tralac Daily News
South Africa’s economic growth is expected to slow to 1.9% in 2022, says Finance Minister Enoch Godongwana. The Minister said this in the National Assembly on Wednesday while delivering the 2022 Medium Term Budget Policy Statement (MTBPS) at the Cape Town City Hall. Addressing Members of Parliament, Godongwana said this level of growth is “too low” to support the country’s developmental goals. “Accordingly, we must take action to put our economy on a higher growth trajectory,” he said.
The projection is a significant decline from 2021’s 4.9%. The forecast, said the National Treasury, is in response to global and domestic shocks. Growth is projected to average 1.6% from 2023 to 2025.
some of the risks outlined in the 2022 Budget had materialised, including slower global growth from supply chain disruptions and stringent lockdown restrictions in China, surging inflation and tighter monetary policy stances. “South Africa’s structural economic constraints – including unreliable electricity supply, high levels of market concentration, inefficiencies in network industries and a high cost of doing business – limit the rate at which the economy can grow and create jobs.”
National Infrastructure Plan 2050 Phase 2 gazetted for public comment (Engineering News)
South Africa’s minister of forestry, fisheries and the environment Barbara Creecy has called for the transformation of multilateral financing institutions to be “more fit for purpose as the world journeys towards cleaner energy”. Speaking at a national stakeholder consultation on Monday ahead of the COP27 talks next month, Creecy said the current limited access to finance, where 70% of the world’s poor nations were not eligible for multilateral finance, the extremely high borrowing costs coupled with high debt levels were not sustainable and presented a threat to climate change ambitions for developing countries.
She said: “We would argue that given the enormity of the resources required by developing countries over the next 10 to15 years, these resources are not only going to be met through climate financing. They are probably going to need to be met through the transformation of international financial structures and through reform of the multilateral development banks so that these institutions can be more fit for purpose to assist developing countries to address sustainable development and just transition imperatives.”
The finance currently available was mostly loans and not grant financing. South Africa has finalised its implementation plan of the approximately R157 billion made up mostly of loans it’s to receive from the just transition financing partners.
30% food price shock warning for South Africa (BusinessTech)
The Bureau for Food and Agricultural Policy (BFAP) has published its latest food inflation brief, warning of possible food price shocks for South Africa in 2023 if local crop production is thrown off course by any unforeseen events. The group noted that even though food inflation in South Africa remains high – and will likely remain elevated in 2023 – local prices have been kept lower than international markets due to surplus local production.
“South Africa continues to trade at export parity for key commodities such as maize, sunflower, soybeans and canola,” it said. “This essentially means that surplus production is keeping local prices low and that inflationary trends are driven by global prices, the weak exchange rate and growing costs of logistics and processing of products, such as transport, electricity and wages.”
Zimbabwe says it is on the brink of its biggest wheat harvest in history, but bushfires and impending rains are threatening crops yet to be harvested. Like other African countries, Zimbabwe has for decades relied on imports to offset low local production. After the Russia-Ukraine conflict resulted in global shortages and price hikes, the country wanted to ensure “self-sufficiency at all costs,” Deputy Agriculture Minister Vangelis Haritatos told The Associated Press this week. The country expects to harvest 380,000 tons of wheat, “which is 20,000 more than we require as a country,” Haritatos said. That is up from about 300,000 tons produced last year.
“We are most likely to get the highest tonnage since 1962 when wheat was first introduced to Zimbabwe. A lot of countries are facing shortages, but the opposite is happening in Zimbabwe,” Haritatos said.
Zimbabwe is looking at using its anticipated surplus of grain to build “a small strategic reserve” for the first time in its history, agriculture minister Anxious Masuka told journalists earlier this month. This would cushion Zimbabwe against future shocks.
“Trade agreements can promote integrated economies and reduce conflicts,” Deputy Executive Secretary of the UN Economic Commission for Africa (ECA), Ms. Hanan Morsy said at the opening of the Inaugural African Union Policy Conference on Promoting the Peace, Security, and Development Nexus, which is being held from 25 to 27 October in Tangier, Kingdom of Morocco.
