tralac Daily News
We have come to the end of the 5th South Africa Investment Conference.
We have honoured the undertaking we gave the South African people in 2018 that we would attract new investment to our shores, support the growth of local businesses and create more jobs.
Nor could any of us have imagined the lingering impact on investment, businesses, jobs, and livelihoods, even years after the existential health threat has passed. For us to have been able to meet our five-year target despite major challenges and disruptions, including the pandemic, is no mean feat.
Infrastructure development is one of the key areas of focus to drive economic growth and is the flywheel that drives economic growth.
When we talk about investment in the cause of development, infrastructure is at the center.
Propelled by the success of the South Africa Investment Conference (SAIC) held annually in the country over the past five years, President Cyril Ramaphosa has set a R2 trillion target for South Africa to achieve over the next five years.
Attended by delegates from varying industries in South Africa and across the world at the Sandton Convention Centre in Johannesburg, the afternoon session of the conference saw investments announced in the digital economy, manufacturing sector and the Special Economic Zones (SEZs). These are expected to pave the way for job creation and economic growth.
SA “conducive for business” (SAnews)
Human Settlements Minister Mmamoloko Kubayi has lauded the functioning judicial system which makes South Africa fertile ground for investment. The Minister was speaking during a panel discussion on Investing in South Africa at the fifth South Africa Investment Conference on Thursday.
“In terms of the story around investing in South Africa, one of the things that I say is we as a society tend to focus on the negative, which we must pay attention to, but there are quite a number of things that make South Africa a good area for investment, which sometimes we don’t talk about.
Kubayi also lauded the tax regime in the country, which provides a sound framework for business to thrive.
Car importers feel heat of new registration policy (Business Daily)
A State requirement for used cars to be assigned registration number plates before clearance and not when selling them has led to a backlog of 6,000 used vehicles at various Container Freight Stations (CFS) in Mombasa.Car Importers Association of Kenya Chairman Peter Otieno says the rule has put importers at a disadvantage as their vehicles take several months before they can be sold in a market where buyers prefer cars with plates.
This, they said, has forced them to sell their cars at lower prices or offer discounts between Sh50,000-Sh200,000 per unit on those that may not be older but were imported earlier, and do not bear latest number plates.
“This system is not fair to our members due to the fact that customers do not buy the motor vehicles but the new number plates therefore the one month or more registered number plates are considered to be old vehicles,” said Mr Otieno in a recent letter to the Kenya Revenue Authority.
Kenya’s external debt balloons by $2.58b on weak shilling (The East African)
Kenya’s external debt has ballooned by a staggering KSh344.4 billion ($2.58 billion), giving dimension to the impact of a weakening shilling whose exchange rate against the greenback has tanked to a historic low of KSh133.55.
The Central Bank of Kenya (CBK) data shows that total external debt as of January stood at $37.63 billion (KSh4.7 trillion), where the mean exchange rate was 124.4 against the dollar.
Most of the Kenya’s foreign loans are owed to multilateral institutions such as the World Bank, the International Monetary Fund (IMF) and African Development Bank (AfDB), with a big chunk of the loans being concessional loans with preferential repayment terms.
With the tightening of the global market, the country has been forced to rely on cheap loans, especially from the World Bank and IMF.
Kenyan economy to overtake Angola as Ethiopia widens lead (Business Daily)
In its latest World Economic Outlook, the IMF says gross domestic product (GDP) of Angola, an oil producer, will shrink during the period allowing Kenya, whose economy is expected to grow by 5.3 percent, to overtake it, and perch itself at the fourth spot behind Ethiopia.
However, Ethiopia, which the IMF had projected in its October 2022 outlook would overtake Kenya to become Eastern Africa’s largest economy, is now expected to overtake both Angola and Kenya to become the third largest economy in sub-Saharan Africa.
This is after the IMF revised its earlier forecast on Ethiopia’s GDP in 2023 from Sh16.9 trillion ($126 billion) to Sh20.9 trillion ($156.1 billion), stretching its newfound lead over Kenya.
Tunisia drought threatens ‘catastrophic’ grain harvest (The East African)
A severe drought in North Africa has left Tunisian farmers bracing for a catastrophically poor harvest, imperilling food security in the cash-strapped country.
At a time when the global cereals market has been disrupted by the Ukraine war, Tunisia’s domestic grain production has also withered under a lack of rainfall that has killed off crops.
Even before the roasting summer months, the soil is dry and dusty in the small Mediterranean country, whose water resources are steadily depleting as climate change intensifies.
