tralac Daily News
The 53rd Annual Meeting of the World Economic Forum (WEF) in Davos, Switzerland, concluded on Friday, 20 January 2023. World leaders and corporate executives expressed hope that the looming recession facing the global economy could be avoided if countries collaborated to boost global trade and investment.
A high-level South African government and business delegation has returned home from the meeting more upbeat than before that the current economic slowdown and rising inflation could be resolved if nations addressed global supply disruptions that are leading to commodity shortages and driving up energy and food prices.
“The South African delegation did a fantastic job in Davos where it sold our country to global investors as a favourable market to do business and invest in. Notwithstanding the energy supply constraints that our country is currently grappling with, South Africa remains an attractive investment destination given its excellent infrastructure, sophisticated financial markets, and a skilled workforce,” says Sithembile Ntombela, Acting CEO of Brand South Africa.
“The structural reforms that are currently being implemented by the government are making progress in removing investment bottlenecks and reducing the cost of doing business. These reforms will enable South Africa, a preferred destination by local investors and global multinationals looking to expand across Africa, to take advantage of the opportunities presented by the African Continental Free Trade Area (AfCFTA),” says Ntombela.
The government has said it will deploy a cargo ship to ply between Mtwara Port and Comoros Islands from next month to serve traders in the two countries. “The ship is ready; it only awaits the clearance of some minor issues such as operation permits for it to be officially launched come February this year,” Mtwara Regional Commissioner Colonel Ahmed Abbas said.
According to the RC, the coming of the cargo ship is part of the government’s efforts to address long-lived challenges facing businesspeople operating their businesses between Mtwara and Comoro.
Kenya’s trade deficit in the 11 months to last November widened by 20.4 percent amid a surge in fuel and cooking oil imports and a weakening shilling. Data from the Central Bank of Kenya (CBK) show the gap between imports and exports widened to Sh1.49 trillion from Sh1.23 trillion in the corresponding period in 2021.The county’s total import bill — both public and private sector — rose by 20 percent to Sh2.29 trillion in the country, led by goods such as fuel and lubricants, vehicles, industrial inputs and edible oils.
Following a coup d’état in September 2021 and a year of socio-political tension, the situation has stabilized after the authorities agreed with ECOWAS on a revised, shorter (24-month) transition calendar. While the non-mining sector remains weakened by the subsequent shocks—the pandemic, political uncertainty, the global food and fuel price shock and ensuing food insecurity—overall growth remains buoyant, driven by strong mining production. Inflation hovered around 12 percent for most of 2021 and 2022, despite significant international prices pressures. Food insecurity became increasingly acute during 2022 stemming from the price shock and could be exacerbated next year.
Algeria and Libya’s strategic ‘‘gateway’’ location and sub-Saharan Africa’s huge potential heralds great potential for transit trade, Yassin Bousrewiel, Chairman of the African Economic Forum and General Supervisor of the Forum and Exhibition for Transport and Transit Trade in Africa (AFRO-TT), told Libya Herald in an exclusive interview today.
This forum comes due to the importance of the strategic location enjoyed by the two neighbouring countries as a gateway to Africa and the great potentials and human and natural resources of sub-Saharan Africa, he expanded. Sub-Saharan Africa contains about 30 percent of the world’s mineral wealth, 12 percent of oil reserves, 43 percent of gold and 50 percent of diamonds and 67 percent of arable land. The value of African exports and imports amounts to about US$ 1,016 billion, of which 6.8% is intra-trade, Bousrewiel added reinforcing the case for increased trade.
He explained that the forum will shed light on important African trade issues, diagnose the reasons for the low level of African transit trade, and encourage the private sector to enter African markets with the aim of promoting growth and economic diversification, providing new job opportunities, and reducing inflation in government funding spending in Libya and Algeria.
The East African Business Council (EABC) and the GIZ- Support to East African Market-Driven and People-Centered Integration Programme II kicked started the National Private Sector Sensitization Workshop on African Continental Free Trade Area (AfCFTA) Agreement on Trade in Goods Protocol in Kigali, Rwanda.
In his remarks, EABC Vice Chair, Mr. Denis Karera said, the AfCFTA Agreement envisages to boost intra-African trade through the gradual elimination of over 90 percent tariffs on goods and the removal of non-tariff barriers and trade restrictions on good and services. He urged Rwanda private sector players to educate themselves on AfCFTA and take the leading role in the AfCFTA agenda.
