tralac Daily News
Minister Thoko Didiza attends World Trade Organisation 12th Ministerial Conference on Agricultural Negotiation in Geneva, Switzerland, 12-16 Jun (South African Government)
Minister Didiza to attend the World Trade Organisation 12th Ministerial Conference on Agricultural Negotiation in Geneva, Switzerland from the 12th to the 16th June 2022The Minister of Agriculture, Land Reform and Rural Development, Ms. Thoko Didiza, MP will from the 12th to the 16th of June 2022 attend the World Trade Organisation Ministerial conference on agricultural negotiations in Geneva, Switzerland. The last major decision related to the agricultural negotiations was at the Nairobi Ministerial Conference of the WTO in December 2015 with the elimination of export subsidies. At the Ministerial Conference in Buenos Aires in December 2017, no joint declaration or work program could be agreed by the WTO membership. To date, progress has been limited with members mainly repeating known positions. The divide remains largely between developed and developing members. In addition, there are huge differences between the USA and China and India.
South Africa’s priority in the agricultural negotiations is to achieve a substantial and real reduction of trade distorting domestic support and to ensure sufficient policy space to carry out developmental policies that seeks to address poverty, inequality and low economic growth. For South Africa, the negotiations need to follow a certain sequence with domestic support as a priority. Market access negotiations can only start once substantial progress has been made with domestic support. This is to ensure historical imbalances are addressed and the playing field is leveled before engaging in further market openings.
Approximately 70% of South Africa’s agricultural exports are already duty free incorporating the SADC Trade Protocol, the EPA agreement with the EU, AGOA with the USA and including the African Continental Free Trade Agreement (this agreement is not yet implemented). South Africa’s major challenges regarding market access are in the SPS field and those are not negotiated with the Agreement on Agriculture.
Cabinet approves public consultations on illegal metals trade (SAnews)
Cabinet has approved that public consultations be undertaken on proposals to restrict the trade of illegally obtained scrap and processed metals. Addressing reporters following this week’s Cabinet meeting, Minister in the Presidency, Mondli Gungubele, said the theft of scrap metal and copper cable from public infrastructure hinders the performance of the economy by imposing enormous costs.
“Some of the disruptions include the supply of energy and rail services due to vandalised rail tracks. They impose additional transport costs on commuters due to disrupted commuter transport. Vandalised and unsecured electricity cables pose safety risks to communities, especially children.”
Japan-South Africa business forum a boost for SA economy (SAnews)
Minister in the Presidency, Mondli Gungubele, says strengthening ties with Japan can present increased economic opportunities for South Africa. The Minister was briefing media on Cabinet decisions on Thursday. This after the Japanese government, together with the Department of Trade, Industry and Competition (dtic), launched the Japan-South Africa Business Forum last week.
“Japan is one of our most important trade partners and a leading investor in a number of South African sectors, ranging from automobiles to advanced mining machinery, and from agribusiness to financial services. “Cabinet welcomed the outcomes of the recent Japan-South Africa Business Forum, which agreed to an ambitious work programme that includes collaboration on green industrialisation, electric vehicle technologies and green hydrogen.
“SA exports to Japan increased from R61 billion in 2011 to R150 billion in 2021. Last year, SA imported R34 billion worth of goods... resulting in a R114 billion trade surplus in South Africa’s favour with Japan,” the department said.
Kenya to begin exports of livestock products from Chinese-built port in 2023 (CGTN Africa)
Kenya will begin to export livestock products from the Chinese-built Lamu Port in 2023, a government official said Wednesday. Harry Kimtai, the principal secretary of the Ministry of Agriculture, Livestock, Fisheries, and Cooperatives, told journalists in Nairobi, the capital of Kenya, that the government has allocated 500 million shillings (4.27 million U.S. dollars) for the construction of an efficient transport corridor for livestock at the port. “We want to establish facilities at the Lamu port that will support the docking of ocean vessels to allow the loading of livestock using the right procedures that take into consideration the issue of animal welfare,” Kimtai said. Lamu Port, which is being built by China Communications Construction Company, can handle vessels with a capacity ranging from 12,000 to 18,000 twenty-foot equivalent units (TEUs). Kenya commissioned the first berth of the Lamu port in May 2021, which is part of the Lamu Port South Sudan-Ethiopia Transport (LAPSSET) corridor.
Tanzanians can now invest in SADC without BOT waiver (IPPMedia)
TANZANIANS can now invest in Southern Africa Development Community (SADC) countries without seeking waiver from the Bank of Tanzania (BOT). “This is expected to increase investor base and competition in government securities market,” said a statement by the Monetary Policy Committee after its meeting on 6th June 2022 to assess the conduct of monetary policy in March and April 2022, recent global and domestic economic situation. However, according to the regulations, government securities purchased shall not be transferred to a resident within six months from the date of purchase.
