tralac Daily News
South Africa’s government has signed an agreement with trucking associations to end frequent blockades of key trade routes that are estimated to have cost the economy millions of dollars. Truckers regularly block major arterial roads in protest of the hiring of foreigners as drivers, including last week when a key route to South Africa’s biggest port and commercial hub of Johannesburg was disrupted. The blockades will stop while a taskforce develops a plan to address truckers’ concerns, particularly around the hiring of foreigners, according to the terms of a deal signed on Monday.
President Yoweri Kaguta Museveni has met and held discussions with a Special Envoy from Algeria, Ramtane Lamamra who is also the North African country’s Minister for Foreign Affairs. The meeting that took place at Museveni’s country home in Rwakitura was also attended by the State Minister of Foreign Affairs of Uganda, John Mulimba. The president and his guest discussed bilateral cooperation between the two sister countries of Uganda and Algeria in the fields of trade, agriculture and security, among others. Museveni used this opportunity to lobby the Algerians to invest in Uganda especially in agricultural value addition but also asked the North African country to start importing milk from Uganda.
The Government of Uganda has scaled up the practice of voluntary local reviews – which monitor progress made by local governments towards the Sustainable Development Goals (SDGs) – and is bringing their outcomes to the forefront of its national SDG reporting process. This development builds on the country’s first voluntary local review of the SDGs and African Union’s Agenda 2063, which was conducted for Uganda’s eastern district of Ngora in 2019 with support from the United Nations Economic Commission for Africa (ECA).
“Local communities are at the heart of our shared drive to achieve the SDGs. There is no aspect of the SDGs or the Agenda 2063 where local governments do not play a central role. Without the local ownership and action, the achievement of the SDGs at the national, regional and global levels during this Decade of Action is not possible – and that has been the focus of ECA’s work,” she said.
Export strategy sector committee inaugurated html (Graphic Online)
A governance structure in the form of a sector committee to guide the successful implementation of the National Export Development Strategy (NEDS) has been inaugurated in Accra.
The NEDS sector committee which comprises stakeholder groups of all the product sectors of the Ghana Export Promotion Authority (GEPA) is expected to assist the NEDS secretariat to facilitate effective implementation of the NEDS to promote Ghana’s value-added products for export.
A media release issued in Accra on June 16, 2022 said that the NEDS, spanning 10 years (2020-2029), sought to diversify and grow the Non-Traditional Export (NTE) sector of the economy and employ a private-sector-driven approach.
The World Bank in its latest report on Nigeria Development Update argued that the country’s protectionist trade policy is counterproductive, writes Dike Onwuamaeze Nigeria’s trade protectionist policy, ostensibly conceived to protect Nigerian local manufacturing industry, is counterproductive. This is the verdict of the World Bank in its latest report titled, “Nigeria Development Update June 2022.” The report said that Nigeria’s trade policy is costing the country more public revenue and pushing its citizens into poverty.
One, the country’s trade policy since the inception of President Muhammadu Buhari’s administration in 2015 has been remarkably moving further in a protectionist direction and yielding several unintended consequences, including high levels of tariff evasion accounting for the loss of $1.8 billion annually in public revenue. This is estimated to be 0.4 percent of GDP. The report also asserted that the country’s increasing trade protectionist stance is constraining the efficiency and competitiveness of its domestic firms. The third assertion made in the report is that import restrictions are pushing millions of Nigerians into poverty as “distortionary trade policies can decrease overall purchasing power and, in turn, increase poverty.”
The Chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), Prof. Bolaji Owasanoye yesterday called for better negotiation skills in dealing with expiring international trade agreements as well as in establishing new ones. He spoke at a two-day workshop on mitigating illicit financial flows with the theme: “Capacity Building for Nigeria’s Negotiators for Improved Terms of Engagement with the Rest of the World,” which kicked off at the commission’s headquarters in Abuja. In his paper titled “From Gunboat Diplomacy to the Negotiation Table,” Owasanoye stated that globalisation made interactions with diverse global communities inevitable. He, however, noted that the rules of engagement were more often than not unfavorable to poor economies of the global south, who lack the development and technological advancements of the global north.
The Chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), Bolaji Owasanoye, has called for better negotiation skills in dealing with expiring international trade agreements as well as in establishing new ones. Mr Owasanoye, a professor and senior advocate, made this call in his opening remarks Monday at a two-day workshop on mitigating illicit financial flows in Abuja. The event was themed, ‘Capacity Building for Nigeria’s Negotiators for Improved Terms of Engagement with the Rest of the World’, according a statement by ICPC spokesperson, Azuka Ogugwa. In his paper titled, ‘From Gunboat Diplomacy to the Negotiation Table’, Mr Owasanoye said, although globalisation has made interactions with various global communities inevitable, the rules of engagement are frequently unfavourable to developing and technologically backward economies in the global south. “This has often led to poorly constructed trade agreements which have ultimately been disadvantageous to the growth of the country and also opened loopholes to encourage illicit financial flow,” he said.
Nigeria seeks ILO support to achieve SDGs (Tribune Online)
The Nigerian government has called for support of the International Labour Organisation (ILO) to achieve the Sustainable Development Goals (SDGs) by 2030. The Minister of Labour and Employment, Sen. Chris Ngige, said this at the ongoing 110th session of the International Labour Conference in Geneva, Switzerland. He was responding to the report of the Director-General of the ILO, Mr Guy Ryder on the Least Developed Countries (LDCs) -Crisis, structural transformation and the future of work.
Ngige, represented by Daju Kachollom, Permanent Secretary in the Ministry, said the support was imperative due to the current state of growing inequality gap. “We consider that the achievement of the SDGs by 2030 is at a 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,” he said.
The Secretariat and Government reports are discussed by the WTO’s full membership in the Trade Policy Review Body (TPRB). A policy statement by the government of the member under review.
Ethiopia wants to modernize its agriculture and industrialize its rural areas. To this end, authorities have launched a project (with backing from several international partners) to develop agro-industrial parks in four regions. Ethiopia recently secured a €22 million loan from Italy for the development of agro-industrial parks in the country. The loan agreement was announced by the Ministry of Finance in a release published on its website, Monday, June 13. The loan will help build the capacity of national and regional industrial park development companies, farmers’ organizations, and private investors. It will also facilitate innovative contractual arrangements aimed at connecting farmers’ organizations with agro-processors.
According to the release published by the Ministry of Finance, the project aims to “create jobs in the rural areas of the country, increase farmers’ incomes, generate export revenues, substitute imports of agro-processed goods and contribute to economic growth and structural transformation.”
“The intervention will improve the involvement of private sectors in the Integrated Agro-Industrial Parks and Rural Transformation Centers, and their competitiveness in the internal and international market, which is in line with the Home-Grown Economic Reform agenda and the 10 years development plan of Ethiopia,” it adds.
The African Development Bank will join the Gabonese Government to host national consultations on the Country Diagnostic Note and Country Strategy Paper for the 2016-2022 period in Libreville, from 21 to 24 June. Key stakeholders in the discussions will include the Ministry of Recovery and Economy, technical departments of sectoral ministries, financial partners, civil society, academics and the private sector. “The Country Diagnostic Note provides the analytical basis for preparing the Country Strategy Paper, the strategic and programming tool for the Bank’s operations in Gabon, for the 2023-2027 period, “ says Nouridine Kane Dia, African Development Bank Country Manager in Gabon. The Country Diagnostic Note identified seven priority areas of intervention to propel Gabon’s sustainable development and these will be scrutinized during the national consultations. In addition to improving governance, the draft note also explores ways to enhance the business climate by developing the private sector, diversifying investment in agriculture and promoting agro-industry, and deepening the country’s industrialization process in timber, mining and hydrocarbons.
According to the fifth edition of the World Bank’s Report on the Economic Situation in Mauritania, the country’s economic recovery in 2021 was robust but below pre-COVID-19 levels and growth potential. Growth is estimated to have rebounded by 2.4% in 2021 thanks to an increase in private consumption and investment, as well as an improvement in the performance of the services sector. Likewise, the negative impact of the pandemic on human, economic and social activities decreased significantly in 2021, reflecting the recovery in growth and the effectiveness of the mitigation measures put in place by the government. The report notes that Mauritania has presented positive recent economic developments, including a surplus budget balance, a reduction in the total public debt-to-GDP ratio and a monetary policy favorable to the return of growth. With successful COVID-19 vaccination campaigns, a thriving extractive sector and an expected increase in public sector contribution, the country looks set for a more optimistic growth in 2022.