Mr. Kajangwe said sectors such as Manufacturing and agro processing are perceived to be less competitive but under AfCFTA these sectors in Rwanda can be very competitive when compared with other western African countries due to economies of scale. “Let’s take advantage of the market of the 1.2 billion people with a combined Gross Domestic Product valued at USD3.4 trillion which will be created by AfCFTA” guest of honor Mr Antoine Kajangwe the Director of General of Trade and Industry from Ministry of Trade and Industry, Republic of Rwanda said.
The East African Community (EAC) today officially launched the verification mission to assess the Federal Republic of Somalia’s readiness to join the Community. The verification team comprising of experts from the EAC Partner States shall be in Somalia from 25th January to 3rd February, 2023, to establish the country’s level of conformity with the criteria for admitting foreign countries as provided in the Treaty for the establishment of the EAC.
The Secretary General further said that the team will assess Somalia’s development strategies and plans in key areas of collaboration including infrastructure, energy, education and science, peace and security, and international cooperation.
The African Union (AU) has called on global south nations to continue creating partnerships that will effectively address the issues on the African continent and equally have partnerships that will deepen the delivery of tangible outcomes.
The call was made at the three-day second high-level forum on the South-South and Triangular Co-operation (SSTC) organised by AU Commission deputy chairperson Dr Monique Nsanzabaganwa at the Speke Resort Munyonyo in Kampala via a recorded video.
The AU is currently reviewing Agenda 2063 strategic partnerships for the first decade to establish the creation of more effective partnerships that are expected to enable improved synergy and co-ordination in the financing and implementation of the development frameworks at the national, regional and continental levels.
Morocco, one of the key African states, has come to New Delhi’s rescue, after China suspended exports of a key component to manufacture fertilisers essential for Indian farmers. India has turned to Morocco to secure fertilizers after China suspended the export of ammonium phosphate, a key component in the manufacturing of fertilizer. Over the weekend during the visit of Fertiliser Minister Mansukh Mandaviya Morocco, Morocco’s phosphate giant OCP Group announced signing a deal with India to supply New Delhi with 1.7 million metric tonnes of phosphate-based fertilizer over the coming 12 months.
Under the deal, OCP Group will supply India with 700,000 tonnes of fertilizer. The fertilizer would be tailor-made to meet the needs of the plants and crops they are intended for. The Moroccan fertilizer producer is set to provide another one million tonnes of fertilizer directly to the Indian farmers, according to a statement by OCP.
The disruption of grain deliveries from Ukraine is an opportunity for countries African countries to increase their food production at home, the African Union’s Commissioner for rural economy and agriculture, Josefa Sacko, has said.
Speaking to the European media, she said Ukraine and Russia made up significant of worldwide grain and oilseed exports and countries, mainly from Africa, dependent on imported wheat and other products imports were seriously affected by the disruptions and price spikes.
Some of the affected countries were Egypt, Algeria, Tunisia, Nigeria, Kenya, and Benin.
Last week the new Foreign Minister of China, Qin Gang made his first international tour as the foreign minister to Africa. The visit was significant, it was symbolic in a way; it emphasized China’s foreign policy priorities. This week two very senior officials from Russia and the US will be in Africa almost the same time. The US Secretary of the Treasury Janet Yellen kicked started her visit in Senegal on Saturday. Her visit comes to as Biden’s administration continues to advance its charm offensive in Africa. The visits also mark a new scramble by China, Russia and the US as the competition development alternative energy infrastructure in Africa begins. Africa, led by South Africa, has committed to transition to clean energy harnessing its fast natural energy resources in this regard.
U.S. Ambassador to the United Nations Linda Thomas-Greenfield will travel to Ghana, Mozambique and Kenya this week to advance joint priorities following December’s U.S.-Africa Leaders Summit.
Her tour, from January 25 to 29, will focus on regional security issues, food insecurity, humanitarian issues, and supporting African efforts to mitigate climate change, a senior administration official told reporters on Monday.
Thomas-Greenfield’s trip is happening in tandem with Treasury Secretary Janet Yellen’s ongoing mission to Senegal, Zambia and South Africa that will continue through January 28. Yellen is seeking to deepen U.S.-Africa economic ties, including by expanding trade and investment flows.