US-Ghana Business Forum comes off on June 16, 2022 (Myjoyonline)
The U.S Chamber of Commerce and the American Chamber of Commerce Ghana will organize the 3rd high-level meeting between US and Ghanaian Government Officials and Businesses on the official visit of the Deputy Secretary of Commerce, Don Graves.The U.S.-Business Forum is aimed at deepening diplomatic and commercial partnerships between Ghana and the United States for successful implementation of the African Continental Free Trade Agreement (AfCFTA).The theme for 2022 U.S.-Ghana Business Forum is: “Leveraging the AfCFTA to Promote U.S-Africa Commercial Partnerships.” This event is in line with the drive by the AfCFTA Secretariat to engage the private sector, the African diaspora, and other strategic partners for the effective implementation of the Agreement.
The 2022 Forum aims to strengthen trade and investment, promote business partnerships, and opportunities between U.S. and Ghanaian businesses and review the manufacturing and digital sectors as enablers for implementation of the single market project in Africa. At the end of the conference, it is expected that U.S.-Ghana commercial partnership will be projected and enhanced, focused on improving the investment climate in Ghana and the African continent.
DRC may hold key to prosperity in East Africa (China Daily)
In Africa’s COVID economic recovery strategies, countries need to embrace the trinity of unification, regionalism and multilateralism to spur industrialization, economic growth and development. As Africa as a whole is one of the most affected economies in the world, the World Bank estimates that approximately 40 million people on the continent have been pushed into extreme poverty due to the pandemic’s devastating impact. However, the pandemic merely triggered compounded issues that Africa has suffered from for decades.
The Democratic Republic of Congo is one country that has chosen unification, regionalism and multilateralism over unilateralism. On April 8, the DRC signed a treaty of accession to the East Africa Community, becoming the seventh member of the regional bloc, which also includes Burundi, Kenya, Rwanda, South Sudan, Tanzania and Rwanda.
Faced with the challenge of immense poverty, the DRC has about 60 million people who live on less than $1.90 a day, the international poverty line. This comes at a time when the country with a population of more than 94 million has ample natural resources such as gold, diamonds, aluminum, cobalt and copper, significant arable land and hydropower, as well as immense biodiversity and the world’s second-largest rainforest.
The East Africa Community, which aims to strengthen the ties among its member states through a common market and a common customs tariff to help achieve economic growth in the region, faces a tall order in the re-engineering of the economy of the DRC－a country that was once ravaged by conflict and war. However, will the DRC have an impact on the East Africa Community?
How taxes are driving illicit trade in Kenya (BusinessLIVE)
A rapid rise in the cost of living in Kenya — brought on by inflation on essential goods and heavy taxes — is thought to be fuelling the illicit trade in goods. Timothy Kamau* is a trader in the Kenyan town of Bungoma, near the border with Uganda. He’s ready to shut up shop, he says, as buyers have taken their custom to the store next door, where goods that have been smuggled into the country are sold more cheaply. Or he needs to find a way into the illicit economy himself. “I am looking for a connection in Uganda so that I can start getting goods from there to keep me afloat,” Kamau tells the FM.
Malawi Must Step Up Efforts to Address Critical Gender Gaps to Unlock Untapped Economic Potential and Empower Women (World Bank)
Malawi’s efforts in closing the gender gap require urgent improvements in schooling rates for girls at the upper secondary level, lowering maternal mortality rates, further decreasing the fertility rate, ending child marriages, and addressing constraints on access to various assets that affect women’s productivity as farmers, entrepreneurs, and wage workers, according to two new World Bank reports. The new Malawi Gender Assessment and Gender-Based Violence Assessment reports show that with more than 12 laws, 10 policies, and nine international or regional treaty obligations related to advance gender equality, Malawi has an enabling environment anchored in a progressive Constitution and relevant legislation. However, low and fragmented allocation of resources to support implementation of existing laws, policies, and programs, continues to constrain efforts to close the remaining gender gaps and prevent GBV.
Ghana Can Leverage Trade Policies to Accelerate Export Diversification and Economic Transformation for Jobs (World Bank)
Ghana’s merchandise trade competitiveness declined over the last decade, resulting in a reduction in the number of exporting firms and their participation in Global Value Chains (GVCs). However, improvements in transport logistics and access to ICT infrastructure over last decade can be leveraged for expanded trade and economic transformation; a key pathway to the creation quality jobs, says the World Bank’s latest trade analysis for the country. The newly released Ghana Trade Competitiveness Diagnostic- Strengthening Ghana’s Trade Competitiveness in the Context of AfCFTA, notes that trade in services and foreign direct investments are also important for ensuring deeper integration into GVCs and efficiency of the manufacturing sector.
“The potential benefit offered by the AfCFTA (about 0.5% additional GDP growth per annum over next ten years) – is very significant, says Pierre Laporte, World Bank Country Director for Ghana, Liberia and Sierra Leone “This should motivate Ghana to harness the transformative potential of trade by cultivating export-oriented activities in both manufacturing and services and following up with the outstanding negotiations and implementation of the AfCFTA protocols.”
