tralac Daily News
Africa Day took place on Tuesday the 8th November 2022 at the Africa Pavilion at COP27 in Sharm El Sheikh, Egypt. The theme of the event was “Implementation of Climate Actions and Africa’s Responses for a Just and Sustainable Transition”, which closely aligns with the clarion call of COP27 i.e., “Together for implementation”.
In the run-up to COP27, stakeholders that included policy makers, researchers, civil society, youth, and media gathered in Windhoek, Namibia on the 24-28th October for the 10th conference on Climate Change and Development in Africa (CCDA-X). The event, which was attended by over 400 participants who represented all African sub-regions, produced key messages and recommendations as a contribution towards shaping Africa’s continuing climate change interventions, as well as guiding engagement at the global UNFCCC negotiations platform.
The outcome of the conference mirrored contemporary challenges that the continent continues to grapple with, such as just transitions, financing climate action, building climate resilience, bolstering adaptation, disaster risk reduction, and Article 6 of the Paris Agreement. Other pressing issues on the agenda included fostering a gender-responsive, inclusive and people centred transition, mitigation and adaptation action, Climate Information Services (CIS) and next steps in the establishment of the African Islands climate commission.
African Export-Import Bank (Afreximbank) has pledged to support Africa to bridge the USD250 billion climate finance gap in collaboration with other African financial institutions. Speaking at the ongoing COP27 Conference hosted by the Arab Republic of Egypt in Sharm El Sheikh, Denys Denya Afreximbank’s Executive Vice President – Finance, Administration & Banking Services said, “African financial institutions, with Afreximbank at the forefront, need to step in and bridge the finance gaps. With the right support and commitment, Africa can in addition achieve the vision and goals of the AfCFTA, helping Africa’s population grasp the opportunities within it, and ensuring it plays a leading role in revitalizing Africa’s climate adaptation and mitigation initiatives”.
He urged African financial institutions to offer both financial and technical support which would then be targeted at curbing Africa’s greenhouse gas emissions, ensuring the achievement of the goals under the AfCFTA are not derailed. While also speaking on the effects of climate change on the continent during COP27’s decarbonisation day, Dr. Elias Kagumya, the Bank’s Chief Risk Officer, commented that it is high time Africa turned to the continent’s vast mineral resources to finance adaptation, loss and damage and build resilience in the continent.
Dr. Elias added that, “With the world turning to clean energy technologies, the need for minerals like copper, lithium, nickel, cobalt and rare earth elements have and will continue to grow.”
Africa continues to be the least emitting continent, but the continent continues to battle unprecedented forest fires, droughts, soil erosion, landslides, cyclone, and floods, which are expected to get worse as temperatures rise.
For African governments and stakeholders, ensuring that the AfCFTA does consider a green transition is a huge mandate, and the implementation of the AfCFTA forms part of the larger solution to Africa’s climate change issues. However, critical financing is important to achieve this. And if done correctly, experts agree, AfCFTA can help in shaping the transition of African economies to green growth, climate adaptation and mitigation.
Global experts meeting during a panel session at the 27th global climate summit (COP27) in Egypt have endorsed a new climate finance roadmap to mobilize $1 trillion in annual external finance required by emerging markets and developing countries—excluding China. The roadmap draws on the findings of a recently released report, Finance for climate action: Scaling up investment for climate and development, produced by a panel of experts chaired by Vera Songwe and Lord Nicholas Stern.
Songwe said investment priorities must encompass transformation of the energy system, address developing countries’ growing vulnerability to climate change and undo earlier harm to natural capital and biodiversity. “The scale of investments needed in emerging markets and developing countries over the next five years and beyond will require a debt and financing strategy that tackles festering debt difficulties, especially those of poor and vulnerable countries,” Songwe said. She added that reforms must lead to a major expansion of domestic and international finance –public and private, concessional and non-concessional.
Access to energy is a catalyst for development anywhere in the world. In Africa, energy poverty has been a major constraint not just to economic development but increasingly to trade. “These constraints can only be addressed if there is access to energy, and the energy gap is closed. More than 600 million Africans have no access to energy, resulting in diminished industrialization.” Dr. Hippolyte Fofack, Afreximbank’s Chief Economist and Director Research and International Cooperation noted while addressing the media at the 27th UN climate summit (COP27) in Sharm el-Sheikh, Egypt.
“African governments are spending between 5-11 percent of their GDPs to adapt to climate impacts. With the increasing rate of famine, drought across regions, and rising conflict borne out of the climate crisis as neighboring communities fight for scarce resources, African development is at risk,” he noted.
The African Common Position on Energy Access and Just Transition stipulates that Africa will continue to deploy all forms of its abundant energy resources, including renewable and non-renewable energy, to address energy demand. Natural gas, green and low-carbon hydrogen, will play a crucial role in expanding modern energy access in Africa. Both in the short to medium term, while enhancing the uptake of renewables in the long term for low carbon and climate-resilient trajectory on the continent.
