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The Head of Invest South Africa (InvestSA), Mr Yunus Hoosen, has lauded success in the first phase of the work done to create a conductive environment to attract domestic and foreign investment into South Africa. InvestSA is an agency of the Department of Trade, Industry and Competition (the dtic) and hosted a session at the Protea Hotel Fire and Ice in Menlyn, Pretoria to assess progress in the Investment Climate Reform Programme.
The Programme has been running over the past 4 years and is a partnership with the dtic and the International Finance Corporation (IFC) of the World Bank Group being the main partners.
“In Competition Policy and Market Regulation, the programme produced tools to enforcement action to address cartel behaviour as well as reduced costs for customers for a range of essential services. Through this development, we have also witnessed the deployment of electronic platforms such as Bizportal and City of Johannesburg’s online construction permits system. These are pioneering e-government initiatives with the potential to have their functionalities replicated across government departments.”
The IFC’s Country Manager for South Africa, Mr Adamou Labara, said the runaway successes of the four investment conferences held in South Africa are testament to the county’s ability to articulate a clear investment proposition and deliver on investment commitments through
Deputy Minister of International Relations and Cooperation, Alvin Botes, has told a sitting of the National Assembly that South Africa’s exports to Africa have surpassed those to the European Union in 2021. Botes said this when he participated in a debate on Africa Day at the Good Hope Chamber in Parliament on Wednesday. “We are committed as the South African government to work towards halving of poverty through agriculture by 2025, working amongst others, with countries such as Ghana and Morocco and in terms Malabo [Declaration] commitment five: the boosting of Intra-Africa Trade, we know that the trade figures in South Africa have increased remarkably,” he said.
Among the commitments made at the meeting was Malabo Declaration Commitment five, which speaks to African states committing to boosting intra-African trade in agricultural commodities and services – by tripling trade in this area and by fast-tracking the continental free trade area and transition to a continental common external tariff scheme.
While the EU is SA’s biggest export market by a long way and SA benefits from a large number of duty-free items, trade relations with the EU could be exploited to far greater benefit, the head of the trade and economic section of the EU delegation to SA, Roberto Cecutti, said on Thursday. The study, which modelled products with preferential access against the potential demand globally, and particularly European countries, was conducted by consultancy Trade Advisory. It found that R350 billion worth of products had potential for export in the short term, in the medium term R280 billion, and the long term R210 billion.
In the short term, motor vehicle components and food and agricultural products held the most untapped potential. In the medium term and long term, food and agricultural products, basic iron and steel, metal products, primary agriculture, and textiles had the largest export growth potential.
The EU has an asymmetrical economic trade partnership (EPA) with the SADC region, with 96% of SA products carrying no duties with 2.5% of products restricted and 1.3% excluded from free trade. On the other side of the relationship, 13.8% of EU goods are excluded from free trade.
With May celebrated as Africa Month, the Coega Development Corporation (CDC) has identified the rest of the African continent as an important market for sustainable growth. This is consistent with its strategic plan 2020-2025, but also as part of the African Continental Free Trade Area (AfCFTA) agreement. “In the next financial year, the CDC will focus on fast-tracking the implementation of projects in the Central African Republic (CAR) and Zimbabwe, whilst marketing its services to increase the portfolio of clients,” CDC Programme Director Idriss Mouchili said on Wednesday. The Department of Trade, Industry and Competition (the dtic) in the Special Economic Zone (SEZ) Strategic Framework 2020-2030, has identified cross-border exchanges with the rest of Africa as a key pillar of the implementation of reconfiguring and expansion of existing SEZs.
The CDC has expanded its non-SEZ services to other markets in countries that include Zimbabwe, Nigeria, Cameroon, Central African Republic, Democratic Republic of Congo and Senegal under the Coega Africa Programme (CAP). Through its African Trade and Investment Solutions Strategy, the CDC is championing the country’s renewed push for business exchanges between South Africa and the rest of the continent.
The US government is looking beyond a delayed trade deal with Kenya to expand commercial ties between the two countries amid Nairobi’s mounting frustration with Washington’s slow pace to conclude the deal. In a new report submitted to the US Congress by Joe Biden’s top trade diplomat Katherine Tai, the US government revealed it would pursue “other means” of deepening trade engagements with Kenya in the absence of a free trade agreement (FTA). “(We will) engage with Kenya to deepen bilateral trade, potentially through an FTA or other means, to spur Kenyan development and promote more equitable, worker-centric trade with Kenya,” said the United States Trade Representative Office (USTR) in the report seen by Business Daily outlining its objectives for this year.
The US government and Kenya early this month held another round of trade talks, which raised hopes of a fresh direction after the Biden administration froze Trump-era negotiations on the free trade agreement.