The first State of Instant and Inclusive Payment Systems in Africa report (SIIPS – Africa) has been launched with a call for more inclusivity to leverage the current payment systems and infrastructure to benefit Africans and push the African Continental Free Trade Area agenda. The report, prepared by AfricaNenda, the United Nations Economic Commission for Africa (UN ECA), and the World Bank (WB) was launched this October 25, 2022, on the sidelines of the 2022 Global System for Mobile Communications Association Mobile World Congress (GSMA- MWC) on happening in Kigali city.
Robert Ochola, CEO AfricaNenda said “IPS is critical in the successful implementation of the African Free Continental Trade Area (AfCFTA) Agreement by providing instant and inclusive payment solutions for the majority of businesses on the continent, including SMEs”
The report provides a detailed landscape of Instant Payment Systems (IPS) in Africa and highlights ways in which they can become more inclusive to leave no African behind in the digital era, highlights how they can create opportunities and advance financial inclusion, and benchmarks instant payments in Africa.
The East African Community (EAC) has kicked off the verification process to admit Somalia into the regional bloc. According to the EAC secretary general, Dr. Peter Mathuki, the verification team met with the President of Somalia, Hassan Sheikh Mohamud, on Tuesday to discuss the modalities of fast-tracking Somalia’s amalgamation into the regional bloc of Uganda, Kenya, Tanzania, Rwanda, Burundi, South Sudan, and the Democratic Republic of Congo (DRC). During his meeting with the President of Somalia, Mathuki said that the leader of Somalia expressed “political goodwill to actualize” the EAC summit decision to admit Somalia into the regional conglomeration.
Somalia first applied to join the EAC in 2016, but the application was rejected by officials, citing weak institutions and unending conflict.
In 2019, the former Somalia President, Mohamed Farmaajo, re-applied, but the verification was delayed until early 2022, when the new President, Mohamud, rejuvenated the bid.
Two bills in line with the establishment of the East African Community (EAC) Monetary Union are among the key businesses that East African Legislative Assembly (EALA) intends to transact during its sessions being held in Kigali.
Martin Ngoga, EALA Speaker, said they are EAC Surveillance, Compliance and Enforcement Commission Bill, 2022 which intends to establish the EAC Surveillance, Compliance and Enforcement Commission, and EAC Financial Services Bill, 2022, which aims to establish the EAC Financial Services Commission as an institution of the Community.
He made the observation on Tuesday, October 25, during a press conference opening the EAC legislative organ’s session, which is taking place at the Parliament of Rwanda’s premises from October 23 to November 05, 2022.
Other bills to be discussed by the regional parliament sitting in Kigali include the EAC Supplementary Appropriation Bill, the EAC Customs Management (Amendment) Bill, 2022, which aims to streamline and rationalise customs administration, operations and procedures adopted by the Community.
The Judge President of the East African Court of Justice, His Lordship Justice Nestor Kayobera, has called for the granting of administrative and financial independence to the Court to enable it execute its mandate more effectively.
The Judge President said that the much-needed autonomy would place the regional court at par with its counterparts in the Partner States where national judiciaries enjoy financial and administrative autonomy from the executive.
“Among the fundamental principles that governs the achievement of the objectives of the Community, include adherence to good governance which encompass the rule of law, transparency, accountability, democracy, respect and promotion and protection of human rights,” said Justice Kayobera.
Justice Kayobera said that through teamwork and good faith, the Court would achieve more while executing its mandate while judicial diplomacy would ensure that the Court has a human face even as it administers justice.
ENVISAGED construction of a standard gauge railway (SGR) from Kigoma in Tanzania to DR Congo through Burundi is set to massively boost regional trade within the East African Community (EAC). Trade and Policy Advisor of the East African Business Council (EABC), Mr Adrian Njau told the `Daily News’ in a telephone interview yesterday, that the project would propel trade in member states of the EAC.