As the COP27 Climate Summit continues in Sharm El Sheikh, Egypt, the Africa pavilion is busy hosting crucial events on topics that matter to Africa as well as on pressing issues that are impacting the Continent. The High-Level Forum on Financing Energy Transition in Africa organised by the African Union Commission (AUC) and the International Energy Agency (IEA) on 9th November 2022. It deliberated on critical energy issues facing Africa and ways to mobilise adequate finance to accelerate energy access and energy security on the Continent, as well expanding innovative mechanisms to increasing climate finance flows to Africa in the context of ‘energy transition’.
Commissioner Abou-Zeid further recalled that African Common Position on Energy Access and Just Transition identifies financing as a critical pillar to achieving Africa’s targets of developing its energy sector along a low-carbon and climate-resilient pathway. “Despite its enormous energy needs and opportunities, Africa is only accessing 3% of climate finance leaving an annual financing gap of US$ 90 billion for its energy access and transition goals. This status quo has to change, and all stakeholders should demonstrate the willingness to make the required policy adjustments that will unlock the flow of financing necessary for energy access and energy transition in Africa.”
The African Union (AU), on the sidelines of COP 27 Climate Change Conference launched the Transition Fuels Oversight & Regulatory Management Accelerator (Transforma Platform), a new combined business, governance, and digital platform to connect African energy regulators, industry actors, and consumers around a common interface to advance Africa’s clean energy and green transformation agenda.
The launch of Transforma platform by the continent’s political and technocratic leadership signals the AU’s commitment to coordinating the search for durable and practical pathways to Africa’s sustainable future. This is germane considering 600 million people, or 43% of the total population, lack access to electricity, most of them in sub‐Saharan Africa. About 970 million people in Africa lack access to clean cocking with the attendant deaths and other health risks.
Transforma is a critical module of the 4D Digital Green Corridor jointly promoted by the AU and its strategic partners mobilized by AfroChampions. In the words of H.E. Yemi Osinbajo, “innovations like the 4D Digital Green Corridor and TRANSFORMA are critical to finance and more broadly, resource mobilization on the continent.”
The Digital Green Corridor creates an “integration highway” for African countries to harmonize regulatory and investment policies in ways that advance the continent’s green transformation by leveraging existing interstate legal frameworks such as the AfCFTA and supranational policy instruments such as the AU-led Green Recovery Action Plan for Africa (GRAP).
Digitalization of natural gas regulatory & safety frameworks, distribution networks, marketplace clearing and settlement mechanisms, and tokenization protocols should greatly advance the long overdue modularization of infrastructure needed to accelerate the rapid uptake of cleaner, cheaper, gas products across the services and manufacturing sectors. By further linking the Transforma platform to the AfCFTA Hub (www.afcfta.app) and the Trillion Dollar Framework, strong synergies with pre-existing AU-backed strategic initiatives to boost regional trade linkages while mobilizing and leveraging trans-frontier capital for Pan-African energy reform.
With much of it bathed in sunlight year-round, the continent has 60% of the world’s best solar resources. And it has enough wind potential in a year to meet its electricity demand 250 times over, with resources stretching all the way from Algeria to South Africa. Countries like the Democratic Republic of Congo and Ethiopia already cover more than 80% of their consumption with hydropower — but there is room to produce even more across the continent. Meanwhile, Kenya is a world leader in harnessing geothermal energy.
Though the use of clean power varies greatly across Africa, the continent as a whole still gets almost all of its energy from fossil fuels. As half of the population in sub-Saharan Africa doesn’t have access to electricity, there are hundreds of millions of customers waiting to enter the market.
Other continents electrified off the back of coal, oil, and gas and, to different extents, are now trying to transition to renewables. Could Africa skip fossil fuels and service new consumers with green energy?
In the past two-and-a-half years in South Africa, for instance, a range of mining companies and manufacturers, including Anglo American, Tronox Mineral Sands, Impala Platinum, Rio Tinto, Samancor, Sasol and Glencore, have made massive investments into large-scale renewable energy projects. There is a great opportunity to continue promoting the use of all forms of renewable energy and to explore other forms of clean technologies to boost Africa’s ailing electricity sector.
The United Nations Environment Programme (UNEP) recently released the thirteenth edition of the annual Emissions Gap Report ahead of the 27th Conference of Parties that is taking place in Sharm el-Sheikh, Egypt. As the name suggests, the report highlights the global trends in emissions of greenhouses gases (GHGs) and provides an overview of the gap between the projected emissions by 2030 and the levels to be maintained as per the Paris Agreement in order to limit the global temperature rise to well below 2°C.
The latest report, ‘Closing Window – Climate crisis calls for rapid transformation of societies’ finds that the international community is falling far short of the Paris goals, with no credible pathway to 1.5°C in place. The latest report is a testimony to inaction on the global climate crisis. It noted that despite the decision made in COP26 in 2021 held at Glasgow, UK to strengthen Nationally Determined Contributions (NDCs) for 2030, the progress has been poor.
