tralac Daily News
President Cyril Ramaphosa has met with business leaders from key sectors of the economy ahead of Thursday’s South African Investment Conference (SAIC). At a media briefing on Wednesday on the President’s upcoming engagements, Presidential spokesperson Vincent Magwenya said economic interventions, economic growth and job creation were the issues discussed at the meeting.
“The President has agreed with business that there is a need for acceleration towards the resolution of challenges impacting key economic enablers, namely energy, transport and logistics, and crime and corruption.
“On the eve of the fifth South African Investment Conference, President Ramaphosa is highly enthused by the collaborative spirit that continues to guide engagements between government and business and more importantly, the commitment shown by business to take collective responsibility in resolving some of the challenges that are facing our country and the economy,” said Magwenya.
SA must avoid agro trade fallout with neighbours (CAJ News Africa)
South Africa’s agricultural export expansion drive to Asia should not be at the expense of existing markets, mostly the Southern African Development Community (SADC) regional bloc. In addition, the country must ensure cordial trade relations with fellow African nations in this drive to broaden its export base. This is the view of locally-based agricultural expert, Wandile Sihlobo.
Sihlobo, chief economist at the Agricultural Business Chamber (Agbiz), maintained South Africa should expand its markets to Bangladesh, China, India, Saudi Arabia and South Korea but existing markets should not be disregarded.
“We should actively engage with existing markets to promote further growth of exports of South African agricultural products,” the economist stated.
Flour price to remain high as State fails to get cheap maize (Business Daily)
Kenyans will continue waiting for cheaper flour after it emerged that the government’s search for cheap maize was facing headwinds on limited supply of the grain on the international market. The Ministry of Agriculture has opened negotiations with traders aimed at reviewing the Sh4,200 per 90-kilo bag that the government had issued to maize importers as the landing price under a duty waiver.
Agriculture Principal Secretary Harsame Kello says it has become difficult for traders to find cheap maize owing to a tight competition with other African countries such as South Sudan, which is offering higher prices.
“Importers failed to match the price that the market is demanding out there because of a scarcity in the world market, we are now negotiating on a new price with the traders,” said Mr Kello.
The requirement to commit on landing price saw millers opt out of imports citing that it would be difficult to get maize at that price, given the shortage of non-genetically modified maize and a weakening shilling.
CS Kuria Lifts Ban on Exportation of Raw Macadamia (Capital News)
Trade and Investment Cabinet Secretary Moses Kuria has lifted the ban on the exportation of raw macadamia nuts for a period of one year in a bid to open up the global markets. Speaking in Kirinyaga, Kuria said that the current prices of Macadamia nuts had gone as low as Sh20 shillings per kilogram which he termed exploitative to farmers who toiled the land only for middlemen to reap the profits.
Kuria said that the lifting of the ban on the exportation of raw nuts will open up marketing outlets and attract across the world to allow competitiveness so that farmers can sell to the highest bidders.
Budget misalignment expected to hurt high-impact sectors – IPF (Capital Business)
Kenya’s economy is headed for a tougher run due to a growing burden of debt servicing, the government’s inability to implement austerity measures, and a worsening global economic slowdown. This is according to projections by the Institute of Public Finance (IPF), which noted that the government’s decision to reduce budget allocations to high-impact sectors like Agriculture and Social Protection that have the potential to support inclusive growth.
Speaking during the launch of the Financial Year 2023/2024 Annual National Shadow Budget, IPF CEO, James Muraguri pointed out that it is concerning that the budgetary allocation to the priority regions does not meet the government’s pledges.
“There seems to be a significant misalignment or less prioritization of critical sectors of high impact. The agriculture sector, which employs more than 40 percent of the total population and 70 percent of the rural population, does not seem to receive the attention that it deserves. This has a net effect of leading to food insecurity where it is estimated that by June 2023, 5.4 million Kenyans are projected to face elevated levels of acute food insecurity,” said Muraguri.
Minister of Finance Mohamed Maait has said that Egypt has become more attractive to foreign investments with its promising and attractive opportunities, advanced infrastructure capable of meeting all the needs of investment and production activities, a legislative environment, tax and customs incentives, and the incentive efforts taken by the government to empower the private sector, including the state ownership policy document and the golden licence.
He added that a memorandum of understanding (MoU) will be signed between the Egyptian and South Korean customs authorities at the end of this month to enhance customs cooperation and facilitate trade movement.
