Sustainable Development Goals and the aspirations of the African Union’s Agenda 2063 further out of reach, and provides key recommendations for actions that need to be taken immediately, to avert further crises in Africa.
According to the report, some of the direct impacts of the crisis in Africa include trade disruption, food and fuel price spikes, macroeconomic instability, and security challenges. African countries are particularly affected due to their heavy reliance on imports from Russia and Ukraine.
UNDP’s new report proposes three main areas of action that could mitigate the impact of the war in Ukraine on Africa.
Global economy news
The report — “Accessions of Least-developed Countries to the WTO — Challenges and Opportunities” — summarizes the commitments undertaken by the nine LDCs who have acceded to the WTO under Article XII of the Marrakesh Agreement. It also looks into the challenges and opportunities for LDCs regarding WTO membership, including the importance of participating in WTO activities. The paper also briefly examines the economic performance of recently acceded LDC members to see how they have fared since joining the WTO.
The war in Ukraine will change the world in many ways. One change that deserves more attention is how it is impacting trade policy and thus changing trade flows and creating trade opportunities.
Economic sanctions are traditionally considered to be coercive measures that are designed to bring about a change of behaviour. The point is not to punish but to change behaviour. They are also normally designed to maximise the economic pain on the target while minimising that on the parties imposing the measures.
For this reason, trade measures are traditionally designed to be temporary with built-in expiry dates and sanctioned assets are normally frozen, not confiscated.
Trade sanctions are most effective where they are universal. Unilateral sanctions can be avoided by trade diversion, especially in the case of commodities and other fungible goods. For this reason, many sanctions regimes are applied extraterritorially, although there are often legal and practical limits to this.
Most Favoured Nation Treatment (“MFN”) is the foundation of the GATT/WTO system and exceptions are limited and well-defined. There is no WTO mechanism for suspending or removing MFN status or even for ejecting a member from the organisation. There are security exceptions that allow restrictive trade measures on both goods and services trade to be taken against a WTO Member, notably “in time of war or other emergency in international relations”. A number of countries including the G7 and the EU have announced that they have suspended MFN treatment of Russia. What they mean by this is that they consider the restrictive measures concerning goods and services that they are taking against Russia are justified by the national security exceptions.
A pioneering effort to facilitate cross-border investment in the digital economy was launched this week at the World Economic Forum Annual Meeting 2022. The new initiative on digital foreign direct investment, the Digital FDI initiative, will implement projects in several countries to help grow Digital FDI, as the reforms to attract such investment must take place at a country level. The first digital FDI project will take place in Nigeria.
Attracting Digital FDI requires creating digital-friendly investment climates through targeted and country-specific policies, regulations and measures. These investments involve new business models, often based on data and technology, and platform economies, as well as using non-traditional assets. The Digital FDI initiative will aim to identify and implement enabling reforms through public-private projects in emerging markets and developing countries.
“As the first and only global multilateral focused on enabling digital prosperity for all, the DCO is partnering with the Forum on a Digital Foreign Direct Investment initiative to help countries develop digital FDI-friendly investment climates. We invite digital innovators with a commitment to economic development and inclusion to join us,” said Deemah Al Yahya, Secretary-General, DCO.
In 2023, the United Nations aims to agree a Global Digital Compact, a multistakeholder understanding between states, the private sector and civil society on how to achieve the Roadmap for Digital Cooperation. In the broader context, digital cooperation spans topics such as connectivity, artificial intelligence, Internet governance, safety and security, and data governance; all of which mandate the involvement of all stakeholders, not only governments. Will digital cooperation change the way we think about governing?
The war in Ukraine and related sanctions have triggered a sharp increase in commodity prices, which will add to the challenges facing countries in the Middle East and North Africa—particularly the region’s oil importers.
After leaping to a peak of $130 per barrel following Russia’s invasion, oil prices are expected to settle at an annual average of around $107 in 2022, up $38 from 2021, according to the IMF’s latest World Economic Outlook. Similarly, food prices are expected to increase by an additional 14 percent in 2022, after reaching historical highs in 2021.
This surge in prices comes at a precarious time for the region’s recovery. In our Regional Economic Outlook, we revised up our forecast for growth in the Middle East and North Africa as a whole by 0.9 percentage points to 5 percent, but this reflects improved prospects for oil exporters helped by rising oil and gas prices.
For oil-importing countries, we marked down our projections, as higher commodity prices add to the challenges stemming from elevated inflation and debt, tightening global financial conditions, uneven vaccination progress, and underlying fragilities and conflict in some countries.
World Bank and S&P Global Market Intelligence container port performance index shows ports in the Middle East and East Asia responded best to the heavy volume growth and service volatility caused by impacts of the global pandemic
“Increasing the use of digital technology and green fuel alternatives are two ways countries can modernize their ports and make maritime supply chains more resilient,” said Martin Humphreys, Lead Transport Economist at the World Bank and one of the researchers behind the index. “Inefficient ports represent a significant risk for many developing countries in that they can hinder economic growth, harm employment, and increase costs for importers and exporters. In the Middle East, heavy investments in container port infrastructure and technology are proving to be effective.”
Amb. Abraham Peralta told the meeting that Director-General Ngozi Okonjo-Iweala has suggested a three-track informal process focusing on: a food security declaration as an immediate response to current challenges; a proposed Ministerial Decision that would exempt food bought by the World Food Programme (WFP) from export restrictions; and an outcome that would guide negotiations on all agriculture topics after the Ministerial Conference has ended.
FTI report highlights importance of urgency on energy transition (Engineering News)
This year represents a critical inflection point in the way that energy is perceived, and the global systems needed to find, produce, deliver and decarbonise it, a new report by global business advisory firm FTI Consulting emphasises. “Significant, era-defining events are happening all around us, all around the world, and all at a breakneck pace – shaping both short- and long-term structural considerations around energy and sustainability,” the company says.
Report: State and Trends of Carbon Pricing (World Bank)
providing an important source of funds to help support a sustainable economic recovery, finance broader fiscal reforms, or invest in communities as part of the low-carbon transition future, according to the World Bank’s annual “State and Trends of Carbon Pricing” report released today.
“The past year has seen some very positive signs, such as the significant increase in revenue that can be invested in communities and in supporting the low carbon transition. There is also good progress towards resolving cross-border issues related to carbon pricing and the adoption of new rules for international carbon markets that was agreed at COP26 in Glasgow, which helps set a clearer policy direction,” said Bernice Van Bronkhorst, Global Director for Climate Change at the World Bank. ”It is important now to build on this momentum and really ramp up both the coverage and the price levels to unlock the full potential of carbon pricing in supporting inclusive decarbonization.”
Key topics covered in the State and Trends of Carbon Pricing 2022 include cross-border approaches to carbon pricing, challenges and opportunities from rising energy prices, and new technologies and governance frameworks shaping carbon markets.