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N3 protest: Supply chain under attack, cost to economy more than R300m (Engineering News)
The Road Freight Association wrote to President Cyril Ramaphosa on Thursday to ask him to to urgently intervene in an ongoing blockade of key cargo routes across the country. In an open letter, Road Freight Association CEO Gavin Kelly told Ramaphosa road freight companies were being targeted and that the entire supply chain was under attack.
“The economic impact – initially felt and carried/absorbed by all the transporters stuck on the various routes – is not only enormous (we have already lost around R25 million in truck operating costs), but will cripple many of our smaller operators (88% of our members are SMMEs), will have a knock-on effect on all other industry sectors (from manufacturing to retail), [and] will result in penalties for late delivery, damaged goods, contract breach and even loss of business and thereby, unemployment,” Kelly said.
“Ships will sail past to other ports – they will not wait for us to ‘get our act together’. We will lose trade and business to and through South Africa. Our ports will become ghost towns – and the surrounding businesses relating to those activities of trade and support will close.
SA invests in youth empowerment (SAnews)
Minister in the Presidency, Mondli Gungubele, has encouraged the youth to utilise all opportunities presented to them by government to grow and create their own businesses.
“The youth are the future of this country and therefore, government remains resolute in creating a favourable and supportive environment for youth to become successful entrepreneurs and leaders. “The youth of 2022 is called upon to help us build a better tomorrow for everyone. Young people become agents of change, embrace the opportunities provided and rise to the challenge of leading South Africa’s post-COVID-19 recovery,” Gungubele said.
According to the Government Communication and Information System (GCIS), government is creating favourable conditions for youth-owned businesses to thrive through Presidential youth employment intervention programmes like the Youth Employment Stimulus and the Social Employment Fund.
Experts say that Rwanda’s AfCFTA strategy places the country on a firm footing (UNECA)
Trade Experts, members of the private sector and officials of the UN Economic Commission for Africa (ECA) met to discuss and validate the African Continental Free Trade Area (AfCFTA) National Implementation strategy. The validated strategy will serve as a blueprint to identify key products and services as well as markets that Rwanda will prioritize to tap into the opportunities provided by the agreement.
ECA estimates large gains for Eastern Africa, including an increase in intra-African exports by over US$ 1 billion and the creation of over 2 million new jobs.
The National AfCFTA Implementation Strategy highlights that Rwanda is expected to gain from sectors with strong potential for increased industrialisation such as agro processing of food products, mining and mineral processing of high-value extracts like coltan, tantalum and cobalt, construction materials like cement, iron, steel and ceramics, light manufacturing of textiles, leather products, pharmaceuticals, electronic equipment.
Tanzania joins a growing number of African countries imposing digital tax on big global tech firms (Business Insider Africa)
According to local media reports, the taxation will take effect from next month, following anticipated approval from the Tanzanian parliament. Business Insider Africa understands that lawmakers are scheduled to vote on the matter any moment from now. “Tanzania Revenue Authority shall establish a simplified registration process to accommodate digital economy operators who have no presence in Tanzania. This measure is intended to keep pace with rapid growth in the digital economy,” the Finance Minister was quoted to have said. Tanzania joins a growing list of African countries that have so far introduced various forms of digital taxation aimed specifically at big global tech companies that make money across Africa. Just last week, a Nigerian regulatory agency announced a code of conduct that would, among other things, require such companies to pay taxes.
M23 clash: DRC now suspends bilateral trade agreements with Rwanda (The East African)
The Democratic Republic of Congo is suspending all agreements with Rwanda, which it accuses of supporting the M23 rebels, even though Kigali denies the charge. After a meeting which ended late in the night on Wednesday, June 15, Patrick Muyaya, the government spokesman, announced several resolutions by President Félix Tshisekedi and the High Council of Defence.
The agreements include a commercial deal signed in June 2021 between President Tshisekedi and his Rwandan counterpart Paul Kagame on exploiting gold to ensure its traceability in DR Congo. The aim was to control the value chain from extraction by Sakima and refining by Dither in Rwanda.
The two neighbouring countries also had an agreement on the prevention of tax evasion and double taxation and another on the promotion and protection of investments.
Ghana, US trade to double in two years …US Department of Commerce projects (Ghanaian Times)
The United States (US) Department of Commerce has projected the value of trade between Ghana and US to double in the next two years. Currently, the value of trade between Ghana and U.S stands at $2.7 billion. “We have a strong commercial relations. I’m hoping that we can take that $2.7 billion or somewhere around that range, and double it in just a matter of two or three years and then double it again in just a few years after that,” the Deputy Secretary of the US Department of Commerce, Don Graves said at the US-Ghana Business forum in Accra on Thursday.