In his official launching statement, Mr. Keita said the launching of this new system was indeed a “great milestone” in the government’s effort to improve efficiency and effectiveness in the customs clearance process. “This state of the system, which will replace the current ASYCUDA++ system, will digitalise the entire customs clearance process, thus eliminating the need for human intervention.” “The implementation of this new system has the potential to enhance administrative efficiency, and improve the quality of international trade data,” he added. “With the introduction of the AFCFTA and its potential to improve intra-Africa trade, the Ministry of Finance aims to position The Gambia to reap the gains envisaged under the AFCFTA.”
African trade and development news
Afreximbank launches the African Trade Report 2022 (Afreximbank)
Africa’s trade grew significantly as the world gradually recovered from the COVID-19 pandemic, Professor Benedict Oramah, President and Chairman of the Board of Directors of African Export-Import Bank (Afreximbank), said in Cairo. Launching the African Trade Report along with H.E. Mr Lai Mohammed, Minister of Information, Culture and Tourism of the Federal Republic of Nigeria, at the 29th Afreximbank Annual Meetings (AAM2022), Professor Oramah said that Africa showed resilience during the COVID-19 pandemic, contracting by only 1.6% in its first recession in 25 years and rebounding strongly with GDP expanding by about 6.9% in 2021. “African trade grew significantly just as the world was gradually recovering from the COVID-19 pandemic,” he said, adding that intra-African trade was resilient, notwithstanding the restrictions imposed by COVID-19.
Dr Hippolyte Fofack, Afreximbank’s Chief Economist, noted however that despite the increasing resilience of African economies, the region remained a peripheral contributor to global trade and growth, accounting for 2.6% of global trade and less than 3% of the world’s GDP.
In order to increase its share of global growth and trade and to foster its integration into the global economy, Africa must use the AfCFTA, which has been touted as a game changer, to accelerate the process of structural transformation and growth, he quoted the report as recommending.
The 9th meeting of the Committee on Trade in Goods of the AfCFTA was held from 6 to 10 June 2022 to consider the Reports of Sub-Committees under the Committee on Trade in Goods. This covered such vital work as the Sub-Committee on Rules of Origin reports, the finalisation of the drafting the AfCFTA Rules of origin Manual and the AfCFTA Regulation on the treatment of Special Economic Zones (SEZ) in accordance with Decision 70 of the 8th Meeting of the Council of Ministers.
The meeting adopted the draft AfCFTA Manual on Rules of Origin with amendments for onward submission to the Committee of Senior Trade Official and ultimately to the AfCFTA Council of Ministers responsible for trade. The delegates had discussions on the draft Regulations on Special Economic Zones but could not reach a consensus and, therefore, recommended that the Committee seek policy guidance from high AfCFTA negotiation structures. In addition, the delegates worked on outstanding textiles and sugar issues. They had an in-depth discussion of these HS headings but could not agree on the rules of origin. These outstanding HS headings will be submitted to the higher AfCFTA structures for further guidance.
The African Continental Free Trade Area (AfCFTA) is developing a protocol for women and youth in trade to place them at the centre of its activities, Wamkele Mene, Secretary-General, AfCFTA has announced. The move, according to him, was to ensure that women and youth had access to and derive the intended benefits from the continental trade arrangements. Speaking at a plenary session on the topic: Making the AfCFTA work for Africa we want’ at the ongoing Afreximbank annual general meetings in Cairo, Egypt, Mr Mene said “We intend to foster a favourable environment for young Africans to competitively engage in cross-border trade in goods and services, in the context of the AfCFTA,” 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.
The African Continental Free Trade Agreement (AfCFTA), may have suffered setback over huge tariffs and checkpoints delaying smooth movement of transit cargoes along the West African corridor. The AfCFTA is an ambitious trade pact to form the world’s largest free trade area by connecting almost 1.3bn people across the 54 African countries. The agreement aims to create a single market for goods and services in order to deepen the economic integration of Africa.
As of 10 February 2022, 41 of the 54 signatories had deposited their instruments of ratification with the chair of the African Union Commission, making them state parties to the agreement. But, despite the ambiguous and inherent potentials in the agreement, it seems it has hit a snag as checkpoints, tariff hinder movement of goods and trade facilitation. It was gathered that the imposition of the Cfa9 million levy was a result of a retaliatory policy by the Benin authorities to express their anger over Nigeria’s decision to shut its land borders against the West African neighbours.
