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South Africa Ponders Buying Russian Oil, Signifying Potential Win for Putin (Newsweek)
South African officials are openly considering importing Russian oil to ease record fuel prices, a move that would help Moscow sidestep sanctions imposed by Westerns powers for its invasion of Ukraine. Gwede Mantashe, minister of Mineral Resources and Energy, said during a parliamentary debate Wednesday that it was time for South Africa to turn to Russia for its fuel needs. Mantashe’s remarks, which were met with applause, point to possible limits of efforts to economically squeeze as fuel prices continue to soar. “We should consider importing crude oil from Russia at a low price because it is not sanctioned,” said Mantashe. Mondli Gungubele, South Africa’s minister in the presidency, told reporters last week that the government hadn’t ruled out purchasing oil from Russia if it could lower fuel prices, reports fin24.
Namibia mulls developing poultry industry standards (News Ghana)
Namibia plans to develop poultry industry standards to boost sectoral growth, an official said Wednesday. The standards will serve as a structured guide for poultry production to tackle bottlenecks that have hindered market access to local producers, said Rebekka Shiimi, promotion officer at the Ministry of Industrialization and Trade. “The country does not have standards for poultry production and its products. As a result, local producers cannot export products due to the absence of such, which limits them to the domestic market,” she said. The standards will address issues of safety, quality assurance, supply chain processes, and other aspects, Shiimi said.
National treasury to progressively eliminate fuel subsidy (Kenya News Agency)
The government is mulling a plan to gradually adjust domestic fuel prices saying that the move is necessary in order to progressively eliminate the need for the fuel subsidy, possibly within the next Financial Year. National Treasury and Planning Cabinet Secretary (CS) Ukur Yatani said that this will then create the fiscal space necessary for the government to support targeted public spending on productive sectors that support the most vulnerable, such as fertilizer subsidies, universal health coverage, and subsidized primary and secondary education, among others.
Kenya eyes open skies in deal with eight countries (Business Daily)
The Ministry of Transport has tabled bilateral air service agreements between Kenya and eight countries that will see national career Kenya Airways expand its routes network to new markets. The Transport Ministry said Kenya had air agreements with the Czech Republic, Cyprus, Chile, Belize, Suriname, Austria, Tanzania and Barbados. Transport Cabinet Secretary James Macharia told Parliament the bilateral air services agreements will enable airlines to expand their existing route networks by directly operating scheduled services to other markets. “Bilateral air services agreements between Kenya and the various countries are established to enable Kenyan air operators such as Kenya Airways to provide scheduled air services and expand their existing route networks,” Mr Macharia said in a report to Parliament. “In addition, the agreements allow foreign careers to access the Kenyan market.”
He said where airlines are unable to offer services, the agreement allows them to enter into commercial arrangements such as codeshare agreements, which allow airlines to grow the demand in other markets by putting their code on other carriers thereby offering seamless connectivity to the travelling public.
Millers to import 1.5m bags of wheat (Business Daily)
Millers will be shipping in at least 1.5 million 90-kilo bags of wheat in the next 10 days as they rush to replenish the diminishing stocks amid poor crops locally from the current season. According to the Port of Mombasa, four ships carrying bulk wheat will be docking at the harbor by Sunday next week. They will be among the 35 vessels that are expected to dock at the port between 13 and 25 June with different cargo. Kenya is grappling with a shortage of wheat following disruption at the source markets of Ukraine and Russia in the wake of the conflict between these two countries which has cut the supply of the grain. “Local wheat production for the current season was lower at 1.2 million 90 kg bags compared to 1.8 million last season,” says Agriculture and Food Authority (AFA).
The shortage of grain in the local market has seen the price of wheat flour steadily rise to now hit Sh212 for a two kilogramme packet up from Sh200 last month. Total wheat imports for the current season stood at 1.5 million tonnes by April 2022 against a total allocation of 2.7 million tonnes that millers were permitted to ship in.
US starts resetting trade ties with Kenya to reflect Biden priorities (Business Daily)
The US government on Monday started reshaping trade deals with Kenya to reflect the priorities of the Joe Biden administration, American officials said. The US and Kenya agreed to discuss an “ambitious” trade arrangement with “high-standard commitments” in key areas including agriculture, digital trade and climate change, the Office of the United States Trade Representative (USTR) announced on Monday. The USTR stated this after the US Trade Representative Katherine Tai and Kenya’s Trade Cabinet Secretary Betty Maina met on Monday on the margins of the ongoing World Trade Organization’s 12th Ministerial at WTO headquarters in Geneva, Switzerland.
“They discussed a number of issues where the United States and Kenya could develop an ambitious roadmap for enhanced cooperation and, where appropriate, explore negotiating high-standard commitments,” a statement from Ms Tai’s office said without divulging additional details.
“As a next step, the two countries will work to finalize a list of areas for cooperation to deepen economic engagement, and the two ministers agreed to meet again in the coming weeks to announce the next steps,” the USTR said.
