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Bleak outlook for third-quarter economic growth in South Africa (Engineering News)
September reflected another month of weakened economic activity in South Africa, indicating bleak prospects for the economy’s growth in the third quarter, automated clearing house BankservAfrica’s Economic Transactions Index (BETI) data shows.
On a quarterly basis, the BETI is 2% lower, confirming that the economy lost momentum in the third quarter. This is substantiated by the data showing that the BETI has declined for the past three consecutive months. “As a valuable early indicator of economic activity, the BETI data reflects the ongoing ‘muddle-along’ narrative playing out in the South African economy,” explains independent economist Elize Kruger.
The South African economy continues to face many challenges of ongoing loadshedding, water supply issues and a logistics sector burdened by a steep deterioration in rail services and ongoing port inefficiencies, among others.
South Africa egg shortage: How poultry products became a hot commodity (BBC)
The country has been grappling with one of its worst outbreaks of bird flu - millions of chickens have been killed over the past few weeks, supplies of poultry meat have been threatened and supermarkets across the nation have run out of eggs.
Experts predict the egg shortage will cause the popular ingredient to jump in price - far from ideal considering it is one of the most affordable sources of protein for the millions living in poverty.
Retailers, farms and industry giants have also been hit, with the nation’s largest chicken producer stating the flu had “ravaged” a sector already burdened by rising costs and an electricity crisis.
In an effort to stop the spread of Highly Pathogenic Avian Influenza - a deadly, extremely infectious type of bird flu - farmers have culled more than seven million egg-laying chickens. That amounts to 20-30% of the country’s entire chicken stock, according to South African Poultry Association.
We’re working on cassava value chain revitalisation (Tribune Online)
The Minister Agriculture and Food Security, Senator Abubakar Kyari, on Tuesday, expressed hope over the maiden Africa Cassava Conference to boost productivity along the value chain towards achieving food security.
The Minister, who was represented by the Director, Federal Department of Agriculture, Engr Abubakar Garba, stated this in a keynote address during a press conference held ahead of the maiden African Cassava Conference holding from October 18-20, 2023 in Abuja, with the theme ‘Stimulating Africa’s Industrialization through Development of Cassava Based-Products and Assuring Quality Along the Cassava Value Chain’.
Kyari said the Ministry through the Cassava Value Chain is continuously working earnestly towards continuous promotion and development of cassava and its derivatives. He however expressed hope that the conference would highlight how stakeholders can work to develop a robust, commercially driven and economically viable cassava sector that will not only contribute to food and nutrition security but also increasingly contribute to growth of the commodity in Nigeria and Africa as a continent. Furthermore, the Minister assured the Ministry’s continued support to promote boundless opportunities that exist in the cassava sub-sector for all stakeholders.
Trade and Investment Opportunities to Come Under the Spotlight at the Namibia-South Africa Business Forum and Exhibition (The Department of Trade, Industry and Competition)
The Business Forum and Exhibition will focus on strategic priority sectors agreed to by both countries, namely: agriculture and agro-processing, automotive, clothing and textile, and green hydrogen, including exploring opportunities to strengthen cross-border value chains along with the integration of the requisite infrastructure and logistics supply chains.
Namibia and South Africa’s business executives will be exploring opportunities to increase trade and investment flows between the two countries at the Namibia-South African Business Forum and Exhibition, which will be held at the Windhoek Country Club on Friday, 13 October 2023.
The Forum is held under the theme: Forging a New Era of Mutually Beneficial and Reciprocal Trade and Investment Relations. The event is hosted by Namibia’s Ministry of Industrialisation and Trade, on the margins of the 3rd Session of the Namibia-South Africa Bi-National Commission (BNC) which is co-chaired by the His Excellency, Dr. Hage G. Geingob, President of the Republic of Namibia and H.E. Mr. Cyril Ramaphosa, President of the Republic of South Africa.
AfCFTA offers opportunities for chemicals and cosmetics sector (Freight News)
The chemicals, cosmetics, plastics and pharmaceutical sectors are set to get acquainted with the benefits offered under the African Continental Free Trade Area (AfCFTA). This will occur during a virtual workshop on the implementation of the AfCFTA hosted by the Department of Trade, Industry and Competition (the dtic) on Wednesday, October 11.
