tralac Daily News
South Africa’s manufacturing sector needs to move urgently towards producing electric vehicles, or around 100 000 jobs could be wiped out in the next five years as key export destinations move to ban petrol and diesel cars, Minister in the Presidency Mondli Gungubele has warned. The European Union has given local vehicle exporters until 2030 to decarbonise the sector, after which they will stop importing internal combustion engine vehicles assembled in South Africa.
GDP rises by 1.6% (SAnews)
South Africa’s gross domestic product (GDP) increased by 1.6% between July and September, Statistician-General Risenga Maluleke, announced on Tuesday. The main attributors, Statistics South Africa (Stats SA) said, were the agriculture, forestry and fishing industries, which increased by 19.2% in the third quarter, contributing 0.5 of a percentage point to GDP growth. During this period, said Stats SA, increased economic activities were reported for field crops and horticulture products.
Stats SA said the manufacturing industry during this period increased by 1.5%, contributing 0.2 of a percentage point to GDP growth.
“There was a R63 billion build-up of inventories in the third quarter of 2022 (seasonally adjusted and annualised value). Large increases in three industries contributed to the inventory build-up, namely trade, catering and accommodation; transport, storage and communication; and mining and quarrying. “Net exports contributed positively to growth in expenditure on GDP in the third quarter. Exports of goods and services increased by 4.2%, largely influenced by increased trade in mineral products; base metals and articles of base metals; vegetable products; and paper products,” Stats SA said. Imports of goods and services increased by 0.6%, driven largely by increases in mineral products and animal and vegetable fats and oils.
The Deputy Minister of Trade, Industry and Competition, Ms Nomalungelo Gina says the cannabis sector has a huge potential for the Small, Medium and Micro Enterprises (SMMEs) located in the rural areas where poverty is concentrated. Gina was speaking during the Agriculture and Land Summit in Bergville, KwaZulu-Natal today. The aim of the summit was to identify gaps and explore opportunities in the agricultural sector value chain within the district and the province. The summit was also aimed at promoting and developing the agricultural sector within the municipality for both commercial and small-holder farmers, as well as promoting youth and women participation in the agricultural sector.
Kenyan diaspora community unveils plans to bolster remittances (Capital FM Kenya)
The Kenyan diaspora community is exploring ways in which the government could bolster diaspora remittances and investment opportunities in the country, chairman of the Kenya Diaspora Alliance Shem Ochuodho has announced. Ochuodho who exuded confidence in the Kenya Kwanza regime’s creation of a diaspora portfolio said that they are set to engage the government on new investment opportunities and how to create jobs for Kenyans who are at home and abroad as
Through an upcoming investment conference, Ochuodho explained they were championing a mind shift from the negative African narrative and advocating for respect, building business partnerships on a win-win basis, and bringing back Africa into their rightful place in geopolitics and international trade.
This year’s convention dubbed Kenya Diaspora Alliance Homecoming is set around the Theme: Inclusive Growth – Leveraging Diaspora Resources.
The private sector and more especially now, when the country is faced with a constrained fiscal position, is key to actualising our envisaged economic transformation and creation of jobs for our people,” says Zambia Minister of Finance and National Planning, Hon. Situmbeko Musokotwane in an official opening speech delivered on his behalf by the Permanent Secretary Mr. Trevor Kaunda.
The Nigerian Investment Promotion Commission (NIPC) said that in order to attract FDI under the African Continental Free Trade Agreement (AfCFTA), FG will simplify import substitution to facilitate exports and save forex. This was disclosed by the Executive Secretary of the Nigerian Investment Promotion Commission (NIPC), Saratu Umar, after meeting with President Muhammadu Buhari on Friday. She disclosed that the President fully supports the drive to strengthen the investment drive in Nigeria.
Nigeria has recorded a negative trade balance quarter-on-quarter, QoQ, as export declined by 19.8 percent to N5.93 trillion in the third quarter of 2022, Q3’22, from N7.4 trillion in Q2’22, while import bill rose 4.2 percent to N5.66 trillion from N5.43 trillion.
As a result of the negative development in the export sector the total foreign trade recorded a 10 percent decline to N11.59 trillion in Q3’22 from N12.84 trillion in Q2’22, while the trade balance fell quarter-on-quarter (QoQ) by 86 percent to N269.3 billion in the Q3’22 from N1.97 trillion in Q2’22.
These were contained in the National Bureau of Statistics, NBS, Foreign Trade in Goods Statistics report for Q3’22 released yesterday.
