tralac Daily News
UK-SA Tech Hub renews funding for South African startups group (Engineering News)
The UK-SA Tech Hub, an initiative of the British High Commission (Embassy) in South Africa, has announced that it will provide a second round of funding for South Africa’s Startup Act Movement (SUA). “Our role is to support South Africa’s high-growth startups – whether in the tech industry or by enabling SMEs [small and medium-sized enterprises] in rural and township communities to become tech-enabled businesses – to maximise the value and impact they have on the South African economy and job creation,” explains UK-SA Tech Hub director Milisa Mabinza.
Kenya to Abolish Visas for AU Member States (Foundation For Investigative Journalism)
By the end of the year, Kenya will open its borders to all African Union member states. Alfred Nganga Mutua, the cabinet secretary for Foreign & Diaspora Affairs of the Republic of Kenya, made this known in his welcome address at the 43rd ordinary session of the African Union Executive Council in Nairobi on Thursday.
“Kenya is committed to progressively, and we are moving very fast, to the end of this year, to abolish visas to citizens from African Union member states to make it easier to invest and do business in Kenya and across the continent,” Mutua said.
This, according to him, was Kenya’s contribution to the union’s free continental trade aspirations. “We are going to open the borders of Kenya. We do not fear our fellow Africans,” he said.
Nigeria urgently needs to revolutionise its industrial sector to become an economic giant. When it does, this will transform the lives of its people and Africa as a whole, the President of the African Development Bank, Dr. Akinwumi Adesina, said in Lagos on Thursday. Giving examples from some countries, he said this was doable.
Adesina said: “Malaysia and Vietnam have used aggressive horizontal and vertical diversification of industrial production to move from low-value to high-value market products. The result is reflected in the comparative wealth of the three countries. While the per capita export value is $7,100 for Malaysia and $3,600 for Vietnam, it is only $160 for Nigeria.”
Speaking on the theme ‘The Day the Lion Roared: making Nigeria a global industrial and economic giant,’ Adesina emphasised that Nigeria’s prosperous future could only be secured by strongly supporting the private sector to unlock wealth that would lift all its people.
Earlier this month, Sierra Leone’s President Bio announced the launch of the National Payment Switch. This new financial infrastructure, which is part of a $12 million funding program from the World Bank, interconnects six commercial banks and enables payments interoperability among banks, microfinance institutions, mobile money operators and financial technology firms.
In the first phase of what President Bio defined as a “major step forward in this era of the fourth industrial revolution”, the new infrastructure will cover processing of card transactions carried out through point-of-sale and Automated Teller Machines managed by different financial institutions.
Walton Gilpin, managing director of Rokel Commercial Bank and chair of the Sierra Leone Association of Commercial Banks said the new payments infrastructure will advance financial inclusion and encourage a greater share of formal economic activity.
Thailand pursues FTA with East African community (Pattaya Mail)
Thailand has set its sights on establishing a free trade agreement (FTA) with the East African Community (EAC), in a bid to enhance trade and investment opportunities.
According to Department of Trade Negotiations Director-General Auramon Supthaweethum, discussions regarding an FTA recently took place between Thai officials and Kenyan Ambassador to Thailand, Kiptiness Lindsay Kimwole. The primary objective is to boost trade ties between Thailand and the seven-nation EAC bloc, which includes Burundi, the Democratic Republic of Congo, Kenya, Rwanda, South Sudan, Tanzania, and Uganda.
Recognizing the potential of the African market, Thailand’s Commerce Ministry has received requests from the private sector to pursue FTAs with African countries. Auramon expressed Thailand’s keen interest in an FTA with the EAC and outlined plans to convene a joint trade committee meeting with Kenya in the first quarter of next year. The meeting, to be hosted by Kenya, will serve as a platform to discuss trade and investment matters.
Africa offers vast investment opportunities for Asian countries with the appropriate incentives for their private sectors, Prof. Kevin Urama, Chief Economist and vice president of the African Development Bank Group has affirmed.
Urama made the call during a webinar to discuss the 2023 edition of the African Economic Outlook report. The African Development Bank organized the session jointly with the Korea Institute for International Economic Policy (KIEP) in Sejong-Si, Korea.
The report shows that Africa has remained broadly resilient despite experiencing significant shocks, particularly from the Covid-19 pandemic, climate change, and the Russian invasion of Ukraine. From an economic growth of 3.8% in 2022, the continent is set to climb to 4.1% in 2023 and 2024, exceeding the global average by 2.9% and the European average by 1.1%, according to the report, which estimates that growth in Asia would be higher, at 4.3%.
Urama said, “Africa must play a key role in the green transition, given that it is home to 60% of the world’s unexploited arable land and the minerals needed for green growth.” He said these resources could stimulate sustainable development and investments. “This is virgin land, which can be easily used to build low-carbon infrastructure without large-scale expenditure.”
Over 1,000 participants from the U.S. and across the African continent, including government officials, private sector executives, investors, and multilateral stakeholders, are meeting in Botswana’s capital city of Gaborone at the U.S.-Africa Business Summit to explore investment opportunities and strengthen business relationships between Africa and the U.S.
“The U.S. is focused on what we will do with African nations and with African people and not for African nations and people as we work to deepen and expand our partnerships, amplify African voices, and support the empowerment of Africans,” said Scott Nathan, Chief Executive Officer of the United States, International Development (DFC).