FG signs agreement to re-concession Lagos trade fair complex (Premium Times Nigeria)
The Bureau of Public Enterprises (BPE) has signed a tripartite agreement to commence the re-concession of the Lagos International Trade Fair Complex (LITFC). This is contained in a statement signed by BPE’s Head of Public Communications, Amina Tukur, in Abuja on Monday.
Director-General of BPE Alex Okoh said the standardisation of lease agreements would ultimately increase the earnings of the LITFC and the Federal Government in particular.
CAPS, new gas megaproject, aims to power Central Africa, but at what cost, critics ask (Mongabay Environmental News)
More than 60% of people in Central Africa have no access to electricity. An ambitious proposal aims to change that with a network of pipelines, refineries and gas-fired power plants stretching across 11 countries in the region. But critics say the proposed Central African Pipeline System is a mistake.
Nathalie Lum, chairwoman of the Central Africa Business Energy Forum (CABEF), an organization that hosts an annual conference of oil and gas corporations and regional energy ministers, told Mongabay that CAPS will help make the Central Africa region an “energy poverty-free zone” by 2030.
“Access to reliable, affordable energy can help reduce poverty, attract investments, and create jobs, while also providing an important source of revenue for governments.” she said.
Over the past months, Egyptian-Turkish relations have been thawing at the state level following a decade-long rupture. In the latest round of the recent rapprochement between Türkiye and Egypt, Turkish Minister of Foreign Affairs Mevlüt Çavuşoğlu visited Cairo in March and held bilateral talks with his Egyptian counterpart Sameh Shoukry.
On the economic front, the two countries maintained strong ties despite the frosty diplomatic relations. Türkiye was the largest importer of Egyptian products in 2022 totalling $4bn. Also in February, a delegation of 14 representatives of Turkish companies visited Cairo and met with Egyptian Prime Minister Mostafa Madbouly, to discuss economic cooperation between the two countries.
Investors should seize the economic and business opportunities to establish a commercial presence in South Africa, said Secretary General of the African Continental Free Trade Area (AfCFTA) Secretariat, Wamkele Mene.
Mene was addressing delegates from varying industries in South Africa and across the world at the fifth South Africa Investment Conference (SAIC) on Thursday.
“By 2050, the continent will be home to 2.5 billion people. The largest working force in the world by 2050 will be in Africa. At that point, estimates are that consumer spending and business spending in Africa will be in excess of $16 trillion.
“This is an opportunity that our continent and our investors should not miss. It is of course expected that there will be challenges but I encourage everyone to look at Africa with a long-term view of investing and to see your returns in your investments,” Mene said at the gathering held at the Sandton Convention Centre in Johannesburg.
The implementation of the agreement is also expected to contribute $450 million combined gross domestic product (GDP) to Africa’s GDP and increase wages by close to 9%.
“We project that the most immediate beneficiaries will be small, micro and medium enterprises (SMMEs) that are led by women, this is why this agreement is so important for the future of our continent,” he said.
“The long station ambition of the African Union (AU) is that one day our continent must be a common one. That is why we recently concluded protocols on investment protection with some ratifications to be done on international property rights and competition, which are so critical for the economic integration in Africa,” Mene said.
South Africa to Host African Critical Minerals Summit in 2023 (Energy Capital & Power)
The first ever African Critical Minerals Summit will take place on November 6-7, 2023, in Johannesburg, hosted by South Africa’s Department of Mineral Resources and Energy. H.E. President Cyril Ramaphosa will open the global gathering with over 2,000 delegates expected to participate. South Africa’s government will welcome delegations from around the world – including the United States, European Union, United Kingdom, BRICS and G20 countries.
The Africa Fertilizer Financing Mechanism’s (AFFM) Governing Council committed to to mobilize funds to implement the AFFM’s Strategic Plan 2022 - 2028 to support the increased availability and appropriate use of fertilizer on the continent.
The AFFM strategic plan 2022-2028 prioritizes broadening access to finance through capital investments and policy reforms. Technical assistance will also be provided to boost smallholder farmers’ access and appropriate fertilizer use.
Through the end of 2022, trade credit guarantees totaling $8.8 million provided 5.3 times leverage, enabling the provision of 112,268 tonnes of fertilizer to 690,896 smallholder farmers in the four countries. Under these projects, 97 small and medium enterprises gained access to finance, and 138 companies, including fertilizer suppliers, hub-agro dealers and aggregators, and 20,987 smallholder farmers, benefited from capacity building
To scale up its trade credit guarantee investments, the AFFM has developed a pipeline of projects for implementation in 2023. These will be rolled out in Mozambique, Zimbabwe, Uganda, Kenya and Tanzania.