The Nigerian government, in a bid to boost trade with South East Asia and maximize the African Continental Free Trade Area (AfCFTA) agreement, has announced plans to make $336 billion exporter Vietnam use Nigeria as a gateway into the African market. This was disclosed by Vice President Yemi Osinbajo in a statement on Monday night following his ongoing state visit to one of Asia’s largest exporters. The Nigerian government also stated it will support Vietnam’s quest to establish relations with ECOWAS and is prepared to sign, specifically trade and industry agreements. Vice President Osinbajo stated that there are vast opportunities for cooperation and collaboration between Nigeria and Vietnam, especially in the digital economy space.
On 17 November 2022, the African Development Bank Group Board of Directors approved the 2023-2027 Country Strategy Paper for Ethiopia. The key objective of the Strategy is to support Ethiopia in expanding inclusive and sustainable growth through agro-industrialization, improved connectivity and competitiveness and reduced vulnerability to shocks. The blueprint focuses on two priority areas: i. improving economic and financial governance for greater resilience, enhanced service delivery and private sector growth, and ii. developing quality and sustainable infrastructure to support Ethiopia’s agro-industrialization.
Plans to put more One Stop Border Post at entry points (Capital FM Kenya)
The government is working on modalities to establish one stop border posts in all entry points to ease and promote trade and other mutual benefits with neighbouring countries. State Department of East African Community (EAC) Principal Secretary (PS) Abdi Dubat said that currently the operational One Stop Border Posts include Taveta, Lungalunga, Namanga, Isebania, Busia, Malaba and Moyale. Speaking in Nairobi on Monday when he took over from the immediate former EAC PS Dr. Kevit Desai, Dubat said that the operational one stop border posts have proved their worth by enhancing trade facilitation, promoting efficient movement of persons and goods and reducing the cost of doing business in the region and adjoining countries.
“We are working on ensuring that the one stop border posts continue being more efficient, more impactful and try to move a bit faster in guaranteeing that business across the East African partner states thrive and is beneficial for Kenya,” he said.
Why some agricultural projects don’t get funded (Food for Mzansi)
According to the African Development Bank (AfDB), Africa’s agricultural sector is brimming with investment potential but unfortunately many agricultural projects do make it past the funding hurdle because of unbankable propositions. As the premier development finance institution on the continent, the AfDB invests about$1.2 billion into the agricultural sector annually. While the bank has given many agri projects a leg up through their funding model, many projects do not make the funding cut. In an interview with Food For Mzansi, Atsuko Toda, director of agriculture finance and rural development at the bank, unpacks why agricultural projects often fail at securing funding from development finance institutions.
She also talks funding monitoring mechanisms and what’s needed to carry agriculture in Africa forward.
The SADC Secretariat through its Climate Services Centre (SADC-CSC), is convening the mid-term review of the twenty-sixth Southern Africa Regional Climate Outlook Forum (SARCOF-26) from 5-7 December 2022 in Johannesburg, South Africa. The SARCOF-26 mid-term review is being supported through the European Union (EU) funded Intra-ACP Climate Services and related Application Programme (ClimSA). SADC- CSC is the specialised SADC regional climate institution whose mandate is to develop, generate and disseminate hydro-meteorological products, which make valuable contribution to the safety and well-being of the people and communities in the SADC region. These products also support key socioeconomic sectors including agriculture, energy, water resources, health, among others and are also crucial for increasing resilience and adaptation to climate variability and change in the region which is prone to hydrometeorology hazards such as flash floods, heatwaves, tropical cyclones and droughts.
Aligning with the African Development Bank’s “Industrialize Africa” strategic priority, a study to analyse the performance of the timber industry in East Africa identifying trends on forest resource endowment and use, trade balances, challenges and opportunities for improvement was conducted. Data were gathered through desk reviews and a questionnaire survey among selected key stakeholders in the East African Community (EAC) member countries. Data analysis of primary statistics used the pivot table in Excel. Results showed that, despite increased timber trade performance in eight primary and secondary wood products within the EAC countries, the forestry sector`s contribution to Gross Domestic Product (GDP) is still low due to several challenges.
How the African continent can meet the wood product needs of its growing population, projected to rise to 2.5 billion by 2050 and to 4 billion by the turn of the century, is a question which spurred the African Natural Resources and Investment Centre (ANRC), a non-lending knowledge building entity of the AfDB, to organize a webinar on timber’s role in industrialization and regional integration.