“Construction of the railway line to connect the port of Dar es Salaam to the hinterland in Burundi and DRC is a very good initiative which will boost trade among these countries.
“We really need to construct transport infrastructure to enable EAC countries to improve trade among ourselves. The railway line to Burundi and DRC will enhance regional trade value chain among the member states of the EAC,” he commented.
Africa is endowed with a vast wealth of natural resources, ranging from precious stones such as gold and diamonds to fossil fuels, and has 40 percent of the world’s gold and up to 90 percent of its chromium and platinum. The largest reserves of cobalt, diamonds, platinum and uranium in the world are in Africa. It holds 65 percent of the world’s arable land and 10 percent of the planet’s internal renewable fresh water source. In addition to its natural endowments, Africa has the youngest population in the world; around 60 percent of the continent’s population is currently below 25 years of age. With a population of about 1.3 billion people, the continent is one of the world’s largest free trade markets in the context of the new implemented African Continental Free Trade Area (AfCFTA) framework.
Although, African industry is underperforming in terms of quality employment creation and total factors productivity. The African continent has not advanced to satisfactory industrialization levels. To reverse this situation, the attainment of inclusive and sustainable industrialization and economic diversification in Africa is a priority item on the development agenda.
Africa’s drive for industrialization will benefit from an innovative policy mix that combines the focus on traditional manufacturing with a forward-looking focus on new and emerging high-sophisticated opportunities. This will yield certainly significant economic progress across Africa, particularly with the new Africa Industrial Revolution Strategy (AIRS) framework associated with the fully integrated African market under the AfCFTA.
Despite historical policy limitations, Africa now has another chance. Some attributes of the regional economy as well as global conditions present the continent with new frontier opportunities to industrialize, several of which transcend the scope of manufacturing.
Will Africa’s metals boom suffer the same curse as oil? (The East African)
Mechanical diggers are hard at work in the bleak landscape of the Moanda open-cast mine in Gabon, using giant jaws to rip out manganese and then dump the ore into trucks with a crash.
Decarbonisation of the world economy will take centre stage at the UN’s COP27 climate talks in Egypt next month. And as the great transition goes into higher gear, eyes are turning to Africa. Its soil is rich in manganese, cobalt, nickel and lithium -- crucial ingredients in cleaner technology for generating or storing power.
But hopes that the mineral boom will translate into a new dawn of prosperity in the world’s poorest continent are clouded by memories of what happened with oil. In Africa’s oil-producing countries, black gold meant a gush of wealth for a well-connected few -- but only drops for the needy majority.
Africa’s potential in new-age minerals is “huge”, said the former chief economist of the African Development Bank, Rabah Arezki, who pointed out that reserves are not even known because so little exploration has been done. But, he said, “there is very little reason to think that this windfall will benefit the people of Africa, particularly because of governance concerns.”
A big problem is that Africa is typically used as a source of raw materials, and rarely for processing them into goods of higher value, said Gilles Lepesant, a geographer at the French National Centre for Scientific Research (CNRS).”If activity is limited to mining and extracting ore, Africa will reap no benefit from the energy transition in Europe. It’s absolutely necessary to invest in the value chain,” he said.
Africa’s digital economy is estimated at $115 billion today and is expected to grow six times to $712-billion by 2050, according to a 2022 report published by Endeavour Nigeria. The opportunities and benefits of digitisation are extensive. We saw this during the pandemic when connectivity and mobile devices became the lifeline for many Africans when they needed to keep their homes, businesses and communities functioning despite widespread disruptions. The Covid-19 pandemic also accelerated demand for digital solutions and digital financial inclusion, super-charging interest in digital innovation across the region.
None of these benefits, however, will have a real impact on the lives and livelihoods of African citizens going forward if policy does not keep up with technology and innovation. Some existing policies and regulatory practices are not enabling the growth of the digital economy and are in some ways preventing a number of African States from fully reaping the economic and socio-economic benefits that connectivity and technology can provide. Restrictive data-localisation laws, unclear and underused adequacy requirements and a lack of standardisation in policy and legislative terminology remain major hurdles for the continent.