Kenya, Zambia agree to remove barriers hindering trade (Kenya Broadcasting Corporation)
Kenya and Zambia have agreed to work together towards removing barriers that hinder trade and investment between the people of the two countries. President Kenyatta said his discussions with visiting Zambian President Hakainde Hichilema on Wednesday focused on opportunities to harness the strong bonds of friendship as well as the business and economic ties including the removal of obstacles to trade.
“In this context, we have agreed to address the prevailing bottlenecks, including addressing ourselves to a few tariff and non-tariff barriers that bar our people from enjoying the freedom of trade amongst themselves,” President Kenyatta said.
Budget: Tanzania’s new tax targets Google, Facebook (The East African)
Tanzania will introduce a digital tax this year, the country’s finance minister said, in a move targeting global internet giants offering services in the country. The two percent tax will come into effect in July and follows similar attempts by other countries to force US multinational tech companies to pay at least a portion of their revenues in local tax. Tanzania’s Minister for Finance and Planning, Mwigulu Nchemba, announced the measure on Tuesday as he presented the national budget.
RRA increases taxes for imported goods manufactured in EAC (The New Times)
Importers of products such as construction materials, furniture, wine, beauty and makeup products to the East African Community are set to pay more taxes as new EAC directive comes into force. Effective July 1, a 35% tax rate will be charged on products that are imported from outside the East African Community yet they are manufactured within the community. In a communique issued by Rwanda Revenue Authority last week, the new tax rate will affect commodities such as construction materials including tiles, steel bars and barbed wires.
Other products to be taxed include mattresses, packaging, soap, beverages, toilet paper, footwear, vegetables, fruits, coffee, tea, dairy and meat products. The new tax rate is for the fourth band of the EAC’s Common External Tariff (CET). Common External Tariff is a uniform tariff rate adopted by a customs union or common market, such as the East African Community, to imports from countries outside the community.
Uganda Budget Offers Distant Hope Rather than Instant Relief (East African Business Week)
In recent years, it has become the norm for the finance ministry to come up with a breathless theme to pivot the annual budget presentation. This year was no exception. The government is proposing to spend UGX48.1 trillion ($12.8 billion) for financial year 2022/23 under the theme, ‘Full Monetisation of Uganda’s Economy through Commercial Agriculture, Industrialisation, Expanding and Broadening Services, Digital Transformation and Market Access’. Of the projected total expenditure, UGX 30,797.3 billion is to be raised through domestic revenue sources specifically UGX23,754.9 billion as tax revenue and UGX1,795.9 billion from Non-Tax Revenue.
Launching into his budget speech with a determined air, the Minister of Finance Planning and Economic Development, Matia Kasaijja said, “The theme is in line with that of the East African Community which is ‘accelerating economic recovery and enhancing productive sectors for improved livelihood’.” He spelt out the government goals in the coming year and the medium term. These are to kick-start the process of getting the households still engaged in subsistence into the money economy. Support businesses and the overall economy to recover from the impact of the Covid-19 pandemic and restore the lost jobs and livelihoods as well as protect households from the rising prices of food, fuel, and other essential commodities using prudent economic policies.
He said the size of the economy is projected to expand to UGX162.1 trillion for the financial year ending 30th June 2022.”This is equivalent to $45.7 billion. Economic activity has been more buoyant at the growth rate of 4.6 percent per annum this financial year, up from 3.5 percent of last year. This shows that the economy is on a path to full recovery from the Covid-19 disruptions,” he said.
Leveraging Non-oil Exports for Nigeria’s Export Diversification Agenda (This Day)
One of the biggest challenges facing policymakers across the globe is how to reinvigorate their economies following the COVID-19 pandemic, which disrupted global supply chains and decimated demand leading to losses across various economic sectors. Consequently, policymakers have had to leverage fiscal and monetary tools to stimulate growth. The programmes and initiatives deployed in each economy depend on the needs, challenges, and dynamics at play. For Nigeria, expanding non-oil export has remained a matter of strategic economic importance requiring continual intervention. The impact of the pandemic on oil demand and, by extension, the price of crude oil in the international commodities market further exposed Nigeria’s over-dependency on crude oil earnings and its susceptibility to oil-related vagaries. The events that characterised the pandemic also highlighted the limited range of the country’s exports to foreign markets. While non-oil export is increasingly becoming a major source of foreign exchange earnings for Nigeria, accounting for 11.32 per cent of total exports in 2021, oil still contributes about 76 per cent of the country’s total exports, according to the National Bureau of Statistics (NBS).
The expectation is that export diversification programmes and initiatives will intensify as Nigeria continues to re-orient its export profile and boost foreign currency earnings. In 2020, the Federal Government rolled out an NGN50 billion Export Expansion Facility Programme (EEFP) under the NGN2.3 trillion National Economic Sustainability Plan. The programme is designed to increase Nigeria’s export capacity in the near term and export volumes in the medium term by supporting exporters, especially micro, small and medium entrepreneurs (MSMEs). The EEFP targets sixteen programmes in five areas, including capacity building, financing, market development, infrastructure, and institutional strengthening, and will be implemented by the Nigerian Export Promotion Council (NEPC).
