tralac Daily News
Structural growth in South Africa to slow for the rest of this year (Engineering News)
While South Africa's real gross domestic product (GDP) growth expanded above consensus forecasts in the first quarter of this year, fading base effects, persistent structural constraints and the impact of Russia's invasion of Ukraine will result in growth slowing across the rest of the year, market and credit intelligence company Fitch Solutions Country Risk & Industry Research sub-Saharan Africa country risk analyst Lara Wolfe noted this week.
Elevated inflation and the poor labour market in the country will also cap real GDP gains, which are expected to slow to 1.7% for the year, well below the regional average of 3.2%.
As a result of growing inflation pressure and, given the hawkish stance of the US Federal Reserve Bank, Fitch Solutions expects the SARB to hike interest rates by a further 125 basis points to 6% before the end of the year.
Black Industrialists conference to highlight govt’s progress since 2016 (Engineering News)
Trade, Industry and Competition Minister Ebrahim Patel has confirmed that government will share the findings of research conducted into the impact of black industrialists on economic output and job numbers during the inaugural Black Industrialists and Exporters Conference.
The conference will be hosted on July 20 in Sandton and will serve to reflect on the performance of government’s Black Industrialists Programme since its inception in 2016.
The conference will comprise a keynote address by President Cyril Ramaphosa; a number of panel discussions; the launch of growth initiatives, such as the Black Exporters Network; a marketplace with 85 businesses showcasing products; and ten Presidential Awards that will be issued for excellence in business.
On 14 July 2022 in Abidjan, the Board of Directors of the African Development Bank Group approved a $66.39 million support package for Guinea. The funding is intended to help it increase access to electricity.
It consists of a $4.17 million grant and a $9.37 million loan from the African Development Fund (the concessional arm of the African Development Bank Group) and a $24.13 million grant and a $28.72 million loan from the Transition Support Facility. The project is co-financed by the French Development Agency, the Islamic Development Bank, the Sustainable Energy Fund for Africa, hosted by the Bank, USAID, through the Africa Energy Program, and the Guinean government.
The Guinea Power Access Improvement Project will improve people's living conditions and the productivity of beneficiary companies through access to regular, reliable and cheaper energy services, explained Léandre Bassolé, the Bank Group's Country Manager for Guinea.
Rebuilding Cabo Delgado a daunting task (defenceWeb)
Mozambique’s restive northeastern province is abuzz with action. Despite recent losses, violent insurgents continue to attack villages and residents, while thousands of security forces fight to secure towns in order to welcome back displaced citizens and restore budding hopes of normalcy.
At the same time, the government, international organizations, donor countries and a regional bloc working to stabilize southern Africa are debating and forming plans to rebuild the province. The number of moving parts, like the rebuilding challenge itself, is overwhelming.
Ghana seeks IMF bailout as inflation spikes (Quartz Africa)
Ghana’s annual inflation climbed to 29.8% in June 2022, the first time the country’s inflation rate has touched 29% since January 2004. Ghana Statistical Service’s latest consumer price index report says June’s inflation was accelerated by higher costs of transportation, household equipment and maintenance, and utilities like electricity, gas, and water.
The new inflation rate underscores worsening economic conditions in the west African country especially this year. Between October and December last year, Ghana’s inflation rate averaged under 12%. In the second quarter of 2022, it was 27%, GSS’s data show.
Frustrated by rising costs of living, Ghanaians held days of protests in Accra at the end of June to draw the government’s attention, following up on previous outcries against new taxes on electronic transactions. Seemingly unable to save itself, Ghana’s federal government is, once again, looking to the International Monetary Fund for help.
AfDB to establish entrepreneurial bank in Tanzania (The Citizen)
Speaking in Dar es Salaam on Tuesday evening during the monthly engagement meeting of the CEO Roundtable of Tanzania (CEOrt), the AfDB country manager in Tanzania, Dr Patricia Laverley, said the envisaged Entrepreneurial Development Bank would be established under the AfDB’s Youth Entrepreneurship and Innovation Multi-Donor Trust Fund.