The Kenyan horticultural sector exports many high value products, such as vegetables, fruit and flowers, globally, including to the UK. The sector is vital for Kenyan smallholder farmer incomes, jobs, and foreign exchange, which support economic growth. As a major trading partner for Kenya, the UK imports Kenyan vegetables and flowers and supplies of finance and high-tech equipment. This 2-way trade is vital to Kenya’s horticultural sector, but it has been declining steadily since 2012.
Despite previously stagnant UK retailer prices and rising freight costs, Kenyan producers have struggled to deliver consistent quality and high volumes competitively. Poor trade facilitation, depreciation of the pound and uncertainty over post-Brexit food standards requirements have further reduced their market share.
Similarly, UK exports to the Kenyan horticultural sector including eg farm machinery have declined after competition from India, China, and Turkey. This is made worse because competitive credit terms have not been available for Kenyan importers.
A new International Development Association (IDA*) credit of $550 million that will allow Tanzania to unlock critical road and airport bottlenecks, enhance its role as a transit country, and leverage more effectively its national parks for tourism. The Tanzania Transport Integration Project (TanTIP) aims to improve the safety, climate resilience, and capacity of key road corridors and regional airports. It will also help improve the capacity of relevant transport sector institutions to plan for and manage the sector. “Much of Tanzania’s development success over the past decade has been predicated on the critical advantages of its strategic maritime location, its rich and diverse natural resources, its socio-political stability, and its rapidly growing tourism industry,” said Mara Warwick, World Bank Country Director. “Investments under this project will contribute to wider government efforts to improve the integration of Tanzania’s economy and its connection with its neighbors and global markets, while ensuring adaptability of the infrastructure.”
A tiny sliver of lawmakers on the Budget Committee have objected to the decision to appropriate Shs35b to the Microfinance Support Centre (MSC) in the Budget for Financial Year 2022/2023. In a minority report, the five lawmakers claim that “MSC operations are marred with massive irregularities and without adequate supervision.” They go on to add that “it has veered off its operational guidelines.’’
“Continued budget allocation to the entity exposes the scarce public resources to the risk of further abuse,’’ the report reads, naming 10 Saccos that scooped huge sums anywhere between Shs700m and Shs3b.
Ghana and Uganda are among several African countries banning the export of grains and other farm produce, with the latter imposing high taxes to prevent food exports to neighboring countries. The Ghanian government has extended a ban on grain exports. A temporary ban on exporting maize, rice, soybeans, and other grains — which took effect in September last year — will now run until September 2022. The original ban was put in place to ensure food security and increase local poultry and livestock production. The extension of the ban comes as grain prices soar, partly because of Russia’s war on Ukraine. But some farmers are unhappy with the extended ban, saying they would get better prices if they could sell their crops outside of Ghana. So they want the government to lift it.
A ten-member delegation of Zambian legislators just through a visit to Tanzania made this appeal after a tour of Kairuki Pharmaceuticals Industry Ltd (KPIL) at Zegereni in Kibaha, Coast Region, at the weekend. Heading the team was Dr Christopher Kalila, acting chairperson of the standing committee for Health in the country’s legislature, who remarked shortly after the tour that a strong private sector has immense potential of playing a decisive role in helping make the pharmaceutical subsector more high-tech. This would fast-track investments, improve the production and distribution of drugs while cutting production costs, he stated.
“If African countries can produce medicinal drugs locally, they will have greater capacity to transport and reach their people faster and more easily, especially during pandemics like Covid-19,” he asserted. He remarked that Tanzania was leading the way in the Southern African Development Community (SADC) zone in “laying the ground” for enhanced local production of pharmaceuticals.
Despite the recent decision of the Federal Government to reopen additional four land borders, Nigerian importers and manufacturers are still forced to pay over N9 million levy on transit goods by the Benin Republic. This development has made it difficult for manufacturing firms that engage in cross-border trade to freight their products to the neighbouring countries, especially to Ghana through the Seme border corridors.
However, a source at the Manufacturers Association of Nigeria (MAN) disclosed that Nigerian manufacturers are made to pay the N9 million mandatory transit levy per truck, hence, any truck that refuses to pay would not be allowed to go through the Benin border despite Nigeria being a signatory to the ECOWAS Trade Liberalisation Scheme (ETLS).
AfDB to reduce wheat importation in Nigeria by 40% in 2023 (Farmers Review Africa)
The African Development Bank (AfDB) is set to reduce the importation of the wheat in Nigeria by 40% by 2023.
