tralac Daily News
President Cyril Ramaphosa says the export of South African products to markets in other countries has a lasting effect on the fight against unemployment in the country. He was speaking at the opening of a Lulu Hypermarket in the Kingdom of Saudi Arabia during an official State Visit to the country.
The President said the 500 South African products that are being sold at the hypermarket make an impact on the lives of those exporting the products. “[These products] create jobs in South Africa by those workers who produce this product. But they also create jobs in Saudi Arabia, by those who package them, who repackage them, who present them, and who sell them. So that, in my view, is the smartest of all partnerships that you can ever get. And we should applaud everyone who is involved,” he said. President Ramaphosa highlighted that bringing South African products to other parts of the world means that other cultures can also enjoy and become knowledgeable about the South African way of life.
Why South Africa is losing its mining investment appeal (The Exchange)
Mining MX the South African mining industry journal published its 2022 edition of the Mining Yearbook recently. The 2022 edition ran under the theme “Rock Bottom: Why South African Mining cannot risk more Mantashe blunders”. The theme is a harsh though factual indictment on the effect of government policy on the mining industry personified by the current minister of mines and former communist Gwede Mantashe.
South Africa owes its existence as a nation to its mining industry which remains one of its largest contributors to its GDP. Mining investment however, been gradually on the decline in South Africa relative to other mining destinations like Australia which consistently attracts the most in terms of mining investment in exploration and development Mining MX reports.
Botswana banned SA fruit and veg. Now traders there are demanding a U-turn (Business Insider)
A short supply of fresh produce in Botswana has left traders pleading with their government to allow them to get produce from South Africa and others again, following the Tswana nation’s decision to instate an import ban on certain commodities, the Sunday Standard reported. Instead of closing off the borders completely, Batswana traders and representatives of small-scale traders are requesting that the government reconsiders its importation ban policy to allow them to import at least 30% of vegetable and fruit commodities, it reported. Botswana earlier this year halted imports of certain produce from South Africa, including tomatoes, carrots, beetroot, potatoes, cabbage, lettuce, garlic, onions, ginger, turmeric, chilli peppers, butternut, watermelons, sweet peppers, green mealies, and fresh herbs.
Its rationale was to protect its local agricultural sectors, decrease its P9.2 billion (R12 billion) yearly import bill and boost horticultural competitiveness; but the little supply of produce it is now left with is being absorbed by big chains, with most farmers reserving contracts to supply them, per the Sunday Standard.
Coffee farmers bank on grafting to grow returns (Business Daily)
Coffee ranks among key foreign exchange earners for Kenya. However, its production has over the years been dwindling to stand at a paltry 40,000 tonnes annually from highs of 150,000 tonnes at its peak. The decline has been partly attributed to farmers abandoning the crop due to poor returns, adverse effects of climate change and an ageing farming population. To stop the sector from suffering the same fate as pyrethrum, Kenya has stepped up initiatives to boost production in the race to match successful producers such as Ethiopia, which is one of the top exporting nations of the Arabica variety in the world market.
Kenya sugar price increases on weak shilling, global scarcity (Business Daily)
A global shortage of sugar and the depreciating shilling to the dollar is contributing to the high cost of the product, as the regional States opt to sell their commodity to the European market where it is fetching a premium. The sugar prices on the world market have been volatile in the last one year with a tonne of the product going up from $509 in January to $531 in August, according to the International Sugar Organisation.
Kenya relies on imported sugar to meet its annual deficit which has now grown to 200,000 tonnes, with the country consuming one million tonnes against production of 800,000 tonnes annually. The Common Market for Eastern and Southern African (Comesa) countries, from where Kenya is allowed to import the commodity, are selling their produce to other global regions especially the European Union owing to good prices that it fetches there.
“The diversion of the commodity to other markets has contributed to an acute shortage of the produce, thus denying countries that benefit from quota sanctioned by the regional bloc secretariat every year,” said Willis Audi, head of the sugar directorate.