In 2020, seven countries (China, USA, European Union, India, Indonesia, Brazil, and Russia which are G20 members) and international transport contributed to more than 55% of the total GHG Emissions. Together, G20 nations contributed to 75% of the total emissions in 2020.
The report focuses on Food systems, which account for one-third of all emissions a year in addition to being contributors to other environmental damage like land-use change, biodiversity loss, depletion of freshwater resources, and pollution of aquatic and terrestrial ecosystems. About 39% of this was from agricultural production which includes the production of inputs such as fertilizers.
An analysis by Our World in Data revealed that even if fossil fuel emissions are reduced to zero, the emissions from the food sector alone were enough to raise the temperature to 1.5°C. The United Nation’s Food and Agriculture Organization (FAO), CGIAR and The Rockefeller Foundation are hosting the first official ‘Food and Agriculture Pavilion’ at COP27 to have dedicated discussions on food system and agriculture.
In this regard, the report calls for demand-side dietary changes (including tackling food waste), protection of natural ecosystems, improvements in food production at the farm level and decarbonization of food supply chains which is expected to bring down the emissions to one-third of the current levels by 2050. Else, the emissions are expected to double. Further, changes at individual level and involvement of private sector along with government support like subsidies and tax reforms have been suggested.
While world leaders and negotiators are primarily concerned with the future at the UN climate change conference in Sharm el-Sheikh, Egypt, the latest Climate Change Performance Index is taking stock of the current state of global climate protection measures. The report, released on Monday, is published by environmental NGOs Germanwatch and the New Climate Institute, together with the global Climate Action Network. It assesses the climate protection measures of the European Unionand 60 other countries, which together are responsible for more than 90% of the world’s greenhouse gas emissions.
The global energy crisis sparked by the Russian war in Ukraine clearly shows how dependent the world still is on fossil fuels, said the report’s authors. Among them is Niklas Höhne, founder of the New Climate Institute.
“The energy crisis shows that ambitious climate mitigation is the most reasonable way to move forward economically,” he said. Renewable energies are more cost-effective than any newly built conventional power plant, and investments in energy efficiency have never paid off as they do today, he added.
The African Union, the African Development Bank Group and Africa50—in partnership with several global partners—have launched the Alliance for Green Infrastructure in Africa (AGIA), an initiative to help scale and accelerate financing for green infrastructure projects in Africa.
The launch ceremony took place on 9th November on the sidelines of the ongoing 27th annual global climate summit (COP27) in Sharm El-Sheikh, Egypt. The Alliance’s mission is to raise significant capital to accelerate Africa’s just and equitable transition to Net Zero emissions. It has two strategic objectives. The first is to generate a robust pipeline of transformational bankable projects. The second is to catalyze financing at scale and speed for Africa’s infrastructure.
The Alliance for Green Infrastructure in Africa will raise up to $500 million to provide early-stage project development capital. This is capital that will build a robust pipeline of bankable projects, starting with pre-feasibility stage all the way through to commercial and financial close. This is projected to generate up to $10 billion worth of investments in green infrastructure. This will be mobilized from a combination of co-investments, co-financing, risk mitigation and blended finance provided by Alliance members. This capital will also be drawn from other financial institutions and foundations, public and private global and African institutional investors, project sponsors, multilateral development banks’ sovereign operations, and from G-20 bilateral donors.
The Alliance’s focus sectors are energy, transport, water and sanitation, health infrastructure, broadband infrastructure, urban and rural infrastructure. It will support large-scale programs, such as mega solar projects or green hydrogen projects, as well as smaller venture capital initiatives like cleantech projects, energy storage or e-mobility solutions.
An African initiative to increase solar generation capacity to provide 250 million people with electricity access across Africa’s Sahel region for socio-economic development continues to attract financial support from around the world. Launched in 2019 by the African Development Bank Group and its partners, the Desert to Power initiative is designed to make Africa a renewable power house. Desert to Power will develop and provide 10 gigawatts of solar energy by 2030 across 11 countries where 64% of the population lives without electricity – with consequences for education, health and business. The project will positively impact Senegal, Nigeria, Mauritania, Mali, Burkina Faso, Niger, Chad, Sudan, Ethiopia, Djibouti and Eritrea.
At an event held during the 27th United Nations Climate Change Conference in Sharm El Sheikh on Friday, the Global Energy Alliance for People and Planet, represented by its executive director for Africa, Joseph Nganga, announced $35 million in support of Sustainable Energy Fund for Africa (SEFA) under the initiative.
The event — organized by the African Development Bank in the Africa Pavilion at COP27 titled Desert to Power – transforming the Sahel from fragility to resilience and prosperity — brought together government ministers, development partners and private sector representatives to discuss how to facilitate private sector investments In the Sahel.
“Desert to Power is a $20 billion initiative to do 10,000 megawatts of solar power … This will be the largest solar zone in the world and so we want to turn this into a real economic activity … one that will generate productive energy to be used by the countries across the Sahel,” Adesina said.