Maait affirmed, during his meeting with the South Korean ambassador in Cairo today, Egypt’s aspiration to increase the investments of Korean companies, in a way that contributes to maximizing Egyptian production and export capabilities, and strengthening the partnership between the two countries, as the investments of Korean companies are a leading model in the electronics industry in the Egyptian market, and play a pivotal role in deepening the national industry, increasing the proportions of the technological component in the industry, and providing new job opportunities.
The Nigerian Customs Service, NCS Seme Area Command has lamented the severe impact of prolonged border closure on revenue generation at the Seme border.
Customs Area Controller Seme Command, Comptroller Dera Nnadi, gave the figures during a media briefing of the First Quarter, Q1 performance of the Command and the handing over of fake $6 million to the Economic and Financial Crime Commission, EFCC as well as handing over of other seized items to partner government agencies at Seme, Badagry.
He said: “The major source of revenue of the Command (import/export) have not been enhanced since the opening of the land Borders as directed by the Federal Government of Nigeria as the traders are still bracing with the challenges of having been out of business for over two years.”
Civil Society Legislative Advocacy Centre/ Transparency International Nigeria (CISLAC/TI-Nigeria) has urged the incoming government to deepen economic and export diversification, focus on production, improve business climate and macroeconomic stability. The organisation reiterated the need to strengthen ease of doing business and block leakages for corruption.
Executive Director, Ibrahim Musa (Rafsanjani), spoke yesterday at an interactive session in the spring meeting of World Bank and International Monetary Fund (IMF) in Washington DC, United States.
Rafsanjani, in a statement, noted the incoming government should sustain policies with potential of driving growth and development. Deliberate efforts, he said, must be made to avert placement of priorities, reverse policies, sustain and implement new ones.
Nigeria’s debt to the World Bank alone jumped to $13.9 billion in December 2022, an increase of $1.5 billion from 2021 – apart from the latest $800 million loan granted by the bank to cushion the effects of anticipated fuel subsidy removal.
Reliance on the World Bank by Nigeria has increased in the past three years, particularly after the Covid-19 lockdown.
Total debt owed the World Bank was $10.1 billion in 2019, which rose to $12.5 billion in 2020. Between 2019 and 2022, Nigeria’s debt to the World Bank increased by $3.8 billion.
Nigeria probes sale to China of stolen 48m barrels of crude oil (The East African)
Nigerian lawmakers have begun a probe into the sale of stolen 48 million barrels of crude oil to China.
“It is quite alarming that illegal deals with China cost Nigeria $2.4 billion revenue loss from the sale of stolen 48 million barrels,” Nigeria’s Speaker of the House of Representatives Femi Gbajabiamila said in Abuja on Tuesday, at the opening of the ad hoc committee set up to probe the deals.
He said Nigeria loses $700 million monthly to oil theft, a menace that impacts negatively on the country’s national budget.
He noted that the oil and gas sector remained the main contributors of Nigeria’s economy as it accounted for its 95 percent of foreign exchange earnings and 80 percent of annual budgeted revenue.
The World Bank-supported West Africa Unique Identification for Regional Integration and Inclusion (WURI) programme is set to enjoy new impetus after members of the steering committee met in Nigeria’s commercial capital Lagos last week to okay the overall program development objectives.
Already, the first phase of the $395 million project, which is meant to provide unique proof of identity for easy access to public services, has been piloted by Cote d’Ivoire and Guinea and is in the process of being implemented by Benin, Burkina Faso, Niger and Togo, according to the ECOWAS Commission, which is spearheading the project.
The project, which is in two phases, will be expanded by all the other member states of ECOWAS as a way of providing legal and acceptable identity for all citizens of the regional economic and political bloc, writes Premium Times. About 196 million people within ECOWAS are said not to have any form of legal identity, despite the high level of regional mobility within the bloc.
Kenya is the only economy in East Africa whose projected economic growth for 2023 has been revised upwards by the International Monetary Fund (IMF) in its latest review, giving Nairobi a major confidence boost as it fights an economic crisis.
In the just-released World Economic Outlook, IMF now projects that Kenya will grow at a rate of 5.3 percent in 2023 from 5.1 percent forecasted in October 2022.The IMF has revised projections for Rwanda, Uganda, Burundi and the Democratic Republic of Congo (DRC) downwards.
This upward revision of projected growth implies that Kenya is poised to generate Sh25.5 billion more in economic output in 2023 than had been earlier projected by the IMF. The fund also expects Kenya’s economy to grow faster than had been earlier projected with the fund projecting moderate acceleration in the economy’s growth momentum to 5.4 percent in 2024.
