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Localisation strategies must identify, remove constraints for local producers (Engineering News)
Effective localisation strategies must start by identifying the constraints on local producers that make it harder for them to compete with foreign suppliers, a report issued by economic research firm Trade and Industrial Policy Strategies (Tips) on June 10 states. Tips identified several constraints to localisation, such as inadequate information about market opportunities; high-cost or poor-quality infrastructure, inputs and skills; lack of access to markets locally and abroad – for instance because they cannot get into the relevant retail chains – and prohibitive initial investment costs.
Transport and logistics on the mend, but load shedding, inflation still hurting economy (The Citizen)
The transport and logistics sector is picking up but still has a long road to recovery ahead, after the floods in KwaZulu-Natal which devastated the Durban-South area, causing major disruption in the Port of Durban, the fourth largest in the Southern African Development Community (SADC) region. The overall Ctrack Transport and Freight Index for April 2022 declined by 0.4% compared to March, but was still up by 8.6% compared to a year ago, although this represents a setback compared to March’s strong 12.4% year on year increase, says Hein Jordt, CEO of Ctrack.
According to the Index, three of the six sectors it measures declined in April, with the biggest contractions in sea freight and rail, both particularly hard hit by the floods as it also affected surrounding roads, forcing activities to a halt for a few days.
RMB says Rail Policy White Paper lays foundation for private investment (Engineering News)
Financial services provider Rand Merchant Bank (RMB) says the private sector stands ready to invest in South Africa’s rail industry, in partnership with government. Referring to the recently released National Rail Policy White Paper, RMB infrastructure finance public-private partnerships and concessions head Siyanda Mflathelwa says the paper reveals a much-needed localisation strategy for South Africa and an opportunity to strengthen manufacturing and export industries – one that the private sector can gladly get behind. The policy will serve as a starting point to facilitate private sector involvement in the rail sector.
“Regulation is a key determinant of the degree of openness of a railway market to private investment,” she notes, adding that in South Africa’s case, the regulation should create transparency.
Lesotho Revenue Authority (LRA) Launches E-Customs Tariff (African Business)
Delays in obtaining information on goods classification, applicable duties and taxes will now be a thing of the past. This, follows the government’s decision to launch the e-Customs Tariff, the launch was held in Maseru on Friday. On behalf of the Minister of Trade and Industry, the Deputy Principal Secretary (DPS), Mrs. Tšireletso Mojela said trade and customs play an interlinked and critical role in creating conditions for economic development across frontiers. She said both the Ministry of Finance through the Lesotho Revenue Authority (LRA) and the Ministry of Trade and Industry have a huge responsibility to facilitate trade hence making a real difference in people’s lives by helping to deliver jobs, growth and development that trade supports. She said the government of Lesotho undertook accession to the Trade Facilitation Agreement in 2016, saying LRA remains an integral arm for the country to implement the agreement as Lesotho is an inevitable partner in this journey.
Moreover, Mrs. Mojela said WCO through the Revised Kyoto Convention forms the basis for several provisions of the World Trade Organisation (WTO), Trade Facilitation Agreement (TFA), saying the organization provides support to the technical assistance agenda on trade facilitation, through the agreement the Mercator Program and several other instruments.
Kenya fresh tax on Uganda eggs sets stage for trade war (Business Daily)
Kenya and Uganda are staring at another round of trade wars after Nairobi reintroduced a levy on eggs imported from the neighbouring country. Uganda says Kenya is now taxing its eggs at a rate of Sh72 a tray, bringing back a levy that had been suspended last December following bilateral talks between Kampala and Nairobi. Ugandan traders have protested the move, saying it does not augur well for trade between the two countries. “The implementation of levies on Ugandan eggs by Kenya is a bad policy and in violation of the East African Community policy of free movement of goods and services originating from the member states,” Godfrey Oundo Ogwabe, the chairperson Uganda National Cross-Border Trade told the Daily Monitor. Livestock PS Harry Kimtai said the charges could be a normal levy that is imposed on imports.
Leveraging digital tech to combat counterfeits (Business Daily)
In July 2018, Kenya formed a multi-Agency team to combat illicit trade estimated to be at KES 826 billion at the time, a 12 percent increase from the previous year, and subsequently unveiled the National Action Plan and Implementation Framework. Moreover, a report by the Anti-counterfeit Agency ranked counterfeiting and piracy highly with 71 percent of complaints reported by Kenya government agencies being counterfeit products between 2016 and 2018.Globally, counterfeiting has been recognised as a dire activity that has a substantial economic and social impact. This negative impact is felt across the entire economic system — consumers who buy counterfeit products end up paying huge amounts for defective and sometimes harmful products, manufacturing companies lose their credibility, and the government misses out on tax revenues, which are instrumental for sustainable growth. That said, the safety and risk factors pose a challenge, especially with electrical products such as those that Eaton Electric provides, which require systematic assembling and have specific usage parameters.
