tralac Daily News
New EU food regulations could see many South African citrus consignments destroyed (Engineering News)
New European Union (EU) regulations, which apply from July 14, require that imports of citrus fruit must undergo specified mandatory cold treatment processes and precooling steps for specific periods, up to 25 days of cold treatment, before importation, says Citrus Growers’ Association of South Africa (CGA) market access and EU matters special envoy Deon Joubert. If enforced this month, these new regulations could result in millions of cartons of citrus currently headed to the EU being destroyed, he adds. In June, the EU Standing Committee on Plant, Animal, Food and Feed published drastic new regulations requiring the cold treatment of oranges heading to the region as a means to address False Coddling Moth (FCM) interceptions from Southern African orange exports. These regulations make extensive changes to the current applicable phytosanitary requirements for citrus coming from South Africa, says Joubert.
A More Competitive Private Sector Could Boost Growth and Jobs in Namibia – World Bank Group Report (IFC)
Namibia can transform its economy, create jobs, reduce inequality, and recover faster from the impact of COVID-19 by deepening private sector reforms and increasing private sector participation in its renewable energy, climate-smart agribusiness, housing, and other key sectors, according to a report published today by IFC and the World Bank.
The report, the Namibia Country Private Sector Diagnostic (CPSD), highlights opportunities for Namibia to attract investment and achieve sustainable private sector-driven growth. The report suggests policy reforms to encourage competition and public private partnerships (PPPs), especially in the energy and water sectors.
Namibian beef enters Ghana’s market (Graphic Online)
The Namibia High Commissioner to Ghana, Selma Ashipala-Musavyi, has given an assurance of deepened trade relations between Ghanaian and Namibian businesses. The increased relations, she explained, would enhance the activities of the businesses and capture new foreign direct investment.
Namibia is renowned for its export of beef and related products, while Ghana is a major meat importer. With the high quality of breed, it is not surprising that Namibia in February, 2020, became the first African country eligible to export meat to the United States of America.
Kenya wants share of maize imports from region raised (Business Daily)
Kenya is seeking to limit Zambia, Tanzania and Uganda from exporting maize to other countries at its expense in fresh efforts to curb the surge in maize flour prices, ease inflation and the squeeze on household budgets. Agriculture Cabinet Secretary Peter Munya says the country has opened talks with the three countries to guarantee Kenya a share of the maize export to plug the shortfall in supplies. Crop failure due to poor weather and a shift in the movement of Uganda maize to South Sudan have seen flour prices rocket to a record high of Sh210 for a two-kilo packet, up from Sh120 at the start of the year.
Rwanda SMEs Set to Access Egyptian Market (COMESA)
Rwanda’s Small and Medium Sized Enterprises (SMEs) engaged in horticulture and agro-processing are set to access the Egyptian market following a successful trade mission facilitated by the COMESA Regional Enterprise Competitiveness and Access to Markets Programme (RECAMP). Fourteen SMEs from the Private Sector Federation accompanied by two officials from the Ministry of Trade and Industry of Rwanda, participated in the four-day trade mission to Egypt 16 – 19 May 2022 and explored trade and investment opportunities.
While in Egypt, the Rwanda delegation participated in trade and investment conference which brought together government officials and 300 businesses under the Egyptian Federation of Industries with discussions focusing on trade and investment opportunities. Most of the businesses were in textile, construction, agro-processing and the manufacturing sector.
China ready with avocado exports audit, says agency (Business Daily)
The Chinese crops agency has concluded the audit of Kenya’s avocado and pack houses, raising hopes of Kenyan farmers and plantations starting exports to the lucrative Asian market soon. The Kenya Plant Health Inspectorate Service (Kephis) general manager Phytosanitary services Isaac Macharia says the audit was completed mid-last month and they are awaiting a response from the authorities in Beijing. Kephis had completed an inspection of the firms that had applied for licences to export the fruits to China in May, however, the process could not begin as the Chinese introduced another requirement, hence the audit. “We are now waiting for the findings after the Chinese finished the process of auditing the farms and the pack house last month,” said Dr Macharia.
Kenya-Uganda urged to fight growing illicit trade (The Star, Kenya)
The Kenyan government has been urged to enhance surveillance and seal-off growing illicit trade between the country and neighbouring Uganda, its biggest trading partner in the region. This follows an explosive documentary that lifts the lid on Kenya’s rampant trade in counterfeit and smuggled goods, with cigarettes topping the list. Stop Crime Kenya (StoCK), which has a secretariat at the Consumers Federation of Kenya (Cofek), has now called for urgent response from lawmakers. Investigation by African Uncensored reveals the deep-rooted involvement of law enforcement officers in the smuggling of illicit goods, ranging from cigarettes to sugar, which robs Kenyans of billions of shillings every year.
StoCK chairman Stephen Mutoro said: “This chilling expose by African Uncensored illustrates how deeply entrenched the menace of illicit trade has become as consumers struggle to cope with the soaring cost of living.”
IFC and CRDB PLC to Boost Access to Finance for Small Businesses in Tanzania and Burundi (IFC)
A new investment between IFC and CRDB PLC announced today will increase access to finance for micro, small and medium-sized enterprises in Tanzania and Burundi, helping strengthen both countries’ recovery from the economic effects of the COVID-19 pandemic.
Under the partnership, IFC is providing a $100 million loan to CRDB Bank Tanzania, half of which will be in local currency, and a $5 million loan to CRDB Bank Burundi to support lending to smaller businesses in both countries, especially to women-owned businesses.