These systems are critical to maintaining the quality, nutritional value and safety of food, especially as an estimated 14 per cent of all food produced for human consumption is lost before it even reaches consumers. The increased investment is also required if the world is to meet the challenge of feeding an additional two billion people by mid-century.
The report by the UN Environment Programme (UNEP) and the Food and Agriculture Organization (FAO) was launched at the COP27 climate change conference underway in Sharm El-Sheikh, Egypt. “At a time when the international community must act to address the climate and food crises, sustainable food cold chains can make a massive difference,” said Inger Andersen, the UNEP Executive Director.
“They allow us to reduce food loss, improve food security, slow greenhouse gas emissions, create jobs, reduce poverty and build resilience – all in one fell swoop.”
Sustainable food cold chains can also make an important difference in efforts to achieve the Sustainable Development Goals (SDGs), according to FAO Director-General Dongyu Qu. “All stakeholders can help implement the findings of this report, to transform agrifood systems to be more efficient, more inclusive, more resilient and more sustainable – for better production, better nutrition, a better environment and a better life for all, leaving no one behind,” he said.
The food cold chain has serious implications for climate change and the environment, the report revealed. Emissions from food loss and waste due to lack of refrigeration totalled around one gigatonne of carbon dioxide equivalent in 2017, or roughly two percent of total global greenhouse gas emissions.
This sentiment echoed through dozens of pavilions and conference rooms in Sharm el-Sheikh on Saturday as COP27 turned its attention to the vital issues of adaptation, agriculture and food systems in the context of climate change. “We need to help rural populations build their resilience to extreme weather events and adapt to a changing climate. If not, we only go from one crisis to the next. Small scale farmers work hard to grow food for us in tough conditions,” Sabrina Dhowre Elba, Goodwill Ambassador for the UN International Fund for Agricultural Development (IFAD), said during a press conference.
“Trillions of dollars were made available to tackle the COVID-19 pandemic and its economic consequences. The same is needed for climate change. The same is needed for sustainable agricultural support. It’s crucial to the well-being and the food security of us all,” she added.
Dina Saleh, the Regional Director of IFAD, explained that failure to help rural populations to adapt could have dangerous consequences, leading to longer poverty, migrations and conflict. “This is why today we are calling on world leaders from developed nations to honour their pledge to provide the $100 billion a year in climate finance to developing nations and to channel half of that to have that amount to climate adaptation,” she underscored.
The International Islamic Trade Finance Corporation (ITFC) and United Nations Industrial Development Organization (UNIDO) Egypt Host a Panel Discussion on Cotton Traceability and Resilience During COP27 (ZAWYA)
On the sidelines of the ongoing 27th United Nations Climate Change Conference (COP 27) in Sharm el Sheikh, the International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank Group (IsDB), organized a joint session with United Nations Industrial Development Organization (UNIDO) Egypt titled ‘Egyptian and Sub-Saharan Africa Cotton Traceability for Resilience and Sustainability.
This session highlighted the strategies for boosting the ability of value stream participants to fully realize the potential of the climate-resilient textile and cotton sector in Egypt and Sub-Saharan Africa while increasing competitiveness and integration in regional and global value chains.
Egyptian cotton is mostly renowned for its outstanding physical fiber qualities, exceptional aesthetic performance, and unmatched durability. However, in the Egyptian cotton-textile value chain, cotton is both a contributor and a victim of climate change.
In response to these challenges, the UNIDO multistakeholder project, “The Egyptian Cotton Project,” supported by ITFC, began supporting Egyptian farmers in June 2020 to execute a methodical strategy for sustainable cotton growing as advocated by The Better Cotton Initiative.
During his keynote speech, Eng. Hani Salem Sonbol reiterated- “The African cotton sector has been a key focus of ITFC, particularly in all major producing countries, including Benin, Burkina Faso, Cameroon, Côte d’Ivoire, and Mali with US$ 1.4 billion in financing the cotton sector. Since its inception, ITFC has provided approximately US$7 billion in financing to the food and agriculture sectors. Farmers are one concrete example of how our impact manifests. ITFC also collaborates with UNIDO through the Better Cotton Initiative because of our long-standing involvement in the African cotton sector. Together, we assist brands and retailers in achieving more consistent quality and sourcing their products from Egyptian cotton producers who adhere to national and regulatory agricultural practices.”
Months after torrential rain and fast-melting glaciers submerged a third of Pakistan, parts of the country’s southern Sindh and Balochistan provinces still resemble an inland sea.
The disaster has left thousands of families camped out in tents on elevated roadsides, first battling scorching summer heat with little shade - and now needing protection to deal with the winter cold, she said. But just a fifth of an $800-million U.N. aid appeal for the country has been covered so far.
At the COP27 U.N. climate summit in Egypt, a range of new efforts to limit such “loss and damage” - and get disaster-hit countries back on their feet more quickly - are being proposed. On Monday, Germany and other G7 countries, alongside Ghana and the V20 group of vulnerable countries, unveiled plans to launch a “Global Shield” against climate risks.