Speaking, chairman of Association of Nigeria Licensed Customs Agents (ANLCA) at Seme Border, Mr Onyekachi Ojinma, lamented that transit goods are being asked to pay Cfa9million instead of 0.3percent they are supposed to pay on transit. According to him, these goods are manufactured from ECOWAS region, not in Cotonou, they are not supposed to open that cargo but the Cotonou government would collect duty.
Panellists at the ongoing 29th Annual General Meetings of Afreximbank in Cairo, Egypt, have called on African leaders to strongly consider establishing stronger banks to fund the continent’s development needs. They unanimously agreed that small banks and microfinance institutions were useful, but they were incapable of financing Africa’s infrastructure deficit. Speaking on the topic: “Africa under the storm of external shocks and internal challenges” Mr Arnold Ekpe, former Chief Executive Officer, Ecobank Group, said financing infrastructure projects such as roads, railways, power stations, factories and large commercial operations necessary for economic development could only be financed by larger banks.
The African continent he said, must rely less on foreign funding and pay its own way for economic development. He said the current externally focused model of African economic development was not working. Mr Ekpe said by continuing to be overly reliant on developed market models of economic development, Africa would not be able to realise its full growth potential.
The Secretariat of the Southern African Development Community (SADC) has appointed globally active engineering services and consulting company DMT Group to lead the delivery of an investment programme that will empower regional value chains in copper, battery storage and mining inputs. The SADC ‘Regional Study and Project Viability Scan’ will identify investment opportunities for building local content capacity in what are noted as three critical areas for economic activity and value addition in Southern Africa. The project’s findings are intended to spur a rush of new investment activity. The SADC project will be led with the support of a range of sector experts.
The African Continental Free Trade Area promises to open up the continent’s market of 1.2 billion people, and improve the circumstances that currently keep intra-Africa trade around 17%, versus 68% in Europe, 59% in Asia, and 55% in America. Industrialization is the next necessary step, and the key to improved industrialization is improved logistics. That was one of the key insights to emerge from a panel at this year’s Africa CEO Forum, the largest annual gathering of Africa’s private sector. The event in Abidjan brought together close to 2,000 political, business, and thought leaders. The session on how the health crisis is revolutionizing African logistics featured speakers like Ahmed Bennis, group business development director at Tanger Med in Morocco, Africa’s biggest port complex; and Portia Derby, CEO of Transnet, one of the continent’s largest rail, port, and pipeline companies. The panelists noted that industrialization will enable Africa to create jobs for the 8-9 million Africans joining the labor force annually, and allow the continent to capture a larger value of global commodities markets. At present, Africa mostly exports raw materials, leaving greater economic benefits to other countries that add value through processing. That’s because processing on the continent is more expensive, and that is because of high energy costs and poor infrastructure.
MAN president seeks collaborations among African manufacturers (Businessamlive)
Mansur Ahmed, president of the Manufacturers Association of Nigeria (MAN) and the interim chairman of the Pan African Manufacturers Association (PAMA), has called on members of PAMA to work together and collaborate to empower the private sector and create a system of interaction that will act as a catalyst to the growth of investments in Africa. Ahmed said the major imports of countries in Africa are manufactured goods and that about two percent of the intra-African trade is in manufactured goods and emphasised on the reasons behind the formation of PAMA. According to him, with the establishment of PAMA and the AfCFTA, he said that the widening gap between imported products and those manufactured within would be bridged. Mansur, however, stated that the economies of the continent should be focused mainly on manufacturing, and to create capacity, expand the scope for value addition, and integrate Africa’s manufacturing so that Africa can achieve economies of scale. He enjoined manufacturers to ensure they prioritise the areas of comparative advantage to achieve the required industrial transformation.
African countries’ requests for information for tax collection purposes rose 26% over the previous year, signaling continued progress toward tax transparency in spite of a challenging environment, according to a report by The Africa Initiative, launched on Tuesday in Nairobi. The Tax Transparency in Africa 2022 report, which covers 38 countries, documents Africa’s progress in tackling tax evasion and other illicit financial flows (IFFs) through transparency and exchange of information (EOI) for tax purposes. The Africa Initiative is a partnership of the Global Forum on Transparency and Exchange of Information for Tax Purposes (The Global Forum), 33 African countries and 16 partners, including the African Development Bank, the African Union Commission, the European Union and the governments of Switzerland and the UK. Five non-member countries participated in the study for the report.