LCCI to leverage Lagos international trade fair for SME devt (The Guardian Nigeria)
The Lagos Chamber of Commerce and Industry (LCCI) has announced plans to drive Small and Medium Enterprise (SME) development in the country. The move, according to the Chamber, is due to the fact that SMEs are veritable tools for economic growth and development. The Vice president and Chairman, Trade Promotion Board, LCCI, Leye Kupoluyi, stated that the Chamber’s goal is to see today’s SMEs grow to become multinationals leveraging the Lagos International Trade Fair (LITF).
“We will continue with our generic theme, “Connecting Businesses, Creating Value”. The aim of this media parley is to continue the excellent relationship existing between the LCCI and the media. We intend to improve on the support and interaction with all our media partners for mutual benefits. This parley will also give us an opportunity to clarify issues on LITF,” he said.
Liberia: Commerce Minister Reaffirms Support for WTO Declaration on Public Health (Liberian Observer)
The Minister of Commerce and Industry, Mawine Diggs, has reaffirmed Liberia’s commitment to the WTO Doha Declaration and supports the current African group position for TRIPS Waiver on health-related products including vaccines. Speaking at the World Trade Organization in Geneva, Switzerland, Minister Diggs further called on her colleagues to demonstrate the true purpose of the work they were called to do by building consensus and delivering a win for the equitable health of the world. Chairing the G7+ WTO Accessions Group – 2nd ministerial meeting on the margins of the conference, Minister Diggs, outlined the core values of the group which aims at forging pathways out of fragility and achieving resilience. She named advocates for the integration of fragile and conflict-affected states (FCS) into the multilateral trading system through alignment with WTO rules and the domestication of WTO-related reforms as a catalyst to transition countries from fragility to peace and sustainable development as the group’s major objective.
Minister Diggs highlighted the need for continuous cooperation among member-states and the Secretariat in supporting acceding countries like Ethiopia, Comoros, Sudan, Somalia, South Sudan, and Timor Leste to meet their objective of integrating in trade multilateralism and acknowledged the WTO Accession Division’s dedication in advancing the negotiations of the above countries in spite of the challenges imposed by the covid-19 pandemic.
World Bank Report: With Peace and Accountability, Oil and Agriculture Can Support Early Recovery in South Sudan (World Bank)
Economic recovery has stalled in South Sudan amid a multitude of crises, including the COVID-19 pandemic, climate shocks and dwindling oil production, and most recently, the adverse effect of the broad-based rise in commodity prices brought on by the war in Ukraine. The latest World Bank economic analysis for South Sudan, Directions for Reform: A Country Economic Memorandum (CEM) for Recovery and Resilience, highlights the need for the country to leverage its natural capital in the agriculture and oil sectors to support recovery and resilience. Oil and agriculture are the most important sectors of South Sudan’s economy, with oil contributing to 90 percent of revenue and almost all exports, while agriculture remains the primary source of livelihood for more than four in five households. Thus, the report suggests a focus on the country’s use of its main endowments of natural capital—oil and arable land—is warranted in the early stages of recovery.
Cameroon triples its price support budget for basic necessities – (Journal du Cameroun)
In the ordinance amending and supplementing certain provisions of the 2022 finance law, currently being ratified by parliament, the provision for ‘supporting essential prices’ has been increased to 40 billion FCFA, is provided for in the initial finance law.
The government explains that this increase is aimed at fighting inflation. But it does not indicate how the money will be used to achieve this end or which products are concerned. It is however certain that fuels are not concerned. An amount of 480 billion F has already been budgeted to subsidise these products.
In order to stabilise the general level of prices, if not to reverse the trend, the National Institute of Statistics (NIS) suggested to the government, in a report published last May, to implement “additional support measures for businesses and households, both comprehensive and targeted”.
African trade and integration news
African Youths Are Catalytic Force to Propel AfCFTA, Says Afreximbank Boss (This Day)
The President of the African Export and Import Bank (Afreximbank), Prof. Okey Oramah has identified African youths as the catalytic force that would propel the realisation of the African Continental Free Trade Area (AfCFTA) initiative. Oramah said this yesterday in his opening address to the Afreximbank 2022 Annual Meetings in Cairo, Egypt, where he declared that Afreximbank Central Bank Deposit Programme (ACBDP) had mobilised $35 billion and attracted 50 participants since its inception in 2019. The theme of the annual meetings is “Realising the AfCFTA Potential in the Post COVID-19 Era: Leveraging the Power of the Youths.”
He also used the address to counter the conclusions of The Economist Magazine in an article titled “Africa’s Ambitious Trade Plan: Need to Speed Up,” which stated that continued political wrangling among Africa’s leaders might squander the promise of freer trade.
Oramah said: “A youth powered AfCFTA will trigger a continental economic expansion; and whether the next decade will become lost decade for Africa will depend on how we creatively deploy the energies and tenacity of our youth to implement the AfCFTA agreement.