“We are committed to supporting entrepreneurs with focus on women, micro-enterprises and SMEs to have access to finance as well as equipping them with skills development,” she said, adding, “Our targeted goal is to ensure that they have businesses that are sustainable.”
Dar es Salaam. The African Development Bank (AfDB) is considering establishing a development bank that will specifically cater for the funding needs of micro and small and medium enterprises (MSMEs) in Tanzania.
The African Development Bank Group (www.AfDB.org) President Dr Akinwumi Adesina has met with Cape Verde Prime Minister José Ulisses de Pina Correia e Silva on an official visit to the institution’s headquarters in Abidjan. The two discussed the economic situation of Cabo Verde and emphasized the need to strengthen the country’s emergence in the face of exogenous shocks such as the war in Ukraine and the Covid-19 pandemic.
Prime Minister de Pina Correia e Silva expressed his admiration for the way in which the Bank helps African countries to address key development challenges and emerging issues. In particular, he welcomed the Bank’s support in the fight against Covid-19 and the Zika Virus, which have enabled the country to preserve its economy.
Adesina praised the Cabo Verde government for its “rapid and effective” response to the Covid-19 pandemic, which mitigated its shock. He particularly noted how the country had managed to re-open its economy as early as October 2021, in tandem with the vaccine roll-out. “It is important to note that by the end of June 2022, 85.2% of the population was fully vaccinated, in contrast with an African average of 16%. I congratulate you and your government for this remarkable effort,” Adesina said.
Exhibitors at the 46th Dar es Salaam International Trade Fair (DITF) inked a total of 19 Memorandum of Understanding (MoUs) that spell out how local and foreign investors could work together in the advancement of their common interests.Out of the number, nine – valued at $3 billion (about Sh6.9 trillion) - are those under the Sino-Tanzania Industrial Park which will create over 500,000 direct and indirect jobs upon successful execution.
Speaking at an event to officially close the 46th DITF in Dar es Salaam yesterday, Ministry of Investment, Industry and Trade’s permanent secretary Godius Kahyarara said negotiations for 16 more contracts - under the Export Processing Zone Authority (EPZA) – were still on going.
Neal Applauds Launch of the U.S.-Kenya Strategic Trade and Investment Partnership (Ways and Means Committee)
Today, House Ways and Means Committee Chairman Richard E. Neal (D-MA) applauded the launch of the United States-Kenya Strategic Trade and Investment Partnership: “Today’s announcement that the United States will be furthering our partnership with a key trading partner, Kenya, is a welcome advancement in our trade relationship, and I thank USTR Ambassador Tai for her leadership in launching this initiative.”
Economic Development in Africa Report 2022 shows that neglecting the potentially transformative role of high knowledge-intensive services, such as information and communications technology services and financial services, is among the key reasons why export diversification remains a challenge in Africa.
The report shows that effectively addressing barriers to services trade under the African Continental Free Trade Area will be key to unleashing the transformative role of services in enhancing the diversity and complexity of products from Africa.
UNCTAD recommends that for export diversification strategies to be impactful in Africa, policies need to be in place that enhance inclusive access to innovative financing technologies, including for small and medium-sized enterprises. Leveraging high knowledge-intensive services to increase productivity and improve competitiveness in the private sector will be key to achieving higher value-added diversification and growth under the African Continental Free Trade Area.
The Resilience and Social Cohesion project, launched by the UN Children’s Fund (UNICEF) and World Food Programme (WFP), will enhance peace, increase livelihood opportunities, and provide education, health, nutrition, child protection, and sanitation support to vulnerable populations in Borno and Yobe states.
Funded to the tune of €40 million from the German Government, the three-year humanitarian package targets children from birth up to two years of age, pregnant women, school-age children, adolescent girls, female-headed households, and people with disabilities.
“Children and other vulnerable groups will have a lifeline, and an opportunity to survive and thrive in communities where livelihood and peace building activities are present,” the UNICEF Representative spelled out.
SolarPower Europe and GWEC have signed an agreement with RenewAfrica and the AFSIA to jointly organise the Africa Renewables Investment Summit (ARIS), an event that seeks to catalyse renewable energy investment for African countries.