Small businesses are critical to the economies in Tanzania and Burundi. In Tanzania, an estimated 3.2 million micro, small and medium-sized businesses contribute 27 percent of the country’s GDP and employ more than 5 million people. However, roughly 81 percent of these businesses lack access to finance. Businesses in Burundi also struggle to access financing.
Call for incentives as Rwanda and Netherlands shift from aid to trade (The New Times)
This year marks the end of Netherlands’ financial aid to Rwanda as the two countries move to boost trade to support Rwanda realise its ambition of becoming self-reliant. Both countries are ready to enter a new chapter as emphasised by the Netherlands Ministry of Foreign Affairs’ acting head of the department for Sub-Saharan Africa in, Martine Van Hoogstraten, while speaking during the 28th Liberation event at The Hague recently.
Rwanda’s business community is already tapping into the Netherlands market, however, there is hope for special incentives that traders and economists say would encourage exporters to increase their exports.
S.Sudan - Uganda forum will boost trade (Monitor)
The Republic of South Sudan is an independent country with a government though existing in an International system. The Uganda Embassy has no military forces in South Sudan. But we work with the host government and its security services to ensure safety and security for Ugandans in South Sudan. Generally, they are safe despite the isolated incidents. Ugandans are the biggest diaspora community in South Sudan involved in formal and informal business. Ugandans are also the most daring people in the region. They cannot be easily intimidated. You hear them say that dying of poverty in Uganda, they rather die from a bullet in South Sudan. They have promoted the spirit of regional cooperation and regional integration by promoting trade. We shall protect them and their businesses. After that bitter war, the government is doing its best to restore systems in all sectors. Most systems broke down because there was a total breakdown of law and order.
Uganda’s current exports to South Sudan are between $350m (Shs1.3 trillion) and $400m (Shs1.5 trillon). Before the war in 2013, it was approaching $1b (Shs3.7trillion). South Sudan exports to Uganda are valued at $86b (about Shs323b).One way of securing Uganda’s interest is through government to government engagements and private sector to private sector both in Uganda and South Sudan. We believe in that joint strategy of working together, we shall secure our business interests like we have done on the launch of a joint business forum. In Mid July during the forum, we shall have a symposium and exhibition to showcase what we have and what the South Sudanese have and use the opportunity to discuss challenges and opportunities.
Congo plans border post expansion as mining trucks endure up to 60 km queues (Engineering News)
Democratic Republic of Congo plans to expand its main border post with Zambia, a source close to its government said, to ease truck queues of up to 60 km that copper miners have faced this year due to increased production and inadequate infrastructure. The backlog of trucks at Kasumbalesa, a border town and the main exit point for metals exports from Congo, is an example of supply chain disruption that will make it harder to meet future demand for copper, essential for electric vehicles.
AfDB to boost non-oil export with agro testing centre in Nigeria (The Nation Newspaper)
A world-class agro testing centre is to be established in Sagamu, Ogun State by the African Development Bank (AfDB), it was learnt yesterday. The centre, when built, will stimulate the standardisation of farm produce export from Africa, sources privy to the development confirmed. They said the Sagamu site is the only facility approved in Africa. The site was conceived as part of ancillary infrastructure to drive viability for the about-to-be-completed Ogun International Agro Cargo Airport in Ilisan Remo, Ogun State.
Ogun State Commissioner for Works & Infrastructure, Ade Akinsanya, who confirmed the development, said the project is put together as part of international collaboration for driving air transport infrastructure in Africa. Akinsanya said the facility would address challenges associated with processing agro-allied produce for export.
IMF: the bitter pill needed to heal the economy (The Business & Financial Times)
The decision by Ghana’s economic managers to request assistance from the International Monetary Fund (IMF) started the 2022 mid-year off with a jolt. In a letter signed by the Information Minister, the President authorized the Finance Minister to commence formal engagements with the IMF, inviting the Fund to support an economic programme put together by Ghana. In a tweet, the IMF’s Country Director stated that the Fund was ready to help Ghana restore macroeconomic stability, safeguard debt sustainability, and promote inclusive and sustainable growth.
Many Ghanaians were shocked by this development because the current economic managers had repeatedly assured them that they would not request an IMF bailout despite the country’s growing economic instability and prevailing hardships.
With our debt to GDP ratio exceeding 78%, current inflation rate reaching almost 30%, our widening budget deficit, policy rate of 19%, making cost of borrowings high, it appears that Ghana has no alternative than to run to the IMF to seek refuge.
MSMEs, Backbone Of Nigeria’s Economy – UNIDO (Economic Confidential)
The United Nations Industrial Development Organisation (UNIDO) has said that Micro Small and Medium Enterprises account for 96 per cent of all business activities in Nigeria. Mr Jean Bakole, UNIDO Regional Director and Representative to ECOWAS said this at the dissemination event on ‘Strengthening the Capacities of MSMEs to Produce High-quality Personal Protective Equipment (PPEs) and Healthcare-related Products’ which held in Abuja yesterday. According to him, the MSME sector currently contributes 50 per cent of the GDP and has provided over 48 percent of all employment opportunities in the country.
Local products without certification to lose out on AfCFTA – GSA (The Business & Financial Times)
Producers of locally manufactured products risk being outperformed with the start of the African Continental Free Trade Area (AfCFTA) if they fail to ensure their products meet the standard certification requirements, Principal Scientist at the Product Certification Department of the Ghana Standards Authority (GSA), Emmanuel Adjei, has said.
This is against the background that about 50 percent of local manufacturers delay in complying with the timeline for renewal of certification licenses issued for products, by GSA, while some do not renew at all. However, every product ready for export need such certification.