The aim of this study is to fill the current gaps in knowledge about the economic performance of the forest industries in North Africa. Its specific objectives were to analyse trends of forest resources and use, timber trade data and institutional arrangements as well as identifying the strengths, weaknesses, opportunities and threats (SWOT) of forest industries in the region, and present recommendations to stakeholders. The study focused on an analysis of the trade of wood and wood products (WWPs) from 2010 to 2020 and covered Algeria, Egypt, Libya, Mauritania, Morocco and Tunisia. Four primary wood products, four secondary wood products, and six tertiary wood products were covered in the study which also included a desk review of reports, documents, websites and scientific articles relevant to the topic.
Does the US support the AfCFTA? (African Business)
Almost two years since trading commenced under the African Continental Free Trade Area (AfCFTA), signed by 44 of the African Union’s 55 member states, the United States’ commitment to the project is being questioned. With crucial negotiations for the trade area’s implementation still underway, the US insisted in its August US Strategy Towards Sub-Saharan Africa document that it “will support the AfCFTA’s implementation.” But while the US has provided technical support in the form of workshops and programs, for example on digital trade negotiations and policy frameworks, there’s no evidence of US funding for activities specifically supporting the AfCFTA’s development and implementation, according to an August report by the Congressional Research Service.
“The US has provided technical support for the AfCFTA under both the Trump and Biden Administrations, but there appears to be no current comprehensive source of data on funding for US activities specifically in support of AfCFTA’s development and implementation,” the policy paper says.
Can the US and Africa usher in a new era for globalization? (Atlantic Council)
As the United States looks to usher in a “new version” of globalization focused on resilience, inclusivity, and sustainability, it has eyes on its economic relationship with Africa, according to US Trade Representative Katherine Tai. Tai spoke at an Atlantic Council Front Page event on Friday alongside the African Continental Free Trade Area’s (AfCFTA) secretary-general, Wamkele Mene. She explained that the current form of globalization has done a great job to expand the size of the economic pie, but it “hasn’t done a great job in terms of sharing the pie,” as big companies have gotten the biggest slices, at the expense of small and medium-sized companies. “We need to adjust and rebalance across the board,” she said.
Mene and Tai will attend the White House’s US-Africa Leaders Summit later this month, where African heads of state and government will discuss collaboration on climate change, security, and the economy—and will sign a memorandum of understanding about the US-Africa relationship. Mene said that the global backdrop—Russia’s war in Ukraine and the pandemic—shows how the world is “incredibly challenged to be more innovative about the tools that we deploy at times of crisis,” with perhaps “the most important tool” being an economic one, based in trade and investment.
With effect from 1 December, China granted a zero-tariff condition to 98% of taxable products from 10 least-developed countries, most of them African, in what it said was aimed at promoting an open global economy. In a statement, Beijing said Afghanistan; Benin; Burkina Faso; Guinea-Bissau; Lesotho; Malawi; Sao Tome, Principe; Tanzania; Uganda and Zambia would benefit from the facility. “The step is conducive to opening up with win-win outcomes, building an open global economy, and helping least-developed countries to accelerate their development,” said China’s Customs Tariff Commission of the State Council.
This is the latest soft power initiative from China which is challenging the US’ influence in Africa.
African countries will be in the US in a week attending the US-Africa Summit, fully aware China will extend its zero-tariff system to countries it shares strong diplomatic ties with. The Customs Tariff Commission of the State Council said this policy measure would “gradually expand to all the least-developed countries that have established diplomatic ties with China”.
Senior representatives from governments, the private sector and the international trade and development community came together at the United Nations SDG Investment Fair on 1-2 December to boost investments in the Sustainable Development Goals (SDGs). Launched in 2018, the Fair has become a leading platform to facilitate dealmaking in SDG investment, with over US$10 billion worth of projects in infrastructure, green energy, and agribusiness presented so far. Now in its 7th edition, twenty countries across all regions have been showcased as SDG investment destinations.
Scaling up private investment is crucial to achieve the SDGs. Despite a rebound of foreign direct investment in 2021, private investment in infrastructure in developing countries remains low relative to historical averages, whereas the Least Developing Countries (LDCs) have the lowest rates of investment in sustainable development and that remains a key challenge. The Fair is the platform to address it.
“Private investment flows into relevant SDG sectors are still largely failing to reach the ground in developing countries that need it the most,” says Assistant Secretary-General for Economic Development Navid Hanif. “We have put a strong focus on this edition of the Fair on how to mobilize private investment in least developed countries.”