AGI pushes for duty exemption on raw material imports (The Business & Financial Times)
Producers want a review of import duty on raw materials meant for production so as to make locally-made products competitive. Ideally, the Association of Ghana Industries (AGI) – which is the umbrella-body of leading local manufacturers – says such taxes are paid after production and not directly on import of raw materials, as it is the case in this country.
“We want importers of raw materials to be considered, because elsewhere producers do not pay duty on imports,” said AGI’s Chief Executive Officer, Seth Twum Akwaboah.
He spoke during the 11th Association of Ghana Industry and Quality Awards launch in Accra, and lamented that making producers pay duty on imported raw materials and then also taxing the final product constitutes an unwarranted double tax burden on them. He said these taxes end up being passed on to the final consumer, and are part of the reason domestically-made goods are uncompetitive in their pricing relative to imported ones.
Ghana Moves Motion On Role of African Parliaments In Accelerating Intra-African Trade at Ongoing 52nd CPA Regional Conference (Peace FM Online)
Ghana’s delegation at the 52nd CPA Africa Regional Conference has moved a motion on the role of African Parliaments in accelerating Intra-African trade. The motion which was moved by the Majority Leader, Osei Kyei-Mensah-Bonsu on behalf of the Rt. Hon. Speaker, Alban Sumana Bagbin and the Parliament of Ghana as a whole is expected to fashion out ways to stimulate local and intra-African trade in a bid to reduce the shocks of the global crises being felt by African countries. Hon. Osei Kyei-Mensah-Bonsu in moving the motion outlined the significance of the trade agreement which he said will turn around the negative to extremely low economic growth being witnessed on the African market as well as its unsustainable fiscal deficits and the constant increase in rising debt levels. “As a direct consequence of COVID-19, African economies experienced negative to extremely low economic growth, unsustainable fiscal deficits, rising debt levels, huge populations being pushed below the poverty brackets and balance of payment problems. As African economies were about to emerge from the shocks of COVID-19, entered the war in Ukraine which is affecting food, fuel, and steel products prices as well as access to international finance.”
“Besides, to achieve the Sustainable Development Goal (SDGs) and the African Union’s Agenda 2063, intra-African Trade will undoubtedly play a key role in ameliorating the poor living conditions of the disadvantaged and repositioning them towards medium to long term inclusive and sustainable growth.”
UNIDO, Canada and Ghana launch Ghana Circular Economy Centre to support the country’s transition to a circular economy (UNIDO)
The United Nations Industrial Development Organization (UNIDO), Global Affairs Canada and the Government of Ghana, through the Ministry of Environment, Science, Technology & Innovation (MESTI), have launched the Ghana Circular Economy Centre Project to support the country’s just transition to a circular economy. “As Ghana seeks to diversify its economy, create export revenue and improve labour and capital productivity, it is also aiming to become a global leader in the transition to circular economy”, said Dr. Kwaku Afriyie, Minister for Environment, Science, Technology and Innovation (MESTI), during the launch event. He reminded stakeholders about the need for all to contribute to environmental protection by thinking and acting circular at all times, “Transitioning to a circular economy will be advantageous to Ghana and will help the country generate green decent jobs, reduce inequality, minimize the impact of climate change on the environment, and provide the economy with a competitive advantage”.
That controversial duty on imported vehicles (The Guardian Nigeria)
The controversy surrounding the recent imposition of 15 per cent National Automobile Commission (NAC) levy on imported used vehicles by the Nigeria Customs Service (NCS) is not unexpected, given the struggling economic condition of Nigerians, and the complications that are bound to attend the levy. Stakeholders such as the African Association of Professional Freight Forwarders and Logistics and the Association of Nigerian Licensed Customs Agents, among others have bluntly rejected the new tax while a few others are largely indifferent in this regard. The NCS, on its own part has indicated that the reported increases are as a result of the migration of the Service from the old version of the ECOWAS Common External Tariff (CET) to the new one commencing in 2022, in line with the World Customs Organisation. This has raised some issues in relations to the conduct of import trade in the country.
The situation needs to be properly reviewed given that while the Customs Services in many other African countries are reducing taxes, the NCS is introducing new ones with the backing of the Federal Ministry of Finance. All these have significant impact on the price of used cars and other related goods in the Nigerian economy. The quest for more revenue by government should not lead to some unnecessary crisis at the ports.
How nanotechnology can revive Nigeria’s textile industry (The Conversation)
Nigeria’s cotton production has fallen steeply in recent years. It once supported the largest textile industry in Africa. The fall is due to weak demand for cotton and to poor yields resulting from planting low-quality cottonseeds. For these reasons, farmers switched from cotton to other crops. Nigeria’s cotton output fell from 602,400 tonnes in 2010 to 51,000 tonnes in 2020. In the 1970s and early 1980s, the country’s textile industry had 180 textile mills employing over 450,000 people, supported by about 600,000 cotton farmers. By 2019, there were 25 textile mills and 25,000 workers. The industry competes in a global textile market that was valued at US$ 993.6 billion in 2021 and is expected to grow at a rate of 4.0% from 2022 to 2030. Once the continent’s leader, Nigeria spends on average US$4 billion a year to import textiles that it could produce itself. Imports put pressure on foreign exchange reserves, jobs and local demand for cotton. Technical innovation could make the textile sector more competitive – not only by improving cotton production but also by improving textile quality. This can be achieved in Nigeria.
