Building capacity to help Africa trade better

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South African economy slowly recovering post-pandemic – TIPS (Engineering News)

The latest ‘Real Economy Bulletin’ (REB), published by economic research institution Trade and Industrial Policy Strategies (TIPS) on December 8, points to an upswing in South Africa’s economy and its trade and investment performance, with gross domestic product (GDP) exceeding pre-Covid-19 levels for the first time. This outcome points to considerable resilience, especially around private-sector adaptations to the extraordinarily high levels of loadshedding over the past quarter. The latest REB points out that GDP grew by 1.6% in the third quarter, reaching R6.7-trillion and showing stronger-than-expected resilience to loadshedding and continuing volatility in the global economy.

Manufacturing sales grew 12.7% in real terms between September 2020 and September this year, being 7% higher in September than before the pandemic. The key sectors contributing towards this included food and beverages, and automotive sales.

In terms of international trade, South Africa’s trade balance has continued to narrow, with export prices softening while growth has brought a surge in inputs.

In the third quarter, South Africa’s trade surplus narrowed to R50.7-billion from R73-billion in the second quarter, but remains extraordinarily high by historic standards.

Illicit and counterfeit trade fuels organised crime and is a growing threat to SA’s economic recovery (Daily Maverick)

One of the cornerstones of a functional economy is a supportive regulatory and policy environment that supports business growth, job creation and improves the living standards of the majority. In a South African context, this also means protecting businesses from the growing threat and risk to economic order and the fiscus from the impact of illicit trade.

Although the Consumer Goods Council of South Africa (CGCSA) has previously highlighted the destructive impact of illicit trade to businesses, job security and the health of consumers, the magnitude of the problem now requires an even more robust response and intervention from the government, working together with other stakeholders, among them business and law enforcement.

The problem has become so pervasive that it is now estimated more than R100-billion is being lost annually to illicit trade in a wide range of products in South Africa.

South Africa tops list of Iran’s African trade partners (Mehr News Agency)

“Imports from the African country during the same period stood at $6.5 million,” Rouhollah Latifi was also quoted as saying by the news portal of Iran Chamber of Commerce, Industries, Mines and Agriculture, Financial Tribune reported. Last fiscal year (ended March 2022), he added, $255 million tons of products were exported from Iran to South Africa with the main product being urea ($218 million).

Ghana’s structural transformation gets boost with economic enclave project (Ghana Business News)

Ghana’s quest to transform the structure of her economy from import-driven to a self-sufficient and export-oriented one, has received a boost by a public-private partnership to enhance the agriculture value chain. The Government on Friday launched the Economic Enclave Project, in the Eastern Region under the GH¢100 billion Ghana COVID-19 Alleviation and Revitalisation of Enterprises Support (Ghana CARES) programme to anchor such projects. The public-private partnership project, which has the Millennium Development Authority (MiDA), as the implementation lead, has 10,000 acres of land under development for end-to-end improvement in the agriculture ecosystem.

It is aimed at increasing productivity, enhancing storage, processing of major food staples and enabling access to ready market – to improve food security, reduce importation and increase the income of farmers and others in the agriculture value chain.

The project seeks to expand Ghana’s productive capacity in rice, tomato, maize, soya, vegetables and poultry – mostly imported, add value to those staples and make markets to then easily accessible.

Gabon Country Economic Memorandum: Toward Greener and More Inclusive Growth (World Bank)

In recent years, Gabon has positioned itself as a climate champion, undertaking a series of actions toward a green economy – with a strategy centered on agriculture, mining, sustainable fishery and timber resources, clean energy, and ecotourism. Its commitment to protecting forests and reducing greenhouse gas emissions is bearing fruit, as Gabon is the first country in Africa to receive a payment from the UN-hosted Central African Forest Initiative (CAFI). The country can continue to embrace a green economic transformation to reduce growth volatility and over-reliance on natural resources, unlocking opportunities for diversification, job creation, and stronger economic resilience.

Yet, despite its abundant natural wealth, growth has been slow to reduce poverty. Gabon is an upper-middle income economy, but real GDP per capita was 20% lower in 2020 than in 1990 and a third of its citizens live below the $5.50/day poverty line. Although Gabon’s economic base has expanded to wood, mining and services industries, lack of economic diversification remains a challenge. Gabon is one of the most highly commodity-dependent economies in the world, with oil, manganese and other extractives accounting for 98% of merchandise exports in 2021. As a result, the country’s growth, exports, and finances are still highly vulnerable to volatile global commodity prices.