Kenya asked to post tax officials to Tanzania to pre-clear goods (The Star, Kenya)
The East Africa Business Council wants Kenya Revenue Authority (KRA) officials to be posted to the key cities in Tanzania to facilitate the pre-arrival clearances to reduce traffic queues at border points. EABC chief executive officer John Bosco Kalisa said Kenya doing destination clearance of goods at Horohoro-Lunga Lunga One-stop Stop Border Point leads to delays and long queues of cargo trucks to Kenya. Kalisa spoke at the EABC Trade Facilitation Forum at Horohoro-Lunga Lunga OSBP. Tanzania has already posted Tanzania Revenue Authority (TRA) officials in Mombasa and Nairobi to facilitate the pre-arrival clearance of goods under the Single Customs Territory framework. Kenya’s exports to Tanzania for the first quarter January-March 2022 stood at $139.42 million while imports at $118.6 million.
The Africa Fertilizer Financing Mechanism (AFFM) will extend a $2 million partial trade credit guarantee to ETG Inputs Ghana Limited to support delivery of fertilizer to 200,000 smallholder farmers in Ghana’s Upper East, Savannah, Northeast, and Northern Regions. The move will ease the current shortages in supply and boost yields, food security, and incomes of farmers in the designated regions. Under the agreement ETG Inputs Ghana Limited, a subsidiary of agricultural conglomerate ETG, will enable delivery of 10,000 metric tons of fertilizer to wholesalers who will distribute it, via retailers, to farmers in the regions. The credit enhancement mechanism is expected to reduce risks associated with suppliers selling fertilizer to wholesalers on credit, which can result in farmers having limited access to good quality fertilizer.
The war in Ukraine has contributed to fertilizer shortages, driving prices higher, and reducing supplies. In Ghana, the fertilizer shortage has now affected 60% of the supply. The country has seen the cost of a 50kg bag of a commonly used nitrogen-, phosphorus- and potassium-based fertilizer skyrocket from $26 in November 2021 to $46 in April 2022, according to the Africa Fertilizer initiative, which compiles data, statistics, and information on fertilizers in Africa.
The trend is threatening agricultural production just as many countries head into the planting season. At the same time, imports of food staples into Africa, such as wheat and oilseed, are also being disrupted by the war.
LCCI seeks integration, bilateral trade to improve 12% Africa’s GDP (New Telegraph Newspaper)
The Lagos Chamber of Commerce and Industry (LCCI) has said that only the economic integration and bilateral trade among Nigeria and other countries could improve the abysmal 12 per cent Africa’s Gross Domestic Product (GDP). It noted that economic integration would play a vital role in the realisation of the Africa Continental Free Trade Area (AfCFTA) agreement initiative in the continent.
The Director-General of LCCI, Dr. Chinyere Almona, said in an interview on the upcoming 2022 Lagos International Trade Fair (LITF) in Lagos that AfCFTA was a key trade agreement the chamber would be exploring to bring together various exhibitors and investors within the continent to boost trade and GDP despite the challenges trailing the protocols agreements. She stressed that the chamber was not satisfied with the penetration of trade among the African countries, which had been responsible for the 12 per cent continental GDP trade, saying that LCCI was looking forward on the benefits of AfCFTA that could only be achieved via trade and economic ties.
Debt Servicing: Nigeria paid $156.29m to China, others in Q1 (New Telegraph Newspaper)
The Federal Government spent a total sum of $156.29million on servicing the debts owed to the Exim Bank of China, the World Bank and other International Financial Institutions (IFIs), in the first quarter of this year, latest data released by the Debt Management Office (DMO) shows.
According to the actual external debt service payments data for January –March 2022, published by the DMO last week, the country spent the sum of $67.91million servicing its bilateral debt during the period with $66.90million of the amount going to the Exim Bank of China.
Similarly, the data shows that the Federal Government spent the sum of $88.38million to service multilateral debt during the period under review, with payments to the World Bank’s International Development Association (IDA), amounting to $45.24million. This means that the nation spent the total sum of $156.29million to service its bilateral and multilateral debts in the first three months of this year.
Will Egypt be the locomotive of the African economy? (ZAWYA)
There is a necessity and utmost importance to enhance cooperation between Egypt and its brothers in the African continent in all fields, especially economy and development. This is to complete its active role in its regional environment, achieve African integration, revitalize trade between the countries of the brown continent, and integrate it into the global trade system. Egypt seeks to become the locomotive of the African economy. It operates on two levels; the first is to localize and develop basic industries, and the second is expanding into new markets. Therefore, Egypt currently seeks to expand its exports into the African market, through the application of a package of logistical facilities and shipping procedures, especially with the promising opportunities that the African market enjoys.
African trade and integration news
Akufo-Addo urges Africa to trade more with itself as AfCFTA is a game-changer (Ghana Business News)
African countries trade least among themselves, and trade more with countries on other continents, and President Nana Akufo-Addo says it is therefore not an accident that Africa being the continent that trades least with itself is the poorest. The President was speaking during a panel discussion at the opening of the Africa CEO Forum in Abidjan, Cote d’Ivoire, June 13, 2022. He pointed out that the African Continental Free Trade Area (AfCFTA) is a game-changer for the continent, and urged improvement in the quality of cooperation among African states. He said there must be linkages in the private sector and education, and called on African countries to align their thinking.
PPP, game changer for cross-border infrastructure development for AfCFTA (Ghana Business News)
Professor Festus Ebo Turkson, a Development Economist, says, Africa has the potential to build a strong infrastructure base through Public Private Partnerships (PPPs) to enhance cross-border trade on the Continent. Prof Turkson pointed out that there were deficits in both soft and hard infrastructure on the continent, a major bottleneck to the implementation of the AfCFTA. The hard infrastructure included ports, railways, roads, and airports, while the soft infrastructure was excessive checkpoints, burdensome administrative procedures, and inefficient processing at border crossings. However, these challenges could be addressed by harnessing opportunities PPPs offered to the continent to facilitate cross-border trade, thereby, encouraging investments to increase economic integration and cooperation among Africans, he said.