“As the youths are technologically savvy, and we believe that it is technology that will bring down the borders, Afreximbank and the AfCFTA secretariat have started to implement a digital AfCFTA called the Africa Trrade Gateway. This will offer the opportunity for the youths to access African market, access payment services and access credit.
East Africa’s private sector wants rules of origin finalised (The Citizen)
The private sector in the East African region wants finalisation of Rules of Origin under the African Continental Free Trade Area (AfCFTA) speeded up.The call was made early this week in Nairobi by the business leaders during a consultative meeting organised on AfCFTA and Tripartite Free Trade Area (TFTA). It emerged at the forum co-organised by the East African Business Council (EABC) and Trade Mark East Africa (TMEA) that 43 out of 55 African countries have ratified the AfCFTA agreement.
Forty five countries have already submitted the schedule of liberalisation plus 87 percent of Rules of Origin for products that have been agreed upon. However, according to Mr Prudence Sebahizi, the chief technical advisor on the AfCFTA at the African Union (AU) Commission, the process is yet to be finalised.
He said products such as textiles and clothing products alone compose 10.5 percent of the outstanding Rules of Origin yet to be finalised under the AfCFTA trade arrangement. Motor vehicle parts and accessories compose 1.4 percent of the outstanding Rules of Origin while tobacco and tobacco substitutes and fish and others compose one percent.
“It is crucial because the outstanding products are central in the East African Community (EAC) regional value chains and job creation,” he said.
Egypt has become symbol of growth resilience in Africa: Afreximbank (Daily News Egypt)
As the only one of the three Africa largest economies (the others are Nigeria and South Africa) where GDP growth expanded strongly even at the peak of the pandemic downturn (3.3%), Egypt has become the symbol of growth resilience for the continent, according to the African Export-Import Bank (Afreximbank).
Afreximbank’s report “Africa’s 2022 Growth Prospects: Poise under Post-Pandemic and Heightening Geopolitical Pressures” highlighted that Egypt is projected to account for 17% of Africa’s combined output expansion in 2022, up from 16% in 2021. The two largest economies, Nigeria and South Africa, are expected to account for 17% and 15%, respectively of aggregate output of the region.
Mombasa Port On Course To Become Africa’s Trade Hub (Kenya News Agency)
Recent mega infrastructure projects by the government, aims to transform the Port of Mombasa into the most efficient and modern port in the region. Mombasa port is the gateway for landlocked countries such as Uganda, Rwanda, Burundi and South Sudan, and has lately witnessed major improvement through multi-billion infrastructural, technology and modern equipment investment.
The new port infrastructure developments are envisaged to firmly consolidate the new era of the port as a critical transport and logistics hub in the region. The port expansion projects seek to transform the Mombasa port, the gateway to East and Central Africa, into the most efficient, competitive, modern and safe port in Africa.
Zambia President says Africa buying its goods through Europe (The East African)
Zambian President Hakainde Hichilema says trade barriers between African countries are stifling the movement of goods to the extent that countries find it easier to buy African products through Europe.On his State visit to Kenya, President Hichilema said the continent must open its borders, implement the African Continental Free Trade Area (AfCFTA) to correct the anomaly, and ease trading between countries instead of using third parties.
Both countries belong to the Common Market for Eastern and Southern Africa (Comesa), a 21-member trading bloc that includes countries as diverse as Tunisia and eSwatini, but all of which belong to the African Union.
Since last year in March, African countries have been implementing the AfCFTA, which is seen as an ultimate solution to gradually eliminate trade barriers and make it easier to move goods between member states, and hopefully raise intra-African trade from the current 14 percent.
“I want to assure you that the Kenya Government will continue to work with its partners in Zambia and across the African continent to continuously remove barriers to trade, continue to improve the ease of doing business, continue to open our borders to our brothers and sisters across the continent,” the President Kenyatta said at the reception. In this context, we have agreed to address the prevailing bottlenecks, including addressing ourselves to a few tariff and non-tariff barriers that bar our people from enjoying the freedom of trade amongst themselves.”
What is the future of Africa’s automotive industry? (The New Times)
Experts argue that the automotive industry can leverage the African Continental Free Trade Area (AfCFTA) to scrape the continent off the tagline of being the ‘dumping site’ of old used vehicles. The long-term impact is quite sobering where EAC has a trade deficit of $2.8billion per year, only for the automotive sector.
“We have been flooded with used old vehicles and there is not a large enough market so that local supply can be viable…if you want to have a good production capacity, you need to have a strong local demand as well as external demand,” Serge Kamuhinda, CEO of Volkswagen Mobility Solutions Rwanda, claimed.
“We need to look at electric and connected vehicles if we want to participate in the continental value chain that is able to be viable within the global value chain of the automotive industry,” Kamuhinda noted.