Given the historic infrastructural deficit that exists across the developing world, it is important that we focus on collaboration, innovation and putting the necessary infrastructure ecosystems and policy frameworks in place to increase Africa’s participation in the digital economy as well as its
Stakeholders in the African travel and tourism sector have called on governments across the continent to match their various promises of open borders and seamless connectivity with actions that will soar intra-African travels and exchanges. The stakeholders, comprising aviation, hospitality, travel agencies, tour operators, destination management companies, convention bureaus, among others, made the call at the ongoing African Tourism Leadership Forum (ATLF 2022) in Gaborone, Botswana.
Speaking on the rationale for supporting intra-Africa travels and exchanges, Kwakye Donkor, CEO, African Tourism Partners, organisers of the forum, noted that the 54 countries and their huge population offer great business potential for SMEs and private sector in the travel sector, amid booming travels that will impact Africa’s economy positively.
He noted further that a booming intra-Africa travel will be possible with government and private sector collaboration, but that government has to lead with more action on enabling policies than promises.
Africa may need to take a leaf out of Europe’s book when it comes to integration between states for ease of travel if it is to win in its quest to tap into the intra-Africa tourism market. That is according to Insights Expert and Market Data Analyst, George Shingai. Speaking on the sidelines of the 5th Africa Tourism Leadership Forum currently underway at the Grand Palm Hotel Convention Centre in Gaborone, Shingai says travel between African states has for a long time been handicapped by protectionism within African states.
“In the past, there has been a lot of protectionism that has existed among African states because all the African states were trying to protect their local carriers. However, with the implementation of Satam, which is a single African air transport market that aims to unify all the African countries into one umbrella and a single aviation market, I think we will start to see all these barriers do down.”
The newly appointed International Organisation for Migration (IOM) Regional Director for Southern Africa, Mr Ashraf El Nour, presented letters of credence to the Southern African Development Community (SADC) Executive Secretary, His Excellency Mr. Elias M. Magosi, in Gaborone, on 22nd October, 2022.
The meeting presented an excellent opportunity for the two leaders to reflect on the ongoing cooperation as outlined in the Memorandum of Agreement (MoU) which was signed in 2016. The MoU provides for cooperation in areas that include labour migration; counter trafficking; combatting smuggling and irregular migration; addressing mixed migration; migration health; and immigration and border management.
So far SADC has benefitted from collaboration with the IOM on the development of the Regional Migration Information Management system (Migration Data) and technical assistance in the development of the Regional Migration Policy Framework and Action Plan 2020-2030. Furthermore, IOM and the International Labour Organisation (ILO) are actively supporting implementation of the SADC Labour Migration Action Plan (2020-2025) at Member States level, and at the regional level. A SADC Technical Committee on Labour Migration (TCLM), in which IOM participates, has been put in place to oversee implementation of the action plan.
Through the Africa Regional Migration Programme (ARMP), funded by the United States Department of State Bureau of Population, Refugees and Migration, IOM has extended technical and financial support towards the convening of a TCLM meeting scheduled for 26th – 28th October 2022 in Johannesburg, South Africa. The meeting will enable Member States to finalise and submit their country reports on the implementation of the SADC Labour Migration Action Plan.
Nigeria, other LDCs account for 1.3% of global manufacturing (The Nation Newspaper)
Despite comprising 15 per cent of total land area and nearly 14 per cent of the world population, Nigeria and other Least Developed Countries (LDCs) in Africa account for only 1.3 per cent of global Gross Domestic Product (GDP), 1.2 per cent of industry value added and 1.0 per cent of Manufacturing Value Added (MVA).
The United Nations Industrial Development Organisation (UNIDO), which made this known in the 2022 edition of its ‘International Yearbook of Industrial Statistics,’ said the share of MVA in GDP, an indicator of structural transformation, remains low in Nigeria and other African LDCs and Haiti. The publication, which serves as an indispensable introduction to the rich databases maintained by UNIDO and sheds light on the world of industrial development, defined LDCs as “low-income countries suffering from the most severe structural impediments to sustainable development.”