Protectionism as setback for Africa’s aviation (New Telegraph)
Africa is considered a growing aviation market with the International Air Transport Association (IATA) forecasting a 5.9 per cent year-on-year growth in African aviation over the next 20 years, with passenger numbers expected to increase from 100 million to over 300 million by 2026 and SAATM is a way to tap into this market. The benefits of SAATM to African countries include job creation, growth in trade resulting in growth in GDP and lower travel costs resulting in high numbers of passengers. However, is Africa ready for a Single African Air Transport Market? That is a huge question, considering the fact that if all the necessary issues are not resolved, it may go the way of the Yamoussoukro Decision (YD), which never saw the light of the day more than 30 years after the idea was set in motion.
The failure of YD gave rise to the SAATM, with a solemn declaration by about 35 African nations to forge ahead with the air transport liberalisation in the continent because of the exponential benefits it brings to Africa.
At the weeklong FAAN National Aviation Conference (FNAC) held in Abuja last week, some were of the view that the SAATM initiative was good, but hinted that the African Civil Aviation Commission (AFCAC) must come up with a regulatory framework that would see to the speedy implementation or operatability of the Africa Union Agenda.
East Africa wrestles with proposals to ban imports of used clothes (The East African)
A proposal by Kenyan presidential candidate Raila Odinga in his manifesto to phase out trade of second-hand clothes, popularly called mitumba in Kenya, has sparked a debate on the future of the trade, with opinion divided on whether time has come to ban used clothes imports in the region. The East African Community has since 2016 pushed member states to buy clothes and shoes made in the region to boost local manufacturing, help the economies and shore up the local textile industry. Kenya, Uganda, Tanzania, Rwanda and Burundi were to phase out the second-hand clothes trade by 2019 but only Rwanda has implemented the plan, introducing high taxes on mitumba imports to deter trade.
Now the private sector in the region says importation of used clothes should be phased out gradually to allow focus on growth of the local textiles and apparel sector.
Stakeholders in Africa strategise on sustainable fish production (Tribune Online)
AS Africa looks forward to end hunger by 2025, stakeholders in the fisheries sector in the African continent have converged in Abuja to chart way forward in closing the deficit in fish production. The meeting also sought to review the progress made at the Fisheries Governance project phase 1 and develop work plan for the phase 2 of the project. The Director African Union – Interafrican Bureau for Animal Resources (AU-IBAR) Dr. Nick Nwankpa in his address, said the Regional Economic Communities (the RECs) are strategic regional institutions with the political mandate for regional integration agenda, enhancing regional cooperation and fostering regional policy coherence. He said the Fisheries Governance project (FishGov) Phase 2 project therefore considered the RECs as important partners in facilitating the implementation of the Project at regional and national levels.
The United Nations Economic Commission for Africa (UNECA) in partnership with the Economic Community for West African States (ECOWAS), the United Nations World Food Programme (WFP), and the Senegalese Ministry of Economy, Plan and Cooperation, today launched the annual forum of intergovernmental organisations from West Africa, to examine and address the impact of emerging risks and challenges associated with the COVID-19 pandemic and the unfolding crisis in Ukraine. During the two-day forum in Dakar held on 21 and 22 June 2022, participants will address sustainable development issues, identify and discuss policy directions and actions needed to strengthen the resilience and recovery of West African economies. They will also lay the groundwork for policy responses to emerging development challenges in West Africa, including growing levels of food insecurity, the climate challenge, extreme violence, and the breakdown of social cohesion. The socioeconomic fallout from the COVID-19 pandemic and the ripple effect of the conflict in Ukraine have led to increased costs of food, fuel, and agricultural inputs - particularly fertilizer - in the region according to the joint studies conducted by ECOWAS, UNECA, FAO and WFP.
These studies revealed that West African countries are highly dependent on food imports – with the region spending US$ 4.5 billion in 2019 on cereal imports. Dependence on wheat imports is particularly acute in Mali, Senegal, Guinea, and Benin, where just over half of the wheat consumed comes from Russia. This situation poses a threat to the region due to the unprecedented rise in food prices witnessed in February-March 2022, with the FAO Food Price Index reaching its highest level on record in March 2022.