DRC to deposit EAC admission instruments this week: Mathuki (The East African)
The East African Community’s (EAC) newly admitted member, Democratic Republic of Congo (DRC), has completed internal processes of ratifying the EAC treaty it signed in April and will now deposit instruments of that approval to the Secretary-General this week.
After DRC signed the Accession treaty of the EAC on April 8, becoming the seventh member of the bloc, the country was given five months to complete the process, which would see it integrated into the region. Some of these processes included approval by Kinshasa’s parliament, and having its ministries and internal organs aligned with requirements of the EAC pillars such as the Customs Union and the Common Market Protocol.
Paris conference calls for African production network (New Business Ethiopia)
At the Africa Forum held in Paris, France, African and international leaders call for boosting Africa’s regional production networks to create more jobs The COVID-19 pandemic has derailed progress on Africa’s development efforts and pushed more than 29 million people into extreme poverty. Fast and challenging mutations in the global economy are reshaping the context for Africa’s economic transformation. The consequences of the Russia-Ukraine conflict has exacerbated food insecurity and instability; and could weaken Africa’s recovery.
Meanwhile, it is urgent to maintain open markets, refraining from export restrictions, and allowing grain and fertilizers to reach the countries in need. These measures must go hand in hand with actions to reduce the vulnerabilities of African economies. In particular, investing in local production and empowering SMEs in the transformation of African agriculture and industry is crucial to build resilience and generate decent, quality jobs for a young, fast expanding population.
“Stronger investment and trade links within Africa can drive production transformation, growth and employment generation: they should be a priority of the continent’s evolving international partnerships”, reaffirmed Ragnheiður Elín Árnadóttir, Director of the OECD Development Centre, welcoming the strong and expanding cooperation with the African Union and its member countries.
To achieve a fast, sustainable and job-rich recovery, the continent needs stronger networks of African firms that buy goods from regional suppliers and re-export higher value-added products, in the context of the African Continental Free Trade Area (AfCFTA).
Africa Needs Structural Change To Develop - Prof. Ackah (Peace FM Online)
An Associate Professor of the Institute of Statistical, Social and Economic Research, Professor Charles Godfred Ackah, has said that Africa needs accelerated growth and structural change in order to develop. That, he said, would be by creating decent jobs to deliver the people from poverty. He said structural change was the process of reallocation of economic activity across the sectors of agriculture, manufacturing and services. Prof. Ackah said this when he delivered a paper on “Promoting Structural Transformation through IntraAfrica Trade” at the Ghana Academy of Arts and Sciences public forum in Accra last Monday. The event, held in collaboration with UMB, was dubbed: “African Continental Free Trade Area (AfCFTA): Challenges and Prospects”.
Prof. Ackah said the main determinants of the nature of structural transformation were the industrial and trade policies implemented by the various governments, and that “the importance of industrial development in bringing about the needed structural transformation of African economies cannot be overemphasised”.
African economy upbeat despite pressures – Afreximbank (Vanguard)
Ahead of next week’s Annual Meetings of the African Import-Export Bank (Afreximbank), the institution has assured that the region’s economy would be on upbeat in 2022, despite pressures. The bank identified the post-COVID-19 and current Russian invasion of Ukraine as factors that would put a lot of pressures on the economies of African countries.
However, the regional body said in the report authored by the Chief Economist and Director of Research, Dr. Hypolite Fofack, that the region would witness a positive growth, with 16 countries (30%) expected to grow at more than 5 per cent.
The report was titled, ‘Africa’s 2022 Growth Prospects: Poise under Post-Pandemic and Heightening Geopolitical Pressures’.
African ministers of finance set to tackle new risks, challenges (African Business)
African ministers of finance, planning and economic development called for the reform of the international financial architecture to allow African countries to access resources more easily and at a lower cost from multilateral and regional financial institutions. In the final communique wrapping up the 54th UNECA conference held in Dakar, they commended the ECA, African finance ministers and the IMF for facilitating the establishment of a high-level working group towards this end. This came out of the final communique issued at the end of a week’s deliberations on the need for higher levels of financing for the post-Covid-19 pandemic recovery and to achieve the 2030 Agenda for Sustainable Development and goals of Agenda 2063, which have suffered significant setbacks from the pandemic. The group cited the impact of the Russian war with Ukraine, highlighting the impact it was having on prices of key commodities.
President Macky Sall calls for a better deal for Africa (African Business)
In a fiery speech in which he criticised international organisations for giving Africa a bad deal, Macky Sall, President of Senegal and current Chairman of the African Union, also recognised the leading role played by the African Development Bank and Afreximbank in supporting development. However, Sall argued that the current deal for Africa in the international system is a handbrake on its development. “The rules are unfair, outdated, and need to be disputed,” he told delegates attending the ECA’s Conference of African Ministers of Finance, Planning and Economic Development in Dakar’s plush conference centre yesterday.