African trade and integration

Africa: Industrialization Trapped in Limbo Despite All Efforts (IDN InDepthNews)

Jobless and weighed down by idleness, 53-year-old Jasper Mhandu, in the Zimbabwean capital, now has to spend time sited at a street corner chatting with gangs of drug-taking jobless youths in Highfield, a poor income suburb here. Mhandu used to work for a clothing factory that shut its operations in 2007 when Zimbabwe’s comatose economy forced many firms to close down. 15 years later, nothing has changed for many Zimbabweans like Mhandu, with no functioning industry to turn to while more and more jobless young people join him. Yet that is not the story for Zimbabwe alone.

In neighbouring South Africa, despite the country being famed for being Africa’s economic powerhouse, industries have been closing down as the economy falls apart.

Even as South Africans have over the years blamed foreigners for taking their jobs, economists there have painted a gloomy picture of the country’s deteriorating industrialization. De-industrialization is happening instead.

Digitalization will turbocharge the African Continental Free Trade Area (UNECA)

The Economic Commission for Africa (ECA) has launched two key publications making a case for Africa’s participation in global value chains and leveraging digitalization and furthering trade under the African Continental Free Trade Area (AfCFTA)

In remarks at the launch of the two publications, Deputy Executive Secretary and Chief Economist of the Economic Commission for Africa, Hanan Morsy, highlighted how Africa can leverage digital technologies and participate in global value chains.

Burundi ranks as second most visa-open in East Africa (The East African)

Burundi’s immigration policies for other Africans have improved significantly, with the country’s visa openness ranking rising by 32 places in the year and becoming the second most open country in the East African Community (EAC) bloc.

According to a new report by the African Development Bank (AfDB), Burundi’s rise, mostly since 2021, is a result of Bujumbura accepting all travellers from Africa into the country either on visa-free travel (all East Africans) or visas on arrival (all other Africans). Burundi does not have electronic visas yet, but it does not require Africans to apply for entry permits before travelling to its territory.

Burundi’s decision to allow all Africans to travel without visa applications helped it rise from position 44 to 12, making it one of the most improved countries on the continent’s visa openness ranking alongside Benin, Nigeria and Ethiopia.

In the bloc, The Africa Visa Openness Report 2022 shows that Rwanda is still the highest-ranked country on visa openness, allowing visitors from 18 African countries without visas, while granting visas to all other Africans on arrival. It was ranked 5th in Africa, behind Benin, Seychelles, the Gambia and Ghana.

SA ranks among the lowest for Africa visa openness (BusinessLIVE)

Countries that have removed visa requirements have seen their tourism and travel economies thrive 12 December 2022 - 05:05 Thuletho Zwane SA continues to rank among the lowest in Africa for visa openness — a measure that refers to the percentage of other countries in Africa whose citizens are permitted to enter a country’s territory without having obtained a visa before arrival. African states a

ISS TODAY OP-ED: Free trade and cross-border mobility must be enabled for Africa to prosper (Daily Maverick)

Africa Has Resolved to Implement Single Air Transport Market, Says Sirika (This Day)

The Minister of Aviation, Senator Hadi Sirika, has said that Africa had resolved to implement a Single Air Transport Market in Africa (SAATM) to advance liberalisation. This is coming as the Nigerian Civil Aviation Authority (NCAA) disclosed that it was seeking its removal from the public service sector.

Sirika made this known at the weekend during his closing remarks at a five-day International Civil Aviation Organization (ICAO) Air Services Negotiation Event (ICAN2022) in Abuja.

He said that SAATM, being a flagship project of the African Union Agenda 2063, would boost the continent`s economic integration agenda. “It will also open the borders to connect the whole world. “Aviation ought to play its role in connecting our markets, places, friends and families among others,” the minister said.

Effective logistics key to a more connected, diverse EAC market (Business Daily)

On March 29, 2022, the Democratic Republic of Congo, sub-Sahara’s largest country, officially joined the East African Community (EAC), making it the 7th member after Kenya, Uganda, Rwanda, Tanzania, Burundi, and South Sudan. This move was welcomed in the region and is a testament to the increasing maturity of the EAC. Over the years, the EAC has made tremendous progress in terms of investments in trade-related infrastructure.

As the DRC becomes integrated into EAC’s trade infrastructure, manufacturers within the partner states stand to benefit greatly from economies of scale, making them increasingly efficient and competitive. For one, DRC’s entry into the EAC offers a new market with a combined GDP of approximately $275 billion and an economy of over 285 million people (World Bank report, 2020).

The opening up of these trade routes means that more cargo will traverse these African blocs, and regional business owners and investors can participate in a robust value chain that stimulates business growth, cooperation, and unlimited investment opportunities.