The CEO said they are working closely with the African Association of the Automotive Manufacturers to build regional hubs, in a sense that one hub in East Africa will be producing one model of vehicles and another hub in West Africa for another kind of model. The end goal is to have cars sold on the continent with enough market size. He added that there is work in progress to have 40 percent of rules of origin under the AfCFTA, meaning vehicles produced on the continent will have 40 per cent local value addition. “Otherwise, there are not enough incentives for the industry to make investments.”
ECOWAS Postpones Plans to Launch Single Currency to 2027 (Business Post Nigeria)
Pan-African multilateral finance institution, the African Export-Import Bank (Afreximbank), has called for an increase in intra-African trade and financing on the back of the continent’s youth and technology resources. Speaking during the 29th Annual Meetings of Afreximbank on Wednesday in Cairo, Mr Benedict Okechukwu Oramah, President and Chairman of the Board of Directors, made a strong case for increasing intra-African trade, providing insight into the challenges restricting trade and providing clear solutions as to how the continent can resolve them. Mr Oramah’s suggestions come at a time when Africa is well-positioned to become a highly competitive trade hub.
A year on, the continent has been slow to unlock the full potential of this agreement, leading to an accelerated push by the Afreximbank to promote intra-African trade and finance in Africa. “While the problem was identified decades ago, it is only now that Africa can boast of possessing a combination of factors that can resolve it. These consist of visionary and committed leadership, the youth, and digital technology. “Our leadership has done the courageous work of giving us the AfCFTA. A lot now hinges on our youth. It is for this reason that Afreximbank dedicated this year’s Annual Meeting to the theme, Realizing the AfCFTA Potential in the Post-COVID-19 Era: Leveraging the Power of The Youth, stated Mr Oramah in his opening remarks.
Burundi, the Democratic Republic of Congo (DRC), and neighboring countries within the Great Lakes Region of Eastern Africa are set to benefit from the new Great Lakes Trade Facilitation and Integration Project approved on June 9, 2022, by the World Bank’s Board of Executive Directors. The $250 million International Development Association (IDA*) financing aims to facilitate cross-border trade and enhance the commercialization of selected value chains, primarily targeting small-scale and women traders in the borderlands of the Great Lakes region. “Local cross-border trade, if properly facilitated, can be an important way to address poverty, food insecurity, conflict, and other socioeconomic vulnerabilities that populations in the border areas face,” said Dr. Chris Onyango, Director of Customs and Trade of the Common Market for Eastern and Southern Africa (COMESA). “We seek to reduce the cost and time to trade and improve the volume and quality of goods that are traded to boost incomes, prosperity, and stability in Burundi, the DRC, and the wider region.”
Africa’s energy transition calls for pragmatic measures to keep the continent competitive (UNECA)
During the United Nations High Level Dialogue in Energy in September 2021 – the first such dialogue in over forty years, the UN Secretary-General – H.E. Antonio Guterres – in his address urged countries to take urgent measures towards the rapid phase out of coal power capacity in OECD countries by 2030 and in the rest of the world by 2040. Mr Guterres noted that efforts must be made to ensure that “…no one is left behind in the race to a net zero future…” and that “…the global energy transition must be just, inclusive, and equitable…”, while recognizing that “…no two national energy transition pathways will be identical…” While Africa’s climate ambition and the drive towards net zero emissions must be relentless, the continent’s energy transition cannot be identical to the rest of the world and needs pragmatic solutions.
The current geopolitical shock arising from the crisis in Ukraine has compounded the severe impacts already being felt by African countries because of the socio-economic impacts increasing climate change and the COVID-19 pandemic. In particular, the war in Ukraine has shifted forward the gear for countries to step up efforts towards the clean energy transition away from fossil fuels to renewable and cleaner energy forms. European countries are rethinking their energy plans and policies. And there is increasing possibility of the use of more coal-fired power plants in Europe, thereby impacting on climate goals. But most importantly, the crisis is causing sharp rises in fuel and food prices globally, with huge impacts on African countries. The crisis has caused European countries to rethink their energy strategy and seek new sources of oil and gas to replace Russian supplies. Meanwhile, the prices of renewable energy technologies have seen sharp increases, after many years of costs declines, at a time when African countries need more deployment of these technologies. This situation calls for renewed thinking on Africa’s energy access, mix and green transition approach, including the role of natural gas in this process.
Gender, Poverty and Environmental Indicators on African Countries 2022 (AfDB)
This is the twenty-second volume of the publication on Indicators on Gender, Poverty, the Environment and Progress towards the Sustainable Development Goals in African Countries by the Statistics Department of the African Development Bank Group. The publication provides information on the broad development trends relating to gender, poverty, environmental issues and the SDGs in the 54 African countries.
The AfDB Statistics Pocketbook 2022 (AfDB)
The AfDB Statistics Pocketbook presents summary economic and social data on regional member countries and operational activities of the African Development Bank Group. Most of the indicators shown are selected from other Bank publications, namely: Compendium of Statistics on Bank Group Operations; Indicators on Gender, Poverty, the Environment, and Progress towards the Sustainable Development Goals in African Countries; and African Statistical Yearbook which contain more detailed information.