The activity is organised by the West African Monetary Agency (WAMA) in collaboration with the Central Bank of The Gambia and it seeks to provide the opportunity to practitioners in the banking and microfinance space of ECOWAS to harmonise their respective acts in preparation for the launching of ECO. Dr. Olorunsola E. Olowofeso, director general of West Africa Monetary Institute (WAMI), expressed delight over the state of the operations of WAMI since its establishment in 2001 which they were highly commended. This includes facilitating the integration of banking and non-banking sectors of the West African monetary zone (WAMZ).
He said WAMI is currently at an advanced stage in drafting a model act for non-bank financial institutions and non-bank financial holding companies of the WAMZ.
Summary Readout of Deputy Secretary Graves’ Travel to West Africa (U.S. Department of Commerce)
On Saturday, Deputy Secretary Don Graves concluded his travels to West Africa, where he met with representatives from the governments of Côte d’Ivoire & Ghana, participated in key commercial forums driving investment and creating opportunities for U.S. businesses across Africa, and engaged with private sector and NGO representatives.
“The Biden Administration places tremendous importance on developing deeper relationships with African countries that are based on mutual respect, which enables us to work together to overcome short-term challenges while building towards long-term economic resiliency and prosperity,” said Deputy Secretary Graves. “I look forward to continuing the collaborations that have been underway for decades, including advancing new means of partnership and identifying additional areas of collaboration in the future. Finally, I would like to commend President Ouattara, Prime Minister Achi, President Akufo-Addo, and Vice President Bawumia, along with my Ivoirian and Ghanaian counterparts and our private sector partners for an excellent series of meetings on my first of what I hope will be many trips to the continent.”
Egypt will host a critical meeting in September aimed at rallying African leaders for a single voice on Nationally Determined Contributions to cut emissions and adapt to climate change ahead of the world’s premier climate conference, COP27. Egypt will host COP 27 this November. This is the first time in six years that the global event will take place on African soil. It comes as the continent faces a growing climate threat and a huge resource deficit—of $1.6 trillion in climate finance over the next decade, according to the African Development Bank—to address the risks to lives and livelihoods. Senior Egyptian officials met with African Development Bank senior management in Abidjan on 14 June to discuss their individual and collective agendas in the run-up to the all-important climate summit. The parties also discussed how best the Bank can generally support Egypt, one of the institution’s major shareholders. Egypt’s Minister for International Cooperation, Dr. Rania Almashat—who led her country’s delegation—said the discussions would take place during the Egypt International Cooperation Forum, to be held in the North African country in September, two months before COP 27.
The 44th Ordinary Session of the Permanent Representatives’ Committee (PRC) kicked off on 20 June 2022, in preparation for 41st Ordinary Session of the Executive Council of the AU and the 4th Mid-Year Coordination Meeting of the African Union (AU) and the Regional Economic Communities (RECS) to be held in Lusaka, Zambia, from the 14-17 July 2022. Addressing the ambassadors in his opening remarks, the Chairperson of the AU Commission, Moussa Faki Mahamat underscored the importance of the session. “This 44th Session of the PRC, is held in a particularly difficult context, marked by the persistent challenges, in particular the control of the ravages of the COVID-19 pandemic, the post-COVID economic recovery, the problems of insecurity linked to the expansion of terrorism and the resurgence of the Unconstitutional Changes of Government on the Continent, the negative effects of Climate Change, the problem of refugees and Internally Displaced Persons,” said Mr. Moussa Faki Mahamat.
China offered to mediate disputes across the troubled Horn of Africa at its first regional peace conference, the latest sign Beijing is expanding decades of economic diplomacy into matters of war and peace. Delegates from six countries gathered in Addis Ababa, Ethiopia, to hear China’s newly appointed special envoy for the region, Xue Bing, pledge that Beijing was best placed to restore stability to Ethiopia, Sudan, Somalia and other countries across the strategically important Horn of Africa, which is perched on some of the world’s key shipping lanes.
Global economy news
‘BRICS partnership has great value for SA’ (Moneyweb)
The value of South Africa’s membership of BRICS has grown substantially since we joined this group of emerging economies 12 years ago. As we work to rebuild our country in the wake of the COVID-19 pandemic, there is much to be gained from our participation in BRICS and the relationships we have established with other member countries. At the outset, BRICS countries identified the strengthening of economic and financial ties as one of the key pillars of its cooperation. The countries have adopted the Strategy for BRICS Economic Partnership to increase access to each other’s markets, promote mutual trade and investment and create a business-friendly environment for investors in all BRICS countries. An important part of this strategy, particularly for South Africa, is to diversify trade so that more manufactured goods, rather than raw commodities, are traded. Last year, over 17% of South Africa’s exports were destined for other BRICS countries, while over 29% of our total imports came from these countries. These countries are therefore significant trading partners, and the value of this trade is continuing to grow. Total South African trade with other BRICS countries reached R702 billion in 2021 up from R487 billion in 2017.