Nowadays, textiles’ properties can be greatly improved through nanotechnology – the use of extremely small materials with special properties. Nanomaterials like graphene and silver nanoparticles make textiles stronger, durable, and resistant to germs, radiation, water and fire. Adding nanomaterials to textiles produces nanotextiles. These are often “smart” because they respond to the external environment in different ways when combined with electronics. They can be used to harvest and store energy, to release drugs, and as sensors in different applications.
At the moment, Nigeria is not benefiting from nanotextiles’ economic potential as it produces none. With over 216 million people, the country should be able to support its textile industry. It could also explore trading opportunities in the African Continental Free Trade Agreement to market innovative nanotextiles.
Optimizing U.S. Strategic Policy: A Regional Approach to Ethiopia (The Strategy Bridge)
The world order that emerged after the collapse of the Soviet Union is fading. The economic, political, and security interests of the United States are being challenged globally. Between the war in Ukraine, heightened tensions in the South China Sea, hostile rhetoric and behavior from North Korea and Iran, and a “wildfire of terrorism” in Africa, policy development and resource management have become a bewildering exercise. Within such a complex environment, the U.S. risks being caught off-guard by regions lower in policy priority that hold enormous potential to increase global instability.
The U.S. government’s approach to the unresolved conflict and weaponization of hunger in Ethiopia highlights these dilemmas, frustrating interventions rather than resolving them.
The opportunity exists in Ethiopia for the U.S. to change how it approaches foreign aid, conducts bilateral relationships, and facilitates regional security roles in Africa. U.S. policy should focus on enhancing the capacity of African-led regional bodies to moderate and reconcile closely linked political, economic, and security issues that often degenerate into humanitarian crises. A regional approach in Ethiopia and elsewhere in Africa can help to protect U.S. interests from hurried unilateralism and excessive burdens on limited national resources, if stewarded effectively. Ethiopia is a potential model and case study for the viability of regionally-led solutions to threats against U.S. interests abroad.
African trade and integration news
2021 African Integration Report shows significant progress in achieving the continental integration agenda (AU)
The 2021 African Integration Report issued under the theme “Putting Free Movement of Persons at the centre of Continental Integration”, is based on the African Multidimensional Regional Integration Index (AMRII). The Index was developed by the African Union Commission (AUC) and the Regional Economic Communities (RECs), with the participation of the Association of African Central Banks and national statistical agencies. The 2021 Africa Regional Integration Index (ARII) assesses the regional integration status and efforts of African countries. ARII compares each country to the other countries in its regional economic community and to the countries of Africa as a whole.
The report captures the opportunities and challenges that come with these significant developments in the African regional integration agenda and provides a comprehensive and structured review of the status of integration and gives innovative policy recommendations for accelerating the ongoing regional integration process.
The overall assessment score for the integration process within the continent is 0.62 on a scale of 0 to 1. The overall AMRII scores for each of the RECs are the arithmetic mean of the scores obtained in the 8 dimensions of the index. These scores are a reflection of the efforts made within each of the RECs. The RECs which are making the most effort are, the East African Community (EAC); the Economic Community of West African States (ECOWAS); the Common Market for Eastern and Southern Africa (COMESA); the Economic Community of Central African States (ECCAS). Overall, they have scores exceeding 0.6 in a rating range between 0 and 1. On the other hand, the Intergovernmental Authority on Development (IGAD); the Community of Sahel-Saharan States (CEN-SAD); and the Arab Maghreb Union (AMU) are just above the average value of 0.5. The fact of not having defined plans or programmes in certain dimensions of integration such as free movement, financial and monetary integration is one reason for the poor overall performance of these RECs.
The Report shows that the average progress of the RECs in the implementation of free movement of persons is moderate at 0.68 on a rating scale between 0 and 1. ECOWAS and EAC stand out from other RECs in the evaluations, with respective ratings of ECOWAS (100%) and EAC (96%); all the other RECs score below 65%. This can be explained by the difficulties experienced in either implementing the regional free movement protocols or the abolition of visas in their Member States.
VITAL INDEX: Standard Bank launches its Africa Trade Barometer to plug information gap (Daily Maverick)
Economies in sub-Saharan Africa have struggled to regain their growth momentum after Covid-19. The region is not rising, nor collapsing, but it is decelerating, says Dr Albert Zeufack, the World Bank’s chief economist for Africa. In particular the region’s three largest economies — Nigeria, South Africa and Angola — are experiencing sluggish growth momentum. Beyond the short-term shocks inflicted by the pandemic and Russia’s invasion of Ukraine, reviving Africa’s fortunes requires deeper structural changes that will transform subsistence agriculture, support the creation of smart cities and accelerate maths and science education. These objectives seem so Herculean that they often lead to paralysis. However, recognising that trade is Africa’s heartbeat and that stimulating trade would drive economic growth, it’s possible to ask a smaller, more targeted question: what can be done to stimulate trade? One answer, from Standard Bank, is to provide business owners, investors and policymakers with detailed information on trade happening across the region. The result is the inaugural publication of Standard Bank’s Africa Trade Barometer, which will be released biannually.