According to the Ms Beth Dunford, AfDB’s Vice President, Agriculture, Human and Social Development, the mission will be achieved through the wheat production technology being supported by the Bank in Nigeria, that aims to boost wheat production in the country. According to Dunford, the technology is presently being used in Nigeria, where it is being cultivated on 87,000 hectares, with the potential to expand to 250,000 hectares this season. She stated that the Bank was now trying to determine how much of the money will be awarded to each country, emphasizing that the fund was open to all countries on the continent. The assistance aimed at smallholder farmers would help them increase production.
“This is the basis of the 1.5 billion dollars Africa Emergency Food Production Facility that was just approved by the Board. This facility will be supporting the African government to reach 20 million farmers with improved technologies like the heat-tolerant wheat to produce 38 million tonnes of food on the continent,” she said.
The ministry of trade and tourism of Djibouti in collaboration with ECA validated its national strategy for the implementation of the African Continental Free Trade Area (AfCFTA) on 9 May 2022 in Djibouti.
Mr Mohamed Warsama Dirieh, Minister of Trade and Tourism, said “The willingness expressed by the President of the Republic H.E. Ismael Omar Guelleh through our accession to the AfCFTA comes at a crucial time marked by the socio-economic setbacks that our countries are experiencing due to the COVID-19 pandemic but also the ongoing financial, economic and food shocks.” He further added: “Despite the challenges, the strategy with a priority action plan should allow our country to analyse in detail the tasks to be accomplished to take advantage of the AfCFTA.”
Mr Souleymane Abdallah, Economic Affairs Officer of the ECA, emphasised the need to pay particular attention to supply-side constraints, which have also been important non-tariff barriers to intra-African trade. “A key element is the lack of investment in infrastructure and logistics that will facilitate market access. This brings us back to the imperative of mobilizing resources to finance investment on the continent” he noted.
Egypt plans to double exports to $100 bln in next 3 years: PM Madbouly (Al Arabiya English)
Egypt plans to double its exports to $100 billion within the next three years, Egyptian Prime Minister Mostafa Madbouly told Emirates News Agency WAM on Sunday. “We are working to increase and double exports to bring Egypt’s exports to more than $100 billion over the next two or three years,” the Egyptian Prime Minister said on Sunday. Madbouly’s comments come after he visited the United Arab Emirates on Saturday to meet with his Jordanian counterpart Bisher al-Khasawneh and the UAE President Sheikh Mohamed bin Rashid to launch the ‘Industrial Partnership for Sustainable Economic Growth.’
Freight transport on the Douala-Ndjamena Corridor fell 10% YoY in 2020 (Business in Cameroon)
Throughout 2020, 900,000 tons of goods transited on the Douala-Ndjamena corridor. Compared to a year before, the volume is down by 100,000 tons or 10%. In a recent note, the Ministry of Transport revealed that this decline, which is due to the Covid-19 pandemic, has broken a growth dynamic observed since 2018. During that year, the document says, 800,000 tons of goods transited the corridor. The number then grew to one million tons in 2019, before dropping to 900,000 tons in 2020.
According to the World Bank, the Douala-Ndjamena corridor “accounts for 35% of the GDP of the two countries and serves 20% of the population of Chad and 35% of that of Cameroon. However, transporters often complain about police harassment due to the high number of checkpoints where they are forced to pay bribes. Also, all these controls delay the flow and fluidity of transport on this road.
To facilitate the traffic, Cameroon has decided to remove 39 irregular checkpoints of the 66 identified on its territory. This will leave 27 regular mixed checkpoints.
African trade and economy news
As part of efforts to boost trade in Africa, stakeholders are tasking African governments to look within their countries and the continent as a whole in their bid for economic transformation. It is for this reason that these industry players are organizing the ‘Kwahu Summit in Africa’s prosperity to provide the platform for various African Heads of state, business leaders and other prominent actors to chart actionable steps towards realizing the objectives of the African Continental Free Trade Area (AfCFTA). Sub-Saharan Africa’s success in the global market rests on deepening regional integration to scale up supply capacity and build regional value chains. The establishment of the Africa Continental Free Trade Area presents opportunities to boost intra-African trade, strengthen the complementarities of production and exports, create employment, and limit the impact of commodity price volatility on the participants. It is for this reason that the Kwahu Summit on Africa’s Prosperity is being organized under the theme ‘AfCFTA: From Ambition to Action, Delivering Prosperity through Continental Trade’.
Pan-African integration has made progress but needs a change of mindset (The Conversation)
This year’s celebration of Africa Day provides another opportunity to assess how far continental integration has progressed. Integration would mean a truly united Africa – either a federalist “United States of Africa” or the African Union (AU) exercising binding powers over member states. At present the AU merely serves as a platform for coordinating the interactions of its 55 member states. Although some progress has been made, more needs to be done to achieve the goal of integration.
