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Eswatini has shown resilience to multiple economic shocks. Real GDP contracted by a comparatively modest 1.6 percent in 2020 but surged by 7.9 percent in 2021 as manufacturing rebounded on the easing of COVID-19 restrictions and strengthened external demand. Real GDP growth declined in 2022 due in part to base effects but also as construction projects slowed in response to government cash constraints, and sugar cultivation and processing were affected by excessive rainfall, high fertilizer and pesticide costs, and arson. Inflation rose in the wake of surging international food and fuel prices but appears to have peaked in 2022.
The trade balance worsened in 2022 with the rising cost of food and fuel imports—driving the external current account into deficit for the first time in over ten years. Together lower SACU receipts and weakening foreign direct investment, central bank foreign exchange reserves fell to about $449 million by end-2022 (2.3 months of import cover). The external position is assessed as broadly in line with the level implied by economic fundamentals and desirable policies.
Uganda, DRC Plan to Share Oil and Gas Infrastructure (ChimpReports)
Uganda is seeking regional partnerships in the development of its multi-billion dollar oil and gas sector, the Energy Minister Ruth Nankabirwa has revealed.
“In developing the oil and gas project, Uganda has adopted a regional outlook, taking into account what the region can achieve by working together,” said Nankabirwa on Tuesday during the 10th East African Petroleum Conference and Exhibition in Kampala.
“Uganda has extended invitations to the EAC Partner States to join in the development of the refinery which will go a long way in guaranteeing petroleum products security for the region,” she added.
Malawi takes critical step towards the validation of a successor Industrial Policy (UNECA)
“Industrialisation is central to the Government agenda of structural transformation of the economy. It is envisaged that industrialisation will transform Malawi from a predominantly consuming and importing country to a predominantly producing and exporting country, thereby reducing the overriding trade deficit” says Ms. Sphiwe Mauwa, Director of Administration, Ministry of Trade and Industry (MoTI).
Ms. Olayinka Bandele, Chief, Inclusive Industrialization ECA, speaking on behalf of ECA SRO-SA Director, said that this important step Malawi is taking is vital as it plays a pivotal role in driving economic growth, promoting diversification, generating employment, adding value to exports, fostering technology transfer and innovation, facilitating regional integration, advancing sustainable development, and improving social welfare.
Republic of Chad: IMF Staff Completes the 2023 Article IV Consultation (IMF)
Economic policy discussions focused on measures to strengthen public finances. Staff noted the progress achieved in domestic revenue mobilization, which will need to continue. It also called for a better control and increased efficiency of budget spending, in particular of the wage bill, and for a prioritization of social expenditures. It is also important that budgetary procedures are followed more rigorously and that the use of emergency expenditure procedures (DAOs) is limited to emergencies. Given the high volatility of oil prices, it is also necessary that part of the oil revenues is used to rebuild liquidity reserves and reduce the stock of expensive treasury securities.
How Naira redesign and its aftermath affect free trade in Nigeria (Businessday)
During the first quarter of 2023, Nigerians experienced cash circulation shortages due to the naira redesign policy. This policy negatively impacted several informal sector businesses, such as local retail shops, artisans, and commercial bus drivers.
Trading activities for small-scale manufacturers were also affected. The impacts of the naira redesign policy show a need to revive the cashless policy for small businesses to address cash scarcity. Promoting strategic monetary approaches that complement the naira redesign policy will boost free trade in Nigeria.
The rejection of old notes by banks, motorists, and other traders caused significant challenges for Nigeria’s informal economy. Also, the country’s high percentage of unbanked individuals underscores financial inclusion.
The implementation of the naira redesign policy also revealed Nigeria’s economic vulnerability. Due to limited access to physical cash, many Nigerians could not pay for basic needs and engage in trading activities. Some bank customers closed their bank accounts in protest of the cash crunch. The CBN must address financial access and reduce reliance on physical cash.
First Tanzanian gets certificate of origin to trade on AfCFTA (The Citizen)
The first Tanzanian received a certificate of origin yesterday to trade in the African Continental Free Trade Area (AfCFTA). Presenting the certificate yesterday, the acting vice president of the Tanzania Chamber of Commerce, Industries, and Agriculture (TCCIA), Mr Vicent Minja said the certificate will allow the businessman to get a reduction in customs duty from 35 percent to 12 percent.
“We have been educating traders about the benefits of exporting goods using certificates of origin under the African Continental Free Trade Area agreement, and today we handed over the certificate of origin to the first trader,” said Mr Minja.
Mr Minja urged more businessmen to take advantage of the opportunities available in the free market by accessing certificates of origin.