“Trade is deeply rooted in Africa’s DNA and integral to its history and future development,” says Philip Myburgh, head of Trade and Africa-China at Standard Bank.
“Insight is key to leveraging trade to build resilience,” he says. “In a world of disrupted local and global supply chains — and on a continent with significant development and infrastructural challenges — businesses face an array of both new and perennial risks. Understanding and resolving pain points in this landscape requires insight.”
AfCFTA: Why regional support is crucial for effective implementation (The New Times)
In order to support the implementation processes of the African Continental Free Trade Area agreement, Regional Economic Communities (RECs) need to make informed choices about how to reap the benefits presented by the agreement, while at the same time managing the challenges that may be encountered in the course of the implementation. Wamkele Mene, Secretary-General of the AfCFTA Secretariat, stressed this Tuesday, June 7, on the occasion of the second coordination meeting of the CEOs of RECs, on the implementation of the AfCFTA held at the EAC Headquarters, in Arusha, Tanzania. The meeting sought to take stock of the progress made since the last meeting in Accra in 2021. Mene said the implementation of the AfCFTA will likely influence future trade policies of the RECs. “In this regard, effective collaboration between the RECs and the AfCFTA Secretariat is necessary to ensure that the AfCFTA outcomes are consistent with regional advancements in trade integration made thus far and the projections for the future,” Mene said. “Therefore, the coordination meetings offer us an opportunity to listen to one another, to better understand our areas of difference, and to work together to build consensus around common positions critical to our success at creating an African Economic Community.”
Afreximbank Backs Titan Trust Bank with a US$300 Million Intra-African Investment Finance Facility (Afreximbank)
African Export Import Bank (Afreximbank) has announced the disbursement of a US$300 million Intra-African Investment Financing Facility to Titan Trust Bank (TTB) to support its acquisition of a majority stake in Union Bank Plc, Nigeria (UBN). The deal will enhance the competitive dynamics of the Nigerian banking sector, while maintaining confidence in the country’s financial services and broader financial stability. The recently disbursed financing will complement the funds required for the proposed acquisition. Afreximbank’s financial support enables TTB to secure the acquisition of a well-capitalised bank with an extensive network, enabling the entity to better serve vital economic activities of the public sector, companies, and small and medium-sized enterprises.
Afreximbank will continue to support the new merged entity in trade finance to promote intra- and extra-African trade through its broad range of programmes and initiatives, including the Afreximbank Trade Facilitation Programmes (AfTRAF) and AfPAY, the Bank’s international payment services. The development impact of the acquisition is immense as TTB will leverage the merged entity to provide financing of about US$3 billion over the medium term of which over US$600 million will directly support intra-regional trade finance.
AfcFTA: 28 banks join $500m pan-African settlement platform (Daily Trust)
One year after the take-off of the African Continental Free Trade Agreement (AfCFTA), no fewer than 28 banks in Africa joined the Pan-African Payment and Settlement System (PAPSS), which took off with a $500m facility with an additional 24 banks on the waiting list. PAPSS is a creation of the African Export-Import Bank (Afreximbank) to facilitate intra-African trades through the settlement of transactions in local currencies in the light of the AfCFTA take-off. Daily Trust reports that there are over 40 different currencies in the African continent and over time many traders within the continent would be demanding for payment in foreign currencies, especially dollars.
The pilot scheme of the payment system took off with $500m in West Africa while 28 banks have so far joined the platform even as 24 others are on the verge of signing into the platform.
Ogbalu disclosed that the target is to bring the over 500 banks in Africa on board while there are plans by the Afreximbank to increase the contribution to $3bn as soon as the pilot scheme in West Africa completes.
AFCFTA-Anchored Pharma Initiative Holds Virtual Induction of National Pharma Consultants (UNECA)
The United Nations Economic Commission for Africa (ECA)’s led AfCFTA-anchored Pharmaceutical Initiative held a virtual induction meeting for the six (6) recently appointed National Pharmaceutical Consultants from 6 (six) of the 10 pilot countries (Djibouti, Ethiopia, Kenya, Rwanda, Seychelles & Sudan), spread out over a 5-day period. The induction focused on the three key pillars, namely, Pharmaceutical Pooled Procurement, Localized Pharmaceutical Production, Regulatory Harmonization as well as Partnership & Resource Mobilization and Communications, commencing with a general introduction to the project, a discussion on administrative procedures, as well as what is expected from the consultants.
Summary of the Decisions and key discussion points of the 35th Ordinary Session of the Assembly of the African Union (AU)
The Assembly of Heads of State and Government of the African Union held its 35th Ordinary Session on the 5th and 6th of February 2022 in Addis Ababa, Ethiopia. Discussions were held on several issues to meet the Agenda 2063 Aspirations for the “Africa We Want”:
The Assembly endorsed 2022 as the African Union Year of Nutrition under the theme “Strengthening Resilience in Nutrition and Food Security on The African Continent: Strengthening Agro-Food Systems, Health and Social Protection Systems for the Acceleration of Human, Social and Economic Capital Development”.