Zambia is hosting a two-day business summit in Lusaka this week to try to attract American investors to the country. Zambian officials say they want to diversify the economy and decrease dependence on extractive industries such as copper, which account for most of the country’s exports. Zambia’s Commerce Minister Chipoka Mulenga said the U.S. should be a key partner in that effort.
“But our focus right now is to see how best we can create jobs and revive our economic fortunes by value addition,” said Mulenga. “We want to take advantage of the new energy system that the world is migrating to from fossil fuels into clean and green energy. And we are trying to take advantage of the minerals that we have and bring a consortium of developed players that have the technology already to see how we can develop our copper from exporting concentrates in its raw form into developing it into finished products for the green energy system that we want to go into.”
Zambia is Africa’s second-largest producer of copper – after the Democratic Republic of Congo – and an important source of other critical minerals like manganese, nickel, and cobalt.
But economists say Zambia’s dependence on minerals means it has not taken advantage of being a member in the Common Market for Eastern and Southern Africa (COMESA) or the Southern African Development Community (SADC).
Uganda financial sector hailed as most developed in EA (The East African)
Uganda is running an economy with the most developed financial sector in the region, according to the latest study by the Official Monetary and Financial Institutions Forum (OMFIF) and Absa Bank. The latest feat depicts a major milestone in the country’s race towards becoming a regional financial hub, with an eye to increased inflow of foreign direct investments. The sixth edition of the Absa Africa Financial Markets Index (2022) report shows that Uganda has made significant improvement in five key areas compared to Kenya, Tanzania, Rwanda and the DR Congo. These include access to foreign exchange market, transparency in taxation and regulatory regime, capacity of local investors, state of the macroeconomic environment and transparency in the enforcement of legal contracts.
Uganda gold exporters glitter again after year’s standoff (The East African)
Ugandan gold exporters are back in business after a 13-month impasse over a tax dispute with the government. According to the recent Bank of Uganda’s composition of exports values report, the country exported gold worth about $171 million in August after recording nil exports of the mineral in the intervening 13 months. The slump came about after the government, in April last year, imposed a new levy of five per cent on every kilogramme of refined gold and 10 per cent on unprocessed gold for export. The tax had proposed a charge of $200 on every kilogramme.
The requirement became operational in July last year, forcing gold exporters to hold back stocks in protest against the tax, pending talks with the government to revise the tax downwards.
Constrained private sector growth has limited the number of quality jobs. Only 33 percent of workers in Zimbabwe receive a salary, well below peers in the region and globally, suggesting a limited share of quality jobs despite workers possessing relatively higher skills. Labor productivity in informal firms is only a fraction of the labor productivity in similar formal firms, negatively affecting overall productivity. Moreover, competition from informal firms has tended to lower the productivity of formal firms by around 24 percent on average, compared with firms that do not face such competition. Dealing with the challenges of informality requires sustained economic growth, and a comprehensive and consistent policy package that tackles the root causes and consequences of informality. The CEM offers two pathways to tackle informality while placing priorities on removing policy distortions and regulatory burdens in the short run
Zimbabwe’s economy remains highly concentrated with few firms and industries, and a small number of export products—mostly minerals and tobacco—generating the bulk of foreign exchange revenues.
Supporting export diversification and participation in global value chains (GVCs) can boost productivity and contribute to jobs. Zimbabwe’s export performance has been declining over the past two decades and is still lagging in terms of the quality of trade-related infrastructure, such as certification systems and border risk management. Fully implementing the WTO Trade Facilitation Agreement would have positive provisions that could be leveraged to improve trade-related infrastructure and new technologies will have a huge impact on how these trade-related services are delivered.
The ongoing review of Nigeria’s trade policy, according to Otunba Adeniyi Adebayo, minister of industry, trade, and investment, will redefine trade and commerce in the nation. The Minister stated, while receiving a draft copy of the revised Trade Policy in Abuja, that “both Nigeria and the world have witnessed major developments such as the explosion of E-commerce and digital payments, the agreement establishing the African continental Free Trade Area (AfCFTA), and the withdrawal of the United Kingdom from the European Union (Brexit).” The African Growth and Opportunity Act is only in its second year, he pointed out, making the policy review even more crucial to seizing present and upcoming prospects.