Africa is on a trajectory of explosive population growth with immense economic, environmental and social challenges if we continue business as usual.
By the late 2060s, sub-Saharan Africa will be the most populous of the eight geographic regions, ballooning to 3.44 billion inhabitants by the end of the century. Ever-depleting resources will risk biodiversity collapse and entrench the continent in an increasingly desperate situation of poverty, with sub-Saharan Africa projected to have 86 percent of the world’s extreme poor by 2050.
To lift people out of the poverty cycle we need locally-driven economies that promote economic growth, generate wealth and create those 7.3 million jobs per year. If this growth is driven with the current waste creating linear business model, this would generate a massive ecological footprint. The negative effects of which could wipe out the benefits of those gains.
Circular business models design out waste, keeping products in use for longer and re-using raw materials to eliminate waste, water, energy, materials and pollutants at source, and reduce total waste to landfill. They create the competitive advantage of a more efficient business model, present opportunities for bottom-up innovation, stem the onslaught of biodiversity loss and address climate change.
Piling debt in Africa to feature in IMF, World Bank meeting in US (The East African)
IMF and World Bank chiefs may be meeting thousands of kilometres from Africa, but the upcoming annual gathering in Washington is eliciting new calls to have piling debt addressed.
The two global lenders are key in funding budgetary deficits in most of East Africa. But this year’s annual meetings often known as Spring Meetings in Washington DC, are also coming amid the clamour for climate change funding and a need for cushioning efforts for the poor.
Across East Africa, economists are already warning that the growing debt levels could push regional economies into financial distress.
“It is alarming, as past funding trends show, that the bulk of climate finance is channelled through loans, further increasing already high debt levels,” said Prof James Gathii of Afronomicslaw.org.
“Without adequate interventions on the loss and damage as well as adaptation fronts, African countries are likely to borrow approximately $1 trillion over the decade for their climate response,” Gathii said.
Joseph Aidoo Jr, executive director at Devtraco Group in Ghana has implored African governments to improve infrastructure, promote political stability, and enhance the business environment to drive growth and realise the continent’s full potential.
“Embracing technology, nurturing entrepreneurship, and promoting investment in critical infrastructure can create a business-friendly environment that supports sustainable economic growth and development across the continent,” he said.
He emphasised that addressing critical challenges, such as poor infrastructure, political stability, and poor business environment, will do Africa well. Nevertheless, he expressed his optimism about the future of Africa, citing significant progress in economic growth, infrastructure development, and technological advancements across the continent in recent years.
Will France still be able to export cereals to Africa on April 25? The government wants to be reassuring, while producers and traders fear that they will no longer be able to use an insecticide (phosphine) in direct contact with the grains, which would close the door to their historical customers.
“There is nothing to worry about for our exports,” French Foreign Trade Minister Olivier Becht said on Tuesday, while his Agriculture counterpart, Marc Fesneau, underlined the major role that France would continue. to stand for global “food security”.
The government was questioned by several deputies on the consequences of a decision by the French Health Security Agency (Anses), dating from October 2022, which does not authorize, from April 25, the use of PH3 insecticide (or phosphine ) in the fumigation of the holds of ships only on condition that it is not “in direct contact with cereals”.
“If no decision is taken, on April 25, we will no longer be able to export to countries such as Togo, Cameroon, Algeria, or Egypt, which require in their specifications fumigation in direct contact with grains,” Eric Thirouin, president of the Association of French Grain Producers (AGPB), told AFP.
IMF review seeks better central bank governance (Business Daily)
The International Monetary Fund (IMF) has reviewed the governance policies of central banks around the world to minimise risks of misuse of loans and default on payments.
The Washington DC headquartered institution recently published a safeguards assessment policy report following the review by an external expert panel that was chaired by Central Bank of Kenya (CBK) chairperson Mohammed Nyaoga.
The Nyaoga team made several key recommendations to the IMF that have been adopted, marking another milestone in tightening the operations of central banks.
Group of Seven (G7) advanced economies will consider how best to help developing countries introduce central bank digital currencies (CBDC) consistent with appropriate international standards, Japan’s top currency diplomat Masato Kanda said on Tuesday. The move will be among key themes of G7 discussions that Japan chairs this year, as part of efforts to address challenges the global community face from fast-moving digital technology, he said.
“As a priority of this year, the G7 will consider how best to help developing countries introduce CBDC consistent with appropriate standards, including the G7 public policy principle for retail CBDC,” he said.
UNCTAD in its latest Trade and Development Report Update released on 12 April warns that developing countries are facing years of difficulty as the global economy slows down amid heightened financial turbulence.