The forum, organised by the US Chamber of Commerce and the American Chamber of Commerce Ghana, was the 3rd High-Level meeting between US and Ghanaian government officials and businesses on the official visit of Mr Graves.
With a globe recovering from the shocks of the COVID-19 pandemic, he said US President Biden was committed to supporting agricultural investment, increased fertiliser, and energy production to meet the challenges of both countries.
He said there was a need for the two countries to find ways to work together and invest in more resilient supply chains and cooperate to reduce inflation as a key driver toward recovery.
Nigeria’s controversial fuel subsidies: A major focus for the new administration (Nairametrics)
Speaking at the hybrid launch of the World Bank’s Nigeria Development Update titled: “The Urgency for Business Unusual”, held in Abuja this week, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed expressed concerns about the federal government’s continuous retention of the controversial fuel subsidy regime, which is currently hurting Nigeria’s ability to service its debts.
For several months, Nigeria has failed to meet its OPEC quota, blaming massive oil theft, the inability to restart oil wells shut down in the wake of the Covid-19 pandemic, lack of investments as well as community issues. There has been a continuous fall in production volumes throughout the year. In an interview with Reuters, Zainab Ahmed noted that low crude oil production means Nigeria can barely cover the cost of imported petrol from its oil and gas revenue.
The country is at a crossroads, and we believe the subject of subsidy will be the starting point for the incoming administration. It is not hearsay that Nigeria has not derived what it should from the current high crude oil prices, rather rising crude oil prices are posing significant fiscal challenges to our economy. The perennial issues limiting production amidst increasing subsidy payments (with increasing global PMS prices) means we are better off with lower oil prices.
Administration of the Kenya Sugar Safeguard in Focus (COMESA)
The Fifth Meeting of the COMESA Sub-Committee on the Kenya Sugar Safeguard conducted a virtual two-day meeting 15-16 June 2022 to consider issues relating to the implementation of the Safeguard. Over the years, Kenya has been granted safeguards by the COMESA Council of Ministers to enable it undertake measures to re-structure its domestic sugar sector to attain competitiveness and become a profitable sector. The Committee oversees implementation of Kenya sugar safeguard measures and address challenges that may arise therefrom. Key issues in the agenda were deliberations on the progress report on implementation of the Kenya sugar safeguard measures and review of the implementation of the country’s sugar recovery plan. The Committee also considered proposals related to administration of the quotas allocated to member countries that export sugar to Kenya, which has been a key issue.
COMESA Assistant Secretary General in charge of programs, Dr Kipyego Cheluget said: “The modalities for the administration of the safeguard measures have so far been stable and serve all parties fairly under the circumstances. My plea to all of us is to avoid introducing drastic changes in the modalities which may bring discomfort or dissatisfaction to some members or section of Member States given that the diversity of sugar production regimes in the entire region.”
Cargo delays hit Mombasa port over payment dispute (Business Daily)
Importers using Mombasa port are experiencing delays in cargo delivery and collection following a payment dispute pitting Kenya Ports Authority (KPA), Kenya Railways Corporation (KRC-SGR) against shipping lines. The Business Daily has learnt that several containers are stuck at different port facilities in Mombasa and Nairobi after KPA, which is owed substantial amounts of money by KRC and shipping lines, suspended the release of cargo until the debts are cleared.
In correspondences, KPA has been writing to shipping lines which use SGR to ferry cargo to Nairobi and Mombasa to clear their arrears in vain, forcing them to take action.
One of the notices dated June 10 2022 added: “For invoice under disputes should be paid in full pending resolution of the disputes and where credit notes are subsequently issued, they will be used to offset subsequent invoices.”
Tanzania grain stuck at Kenya border due to new export requirement (The East African)
Tanzania has imposed a new requirement on grain traders to get an export permit before shipping maize out of the country, in a policy shift that has locked already bought stocks of grain by Kenyan millers at the border. Kenyan millers say the new requirement could paralyse their operations at a time scarcity of grain and other costs of production have conspired to push the price of flour towards Ksh200 ($1.70) for a two-kilo packet. Millers say the requirement was not there before after the two countries resolved their trade dispute last year. This has seen hundreds of trucks stuck at the Namanga border post, cutting the supply of grain to Kenya given that Tanzania is the only source of maize where processors are getting grain from at the moment after local stocks fizzled out. “Our tracks have been stopped from proceeding to Kenya and we are currently incurring more cost on delay charges even as our milling plants have grounded to a halt for lack of stock to process,” said John Gathogo, the publicity secretary of animal feeds manufacturers.