The government has asked potential private sector lenders in the world to advance €500 million (Shs1.9 trillion) to close a 2022/2023 budget gap, adding to an ongoing syndicated Shs1.7 trillion borrowing being arranged through Standard Chartered Bank. In a November 7 public call, Finance minister Matia Kasaija noted that the new credit line that the government is seeking is intended to offset the equivalent of net domestic financing (NDF) approved for the current financial year.
The minister in the call for expression of interest asked any potential creditor to determine the interest rate, but agreed that Uganda will repay the money within a decade, with actual loan servicing starting in the fourth year. He also wants the potential lender to pay the Shs1.9 trillion sought at once and charge no loan arrangement, structuring, legal, agency and other commitment levies.
“[The] government is, therefore, seeking financing partners to structure medium-term and long-term financing using all available financing options excluding Eurobond,” minister Kasaija wrote, adding, “This is, therefore, to request you to submit your expression of interest with detailed term sheet(s) for the proposed financing. Due to strict implementation guidelines, we request you to submit your expression of interest by the closure of November 18.”
Small scale farmers in Uganda appealed to the Government to reject the African Union (AU) Seed Harmonization Guidelines in fear that they will sabotage their diversity of crop options which improve their livelihoods and guarantee food security. Through their umbrella body the Eastern and Southern Africa Small Scale Farmers’ Forum (ESAFF), farmers said the national seed regulations generally only focus on crop varieties that are products of formal sector - plant breeding occasioned with bio piracy. Mr Hakim Baliraine, the National Board Chairperson EASAF - Uganda said they intend to collect over five million signatures aimed at protecting farmer managed seed system.
Data collected from a national household survey conducted by the government between 2019 and 2020 indicated that 68 percent of the population is working in agriculture, forestry and fishing sector. If such a guideline is adopted, it will hurt farmers like in Uganda where we are still practising the International Union for the Protection of New Varieties of Plants (UPOV) of 1978, according to Baliraine. Further, he said the guidelines also side-line small scale farmers where harmonisation is not in favour of national interests of previous countries.
The Africa Investment Forum is an opportunity for Zimbabwe to attract investments into the country, Finance and Economic Development, Mthuli Ncube has told Daily News Egypt. “We had a very successful visit communicating our message that Zimbabwe is open for business, as Zimbabwean President Emerson Mnangagwa said.” Recently, Mnangagwa called on investors to realise the massive investment opportunities in Zimbabwe and shun negative perceptions of risk.
Ncube explained that Zimbabwe has three projects that were showcased in the forum, the first of which is in the steel sector, which received noticeable support from investors. He added that the second is in the dairy sector and the third is developing a border post in the country’s east.
The Ghana Free Zones Authority (GFZA) has signed a memorandum of understanding (MoU) with a private developer for the development of about 1,500 acres of land located in Yabiw/Shama in the Western Region. Designated under its Special Economic Zones, an amount of between US$250 million and US$300 million is expected to be spent to provide world-class infrastructure such as roads, electricity with a dedicated power plant, sewage treatment plant, container depot, office complex, and residential complex, among others.
The Chief Executive Officer (CEO) of GFZA, Michael Oquaye Jnr who announced this said in addition, the project, when completed, will lead to the creation of thousands of jobs and become another source of foreign exchange for the country. He was speaking at the media launch of the 3rd Annual Investment Week 2022 in Accra.
Chandramouli Kern, consulate general of India, Lagos has urged players in Nigeria’s textile industry to explore joint ventures and partnership with technological companies who have the expertise to measure up to expectations. Kern disclosed this at the Africa Textile Manufacturing and Trade Policy Summit and exhibition 2022 organised by Leoht Africa and held in Lagos
“Going through the history of India, you will see that there were joint ventures with technological companies from the West or other developed countries,” Kern said. “There is no need to do things from scratch by Nigeria, they can build on the expertise of India and they can leap also they can try to enhance the value chain rather than to start from scratch”
“It is common knowledge that without manufacturing a country cannot grow,” Kern continued, saying “Indian companies present will explore the possibility to be able to partner and invest in Nigerian businesses in this exhibition and they can send business proposals. We will be ready to help with technology, training and expertise needed to build a vibrant textile industry in Nigeria.”
CAR’s political fragility might increase in the coming months and years. Risks include the macro-fiscal uncertainty created by adopting Bitcoin as the legal tender (in April 2022). Other factors could be waning donor appetite, the spillover effects of the war in Ukraine, demographic dynamics, regional disparities in poverty and service delivery, and the intent to amend the constitution to allow the president to run for a third term. Social cohesion and trust are particularly low in provinces, where the lack of opportunities is the highest, fueling frustrations.
As a recent report shows, for CAR to realize its enormous potential, it must address the root causes of fragility by creating jobs, improving the management of its natural resources, and establishing a social contract.