Commonwealth seeks to grow trade by $6.5 trillion in five years (The East African)
Intra-Commonwealth trade is expected to expand by $6.5 trillion in the next five years from the current $13 trillion, as the group seeks to strengthen both trade and investment ties between the 54 member countries. Figures by the Commonwealth Secretariat show that trade costs within the Commonwealth are on average 21 percent lower, while investment flows are 27 percent higher than those between other country pairs. The combined GDP of Commonwealth countries is now around $13 trillion and is estimated to reach $19.5 trillion in 2027. The population of the Commonwealth is over 2.4 billion. “At the heart of our mission is trade - the lifeblood of economic activity, and the arteries of the economic relationships between our Commonwealth member countries. The Commonwealth advantage…,” Baroness Patricia Scotland, the Commonwealth Secretary-General, said during the opening ceremony of the 2022 Commonwealth Business Forum (CBF 2022) in Kigali on Tuesday. She added that the Commonwealth’s ambition is to facilitate trading within countries.
New Word Bank research tells us how to make Global Value Chains more resilient (Trade for Development News)
The past two decades have seen the share of global exports from low- and middle-income countries almost doubling to 30% and the world’s population living in extreme poverty falling from 36% to 9%. These dramatic expansions in trade, productivity and economic growth were propelled by the emergence of Global Value Chains (GVCs). GVCs also enabled an international division of labour, increasing efficiencies and economies of scale. Firms in low- and middle-income countries now can supply intermediate inputs to global production networks, benefiting from the industrial bases of other states. They can also import cheaper and better inputs, technologies, and improved management practices. This allows them to grow faster and create better, higher-paying jobs.
Policies to maintain trade flows can limit and overcome global shocks. A crisis is a bad time to raise trade barriers, as the need for imports may increase, and exports are an important stabilizer and a source of jobs and incomes. Trade policy reforms, such as tariff reductions, cut the cost and improve the availability of essential goods and services. In so doing, they help restrain inflationary pressures, once again with positive distributional consequences for poorer households and workers. Trade reforms also reduce tax and administrative burdens and support eventual economic recovery and improved resilience through greater diversification of imports and exports.
EU to provide vulnerable countries $633M to address food crisis (Anadolu Ajansı)
The European Union will support vulnerable countries with an additional €600 million ($633 million) to face the food crisis aggravated by Russia’s war on Ukraine. “To help our partners we will mobilize an additional 600 million euros to avoid a food crisis and an economic shock,” Ursula von der Leyen, president of the European Commission, announced at the 2022 European Development Days conference in Brussels on Tuesday. She said the war that began in February is taking a “heavy and senseless toll,” not only on the Ukrainian population but also on those most vulnerable around the world. “Russia is still blocking millions of tons of desperately needed grain,” she added.
With the additional funds, “we will strengthen our support to address the crisis, while contributing to sustainable and resilient food systems,” said European Commissioner for International Partnerships Jutta Urpilainen.
Island nations urge Commonwealth leaders to bolster ocean climate action (The Commonwealth)
Small island nations are calling for strengthened global support for ocean and climate change action, just days before Commonwealth leaders convene in Kigali, Rwanda, to decide on the group’s priorities for the next two years. In their executive sessions later this week, heads of government are expected to discuss issues such as shared climate ambitions, financing climate and ocean action, and rebuilding sustainable green and blue economies in the wake of the COVID-19 pandemic, among other key items on the agenda. During a breakfast meeting co-hosted today by the Commonwealth Secretariat and the Fiji Government in the margins of the summit, High Commissioner Jitoko Tikolevu addressed an audience of mainly envoys from fellow island nations, from Tuvalu to Cyprus to The Bahamas. He said: “The ocean and climate are inextricably inter-connected and the health of our oceans dictate the livelihoods of millions of people around the world, from the Pacific to the Atlantic... The challenges facing our oceans and its resources are diverse and complex and yet our answer is simple, we need action!”