Despite the continent’s massive renewable energy potential, Africa received 2% of the $2tn that was invested in renewable energy globally between 2000 and 2020.
The summit in Cape Town will gather renewable developers, institutional investors, development finance institutions, technology suppliers and African government stakeholders to explore ways to harness Africa’s renewable energy potential, with some investment set to be facilitated right at the event.
Africa World Trade Network Launched (Peace FM Online)
On Tuesday, July 12, 2022, officials from the Ministry of Trade, diplomats and multi-faceted entrepreneurs converged on the Kempinski Hotel for the launch of the Africa World Trade Network (AWTN).
In the wake of the Africa Continental Free Trade Agreement (AfCFTA), AWTN seeks to lead the way in pursuing tailored trade solutions in the best interest of Africans.
The Secretary-General of AfCFTA, H.E Wamkele Mene, in his speech lauded the initiative and made an audacious call to African leaders to dissolve barriers to free movement of Africans across the continent.
The African Development Bank and the Common Market for Eastern and Southern Africa (COMESA) have signed a Letter of Agreement for a US$550,000 NEPAD Infrastructure Project Preparation Facility grant to support a feasibility study for setting up an Africa Cloud Ecosystem (ACE) project.
The agreement was signed by the AfDB Zambia, Country Manager, Dr. Raubil Durowoju and COMESA Assistant Secretary General, Dr Kipyego Cheluget on behalf of Secretary General, Chileshe Kapwepwe, at the COMESA Secretariat in Lusaka, Wednesday,13 July 2022.
“The Africa Cloud Ecosystem project will be a first of its kind, laying the foundation to facilitate the African continent to undertake this shift in the key sectors of economy, education, government, agriculture and health through the provision of a reliable ecosystem of datacentres,” Dr Durowoju said.
Southern African countries agreed on Thursday to extend their troop deployment in Mozambique for another month to help it fight an Islamic State-linked insurgency. The countries, linked in the Southern African Development Community (SADC), agreed last year to send troops to Mozambique
The mission's mandate was set to end on Friday but has been extended on an interim basis until an SADC heads of state summit in mid-August, when a more detailed report on the mission's progress will be considered.
Trans-Saharan Gas Pipeline Offers Hope for Europe (Horn Observer)
Europe is still looking for reliable alternative sources of energy especially gas, as its energy relations with Russia have nosedived. It has been exploring energy sources from the Asian region and Africa. While African energy sources exist, Africa lacks the needed infrastructure to transport them to Europe. Transporting gas would require clearance agreements across the various African borders
The Trans-Saharan gas pipeline (also known as NIGAL pipeline and Trans-African gas pipeline) was first proposed back in the 1970s. The inter-governmental agreement on the pipeline was signed by Energy Ministers of Nigeria, Niger and Algeria on 3rd July 2009 in Abuja. It has not materialized, among due to financial constraints and complicated government bureaucracy.
Mahamane Sani Mahamadou, Minister of Petroleum for the Republic of Niger; Mohamed Arkab, Minister of Energy and Mines, Algeria, and Chief Timipre Sylva, Minister of State for Petroleum Resources of Nigeria as well as the Director Generals of National Oil Companies (NOCs) of the three African countries have held thorough discussions on the implementation of the multi-billion Trans-Saharan Gas Pipeline (TSGP).
According to reports, a Steering Committee made up of the three Ministers and Director Generals of the NOCs, established during the two-day meeting, will be responsible for updating the feasibility study for TSGP and will meet at the end of July 2022 in Algiers to discuss the progress.
Dr. Omar Alieu Touray, a Gambian National, has assumed office as the new President of the ECOWAS Commission for a four-year tenure. He takes over from Jean-Claude Kassi Brou, an Ivorian National, who has piloted the affairs of the Commission from 2018 till date. Other statutory management appointees inaugurated include Damtien L. Tchintchibidja, Vice-President of the ECOWAS Commission, Prof. Nazifi Abdullahi Darma, Commissioner for Internal Services, Dr. Abdel-Fatau Musah, Commissioner for Political Affairs, Peace, and Security, Mme Massandjé Toure-Litse, Commissioner for Economic Affairs and Agriculture, Mr. Sédiko Douka, Commissioner for Infrastructure, Energy and Digitalisation and João Alage Mamadu Fadiá, Auditor-General.