Calls for reform of international system to better respond to crises (African Business)
Africa was a victim of global events in which it had no part, said Vera Songwe, ECA Secretary General and UN Under Secretary General. Speaking at the opening session of the Council of Ministers 2022 meting in Dakar, she said the continent was fighting many wars – against climate change, against poor governance, terrorism and on other fronts. “Ministers of finance have been at the forefront of many of these and have shown “legendary resilience”. She referred to the different crises which the continent now found itself facing. “We though it {Covid-19} was just a pandemic but then realised we also had an economic crisis.” Coupled with a new crisis – Russia’s invasion of Ukraine and the attendant effect on prices of key commodities – was affecting countries’ ability to plan and by extension, their trajectory towards growth and prosperity. “We are facing several exogenous shocks and because of them, we are going to have to see how we can reorient our course.”
Solutions included examining how the financial system can change. One area that needed to be tackled more decisively was the search for ways to strengthen domestic resources. “We have spoken about it a lot but have not even got to 30% of internal revenue mobilisation.”
Economic sovereignty important but Africa needs to collaborate more internationally – Osinbajo (Daily Trust)
Africa’s developmental aspirations can be actualised by deepening cooperation and collaboration with the rest of the world, according to Vice President Yemi Osinbajo, SAN. But the imperative of Africa’s economic sovereignty also exists as there are areas where public and private sector leaders must continue to strive for it. Osinbajo stated this while speaking at the opening panel of the ongoing Africa CEO Forum holding in the Ivorian city of Abidjan. The panel was themed- “Economic Sovereignty: From Ambition to Action.”
Africa loses more than $84bn in illicit financial flows annually (African Business)
UNECA estimates that more than $84bn is lost in illicit financial flows from Africa each year. “This is more than the annual health financing gap, twice the needs of the education finance gap and it is almost equal to the amount Africa receives in remittances each year,” said Hanan Morsy, Deputy Executive Secretary at UNECA. She was speaking at the panel Illicit Financial Flows in Africa: Regional Efforts to track, recover and return assets. However, efforts to curb the illicit practice continue to yield muted results, underscoring the need for a collaborative and comprehensive approach. Corporations and government officials, both local and international, are the main channels for the leakages that result in a significant portion of Africa’s wealth being smuggled out of Africa each year which makes it especially hard to crack down on illegal practices.
African Businesses Lose $5bn To Intra-African Trade Bottlenecks Annually (Leadership News)
The chief executive officer (CEO), Pan African Payment and Settlement System (PAPSS), Afreximbank, Mr. Mike Ogbalu, has stated that, African businesses lose over $5 billion every year to charges, payments and other related costs to intra-African trade barriers. He stated this at the breakfast meeting of the Nigerian American Chamber of Commerce (NACC) themed ‘1 year of AfCFTA (Opportunities, challenges and the Nigerian-American partnership)’ in Lagos. According to him, 80 per cent of payments that are destined for somewhere else on the continent, first of all has to travel somewhere else before getting to its final destination, saying, this is the reason why intra-African trade is still low at 15 to 18 per cent. He added that Africa trade more with rest of the world than it trade with itself. In his words: “If payment still needs to fly half way around the world to somewhere else around the globe before coming back to the continent, then we are not going to support intra-African trade.
Entrepreneurs seek new funding model for African SMEs (Businessday)
The All Africa Association for Small and Medium Enterprises (AAASME) has called for the introduction of an alternative finance model to enable 80 million small and medium enterprises (SMEs) to access finance in Africa. Ebiekure Jasper Eradiri, secretary-general of AAASME, said the Afrocentric Alternative Finance Model for SMEs has the capacity to uplift small businesses within the continent by improving their access to finance. Eradiri stated this at a stakeholder meeting on the African SME development platform held at the African Union Secretariat in Addis Ababa, Ethiopia. In a statement signed by Eradiri and made available to BusinessDay in Yenagoa, he lauded the efforts of the African Union Economic Affairs, Trade, Tourism, Industry and Mines for the growth of SMEs in the continent. He said the AU is poised at leveraging its convening power to engage member states, RECs and critical stakeholders in re-examining how to strengthen SMEs.
According to him, the AU move would also reinvigorate SMEs to achieve set goals as well as support the creation of an enabling environment for the development of SMEs.
Banks, fintechs partnership key to financial inclusion – eTranzact CEO (The Business & Financial Times)
Banks and fintechs should collaborate more to accelerate financial inclusion, says John Apea, Chief Executive Officer of eTranzact Ghana. He said by working together, traditional financial institutions and financial technology firms (fintechs) can leverage their unique capabilities to ensure that majority of Ghanaians are brought within the financially included bracket.
An effective collaboration between the two will also build solid foundation and systems that are relevant to the Ghanaian market. “Previously, we had a lot of unbanked people who couldn’t do transactions online, but what fintechs have been able to do is that they have been able to short-circuit us by enabling us to do what was previously not available. So your phone can be your bank; you can do transfers quickly.
“So fintechs have made the world much smaller in terms of including people who previously were financially excluded,” Mr. Apea told the B&FT.