Member states need to move beyond paying lip service to unity, and empower critical AU organs. This requires a shift in mentality. States need to appreciate the need to sacrifice some autonomy for common socioeconomic and political gains. Lacklustre commitment to continental integration is connected with Africa’s peripheral position in global dynamics.
Why World Bank is pushing against subsidies in E. Africa to deal with crises (The East African)
Samuel Munzele Maimbo, the World Bank director for development finance, spoke to Nelson Naturinda on how the bank is helping regional economies deal with global crises. There has been an outcry over high commodity prices. Countries such as Kenya, Rwanda and Tanzania have given economic subsidies for fuel but the World Bank is reported to be against these.
Context matters. We must consider the state of the global economy. Global economic growth has been declining from 5.5 percent in 2021 to 4.1 percent currently.Covid-19 destabilised the economies of developing countries that have lost a lot. On top of that, the war in Ukraine has taken wheat from Ukraine and Russia off the market.Any government thinking about a response has to look at short-term and long-term needs. Short-term needs could be food and fuel and long term needs would be education.
Member states of the east African trade bloc will have to work on a number of requirements that they are scoring low if they are to fully benefit from European Union’s 447 million market. During a workshop organized by the Stockholm Environment Institute (SEI) and the East African Science and Technology Commission, it emerged that the eight members of the East African Community are showing progress but are still unable to erase critical trade inhibitors. A scoping report presented by SEI disclosed that the bloc is struggling with job creation, taming corruption, climate resilience, innovation, infrastructural development, attracting foreign direct investment and controlling currency volatility.
“On average, east Africa is scoring low in the EU and Carbon Border Adjustment Mechanism (CBAM) policy indicators for macro economy, environment, social protection and governance,” Dr Anderson Kehbila of SEI told attendees.
To achieve optimum trade balance with the EU, Kenya, Tanzania, Uganda, Rwanda, Burundi, Democratic Republic of Congo, Ethiopia and South Sudan will need to show more efforts in prosecuting corrupt trade players in the East Africa Court of Justice while domesticating laws enacted by the East African Legislative Council, participants said.
“Trade laws should not be made in isolation. Rules of origin, fair trade, carbon emission requirements, currency volatility revaluations and financing frameworks need strengthening,” said Caroline Cherop, head of trade at KNCCI.
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.
ESREM Project Closes on a High Note (COMESA)
The Enhancement for a Sustainable Regional Energy Market (ESREM) Project is closing on 30th May 2022 after being in operation for the past five years. Through the support of the European Union, the Project has endeavored to create a favorable regulatory environment and tools for regulatory oversight in the Eastern Africa -Southern Africa-Indian Ocean (EA-SA-IO) region. This is expected to stimulate increased power trading and bring a new horizon of cross border power trade opportunities for the countries in this region.
The overall objective of ESREM was to enhance a sustainable regional energy market in the EA-SA-IO region, which would be conducive to investment and sustainable development of the energy sector. The project was also meant to achieve a harmonized, efficient and gender-sensitive regulatory environment and it sought to capacitate regional regulatory associations and power pools to oversee and stimulate increased regional power trade more effectively.
Heads of Africa’s leading regional and continental bodies on Thursday met to discuss how to fast-track the continent’s development plan, known as Agenda 2063. Covid-19 and rising fuel, food and fertilizer prices in the wake of the Russia-Ukraine war, have raised the stakes, and the urgency to speed up recovery. The roundtable was organized by the African Development Bank Group, on the sidelines of its 2022 Annual Meetings, currently under way in Accra, Ghana. It was attended by representatives of the African Union Commission, the African Continental Free Trade Area (AfCFTA), regional economic communities, Africa50, and other regional development banks. African Development Bank Acting Senior Vice President Yacine Fal, who moderated the meeting, said it offered participants the opportunity to strengthen partnerships, mobilize more resources, as well as to take stock of the status of regional integration in Africa.
n opening remarks, African Development Bank chief Akinwumi A. Adesina noted that Africa would need $484 billion to support recovery efforts, with an additional $7 billion to $15 billion annually to deal with climate change. Infrastructure, which would drive that growth, requires another $68 billion to $108 billion, Adesina said. “Where are we going to find that money? The answer is quite simple: by collaboration and determination. We must pull together and push through,” he said.
Adesina commended the African Continental Free Trade Area (AfCFTA) which became operational in January 2021, marking a major milestone in Africa’s regional integration agenda. He said the institution had broken ground in establishing the legal, regulatory, and institutional arrangements that will allow Africa to become a single, $3.4 trillion market. “We must make the most of the strengths of every institution around the table to succeed in our goals,” he said.