GEPA to boost the capacity of exporters (News Ghana)
The Ghana Export Promotion Authority says it is committed to enhancing the capacity of Ghanaian exporters in efforts to boost the country’s non-traditional exports in line with the National Export Development Strategy. The strategy projects a revenue target of $25.3 billion by the year 2029 with a focus on three strategic pillars aimed at breaking the cycle of being an economy providing mainly raw materials and minimal volumes of manufactured goods and services.
“For exports to thrive, excel and succeed, it is important to ensure that they are well resourced in capacity to deliver as expected. In the long term, it is expected that Ghana’s educational system will be re-engineered to reflect the human resource needs of export-oriented industrialisation,” said Chief Executive Officer (CEO) of GEPA, Dr Afua Asabea Asare.
Dangote Cement Commits To Product Availability (Leadership)
Sub-Saharan Africa is home to over 1.1 billion people. The United Nations estimates that by 2050, the region will have a population of more than 2.1 billion. Two-thirds of this growth will be absorbed by urban areas, which will be home to an additional 950 million people. The World Bank describes Africa as the fastest growing and youngest region globally. As the population continues to expand, Africa urgently needs infrastructure, housing and commercial buildings. This creates a tremendous opportunity for Dangote Cement.
Dangote Cement Plc said: “as a producer of basic building material in Africa, we see a strong demand stemming from the housing needs in all our markets. Urbanisation will necessitate the demand for more schools, supermarkets, recreational centres, and more corporate organisations.
“Cement remains the most used material for building any type of house, either personal or commercial. As a result, there is no doubt that cement will continue to be a sought-after commodity across all our markets. Dangote Cement is prepared to ensure cement is available and the market is adequately satisfied through expansion and our “export-to-import” strategy. We will continue to focus on quality and delivery of superior products to our markets.”
African Development Bank Group chief in Zimbabwe to get debt clearance plan underway (AfDB)
African Development Bank Group President Dr. Akinwumi Adesina arrived in Zimbabwe today at the start of a two-day official visit to the country. Adesina accepted a request in February by the Zimbabwean government to serve as the country’s arrears clearance and debt resolution champion among international financial institutions and bilateral creditors.
The Bank Group President will meet with President Emmerson Dambudzo Mnangagwa and other government officials, including Finance and Economic Development Minister Mthuli Ncube, who is also Zimbabwe’s Governor on the Bank Group’s Board of Governors. Discussions will focus on potential areas of technical assistance that the African Development Bank will provide to the Zimbabwean government. President Mnangagwa, elected in 2018, has introduced several economic reforms to stimulate economic recovery and stability.
Zimbabwe is the only regional member country of the African Development Bank currently under sanctions from the Bank and other multilateral financial institutions because of debt arrears amounting to over $2.6 billion.
The African Development Bank has run the $145.8 million Zimbabwe Multi-Donor Trust Fund (‘the ZimFund’) from 2010 through June this year. The ZimFund has been an important source of financial support for the country’s energy, water and sanitation infrastructure.
Mali’s cotton trucks race to the border after sanctions ease (Reuters)
After months stuck at home unable to provide for his family, Malian truck driver Ibrahima Sangare is delighted to be back on the road after the lifting of regional economic sanctions let him resume long-distance drives to ports in Ivory Coast.
Sangare was waiting with a dozen fellow cotton truckers to be processed by customs at a dusty border crossing last Wednesday - among the first to cross into Ivory Coast there since the Economic Community of West African States (ECOWAS) announced on July 3 that borders with landlocked Mali could reopen.
The border closures were among the painful sanctions imposed by the bloc in January after Mali’s military-led interim government said it planned to extend its rule and delay democratic elections after a coup in 2020.
Ethiopia’s Annual Coffee Export Revenue Hits Record $1.4bln (Ethiopian Monitor)
Ethiopia has obtained a record-hit $1.4 billion dollars from Coffee export in the just concluded 2021/22 fiscal year, according to the Ministry of Agriculture. The revenue, the highest the country obtained in its history, has also surpassed the target for the budget year officials set at a little over a billion dollars. The previous recording of coffee export earnings was registered last year when the country secured $906 Million after exporting 248, 000 tonnes of coffee. “In the last 12 months, Ethiopia exported 300,000 tons of coffee and generated 1.4 billion USD,” revealed Agriculture Minister Oumer Hussien, on his Twitter on Sunday.
Coffee represents a vital part of Ethiopia’s economy, supporting the livelihoods of more than a quarter of the population and generating up to 30% of the country’s foreign exchange earnings.
Mozambique Economic Update: Getting Agricultural Support Right (World Bank)
Despite multiple consecutive shocks, including the COVID-19 pandemic that caused the first recession in nearly three decades, the Mozambican economy is recovering, but with considerable uncertainty. The country’s gross domestic product (GDP) growth reached 2.2% in 2021, as favorable weather conditions supported agricultural growth, and the gradual lifting of COVID-19 containment measures boosted private consumption, fueling the recovery of services.
Despite the gradual rise in domestic and global demand, growth in the extractive and manufacturing sectors remained moderate. Several constraints have dampened global economic performance, including the suspension of multibillion -dollar Liquefied Natural Gas (LNG) projects due to the escalation of the insurgency in the north of the country, tighter monetary policy, and new waves of COVID-19 infections.