New regional digital plan to bridge data gaps in food stocks (Business Daily)
Kenya is among 27 countries that will soon have a digital system that will play a key role in giving real-time estimates on the availability of food stocks in the region. Alliance for Green Revolution in Africa (AGRA) and Common Market for Eastern and Southern Africa (Comesa) are leading the efforts to develop a digital Regional Food Balance Sheet (RFBS) that uses data from a variety of public and private sources to develop the system. 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. So far six countries including Kenya, Rwanda, Malawi, Uganda, Zambia and Tanzania have been involved in the pilot phase.
Gambia’s performance in third Biennial Report reviewed (The Point)
The African Union Commission initiated a comprehensive Africa Agriculture Development Programme (CAADP) Biennial Review Report which is the main mutual accountability tool to track the progress of the African Union (AU) member states in implementing the Malabo Declaration of 2014 focusing on Agricultural growth and poverty reduction based on its seven commitments. The Gambia as a signatory to the Malabo declaration submitted its Third Biennial Report to the African Union through the Regional Economic Community (REC).
Agriculture is limited with funding gaps even though it is a productive sector, Francis Mendy, Director of Planning at the Department of Planning Services, Ministry of Agriculture, stated, adding that a lot of resources is needed to support a productive sector. He also described agriculture as a risk enterprise, saying limited funds allocated to agriculture make it very difficult to implement most of the activities under the sector.
Mombasa, Dar ports behind global rivals in efficiency (The East African)
East African ports are trailing their global peers in operations through red tape and underperformance, a global report says. The region’s busiest ports by cargo handled — Mombasa and Dar es Salaam — are still a far cry from gateways in the Middle East, for example. They are ranked 293 and 362, respectively, out of 370 in the global Container Port Performance Index (CPPI).The latest report for 2021, released last week, shows that the two ports were bogged down by shipment delays, supply chain disruptions, additional costs, and reduced competitiveness resulting in inefficiencies.
“Poorly performing ports are characterised by limitations in spatial and operating efficiency, limitations in maritime and landside access. Inadequate oversight and poor co-ordination between the public agencies involved results in lack of predictability and reliability,” the index reads.
Egypt Adapts to Climate Change (IMF)
Higher temperatures and extreme weather have inflicted crippling losses in countries across the Middle East and Central Asia. Egypt is highly vulnerable to water scarcity, droughts, rising sea levels, and other adverse impacts of climate change. Without adaptation, agriculture, tourism, and coastal communities will be at particular risk.
To support the move to a greener, climate-resilient economy, the Egyptian government recently launched the National Climate Change Strategy. The private sector is scaling up adaptation efforts and will play a key role in this transition. To develop the green finance market, Egypt has also issued the region’s first sovereign green bond to finance projects in clean transportation and sustainable water management. As host of COP27, Egypt is also coordinating global action on climate adaptation, mitigation, and finance.
IMF Executive Board Concludes 2022 Article IV Consultation with Côte d’Ivoire (IMF)
Supported by solid macroeconomic stability, the Ivorian economy proved resilient to the COVID-19 pandemic thanks to the authorities’ effective policy response. COVID-related fatalities remain at low levels by international standards. Vaccination efforts continue and about 70 percent of the target population has already received a first dose.
The economy recovered strongly in 2021 , with growth estimated at 7 percent (from 2 percent in 2020), while annual inflation rose to 4.2 percent due to external and supply shocks. The overall fiscal deficit reached 5.1 percent of GDP, lower than anticipated, mainly due to improvements in customs collection and tax administration which offset higher security spending.
African trade and integration news
AfCFTA seen achieving early positive effect on intra-Africa trade levels (Businessamlive)
The African Continental Free Trade Area (AfCFTA) agreement will have an early positive effect on intra-African trade levels, according to the latest Africa CEO Trade Survey Report. The report, which was based on a survey of over 800 executives from 46 countries in Africa who are active in the continent, shows that the positive effect of the AfCFTA will be felt as early as 2022-23.