The dtic has already embarked on provincial awareness workshops, which provided a platform for information sharing with the private sector on the benefits offered under the agreement. The workshops were also used to identify South African companies in various provinces, in the targeted sector master plans and other priority sectors that have the capacity to export to the rest of the continent. More workshops focusing on different sectors are being organised.
U.S., EU to support African railway development to counter China (Nikkei Asia)
West eyes mineral-rich corridor in Angola, DRC, Zambia as Belt and Road slows
The United States and the European Union will offer assistance on the construction of an international railway in Africa to bring resources from mining areas to a port in a test of whether they can gain a foothold in Africa, where China has gained influence through its Belt and Road Initiative. It is also intended to strengthen supply chains for critical minerals, reducing the donors’ dependence on China.
“This is a game-changing regional investment,” U.S. President Joe Biden said on Sept. 9, when he announced the U.S. would support the development of the Lobito Corridor in partnership with the EU. The corridor aims to strengthen a distribution network that connects Angola’s port of Lobito on the Atlantic coast to Zambia and the Democratic Republic of the Congo, inland countries that are rich in mineral resources.
Africa’s total exports expected to hit close to USD1 trillion by 2035, Standard Chartered report reveals (Standard Chartered)
Rising regional trade levels and greater connectivity will unlock high‑growth corridors across Africa and beyond. Intra-Africa trade is expected to reach USD140bn by 2035, equating to 15 per cent of Africa’s total exports. Africa’s corridors with some of the world’s most dynamic regions will grow faster than the global average of 4.3 per cent. The East Africa-South Asia corridor is expected to emerge as the fastest-growing major corridor, at 7.1 per cent per annum through to 2035. The Middle East-North Africa and the Middle East-East Africa corridors will also be substantial, with their combined trade volume expected to reach almost USD200 billion by 2035.
Standard Chartered has today published its Future of Trade: Africa report, highlighting the outlook for African trade and providing a view of the African Continental Free Trade Area (AfCFTA) as a key proponent of optimising intra-African trade. The report finds that Africa’s total exports will reach USD952 billion by 2035 and the AfCFTA, once fully implemented, has the potential to increase this figure by a further 29 per cent. This represents an annual growth rate of 3 per cent from now until 2035.
Dr José Viñals, Group Chairman of Standard Chartered PLC, said: “Implemented effectively, the African Continental Free Trade Area can radically reshape future growth and development. It will enable higher value-add supply chains and more diversified exports, allowing member states to reduce historical commodity dependence and achieve meaningful progress towards multiple Sustainable Development Goals. Through our global footprint, local expertise and innovative solutions, we are committed to supporting the development of the right policies, securing cooperation, and applying technology and capital in order to build better connections within the continent, and beyond.”
Africa Trade Barometer by Stanbic IBTC Holdings Plc: Nigeria Rises To 4th In Africa’s Trade Rankings
Africa should leverage the AfCFTA to promote green transition (UNECA)
Africa, rich in mineral resources, must leverage the African Continental Free Trade Area (AfCFTA) to accelerate green transition to boost sustainable development and environmental protection. Speaking at a three-day peer review meeting for research papers on Green Considerations of the AfCFTA in Addis Ababa, ECA Director for Regional Integration and Trade Division, Stephen Karingi underscored the importance of green transition for Africa.
“Africa needs to use every instrument at its disposal to move towards green transition, this will be for the region’s own resilience and future competitive advantage as we have already seen from the example of the European Union Carbon Border Adjustment mechanism that African businesses competitiveness in foreign markets will be heavily tested,” said Mr. Karingi, emphasizing that Africa needs to create a policy and regulatory environment that promotes green growth, including green industrialization and environmental protection.
Climate change poses a significant threat to African countries’ economic, social, and environmental sustainability. Investing in green sectors and promoting sustainable investment practices is critical for African countries in mitigating the impacts of climate change and transitioning to a low-carbon economy. The ECA notes that the AfCFTA Protocol on Investment presents a unique opportunity for African countries to attract and promote investments in green sectors that support green transition.
Part of Africa’s Intra-Trade Challenges Include Inadequate Payment and Supply Chain Infrastructures
ECOWAS launch the West African committee for fertilizer control (World Fertiliser)
Over the years, issues related to fertilizer quality, access, and use have been a major challenge that limits the West Africa region’s potential to produce enough food to feed its populations and address food security and nutrition challenges. In light of this, the 2006 Abuja Declaration recommended efforts to increase Africa’s fertilizer use from 8 kg/ha to at least 50 kg/ha.