Morocco — a top fertiliser producer — could hold a key to the world’s food supply (Down to Earth Magazine)
Morocco plans to produce an additional 8.2 million tonnes of phosphorus fertiliser by 2026
Morocco has a large fertiliser industry with huge production capacity and international reach. It is one of the world’s top four fertiliser exporters following Russia, China and Canada. Fertilisers tend to divide into three main categories; nitrogen fertilisers, phosphorus fertilisers, potassium fertilisers. In 2020 the fertiliser market size was about $190 billion. Morocco has distinct advantage in the production of phosphorus fertilisers. It possesses over 70 per cent of the world’s phosphate rock reserves, from which the phosphorus used in fertilisers is derived. And this makes Morocco a gatekeeper of global food supply chains because all food crops require the element phosphorus to grow. Indeed, so does all plant life. Unlike other finite resources, such as fossil fuels, there is no alternative to phosphorus.
African trade and integration news
Making the most of the African Continental Free Trade Area (World Bank)
The African Continental Free Trade Area (AfCFTA) could deliver far greater benefits in terms of jobs, growth, and poverty reduction than previously estimated – making it a potential game changer for Africa’s economic development if its ambitious goals are fully realized. The deal creates a continent-wide market embracing 55 countries with 1.3 billion people and a combined GDP of US$3.4 trillion. Its first phase, which took effect in January 2021, would gradually eliminate tariffs on 90 percent of goods and reduce barriers to trade in services. That could raise income by 7 percent, or $450 billion, by 2035, reducing the number of people living in extreme poverty by 40 million, to 277 million, according to a World Bank report published in 2020.
A new World Bank study, released in collaboration with the AfCFTA Secretariat, accounts for the additional benefits that would accrue from an increase in foreign direct investment (FDI) – both from within and outside of Africa – that the deal is expected to generate.
The report, Making the Most of the African Continental Free Trade Area: Leveraging Trade and Foreign Direct Investment to Boost Growth and Poverty Reduction, is intended to be a guide for policy makers charged with carrying out the agreement. To maximize its benefits, the first step will be to conclude planned negotiations on investment, e-commerce, and intellectual property. The report also recommends building grass-roots support for and understanding of the agreement, simplifying red tape to encourage investment, and pairing the deal with a “complementary agenda” that includes training and advice for national trade ministries charged with supervising compliance and administration.
Southern African Customs Union is in need of reform (BusinessLIVE)
The standard deviation of aggregate Southern African Customs Union (Sacu) receipts for non-SA member BLNS states (Botswana, Lesotho, Namibia and Eswatini), expressed as a share of mean distributions between 2020 and 2012, was 16%. For context, the excess returns to US equities have a historical variation of 15%.That degree of variability might be acceptable for hedge fund returns. It is not acceptable for the precarious public finances of the small countries SA partners with in the customs union, for which Sacu receipts can constitute as much 50% of annual state revenue. This volatility is compounded by the fact that SA makes Sacu distributions to BLNS states based on deeply flawed state forecasts that often require material revisions in subsequent years, accentuating for the unpredictability of BLNS public finances.
The Democratic Republic of the Congo finally becomes the 7th EAC Partner State (EAC)
The Democratic Republic of the Congo (DRC) has finally become a member of the East African Community after depositing the instrument of ratification with the EAC Secretary General at the bloc’s headquarters in Arusha, Tanzania. Handing over the instrument of ratification to the Secretary General, DRC’s Vice Prime Minister and Minister of Foreign Affairs, Hon. Christophe Lutundula Apala Pen’ Apala, said that the entry of his country into the EAC was an economic, cultural, geographical and historical obligation.
The Vice Prime Minister described the EAC as the most integrated bloc on the entire African continent, adding that the Summit of Heads of State also had the political will to achieve the objectives as outlined in the Treaty. Hon. Apala said that the entry of his country into the EAC had strengthened the bloc’s economic, political, socio-cultural, financial and military muscle.
EAC member states split over African trade pact regulations (Fibre2Fashion)
Member states of the East African Community (EAC) are reportedly lacking a consensus over preferential Rules of Origin and tariffs on textile and apparel and goods produced in special economic zones (SEZs) among other products. Rising protectionism could expose the region to unfair trade practices under the African trade pact AfCFTA.
The requirement for local content is 40 per cent now, and is considered too steep for sustainable production, according to a report in a Kenyan newspaper.
Why EAC Competition Bill was amended (The New Times)
The East African Legislative Assembly recently passed an amended EAC Competition Bill, 2021, after introducing a modification to limit circumstances under which a merger that leads to substantial lessening of competition in the market may be approved. The draft legislation was initially a revision of the 2006 Act meant to streamline the provisions on mergers with the international practice on competition; to confer legal personality on the East African Community Competition Authority (EACCA); to empower the latter to impose and collect financial penalties; and provide for any other related matters.
“The amendment [in the Bill] was done to provide for regulations to specify and limit the circumstances under which the Authority may approve a merger that leads to the substantial lessening of competition in the relevant market,” MP Christopher Nduwayo, Chairperson of the House’s standing committee on Communication, Trade and Investment (CTI) which introduced the changes, told Doing Business.
SADC developing measures to ease trade facilitation in the Region (SADC)
The Southern African Development Community (SADC) is developing and implementing customs instruments to tackle challenges that contribute to higher transaction costs in order to ease trade among countries in the region. The customs instruments include logistics, simplification and harmonisation of documentation associated with cross-border trade, improving transparency in operations of regulatory agencies, harmonisation of standards and technical regulations, harmonisation of Sanitary and Phytosanitary measures (SPS), monitoring and resolution of Non Tarif Barriers (NTBs), as well as improving the business environment in which transactions take place.
SADC is also conducting Time Release Studies (TRSs) along its corridors to assess bottlenecks and efficiency in the clearance of goods crossing the border posts. TRS is a method endorsed by the World Customs Organisation (WCO) for assessing a country’s trade facilitation performance. It does so by measuring the average time from arrival of goods at the border until permission is given for the goods to enter home consumption.