Standard Chartered Accelerates Sustainability Commitment In Africa Through Partnership With UNECA and FSD Africa (Africa.com)
In line with Standard Chartered’s vision to be the most sustainable and responsible bank in the world, the Bank today announced its partnership with Ghana’s Ministry of Environment, Science, Technology & Innovation (MESTI), and the UK-funded financial sector development agency FSD Africa as founding members of the African Natural Capital Alliance (ANCA). The Alliance, in partnership with the United Nations Economic Commission for Africa (UNECA), will act as an African-led collaborative forum for mobilizing the financial community’s response to nature-related risks and opportunities across the continent. The ultimate aim of ANCA is to help grow and protect Africa’s natural capital by shifting financial flows from destructive activities for short-term gain to long-term stewardship of nature for sustainable economic growth.
Africa continues to be among the worst hit by the consequences of climate change, despite emitting the lowest levels of greenhouse gases that are driving its impacts. Standard Chartered is committed to shifting capital towards sustainable finance to areas where impact is needed most, with the Bank’s Opportunity 2030 study also showing an investment opportunity of $197 billion being present in funding Africa’s achievement of the United Nations’ Sustainable Development Goals.
Is it Africa’s time, or has the continent’s race been run? (BusinessLIVE)
Is Africa still stretching on the sidelines, or is the continent finally out of the starting blocks in the race to shape the global economy? Many hope the African Continental Free Trade Agreement (AfCFTA) has fired the starter’s gun, but sceptics say this ambitious trade pact may mark more false hope, perpetuating a decades-old replay of Groundhog Day. Is that true, or are the signs more promising than that?
Referencing the late Harvard professor Calestous Juma at a recent Dunning Africa Centre (DAC) webinar at Henley Business School, Francis Mangeni, senior fellow at the Nelson Mandela School of Public Governance and an acknowledged expert on AfCFTA, said: “When it comes to trade, Africa should be one country.” If this is to be the case, the AfCFTA will have to be a game-changer for the continent. To date, political buy-in has been high, with the agreement having been ratified by 42 countries, and there is a solid economic case for what so far has been a legally sound project.
But sceptics will argue that Africa has tried for many years to integrate itself to become a pan-African continent, so what is different now? Some of the common themes around why AfCFTA is doomed to a false start include the often repeated mantra that intra-Africa trade is limited to just 15% of Africa’s total trade. Weak infrastructure criss-crosses the continent, and there is a severe infrastructure deficit among nations. Varying levels of development, and diverse cultures and languages, mean trade-aligned integration is challenging, and the synchronisation of regulations is inharmonious at best. Furthermore, prohibitive bureaucracy continues to pothole border crossings with time-consuming delays and paperwork.
One of the biggest hurdles for Africa is the restricted access to finance. According to Andrew Mold of the UN Economic Commission for Africa, who was also an invited panellist at the DAC webinar, banks are a major block here. Interest rates are high, meaning borrowing is costly and exclusive to a higher-income base. This is out of touch with the majority of Africans and starves entrepreneurial green shoots from the sunshine needed to grow.
Morocco Hosts the 14th US-Africa Business Summit (Modern Diplomacy)
After several negotiations, the Corporate Council on Africa (CCA) has finally launched its 14th US-Africa Business Summit from July 19 to July 22 under the theme ‘Building Forward Together’ and will be held in Marrakech (Morocco) in partnership with Africa50 (the pan-African infrastructure investment platform) and the Kingdom of Morocco.
United States investors are looking forward to exploring several opportunities in the African Continental Free Trade Area (AfCFTA), a policy signed by African countries to make the continent a single market. The market, with estimated 1.3 billion population, requires all kinds of consumable products and new legislations stipulate localizing production inside Africa. Thus the summit will further explore a renewed commitment by both public and private sector stakeholders to building stronger United States and Africa trade, investment, and commercial ties, emerging from unprecedented health and economic challenges for the past two years.
Global economy news
Director-General Ngozi Okonjo-Iweala called today (14 June) on members to go the extra mile to find convergence on the various issues at stake at the 12th Ministerial Conference (MC12) and to be mindful that time is running out to conclude meaningful agreements. On the third day of the ministerial gathering, WTO members continued efforts towards reaching a long-awaited agreement on curbing harmful fisheries subsidies and reaffirmed their intention to pursue convergence on texts related to agriculture.
The DG noted that some delegations approached her to suggest that MC12 could go on for an extra day. “They feel that we really can cross the line on some of these things if we gave it a bit more time, so I just throw that out there for your consideration. We can all sleep over it and perhaps we will take the pulse tomorrow to see if that is needed or not,” she added.
Subsequently, MC12 has been extended by one day until Thursday, 16 June 2022, to facilitate outcomes on the main issues under discussion.