The Board of Directors of the African Development Bank Group (AfDB) has approved a $175 million Trade Finance Funded Risk Participation Agreement facility for the Eastern and Southern African Trade and Development Bank (TDB) to improve regional integration.
The agreement is expected to boost intra-Africa trade, promote regional integration and contribute to the reduction of the trade finance gap in Africa.
The Bank will provide liquidity of up to 50% (the other 50% to be matched by TDB), to issuing banks on a risk share basis and facilitate the issuing on a risk share basis, to support trade activities of local corporates and SMEs in member countries of the Common Market for Eastern and Southern Africa (COMESA).
It will be recalled that the African Peer Review Mechanism (APRM) was adopted by Member States of the African Union (AU), within the framework of the New Partnership for Africa’s Development (NEPAD), as a self-monitoring tool.
The APRM is a vehicle for sharing experiences, reinforcing best practices, identifying deficiencies and assessing capacity-building needs to foster policies, standards, and practices that lead to political stability, high economic growth, sustainable development and accelerated regional and continental integration.
President Akufo-Addo has sworn into office the members of the Governing Council of the National African Peer Review Mechanism on Thursday.
The maiden AfriCaribbean Trade and Investment Forum (ACTIF) aimed at boosting trade and investment between Africa and the Caribbean will be held in the Republic of Barbados.
Slated for September 1-3, 2022 it is being convened by the African Export-Import Bank (Afreximbank) in collaboration with African Union Commission (AUC), African Continental Free Trade Area (AfCFTA) Secretariat, Africa Business Council, the Caribbean Community Secretariat, and Caribbean Export Development Agency.
A media advisory issued by Afreximbank yesterday said the main goal of the forum was to provide a platform for the development of strategic partnerships between the business communities in Africa and the CARICOM Region with the objective of fostering bilateral cooperation and engagement in trade, investment, technology transfer, innovation, tourism, culture and other services.
The 51st Plenary Assembly session of the Southern African Development Community (SADC) Parliamentary Forum (PF) on 14 July 2022 adopted the much-anticipated Model Law on Public Financial Management (PFM), raising hopes in a region in which lack of accountability in the use of public funds has perennially jinxed socioeconomic development.
The Speaker said the management of public finances across SADC member states continued to face various challenges such as corruption, misappropriation, overspending and other forms of illicit financial flows.
In an impassioned and factual submission, Nelly Butete Kashumba Mutti, the Speaker of the National Assembly of Zambia, enjoined the Plenary to adopt the model law. She said the PFM affects all aspects of any nation’s life as it is the fulcrum upon which the implementation of all government programmes hinges.
NEPC, SMEDAN sign pact to expand exports in W/Africa (Daily Trust)
The Nigerian Export Promotion Council (NEPC) and the Small and Medium Enterprises Development Agency (SMEDAN) have signed a Memorandum of Understanding (MOU) geared towards facilitating the first West African MSME (WAMSME) Export Opportunities Exhibition.
Speaking at the MOU signing in Abuja, the Executive Director of NEPC, Dr Ezra Yakusak, said the collaboration was aimed at enhancing the visibility of Made-in-Nigeria goods and services within West Africa.
All of the speakers agreed that significantly more financing is required for stronger African health systems. The goal is for each African country to spend 15% of its budget on healthcare; at present the average is closer to 3%.
Dr Ahmed Ogwell Ouma, Acting Director, Africa CDC (Africa Centres for Diseases Control and Prevention) said that to boost African countries’ pandemic responses, health systems need to be strengthened to manage crises as fast as possible and information must be made available to the public.
As the Covid-19 pandemic develops, African countries’ response strategies must shift from crisis response to long-term control strategies. The momentum of Covid-19 management must be integrated into broader health systems to achieve health equity and health security, while also ensuring that other health issues and deadly diseases are prioritised.The continent’s leading health experts and policymakers discussed these issues in a webinar hosted by the Mail & Guardian and organised by The Conversation Africa and Global Health Strategies, with Devex as a media partner.