The Assembly adopted the proposed reforms of the organizational structures of the AU Organs, Representational, Technical and Specialized Offices including the Secretariat of the African Continental Free Trade Area (AfCFTA), the Economic, Social & Cultural Council (ECOSOCC), African Peer Review Mechanism (APRM) and the African Space Agency (AfSA)
Urged for signing and ratification of the legal instruments establishing the African Monetary Fund and African Investment Bank; and, in the case of the African Central Bank, advocate for rapid attainment of macroeconomic convergence to lead Africa towards Pan-African economic and monetary union.
The Assembly noted the progress achieved since the start of trading under the AfCFTA on 1 January 2021, and directed the AfCFTA Secretariat to implement the AfCFTA Private Sector Engagement Plan. The Assembly also held deliberations on other key issues: Migration; Adoption of Legal instruments; The 4th Mid-Year Coordination Meeting; The Summit on Industrialization and Economic Diversification; AU Humanitarian Summit and Pledging Conference; and Extraordinary Summit on Terrorism; and Key Appointments.
The future of African oil and gas: Positioning for the energy transition (McKinsey)
Africa’s oil and gas industry is entering a new era. As the world looks to accelerate its transition away from fossil fuels, the pressures on the continent’s oil and gas producing nations are mounting. Our analysis has found that most are highly exposed to the global energy transition, as their economies depend on oil and gas revenues, while their reserves both cost more to produce and are, on average, more carbon-intensive than oil and gas from other regions. At the same time, energy demand on the continent threatens to outstrip supply. Over the next two decades, rapid population growth and industrialization are expected to drive strong energy demand growth across the continent—including for fossil fuels. McKinsey modeling estimates that African energy demand in 2040 could be around 30 percent higher than it is today, compared with a 10 percent increase in global energy demand
While these dynamics bring challenges that will need to be negotiated, they also create a clear opening for the continent to take stock and reconsider its energy approach. If oil and gas producing countries in Africa consider steps to create enabling environments, improve access to available capital pools, and attract the right skills and capabilities, they could both meet the energy needs of their developing populations and position themselves strongly in a new energy landscape.
Africa seeks far-reaching climate policy and finance (African Business)
Many regions of Africa felt the health impacts of the Covid pandemic less strongly than other parts of the world, but the economic and social effects have still been keenly felt – and none more so than in efforts to tackle climate change. Construction of projects vital to the greening of the power system dropped behind schedule, while companies charged with supplying solar panels and clean cooking equipment struggled to keep going in the face of disrupted supply chains, movement restrictions and a fall in financial support from the international donor community. At the same time, Africans on low incomes seeking to buy clean energy products such as household solar panels deferred their purchases in the face of an uncertain future. But there are signs of a revival in the clean energy sector as Covid restrictions ease and business and daily life return to something approximating normal. But it remains to be seen whether the mechanism likely to bring the greatest improvement in climate outcomes on the continent – the UN climate change process – can be cranked up to full speed.
African leaders acknowledge that agreement over reducing the use of coal as a feedstock in power stations – responsible for about 40% of annual global CO2 emissions – is also a positive for the climate-vulnerable counties on the continent. But there was disappointment that China and India had weakened the wording of the commitment to ‘phasing down’ coal use, rather than pledging to phase it out in the near term. However, South Africa, the continent’s largest coal producer, did secure investments and loans of $8.5bn from international partners to transition from coal to green energy – said to be the largest single tranche of climate finance made to date.
At the same time as pushing coal usage down, South Africa also intends to invest in the growing green hydrogen economy, seeking to become a global hub by harnessing its copious solar and wind resources to produce hydrogen using electrolysis, a power intensive but clean method of production compared to commonly used methods using fossil fuels with carbon emissions as a by-product. South Africa has an added incentive to develop green hydrogen because it is a major source of platinum, which is used as a catalyst in the electrolysis process.
But overall, international support for climate change measures in Africa has fallen short of expectations. Developed countries still haven’t met a target set in 2009 to invest $100bn a year to help meet developing countries’ climate adaptation and mitigation needs – and many believe that even that amount is not enough.
Why E. Africa had a swift recovery from Covid impact (The Citizen)
The East African economies registered increased growth last year despite the devastating impact of Covid-19 in 2020.The growth averaged 5.9 percent in 2021 compared to an average of 2.3 percent in 2020 when the pandemic hit the region. This is contained in the bloc’s ‘Economic Performance and Outlook’ released ahead of last week’s tabling of the 2022/23 budget estimates. The speedy recovery is largely attributed to public investments and strong performance in the productive sectors. The growth (in 2021) was also largely supported by increased removal of Covid-19 related restrictions, mainly in the travel sector. Compared to 2021, projections are that the economic growth in the East African Community (EAC) bloc will decrease to 5.3 percent this year. The EAC budget estimates for 2022/23 fiscal year were tabled before the East African Legislative Assembly (Eala) on Thursday last week. The regional organisation intends to spend a total of $91.5 million, out of which $37.4 million will be raised by the development partners.