No West African Country yet to meet ‘Eco’ currency requirement (Myjoyonline)
None of the 15 ECOWAS member states is yet to meet the primary convergence criteria for the adoption of the single common currency for the sub region. This is as a result of inadequate funding and other geopolitical factors identified as a setback for the adoption of the common currency. Speaking at a technical committee meeting on the ‘Eco’ in Nigeria, Commissioner for Macroeconomic Policy and Economic Research for ECOWAS, Dr. Kofi Konadu Apraku, said the criteria which was missed by all ECOWAS member states include annual average inflation rate of less than 10% and gross external reserves of more than 3.0 months of imports cover. He is however confident that since real GDP growth in ECOWAS improved to 4.2% in 2021, from -0.7 per cent in 2020, the ECOWAS economies can do better and meet the criteria in the future.
New cement production capacity in Africa might be preferable to high transport costs (Engineering News)
The rapidly rising cost of transport means that adding additional cement production capacity in Africa might be worth considering going forward. Before the outbreak of Covid-19, a long-term decline in shipping costs and the relative price of imported cement, which was also expected to gradually fall, had eroded the rationale for adding more cement production capacity in Africa, Gordon Institute of Business Science Centre for Africa markets and management research associate Francois Fouche said at the African Smart Cities Summit, in Midrand, on June 8.
Addressing unfair trade key to transforming African food systems (Chronicle)
UNFAIR trading practices have continued to characterize African agriculture and food systems for decades. Determining and setting prices for agricultural commodities remains a big challenge in most African countries including local markets where the majority of farmers, traders and consumers depend for their food and income. There have not been convincing answers to questions like: Who determines pricing, packaging, measurement and supply of commodities in food markets?
From a recent survey conducted by eMKambo in Uganda and Zimbabwe mass food markets, most farmers and traders indicated that setting a uniform price for agricultural commodities for the whole country is a recipe for unfair trading because production practices are not standard in different production zones.
Principles of fair pricing are often lacking because the majority of farmers and consumers cannot tell the difference between a fair price and an unfair one due to information asymmetry, among other push factors.
If the cost of getting reliable market information becomes too high for the majority of farmers, it contributes to unfair trading practices as those with information on prevailing market prices end up setting rules of the game for everyone.
Development of a Regional Food Balance Sheet at Advanced Stage (COMESA)
The Alliance for Green Revolution in Africa (AGRA) and COMESA are leading an effort to develop a digital Regional Food Balance Sheet (RFBS) that uses data from a variety of public and private sources to develop near real-time and forward-looking food balance estimates. Once fully developed and operational, the RFBS will inform data-driven decisions around production support, trade policy, and stock management by governments, business decision-making and investment by the private sector, and food assistance by donors and emergency response organizations. Six countries are so far involved in the pilot phase: Kenya, Rwanda, Malawi, Uganda, Zambia and Tanzania. This initiative was in response to the lack of reliable, timely, and accurate data for food and nutrition security related decision-making in many Sub Sahara Africa countries, a situation that was exposed by the COVID-19 pandemic. In recognition of these data gaps and needs, COMESA Council of Ministers, in 2020 directed COMESA Secretariat, to implement a COMESA-wide RFBS initiative.
Why EAC needs enhanced gender equality in food nutrition security (The New Times)
The East African Legislative Assembly has a given a nod to a motion by MP Françoise Uwumukiza urging Ministers in charge of EAC Affairs to recommend partner states to enhance gender equality in access to food nutrition security in the six-member bloc. While justifying her motion on Thursday, June 9, the Rwandan legislator noted that it was part of the commitment she made during a training on ”Achieving Gender Equality in Climate Change and Food Systems: Actions of Parliamentarians and Policy-makers,” from April 24 to May 6. “I’m moving this motion to call upon the Council of Ministers to address the observed gender inequalities in respect of food and nutrition security in the EAC,” she said. “Food insecurity and malnutrition give rise to many consequences for health and development with mothers and children being the most vulnerable to the devastating effects.”
West Africa Food Systems Resilience Program Launched (News Ghana)
ECOWAS, CILSS and CORAF launched the Food Systems Resilience Programme which aims to sustainably reduce food insecurity in West Africa with the financial support of the World Bank and other development partners, including the Kingdom of the Netherlands, the Global Agriculture & Food Security Programme (GAFSP) and the Global Risk Financing Facility (GRiF). Led by the Economic Community of West African States (ECOWAS), the Permanent Interstate Committee for Drought Control in the Sahel (CILSS) and the West and Central African Council for Agricultural Research (CORAF), FSRP aims to increase regional preparedness against food insecurity by pursuing a systemic regional-level approach. The innovative program will simultaneously increase agricultural productivity through climate-smart agriculture, promote intraregional value chains and trade, and build regional capacity to manage agricultural risk. The first phase of the program (2022-2026), which will be implemented by the three regional organizations and Burkina Faso, Mali, Niger, and Togo, amounts to more than USD$400 million.
Storm cooking over edible oil, dollar shortage in East Africa (The East African)
East Africa is facing a shortage of raw materials to manufacture cooking oil, soaps and cosmetics, with no clear signs of availability of such commodities in the next 10 days even as prices soar, adding to consumers’ pain. But it is the high prices and shortage of edible oil that is cooking up a storm across the region. Data available to The EastAfrican shows that no edible oil-related imports are expected in Kenya this month. According to the Mombasa port ship schedule, more than a dozen vessels are expected to dock laden with different products except for palm and vegetable oil, which are key ingredients in the manufacture of such products.