Africans in diaspora are the continent’s largest financiers through remittances – AfDB President (Businessday)

The President, of the African Development Bank Group, Akinwumi Adesina, has said that Africans in Diaspora are critical for Africa’s economic development as they constitute the continent’s largest financiers through remittances. Adesina stated this at the event, on ‘Development Without Borders: Leveraging the African Diaspora for Inclusive Growth and Sustainable Development in Africa’ organised by the Bank in collaboration with the African Union Commission, the International Organisation for Migration, and the African Continental Free Trade Area Secretariat.

The AfDB President said: “The value of remittances from the African diaspora doubled from $37 billion in 2010 to $87 billion in 2019, reaching $95.6 billion by 2021. Yet official development assistance to Africa in 2021 was $35 billion, or 36 percent of the remittances from the diaspora. Egypt and Nigeria are among the top-ten remittance recipients globally, with $31.5 billion and $19.2 billion, respectively in 2021. The African diaspora has become the largest financier in Africa! And it is not debt, it is 100 percent gifts or grants, a new form of concessional financing that is the key for livelihood security for millions of Africans.”

African Economic Conference 2022 urges development community to “walk the talk” on innovative solutions to fight climate change (AfDB)

The 17th African Economic Conference ended on Sunday with a charge to the development community and governments to take decisive actions to address climate change. The African Development Bank, United Nations Economic Community for Africa, and United Nations Development Programme, the conference hosts, called on participants to walk the talk by producing concrete solutions for climate-smart development on the continent. Participants asserted that achieving net zero emissions—the crux of the three-day conference—can be accomplished if all stakeholders are robustly engaged, including providing the right environment for public-private partnerships.

“Africa is the region that is most vulnerable in the face of climate change,” said Mauritius’ Minister of Finance, Economic Planning and Development, Renganaden Padayachy. The scourge of climate change poses a threat to lives, he cautioned.

“And if we limit climate change, we will change lives,” he said at the closing of the three-day conference, which had an in-person attendance of over 350 delegates, with thousands more participating online. AEC 2022 provided a timely forum to discuss innovative solutions to support climate-smart development in Africa.

Africa faces hurdles to energy transition (DW)

During a recent “Africa Roundtable,” meeting, politics, business, and civil society experts discussed strategies for achieving a just energy transition on the African continent. They also talked about strengthening the resilience of countries in the face of food insecurity. The talks — entitled “Europe and Africa, together for a just energy transition” — were head in the capital of Senegal, Dakar. DW was the media partner for the event — it was a first on the African continent. While Europe is working on its Green Deal, many African countries still face challenges with electrification. Nearly half of the sub-Saharan region (which has a population of approximately 600 million) has no access to electricity.

Energy experts said that African countries would only be able to achieve the transition towards a sustainable economy, which at the same time conserves the environment, if they had access to new production technologies, such as electric batteries, solar panels, or wind turbines.

“The paradox is that the continent has strong underexploited potential for energy production, but lacks the necessary technologies for their use,” Al-Hamndou Dorsouma, head of the climate change and green growth department at the African Development Bank (AfDB), told DW. “During this roundtable, Europeans and Africans were able to identify how to move forward concretely on the issue,” he added.

Developed countries asked to finance climate change in Africa (UNECA)

The African Economic Conference 2022 kicked off on Friday in Balaclava, Mauritius, with speakers in the first plenary session calling for the continent to find alternative models of climate financing away from debt instruments. Speaker after speaker reminded developed countries to keep their promise to help pay for the damages caused by climate change in Africa. African governments were also advised to improve their governance systems to attract private financing to mitigate against climate change. The theme of the three-day conference is “Supporting Climate-Smart Development in Africa” and comes at a time when the continent’s challenge of climate change has been aggravated by the war in Ukraine and the Covid-19 pandemic.

CSW67: African Countries Agree on Common Position to harness technology and innovation for empowerment of women and girls (AU)

Building inclusive innovation and technology ecosystems must be at the heart of efforts to leverage the potential of innovation and technology to support the economic, social, and political development of women and girls in Africa. These were some of the key issues highlighted at the 67th pre-Commission on the Status of Women in Africa (Pre-CSW67) Ministerial consultations convened by the African Union Commission in partnership with UN Women, ECA, ITU, and UNDP from 29 November to 1 December 2022.

Consultations heard that technology and innovation have proved a positive disruptor in Africa, accelerating progress in terms of financial inclusion, creating new jobs, improving access to healthcare, providing information on agricultural practices, and opening virtual spaces for citizens to engage on governance concerns.