DG Okonjo-Iweala receives priorities for MC12 from business community, briefs civil society (WTO)
The Director-General briefed close to 80 representatives from a wide array of civil society groups on the ongoing negotiations and potential deliverables on the WTO response to the pandemic, including the TRIPS waiver, food security, fisheries subsidies, agriculture, WTO reform and the moratorium on imposing customs duties on cross-border electronic transmissions. “The good news is that work is going on across the board,” she said, describing members’ intensive negotiations aimed at resolving differences to arrive at consensus at MC12. “The bad news is that we are running out of time.” DG Okonjo-Iweala said: “Achieving results at MC12 is important for the credibility of the multilateral trading system.” She highlighted the importance of decision-making through multilateral consensus at the WTO, particularly because it gives developing country members a clear voice in the negotiations. For this reason, she said, it was important for members to reach multilateral agreements – to demonstrate that the multilateral instrument can deliver results.
pdf MC12 International Chamber of Commerce (ICC) Statement (282 KB) - June 2022
Rocky path to Geneva: WTO ministerial is taking place amid low expectations for a successful outcome (The Financial Express)
All bets are off whether the World Trade Organisation’s 12th Ministerial Conference (MC 12), held in Geneva from June 12-15, delivered a successful outcome for India and developing countries. Ministerial deliberations are being extended by a day to cobble up deliverables if compromises are made at the eleventh hour. Since its inception 27 years ago, WTO has managed only one update on trading rules with respect to trade facilitation, which came into force five years ago. This highest decision-making body seeks to address the challenges of making a rules-based multilateral trading system more relevant in a world where the devastation wrought by Covid-19, climate change, and geopolitical tensions have upset global trade.
MC 12’s deliberations were broadly around four main pillars plus, notably, WTO’s response to the pandemic, fisheries, agriculture, WTO reform plus other issues. These four pillars are critical issues on which India and developing countries have major stakes. It says a lot about the extremely low expectations around MC 12 when the WTO Director-General, Ngozi Okonjo-Iweala, stated that “even landing one or two (deliverables) will not be an easy road.”
Civil society organisations urge trade ministers to demand ‘real TRIPS waiver’ (Hindustan Times)
India’s position on patent waivers at the World Trade Organization (WTO) to cover Covid-19 vaccines, diagnostics and therapeutics got an unexpected boost on Wednesday with a group of more than 150 civil society organisations, including Doctors Without Borders and Oxfam urging trade ministers not to accept the current negotiating text. Doctors Without Borders or Médecins Sans Frontières (MSF), The People’s Vaccine Alliance, Oxfam, Section27 of South Africa and the other organisations have called on trade ministers at the WTO to demand a real waiver.
The group of civil society organisations sent a letter to trade minsters negotiating the draft ministerial decision on the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement at WTO’s conference in Geneva, urging them “not to accept the current negotiating text, which represents backsliding that could set a negative precedent for access to medicines and medical tools”. The group asked governments to adopt a “real TRIPS waiver that will adequately address intellectual property on all essential Covid-19 medical technologies, including treatments, tests, and vaccines during the ongoing pandemic that has claimed more than 15 million lives”, according to a joint statement.
pdf MC12 WTO CSOs call on ministers to reject current draft of TRIPS Decision: Press release (43 KB) - 16 June 2022
Customs Matters: Strengthening Customs Administration in a Changing World (IMF)
Customs administrations around the world face new challenges: an increasing volume of international trade, a revolution in new technologies, and fundamental changes in business models. The benefits of a well-performing customs administration are clear, as is the need to develop efficient, effective, fair, and modern customs administrations. Customs Matters analyzes the many changes and challenges customs administrations face and pro-poses ways to address them. By offering a cross-sectional view of the main aspects of customs ad-ministration, the book guides policymakers and customs officials as they evaluate the current state of their customs system with a view to developing, reinforcing, or relaunching their own roadmaps for customs modernization.
Russia’s War in Ukraine Is Taking a Toll on Africa (United States Institute of Peace)
Speaking at the U.S. Institute of Peace on June 14, Eziakonwa, who serves as the U.N. Development Programme’s assistant administrator and regional director for Africa, said the war has put households, communities and countries across Africa in a “very precarious situation.” Joseph Sany, vice president of the Africa Center at USIP, said: “The critical question before us today is: How can African countries and their partners leverage their abundant resources and human capabilities to address the short-term impact of Russia’s invasion in Ukraine and advance their long-term development and security needs?”
In response to the pandemic, African countries put in place effective macroeconomic policies, made strategic investments and boosted COVID-19 vaccine production and rollout. “While multilateralism appeared to be shrinking in the rest of the world, it was expanding in Africa,” Eziakonwa said. By the end of 2021, Africa exceeded expectations of a 3.7 percent GDP growth, recording a 4.5 percent growth and “showing its resilience and its muscle to bounce back,” Eziakonwa said.
On February 24, Russia invaded Ukraine in an unprovoked act of aggression. The aftershocks of the ongoing war are being felt around the world, including in Africa. While the level of trade between the African continent as a whole and Russia and Ukraine is insignificant, some African countries rely heavily on these two countries for critical imports, particularly wheat, fertilizers and steel. A disruption in these imports could adversely impact African countries.