Turn EAC into a single tourism destination, Uganda lawmakers (Dailynews)
A group of Ugandan MPs visiting the country have urged East African Community (EAC) partner states to collectively promote and market the Community as a single tourist destination. Led by Richard Muhumuza Gafabusa, an MP for Bwamba County, the lawmakers said it was important for the partner states to harmonize their national laws on tourism and related sectors, a move he said will attract more tourists to the region. “It is very important to market EAC as a single tourist destination as the sector boasts of huge potential in natural resources,” observed the lawmaker. Despite the difference in resources, flora and fauna, the legislator insisted it was still possible to have EAC as a single tourism destination. “There is a need of fast-tracking the ratification of the Protocol on Tourism and Wildlife Management and for the EAC to provide additional resources for the Tourism and Wildlife Management Unit,” explained Mr Gabafusa, from the Uganda Tourism Board (UTB) pavilion here recently.
Iran eyes implementing barter trade with Africa (Tehran Times)
Iranian Trade Promotion Organization (TPO) deputy head for export markets development has said his organization is looking for ways to implement barter trade mechanisms with the country’s African trade partners, the TPO portal reported. “Given the implementation of barter trade mechanism by the Trade Promotion Organization with several countries, we hope to benefit from this platform with African trade partners as well,” Ahmad-Reza Alaei Tabatabaei said. The official noted that the TPO has prepared a list of 1,100 commodity items that can be included in the barter trade with African countries. Referring to the TPO plans to expand trade with Africa, Tabatabaei announced the improvement of export infrastructure and strengthening of the presence of Iranian commercial attachés in the said continent.
According to the official, the most important challenge for Iranian businessmen regarding Africa is the lack of knowledge and familiarity with its markets. He further noted that another important challenge in the way of expanding trade with African countries is transportation and logistics, especially the need for developing maritime transportation infrastructure.
Global economy news
It’s time to rebuild the WTO and make international trade a lever for sustainable development (Equal Times)
The World Trade Organization (WTO) is holding its twelfth ministerial conference from 12 to 15 June in Geneva, Switzerland, against a background of conflictual international relations. Mired in its own existential crisis, the WTO has become incapable of fulfilling the role entrusted to it when it was created in 1995 – negotiating world trade rules and resolving trade disputes. This crisis is an opportunity to rebuild a WTO that supports ecological transition, decent work and the fight against pandemics.
As a result of the WTO’s paralysis, trade negotiations are taking place outside its framework through dozens of bilateral and regional free trade agreements, which have continued to steadily rise in number. The new WTO Director-General, Ngozi Okonjo-Iweala, aims to restore the WTO’s status.
The WTO’s existential crisis is an opportunity to reshape it to make world trade more consistent with sustainable development objectives. Firstly, negotiations will not break the deadlock unless they take into account the interests of developing countries. While the latter want to strengthen the “special and differential treatment” they enjoy, the developed countries want to reduce its scope. The WTO grants not only specific treatment to the 46 least developed countries, but also preferential treatment to all developing countries, which can generally be given more time than developed countries to implement liberalisation agreements.
Secondly, a solution must be found to resolve the trade disputes between Western countries and China.
Thirdly, the paralysis of the WTO Appellate Body is an opportunity to reform it and to strengthen the possibility of using anti-dumping measures.
Extending safeguarding measures to social and environmental issues would give states sufficient scope for action to curb dumping and make international trade a lever for sustainable development.
Finally, the majority of trade now takes place under preferential agreements, as a result of the proliferation of bilateral and regional free trade agreements. These are allowed under Article XXIV of the General Agreement on Tariffs and Trade, but they lead to a fragmentation of the international trading system. The fundamental problem with these bilateral free trade agreements is that they guarantee binding rights for transnational corporations and investors, but not their obligations with regard to social and environmental standards.
Manufacturing sector recovery continues but future is unpredictable (UNIDO)
The most recent data on global manufacturing production, covering the fourth quarter of 2021, confirm the recovery of the world economy and its manufacturing sector, albeit with seasonal, regional and sectoral differences. High technology industries had a better production performance and, therefore, recovered faster. It is clear from the data that the economic situation keeps improving as many countries gradually phase out economic and social restrictions, although new trends in the pandemic may still jeopardize the fragile recovery, as shown by recent events in South-East Asia.
The latest UNIDO World Manufacturing Report, published by the United Nations Industrial Development Organization (UNIDO), includes the most recent official data on global manufacturing production. The Quarterly Report points to a recovery with a year-over-year growth of 3.3 per cent in the fourth quarter of 2021, but also shows a different pace of recovery across regions and sectors.