Delegates further noted that while technology and innovation are being hailed as crucial means to accelerate the achievement of the Sustainable Development Goals, the statistics on access, beneficiaries and who influences their development are pointing to disparities between and among the sexes. According to the International Telecommunications Union (ITU), in Africa, women account for only 24% of the population using the internet, while men account for 35% of users. Thus, delegates stressed that ensuring that these technological developments do not widen the digital gender divides was crucial.

Speaking at the opening ceremony of the ministerial segment of the consultations, Ms. Prudence Ngwenya, Ag. Director, African Union Commission – Women, Gender and Youth Directorate called for the Common Africa Position to be translated into implementable actions and mainstreamed into the work that governments are doing towards achieving gender equality and women’s empowerment, “Empowering women and girls through the provision of meaningful access to the internet and innovative technologies could undoubtedly provide them with opportunities to start businesses, and to access education, health, social as well as financial services.” said Ms. Ngwenya

ECA’s Chief Economist says investing in climate-smart development will boost economic transformation in Africa (UNECA)

The Economic Commission for Africa’s Deputy Executive Secretary, Hanan Morsy, has called for investment in climate-smart development for Africa to achieve economic transformation amidst economic and environmental challenges. “Climate-smart development in Africa is the only development model that will unleash the continent’s potential to achieve its development aspirations,” Ms. Morsy said at the opening of the 2022 African Economic Conference on 9 December in Balaclava, Mauritius. The three-day conference is being held under the theme, Supporting climate-smart development in Africa.

Noting that African countries were the most vulnerable to climate change while they contributed the least to global greenhouse gas emissions, Ms. Morsy remarked that Africa needs to close huge development gaps by investing substantially in climate-vulnerable key sectors such as energy, agriculture, transport, water and cities.

Farmers to get cheaper fertiliser via e-wallets (Business Daily)

Farmers will receive fertiliser subsidies for the main season through e-wallets as the government moves to curb theft and misappropriation by middlemen of the crucial planting material through the use of technology. President William Ruto has directed the Ministry of Agriculture to ensure that the technology to aid this process is ready by the end of the year. The government had in 2020 rolled out the e-voucher programme in a pilot phase, but it was only directed to small-scale farmers in selected counties who received money through their mobile phones to purchase the farm inputs from approved agro vets.

Agoa comeback under threat from Africa free trade deal (The East African)

The US government is exploring ways of renewing a preferential trade programme that gives countries in sub-Saharan Africa preferential access to US markets, allowing them to export products tariff-free. President Joe Biden wants to improve on the African Growth and Opportunity Act (Agoa) which comes to an end in 2025, to tap into Africa’s expanding integration. The proposals could be put on the table as Biden prepares to host his first physical US-African Summit to be held on December 13 in Washington. This is despite the fact that, after nearly two decades of Agoa benefits, many East African Community states have failed to fully utilise the programme.

Rwanda, Ethiopia, Guinea and Mali, across the continent, were even suspended from the trade facility. Now these countries are a part of the fledgling Africa Continental Free Trade Area Agreement (AfCFTA), a 2018 trade deal meant to link up regional blocs to one another through trade.

US-Africa set to face-off on duty-free trade pact at summit (Engineering News)

The US’s resolve to claw back lost influence in Africa will be put to the test this week when dozens of the continent’s leaders and officials gather for three days of talks with their American counterparts in Washington. A top priority of President Joe Biden’s US-Africa Leaders Summit, which aims to increase cooperation on some of the world’s most pressing issues, will be to map out the future of market access.

Global economy

It’s time to put productive capacities at the heart of every development strategy (Trade for Development News)

Over the past two decades, the 46 least developed countries (LDCs) have recorded relatively robust economic growth, averaging an annual rate of 5.7% from 2001 to 2019. However, this growth has not necessarily translated into improved development outcomes: many LDCs are still plagued by poverty, food insecurity and inequality. These conditions worsened during the COVID-19 pandemic, when LDCs registered their worst socio-economic performance since the 1980s. Barring a few exceptions, LDCs have a limited capacity to react to exogenous shocks, which makes their socio-economic progress fragile. A number of factors undermine their resilience, notably limited economic diversification and human capital development and weak production systems.

This situation can be explained by a low level of productive capacities. These are the productive resources, entrepreneurial capabilities and production linkages that determine a country’s ability to produce goods and services that, ultimately, help it grow and develop.

UNCTAD’s index reveals that LDCs have the weakest productive capacities in the world, with a median productive capacity index (PCI) score of 23.6, compared to 32.4 for other developing countries. Furthermore, LDCs lag behind other developing countries across all PCI sub-categories, including natural capital, human capital, energy, ICTs, transport, private sector, institutions and structural change.