Consumers have endured rising prices of cooking oil, blamed on Covid-19, the ongoing conflict in Ukraine and a deficiency of dollars, which has seen at least two Kenyan oil manufacturers reduce operations due to the inability to pay suppliers and get raw materials.
How can Africa’s energy sector attract more investment? (African Business)
The announcement of a new African Energy Transition Bank in mid-May has highlighted the problems facing energy financing on the continent. The bank’s two backers, the African Export-Import Bank (Afreximbank) and the African Petroleum Producers Organisation (APPO) said they had been forced to establish the new institution because of “the co-ordinated withdrawal of international trade and project financing” for Africa’s oil and gas industry.
The significance of the announcement lies less in the arrival of a new lender, which may take some time to create, than in the recognition that financing hydrocarbon development in African countries is becoming increasingly difficult.
To date, the largest African exporters of LNG have been Nigeria and Algeria, followed by Egypt, Angola, and Equatorial Guinea. Recent discoveries may now bring Mozambique, Tanzania, Senegal, Mauritania, and South Africa into the game. Late last year, before the Russian invasion, the outlook for these fields might have been marginal, given the global policy move to cut carbon emissions. Europe’s push to diversify supplies has changed that calculus completely. Nonetheless, it is accurate to say that an increasing number of investors are moving out of hydrocarbon development. That does not, however, mean they are turning their backs on Africa. Rather, they are agnostic about where they seek new opportunities. This could be a boon for Africa or, alternatively, the continent could miss the boat.
Learning from Morocco: Funding green energy (African Business)
If Africa wants to build back better from the Covid-19 pandemic, it must significantly ramp up investments in energy – particularly green energy – said Jean Paul Adam, Director, Climate Change, Natural Resource Management and Technology at UNECA. “We have around 600 million Africans who don’t have access to electricity, so we have to significantly increase investments in energy projects to make sure that we meet the sustainable development goals (SDGs),” he said. One of the main barriers to investment is the undeveloped nature of Africa’s capital markets, preventing companies and sovereigns from easily raising capital. On the international markets, governments struggle to access affordable financing due to a risk premium attached to African debt.
Governance and Accountability in Africa: Progress and Road Ahead (IMF)
The issue of good governance and transparency is more than just about wasted money – it is about the erosion of a social contract and the corrosion of the government’s ability to grow the economy in a way that benefits all citizens. Of course, corruption has long been an issue. But today, as we face multiple crises at once – the COVID-19 pandemic, the war in Ukraine, and the ongoing challenges of climate change and the security situation in the Sahel – the need for good governance has only become more urgent.
These multiple crises have made it very clear that countries that have strong economic institutions could respond more effectively to these challenges and better prepare for a resilient recovery — and that is true across any level of development. We also recognize that addressing corruption is an international issue, given the role of professions that enable corruption and jurisdictions that provide safe harbor for the proceeds of corruption.
The 2022 U.S.-Africa Business Summit is Coming to Marrakech, Morocco (The Guardian Nigeria)
The Corporate Council on Africa (CCA) has officially launched the 2022 U.S. – Africa Business Summit website which is now open for registration. The Summit, themed ‘Building Forward Together,’ will be held in Marrakech, Morocco on July 19 – 22, 2022 in partnership with the Kingdom of Morocco and Africa50 (the pan-African infrastructure investment platform). The Summit will explore a renewed commitment by both public and private sector stakeholders to building stronger U.S. and Africa trade, investment, and commercial ties as we emerge from unprecedented health and economic challenges. The U.S.-Africa Business Summit is the first major in-person U.S.-Africa conference that meets the pent-up demand for countries and companies to re-engage and collaborate since the start of the COVID-19 pandemic. CCA has an exciting line-up of high level and panel discussions, networking opportunities, and activities that will allow attendees to meet face-to face to engage on key U.S.-Africa economic issues and re-establish important business contacts that were not possible over the past 2 years.
This year’s Summit will host African Heads of State, U.S. Government & African Officials, top CEO’s and Senior Executives from U.S. and African companies operating in sectors contributing to Africa’s economic growth and relaunch including infrastructure, ICT, health, energy, mining, and creative industries.
African Union is India’s 4th largest trading partner (Millennium Post)
The African Union is India’s fourth largest trading partner after the United States, China and the United Arab Emirates, propped up by diversification in Indian exports to the continent, a senior State Bank of India official has said at a seminar here. With a share of 8.52 per cent in global trade, India’s total trade with Africa in 2019-20 was valued at $68.33 billion. India has a negative trade balance with Africa, implying a dominance of imports over exports. In 2019-20, India’s trade deficit with Africa was valued at $9.1 billion, which accounted for nearly 6 per cent of India’s total trade deficit in the case of trade in goods, Syam Prasad, CEO of State Bank of India in South Africa said on Wednesday. In terms of bilateral trade, the African Union is one of India’s largest trading partners after the US, China, and the UAE, he explained.
India’s trade with Africa has been diversified from exporting mainly textile yarns to petroleum products, pharmaceutical products, chemicals and manufactured products, he asserted. At the same time, India’s import basket, though dominated by primary products and natural resources, is still diverse given the wide natural resource base in Africa, he said.