Conference on the Promotion of Good Governance and Fight against Corruption (AU)
On June 13-14, 2022, the IMF’s Africa Training Institute (ATI) and the Department of the Economic Development, Trade, Tourism, Industry, and Minerals (ETTIM) of the African Union Commission (AUC) organized a high-level conference in Gaborone on the promotion of good governance and the fight against corruption within the context of the COVID-19 pandemic and multiple crises. The conference helped to build consensus about good governance as a critical enabler for macroeconomic stability in Africa. Welcoming the delegates to the conference, the Minister of Finance Hon Peggry Serame, in a speech delivered on her behalf by the Secretary for Development and Budget, Mr Olesitse H Masimega highlighted that weak governance and corruption impose a burden on the government budget due to continuous and elevated public expenditure on programmes that fail to deliver the expected outcomes. Opening the conference, IMF Deputy Managing Director Antoinette M. Sayeh said “Countries that have strong economic institutions respond more effectively to crises and are better prepared for a resilient recovery. And that is true across any level of development.” The importance of reforms in this regard has proven true during the pandemic where countries with stronger institutions have been able to mount more effective responses.
Countries step up efforts to close wheat supply gap (The New Times)
Other countries like Argentina, Brazil, India, have stepped in to fill the global wheat supply gap that was created by the Russia-Ukraine war, The New Times has learnt. Russia and Ukraine have been major players in the global wheat market, but the war waged by the former on the latter has disrupted the supply of this staple cereal worldwide.
Faradjallah Ndagano, Company Relations Affairs Manager at Bakhresa Grain Milling Rwanda Ltd/AZAM – a major wheat processor in the country – said that the firm buys wheat from the international commodity markets where the cereal from various countries is traded. “There is no shortage of wheat supply. The global market is not dormant, they [players in it] are dynamic as they look for other places to source the cereal such that their customers do not lack wheat,” he told The New Times.
Ndagano said countries like Argentina, Brazil, India, and [some countries in] Europe have started supplying wheat to the global market. “It depends on the [wheat] produce they have got. Once they have met their food needs, they take the surplus to the international market,” he said.
Commenting on prices, he said they keep changing as a result of different factors including the wheat output, and challenges of the day, but indicated that of course, the war somehow contributed to the prices.
Meanwhile, The New Times observed that even the traders that did not increase the price of bread and other wheat flour derived products, reduced their size as an attempt to prevent incurring losses from the rising wheat costs.
Climate change: More fossil fuel investment, just ‘delusional’, warns Guterres (UN News)
António Guterres was speaking at the Sixth Austrian World Summit on the climate crisis, convened by the Austrian Government and former Governor of California and Hollywood actor turned climate activist, Arnold Schwarzenegger. Mr. Guterres repeated his call for G20 leading economies to “dismantle coal infrastructure, with a full phase-out by 2030 for OECD countries and 2040 for all others.”
He said renewable energy was “the peace plan of the 21st century” and called on fossil fuel finance to be abandoned wholesale, in favour of the green alternative. “The only true path to energy security, stable power prices, prosperity and a liveable planet lies in abandoning polluting fossil fuels, especially coal, and accelerating the renewables-based energy transition”, he declared.
The African Development Bank Group hosted a workshop to explore securing a just transition in the developing world. The session, which took place during the World Bank’s Innovate4Climate Conference, highlighted the importance of South-South cooperation .
Innovate4Climate 2022, organized by the World Bank, took place over three days, from 24-26 May and featured plenaries and workshops. The event provided a forum for practitioners to demonstrate how to achieve a resilient and low-carbon future.
With a large oil-and-gas sector, the country has many workers that the transition will negatively impact. To mitigate these impacts, the government has incorporated renewable energy into energy efficiency technology to ease the transition for existing workers and create career opportunities. “We are not implementing a climate change or energy-only approach, but a holistic approach to transition toward a global paradigm shift, “ Kishan Kumarish, Head of the Minister of External Affairs Unit in the Trinidad and Tobago Ministry of Planning and Development said.
BRICS meet: NSAs discuss new threats and challenges to national security (Business Standard)
Top security officials of the BRICS countries have held an in-depth exchange of views and reached a consensus on issues such as strengthening multilateralism and global governance and responding to new threats and challenges to national security.
National Security Advisor Ajit Doval on Wednesday attended via video link the 12th Meeting of BRICS (Brazil, Russia, India, China and South Africa) National Security Advisers and High Representatives on National Security. The meeting also discussed strengthening and improving governance in new frontiers, the state-run Xinhua news agency reported.
In his address, Yang Jiechi, the director of the Office of the Foreign Affairs Commission of the Communist Party of China (CPC), said the BRICS was born in the historical tide of the collective rise of emerging markets and developing countries and represents the direction of the evolution and adjustment of the world pattern and international order. He called on the five countries to follow the trend of times, respond to changes of the times and inject more stability and positive energy into the turbulent international situation.