The 15th U.S.- Africa Business Summit, hosted by the Corporate Council on Africa (CCA) and the Government of Botswana in Gaborone, is under the theme Enhancing Africa’s Value Chains.
US International Development Finance Corporation (DFC) CEO Scott Nathan has reiterated the American government’s interest in helping to finance the Lobito rail corridor, linking the copper and cobalt mining regions of the Democratic Republic of Congo (DRC) and Zambia to Angola’s Lobito port. Nathan, who is heading the US Delegation to the US-Africa Business Summit in Botswana this week, made specific reference to the corridor during a virtual media briefing hosted on the sidelines of the summit.
Responding to a question related to what progress had been made since the signing, in December, of a memorandum of understanding (MoU) signalling America’s support for the joint development by DRC and Zambia of a battery metals supply chain, Nathan made a direct link between the MoU and the Lobito corridor.
African trade ministers are urging the United States to overhaul the sweeping trade deal that has opened the US market to African products and renew it this year rather than waiting until the duty-free pact expires in 2025.
Renewing the African Growth and Opportunity Act AGOA immediately would remove uncertainty about the future of the pact and allow for suppliers and partners to better plan and maintain investments in African economies, ministers said during this week’s U.S.-Africa Business Summit in Botswana.
“We are speaking with the same voice that AGOA should be extended,” said Botswana’s trade minister Mmusi Kgafela at a summit panel on Wednesday. He said he and other African ministers want “an indefinite period” for the act. This would do away with the uncertainty involved around the current 10-year renewal cycle.
“There is a compelling case to reauthorize the AGOA now,” wrote Daniel F. Runde and Thomas Bryja for the Washington DC-based Center for Strategic and International Studies (CSIS) in a new paper on calling for AGOA to be renewed.
Atlantic Council fellow Frannie Léautier, who launched an AGOA report on Wednesday said the act “should be renewed by the US Congress for at least a ten-year period as soon as possible.”
There was also a call by ministers yesterday for the AGOA rules to be streamlined and made less cumbersome in order for more countries to be able to benefit more from the program.
When the G20 finance ministers and central bank governors meet in Gandhinagar next week, the world will be looking for joint action to address rising economic fragmentation, slowing growth, and high inflation. Agile multilateral support is vital to tackle common challenges posed by debt vulnerabilities, climate change, and limited concessional financing—especially for countries hit by shocks not of their making.
In April, the IMF projected global growth at 2.8 percent in 2023, down from 3.4 percent in 2022. The bulk of it–over 70 percent – is expected to come from the Asia-Pacific region.
Yet, recent high frequency indicators paint a mixed picture: weakness in manufacturing contrasts with resilience in services across the G20 countries and strong labor markets in advanced economies. At the same time, financial fragilities uncovered by tight monetary policy require careful management—particularly as restoring price stability remains a priority.
The IMF forecast for global growth over the medium-term is around 3 percent—well below the historical average of 3.8 percent during 2000-19. Moreover, economic fragmentation will both undermine growth and make it harder to tackle pressing global challenges, from rising sovereign debt crises to the existential threat of climate change.
South Africa has the potential to become a manufacturing hub for the continent if it fixes its infrastructure and refuses to be bullied by larger nations.
Praveer Tripathi, president of the Indian Business Forum, spoke candidly at the BRICS colloquium in Sandton on Thursday, where he called on BRICS countries to assist South Africa in resisting the “bullying”. Tripathi was part of a panel discussing ways in which trade and investment can be eased between BRICS countries in an era of trade partnerships.
One of the key elements in trade is logistics and South Africa has been brought under the spotlight for its failing rail, road and shipping infrastructure. Tripathi said with its impressive coastline, South Africa could easily become a manufacturing hub in the shipping industry, easily supplying BRICS countries.
South Africa courts Chinese investment ahead of BRICS summit (South China Morning Post)
South Africa is seeking more Chinese investments as it struggles with the impact of rolling blackouts and high unemployment.
Chinese President Xi Jinping is expected to lead a large business delegation to South Africa later next month when he attends the annual summit of the emerging markets group BRICS, which also includes Brazil, India and Russia, in Johannesburg.
On Tuesday, Fikile Majola, South Africa’s deputy minister of trade and industry, spoke to a business seminar in Beijing via video link, saying the country was looking to improve infrastructure.
“We are well aware that we must prioritise economic infrastructure, especially scaling up renewable energy capacity, roads and railways, ports, and airports, telecommunications and water infrastructure.”
According to the report, 3.3 billion people now live in countries where debt interest payments are greater than expenditure on health or education. This five-fold surge in public debt levels since 2000, demands immediate action to tackle the escalating crisis affecting developing countries in particular.
The United Nations Secretary-General underlined: “On average, African countries pay four times more for borrowing than the United States and eight times more than the wealthiest European economies. A total of 52 countries – almost 40 percent of the developing world – are in serious debt trouble.”
Addressing the high cost of debt and the mounting risk of debt distress is of utmost importance. Establishing a debt workout mechanism is crucial to expedite progress under the G20 Common Framework for Debt Treatment, which has faced challenges due to creditor coordination issues and the absence of automatic debt service suspension clauses.
WTO members taking part in the Trade and Environmental Sustainability Structured Discussions (TESSD) on 11 July considered possible outcomes to promote opportunities for environmentally sustainable trade for delivery by the 13th Ministerial Conference (MC13) to be held in February 2024. Members also welcomed Barbados as the newest participant in TESSD, which now includes 75 WTO members as co-sponsors.