SADC registers progress on TIFI programmes (SADC)
The Southern African Development Community (SADC) is making steady progress on its programmes to facilitate industrial development, finance and investment and trade in goods and service among Member States. This emerged out of the Trade, Industry, Finance and Investment (TIFI) Thematic Group hybrid meeting held on 16 June 2022 to discuss progress on the implementation of its programmes to deepen regional economic integration.
Among the deliverables attained are the development of the SADC Simplified Trade Regime (STR) for small cross border traders. The STR framework aims to reduce barriers to trade by simplifying the customs procedures and processes. Its implementation will support small traders by lowering transaction costs associated with formal trade.
Another milestone achieved is the operationalisation of the SADC e-Certificate of Origin (e-CoO) framework. The pilot phase of the programme is being implemented in Botswana, Kingdom of Eswatini, Malawi, Mauritius, Mozambique, Namibia, Lesotho, South Africa, United Republic of Tanzania and Zambia. The e-CoO framework aims at enabling traders to apply for the certificate of origin electronically. This will reduce time for its issuance and transmission to the importing country. The regional e-CoO will also enhance integrity of customs and trade operations as a result of less interference with human beings.
Guidelines for implementing Commodity Based Trade during foot and mouth disease outbreaks (SADC)
In most of Southern Africa the vast majority of cattle are located in areas not free of foot and mouth disease (FMD), leaving owners of these cattle with limited access to regional and international beef markets. This situation constrains investment in cattle production, thereby limiting rural development and helping to entrench rural poverty. For decades, this situation has simply been accepted because the types of FMD viruses prevalent in the region are maintained by wildlife and are therefore essentially impossible to eliminate. Moreover, until recently, international trade rules and conventions were founded on the need for the locality of beef production to be free of FMD. Fortunately, this situation is changing and options include, among others, management of risk of FMD along individual value chains to enable assurance that the final products are free of FMD virus and therefore can be traded with negligible risk of transmission of infection, irrespective of the FMD status of the locality of production (i.e. commodity-based trade (CBT).
The Guidelines on Commodity-Based Trade Approaches for Managing Foot and Mouth Disease Risk in Beef in the SADC Region aims to inform beef producing enterprises of the nature of developments and how a value chain approach could be exploited to broaden market access.
Coming Soon: COMESA Financial Stability Report (COMESA)
The COMESA Monetary Institute (CMI) has commenced preparatory work towards the production of a Financial Stability Report (FSR) for the COMESA region. The first working group of experts meeting took place in Nairobi, Kenya on 22 – 24 June 2022 with participants from the Central Banks of DR Congo, Egypt, Mauritius, Sudan and Zambia. The FSR will contain reviews of the developments in the financial sector in the COMESA region to identify key risks, vulnerabilities and challenges facing the financial systems of member countries and provide policy recommendations to mitigate such risks and strengthen stability.
ECOWAS Wants SADC to Invest in Private Sector in Energy Conservation (Front Page Africa)
Earlier on Monday, Bomi County Senator Edwin Melvin Snowe, Representing Dr. Sidie Mohamed Tunis, Speaker of the ECOWAS Parliament addressed the official opening of the Southern African Development Community (SADC) Parliamentary Forum 51st Plenary Assembly stressing the need for private sector energy conservation. Considering the theme of the forum, “Towards Energy Efficiency, Sustainability, and Self Sufficiency in the SADC Region”, he encouraged the SADC Parliament to place the greater issues of energy efficiency, building capability in energy management, encouraging research and development in energy technologies and soliciting the public interest on the role of the private sector in energy conservation at the core of their deliberations. In his remarks, he expressed the ECOWAS Parliament’s preparedness to share experiences on public-private partnership in the energy sector, as well as promote ideas that would address this very important issue across the regions.
Africa to redouble efforts to deepen African Economic Integration; Africa Integration Day 2022 (African Union)
The operationalization of the African Continental Free Trade Area (AfCFTA), one of the flagship projects of Agenda 2063, represents an opportunity in Africa’s journey towards the operationalization of an integrated market, that will eventually culminate in the formation of an African Economic Community
The African Union Commission’s Department of Economic Development, Trade, Tourism, Industry, and Minerals and the Member States, Regional Economic Communities (RECs), Pan-African Private Sector, Civil Society, Academia, Research Institutions, Women and Youths celebrated the 3rd edition of the Africa Integration Day under the theme “Deepening African Economic Integration in the Era of De-Globalization” on 7th July 2022, Lusaka, Zambia.
The overall objective of the commemoration of the 2022 African Integration Day and Forum was for African governments, private sector, civil society, RECs and AU partners to deliberate on how to utilize regional and continental integration processes and initiatives to foster accelerated Africa’s economic integration in its recovery in the post-COVID era.
H.E Amb. Albert Muchanga, Commissioner for Economic Development, Trade, Tourism, Industry and Minerals welcoming participants to the celebration of the third edition of the Africa Integration day, mentioned few of several factors that confront the continent. “The future of Africa in this new global environment lies in deeper economic integration, continent-wide. We are stronger working together; and, more resilient. We are weaker; and more vulnerable working as individual countries,” he said. Amb. Muchanga encouraged African citizens; cross-border traders; schools; colleges; universities; organized labour; and, the media, among several stakeholders to be actively involved in the African economic integration agenda.
Natural Resources Drive Africa’s Trade, and Ports Will Play a Key Role (The Maritime Executive)
There is a general consensus that Africa is the region most endowed with natural resources. Its arable land accounts for almost a quarter of the world’s arable land, giving the continent unrivalled agricultural potential. This abundant land also has the particularity of containing natural resources that are strategic for world industry and for the continent’s economic development: 85% of the world’s platinum, 60% of manganese, 50% of cobalt, etc.