Nigeria, the most attractive investment destination in Africa – Minister (Voice of Nigeria)
The Nigerian Minister of State for Industry, Trade and Investment, Mrs Mariam Katagum says Nigeria is one of the most attractive investment destinations in Africa. The Minister was speaking at the maiden Nigeria-Egypt Trade Conference and Exhibition, with the theme “For Africa – By Africa” taking place in Cairo, Egypt. The Minister pointed out that Nigeria is a country blessed with huge natural and mineral resources in commercial quantities, favourable climate conditions and high potentials for industrial development adding that the country is one of the most attractive investment destinations in Africa. According to her, “At the onset of the Covid-19 pandemic, the government made tremendous efforts towards sustaining MSMEs, which are the engines of economic growth in any economy.”
The Minister also disclosed that the Government of Nigeria through the Federal Ministry of Industry and Trade and Investment and the Nigerian Export Promotion Council (NEPC) launched the first Export Trade House (ETH) in Egypt on the 21st March, 2022 in Sadat City.
Sub-Saharan Africa’s economic activity is expected to slow significantly in 2022 and remain relatively modest in 2023. A downturn in advanced economies and emerging markets, tighter financial conditions, and volatile commodity prices, have undermined last year’s gains. Looking ahead, the outlook remains highly uncertain. Consequently, countries in the region are living on the edge, the International Monetary Fund (IMF) said in its latest Regional Economic Outlook for Sub-Saharan Africa.
The region is expected to grow by 3.6 percent in 2022, down from 4.7 percent in 2021, due to muted investment and the overall worsening of its balance of trade. Non-resource-intensive countries, which enjoy a more diverse economic structure, will continue to be among the region’s more dynamic and resilient economies, growing by 4.6 percent in 2022, compared to 3.3 percent in oil exporters and 3.1 percent in other resource-intensive countries.
Mr. Selassie pointed to four priorities for policy makers in the region:
“First, in the context of rising food insecurity, the utmost priority must be to protect the most vulnerable. Scarce resources should go to those who need them most. Poorly targeted emergency measures should be gradually phased out.
“Second, to contend with increased inflation and tightening global interest rates, policymakers should cautiously raise policy rates, while keeping a close eye on inflation expectations and foreign exchange reserves.
“Third, policy makers in the region need to continue consolidating their public finances to preserve fiscal sustainability, particularly in the context of rising interest rates. Credible medium-term fiscal frameworks, including effective debt management, can help lower borrowing costs. In countries with acute debt vulnerabilities, debt restructuring or reprofiling may be required, suggesting the need for improved implementation of the G20 Common Framework.
“And finally, they should set the stage for high-quality growth, amid accelerating climate change. Investment in resilient, green infrastructure, and capitalizing on the region’s sizable renewable-energy resources will require both innovative private finance and energy sector reforms.
The Minister for Trade and Industry, Mr Alan Kyerematen has urged African governments to set up the necessary institutional and logistical support structures so that they can all profit equally from the implementation of the African Continental Free Trade Area (AfCFTA) agreement. The Minister, who made this call at the launch of the Africa Guided Trade Initiative in Accra last Friday, underscored the need to have institutional structures and programmes of action for boosting intra-African trade to enable entrepreneurs to produce and take advantage of the huge market provided by the agreement. He stated that governments must ensure that they have the logistics support required to move goods from one country to another.
The Guided Trade Initiative (GTI) was launched in Accra, Ghana on 7 October and seeks to allow commercially meaningful trading, and test the operational, institutional, legal and trade policy environment under the AfCFTA. “The products earmarked to trade under this initiative include ceramic tiles, batteries, tea, coffee, processed meat products, corn starch, sugar, pasta, glucose syrup, dried fruits, and sisal fiber, among others, in line with the AfCFTA focus on value chain development,” says Secretary-General of the AfCFTA Secretariat, Wamkele Mene. The eight countries participating in the GTI are Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania and Tunisia and represent five regions of Africa.
Other countries that have met the requirements and deployed the AfCFTA E-Tariff Book and the Rules of Origin Manual and have officially published their tariff rates and have had them approved by the Secretariat—will also be able to take part in the Guided Trade Initiative.