EA business body calls for empowerment of women, youth in AfCFTA implementation (News Ghana)
The East African Business Council (EABC) has called for the empowerment of women and youth in the implementation of the African Continental Free Trade Area (AfCFTA), the business body said in a statement on Monday.
EABC chief executive officer John Bosco Kalisa said in the statement that the AfCFTA agreement has stepped up to ensure the full inclusion of women and youth who are key components of small and medium enterprises (SMEs).
The statement said Kalisa made the remarks during the East African Civil Society Summit that was held in Tanzania’s northern city of Arusha on May 3-5.
He encouraged women and youth entrepreneurs to utilize digital tools available to take part in regional and continental trade and called for capacity-building and sharing of information, and elimination of VAT in digital tools and platforms to empower women and youth to engage in cross-border trade.
Agoa jobs in Kenya at 66,000 ahead of trade pact expiry (Business Daily)
The number of jobs created by the two-decade-old Growth and Opportunity Act (Agoa) agreement between Kenya and America has hit 66,260 ahead of the expiry of the trade deal.
The latest data shows the value of apparels exported from Kenya via Export Processing Zones (EPZ) under the pact hit a new high of Sh54.1 billion last year, translating to a 10.8 percent rise from the Sh41.6 billion realised in 2018.
The Kenya National Bureau of Statistics (KNBS) during the 12 months to December last year also show that capital investments injected in the sub-sector increased to Sh24.9 billion from Sh16.1 billion in 2018 with the number of employees engaged rising to 66,260 up from 46,248 half a decade ago.
Kenyan manufacturers through their lobby association had in March appealed to the Trade ministry to forward a request to the Joe Biden-led administration seeking an extension of the deal for another 15 years arguing that uncertainty in its fate was costing the country billions of shillings in potential investments.
In a time of energy transition and rising demand for metals and minerals, resource-rich governments in Sub-Saharan Africa have an opportunity to better leverage their resources to finance their public programs, diversify their economy, and expand energy access.
Africa’s Resource Future, a World Bank report launched today, finds that on average countries capture only about 40% of the revenue they could potentially collect from natural resources. In other words, at a time when countries are burdened by slow growth and high debt, governments could more than double revenues from natural resources such as minerals, oil, and gas by adopting a better set of policies, implementing reforms, and investing in better fiscal administration and promoting good governance. Full taxation of natural resources is also important to charge the full cost of environmental and social impacts not always fully covered by producers, including petroleum resources. Failing to do so can act as an implicit production subsidy and raise carbon emissions.
“Maximizing government revenues in the form of royalties and taxes paid by private natural resource industries, alongside attracting new investment, would offer a double dividend for people and planet by increasing fiscal space and removing implicit production subsidies,” said James Cust, Senior Economist in the World Bank Africa Region and co-editor of the report. The prospect of higher revenues is particularly welcome in countries that find themselves unable to make badly needed development investments because of high borrowing and debt service costs.
IMO, AAMA regret non-inclusion of maritime in national devt action plans (The Guardian Nigeria)
The International Maritime Organisation (IMO) and the Association of African Maritime Administrations (AAMA) have decried the non-inclusion of the maritime industry in African countries’ national development action plans.
According to the organisations, this has posed a huge barrier to investing in projects such as green ports and national single window systems, which are key in cutting carbon emissions for the shipping sector.
AAMA also contended that the lack of defined maritime policies is locking out some African ports from accessing climate resilience financing from multilateral lenders.
According to a study by the United Nations Economic Commission for Africa (UNECA), Africa requires 126 vessels for bulk cargo and 15 boxships by 2030 for full implementation of the African Continental Free Trade Area (AfCFTA). They noted that if business remains as usual, the existing carrying capacity of African vessels would only handle less than 10 per cent of the cargo shipped in and out of the continent.
Africa needs $700bn of finance for green energy and metals (Engineering News)
Africa will need more than $700-billion in finance over the next decade to develop renewable power and mines to extract the metals required for the green energy transition, according to Standard Bank Group.
The continent’s financial institutions won’t be able to provide even half of that and most of the money will need to come from investors from elsewhere, Kenny Fihla, chief executive officer of Standard Bank’s corporate and investment banking unit, said.
African governments are under pressure to extend power supply to the 600-million people — about half of the continent’s population — who currently don’t have access to electricity. At the same time, copper and cobalt deposits in the Democratic Republic of Congo and Zambia, lithium reserves in Zimbabwe and platinum and manganese seams in South Africa are seen as key to providing the materials needed for everything from solar panels to electric vehicle batteries.