Speaking on the survey results, Pat Utomi, chairman of PAFTRAC, said the “survey clearly shows that the vast majority of African CEOs believe that the implementation of the AfCFTA will have a positive effect on levels of intra-African trade, even as early as 2022-23”.
“Just 4 percent of participants believe that the AfCFTA will have, or has already had, a negative impact on their businesses,” he said. While intra-African trade and the AfCFTA play a big part in the report, the survey also highlighted how African businesses see opportunities in external markets.
“African companies do not seem to greatly favour exporting to any one region of the world over another. However, the survey showed while Europe appears to be the favoured export destination, the Middle East is an increasingly popular destination given growing trade and investment ties with Africa,” Utomi said.
The African Trade Report is the annual flagship report of the African Export-Import Bank (Afreximbank). The combined 2021-2022 edition of the report focuses on “Leveraging the Power of Culture and Creative Industries in Africa”
Ukraine crises: Afreximbank establishes $4bn Adjustment Trade Finance Programme for Africa - Ghanaian Times (Ghanaian Times)
The ongoing Ukraine crisis presents new challenges to Africa as it is hindering access to grains, fertilisers and petroleum products, Professor Benedict Oramah, President and Chairman of the Board of Directors of African Export-Import Bank (Afreximbank) has said.
He said the crises have led to galloping inflation in many African countries, which were only beginning to recover from the COVID-19 pandemic. Addressing participants at the official opening of the 29th Afreximbank Annual Meetings (AAM2022) in Cairo, Egypt yesterday, he said “Mindful that Africa’s problems are for Africans to solve, Afreximbank has once again stepped in with the launch of a 4 billion dollar Ukraine Crisis Adjustment Trade Finance Programme for Africa (UKAFPA) to help countries to contain the short-term impacts of the crisis.”
Themed “Realising the AfCFTA Potential in the post-COVID-19 Era—Leveraging the power of the youth”, the Afreximbank annual meetings includes Advisory Group Meetings and the Annual General Meeting of shareholders, complemented by seminars and plenaries.
North African conference on labor, entrepreneurship and MSMEs concludes with the “Rabat Declaration” (AfDB)
“The post-Covid-19 world is opening up new avenues and opportunities. All public and private actors have a role to play in making themselves even more accessible to entrepreneurs. This will only be possible if a new impetus is given to entrepreneurship and MSMEs, with a synergy of all programs, public and private, which will have to be scaled up, have greater capacity, and be seamlessly interwoven.” This was the conclusion of a regional conference held on 7 and 8 June in Rabat, Morocco, on the future of labor and the role of entrepreneurship and MSMEs.
The Rabat Declaration calls for new political awareness and a change of paradigm. It establishes convergence around the need for a new job creation model that is nurtured by entrepreneurship.
Eight specific action points were identified, including: improving regulatory frameworks, investing in high-potential value chains, creating public-private partnerships to leverage investment funding, providing targeted support for entrepreneurs and helping them technically and financially.
Top 10 most-innovative economies in Africa (Business Insider Africa)
Data from the report found that Sub-Saharan Africa has the highest number of economies performing above expectations in the GII. Here are the top 10 most-innovative economies in Africa, according to the 2021 Global Innovation Index:
- Mauritius
- South Africa
- Kenya
- Cabo Verde
- Tanzania
- Namibia
- Rwanda
- Senegal
- Botswana
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Malawi
Africa could earn billions in unpaid taxes (DW)
Every year, African countries miss out on vast sums of taxpayers’ money due to a lack of logistical support for business transactions and monitoring systems. However, the real problem is that much of the working population is employed in the informal sector: on markets, in agriculture, the arts and craft industry, in the construction sector, or in transport. Moreover, many small, independent businesses are not registered — self-employed people often pay neither taxes nor social security contributions.
If they were collected, more tax revenues could significantly improve health and education, expand infrastructure, and contribute to other urgently needed development projects in many African countries.
Professor John Gartchie Gatsi, a finance and economy lecturer at Cape Coast University in Ghana, told DW that it would make sense to incorporate the informal sector into the overarching “normal” scheme for taxes: ”If we grow the informal sector and formalize it through various policy interventions, we will gradually move a chunk of the informal sector into the formal sector,” he said. But he added that Africa faced several hurdles along the way. “We have identified digitilization, electronic and automation of systems, but we have not been consistent.”