On the margins of the African Development Bank Group’s 2022 Annual Meetings, the Africa Investment Forum convened investors to promote the power of the platform to draw critical investment to the continent. The investor roundtable on 25 May came at a time when capital flows are in flux in the aftermath of the Covid-19 pandemic. Such discussions are integral to the Africa Investment Forum, connecting project sponsors, investors, and financiers, as well as the public and the private sector.
The investment roundtable, held at the Kempinski hotel in Accra, Ghana, included AIF’s founding partners, development finance institutions, commercial banks, high net worth individuals, family businesses, representatives from venture capital and private equity firms.
On transport infrastructure, the $15.6 billion Abidjan-Lagos Highway project, led by the Economic Community of West African States (ECOWAS) Commission took centre stage. This is the largest investment opportunity that was discussed – and oversubscribed – at the 2021 AIF Boardrooms. This project, part of the Programme for Infrastructure Development in Africa (PIDA), is a critical public-private partnership that will link Abidjan to Lagos, via Accra, Lomé, and Cotonou along the West African coast.
AfDB defends financing of natural gas power projects (Business Daily)
The African Development Bank (AfDB) will continue financing natural gas projects despite environmental lobbyists claiming degradation, its president Akinwumi Adesina said. Although natural gas produces about half as much carbon dioxide (C02) when burned as coal, some critics say that rising production of the commodity is emerging as one of the biggest drivers of climate change and that plans for industry expansion could stifle efforts to stabilise climate. Dr Adesina, however, downplayed the concerns about the impact of natural gas on the environment and maintained that AfDB would continue financing such projects. “Renewable energy alone cannot power Africa…natural gas must remain part of Africa’s stable energy system,” Dr Adesina said last week during the bank’s annual general meeting in Accra.
Africa’s mobile money taxes could push poor out of digital economy (Thomson Reuters Foundation)
Cash-strapped African nations are rolling out an e-levy on mobile money transactions to boost revenues, but the policy could hurt the poorest as the cost of living rises and reverse impressive gains made in boosting economic inclusion.
Ghana is the latest in a growing number of African nations to impose a tax on mobile phone-based transactions, but critics say the levies are hurting millions of small-business owners and other low-income groups, just as the cost of living rises. The charges threaten to reverse the impressive gains made by mobile money in boosting economic inclusion, they warn. “Mobile money has been a great enabler, especially for the marginalised. It’s a main driver of financial inclusion for the poor, women and rural communities across Africa,” said Angela Wamola, head of sub-Saharan Africa at telecoms industry body GSMA.
25 coffee producing African countries under the Inter- African Coffee Organisation (IACO) have officially signed the Nairobi Declaration to have coffee anchored as a strategic agricultural commodity under the African Union, in harmony with AU Agenda 2063. The ongoing Summit is being held under the theme “Sustainable Development and Economic Growth in the African Coffee Sector”. The African coffee producing countries consequently requested the African Union (AU) to adopt Coffee as strategic Agricultural Commodity in harmony with the Africa Agenda 2063.
According to the G25 African Coffee Summit Nairobi Declaration on the adoption of coffee as a strategic Agricultural Commodity in the AU Agenda 2063
he adoption of coffee as a strategic commodity in the AU will give Africa the leverage to address the challenges faced by the coffee farmers and other actors across the value chain under the auspices of the African Union to build a united and integrated Africa. The G25 African Coffee Summit also requested “The AU Commission to urgently develop an evaluation framework to track down the socio-economic impact on coffee farmers in relation to alleviating poverty and enact the AfCFTA to facilitate cooperation between African countries to encourage inter-African trade to explore the untapped coffee markets within Africa.”
The Summit also resolved to support production and research, enhance transparency and traceability of origins; encourage youth employment and empower the role of women; allocate more land for coffee production; incentivize farmers; support coffee research; offer technical assistance to farmers.
Countries in Kisumu declaration, endorse UN, African new urban agenda (The Guardian Nigeria)
With a total of 20 resolutions pledging renewed commitment to tackling key issues relating to growing role of cities on implementation of the United Nations 2030 Agenda and the African Union Agenda 2063, city managers and high level officials of government ended the 9th edition of the Africities summit in the city of Kisumu in Kenya. Given the change in pattern of settlements in Africa from being a continent mainly rural 30 years ago and one which will become mainly urban in the upcoming 10 years; they plan to make intermediary cities the structuring clusters of sustainable development in Africa by granting them a prominent place in spatial planning and creating new territorial dynamics that promote exchanges and linkages between the rural and urban environments. By 2050, 50 per cent of all Africans will live in urban areas. Today, more than 64 per cent of the urban population lives in informal settlements. There is a deficit of housing and finance with only 15 per cent of urban dwellers in Africa able to purchase their own homes.