For the past two decades, the region has experienced sustained growth in the exploitation of its natural resources, driven by the increased interest of foreign investors and the willingness of African governments to identify new sources of funding for their development policies. The significant increase in commodity prices, combined with the exponential demand from emerging powers such as China, therefore provide an encouraging context for the emergence of a sustainable African mining industry. New ports infrastructure being built across West Africa, from Gabon to Ghana to Cote d’Ivoire, are accommodating this demand.
However, the sector is still facing numerous challenges to meet expectations. The intensification of mining has led to a redefinition of geographical spaces on the continent.
Keynote Speech by Axel van Trotsenburg, World Bank Managing Director, Operations (World Bank)
The final IDA20 replenishment will provide $93 billion over the next three years to support 74 countries around the world, of which 39 are in Sub-Saharan Africa. On behalf of the World Bank, I wish to convey my deep appreciation to His Excellency Macky Sall, President of the Republic of Senegal and Chairman of the African Union, for his kind invitation and generous hospitality in hosting today’s IDA for Africa Summit.
Why One African Country Opted for Full Disclosure on Debt (World Bank)
For the past three years, the World Bank has been monitoring how transparent IDA countries are in their debt reporting practices through the Debt Reporting Heat Map. Among the 74 IDA countries, one stands out by meeting the “full disclosure” rating for every single one of the nine categories on the debt transparency Heat Map: Burkina Faso. This performance is even more remarkable considering that the country has been classified as fragile and conflict-affected (since late 2020) and has been fiscally squeezed by both the COVID-19 crisis and internal population displacement (almost 2 million since 2020).
Africa’s illicit financial flows now $80bn – CDD (Daily Trust)
The Director of the Centre for Democracy and Development (CDD), Idayat Hassan, has said that the Illicit Financial Flows (IFFs) in Africa has risen to $80 billion. Her comment was part of activities to commemorate the African Union Anti-Corruption Day with the theme: “Strategies and mechanisms for the transparent management of COVID-19 funds”. Hassan, in a statement on Monday, said the African continent suffered an annual loss of over $50bn as of 2015 through IFFs which had risen due to non-practical action on it. She said, “It is pertinent to note that through corruption and mismanagement, some of the COVID-19 funds in Africa may have become a source of illicit financial flows to countries in the North.”
“Corruption and illicit financial flows are twin evils which continue to constrain Africa’s progress and development. Regrettably, the utilisation of COVID-19 funds has also become a major source of Africa’s corruption conundrum.”
Africa Economic Summit Group unveils the Future of Africa Project website to develop the ‘Africa by Africans for All’ idea (The New Dawn Liberia)
The Africa Economic Summit Group has launched the Future of Africa Project website to enable Africans from around the world to jointly design the Africa they want to see. This project initiated by the Africa Economic Summit Group, a United Kingdom based international organisation committed to the growth and competitiveness of the African continent is a two-year long journey to harvest the finest of thoughts by Africans on the future they want for their continent.
According to Dr Brian Reuben, the CEO of Africa Economic Summit Group, ‘the problems in Africa can only be solved by Africans. There is no single African who does not want Africa to succeed. And when we think about it, Africa is blessed not just by abundant natural resources but also by human resources. All around the world Africans are doing mighty things in medicine, technology, sports and just about anything you can think of. This project is our chance to come together and design the future of our Africa as one people.’
The Future of Africa Project is designed to get Africans together to generate the ideas and frameworks required to build the new Africa with opportunity for all. The idea to to develop all aspects of the African economy and deliver a high standard of living for the people.
This report which will be presented to the African Union on the 25th of May 2024 will serve as a guide to individuals and organisations interested in doing business in Africa. The report will also provide policy direction to African Governments on the pathway towards a strong, resilient and competitive Africa. These proposals will also retain the details of the people who participated in the two year long project, including how to contact them. This therefore will offer all the people who participate on the project a chance to work directly with the Africa Economic Summit Group, Governments of African nations, investors interested in Africa, other international and multilateral organisations etc.
Increase investment in instruments for financial crisis management – President Akufo-Addo urges (BusinessGhana)
Addressing the Boma of Africa Festival on the ongoing global economic turmoil last Sunday, he noted that the current international instruments for resolving those crises lacked input from smaller economies. Speaking in his capacity as the African Union (AU) Champion of Financial Institutions, the President expressed concern about how smaller economies, many of them in Africa, often suffered the harshest consequences during global downturns though they contributed the least to the causes of those upheavals.
The Boma of Africa festival is a series of insightful convenings to drive the African integration agenda through a strategic high-level engagement between the continental governance institutions, represented by the AU Commission, and the African private sector, represented by the AU’s strategic partner AfroChampions.
The AU Commission, in partnership with AfroChampions Initiative - a public-private partnership designed to galvanise African resources and institutions to support the emergence and success of the African private sector - hosted the Boma of Africa on the theme: “Taking stock of the Africa Century”. The theme sought to explore the global shifts and continental developments shaping Africa’s quest to become a powerful global force by 2063.
The African Pharmaceutical Technology Foundation: NMRAs must upgrade to match impending boom in Africa’s pharma sector (Businessday)
The last few years since the onset of the COVID-19 pandemic have revealed the vulnerability of Africa’s pharmaceutical sector and the critical need for Africa to strengthen its local manufacturing capacity. With the growing burden of diseases on the continent, Africa must achieve self-reliance to cater for the increasing healthcare demands of its population. Unfortunately, pharmaceutical manufacturing companies in Africa face immense challenges such as poor availability of sustainable financing (including market access), inadequate access to know-how, unreliable supply chains, and inexperienced regulatory authorities. The pharmaceutical industry in Africa is also severely constrained by intellectual property rights protection and patents on technologies, know-how, manufacturing processes, and trade secrets. This limits the negotiation capacity of African pharmaceutical companies to engage within the global pharmaceutical industry and take part in complex global pharmaceutical innovations.