The economic community of West African states (ECOWAS), in cooperation with the West African economic and monetary community (UEMOA) and the permanent interstate committee for drought control in the Sahel (CILSS), has officially launched the West African committee for fertilizer control to support the joint implementation of the region’s harmonised regulation C/REG.13/12/12, relating to fertilizer quality control. The effort will contribute to the development of the fertilizer sector in ECOWAS member states and promote agricultural production and productivity across the region.
IFDC has been providing support to ECOWAS, UEMOA, and CILSS, as well as their member states, on fertilizer-related issues. This effort began in 1995, when IFDC conducted a study that revealed various challenges facing the fertilizer sector, including quality issues.
Plans to establish a Customs Automation Regional Support Centre (COMESA)
COMESA Secretariat is preparing to establish a Customs Automation Regional Support Centre at its Headquarters, in Lusaka, Zambia. This initiative is being undertaken in cooperation with UNCTAD through a co-delegation agreement.
“The implementation of the key activities for realizing the COMESA Customs Union is lagging and the main issues to be addressed are alignment of national tariffs to the COMESA Customs Tariff Nomenclature and Common External Tariff – issues that are within your areas of jurisdiction together with other stakeholders,” COMESA Director of Trade and Customs Dr Christopher Onyango told the customs experts.
The Secretariat is also collaborating with the World Customs Organisation (WCO) to enhance the capacities of Customs officials in technical subjects, specifically, the Harmonised System (HS) and Rules of Origin. This is being done within the framework of the EU-WCO HS and Rules of Origin Africa Programmes, respectively. The aim is to develop a critical mass of regional experts to charge and control of the expanding roles and demands for customs services.
Africa can and should harness its hydrogen potential for development (Engineering News)
Harnessing the potential for renewable energy and green hydrogen production, or replacing carbon atoms with hydrogen atoms in the energy value chain, can build peace and stability in Africa, petroleum company Conex Liberia MD Amitahb Prasad has said.
“By 2035, Africa can produce 50-million tons of competitively priced green hydrogen. The expected global demand for green hydrogen is 607-million tons by 2050. In comparison, Africa’s demand for green hydrogen and its derivatives is expected to reach 10-million to 18-million tons a year by 2050, but with a production potential much above that.
“Africa can export, after meeting internal demand, between 20-million and 40-million tons a year of green hydrogen by 2050. It can therefore consume its own production of green hydrogen and have sufficient surplus to export,” Prasad emphasised during a presentation at the Hydrogen Africa conference, held in Johannesburg, in late September.
Members discuss improvements to service exports data in LDCs, COVID-19, WTO reform (WTO)
WTO members explored the impact of COVID-19 on trade in health services and improvements in service exports data in least-developed countries (LDCs) at two events on 4 and 5 October organized under the Council for Trade in Services. At a Council meeting on 3 October, they discussed implementation issues from the 12th Ministerial Conference (MC12), including the LDC Services Waiver and e-commerce, and ways of improving the functioning of services bodies in the WTO. In the Council meeting, members also continued reviewing exemptions to the WTO’s most-favoured nation principle and considered various concerns raised by members regarding the impact of certain measures, such as cybersecurity measures, on services trade.
Commodity-Dependent States Underperforming in Development, Expert Warns at Joint Meeting of Second Committee, Economic and Social Council (United Nations)
Despite many commodity-dependent countries underperforming in development and falling further into debt, the global economy lacks an adequate response to the crisis, a Nobel Laureate told the Second Committee (Economic and Financial) and the Economic and Social Council as they met today for their annual joint meeting.
Joseph Stiglitz, Professor at Columbia University, Nobel Laureate and Co-Chair of the Independent Commission for the Reform of International Corporate Taxation, cited the “natural resource curse”, noting that developing countries and emerging markets do not get compensated adequately for their natural resources, while companies tend to use their market power to avoid paying for the extraction-related environmental damage, he said.
Arlene Beth Tickner (Colombia) highlighted the two components of reindustrialization in her country, namely the move from an extractive economy to a decarbonized, productive and sustainable knowledge economy, coupled with a holistic, comprehensive agrarian reform aimed at food sovereignty.