African business still up on AfCFTA (ICLG.com)
The African business community has maintained its bullish outlook on the benefits of the African Continental Free Trade Area, as it weathers global instability and the after-effects of the Covid-19 pandemic. African business advocacy group the Pan-African Private Sector Trade and Investment Committee (PAFTRAC) has published the results of its second Africa CEO Trade Survey Report, examining the effects of the African Continental Free Trade Area (AfCFTA).
In an online presentation announcing the findings of the survey, PAFTRAC Chairperson Patrick Utomi was unequivocal about the AfCFTA’s advantages: “Current challenges such as the war in Ukraine make it imperative for intra-African trade to help protect better the continent of Africa, even in a more globalised world,” he said, adding: “This must be seen as a strategic thing for Africa to do to strengthen our hand in international trade, this ability to trade and aggregate across boundaries enables us to be a bigger stakeholder in international trade.”
Ongoing regional infrastructure will boost free trade in Africa (Africa Renewal)
There is an infrastructure challenge in Africa. Annually, there is a funding gap of up to $100 billion for infrastructural development. Yet the African Continental Free Trade Area, one of the biggest projects on the continent currently, cannot succeed without adequate infrastructure. How does Africa address this funding gap?
The AfDB has been investing heavily in infrastructure in Africa. In the last six years alone, we have invested well over $44 billion in infrastructure—from roads to airports, seaports, digital infrastructure, water and sanitation and energy infrastructure. There’s no institution in the world that is investing more in African infrastructure than the AfDB. Infrastructure is our forte.
Now, for the African Continental Free Trade Area, yes, we need a lot more infrastructure. But let’s see some of the things we’ve done already to promote regional trade.
UNCTAD and the African Continental Free Trade Area (AfCFTA) Secretariat have signed a memorandum of understanding to boost their joint efforts to promote regional integration and inclusive growth in Africa. The heightened partnership will enable UNCTAD to work closely with the AfCFTA Secretariat, African member states, regional economic communities, the business community and strategic development partners to foster regional economic integration and growth in Africa.
Joint work under the agreement aims to help African countries build the productive capacities they need to integrate regionally and participate in world trade more equitably. The two organizations will draw on the depth and breadth of their experiences and prioritize five key areas. These include enhancing cooperation on trade in goods, addressing non-tariff measures and non-tariff barriers and improving trade facilitation and customs cooperation across Africa.
After overperforming in its post-pandemic recovery in 2021, Africa’s economic growth will expectedly lag in 2022. IMF projects that growth will drop from 4.6% in 2021 to 3.8%. The global shocks from Russia’s invasion of Ukraine have dampened Africa’s economic prospects. The high import bills and fuel prices continue to strain import-dependent countries’ fiscal and external balance sheets. The strain risks the recent poverty alleviation progress. Consequently, Africa will remain the only developing economic zone and emerging market where per capita incomes will not revert to the pre-pandemic levels by 2023.
Recent economic diversification has incredibly cushioned East Africa against the pandemic shocks. Moreover, solid agricultural performance, closer intra-regional trade, and public spending on flagship infrastructure projects have supported the region’s GDP.
Africa has continued its post-pandemic trade recovery. Following a sharp decline during the pandemic, exports have since risen. According to IMF’s Direction of Trade Statistics (DOTS), exports topped pre-pandemic levels to reach $150 billion in the first quarter of 2022. However, similar to GDP, the sub-regions have not equally contributed to African trade growth. Since 2019, exports from East Africa have remained reasonably steady. However, some countries in the region have individually stood out. For instance, Rwanda accounts for just 8% of East Africa’s trade.
Africa’s governance, peace and security landscape has continued to present a very mixed picture, with progress in some countries and regions, stagnation in others and retrogression in yet others, with grave implications for the African Continental Free Trade Area (AfCFTA). The African Union and the Regional Economic Communities (RECs), alongside the United Nations and other stakeholders, are trying to prioritize and strengthen governance systems and promote peace and security on the continent.