Japanese investors say they want more business with Africa (AfDB)
There is growing interest in Japan by the government, parliamentarians, mega companies and startups to invest more in Africa.
One of the largest investors in Africa, Mitsui & co Ltd, announced plans to resume the construction of the multibillion-dollar Mozambique LNG project which was stopped in 2021 following an insurgent attack on the facility in the country’s northern region of Cabo Delgado.
Toyota Tshusho Corporation is one of the front-runners among Japanese companies doing business in Africa. It is present in all 54 countries with businesses covering automobile, pharmaceutical, beverages and energy. Across the continent it employs about 22,000 people.
The company is present in 11 countries in Africa: Algeria, Cote d’Ivoire, Egypt, Ethiopia, Kenya, Morocco, Nigeria, Senegal, South Africa. Tanzania and Tunisia. Since entering the African market in 1954, Mitsubishi Corporation has spread its investment wings mineral and metal resources, automotive & mobility, natural gas, food industry and power solutions.
It’s Senior Vice President Tetsuya Shinohara, said the company had limited activities on the continent. “Africa is a tough region,” he said, “We are figuring out areas to invest in, in the future. We are asking for suggestions about the way to follow.”
EU’s CBAM could have concerning economic outcomes for Africa (ESI-Africa)
A newly released study on the implications of the European Union’s Carbon Border Adjustment Mechanism (CBAM) raises concern about the economic ramifications of the mechanism as it will hit the competitiveness of African exports.
The study, released by the African Climate Foundation (AFC) and the Firoz Lalji Institute for Africa at the London School of Economics and Political Science (LSE), says this is of particular concern for industrial exports if product coverage expands over time.
Given the impact of the CBAM on Africa, African-led measures to tackle the negative impact on trade and industrialisation measures will increasingly become pressing.
The report, Implications for African countries of a Carbon Border Adjustment Mechanism in the EU, also notes that the mechanism process will introduce administrative hurdles to market access by African countries, which historically struggle to access the European market.
China’s Hunan reports robust foreign trade growth with Africa in Q1 (China Daily)
Central China’s Hunan province registered robust foreign trade growth with African countries in the first three months of the year, with the trading volume reaching 14.47 billion yuan ($2 billion), according to the customs of the provincial capital Changsha.
The figure represented a leap of 82.9 percent year-on-year. Hunan is the long-term host of the China-Africa Economic and Trade Expo. The third session of the expo, scheduled in June, is expected to further promote the growth of bilateral trade.
In the first quarter, Hunan’s exports to Africa reached 11.19 billion yuan, an increase of 131.2 percent year-on-year, and the imports surged 6.8 percent to hit 3.28 billion yuan.
Hunan’s foreign trade with South Africa accounted for 19.1 percent of the province’s total trade with Africa in the first quarter, which was 2.77 billion yuan, an increase of 8.3 percent year-on-year.
Logistics plays major role in international trade says World Bank (The Africa Logistics)
The World Bank has released its 2023 Logistics Performance Index report, a measure of countries’ ability to move goods across borders with speed and reliability.
“Logistics are the lifeblood of international trade, and trade in turn is a powerful force for economic growth and poverty reduction,” said Mona Haddad, Global Director for Trade, Investment, and Competitiveness at the World Bank. “The Logistics Performance Index helps developing countries identify where improvements can be made to boost competitiveness.”
On average across all potential trade routes, 44 days elapse from the time a container enters the port of the exporting country until it leaves the destination port, with a standard deviation of 10.5 days. That span represents 60 percent of the time it takes to trade goods internationally.
According to LPI 2023, end-to-end supply chain digitalization, especially in emerging economies, is allowing countries to shorten port delays by up to 70% compared to those in developed countries. Moreover, demand for green logistics is rising, with 75 percent of shippers looking for environmentally friendly options when exporting to high income countries.
“While most time is spent in shipping, the biggest delays occur at seaports, airports, and multimodal facilities. Policies targeting these facilities can help improve reliability,” said Christina Wiederer, Senior Economist with the World Bank Group’s Macroeconomics, Trade & Investment Global Practice and the report’s co-author.
South Africa Urges Careful Debate on Option of Introducing BRICS Common Currency (Bloomberg)
The BRICS group of nations will discuss the feasibility of introducing a common currency and shouldn’t rush any decision, according to South Africa’s foreign minister.