World Trade Congress on Gender closes with call for further action on women’s empowerment (WTO)

“Trade has the power to change women’s lives for the better. I am convinced of this. But it works only if trade policies incorporate gender equality issues to level the trade field for women. This has yet to occur, inequalities persist, as indeed we learnt over the last few days of this Congress,” said Anoush der Boghossian, the Head of the WTO Trade and Gender Unit.

“The Congress marks the first time that we put in direct contact WTO members and researchers in the area of trade and gender,” DDG Ellard said. Civil society representatives also featured as speakers in the Congress and in the closing session. “I hope that you found the Congress useful in allowing you to exchange ideas,” DDG Ellard added.

DDG González: Multilateral trading system must do more to avert food security crisis (WTO)

In her opening remarks, DDG González highlighted the seriousness of the food crisis that the world is facing due to an array of factors, the COVID-19 pandemic, the war in the Black Sea region, high inflation and a potential economic recession, and the effects of climate change. Citing the latest figures of the UN Food and Agriculture Organization, she noted that food prices, despite dropping from their peak in March this year, still remain 2 per cent higher than last year. Notably, the global food import bill is forecast to surge to an all-time high in 2022, exceeding USD 2 trillion, and the global agricultural input import bill (mainly fertilizer) is forecast to reach around USD 424 billion in 2022, a leap of 50 per cent compared to 2021.

DDG González said that in the face of pressing challenges, trade has a crucial role to play in ensuring global food security, since “trade feeds one in every six people around the world”. She drew attention to WTO members’ quick action in response to the food crisis, highlighting their success in reaching three outcomes at the 12th Ministerial Conference (MC12) in June this year which have food security at their core. These include a declaration on the emergency response to food insecurity, a decision to support World Food Programme food purchases, and a sanitary and phytosanitary (SPS) declaration to modernize the SPS Agreement, which regulates food, animal and plant standards.

She warned of the worrying trend of export restrictions since the outbreak of the war in Ukraine, noting that 33 members and observers had introduced 72 export-restrictive measures on food and feed and six on fertilizers, of which only 20 have since been phased out. She urged governments to implement the MC12 outcomes, refrain from export restrictions and promote free trade at a time of crisis. “No one country can go it alone, whether on food, vaccines and pharmaceuticals, or any other product,” she emphasized.

DDG Ellard welcomes launch of first-ever study on trade and disability (WTO)

‘Just Transition’ policies needed to create 20 million green jobs: UN report (UN News)

Launched by the International Labour Organization (ILO), UN Environment Programme (UNEP) and International Union for Conservation of Nature at the UN’s Biodiversity Conference (COP15) in Montreal, the Decent Work in Nature-based Solutions report underscores the need for greening the economy in a way that is fair and inclusive, creating meaningful work opportunities for all. “It is critical that as we scale up the use of Nature-based Solutions (NbS) we make sure we do not also scale up decent work deficits, such as the informal work, low-pay and low productivity conditions that many workers in NbS currently face”, said Vic van Vuuren, Director, ILO Enterprises Department.

“The ILO’s Just Transition Guidelines  provide a framework to help us do this”.

Tackling debt and climate challenges in tandem: A policy agenda (UNCTAD)

Climate-related shocks are growing in intensity and frequency while the ability of developing countries to address mounting climate challenges is heavily impaired by unsustainable debt burdens. Achieving climate-resilient structural transformation will require many of them to take on more debt. This policy brief highlights the growing overlap between debt and climate vulnerabilities in developing countries and the urgent need for improved access by vulnerable countries to financing on terms consistent with both long-term sustainable development and debt sustainability.

It proposes a policy agenda that focuses on a reform of the international debt architecture and on scaling-up public-led and affordable development financing for climate investments.

G20 meet in Mumbai to focus on least developed, island nations (The Economic Times)

The G20 Development Working Group (DWG) meeting to be held in Mumbai under Indian presidency between December 13-16 will discuss developmental issues in developing countries, least developed countries and island countries, in keeping with the country’s leadership goals for the Global South.

India will focus on accelerating the progress on achieving the sustainable development goals (SDGs) of the United Nations, by raising the profile of development issues throughout the G20 working streams, said people aware of the matter. The emphasis will be on transformative areas and transitions that can catalyse multiplier effects on SDGs such as women-led development, digital transformations and just green transitions, they said.

According to experts, financing is key to achievement of the 2030 agenda goals. The Covid-19 pandemic has severely hampered efforts of developing countries towards meeting SDG targets by restricting fiscal space, with the SDG financing gap estimated to have increased at least 20%. During India’s presidency, one of the DWG’s priorities includes designing a strategy that will focus on finding solutions to accessing affordable development finance that “will not trap a country”.


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