The summit in its Kisumu declaration, acknowledged that small and intermediary cities currently host 60 per cent of urban dwellers and account for nearly 50 per cent of the African Gross Domestic Product (GDP); the delegates pledged to give priority to urban planning as an instrument for controlling the growth of urban and peri-urban areas by putting in place the institutional, legal, regulatory, and operational instruments, as well as the conditions for a participatory dialogue with the people.
The UK government’s new International Trade Strategy directly links Britain’s aid budget to trade deals – and as a result has been criticised for offering “aid for trade” and accused of putting “politics before poverty” and being “a double whammy against the world’s poor”. One opposition politician called the policy “short-sighted and wrong”; another claimed, “the UK’s proud reputation as a development superpower has been comprehensively trashed.”
One path sees nations in Africa, with something of a perpetual colonial status, eternally dependent on handouts from former rulers. The other sees us raised up – and raising ourselves up – to the status of equals. At the heart of the strategy is a decision that the British government’s contributions to multilateral organisations will decrease in favour of bilateral partnerships. This means favouring individual aid packages aimed at, in the words of the strategy, “supporting partner countries to grow their economies sustainably” through investment “in particular for cleaner and more reliable infrastructure.”
Canada releases $78m for smallholder food producers in Africa (The East African)
The Canadian government has announced a $78 million contribution to a funding kitty of the African Development Bank (AfDB) to aid local food producers improve their yield. The money, to be disbursed as concessional loans, will target small and medium enterprises involved in agribusiness especially those founded and run by women. The money was announced this week as the Bank launched its Emergency Food Production Facility, a $1.5 billion project aimed at raising African yield of food production to 38 million tonnes by end of 2022.
The Bank said it will raise an initial $1.3 billion and partners will raise the rest to support up to 20 million farmers across the continent with soft loans worth of certified seed, fertiliser and technology necessary to improve yield. The money will be disbursed as part of the Assistance Innovation Programme which the Canadian government uses to support private enterprises involved in Sustainable Development Goals such as fighting hunger or climate change.
Pak-Africa current $4.18 billion trade below then it’s potential: Zafar Bakhtawri (Associated Press of Pakistan)
Former President Islamabad Chamber of Commerce (ICCI) and senior leader of United Business Group (UBG) of FPCCI Zafar Bakhtawri said the current $4.18 billion annual trade volume between Pakistan and Africa was far below then it’s potential in the Africa region, which could be doubled in the next three years. Exploring new markets and trade diversification policy in Africa is critical to increasing annual trade, he said.
Global economy news
Following six quarters of sustained growth, the value of international merchandise trade for the G20 reached a new high in Q1 2022. Exports and imports increased by 3.6% and 5.8%, as compared to Q4 2021 and measured in current US dollars. The increase is largely explained by rising commodity prices, as the war in Ukraine and COVID-19 containment measures in East Asia placed further pressure on the prices of traded goods and on already strained supply chains.
Growth in exports and imports of services for the G20 are estimated at around 2.0% and 1.1% in Q1 2022, respectively, compared to the previous quarter and measured in current US dollars. The preliminary estimates are well below the rates of 6.2% and 3.1% recorded in Q4 2021 for exports and imports, reflecting weaker trade in the transport sector in East Asia and a general slowdown in services trade across most of the G20 economies for which data are available.
In recent years, extreme weather events and trade tensions spurred by growing economic nationalism and protectionism have tested the resilience of global value chains (GVCs). The sudden and massive Covid-19 induced drop in global trade in the first half of 2020 dealt them another blow, prompting predictions that the pandemic would result in restructuring of the GVCs, shortening the supply chains, and leading to reshoring. Then, as the world economy was still recovering from Covid-19, the war in Ukraine caused more major disruptions to GVCs, hitting developing countries particularly hard.
Recent studies suggest that GVCs transmit shocks to production and trade from one country to another. On the other hand, participation in GVCs may soften the blow of a domestic shock such as a lockdown or natural disaster like the 2011 earthquake in Japan, by ensuring access to critical inputs when foreign markets are closed. GVCs can also drive a recovery, spreading the benefits as countries emerge from lockdowns or lift trade restrictions at varying paces. What further shocks to GVCs should we expect in coming years? Is it possible to design policies to help developing countries enhance resilience to trade shocks without endangering growth?
