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Global development financing must achieve local benefits (SAnews)
With improved funding for South Africa’s Just Energy Transition, the country will be able to invest significantly in bolstering the electricity grid and new renewable energy generation.
In his weekly newsletter to the nation on Monday, President Cyril Ramaphosa said this will significantly help to end load shedding. The President’s newsletter comes after his participation at the New Global Financing Pact Summit in Paris last week, where several world leaders gathered.
“With improved funding for our Just Energy Transition, we will be able to invest substantially in strengthening our electricity grid and new renewable energy generation. “This will make a significant contribution to ending load shedding and securing a reliable and affordable supply of electricity. This will, in turn, promote economic growth, make our exports more competitive and create employment,” he said.
Reflecting on the summit, President Ramaphosa reiterated that global development financing, if properly directed and provided on a significant scale, can make a huge difference to the lives of people living in countries like South Africa.
“The industrialisation and economic development of the Global North was achieved at the expense of the Global South. Wealthier countries therefore have both an obligation and an interest in supporting development and climate action in poorer countries. “As South Africa, we argued for a fundamental overhaul of the international financial institutions that are responsible for supporting development across the world,” he said.
Namibia’s cosmetics and essential oils sector flourishes (The Namibian)
Industrialisation and trade minister Lucia Iipumbu says Namibia’s cosmetics and essential oils sector has grown in domestic production, enhancing possibilities for active participation in the regional value chain.
“For example, our exportable firms increased from five in 2016 to more than 35 by 2022 through concerted efforts by the private sector, the Namibian government and development partners,” Iipumbu said.
At SADC level, Namibia has prioritised sectors for value chain development, namely agro processing (leather processing), pharmaceutical, automobile, mineral beneficiation and tourism, she said.
Speaking at the same event, sport deputy minister Emma Kantema-Gaomas said women and youth traders are less likely to be equipped with appropriate skills in technology and resources to fully reap the fruits of the trade area agreement. “Moreover, it’s important to note that the youth could play a critical role with the success of this trade area, also noting that Africa is one of the youngest populations, where we have 60% of our inhabitants under the age of 25,” Kantema-Gaomas said.
Kenya: African Development Bank Group Board okays funds to support women and youth in agribusiness (AfDB)
The Board of Directors of the African Development Bank Group has approved an equity investment of €18 million in the Africa Guarantee Fund (AGF) and another €1.2 million to support youth and women entrepreneurs engaged in agricultural value chains in Kenya.
Mrs. Nnenna Nwabufo, the Bank Group’s Director General for East Africa, noted the approval as “another milestone in the implementation of the partnership with the EU, which also signals the importance given to the role of women and youth in the agricultural sector in Kenya.”
The demand for Micro, Small, and Medium Enterprises (MSME) financing remains unmet in Kenya and has been aggravated by the disruptions of the Covid-19 pandemic. The International Finance Corporation (IFC) estimates an SME finance gap of US$19.38 billion, representing 30 percent of the country’s GDP.
The World Bank’s Covid-19 Business Pulse Survey (BPS) shows that many potentially viable firms are still struggling. The agriculture sector employs the largest share of the population, especially in rural areas, and accounts for 60 percent of Kenya’s export.
FG okays re-opening of Seme border for vehicle importation (Vanguard)
Director of Road Transport in the Ministry of Transportation, Ibrahim Musa, yesterday, disclosed that the Federal Government has approved the re-opening of the Seme border for the importation of vehicles. Speaking at the Economic Community of West African States, ECOWAS, meeting, organised between officials of Nigeria and Benin, Musa said the development followed complaints by freight forwarders operating at the Seme border.
The director, who spoke at the ECOWAS Monitoring Team’s visit to the Seme-Krake Joint Border Post, said: “I was here with the former Minister of State for Transportation when the Freight Forwarders pleaded that the border should be reactivated for the free movement of goods and services.
“The former minister made us prepare a memo to that effect. It was considered and sent to the government.”
SON Tasks Auto Stakeholders to Embrace Standards for Global Competitiveness (This Day)
The Standards Organisation of Nigeria (SON) has tasked stakeholders in the auto industry to take advantage of standards to remain competitive and relevant especially as the Africa Free Trade Agreement (AfCFTA) is on the cards.