The UNIDO report also reveals varying trends across industrial sectors. Currently, medium-high- and high- (4.7 per cent), as well as low-technology industries (3.8 per cent), achieved a better production performance than industries using medium-low technology (1.4 per cent), such as manufacturing of mineral products or basic metals. Many of the higher-technology industries have already reached and exceeded their pre-pandemic production levels. However, one exception to this is the manufacturing of motor vehicles. The sector has not been able to return to production levels prior to the pandemic and even faced a year-over-year output reduction of 9.1 per cent this quarter due to supply chain difficulties.
WTO report highlights role of trade in meeting SDGs and assisting economic recovery (WTO)
In its report to the 2022 HLPF, the WTO emphasizes the contribution of trade to improving people’s livelihoods and achieving the five SDGs under review.
On SDGs 14 and 15, the report highlights that WTO rules provide space for accommodating environmental concerns, such as measures aimed at protecting life below water and on land, in trade policy considerations. At the WTO, negotiations are under way, the report underlines, on curbing harmful fisheries subsidies while groups of members are discussing three new environmental initiatives: (i) Trade and Environmental Sustainability Structured Discussions (TESSD), (ii) Informal Dialogue on Plastics Pollution and Environmentally Sustainable Plastics Trade (IDP) and (iii) Fossil Fuel Subsidy Reform (FFSR).
Member Communiqué: World Summit on the Information Society puts technology at forefront of sustainable development (ITU)
Leaders and decision-makers in the rapidly evolving digital sphere have affirmed their commitment to harness new and emerging technological solutions for the good of all of humanity. This year’s World Summit on the Information Society (WSIS) Forum, building on a wide-ranging international policy discussion process started in 2003, reasserted the vital link between digital technologies and global action to ensure sustainable development. Information and communication technology (ICT) experts and implementers fostered ground-breaking partnerships, showcased the latest innovations, exchanged best practices, and announced new tools and initiatives, particularly in the Forum’s intense final week in Geneva, Switzerland.
“Digital technologies offer solutions to all these challenges,” said Houlin Zhao, Secretary-General of the International Telecommunication Union (ITU), one of the Forum’s main organizers. “In these past 11 weeks, the WSIS Forum has brought to life the many benefits of ICTs in areas as critical and diverse as education, health, financial inclusion, climate change, accessibility, cybersecurity, smart cities, and many more.”
War in Ukraine threatens to unleash ‘unprecedented wave’ of global hunger and destitution (UNCTAD)
More than three months since the start of the war in Ukraine, people globally are facing a cost-of-living crisis not seen in more than a generation, with escalating price shocks in the global food, energy and fertilizer markets – in a world already grappling with the COVID-19 pandemic and climate change. An estimated 1.6 billion people in 94 countries are exposed to at least one dimension of the crisis, and about 1.2 billion of them live in “perfect-storm” countries which are severely vulnerable to all three dimensions – food, energy and finance – of the cost-of-living crisis, according to the latest findings of the United Nations Secretary-General’s Global Crisis Response Group (GCRG) on food, energy and finance systems.
New UN Food Outlook report: World’s most vulnerable are paying more for less food (FAO)
The global food import bill is on course to hit a new record of US$1.8 trillion this year, but higher prices and transport costs rather than volumes account for the bulk of the expected increase, according to a new report released today by the Food and Agriculture Organization of the United Nations (FAO).”Worryingly, many vulnerable countries are paying more but receiving less food,” FAO says in its latest Food Outlook. The global food import bill is projected to rise by $51 billion from 2021, of which $49 billion reflects higher prices. Least Developed Countries (LDCs) are anticipated to undergo a 5-percent contraction in their food import bill this year, while sub-Saharan Africa and the group of Net Food-Importing Developing Countries are both expected to register an increase in total costs, despite a reduction in imported volumes. “These are alarming signs from a food security perspective, indicating that importers will find it difficult to finance rising international costs, potentially heralding an end of their resilience to higher prices,” the report notes.
“In view of the soaring input prices, concerns about the weather, and increased market uncertainties stemming from the war in Ukraine, FAO’s latest forecasts point to a likely tightening of food markets and food import bills reaching a new record high,” said FAO economist Upali Galketi Aratchilage, lead editor of the Food Outlook.
FAO has proposed a Food Import Financing Facility to provide balance-of-payment support to the low-income countries most reliant on food imports as a strategy to safeguard their food security.
DG Okonjo-Iweala and negotiations chair join call to ‘stop the fish meltdown’ on Ocean Day (WTO)
With only days before the MC12, which will be held on 12-15 June in Geneva, DG Okonjo-Iweala and Ambassador Wills welcomed joint efforts of over 180 environmental organizations to draw attention to ongoing WTO negotiations for new global rules on fishing subsidies that will combat the depletion of fish stocks and secure the livelihoods of people who depend on them.
Under the mandate from the previous Ministerial Conference and the UN Sustainable Development Goal Target 14.6, negotiators have been given the task of securing agreement on disciplines to eliminate subsidies for illegal, unreported and unregulated fishing and to prohibit certain forms of fisheries subsidies that contribute to overcapacity and overfishing, with special and differential treatment being an integral part of the negotiations.