President Joe Biden announced over $15 billion in two-way trade and investment commitments, deals and partnerships at the three-day December summit that drew delegations from 49 African nations to Washington.
Africa has deeply felt the impact of Russia’s invasion of Ukraine as fuel, food and fertilizer prices rose in its aftermath. This year, U.N. agencies have warned that the impact of the fertilizer crunch could reduce the size of harvests on the continent.
The U.N. and Turkish-brokered Black Sea Grain Initiative has seen more than 18 million metric tons of Ukrainian wheat and other food stuffs exported to international markets since it was signed in mid-July.
India, Egypt agree to elevate bilateral relations, boost trade (Anadolu Ajansı)
Indian Prime Minister Narendra Modi and visiting Egyptian President Abdel Fattah El-Sisi on Wednesday discussed bilateral relations and agreed to boost trade. Addressing a press conference after a meeting in the capital New Delhi, Modi said they have decided to take the bilateral trade between India and Egypt to $12 billion in the next 5 years.
“We’ve decided that under India-Egypt Strategic Partnership we will develop a long-term framework for greater cooperation in the fields of politics, security, economics, and science,” he said.
Bilateral trade between India and Egypt reached $7.26 billion in 2021-22. The trade was fairly balanced with $3.74 billion in Indian exports to Egypt and $3.52 billion in imports from Egypt to India. More than 50 Indian companies have invested around $3.15 billion in diverse sectors of the Egyptian economy, including chemicals, energy, textile, garment, agri-business, and retail.
A slew of urgent reforms to carbon pricing, import tariffs and regulatory issues are needed to decarbonize supply chains in time for the 2030 goals, said Ngozi Okonjo-Iweala, Director-General, World Trade Organization, when she addressed the World Economic Forum’s Annual Meeting.
“Because countries tend to impose higher tariffs on relatively clean finished goods, but lower tariffs on often more-polluting inputs and intermediates, trade policy skews in favour of dirtier products – resulting in an implicit subsidy for CO2 production of $550 billion-$800 billion per year,” she said. Eliminating this bias, she added, would reduce global carbon emissions by 3.6% while increasing global income by 0.65%.
World leaders gathered at the World Economic Forum Annual Meeting 2023 in the first major international gathering of the year to address ongoing economic, energy and food crises while laying the groundwork for a more sustainable, resilient world. While many economists forecast recessionary risks in 2023 and see geopolitical tensions continuing to shape the global economy, there are glimmers of hope that pressures on food, energy and inflation may be peaking.
“Our world is plagued by a perfect storm on a number of fronts,” said United Nations Secretary-General António Guterres, who called for urgent action on a number of interconnected challenges, including the global economic crisis, climate, income and gender inequality, US-China relations, Russia’s invasion of Ukraine and the lingering effects of the COVID-19 pandemic. “Now more than ever, it is time to forge the pathways to cooperation in our fragmented world.”
The Commonwealth Secretary-General yesterday called for an unprecedented level of international co-operation to reach timely and orderly resolutions to the interlocking crises of environmental breakdown, economic insecurity and rising inequality. Secretary-General the Rt Hon Patricia Scotland KC was delivering a keynote address at the 2023 Cumberland Lodge Residential Conference in Windsor, UK, on the theme ‘Commonwealth and Global Challenges’.
“We gather in the midst of new and decisive shifts in the world. The human damage, economic dislocation of COVID-19 and mounting debt confront us all. The rapid intensification of climate change poses an existential danger. The tremors of conflict and instability in our world, the spiralling costs of food and fuel, and economic uncertainty threaten a serious and protracted crisis.”
The Secretary-General continued that each of these crises can be met through international co-operation. However, she cautioned that the multilateral system is under immense pressure, calling for a reinvigoration of multilateralism. “People are anxious about the capacity of governments and international institutions to provide the leadership and action required,” she added.
Colombia’s Minister of Finance and Public Credit, José Antonio Ocampo, has called for urgent policy actions to tackle the economic dimensions of the current cascade of global crises. Mr. Ocampo delivered on 23 January the 18th edition of the prestigious Raúl Prebisch Lecture, a series organized by UNCTAD and named after the organization’s first secretary-general. Watch the lecture.
He underscored the need to strengthen international tax cooperation, improving on the 2021 agreement in the Organisation for Economic Co-operation and Development’s Inclusive Framework in its two dimensions: limiting tax competition and fair taxation of multinational companies.