Russia preparing for second Africa Summit to build closer ties as it pivots away from the West
Russia is preparing for the second Russia-Africa summit, scheduled for October-November 2022 in Addis Ababa, Ethiopia, as it steps up its campaign to move closer to the African countries and pivot away from the West due to the latter’s extreme sanctions imposed after the start of the war in Ukraine. Russia was already heavily invested in Africa as part of President Vladimir Putin’s policy of fostering ties with the non-aligned nations of the developing world ever since relations with the West soured following Russia’s annexation of Crimea in 2014. But the need to develop deep trade and investment ties in Africa has been given a new urgency since the West has broken off almost all business ties with Russia this year. This year’s summit will be even more important as Russia looks for new markets and to expand existing ones after the West imposed extreme sanction on Russia following its invasion of Ukraine at the end of February.
Meeting today in Paris, in the margins of the Meeting of the OECD Council at the Ministerial Level (MCM), the Deputy Chairperson of the African Union Commission (AUC), Dr. Monique Nsanzabaganwa, and the Secretary-General of the OECD, Mathias Cormann, announced that the two institutions intend to scale-up their collaboration to address the most pressing global challenges through a strong and equal partnership based on trust and mutual understanding. The partnership will be developed following this week’s Meeting of the OECD Council at the Ministerial Level (MCM). The AUC and the OECD announced their intent to establish a mechanism for institutional coordination, including focal points to start in-depth consultations aimed at specifying the partnership’s strategic goals and its main areas of work.
Global economy news
Nigeria makes case for developing countries, least developed countries at ILC (Daily Sun)
Nigeria has raised the alert that achieving the SDG 2030 in developing countries and least developed countries (LDCs) is at great risk without the support of international agencies.
Addressing the plenary of the 110th International Labour Conference (ILC), Minister of Labour and Employment, Senator Chris Ngige, who was represented by the permanent secretary of the ministry, Kachollom Daju, said, with the state of growing gap of inequality in the world, Nigeria considers that the achievement of the SDGs by 2030 is at great risk.
“If the goal of ‘not leaving any one behind’ is ever to be realised, urgent effort, support and contribution will be required by all, in a renewed commitment to multilateralism and international cooperation,” the minister said.
Noting that the report of the director-general on the LDCs – crisis, structural transformation and the future of work is very appropriate for debate in view of the multiple implication of current global challenges, Ngige said just as in previous reports, the focus on LDCs is of concern to all as poverty anywhere constitutes a danger to prosperity everywhere.
Draft texts seek entry of private sector in WTO Talks (Economic Times)
The draft outcome documents issued by the World Trade Organization (WTO) seek to pave the way for the formal entry of the private sector in multilateral trade talks, as proposed by the European Union last year. Draft texts on WTO reform and pandemic response highlight the role of international organisations, much to the alarm of developing countries - including India and South Africa - since they would allow private companies a high seat at the WTO negotiating table and allow them to influence processes and outcome. The draft outcome text on pandemic response takes note of the work “undertaken by the WTO Secretariat, including in collaboration with other international organisations” such as analysis, including mapping of supply and demand regarding trade in vaccines, therapeutics, diagnostics and other essential medical goods and services as related to Covid-19. “These international organisations refer to the private sector. EU has been trying to get private companies a say in multilateral negotiations and the WTO Secretariat,” said an official, who did not wish to be identified.
Freedom and fairness more important than ever, Trade Secretary tells WTO (GOV.UK)
Freedom and fairness should be front and centre of the global trade agenda to ensure communities at home and around the world benefit from the power of free trade, the International Trade Secretary says today. Anne-Marie Trevelyan issued the clarion call as she prepares to lead a UK delegation attending the 12th World Trade Organization Ministerial Conference (MC12). While there, she will urge united global action to show solidarity with Ukraine, demonstrate Russia’s illegal assault will not undermine or weaken the rules-based international system, and push for reforms that will reduce our economic dependency on aggressors. UK will use the high-level WTO meeting to secure meaningful progress on long-standing global issues, including food security, over-fishing and tariff-free electronic trade, and drive forward international efforts to cope with the fallout from Russia’s actions and the Covid-19 pandemic.
Big week for the digital economy as world body meets to try not ‘break the internet’ (BusinessTech)
For the past quarter-century, the meteoric rise of the digital economy has been exempt from the kind of tariffs that apply to trade in physical goods. That era may come to a screeching halt this week as a handful of nations threaten to scrap an international ban on digital duties in a game-changing bid to draw more revenue from the global e-commerce market that the United Nations estimated at $26.7 trillion. If governments fail to reauthorise the World Trade Organisation’s e-commerce moratorium, it could open a new regulatory can of worms that could increase consumer prices for cross-border Amazon.com purchases, Netflix movies, Apple music, and Sony PlayStation games.
“Absent decisive action in the coming days, trade diplomats may inadvertently ‘break the internet’ as we know it today,” International Chamber of Commerce secretary-general John Denton wrote in a Hill opinion piece published last week.
some nations like India and South Africa argue that the growth of the internet justifies a rethink about whether the WTO’s e-commerce moratorium remains in their economic interests. In 2020, they introduced a paper that said the moratorium prevents developing countries from gaining tariff revenue from transformative technologies like 3D printing, big-data analytics, and artificial intelligence. While nations could draw somewhere between $280 million and $8.2 billion in annual customs revenue, new digital tariffs would also harm global growth by reducing economic output and productivity, according to the Paris-based Organisation for Economic Cooperation and Development.