The analysis suggests the following:
Bold and sustained reforms to support long-term growth, promote regional trade, improve competition, and tackle corruption. CAR could accelerate its economic performance, halve extreme poverty, and move to lower-middle-income status by 2050 through structural reforms to boost productivity, human capital, and private sector investment. The African Continental Free Trade Area has enormous potential for the country. To seize it, CAR should remove non-trade barriers, including poor road connections and administrative red tape, facilitate business creation, protect property rights, improve infrastructures such as electricity and ICT, and strengthen the public procurement system. The government should focus on the enforcement of laws and regulations and define sanctions for corruption and fraud by public officials.
Egypt’s balance of trade deficit inched up by 0.60% during August 2022 to stand at $4.18 billion, compared to $4.15 billion in the same month a year earlier, Akhbar El-Yom cited data by the Central Agency for Public Mobilization and Statistics (CAPMAS).
The country’s exports decreased by 7.60% in August 2022, reaching $3.33 billion, compared to $3.61 billion in August 2021. The Arab world’s most populous nation’s exports of petroleum products went down by 19.80%, crude petroleum by 49%, and raw plastic materials by 3.60%. Egypt’s Imports slumped by 3.20% to $7.51 billion in August 2022, compared to $7.76 billion in the same month in 2021.
The ECA Office for North Africa will hold on 14-18 November 2022 its second capacity development workshop on the Libya AfCFTA national implementation strategy. The African Continental Free Trade Area (AfCFTA), signed in Kigali, Rwanda in 2018 is the world’s largest free trade zone since the creation of the WTO, with the aim of creating a 1.2 billion consumer single market. The AfCFTA can provide Libya with an opportunity to make the most of its hydrocarbon reserves while diversifying its economy and trade partners.
The implementation of both the regional and the continental free trade area regimes will position the regional economic communities, COMESA, East African Community and Southern Africa Development Community into a formidable economic bloc to collectively exploit the envisaged benefits of Africa’s integration. Addressing the 38th Meeting of the COMESA Trade and Customs experts meeting on 7 – 9 November 2022, Assistant Secretary General of COMESA, Dr Kipyego Cheluget said although the ratification of the Tripartite FTA has not progressed as rapidly as originally envisaged, it remains a commendable effort at RECs consolidation upon which the AfCFTA could build upon.
In this regard, he proposed that the remaining processes under the TFTA should draw lessons from the AfCFTA, especially with regard to the strategies that were used to facilitate its rapid ratification and coming into force.
The experts’ meeting focused on the review of the implementation of regional programs and agreed on policy recommendations to enhance regional integration to be presented to the COMESA policy organs meetings, including the Council of Ministers meeting scheduled on 1st December 2022.
UBA reiterates commitment to development of SMEs across Africa (BusinessAMLive)
The management of United Bank for Africa (UBA) Plc has said that it is committed to the growth of Small and Medium Enterprises (SMEs) across Africa, as evidenced in the increased funding it has provided to such businesses in Nigeria and across Africa.
Muyiwa Akinyemi, deputy managing director, said this while delivering his keynote address at the flag-off of the 2022 Lagos International Trade Fair. UBA has been the lead sponsorship partner for the annual event since 2019.
Speaking on the theme “Connecting Businesses, Creating Value”, Akinyemi explained that armed with the firm belief that SMEs remain the bedrock of any country’s economic development, UBA has pioneered products and services specifically targeted at SMEs and young entrepreneurs towards meeting their financial needs, having access to markets and building capacity.
“We are focused on creating value, connecting and facilitating business across Africa and between Africa with the rest of the world. Already, we have done a trade of about $7.7 billion and Export trade of about $29.4 billion as at August 2022,” he said.
As was the case with most countries, South Africa’s trade took a relatively significant knock during the height of the Covid-19 pandemic and the consequent lockdown responses by government. Initially, imports bore much of the brunt of the lockdowns and border closures, but exports soon followed suit.
While border controls and trade restrictions gradually eased during the course of 2021, it was hoped that the imports and exports would quickly recover from the muted activity that characterised most of 2020. Unfortunately, this wasn’t to be the case, due for the most part to the massive logistics bottlenecks that were created by the pandemic restrictions, many of which have still not been entirely cleared.
Fortunately, these challenges were offset to a certain degree in 2021 by the strong commodities showing in South Africa, with many agri products achieving healthy surpluses and global demand for other South Africa’s commodities keeping prices largely elevated.
It’s likely, however, that this figure would have been even higher were it not for geopolitical tensions simmering over with the advent of the Russia-Ukraine conflict. While neither country is a very significant trade partner to South Africa, the effects of the global downturn in trade of all commodities as a result of the war has undoubtedly filtered through to this country
Of course, there is no benefit to South Africa’s trade sector of waiting in the wings for the Russia-Ukraine conflict to end in order to capitalise on any opportunities that will arise when that happens. It is imperative that we actively seek out new markets now, not only to address the loss, or decline, of trade activity due to the war and the global trade repercussions it has created, but also to mitigate the stellar increases in the costs of transport and logistics, which cannot simply be passed on to consumers indefinitely.