Sub-Saharan African, South African growth to moderate in 2023 (Engineering News)
The gross domestic product (GDP) growth of countries in sub-Saharan Africa is expected to moderate throughout 2023, with the regional average falling to 3.5%, from 3.6% in 2022 and below the 2010 to 2019 average of 4.1%, credit risk and strategy decisions research company Fitch Solutions Country Risk and Industry Research country risk head Jane Morley said on April 13.
This is owing to global headwinds, including tightening financial conditions, lower commodity prices and the lagging impact of higher inflation following Russia’s invasion of Ukraine, while further tightening of global financial conditions will dampen economic activity in many sub-Saharan African markets, she noted.
Africa, rich in human and natural resources has no business being poor or hungry, but large-scale development challenges have taken a toll on citizens, making them very vulnerable and unable to self-actualize.
From Morocco in the North, Zimbabwe in the South, Somalia in the East, Nigeria in the West to the Central African Republic (C.A.R) in Central Africa, citizens suffer the common fate of over-population, leadership deficits, inadequate plan implementation, wars, climate change, pestilence, deprivation, poverty, food scarcity, malnutrition and other factors, which threaten the prosperity of the continent.
To mitigate this challenge, the African Union, the continental body with the mandate to ensure prosperity, peace and unity across the continent, has devised means to address the menace, using Agenda 2063 which is the continental framework for transforming Africa into the global powerhouse of the future. It has other programmes like the African Continental Free Trade Area (AfCFTA) to boost intra-African agricultural trade and the Comprehensive Africa Agriculture Development Programme (CAADP).
40 women and youth-owned businesses attend a three-day masterclass series organized by ITC, AfCFTA Secretariat, ECA, OWIT and CLDP through AWYEG ahead of the AfCFTA Business Forum. The masterclass aims to equip these African entrepreneurs with the skills, information and networks needed to expand their business prospects across Africa by using the AfCFTA.
“Access to investment and trade finance is a critical lever for empowering women- and youth-led businesses to seize new opportunities in exports, business, and regional value chains created through the AfCFTA. ECA’s session on Investment Readiness Under the AfCFTA is, therefore, focused on enhancing the capacity of women- and youth-led businesses in designing compelling business cases for investment. This will enable them to scale and meet the standards of the African market, while also creating business linkages that facilitate their participation in continental supply and value chains,” said Mie Joergensen, Junior Professional Officer, ECA.
The 30th Annual Meetings of African Export-Import Bank (Afreximbank) will take place in Accra, Ghana, from 18 to 21 June 2023. The event will mark the high point of the Bank’s year-long 30th anniversary celebrations, under the theme “Delivering the Vision. Building Prosperity for Africans”. The 30th Afreximbank Annual Meetings and 30th Anniversary celebrations will bring together on one platform thousands of people, including African and Caribbean leaders and senior government officials, African, Caribbean and other policymakers, corporate leaders, bankers, academia and other thought leaders. The meetings will include the Annual General Meeting of Shareholders and an extensive seminar programme, featuring plenaries and side events.
Econews Africa wants Kenya, USA trade deal halted for lack of consultations (Capital Business)
The not-for-profit organization Econews Africa (ENA) now wants trade negotiation between the Kenyan and American governments stopped to allow stakeholders to engage. ENA says that talks under the Strategic Trade and Investment Partnership (STIP) cannot go on until pertinent issues are addressed. STIP will act as the precursor to the African Growth and Opportunity Act (AGOA), whose expiration date is set for 2025.
While American stakeholders have submitted their views to the United States Trade Representative (USTR) for consideration, the country has yet to conduct one.
“We note with concern that American stakeholders have given extensive comments to the USTR, while the Kenyan negotiators have yet to make any attempt to consult widely before embarking on the negotiations.”
“There needs to be a comprehensive assessment of the effect of agricultural trade liberalization,” Odari stated.
The global economy is at another highly uncertain moment: tentative signs of stabilization earlier this year have receded, and the outlook is increasingly risky and uncertain. At the same time, divisions within and across countries are deepening, exacerbated by rising fragmentation. Strong policy action is needed together with pragmatic approaches to find areas of common ground to respond to shared challenges. The IMF is proactively engaging with our members to chart a clear course to a stronger and more sustainable path for the global economy.
In 2022 during the COP27 summit, the African continent set a target of $1.4 billion for the initiative to build the resilience of vulnerable systems and promote sustainable development in the country. However, the target now has been surpassed by 64 percent according to the African Development Bank (AfDB).
AFDB has revealed that they have surpassed its mobilization target for The Just Green Transition (JGT) initiative after raising $2.3 billion which will be invested in tackling climate change-related challenges in Egypt.