In the second panel discussion, on the theme “Leveraging commodities for sustainable economic development — expert panel perspective”, Mohammed Belal, Managing Director for the Common Fund for Commodities, stated that the free market system is not working for all and cited an example of Côte d’Ivoire which produces 45 per cent of the world’s cocoa, but receives only 4 per cent from the $100 billion chocolate industry, while millions of its farmers survive on 78 cents per day.
In line with this, Miho Shirotori, Director of the United Nations Conference on Trade and Development’s (UNCTAD) Division on International Trade and Commodities, stressed that structural transformation strategies for commodity-dependent developing countries need to incorporate new dimensions and new parameters, arising from the decarbonization imperatives and avoiding the commodity trap with critical minerals.
Related: UNCTAD sets out pathways to ease commodity dependence for greener, inclusive growth
Aid-for-Trade monitoring and evaluation exercise gets under way (WTO)
The Aid-for-Trade monitoring and evaluation exercise was launched by WTO members at a meeting of the Committee on Trade and Development on 9 October. The aim of the exercise is to shed light on the trade and development priorities of developing economies and to examine how development finance provided by partners is addressing these needs. The feedback will lay the groundwork for the next Global Review of Aid for Trade, scheduled for June 2024.
Deputy Director-General Xiangchen Zhang emphasized the significance of this exercise. He said: “The Aid-for-Trade monitoring and evaluation exercise is a critical step to understand the trade and development priorities of developing economies and LDCs, donors, South-South partners, and regional economic communities. The evaluation underscores the WTO’s commitment to making trade more inclusive.”
Every bit helps: How policies, governance and institutions can help us spend better for climate and development (World Bank Blog)
The potential for countries to spend better is enormous. By recent estimates, a World Bank report Detox Development finds that countries spend more than $1.2 trillion on subsidies toward energy, water, and agriculture. These are inefficient at best, and often significantly counterproductive.
To achieve resilient and decarbonized development, countries will need major structural and policy change, and investments. By our own estimates, extrapolated from our published Country Climate and Development Reports (CCDRs), low- and middle-income countries (without China) will need to invest around $783 billion between now and 2030, and that’s only part of what’s needed for broader development objectives. Other estimates to achieve the SDGs are even higher. Obviously a very tall order.
But the focus on the need for countries to spend more on their development should not obfuscate another key requisite for success: countries can and need to spend better.
Energy subsidies should help poor people access modern energy. So it should follow that by simply removing them, this would hurt poor people. But because rich people spend much more on energy than do poorer people, they get the lion’s share of these benefits. Moreover, artificially low energy prices discourage all efforts to prevent waste and improve energy efficiency.
So what should governments do? Instead of trying to boost competitiveness and increase energy access through artificially low energy prices, governments can use better tools.
From climate science to global action: Who contributes most to global greenhouse gas emissions?
Introductory Remarks to the Fiscal Monitor Press Conference (IMF)
Global debt has risen persistently over the last 75 years. The mountain range got its tallest and steepest peak, in 2020, the year of the pandemic, at 258 percent of GDP. In the following two years, a strong rebound in economic activity, accompanied by an unexpected inflation surge, pushed debt lower by 20 percentage points of GDP. This brought debts about 2/3 of the way back to pre-pandemic levels. In 2022, total debt liabilities of governments, non-financial corporations and households stood at $235 trillion (238 percent of GDP).
For all countries it is becoming more challenging to balance the fiscal equation. First, debts are generally elevated and borrowing costs are rising. Given that effective interest rates on public debt lag market rates, the effect will likely be very persistent. Second, public expectations about the role of the budget have expanded over time, in part from the experience during COVID 19. Priority policy goals include the eradication of poverty and hunger, climate change, digitalization and artificial intelligence, competitiveness, and growth and much else. Third, there is a widespread aversion to taxation. So much so that it is not a great exaggeration to speak about political red lines on taxation.
Although debt vulnerabilities and risks remain elevated and fiscal restraint a much needed ingredient in the policy mix in many corners, IMF’s assessment is that the risk of a “systemic” wave of sovereign debt defaults remains low.
Quick links
Climate Crossroads Fiscal Policies in a Warming World
Pandor calls for urgent action to protect oceans, livelihoods
Reimagining Africa’s role in revitalizing the global economy