Group of 20 finance chiefs started official meetings in Bali Friday with an eye toward progress on food security and debt issues as tensions over Russia impeded prospects for a more sweeping agreement.
Host Indonesia is pushing for G-20 members to pledge more concrete action to respond to food insecurity, including by sharing data on commodity stockpiles, and for them to coordinate better on macroeconomic policies, according to a person familiar with the discussions.
The G-20 discussions have been “very difficult but sometimes fruitful,” Sri Mulyani Indrawati, Indonesia’s finance minister, said in opening remarks for the Friday meetings. “Despite all our differing positions, we have been able to make tangible progress on some critical issues.”
G20 finance meeting under Ukraine cloud (Manning River Times)
G20 finance leaders are meeting on the resort island of Bali, as host Indonesia tries to find common ground in a group frayed by the Ukraine war amid rising economic pressures from soaring inflation.
Russia's invasion of Ukraine has overshadowed recent previous meetings by the Group of 20 major economies, including last week's gathering of foreign ministers.
G20 members include Western countries that have imposed sanctions on Russia and accuse it of war crimes in Ukraine - which it denies - as well as nations like China, India and South Africa, which have been more muted in their responses.
US Treasury Secretary Janet Yellen said on Thursday the war was causing a negative spillover globally and Russian officials had no place at the G20 meeting.
Ministers, high-level government representatives, experts, civil society and private sector representatives will next week discuss how to better protect consumers amid the global cost-of-living crisis during meetings organized by UNCTAD.
The sixth session of the Intergovernmental Group of Experts on Consumer Protection Law and Policy will take place from 18 to 19 July, followed by the twentieth session of the Intergovernmental Group of Experts on Competition Law and Policy from 20 to 22 July, in Geneva and online.
High-level speakers will discuss pressing and timely consumer protection issues related to financial consumers, health services and international trade of unsafe products.
Policy Makers and leading stakeholders from around the world have called for a united global effort to combat ongoing crises and deliver meaningful change and sustainable development. These issues were emphasized during the “Messages from the Regions” session during the 2022 High-Level Political Forum on Sustainable Development (HLPF). The HLPF is an annual gathering of government, civil society, youth and private sector representatives from around the globe to address pressing socioeconomic issues and propose a sustainable way forward for the planet.
The session heard interventions from environmental stakeholders across the globe, including Arlette Soudan-Nonault, Minister of Environment and Sustainable Development of the Republic of Congo and technical coordinator of the Congo Basin Climate Commission. She highlighted the importance of operationalizing Blue Funds in the region, with the support of ECA.
The Session stressed the importance of regional and sub-regional approaches to crisis recovery, through cooperation between countries and the sharing of lessons and best practices amongst partner countries. As we approach the halfway mark between the adoption and finish line of the 2030 Agenda, such partnerships will be key in accelerating progress. Regional visions such as Agenda 2063 of the African Union complement these global efforts and provide the needed context-specificity for inclusive development that is meaningful and impactful for our communities.
Soaring dollar risks widening US trade deficit (The Africa Logistics)
For the first time in over two decades the exchange rate between the US Dollar and the Euro has hit parity meaning that the two currencies are worth the same amount.
The dollar is the world’s reserve currency, which means it is used in most international transactions.
In a nutshell Americans will have great spending power now than ever before.
On the flipside, the US is likely to experience a bigger trade deficit as countries shy away from buying their products.
Secretary of Commerce Gina Raimondo has appointed 24 members to the President’s Advisory Council on Doing Business in Africa (PAC-DBIA) to serve a two-year term. The PAC-DBIA was established in 2014 to provide recommendations and analysis to the President, through the Secretary of Commerce, on strengthening commercial engagement between the United States and Africa.