The 2nd Extraordinary Session of the African Union Specialized Technical Committee on Transport, Transcontinental and Interregional Infrastructure, and Energy (STC-TTIIE) that convened from June 14-16 virtually came to a close after making crucial decisions regarding the Russia-Ukraine crisis, the Common African Position Paper on Energy Access and Just Transition in Africa to be presented at COP27, the SAATM Dispute Settlement Mechanism and the revised African Civil Aviation Policy, among others.
During the opening of the ministerial session, the Chair of the STC-TTIIE Hon. Tsoeu Mokeretla, Minister of Transport of the Kingdom of Lesotho said the ongoing Russia-Ukraine Crisis is already taking its toll on Africa and it is time to collectively as a continent find ways of mitigating the impacts on the energy and infrastructure sectors thereby addressing the knock-on effects on other sectors. African Union Commissioner for Infrastructure and Energy, Dr. Amani Abou-Zeid, calls the situation ‘a double crisis’ as it came at a time when African economies strive to recuperate from the global covid-19 pandemic, adding that the crisis has contributed to soaring prices of energy and high cost of transport in Africa which has negatively impacted agriculture, industry, trade, tourism, and many other socio-economic sectors in addition to important pressures on the public budgets of African countries.
Commissioner Abou-Zeid emphasizes the need to rapidly adapt to the existing situations and devise innovative ways to seize possible opportunities that may arise. “Africa can step in as an alternative source energy market through its number of projects under the Programme for Infrastructure Development in Africa (PIDA) and other similar initiatives like the African Single Electricity Market (AfSEM) that can be expedited to first address Africa’s energy needs and export to other regions,” underscores the Commissioner.
Global economy news
WTO members secure unprecedented package of trade outcomes at MC12 (WTO)
WTO members successfully concluded the 12th Ministerial Conference (MC12) in Geneva on 17 June, securing multilaterally negotiated outcomes on a series of key trade initiatives. The “Geneva Package” confirms the historical importance of the multilateral trading system and underlines the important role of the WTO in addressing the world’s most pressing issues, especially at a time when global solutions are critical.
Round-the-clock negotiations among delegations produced the "Geneva Package", which contains a series of unprecedented decisions on fisheries subsidies, WTO response to emergencies, including a waiver of certain requirements concerning compulsory licensing for COVID-19 vaccines, food safety and agriculture, and WTO reform.
5 critical policy agendas for economic recovery in developing countries (UNCTAD)
The financing needs of developing countries have significantly expanded in recent years, reflected in increased debt accumulation throughout the 2010-2020 period.
This pre-COVID-19 trend placed a major constraint on government responses to confront the urgency of the pandemic and, in the medium-term, restricts their capacity to recover in the face of emerging shocks such as climate disasters and those associated with the conflict in Ukraine.
During a recent workshop held by UNCTAD and the Economic Commission for Latin America and the Caribbean (ECLAC), experts and policymakers identified five critical policy agendas to support economic recovery across developing regions in 2022.
- Re-channel unused special drawing rights and initiate a new allocation
- Expand state-contingent debt instruments
- Establish a multilateral credit rating agency
- Increase South-South learning from development banks
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Deploy capital flow management
Climate change: Green energy ‘stagnates’ as fossil fuels dominate (BBC News)
“The share of renewable energy has moved in the last decade from 10.6% to 11.7%, but fossil fuels, all coal and gas have moved from 80.1% to 79.6%. So, it’s stagnating,” said Rana Adib, the executive director of REN21.
Targeted Financing Crucial for Ocean Health and Achieving SDGs, New Report Shows (WEF)
A new white paper, published on World Ocean Day by the World Economic Forum, outlines critical steps to channel funding to support the health of the ocean and those who depend on it.
SDG14 Financing Landscape Scan: Tracking funds to realize sustainable outcomes for the ocean highlights the fragmented nature of current data on ocean financing and points to the need for innovative tools to track commitments towards and investment in the Sustainable Development Goal for the ocean, SDG14, with better traceability and granularity of information on financial commitments for the ocean.
Challenge for 2023: Guaranteeing Sufficient Food Production (Inter Press Service)
If the war in Ukraine and other conflicts around the world continue, the challenge for 2022 will be to guarantee greater access to existing food supplies, and sufficient food production by 2023. As we approach four months since the start of the war, data continues to show a trend of rising food prices, particularly in the poorest countries, while concern grows about the possible effects of these increases. It will be the most fragile countries in Africa and Asia that will pay the highest price, even though many European countries are 100% dependent on Russian fertilizers, the world’s leading exporter.
The potential shortages of some commodities may generate internal instability in many countries, increasing internal and external migratory flows.