The global food crisis remains a major challenge. Food insecurity fueled by widely experienced increases in the cost of living has become a growing concern especially in low-income countries, even if price pressures on global food markets have softened somewhat since the onset of Russia’s war in Ukraine in February 2022. Targeted assistance to the most vulnerable households combined with policy measures to support trade and agriculture systems, including to better cope with climate shocks, can help countries withstand the fallout of the ongoing food crisis while building longer-term resilience. The IMF, working in close cooperation with other international organizations, has continued to contribute to international efforts to alleviate food insecurity by providing policy advice, capacity development, and financial support through Upper Credit Tranche Arrangements and the new Food Shock Window. New commitments to countries particularly affected by the global food crisis total $13.2 billion since February 2022, of which $3.7 billion has been disbursed as of March 2023.
Tackling gender inequalities in agrifood systems and empowering women reduces hunger, boosts the economy, and reinforces resilience to shocks like climate change and the COVID-19 pandemic, reveals a new report by the Food and Agriculture Organization of the United Nations (FAO).
The status of women in agrifood systems report, the first of its kind since 2010, goes beyond agriculture to provide a comprehensive picture of the status of women working across agrifood systems— from production to distribution and consumption.
The report highlights that globally, 36 per cent of working women are employed in agrifood systems, along with 38 per cent of working men. However, women’s roles tend to be marginalized and their working conditions are likely to be worse than men’s –irregular, informal, part-time, low-skilled, or labour-intensive.
“If we tackle the gender inequalities endemic in agrifood systems and empower women, the world will take a leap forward in addressing the goals of ending poverty and creating a world free from hunger”, says FAO Director-General QU Dongyu in the foreword of the report.
Indeed, the study explains that closing the gender gap in farm productivity and the wage gap in agricultural employment would increase global gross domestic product by nearly $1 trillion and reduce the number of food-insecure people by 45 million.
The report, titled “Rising Global Food Insecurity: Assessing Policy Responses”, was produced at the request of G20 leaders in their G20 Bali Declaration of November 2022, where they asked the FAO and WBG to undertake a mapping exercise on the global response to rising food insecurity, identify any gaps in this response, and recommend further actions to eradicate hunger.
“Global partnerships like STDF are crucial to help farmers, producers, traders and governments in developing countries address some of the main challenges the world is facing today,” said DDG Paugam. “Around us, we are still grappling with the impacts of the COVID-19 pandemic on our lives and our economies. Climate change is on the rise and has a clear impact on the occurrence of new pests and diseases, and on food safety.”
Brazil’s Lula calls for end to dollar trade dominance (Financial Times)
Brazil’s president Luiz Inácio Lula da Silva has called on developing countries to work towards replacing the US dollar with their own currencies in international trade, lending his voice to Beijing’s efforts to end the greenback’s dominance of global commerce. Kicking off his first state visit to China since taking office in January, Lula called for the countries of the so-called Brics group of nations — which in addition to Brazil and China includes Russia, India and South Africa — to come up with their own alternative currency for use in trade.
Tentative signs of stabilization of the global economy have receded with recent financial sector turmoil. Headline inflation is moderating on the back of retreating commodity prices, but sticky underlying price pressures are complicating disinflation efforts. While growth in low-income developing countries (LIDCs) has been higher than in the rest of the world, its level is insufficient to address momentous challenges that range from combatting poverty to coping with climate change. Moreover, elevated debt levels and higher borrowing costs due to tighter global financial conditions leave policymakers with little fiscal space. Containing inflation, safeguarding financial stability, and protecting the vulnerable remain immediate policy priorities. At the same time, countries need to preserve or—in some cases—restore debt sustainability, which often requires better targeting of fiscally costly support measures taken in response to the COVID and commodity price shocks. Multilateral cooperation is more important than ever as many challenges are global, but it is acutely under threat from fragmentation.
In a recent signed article, United Nations Secretary-General Antonio Guterres called on the G20 to approve an “SDG Stimulus” to scale up affordable long-term financing for countries in need by at least $500 billion a year.
“Sixty percent of low-income countries are currently at high risk of or in debt distress – double the number in 2015. Since 2020, African countries have spent more on debt service payments than on healthcare,” he noted.
The SDG Stimulus plan, by supporting the UN’s Sustainable Development Goals, “aims to boost long term investments in sustainable development, particularly where transformation is most urgent: renewable energy, sustainable food systems, and the digital revolution,” he said.
“Developing countries need financing and technology to go through these transitions with minimal social disruptions,” he added.