The Director General, SON, Mallam Farouk Salim, at a sensitisation programme for Auto Spare Parts and Machineries Dealers Association (ASPAMDA) in Badagry area of Lagos, said the operationalisation of AfCFTA would turn Nigeria and indeed the entire African continent to one huge market, he said AfCFTA would provide for Nigeria the competitive edge in trading with other neighboring countries’ auto and machineries dealers.
“We all must ensure that only products that comply with laid down Nigeria Industrial Standards are available for sale in this market. SON frowns at the practice of cloning successful brands by unscrupulous businessmen to make quick gains, depriving the trade mark owners of their benefits.” According to him, the SON Act 2015 empowers the agency to arrest and prosecute offenders, stressing that it would step up its ante to make it impossible for fakers to thrive.
NEPZA: Economic Zones Attracted $364.6m FDIs in 4 Years (This Day)
The Managing Director/Chief Executive, Nigeria Export Processing Zones Authority (NEPZA), Prof. Adesoji Adesugba, has disclosed that the country attracted $364.6 million in Foreign Direct Investments (FDIs) between 2020 and the first quarter of the year (Q1 2023).
Speaking at an interactive session with journalists, he said if given the necessary support, the scheme could transform the investment landscape within a short time, adding that the foreign capital inflows had led to the creation of over 30,741 jobs in the economy.
He said about $102.93 million was recorded from international exports, while N1.14 trillion came from the domestic market.
The NEPZA boss said the zone would help enhance the competitiveness of locally manufactured products as well as put an end to dumping in the country and boost employment generation.
He, however, stressed that although successes had been recorded, more work needed to be done to ensure the free zones are made attractive to investors.
Benin Can Boost Economic Transformation by Modernizing Road Networks and Economic Corridors (World Bank)
A renewed effort and increased investment in developing and modernizing the roads and ports network in Benin could help transform the country’s economy and the lives of its people, says the World Bank’s first-ever Benin Economic Update.
Titled “Taking Advantage of Benin’s Strategic Position by Investing in Economic Corridors”, the first part of the report analyzes the latest economic developments and provides a mid-term outlook for Benin. Annual growth is expected to hover around 6% over the medium term. While the macroeconomic outlook remains robust, there are vulnerabilities related to tighter access to international finance and uncertainty in aggregate demand, underscoring the importance of a credible fiscal consolidation path to ensure medium-term stability.
The second part of the report focuses on the potential for developing Benin’s transportation sector and economic corridors. It notes that Benin is strategically located in west Africa and serves as a gateway to landlocked neighboring countries, such as Niger and Burkina Faso. The country’s port of Cotonou is also the closest and fastest transshipment point to the port of Lagos in Nigeria, the largest economy in western Africa.
Trade seen growing as Afreximbank, Ghana develop railway corridor (Businessday Nigeria)
The cost of transportation is expected to reduce by 30 percent as African Export-Import Bank (Afreximbank) and Ghana Railway Company, the national railway operator of Ghana, on Friday signed a project preparation facility Head of Terms agreement and Pre-Mandate Letter to finance the development and implementation of an integrated 299-kilometer (“km”) standard gauge railway network that connects Ghana’s western corridor to the Port of Takoradi and provides an essential link to external markets.
The Bank will avail early-stage project preparatory funding to finance the preparation of bankable feasibility studies. The Pre-Mandate Letter appoints Afreximbank to perform certain tasks in advance of the project attaining bankability aimed at raising the debt facility amount, currently estimated at US$ 2.1 billion.
The Bank believes that pursuing railway investments along the continent’s trade corridors would expand existing capacities and create new routes, links and pathways for value-added goods to be transported from manufacturing and processing areas to regional and global markets, thereby promoting intra-African trade within the AfCFTA context. This is evidenced by new mining projects and expansion of existing mining projects being planned in the country that stand to benefit from the project through more efficient and competitive transportation of imports and exports thereby boosting trade, regional integration and overall economic development.
Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, said, “The Western Railway Corridor project is a vital transport network for Ghana, and Afreximbank’s support is in line with our commitment to help member countries address key trade-enabling infrastructure bottlenecks through private sector-led investments that will unlock significant pent-up demand for Ghanaian mineral and agricultural commodities in regional and international markets.
Infrastructure investment critical for success of AfCFTA (SAnews)
Deputy President Paul Mashatile says the success of the African Continental Free Trade Agreement (AfCFTA) depends on the investment in infrastructure in the areas of electricity generation, transportation, as well as freight and logistics distribution.
“This is because Africa’s trade integration has been hampered for decades by the ageing infrastructure and too many regulations which require reforms,” Mashatile said.
Addressing the All Africa Business Leaders Awards on Friday, the Deputy President said investing in infrastructure is crucial to unlocking the potential for Africa to experience growth at faster rates but more importantly, to ensure inclusive diversification.
“We must surely invest in infrastructure because it is a critical driver of success across Africa. It makes a substantial contribution to human development and poverty alleviation,” he said.
UBA partners with AfCFTA to invest $6bn to finance SMEs in Africa (The Ghana Report)
United Bank for Africa (UBA) Plc on Monday, June 19, signed an agreement with the Africa Continental Free Trade Area (AfCFTA) Secretariat to invest $6 billion as funding for African Small and Medium Enterprises (SMEs) within the next three years.
A breakdown of the $6 billion investment shows that a total of $1.2 billion has been budgeted for the year 2023; $1.9 billion for 2024 and $2.88 billion for 2025.
By this agreement, UBA to boost intra-Africa trade, will provide financial services in four main areas which are agro-processing, automotive, pharmaceuticals, and transport and logistics, to small and medium enterprises (SMEs) in all the 20 African countries where UBA operates.
UBA Group’s Deputy Managing Director, Muyiwa Akinyemi said, “We entered into this partnership because we see the future of intra-African payments developed by AfCFTA, which will ease payment constraints across 54 countries in Africa (with about 40 different currencies) powered by the Pan-African Payment and Settlement System (PAPSS).” Continuing, Akinyemi said, “However, we need to develop these businesses before we can talk about helping them trade, which is the strength of UBA, as we are vital in supporting SMEs, and with our presence in 20 African countries, we say your small business is big business.”
Ecobank, PAPSS partner on cross-border payments (IT-Online)
Ecobank Group and The Pan African Payment and Settlement System (PAPSS) have signed a Memorandum of Understanding (MoU) to facilitate settlement of Ecobank’s cross-border transactions, including the transactions of all its subsidiaries, through PAPSS.
Established by the African Export-Import Bank (Afreximbank) and the Africa Continental Free Trade Area (AfCFTA) Secretariat, PAPSS is a financial market infrastructure that provides a secure and efficient channel for processing cross-border payments, ensuring speed, affordable cost, and reliability in order to facilitate intra-African trade.
During the MoU signing ceremony T the 30th Afreximbank Annual Meeting (AAM), PAPSS also introduced the Commercial Bank Settlement Model, a new settlement model which offers the commercial banks a window to open and fund their own settlement accounts at Afreximbank and manage their own liquidity according to their banking needs.
By leveraging the capabilities of PAPSS, Ecobank affiliates in 33 countries with over 32-million customers, will streamline and expedite the transfer of funds while ensuring transparency and compliance under the Regulators supervision.
Manufacturers call out states for using EAC CET loopholes for cheap imports (The East African)
Manufacturers are worried about East African Community partner states’ frequent applications of stay of the EAC Common External Tariff on goods and foodstuff, saying it will lead to price distortion.
The EAC allows CET on certain products to enable the partner states to apply higher or lower import duty rates to protect local industries from competition arising from cheap imports or reduce the cost of inputs required by certain industries. But the application of stay by the partner states on a wide range of products has raised concerns among industrialists.
“When you apply for stay of CET on products that are readily available within the EAC, you are either creating a trade distortion, or protecting an inefficient producer vis-a-vis the region’s producers,” said John Kalisa, CEO of the East African Business Council.”For a stay of application to be justified you must demonstrate that there is a shortage of those products within the region.”