In a new paper, we couple ENVISAGE, a state-of-the-art global economic model, with the GIDD microsimulation framework to simulate three scenarios: (1) high-income economies and China raise barriers to imports and increase domestic subsidies to re-shore production (‘Reshoring leading economies’), (2) wider localisation when developing countries join the reshoring efforts (‘Reshoring all’), and (3) developing countries seek to reduce trade costs and make it easier to use imports in domestic production (‘GVC Friendly Liberalisation + Trade Facilitation (TF)’).
UN “Deeply Troubled” by Impending Cuts on Development Aid by Rich Nations (Inter Press Service)
The four-month-old Russian invasion of Ukraine, which has triggered a hefty increase in military spending among Western nations and a rise in humanitarian and military assistance to the beleaguered country, is now threatening to undermine the flow of Official Development Assistance (ODA) to the world’s poorer nations. In an advance warning of the upcoming cuts, the UN’s Deputy Secretary-General Amina Mohammed told a recent meeting of the Economic and Social Council (ECOSOC): “As Chair of the United Nations Sustainable Development Group, I am deeply troubled over recent decisions and proposals to markedly cut Official Development Assistance (ODA) to service the impacts of the war in Ukraine on refugees”.
UN Secretary-General Antonio Guterres, who was equally concerned about the impending reductions, has urged donor nations to reconsider making cuts that will affect the world’s most vulnerable. He said ODA is more necessary than ever, and called upon all countries to demonstrate solidarity, invest in resilience, and prevent the current crisis from escalating further.
Russia’s invasion of Ukraine has reconfigured the global oil market, with African suppliers stepping in to meet European demand and Moscow, stung by Western sanctions, increasingly tapping risky ship-to-ship transfers to get its crude to Asia. The reroutings mark the biggest supply-side shake-up of the global oil trade since the US shale revolution altered the shape of the market about a decade ago and suggest Russia will be able to navigate a EU oil ban, provided Asia and China continue to buy its crude. Sanctions imposed on Moscow after the conflict in Ukraine kicked off in February, including a US ban on its oil imports, have prompted Russia to pivot away from Europe, where its crude is shunned, to customers in India and China who are picking up cargoes at a steep discount, according to industry data and traders.
Russian exports were back to pre-invasion levels in April, according to data from the Paris-based International Energy Agency and oil prices have stabilised at about $110 after hitting a 14-year high above $139 a barrel in March. Even if the EU agrees to an oil ban in its next round of Russian sanctions, analysts said the impact could be tempered by demand from Asia.
Russia’s invasion of Ukraine has reconfigured the global oil market, with African suppliers stepping in to meet European demand and Moscow, stung by Western sanctions, increasingly tapping risky ship-to-ship transfers to get its crude to Asia. The reroutings mark the biggest supply-side shakeup of the global oil trade since the U.S. shale revolution altered the shape of the market around a decade ago and suggest Russia will be able to navigate a European Union (EU) oil ban, provided Asia and China continue to buy its crude.
Sanctions imposed on Moscow after the conflict in Ukraine kicked off in February, including a U.S. ban on its oil imports, have prompted Russia to pivot away from Europe, where its crude is shunned, to customers in India and China who are picking up cargoes at a steep discount, according to industry data and traders.
IFC and US-based fund manager Partners for Growth (PFG) are uniting to provide much-needed debt capital to innovative early- to mid-stage companies in emerging markets, with a focus on fintech, software, e-logistics, health, and life sciences firms.IFC, a member of the World Bank Group, will invest $30 million in a new investment vehicle managed by PFG. The vehicle will be PFG’s first managed account dedicated solely to global emerging markets and IFC’s first investment with a private debt manager focused on venture and growth stage markets. PFG will collaborate with its long-time strategic partner, Silicon Valley Bank, on the initiative.
“The COVID-19 pandemic has heightened uncertainty and risk aversion in emerging markets, limiting the amount of credit available for small- to mid-sized companies,” said Paulo de Bolle, Global Senior Director of IFC’s Financial Institutions Group. “Our partnership with PFG will play a key role in improving access to finance for deserving high growth technology businesses.”
The adoption of digital business has accelerated tremendously in the last two years as the world adapted to the pandemic. Nowhere is the scope for impact greater than in emerging markets as they rebound in the coming years. This partnership will support the growth of small and medium enterprises across the technology sector and allow new financial services providers to thrive. Deepening capital markets is an essential element to improving the economic recovery. By providing scarcely available private credit to innovative businesses in developing countries, the partnership with PFG is aligned with IFC’s strategy of scaling up investments to reverse economic decline, foster technological innovation, and mobilize private capital at scale.
The preparations to host the Commonwealth Business Forum (CBF) in Rwanda, are in high gear, according to officials. Slated to take place between June 21 and 23, CBF is one of the flagship events of the Commonwealth Heads of Government Meeting (CHOGM), which will be hosted in Rwanda in June 2022. For Rwanda, hosting the forum fourteen years since it was last hosted in Africa, the country sees it as a great platform to strengthen trade and investment with the rest of the Commonwealth members.