Most governments and the private sector reacted swiftly to studies on COVID-19 treatment and prevention. Due to the pandemic, government-imposed lockdowns and shutdowns affected the smooth running of brick-and-mortar businesses. Essentially, only agile companies that embraced e-business systems remained viable.
The lack of agility in e-business systems during the pandemic wiped out 4 million jobs in Africa. The situation was even worse for the micro, small and medium enterprises (MSMEs) in the COMESA region (COMESA is the Common Market for Eastern and Southern Africa). So, our team embarked on a research study aimed at assessing digital financial inclusion in the COMESA region through e-business adoption by MSMEs.
The study revealed interesting statistics about the COMESA region that reflected an increase in the usage of digital platforms for business. The dynamic trend of e-business adoption among MSMEs of the COMESA region showed a positive trend towards the adoption of e-business tools/platforms and technologies. This has been shown by the increasing number of MSMEs using e-platforms, electronic devices, and e-business platforms among countries.
The largest proportion of e-business users was found in Kenya, Rwanda, and Zambia. Countries in Southern Africa (Zimbabwe and Eswatini) had a slightly lower adoption rate compared to countries in East Africa (Kenya and Rwanda). The main platforms of e-business in use, in all countries targeted,
Overcoming global challenges of imports and exports (BusinessLIVE)
Businesses are faced with global economic headwinds, supply chain disruptions and increased requirements to align with environmental, social and governance (ESG) considerations. Financial institutions can help businesses better manage these challenges with specifically designed trade finance products, according to Justin Milo, executive, head of Trade SA for Standard Bank Group. “These solutions are not a means to an end in themselves, but are part of a broader solution to promote economic growth and sustainable development in emerging market economies and especially closer to home in Africa.”
After a decade of solid progress in domestic revenue mobilisation, tax revenues in Africa declined between 2019 and 2020 as a result of COVID-19, according to a new report released today. Africa’s average tax-to-GDP ratio declined by 0.3 percentage points (p.p.) in 2020 to 16.0%, reducing the continent’s ability to meet the challenges of higher borrowing costs, rising food insecurity and heightened global economic uncertainty.
Revenue Statistics in Africa 2022 reveals that tax revenues fell by 0.5% in nominal terms between 2019 and 2020 on average across the 31 African countries covered by the report, while GDP rose by 0.2%. Twenty-four of these countries recorded a decline in their tax-to-GDP ratio in 2020 compared to 2019. Tax-to-GDP ratios ranged widely across the continent in 2020, from 5.5% in Nigeria to 32.5% in Tunisia.
AU Seeks ECOWAS’ Support On Free Movement Of Persons (Leadership)
The African Union (AU) has sought the support of the Economic Community of West African States (ECOWAS) with the implementation of the AU Free Movement Protocol. Indications to this development emerged at the weekend when a delegation led by Rita Amukhobu, the Coordinator of Free Movement Programme of the African Union Commission (AUC) paid a working visit to the ECOWAS Commission in Abuja, a statement from the commission said.
The Board of Directors of the African Development Fund, the concessional lending arm of the African Development Bank Group, on 2 November 2022 in Abidjan, approved a $6.63 million grant to the Common Market for Eastern and Southern Africa (COMESA) to develop the pharmaceutical sector in the sub-region. The project, which will be implemented over three years (2023-2025), is institutional support to develop the region’s pharmaceutical industry. In particular, it will build the capacity of pharmaceutical regulatory bodies, product quality control and management systems, and research and development institutions. The aim is to achieve the manufacture and marketing of safe, quality pharmaceutical products, for Covid-19 and other diseases.
Stakeholders call for tapping export potential in Africa market (The Business Standard)
Bangladesh needs to connect with the African countries in sectors where economic complementarities exist, according to experts and stakeholders, as they said the African subcontinent could be the next potential destination for Bangladeshi exports. “Bangladesh is eager to utilise the African economic platforms such as the South African Development Forum, African Continental Free Trade Area Framework and Economic Community of West African States,” said Ambassador Mashfee Binte Shams, secretary (East) of the Ministry of Foreign Affairs, at a seminar in Dhaka on Sunday.
Beyond trade and commerce, she mentioned that Bangladesh looks to increase cooperation on agriculture, research and education, social development, health, IT and ICT, and SME sector.
At the seminar titled “Look Africa: Exploring New Horizons for Bangladesh” and organised by the Bangladesh Institute of International and Strategic Studies (BIISS), she pointed out some stumbling blocks in harnessing the trade potentials.
In FY22, Bangladesh exported goods worth $133.33 million to South Africa as the import was around $185.50 million, according to the Export Promotion Bureau. In that year, Bangladesh’s exports to Egypt and Kenya were only $51.71 million and $20.28 million respectively. The export basket includes readymade garments, ceramics, pharmaceuticals, jute, food products, light engineering items, electronic products and home appliances.
Asked why there is no remarkable success in contract farming in African countries yet, the foreign secretary said, “It takes time. Besides, there must be a structure first. We are working on it.”