Kenya’s Treasury Cabinet Secretary Prof Njuguna Ndung’u said the stay Nairobi has applied for one year is for rice, imported iron and steel products, vegetable products (sic), baby diapers, leather and footwear products, paper and paper products, all which attract a 35 percent CET.
EAC urged to speed up sanctions against Partner States not paying contributions (The New Times)
With very limited contributions from Partner States to the East African Community (EAC), which are even in some cases delayed or not remitted, the realisation of deeper and wider regional integration is questionable, Members of the East African Legislative Assembly (EALA) have said.
To tackle the issue, they urged the region to expedite sanctions against Partner States who do not honour their contributions to the bloc.
While presenting the report on an analysis of EAC budget for the 2023/2024 fiscal year during an EALA plenary session in Tanzania on June 22, MP Kennedy Ayason Mukulia, Chairperson of EALA’s Committee on General Purpose, said the Committee noted that no effort has been made to sanction the non-compliant Partner States in terms of paying contributions to the bloc’s initiatives.
The United Nations Economic Commission for Africa Sub regional Office for Southern Africa (ECA SRO-SA) in collaboration with the SADC Business Council held a three-day Regional Meeting on Technology and Innovation for Micro, Small and Medium Enterprises (MSMEs) in Southern Africa, preceded by the presentation of TechniAfrica, a Technology and Innovation Platform for MSMEs for Southern Africa which remains to be operationalized.
The objectives of the two consecutive events were to stimulate discussions among key stakeholders on the role of technology and innovation for MSMEs, assess the major gaps in relation to innovation eco-systems, reflect on main policy reforms and promote networking and exchanges of experiences and best practices among MSMEs, the public and private sectors in Southern Africa.
To attain the above objectives, the meeting deliberated on draft study reports and survey results funded under two United Nations Development Account 13th tranche projects titled “Innovative approaches for MSME competitiveness to promote trade and inclusive industrialization in Southern Africa in the Post-COVID context” and “Global MSME Surge”.
Ministers responsible for Environment, Natural Resources and Tourism from the Southern African Development Community (SADC) have called for prioritisation of policies, projects, and activities on environment, natural resources and tourism in the region.
The call was made during the virtual meeting of the Ministers responsible for Environment, Natural Resources and Tourism which was held on 22 June 2023 to review progress on activities and projects supporting the implementation of SADC Protocols and strategies to support environment, natural resources and tourism sectors.
Ambassador Joseph Nourrice, the SADC Deputy Executive Secretary responsible for Corporate Affairs reiterated the urgent need for the SADC region to address challenges such as environmental degradation, climate change impacts, illegal harvesting of natural resources, and under-development of tourism, which are recurrent, pervasive and significantly affecting agriculture, infrastructure, human health, terrestrial and marine ecosystems as well as water resources.
African Union Private Sector Forum (AU)
The African Union Commission, has throughout the years worked closely with the private sector to define the significant role and great contribution by the Private sector in driving the economic development Agenda of the continent. The efforts are a demonstration of the African Union’s commitment towards enhancing the private sector capacity to contribute towards the realization of Agenda 2063 and be part of the global value-chain, for inclusive and sustainable growth in Africa.
The AU Commission is organizing the 14th African Private Sector Forum under the theme “Strengthening Public-Private Partnerships to accelerate trade and investments in Africa” focusing on how to enhance Public - Private Sector engagement for inclusive growth and sustainable development, relatedly, deepening regional and continental trade and investment towards the implementation of the African Continental Free Trade Area (AfCFTA).
India plans to revive trade deal with SACU (Mint)
Amid declining merchandise exports due to demand slowdown in the west, India is placing renewed focus on striking a trade deal with a union of five countries of Southern Africa that could give a leg up to exports of pharmaceutical products and automobiles, two people aware of the development said.
The resource rich Southern African Customs Union (SACU), a customs union among five countries of Southern Africa: Botswana, Eswatini, Lesotho, Namibia, and South Africa, is one of the largest suppliers of raw primary or semi-processed commodities. According to the ministry of commerce, five rounds of negotiations regarding a potential India-SACU preferential trade agreement have been held thus far. The first round of discussions took place in 2007 and talks stalled in 2010. However, reports indicated that both sides had agreed to revive the talks in 2020. According to persons aware of the matter, talks between both sides have made progress.