According to the Commonwealth Secretariat, the Commonwealth Advantage, with its shared values, regulatory systems and language, has the potential to increase intra-Commonwealth trade by 20 percent. It can also reduce the cost of doing business between member countries by up to 19 percent. Revised estimates indicate that bilateral trade costs between Commonwealth country pairs are 21 percent lower, on average, compared with non-Commonwealth countries.
Despite concerns that the COVID-19 economic collapse would torpedo international remittances, formal remittances to several developing countries ballooned early in the pandemic. This increase might, however, have reflected a shift from informal channels to formal ones rather than a change in actual flows. This paper employs Mexican data to explore this and finds that remittance channels did change. The rise in formal inflows was larger among municipalities that were previously more reliant on informal channels (for example, near a border crossing). Households there also experienced a disproportionate increase in bank accounts opened after lockdown measures. The paper also rules out hypotheses related to the US Coronavirus Aid, Relief, and. Economic Security Act and altruism.
Blockchain can drive financial inclusion and climate resilience (Thomson Reuters Foundation)
Crypto and blockchain solutions can be tailored to meet the specific needs of the world’s underbanked, and enable an inclusive and equitable global financial system.
Today, some 1.7 billion people around the world lack access to one of the most basic building blocks of prosperity: a bank account. As the use of crypto and blockchain technologies expands globally, there’s an opportunity to drive financial inclusion and climate resilience by transforming the core infrastructure that affects how financial products and services are delivered. For people without access to any form of financial services, the inability to save money safely or trade beyond cash in hand can leave them caught in a poverty trap that’s almost impossible to escape. Meanwhile, the World Bank predicts that by 2030, climate change will push 100 million more people into poverty, with low-income countries bearing 75%-80% of climate impact costs. This is where crypto and blockchain come in.
Bitcoin is often referred to as “digital gold”. Back in 2010, BTC was worth 5 cents, and its price reached $69,000 at its peak in November 2021. It is clear that the prospect of quickly and easily turning $100 dollars into $138,000,000 attracted a huge mass of people willing to get rich quickly. So what happened in the last 10-12 years can be called the “Digital Gold Rush”, by analogy with the Gold Rush in the USA in the second half of the 19th century. But then many, instead of getting rich, on the contrary, lost their money. The same can be observed now: bitcoin has returned to the values of December 2020, having lost about 60% of its value in just 6 months.
According to the Bloomberg Billionaires Index, Coinbase CEO Brian Armstrong’s net worth has decreased from $13.7 billion to $2.2 billion. This was not only due to the fall in digital asset prices, but also due to the fall in Coinbase shares, the price of which fell by more than 80%. The capital of the CEO of the FTX crypto exchange Sam Bankman-Fried has halved and now stands at $11.3 billion. The well-known founders of the Gemini cryptocurrency trading platform, the brothers Cameron and Tyler Winklevoss, have individually lost more than $2 billion, which is equivalent to almost 40% of their total fortune.
The Crypto Fear & Greed Index is firmly entrenched in the Extreme Fear zone. And the president of Euro Pacific Capital Peter Schiff predicts the fall of the main cryptocurrency to $8,000. “We have a long way down,” the billionaire wrote.
Green trade is crucial to growing the UK’s economy, achieving net zero and driving our future prosperity, the International Trade Secretary will say today (18 May). In a speech at Bloomberg, Anne-Marie Trevelyan will set out the UK’s pioneering role in harnessing trade to combat climate change, and how driving renewable energy can cut reliance on Russian oil and gas and reinforce the UK’s energy security. The UK’s green economy is projected to grow by 11% per year out to 2030, and by 2050 over 1.2 million people could be directly employed in low-carbon goods and services sectors – a six-fold increase from today.
The International Trade Secretary will also announce a new Green Trade and Investment Expo in the North East this autumn, hosted alongside the Department for Business, Energy and Industrial Strategy. The Expo will bring together UK businesses and global investors to capitalise on the commercial opportunities from our drive to net zero.
The Ocean is the planet’s largest ecosystem, regulating the climate, and providing livelihoods for billions. But its health is in danger. The second UN Ocean Conference, due to take place in June, will be an important opportunity to redress the damage that mankind continues to inflict on marine life and livelihoods. With delegates from Member States, non-governmental organizations, and universities attending, as well as entrepreneurs looking for ways to sustainably develop the “Blue Economy”, there are hopes that this event, taking place in the Portuguese city of Lisbon between 27 June and 1 July, will mark a new era for the Ocean.