Over the next two years, the PAC-DBIA will serve as an important source of private sector input helping to advance the Biden Administration’s commitment to expanding and deepening U.S. commercial partnerships in Africa that are grounded in shared interests, support, and mutual respect and responsibility. The PAC-DBIA will advise the President on facilitating U.S. business participation in economic sectors critical to economic recovery from recent global crises and inclusive long-term growth across Africa, creating jobs in the United States and Africa through trade and investment, building the capacity of Africa's youth and entrepreneurs to develop trade and investment ties with partners in the United States, and developing and strengthening partnerships and other mechanisms to increase U.S. public and private sector financing of trade with and investment in Africa
A Chinese port in Nigeria will change the world economy (Nikkei Asia)
A milestone was reached this month when a Chinese vessel became the first ship to berth at Nigeria's first deep-water port in Lekki that was financed by the China Development Bank and built by Lekki Port LFTZ Enterprise, a special purpose vehicle owned by a group of investors led by state-owned China Harbour Engineering and Tolaram Group, a Singapore-based conglomerate, and including local and federal Nigerian governments.
According to Nigerian Ports Authority managing director Mohammed Bello-Koko, the arrival of the megaship from Shanghai was historic, signifying not only Nigeria's readiness to take trade facilitation a notch higher but also the port's potential to help optimize the African Continental Free Trade Area, a pact connecting 1.3 billion people across 55 countries that the World Bank believes can transform Africa's economies.
Just 60 km east of the world's 15th largest city and Africa's largest metropolis Lagos, the port will increase its container-carrying potential from 3,000 containers to up to 20,000 containers. It will also allow up to 5 megaships to berth at the same time, putting Nigeria light years ahead of what is presently available in alternative Nigerian ports at Tin Can Island and Apapa.
High-profile aid to Ukraine that the EU promised in May seems to be shifting to the back burner as the bloc faces the prospect of severe economic pain at home. While commission President Ursula von der Leyen proposed sending 9 billion euros in emergency loans to Ukraine, so far, the EU has only managed to agree on an initial tranche that covers a ninth of that target. When finance ministers discussed the issue this week, we learned that economy commissioner Paolo Gentiloni told them that governments need to ensure the economic response to the war’s fallout at home is strong enough to avoid the risk of fatigue among Europeans. Heading into the traditionally sleepy summer period in Brussels, the EU will face new challenges as the specter of a total cut-off from Russian gas and the tightening of monetary policy risk pushing the region into a second recession in two years.
In its just-completed fiscal year 2022 (FY22), the World Bank Group responded with unprecedented scale to overlapping global crises, providing advice and financing in response to the sharpest economic slowdown in eight decades, rising inflation, deepening food insecurity, war and fragility, and the continued negative impact of the COVID-19 pandemic.
“Developing countries are facing multiple challenges—from war to surging food and energy prices—which deepen inequality and lead to reversals in development gains,” said World Bank Group President David Malpass. “The World Bank Group has responded with urgency, scale, and impact. We have committed consecutive surges of financing, analytical support, and policy advice, first in response to the COVID-19 pandemic, and now to address the food crisis, the war in Ukraine, and its spillover effects.”
Amid these devastating crises, the World Bank Group deployed a record $114.9 billion in FY22 (July 1, 2021-June 30, 2022). Commitments during FY22 were informed by our knowledge work and helped countries address rising food prices, manage refugee flows, bolster health preparedness, maintain private sector trade, and support efforts to mitigate and adapt to climate change, among others, benefitting especially the poor and most vulnerable.
FTAs will stimulate trade, spur recovery (China Daily)
China will make full use of free trade agreements to guide export-oriented companies to explore overseas markets, while encouraging exports of innovative, green and high value-added products to bolster their competitiveness, said the Ministry of Commerce on Thursday.
As the country's foreign trade still faces uncertainties in the second half, the government will urge related parties to lower exporters' corporate financing costs and shipping expenses, and accelerate the progress of export tax rebates, Shu Jueting, a ministry spokeswoman, said.
UK-China trade talks on ice as hawks vie to replace Boris Johnson (POLITICO Europe)
Boris Johnson's government paused two key sets of trade and economic talks with China amid a backlash from Tory MPs and hawkish statements from candidates vying to replace him as U.K. prime minister. The outgoing British leader's administration has put two sets of talks that businesses were expecting to take place later this month back on ice, according to three people familiar with the discussions.
The decision to keep them in limbo has some British businesses worried, while human rights campaigners are claiming victory and hoping Conservative leadership contenders will keep the talks paused.