Taxation and fiscal policies play a key role in development financing. Taxes provide the necessary funding, promoting new and more sustainable growth strategies, and they are the most stable and reliable source of state revenue. As we have seen in many countries, however the full tax potential is yet to be tapped. All too long different countries have rather backed on official development assistance and taking on loans – a strategy that for various reasons has proven to be rather unreliable and risky, thus needs to be rethought.
Next to being a revenue source, well-targeted tax and fiscal policy can encourage behavioural changes that could help achieve desired environmental, health, and gender equality outcomes, to name a few, which are important aspects of the Sustainable Development Goals
There is no doubt, we need to make advances on tax and the SDGs without further delay to have the developmental impact at the scale and speed that is needed. Domestic revenue mobilization is becoming increasingly important. Moreover, the strategic use of the dual function of taxation can bring us closer to foster good governance, establish a deeper social contract, and achieve sustainable development goals across various sectors.
Energy crisis driving an acceleration in renewables installations – IEA (Engineering News)
The global energy crisis is driving an unprecedented acceleration in the installation of renewable power, with total capacity growth worldwide set to almost double in the next five years to reach 2 400 GW by 2027, according to the ‘Renewables 2022’ report published by the International Energy Agency (IEA) on December 6.
The report also finds that renewables are set to account for over 90% of global electricity expansion over the next five years, as well as adding as much renewables in the next five years as it did in the past 20, overtaking coal to become the largest source of global electricity by early 2025.
The 27th Conference of Parties (CoP-27) held in Egypt under the aegis of the United Nation ended last month in an expectedly disappointing way. Nearly 34,000 people registered for the event. Eloquent words were spoken. Action remained well short of rhetoric. The silver lining of the cloud was an agreement on a Loss and Damage Fund. This fund aims to provide compensation and financial assistance to vulnerable nations most impacted by the effects of climate change.
Climate finance lies at the heart of climate action. The incentive for countries to procrastinate on climate action is high, given other urgent priorities. The only way to tilt them towards climate action is to tie down the usage of funds directly. In rich countries, this must be done by legislation and market forces. In vulnerable countries, like small island nations, this takes the form of technology and financial assistance that is earmarked for climate action. In developing countries, it has to be a bit of both.
The internet presents opportunities for digital transformation, particularly in Africa that is fast embracing the information technologies, global leaders say, calling for the promotion of digital governance. “Resilient internet for a shared sustainable and common future is a topic of utmost importance for all countries,” Mr. Demeke Mekonnen Hassen, Deputy Prime Minister, Minister for Foreign Affairs, Ethiopia, said in closing the 2022 Internet Governance Forum (IGF) held from 28 November to 2 December 2022 in Addis Ababa, Ethiopia.
Fintech has become one of the most popular topics among policymakers and experts. It usually comes with the qualifier “disruptive”. Thus, the hype is easy to understand: fintech would upend the financial system due to its disruptive nature, as it would allow financial services to be completed faster, cheaper, and more efficiently. Indeed, many have predicted that the remittances market was on the verge of being disrupted as remittances are considered too costly while remittance service providers inefficient, opaque, and outdated. Therefore, there seems to be no better setting for assessing the allegedly disruptive effects of fintech. Against that background, this paper investigates how those predictions have fared so far. Contrary to expectations, it found that instead of disrupting incumbents fintechs have increasingly been entangled with them. Therefore, not only there is no evidence of disruption, but it is unlikely to occur in the foreseeable future. Even so, the paper argues that fintechs play an important role in the remittances market.
G20 needs to push rankings reforms at the World Bank (Observer Research Foundation)
Anywhere you look, a White West narrative supremacy is running amok. Part of that ‘supremacy’ lies in real numbers—high per capita income, invention of technology and innovation, a powerful military-industrial complex, development that is an aspiration, and consumption that doesn’t need to bother about earnings. But a large and increasingly vocal expression of that supremacy is accentuated by manipulated narratives.
Authored by Sanjeev Sanyal and Aakanksha Arora, both of whom work with EAC-PM, Why India Does Poorly on Global Perception Indices brings a critical and fresh approach to such rankings that, sadly, lay bare the subjective and manipulated narratives we have been swallowing whole for decades. Rather than being robust, objective, and methodology-based indices that can withstand the scrutiny of questions and the test of rigour, these rankings are little more than the opinions of a few opaque voices, whose selection process is shrouded in secrecy.