Annual growth across large parts of the global economy will fall below the performance registered before the pandemic and well below the decade of strong growth before the global financial crisis.
The UN trade and development body estimates that interest rates hikes will cost developing countries more than $800 billion in foregone income over the coming years. UNCTAD expects global growth in 2023 to drop to 2.1%, compared to the 2.2% projected in September 2022, assuming the financial fallout from higher interest rates is contained to the bank runs and bailouts of the first quarter.
Trade and Development Chart: The Rise of China (World Bank Blog)
Since China entered the World Trade Organization on December 11, 2001, it has become the most important trading partner to the world. This chart shows the number of countries for which either China or the United States is the top trading partner in merchandise goods. China gained prominence in sub-Saharan Africa, while the US remains the most important partner for Latin America and the Caribbean.
DG Okonjo-Iweala said: “I am delighted and grateful to receive the United States’ formal acceptance of the WTO’s Agreement on Fisheries Subsidies. This strong show of support by the United States for the WTO’s work toward ocean sustainability marks a pivotal increase in momentum among the membership to ensure this landmark agreement enters into force. US leadership is vital to the WTO and to multilateralism. I look forward to continuing to work with the United States to ensure that the WTO responds to the needs of people and the planet.”
United States Trade Representative Katherine Tai said: “The United States has been a leader in protecting our shared environment from harmful and unsustainable practices, including our oceans and marine resources — and those whose livelihoods depend on them.”
“We are proud to be among the first WTO members to accept this agreement, which is the first ever multilateral trade agreement with environmental sustainability at its core. It will help improve the lives of fishers and workers here in the United States and elsewhere”.
Extract: Rising trade protectionism amid economic uncertainties and slow progress in global trading system reforms are key concerns. Global trade is important for sustainable inclusive growth and poverty reduction, but many EMDEs experience unequal distribution of the benefits of trade, limited market access and unfair trade practices, especially the agriculture sector, which is often the main source of livelihood for the poor. Some recent policies meant to resuscitate domestic production or meet net-zero targets have the potential to increase the relative costs of some tradable commodities, which deviates from the principle of comparative advantage, distorts trade and investment decisions and further affects developing countries. We call on the IMF and WBG to analyze the costs and benefits of free trade and globalization, including the threats to economic security during crisis such as the pandemic when concentration risks and supply chain risks upended the global markets. We urge World Trade Organization support in the design of a robust multilateral trade system, so that agreement on basic principles, including on nontariff barriers and services could be reached at the multilateral level. In this regard, we welcome the IMF review of the Role of Trade to help guide policy advice on increasing supply-chain resilience while avoiding distortive protectionist measures. We urge that measures taken to combat climate change should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade.
Climate change is one of the most critical macroeconomic and financial policy challenges that IMF members face in coming decades. Capital is among the most important enablers of climate action, but not enough is getting to the people and places that need it most.
As massive global investments to reduce emissions and boost resilience are required—we need a major shift to harness public and, especially, private financing. That includes substantially more concessional finance that can lower risk and drive private sector finance more efficiently to emerging and developing countries. It also requires that both the public and private sectors finance all components of the energy transition, including both the scaling of clean energy and the managed phaseout of fossil fuels on an accelerated time frame.
To achieve this objective, all countries need robust climate policies that accelerate the green transition, and stronger mechanisms to promote cooperation and risk-sharing among stakeholders.
“Developing countries have suffered the most from this onslaught of crises. The [COVID-19] pandemic increased the global extreme poverty rate from 8.4 to 9.3 percent, the first recorded increase since we started keeping count…. Now, a growing number of developing countries are facing the prospect of major domestic crises, with economic growth slowing, poverty and hunger on the rise, public debts reaching unsustainable levels amid rising interest rates, ineffective mechanisms for resolving external debt distress, underinvestment, and growing populations.”
“Confronted by these developments, we have the responsibility to forcefully reassert core economic principles for development in every country. I will highlight four:
First, achieving macroeconomic stability is critical – not least because fiscal recklessness compromises essential services and inflation penalizes the poor the most.
Second, sound policies to promote private investment should always remain a top priority – because without them there would be no economic growth.
Third, free and fair international trade must be nurtured – because it promotes efficiency and creates enormous opportunities for growth and convergence.
Finally, the international community’s mechanisms to finance the provision of global public goods must be strengthened – because climate costs, conflict, and pandemics will set back human progress everywhere unless the effectiveness of global efforts improve.”