Trade agreements can foster integrated economies and reduce conflict by creating disincentives among states and their actors due to the disproportionate cost of conflict. In states with high government accountability, low levels of income inequality and ethnic divisions, changes in export prices of certain high demand commodities have also been found to have limited effects. This suggests that overall public governance and systematised trade governance aimed at wide scale income generation, could positively contribute to fostering peace and stability. However, at national level, the marketplace as the locus for trade is a space where conflict becomes manifest and therefore holds the potential to contribute to both peace and development outcomes.
Against this background, the Economic Commission for Africa (ECA) commissioned a study entitled “Realizing the Triple Nexus And Trade: Towards A New Agenda For Africa” to explore the contribution of trade in the transitions from fragile, unstable and emergency contexts to sustainable development within the framework of the triple humanitarian-development-peace nexus.
Against this background, the Economic Commission for Africa (ECA) commissioned a study entitled “Realizing the Triple Nexus And Trade: Towards A New Agenda For Africa” to explore the contribution of trade in the transitions from fragile, unstable and emergency contexts to sustainable development within the framework of the triple humanitarian-development-peace nexus.
Africa’s governance, peace and security landscape has continued to present a very mixed picture, with progress in some countries and regions, stagnation in others and retrogression in yet others, with grave implication for the African Continental Free Trade Area (AfCFTA). Economists, social and political researchers have devoted vast efforts to better understand the causes of civil conflicts. Trade agreements can foster integrated economies and reduce conflict by creating disincentives among states and their actors due to the disproportionate cost of conflict. It is against this background that the Economic Commission for Africa (ECA) commissioned a study entitled “Realizing the Triple Nexus And Trade: Towards A New Agenda For Africa” to explore the contribution of trade in the transitions from fragile, unstable and emergency contexts to sustainable development within the framework of the triple humanitarian-development-peace nexus. Using the conflict assessment tools of the Fragile States Index (FSI) collated by the Fund for Peace, it identifies and analyses states with high levels of vulnerability to protracted social conflict due to the complex interplay of political, social and economic factors.
Progress on the implementation of the COMESA liberalization programme on trade in services in the COMESA region is the focus of a three- day meeting of experts that got underway in Lusaka, Zambia today. This is the 12th meeting of the Committee on Trade in Services (TIS) whose key mandates include trade negotiations amongst Member States. During this meeting, the Committee will review the status of negotiations including what has been achieved and the challenges faced, with the goal being to conclude negotiations on the sectors that have been prioritized for liberalization. These are communication, finance, tourism, transport, business, construction and energy-related services.
Assistant Secretary General of COMESA, Dr Kipyego Cheluget, who opened the meeting noted that even though trade liberalization is a continuous process, the negotiations on COMESA trade in services (TIS) liberalisation programme has been lagging. “Trade in services accounts for more than 70 per cent of the global output and 51.1 per cent of labour force and thus playing a significant role in the COMESA economies,” he said. “A slow pace of negotiations cannot deliver effectively the expected results and within the given time- frames.”
Ruto navigates EAC muddy waters, but he has a grand trade plan (The East African)
Speeches by Kenyan President William Ruto since his inauguration on September 13 have left no doubt about the East Africa he wants — a borderless bloc. And he’s banking on his friend, Ugandan leader Yoweri Museveni, to help push the agenda of eliminating barriers in trade, customs, financial services and even cultures.
President Ruto lamented that border barricades have impacted the region’s growth pace. “It is our place as leaders and citizens of East Africa to work together so that we can transform our borders, which today stand out as barriers, and convert them to bridges so that goods, services and people can move across the region without any impediment,” he said.
Taxes still giving traders in East Africa sleepless nights (The East African)
The business community in the region want taxes and protectionist laws reviewed to make their products competitive. The complaints emerged at the end of a manufacturers exhibition last week in Kampala, during which they lamented taxation regimes, which are making it harder to sustain businesses. “Your tax collectors are prioritising collecting the last penny and sometimes beyond. When you tell them to broaden the tax base, they only understand registering more taxpayers, when you tell then to deepen the tax base, they understand charging more tax to the existing taxpayers; Excise duty here and there,” Deo Kayemba, the chairman of the Uganda Manufacturers Association (UMA) told an audience, among them told Prime Minister Robina Nabbanja, who represented President Yoweri Museveni at the closure of the week-long trade fair on Monday.