In view of these challenges, the African Development Bank has approved the establishment of a ground-breaking institution, the African Pharmaceutical Technology Foundation (APTF) to strengthen the local capacity for manufacturing medicines, vaccines, and other pharmaceutical products. However, Africa’s capacity to leverage on the opportunities the APTF provides will depend strongly on the committed collaboration of African governments and the capacity of their National Medicines Regulatory Authorities (NMRAs). This is because NMRAs play a leading role in guaranteeing availability of quality-assured medicinal products in their respective countries, ensuring that medicines, including vaccines, medical devices, and other pharmaceutical products meet applicable standards of safety, quality and efficacy.
Can sustainable development help Africa with rising food insecurity? (The Africa Report)
Russia’s invasion of Ukraine has left many African countries no option but to find alternative sources of grain imports. Despite a dip in prices in recent weeks, Ukraine has warned that Russia has been stealing and then selling grain on the black market, mainly to Syria via countries like Turkey. This has left many countries across the continent to fend for themselves against rising inflation that has driven many to famine and farmers strained to produce enough grain. African governments are now focusing on improving agricultural conditions and investing in greater self-sustainability.
We can take lessons from war in Ukraine concerning Africa’s food need (Monitor)
Some of the countries which are reported to face acute food crises due to the war in Ukraine are African. They include Egypt, Sudan, Libya and Somalia. A year ago, it was reported that Africa imported about 54.8 metric tons of wheat. African countries are some of the world’s leading wheat importers in the world. Media reports indicate that Ukraine and Russia export about a third of the world’s wheat and barley. It is therefore no wonder that the war in Ukraine spells immense distress for Africa, from a food supply perspective. Overall, the continent is a net food importer. Previous estimates have put the food import need for Africa at $110billion, by 2025, a mere three years from now. The rest of the world is thus strategizing to benefit from utilizing a growing and lucrative food demand on the continent. This is unfortunate for a number of reasons.
Insight 07: Implications of the Ukraine invasion for Africa (IC Intelligence)
‘There’s a massive knock-on from the Ukraine crisis in Africa’ – Dr Alex Vines, Director, Africa Programme Chatham House:
Russia is increasingly economically isolated through sanctions. How will this impact Africa? The commodity producers will certainly in the short term do better. Oil is over $100 a barrel and that’s very good news for a country like Angola in the short term, and gas becomes much more strategically important with Europe looking to diversify away from Russian gas. We’re seeing plans for a high-level Italian delegation to go to Mozambique. ENI is regarding its gas assets in Mozambique as incredibly strategic. Before the invasion of Ukraine they might have been considering selling them because they were exposed cost-wise with the investments on gas in Egypt. This is a game-changer in the way that Europe in particular is looking at African energy to help in the energy transition. The same will be true for certain minerals that will help in the energy transition to net zero. This is where graphite and cobalt will become much more important – countries like DRC, and northern Mozambique will become more strategic. Suddenly a number of African countries will be more important to Europe. Likewise, although we’re seeing a partial European retreat in the Sahel at the moment, in the longer term the Sahel will remain important and West Africa in particular, because it’s basically the European near abroad. If you look at senior policymakers in Europe, they were saying a lesson from Covid is that extended supply chains to Europe were unsustainable, including farm production. So if you have more enabling business environments in West Africa, they’ll see inward FDI building up industrial capacity and capability because it’s basically Europe’s extended neighbourhood.
Staple Food Prices in Sub Saharan Africa: An Empirical Assessment (IMF)
This paper analyzes the domestic and external drivers of local staple food prices in Sub-Saharan Africa. Using data on domestic market prices of the five most consumed staple foods from 15 countries, this paper finds that external factors drive food price inflation, but domestic factors can mitigate these vulnerabilities. On the external side, our estimations show that Sub-Saharan African countries are highly vulnerable to global food prices, with the pass-through from global to local food prices estimated close to unity for highly imported staples. On the domestic side, staple food price inflation is lower in countries with greater local production and among products with lower consumption shares. Additionally, adverse shocks such as natural disasters and wars bring 1.8 and 4 percent staple food price surges respectively beyond generalized price increases. Economic policy can lower food price inflation, as the strength of monetary policy and fiscal frameworks, the overall economic environment, and transport constraints in geographically challenged areas account for substantial cross-country differences in staple food prices.
Renewable energy may boost Africa’s construction sector in tough 2022 – report (Engineering News)
Turner & Townsend has released its International Construction Market Survey (ICMS) for 2022. The company is an independent professional services entity operating in the global real estate, infrastructure and natural resources sectors. The ICMS is the company’s largest and most in-depth report, drawing from data and experience from 90 global markets. It explores the challenges and opportunities presented by the economic market conditions that affect the construction industry.
Time for a new US engagement with Africa- Tony Elumelu (Nairametrics)
In February, at the sixth European Union-African Union Summit, leaders of the 27 EU nations welcomed 40 African heads of state to Brussels and committed €150 billion in investments targeting health, education, digital innovation, transportation infrastructure, and green energy.
Global economy news
Global trade hits record $7.7 trillion in first quarter of 2022 (UNCTAD)
The value of global trade rose to a record $7.7 trillion in Q1 2022, an increase of about $1 trillion relative to Q1 2021, according to UNCTAD’s Global Trade Update published on 7 July. But the positive trend for international trade may soon come to an end amid tightening policies and geopolitical frictions.