“While some trade-restrictive measures have been lifted by G20 countries, the report indicates that the trend has been going in the wrong direction. Export restrictions contribute to shortages, price volatility, and uncertainty. G20 economies must build on their collective pledges from the 12th Ministerial Conference and demonstrate leadership to keep markets open and predictable, so that food and fertilizer in particular can flow to where they are needed,” said WTO Director-General Ngozi Okonjo-Iweala, who will be attending the G20 Leaders’ Summit in Bali, Indonesia, on 15-16 November.
The report indicates that supply chains on the whole have thus far proved to be resilient, despite the war in Ukraine, the continuing impacts of the COVID-19 pandemic, the highest inflation many countries have experienced in decades, and the impacts of monetary tightening by central banks seeking to limit price increases. That said, specific industries and regions have been differently impacted.
And so what I’d like to do with the session today—because we will continue this discussion tomorrow—is to kind of draw up a list of ideas where they can be outline or in detail that we can perhaps hope to get the attention of the participants in the G20, and in particular I believe the Indonesian government, which is the host of the conference, if only because I know that President Jokowi himself has a real interest in the issue of food security. I’m conscious, also, that the immediate problem, of course, is the supply of particularly natural gas and ammonia nitrate, which is actually causing the production of fertilizers to decline drastically and for the price to go up.
Factors such as the war in Ukraine, high inflation, supply chain disruptions and the global economic downturn have led to soaring prices for fertilizers and agricultural products, notes the study titled “Global fertilizer markets and policies: a joint FAO/WTO mapping exercise”, resulting in limited availability in many countries. The study forecasts that shortages in fertilizers will likely persist into 2023, threatening agricultural production and food security in Africa in particular, where farmers are heavily dependent on imported agricultural inputs.
The study urges G20 governments to deploy all policy measures available to deal with the fertilizer crisis, underlining the need to make “every effort” to keep trade in fertilizers open so that supplies reach the countries in most need of them. The study recommends, in particular, that G20 governments keep food, feed and fertilizer markets open and minimize disruptions to trade in fertilizers, including refraining from export restrictions inconsistent with WTO rules. It stresses the need to ensure access to fertilizers for the most vulnerable countries, including through mobilizing international financial support and leveraging risk management tools, such as fertilizer contract swaps to hedge against extreme price volatility. In addition, it underlines the need to increase market and policy transparency, through G20 members’ timely and complete notifications of trade measures to the WTO and enhanced data and policy monitoring at the FAO and through the G20 Agriculture Market Information System (AMIS).
G20 hosts Official Launch of The Pandemic Fund (World Bank)
The G20 Presidency of Indonesia, in partnership with the Pandemic Fund secretariat, today officially launched the Pandemic Fund at a high-level event, opened by Joko Widodo, President of Indonesia, on the margins of the G20 Joint Finance and Health Ministers’ Meeting.
Drawing on lessons from COVID-19, which exposed huge weaknesses and under investment in pandemic prevention, preparedness and response (PPR), particularly in low- and middle-income countries, the Pandemic Fund is intended to strengthen the capacity of these countries to mitigate the risks of future global health threats. It will provide a dedicated stream of long-term financing for PPR and address critical gaps through investments and technical support at the national, regional, and global levels. The Pandemic Fund is also expected to incentivize countries to prioritize this agenda and increase their own efforts.
“This is the first time the international community has come together around a funding mechanism dedicated to investing in pandemic prevention, preparedness, and response in developing countries - a testament to multilateralism, said Dr. Chatib Basri, co-Chair of the Pandemic Fund Governing Board. “The Pandemic Fund has a unique and vital role to play in making the world safer. PPR is a global public good that benefits all. Every dollar we mobilize to invest in PPR now in low- and middle-income countries will save lives and financial costs and lead to a more resilient world for years to come.”
Global economic growth prospects are confronting a unique mix of headwinds, including from Russia’s invasion of Ukraine, interest rate increases to contain inflation, and lingering pandemic effects such as China’s lockdowns and disruptions in supply chains.
In turn, our latest World Economic Outlook, released last month, lowered our global growth forecast for next year to 2.7 percent, and we expect countries accounting for more than one third of global output to contract during part of this year or next. Moreover, as we discuss in our latest report prepared for the Group of Twenty, recent high-frequency indicators confirm that the outlook is gloomier.
While gross domestic product releases for the third quarter surprised on the upside in some major economies, October PMI releases point to weakness in the fourth quarter, particularly in Europe. In China, intermittent pandemic lockdowns and the struggling real estate sector are contributing to a slowdown that can be seen not only in PMI data but also in investment, industrial production, and retail sales. This will inevitably have a significant impact on other economies due to China’s large role in trade.
Despite growing evidence of a global slowdown, policymakers should continue to prioritize containing inflation, which is contributing to a cost-of-living crisis, hurting low-income and vulnerable groups the most. As our G20 report emphasizes, the macroeconomic policy environment is unusually uncertain.