“None of the tax collectors thinks about the survival, sustainability and continued growth of the taxpayers and we think this is not helping the long-term growth of the economy,” Mr Kayemba said. Ms Nabbanja promised to address the concerns of the business community. But the complaints over tax are just among several issues that continue to plague the wider East African Community, 12 years after the Common Market Protocol was mooted to establish easier movement of goods, persons, labour, services and capital. Domestic market protectionism also featured among the complaints.
The European Union (EU) is preparing new regional programmes that will benefit the Southern African Development Community (SADC) Region and help strengthen the EU-SADC partnership by bringing it to a new level, representative of the EU Delegation to SADC and the Republic of Botswana, Mr Jose Angel Marta Beccera, has said. He was speaking at the official launch of the workshop on Intellectual Property Rights (IPRs) organised by the SADC Secretariat under the Support to the Industrialisation and Productive Sectors programme (SIPS) on 5th October 2022.
Mr Beccera said in the new Multiannual Indicative Programme 2021-2027 for Sub-Saharan Africa, the EU will focus its efforts on promoting enabling environments for further economic integration and trade. Under Priority Area 5 (Sustainable Growth and Decent Jobs), the Indicative Programme will support the harmonisation of trade related policies in order to strengthen Africa’s competition regime through the establishment of both modern competition rules at all levels and independent competition authorities.
Regional Experts in charge of issuing and control of visas have converged in Abuja for a three (3) day technical meeting to validate the recommendations of the previously held Task Force meeting, harmonize the cost and design of the visa and deliberate on other associated modalities related to the implementation of the ECOVISA.
ECOWAS Commissioner for Economic Affairs and Agriculture, Massandje Touré-Litsé welcomed participants on behalf of the President of the ECOWAS Commission, H.E. Dr. Omar Alieu TOURAY, and the new management. She reemphasized the commitment of ECOWAS Commission towards the actualization of ECOVISA which will boost tourism in the ECOWAS region as a major economic activity in terms of income generation, job creation, foreign exchange earnings and cultural exchange which cannot be overlooked. She also underlined the benefits the implementation of the ECOVISA will bring to the region in terms of foreign direct investment drive, strengthened private sector for industrialisation that can boost economic development. Finally, she stated that ECOVISA would play a vital role in the implementation of the African Continental Free Trade Area (AfCFTA) as a tool to allow citizens of third countries to focus on our region.
President of the African Development Bank Group Dr Akinwumi Adesina says civil society organizations are essential partners in the Bank’s effort to build the continent’s resilience to climate change. Addressing the opening plenary of the 2022 Civil Society Forum on Thursday in the Ivorian economic capital, Abidjan, Adesina highlighted the African Development Fund’s Climate Action Window to mobilize up to $13 billion to provide 20 million farmers with climate-smart agricultural technologies and 20 million farmers and pastoralists with weather-indexed insurance. The scheme will also revive 1 million hectares of degraded land, and provide renewable energy for about 9.5 million people.
The two-day forum was held under the theme “Engaging civil society for climate resilience and just energy transition.” It fostered an open dialogue with civil society actors, allowing them to share their views and proposals ahead of the global climate summit, COP27, slated for mid-November in the Egyptian resort city of Sharm El Sheikh.
The Board of Directors of the African Development Bank Group has approved a $50 million Risk Participation Agreement (RPA) for Natixis, a French Bank. The agreement will enable Natixis to support African banks and their small and medium-sized enterprise (SME) clients to undertake more regional and international trade. The agreement is expected to help achievement of a cumulative trade volume of $430 million over the next three years
“With this new operation, we are strengthening the trusting relationship between the various players in the African banking system in order to accelerate the development of trade,” said Mohamed El Azizi, Director General of the African Development Bank for North Africa. He added: “This is another step towards the realization of the African Continental Free Trade Area which will unleash the full growth potential of the continent and create new opportunities and jobs.”