The growth, which represents a rise of about $250 million relative to Q4 2021, is fuelled by rising commodity prices, as trade volumes have increased to a much lower extent. Though expected to remain positive, trade growth has continued to slow during Q2 2022.
According to the report, trade growth rates in Q1 2022 remained strong across all geographic regions, although somewhat lower in the East Asia and Pacific regions. Export growth has been generally stronger in commodity-exporting regions, as commodity prices have increased.
The role of WTO Aid for Trade in actualizing an inclusive circular economy (Trade for Development News)
Unsustainable use of the earth’s resources is a primary driver of the triple threat of pollution, biodiversity loss and climate change. The current linear model of production and consumption is also a significant driver of social injustice, with the majority of resource consumption and wealth accumulation occurring in the Global North, but the highest levels of environmental impact and threats to human health being experienced in the Global South. There is an urgent need to move away from an extractive, polluting, and unjust production–consumption system to one that decouples social and environmental prosperity from unsustainable resource use.
The circular economy offers a life cycle approach to tackling this problem across value chains. Rather than the current linear flow of materials through the global economy, in which they are extracted, processed, manufactured, used, and finally disposed of as waste, a circular economy uses a systemic approach to decouple economic prosperity from material use by maintaining a circular flow of resources through regenerating, retaining, or adding to their value, while contributing to sustainable development. No country can achieve a circular economy on its own. Rather, all are dependent on international trade to secure affordable and reliable access to a wide range of different materials, goods and services.
Circular trade flows have grown strongly in value over the past two decades. For example, the value of trade in second-hand goods, secondary raw materials, and waste for recovery rose by more than 230 per cent (from $94 billion to $313 billion) between 2000 and 2019, with the global export value of trade in goods rising by around 195 per cent over the same period.
Although circular trade is a key enabler of a global circular economy, a range of regulatory and technical challenges are inhibiting its advancement.
OECD Economic Outlook reveals heavy global price of Russia’s war against Ukraine (OECD)
Russia’s invasion of Ukraine immediately slowed the recovery from the COVID-19 pandemic and set the global economy on a course of lower growth and rising inflation. The OECD’s latest Economic Outlook projects global growth to decelerate sharply to around 3% this year and 2.8% in 2023, well below the recovery projected in the previous Economic Outlook last December.
The economic and social impact of the war is strongest in Europe, with many of the countries hardest hit in Europe, given exposure through energy imports and refugee flows.
“Countries worldwide are being hit by higher commodity prices, which add to inflationary pressures and curb real incomes and spending, dampening the recovery,” OECD Secretary-General Mathias Cormann said during the presentation of the Outlook. “This slowdown is directly attributable to Russia’s unprovoked and unjustifiable war of aggression, which is causing lower real incomes, lower growth and fewer job opportunities worldwide.”
G20 economies show restraint in use of trade restrictions amidst ongoing instability (WTO)
“This report arrives at a time when the world economy faces several challenges. As we continue to fight against the COVID-19 pandemic, the conflict in Ukraine has created a humanitarian crisis of immense proportions with serious implications for millions of people, especially with respect to their food security. It is in this context of economic and trade uncertainty that G20 economies must show restraint in implementing trade-restrictive measures and exercise leadership in supporting open and mutually beneficial trade,” DG Okonjo-Iweala said.
The G20 Trade Monitoring Report makes reference to the recent WTO 12th Ministerial Conference (MC12) on 12-17 June, which secured unprecedented multilaterally negotiated outcomes.
G20: SA calls for reforms at UN to give emerging economies a stronger voice (IOL)
The South African government has called for wide-ranging reforms to the United Nations (UN) in a bid to enable emerging economies (EM) to have an effective voice in the global community. Minister of International Relations and Co-operation, Dr Naledi Pandor on Friday said that the UN must be strengthened to play the development support role expected of it, and promote its collaboration with continental and regional bodies.
G20: FAO says global threats to agrifood systems need complex approach (FAO)
The challenges undermining global food security call for a complex approach embracing investment, policy reforms and better use of resources, QU Dongyu, Director-General of the Food and Agriculture Organization of the United Nations (FAO) told a key meeting of the G20 today. “Recent global events, from the COVID-19 pandemic to the climate crisis, multiple conflicts around the world and the war in Ukraine, have all heavily affected agrifood systems in multiple ways,” Qu told the G20 Sherpa meeting of senior government representatives. Qu cited the recently launched 2022 edition of the State of Food Security and Nutrition in the World (SOFI) Report, which confirms that world hunger has increased again in 2021, reflecting growing inequalities across and within countries. It says 828 million people suffered from hunger in 2021, an increase of 46 million from 2020, and 150 million from 2019 before the pandemic.
Cascading global crises threaten human survival and the SDG roadmap is the way forward (United Nations)
The climate crisis, the COVID-19 pandemic and an increased number of conflicts around the world have placed the 17 Sustainable Development Goals (SDGs) in jeopardy, according to The Sustainable Development Goals Report 2022. The Report highlights the severity and magnitude of the challenges before us, with these cascading and intersecting crises creating spin-off impacts on food and nutrition, health, education, the environment, and peace and security, and affecting all the SDGs, the blueprint for more resilient, peaceful and equal societies.
“The road map laid out in the Sustainable Development Goals is clear,” stated Mr. Liu Zhenmin, United Nations Under-Secretary-General for Economic and Social Affairs. “Just as the impact of crises is compounded when they are linked, so are solutions.”