In 2022, 46 economies are classified as LDCs. They are located all over the world, but are mostly found in the African continent. In fact, 33 LDCs are located in Africa, nine in Asia, three in Oceania and one in the Americas. LDCs account for 1.08 billion of the world’s population and a combined GDP of $1.16 trillion.
Trade and transport corridors, the major routes that facilitate the movement of people and goods between regions and countries, have existed for millennia. The Trans-Saharan Road (TSR) corridor, one of the oldest in Africa, comprises a 4,500-kilometre main road that links Algeria, Niger and Nigeria with an additional 4,600 kilometres of highways connecting Chad, Mali, Niger and Tunisia. More than 80% of the corridor is paved or asphalted.
UNCTAD and the Islamic Development Bank (IsDB) launched on 25 October a report providing recommendations that countries along the corridor can implement with the Trans-Saharan Road Liaison Committee and the support of development partners to transform the TSR from a road transport corridor to an economic one.
The study entitled “Towards an economic corridor: Commercializing and managing the Trans-Saharan Road Corridor” is an outcome of a project aimed at promoting trade through a regional transport corridor management mechanism.
“An economic corridor will enable TSR nations to move towards greater continental integration,” said Shamika N. Sirimanne, UNCTAD’s director of technology and logistics. “This joint study considers ways of achieving this through greater connectivity, transit and trade.”
Elevated commodity prices could prolong inflationary pressures, according to the World Bank’s latest Commodity Markets Outlook report. In U.S. dollar terms, the prices of most commodities have declined from their recent peaks amid concerns of an impending global recession, the report documents. From the Russian invasion of Ukraine in February 2022 through the end of last month, the price of Brent crude oil in U.S. dollars fell nearly 6 percent. Yet, because of currency depreciations, almost 60 percent of oil-importing emerging-market and developing economies saw an increase in domestic-currency oil prices during this period. Nearly 90 percent of these economies also saw a larger increase in wheat prices in local-currency terms compared to the rise in U.S. dollars.
“Although many commodity prices have retreated from their peaks, they are still high compared to their average level over the past five years,” said Pablo Saavedra, the World Bank’s Vice President for Equitable Growth, Finance, and Institutions. ”A further spike in world food prices could prolong the challenges of food insecurity across developing countries. An array of policies is needed to foster supply, facilitate distribution, and support real incomes.”
The outlook for commodity prices is subject to many risks. Higher-than-expected energy prices could feed through to non-energy prices, especially food, prolonging challenges associated with food insecurity. A sharper slowdown in global growth also presents a key risk, especially for crude oil and metals prices.
Ukraine grain exports face vessel backlog as concerns grow over Black Sea initiative (Global Trade Review)
Authorities responsible for the safe export of Ukrainian grain from Black Sea ports are working to clear a backlog of vessels awaiting inspection, as concerns grow over whether the initiative will be renewed next month. The Black Sea Grain Initiative has been hailed as a “beacon of hope” for food security since its launch in August, after Russia’s blockade of Ukrainian ports left millions of tonnes of wheat, corn, sunflower products and other goods stuck in siloes. But this week, the Joint Coordination Centre (JCC), which comprises representatives from Russia, Turkey, Ukraine and the UN, announced there is now a backlog of 113 vessels awaiting inspection in Turkish waters, plus another 60 waiting to join the initiative. “The JCC is concerned that the delays may cause disruption in the supply chain and port operations. Over the last few days, the JCC has started registering again new vessels to join the initiative,” it says.
The WTO issued today (26 October) the latest edition of Trade Profiles, an annual publication providing key data on merchandise trade and trade in commercial services for 197 economies. Each profile displays a sectoral breakdown of the economy’s exports and imports, its main trading partners and its most traded products and services.
For merchandise trade, top exports and imports are listed for both agricultural and non-agricultural products. For trade in services, data is provided for transport, travel and other commercial services. Foreign affiliate statistics (FATS) and statistics on intellectual property are also provided.