US interest-rate hikes and geopolitical conflicts have pushed up the value of the American currency and all the commodities priced in it, to the detriment of most emerging markets. That’s spurred calls for alternatives to using the greenback as the global trading currency and one option that’s been flighted is for the BRICS bloc — which comprises Brazil, Russia, India, China and South Africa — to adopt their own unit. The issue is likely be on the agenda of an Aug. 22 summit of its leaders in Johannesburg.
Employment and Labour on second BRICS Employment Working Group meeting (South African Government)
There was a pressing need for BRICS countries to trade more with each other than with the rest of the world, a meeting was told at the second Employment Working Group (EWG) in Port Alfred on Wednesday.
Mr Jens Dyring Christensen, Senior Specialist: Enterprise Development and Management at the International Labour Organisation (ILO), was speaking on the topic: BRICS Productivity Ecosystems.
“What we find is that trade with the United States is six times higher that within BRICS member states. What is needed is to expand inter-BRICS trade,” he said.
“If BRICS countries trade more among themselves it will boost economic growth among member states. They could do this by identifying within their countries where there is mutual interest such as beef,” he said.
UNCTAD calls for balanced global approach to manage digital data (UNCTAD)
UNCTAD Secretary-General Rebeca Grynspan has reiterated the organization’s call for a more balanced approach to global data governance for the benefit of people and the planet.
The world currently has a global data governance system split in three, with some countries relying on the private sector for data management, others on citizens and others on the state itself. Ms. Grynspan said global efforts towards a more balanced approach should “enable data to flow as freely as necessary and possible, while being able to address various development objectives.”
To ensure an inclusive process with representation of all developing countries, she said the United Nations needs to play a key role in the process, which should be “multilateral, multisectoral and multi-stakeholder.”
“And these are still early days in the data-driven digital economy,” she said. With the spread of 5G, the growing number of Internet of Things devices and greater use of artificial intelligence (AI), data and data flows will continue expanding rapidly.
But as captured by UNCTAD’s latest Digital Economy Report, data flows are deepening already existing digital divides.
Many developing countries remain mostly providers of raw data to global digital platforms, while having to pay for the digital intelligence generated from their data.
DDG Paugam urges ministers to harness WTO potential for advancing agricultural innovation (WTO)
The WTO offers a very good framework to support innovation in sustainable agriculture. We manage a trade policy toolbox that can be leveraged to foster innovation worldwide.
The first tool is creating and enhancing access to the global market: It is the most classical one of them all: tariffs. Decreasing tariffs is directly relevant to enhancing access to technology, accelerating the dissemination of innovation, and achieving economies of scale that would incentivise investment. And this is not just theoretical. We know that we have a global problem of disconnect between tariffs and the climate: several research studies show that tariffs are biased in favour of carbon intensive products, meaning they are lower for “brown” products and technologies as compared to “green” products and technologies. Take alternatives to plastics for example: they are usually taxed with higher tariffs. The reason for that, of course, is that they are derived from agricultural products which are themselves taxed higher. So, decreasing tariffs is the first thing to consider when thinking about how trade can help.
The second tool is about finance.
The third tool is about regulation.
But overall, we lack consensus on all these issues at the WTO. One of the main reasons is that we have so much unfinished business from the past, including trade distorting domestic subsidies. And this has prevented our members from tackling the critical issues impacting agriculture today and into the future — such as climate change and climate smart agriculture.
Today we have one emerging topic that could help us bridge the gap and that is food security: food security is obviously at the heart of the conundrum between production, trade, and climate change. The United States amongst other recently presented an interesting contribution to the WTO on that topic. So, I hope that it may build the needed bridge between the past and the future. My message today to Ministers of Agriculture is, please push together with your trade counterparts for the WTO to deliver what it should be delivering in support of your climate smart agricultural policies.
Closing the ‘great finance divide’ for the SDGs (UNDP)
The Sustainable Development Goals (SDGs) are in emergency mode. Halfway to the 2030 deadline, progress is eroding before our eyes.
The overlapping food, health, energy and economic shocks of the past few years have pushed tens of millions of people into poverty.
During the pandemic, rich countries could afford to invest in recovery and got back on pre-pandemic growth paths. Their recovery spending was 30 times higher than for developing countries, and 610 times higher for least developed countries, which could only afford US$20 per person.
The global financial system has failed to protect developing countries in this time of unprecedented crises, in part because it was never designed with their interests in mind in the first place. The ‘great finance divide’ risks becoming a lasting sustainable development divergence.
With just seven years to go until the SDG deadline, the United Nations is calling for revolutionary financial and industrial transformation to meet the Goals and close the widening gaps between rich and poor. It is called the SDGs Stimulus Plan. The 2023 Financing for Sustainable Development Report lays out what it will cost and how we can get there.