WTO Have Let People Of Least Developing Nations Down: Piyush Goyal (Outlook India)
Reform World Trade Organisation to make it responsive - Alan Kyerematen (Myjoyonline)
Egypt submits draft resolution to WTO for enhancing response to food security challenges (Ahram Online)
Commonwealth Secretariat and WTO strengthen efforts to boost trade capacity of Commonwealth members (The Commonwealth)
Non-contributing countries seek ban on export curbs on World Food Programme (Mint)
While nearly 81 World Trade Organisation member countries led by Singapore are seeking a ban on export restrictions for the World Food Programme at the ongoing ministerial meeting taking place in Geneva, data shows that most of them have not contributed to the United Nation’s programme.
Although India has been opposing such a move to restrict its policy space to ensure domestic food security, it contributes to the WFP, and in fact was the highest contributor in 2015. Thirty-three countries have never contributed to the WFP, including Singapore, New Zealand, Albania, Bahrain, Brunei Darussalam, Chile, and Taiwan. It is suspected that traders in some of these countries are pressing for the ban on export restrictions, as these lead to price increases.
Beyond the Pandemic: Commonwealth Trade and Investment Prospects (Commonwealth Secretariat)
By June 2022, it will be nearly two and a half years since the outbreak of COVID-19. The impact of the pandemic on global trade and investment flows, including among the Commonwealth’s 54 member countries, is now becoming clearer. The trade collapse in 2020 was deeper than previously estimated (Commonwealth Secretariat, 2021). Collectively, Commonwealth countries’ exports fell by US$475 billion compared to 2019 and included an almost $100 billion drop in intra-Commonwealth trade. This was the result of economic recession in several major markets and severe disruptions to production and supply chains. Global trade rebounded in 2021 as many developed countries started to reopen their economies, facilitated by national vaccination efforts and stimulus spending. However, most developing and low-income countries lack equitable and affordable access to vaccines and other vital medical supplies, delaying recovery efforts.
Russia intends to remain in global food market as major exporter: Russian Minister at WTO (Republic World)
World’s major global food exporter, Russia, plans to remain in the global food market and does not intend to abandon it, Deputy Economic Development Minister Vladimir Ilyichev told TASS in an interview aired on Sunday. Speaking at the 12th ministerial conference of the World Trade Organization (WTO) that began in Geneva on June 12, Ilyichev said Moscow plans to discuss the issue of the food supplies and global crisis at length during the WTO conference. However, he reiterated that the views on what caused the staggering food crisis and critical shortage worldwide “differs significantly,” according to Russian state-affiliated news outlet Tass.
“As a major supplier of food on the world market, we intend to remain there, to supply our products to partners, our traditional consumers, and we are ready to take all the actions available to us to that end, which we have repeatedly stated,” Russia’s Ilyichev said. “But in order for the system to work, it’s necessary for all participants in the process to strive for results.”
Participants at the hybrid 114th Session of the Council of Ministers of the Organisation of African, Caribbean and Pacific States (OACPS), held from 8-9 June 2022, deliberated eleven Decisions and one Resolution arising from the Meeting, which took place at the Brussels-based Headquarters of the OACPS.
Ministers with responsibility for OACPS affairs discussed, inter alia, the finalisation of the new OACPS-EU Partnership Agreement; the EU list of non-cooperative tax jurisdiction and that of third countries regarding anti-money laundering and countering the financing of terrorism (AML/CFT), projects being undertaken by the five departments of the OACPS in the areas of trade, fisheries and aquaculture, as well as the upcoming 10th Summit of OACPS Heads of State and Government, to take place in Luanda, Angola in December 2022.
Ministers expressed serious concern about the delay in signing the new OACPS-EU Agreement as a result of EU internal procedures that require unanimity for entering into international agreements. They took note of the proposed 12-month extension of the transition measures to allow the continued application of the provision of the Cotonou Partnership Agreement pending the signing of the new Agreement. Ministers further urged the concerned EU Member State(s) blocking approval of the new Agreement to positively consider facilitating the normal functioning of the relations, such as the holding of regular joint meetings, as foreseen in the new OACPS-EU Partnership Agreement.
Reigniting Old Flames: The Liberalisation of Trade in Environmental Goods and Services (Commonwealth Secretariat)
This study traces the evolution of the World Trade Organization (WTO) negotiations on liberalising trade in Environmental Goods and Services (EGS). It explores the challenges and opportunities faced by Commonwealth small states and countries in Sub Saharan Africa (SSA) in participating in EGS discussions. Small states and SSA countries have been primarily absent from the multilateral discussions on EGS for reasons that include insufficient trade-related interests in environmental goods. Notwithstanding, these countries should partake in these discussions especially amid the changing economic and trading landscape of the 21st century and concomitant changes in the environment. International trade is not as it was in 2001 when these negotiations began and likewise environmental concerns like climate change now pose an existential threat to mankind. The study begins by mapping the progression of the EGS negotiations at the WTO including attempts at establishing a plurilateral environment goods agreement. Thereafter, the paper analyses the trade-related interests of Commonwealth small states and SSA countries in EGS. The challenges and opportunities they face in participating in negotiations on liberalising trade in EGS are then highlighted. The paper concludes by identifying the priorities that these countries might consider should they decide to participate in the WTO EGS discussions.