This comes as trade experts have pointed out that diversification of exports is crucial as 40% of India’s export orders come from just seven countries and hence are more susceptible to external shocks. Currently, US and Europe form nearly one-third of India’s merchandise exports and have driven outbound shipments in the last decade.
“SACU is a developing country union so it won’t have non-trade issues in the deal such as labor, gender and environment. So it will be relatively easier to complete negotiations. We can sign a FTA with them. There is a lot of complementarity between India and South Africa. We are importing coal, diamonds, gold, and iron ore,” first person aware of the development said.
The consequences of the Russia-Ukraine war on Cemac countries in 2022 (Beac’s review) (Business in Cameroon)
The Bank of Central African States (Beac) has presented its view on how the ongoing war between Russia and Ukraine has impacted the Cemac economies in 2022. In a recent economic and statistical bulletin, the institution observed a V-shaped impact resulting from the conflict.
On a good note, “the economic growth went from 1.8% in 2021 to 2.9% in 2022 thanks to a good impetus in the oil and gas sector in the region, despite a slight decline in the non-oil sector”. However, before the war started, Beac was expecting a 3.2% growth, meaning the war caused a loss of 0.3pts.
Although there has been an improvement in the prices of crude oil and natural gas on the international market, with positive financial repercussions for Cemac countries, demand was less vigorous. Beac points out that gross domestic demand has made a smaller contribution to Cemac growth in 2022, even though it remains the main driver of real growth in the region (2.1 points in 2022, against 7.4 points in 2021), with a slight decline in the contribution of private consumption (3.5pts in 2022, against 4.0pts in 2021) and that of public consumption and gross investment (- 1.1 points and - 0.4 points respectively).
Beac found, is an improvement in the public finances of Cemac countries as a result of “the upward trend in the prices of exported products (...), particularly crude oil”. Overall, the budget balance, including grants, reached 2.5% of GDP in 2022, compared with -1.2% of GDP in 2021. Before the start of the crisis, it was forecast at 0.5% of GDP, an increase of 2.0 percentage points.
Commodities at a glance: Special issue on phosphate (UNCTAD)
Phosphorus, like nitrogen and potassium, is an essential nutrient for plant growth, contributing to root development and maturation.
Phosphate fertilisers, which provide plants with phosphorus when it is lacking in the soil, therefore play an essential role in plant life. They help maintain a high level of agricultural productivity. Along with irrigation, high-productivity seeds and plant protection products, they are an essential component of food security.
However, phosphate fertilisers remain difficult to access in many developing countries. Costly to produce and transport, they are also complex to use, requiring precise agronomic knowledge of soils and plants.
These difficulties are particularly detrimental to the least developed countries, which do not always have the necessary resources in terms of investment and human capital to ensure wider access to these inputs.
Renewables growth did not dent fossil fuel dominance in 2022, report says (Engineering News)
Global energy demand rose 1% last year and record renewables growth did nothing to shift the dominance of fossil fuels, which still accounted for 82% of supply, the industry’s Statistical Review of World Energy report said on Monday.
Last year was marked by turmoil in the energy markets after Russia’s invasion of Ukraine, which helped to boost gas and coal prices to record levels in Europe and Asia.
The stubborn lead of oil, gas and coal products in covering most energy demand cemented itself in 2022 despite the largest ever increase in renewables capacity at a combined 266 gigawatts, with solar leading wind power growth, the report said.
France commits EUR 1 million to WTO Fisheries Funding Mechanism (WTO)
The government of France is contributing EUR 1 million (approximately CHF 969,957) to the WTO Fisheries Funding Mechanism to help developing members and least-developed country (LDC) members implement the landmark Agreement on Fisheries Subsidies adopted at the 12th Ministerial Conference in June 2022.
The funding mechanism for targeted technical assistance and capacity-building seeks to help developing and LDC members implement the Agreement on Fisheries Subsidies, as the new rules would involve adjustments to members’ legislative and administrative frameworks, transparency and notification requirements, and the enhancement of their fisheries management policies and practices. The mechanism is provided for in Article 7 of the Agreement.