The 27th Conference of Parties (COP27) on Climate Change will take place in Egypt from on 6 – 18 November and COMESA is gearing up for robust participation. On 6 – 7 October 2022, representatives from 13 Member States met in Harare, Zimbabwe for a preparatory workshop to develop a Regional Position Paper. In the paper, the delegates put together strategic regional priorities and critical thematic issues for submission to the African Group of Negotiators (AGN) for the COP27. The agreed priorities will be included in the negotiating texts of the global discussions.
Former President John Dramani Mahama has said African imports from China amount to roughly $148 billion, while exports from Africa to China is estimated at roughly $106 billion, hence, it is important to work together to bridge this trade deficit. He said the takeoff of the African Continental Free Trade Area (AfCFTA) will further bolster free trade between the continent and China but the concern should focus on how this trade benefits countries on the continent as much as it benefits China, as China is one of Africa’s biggest bilateral trading partners and will remain so.
In his keynote address to open the virtual Abuja Forum 2022 organised by Gusau Institute on Thursday, 13 October 2022, Mr Mahama noted that Ethiopia should be a model for Africa’s relations with China.
“Why should the rest of Africa not look up to that model and get the support of China to develop same and contribute to a great industrialisation drive on the continent?” he quizzed.
The perfect storm of crises hitting the world has strong trade dimensions, hence trade solutions must be at the heart of global efforts to respond to the challenges, UNCTAD Secretary-General Rebeca Grynspan said on 13 October. The combined effects of the COVID-19 pandemic, the climate emergency and the war in Ukraine have accelerated a global cost-of-living crisis that could plunge tens of millions more people across the world into hunger and poverty this year. Rising trade costs, especially in maritime transport, have contributed to soaring food and energy prices, which have hit record levels this year.
Trade restrictions, which now cover about 10% of all calories traded worldwide, have limited global supplies.
“If the problem has a trade dimension, then the solution must also have a trade dimension,” Ms. Grynspan said as she opened an UNCTAD side event at the 77th session of the United Nations Economic and Financial Committee.
Monetary and fiscal policy moves in advanced economies risk pushing the world towards global recession and prolonged stagnation, inflicting worse damage than the financial crisis in 2008 and the COVID-19 shock in 2020, UNCTAD warns in its Trade and Development Report 2022. According to the report, rapid interest rate increases and fiscal tightening in advanced economies combined with the cascading crises resulting from the COVID pandemic and the war in Ukraine have already turned a global slowdown into a downturn with the desired soft landing looking unlikely.
UNCTAD expects the world economy to grow 2.5% in 2022. Prospects are worsening, with growth in 2023 expected to decelerate further to 2.2%, leaving real GDP still below its pre-pandemic trend by the end of next year and a cumulative shortfall of more than $17 trillion -- close to 20% of the world’s income.
Net capital flows to developing countries have turned negative with the deterioration of financial conditions since the last quarter of 2021, the report says. On net, developing countries are now financing developed ones.
Despite multiple crises of the past two years, countries and municipalities have remained committed to pursuing digital government strategies — many implemented specifically to address the impacts of the COVID-19 pandemic. Yet, many have fallen short in providing adequate online services, according to the 2022 edition of the United Nations E-Government Survey – The Future of Digital Government.
Africa’s digital infrastructure gap is physical (TechCabal)
WTO tasks Africa on adopting digital technology for trade (The Guardian Nigeria)
To attain the objective of economic integration and sustainable development on the continent as enshrined in the Africa Agenda 2063 of ‘The Africa We Want’, the World Trade Organisation (WTO) has harped on the need for adoption of digital technology for trade in Africa. At the WTO Public Forum 2022 held recently in Geneva, Switzerland, the Lead Advisor, Dynamics Impact Advisory (DIA), Gbemisola Osadua, spoke on harnessing technology and digital innovation in order to advance Africa’s Trade and Sustainable Development Agenda during the working session.
In her remarks at the session, President of Borderless Trade Network (BTN), Dr. Olori Boye-Ajayi, specifically highlighted the peculiar challenges that women encounter while trading on the continent in relation to harnessing the potential of digital innovations.
Also speaking, the CEO of Supply Chain Africa (SCA), Adebayo Adeleke, made emphasis on Africa’s disjointed and fragmented economic and trade situation post-COVID.
On his part, Head of Trade Logistics Branch of United Nations Conference on Trade and Development (UNCTAD), Jan Hoffmann, spoke on how technological advancement would be faster in the future than it is now.
“But domestic policies are just one part of the equation,” she said, adding that “we must also intensify work to develop and strengthen international standards, norms and rules to build a truly global and inclusive digital economy that benefits all, including small and women-owned businesses and least developed countries.” “To turn the huge potential of digital trade into tangible benefits, governments must deploy the right policies, including policies to build trust and confidence in the digital economy and help mobilize the massive investments needed to expand the digital economy and shrink the digital divide,” DDG González said.
To help mitigate the impacts of soaring food prices and grains, worsened by Russia’s war in Ukraine, the African Development Bank in May launched the African Emergency Food Production Facility to enable production of 38 million tonnes of food over the next two years.
The alarming signs of growing acute food insecurity should make us rethink the way we tackle hunger crises by addressing the root causes rather than just treating ad hoc symptoms of hunger, Director-General of the Food and Agriculture Organization of the United Nations (FAO) QU Dongyu said today. He spoke at a special side event looking at how to change the humanitarian game plan to better meet people’s needs and priorities and reverse the march of hunger across the planet.
Sending a special message to the event, Secretary-General Antonio Guterres said it was taking place “at a challenging moment for global food security”. Secretary-General António Guterres delivers a message via video link at a FAO World Food Day event held in Rome, Italy.
The 55-member body was founded in July 2002, and ambassadors met to discuss how UN collaboration with the organization has grown, and where progress still needs to be made. “Over the past 20 years, the United Nations and the African Union have developed a unique partnership, rooted in the principles of complementarity, respect and African ownership – a partnership that has become a cornerstone of multilateralism,” said Mr. Guterres. He listed some of the latest highlights in their cooperation, including initiatives to support the timely return to constitutional order in Burkina Faso, Guinea and Mali, conducted jointly with the West African regional bloc, ECOWAS.
World Cotton Day marked on 7 October is an opportunity to celebrate and show the positive impact of this important commodity. Cotton is a source of income for over 100 million families worldwide, many of them small farmers in rural communities in developing countries. A single tonne of cotton provides year-round employment for 5 people on average, often in some of the most impoverished regions, according to United Nations estimates. “But the importance of cotton for many developing countries extends beyond its producers and those directly or indirectly engaged in the value chain,” UNCTAD Secretary-General Rebeca Grynspan said in a statement.
Ms. Grynspan said it’s important for developing countries to reap the full benefits offered by cotton, by addressing both old and new challenges present in the cotton value chain.
First, productivity must be increased to produce cotton at a scale that can feed the cotton industry.
Second, adequate, timely and affordable access to inputs like fertilizers remains challenging in several cotton-producing developing countries, especially following the war in Ukraine, which has produced a massive fertilizer crunch.
Third, the cotton sector faces the rising challenge of climate change, especially the elevated risk of extreme weather events, in countries where farmers have very limited access to risk-mitigating measures such as insurance.
Fourth, efforts need to be devoted to fostering higher and more stable prices for cotton farmers, increasing access to post-harvest services such as transport, and investing in the production of cotton by-products. This could boost the benefits of this commodity by creating a wider industry cluster around it.
In his opening remarks at the launch, Mr Diop said: “Global trade finance gaps increased during the pandemic. Supply chain pressures, inflation, and the war in Ukraine have only exacerbated the problem. This study couldn’t be timelier. There is enormous potential for an economic boost in West Africa by harnessing intra-Africa trade, but we will need coordinated action from governments, the private sector, and multilaterals to build the capacity of local lenders and improve access for SMEs.”
He continued: “The report focuses on improving the competitiveness in the region although it also shows this potential has been constrained by the costs of trade.”
More WTO news