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The latest Kenya Country Economic Memorandum – Seizing Kenya’s Services Momentum, analyzes the key drivers and constraints to boosting inclusive long-term growth and provides policy options for reforms. While growth in Kenya has been solid, there is a need to increase productivity and investment to create much-needed jobs.
This report looks specifically at how including the services sector – a sector that is growing and becoming increasingly more traded – in Kenya’s growth strategy can contribute to long-term growth and job creation, including in non-services sectors.
The International Monetary Fund (IMF) has lauded Kenya’s move to join the Pan-African Payments and Settlement System (Papps), terming it a step in the right direction in addressing foreign-exchange-related challenges in frontier markets. Kenya joined Papps on September 29, after the Central Bank signed the instruments of accession. The arrangement is billed as a game changer in facilitating cross-border trade in local currencies.
Currently, 10 economies are part of Papps, a brainchild of the African Continental Free Trade Area Secretariat and Afrexim Bank, which went live in 2021. The other countries are Nigeria, Ghana, Liberia, Guinea, Gambia, Sierra Leone, Djibouti, Zimbabwe and Zambia.
The praise notwithstanding, the IMF states that economies such as Kenya should maintain focus on allowing foreign exchange to float freely, providing what has been termed as a shock absorber.
US trade with Kenya may be breeding some anxiety (Business Insider Africa)
Zimbabwe ranks among world’s top diamond producers (CGTN Africa)
Zimbabwe ranks as the seventh-biggest diamond producer in the world with an annual output of over 4 million carats worth 420 million U.S. dollars, state-run Zimbabwe Broadcasting Corporation news reported Monday, citing the latest production statistics by the Kimberley Process Certification Scheme (KPCS).
In terms of diamond output, the Southern African country was only behind Botswana, Russia, Angola, Canada, South Africa and Namibia, according to the KPCS, a regulator of trade and production of diamonds globally. Zimbabwe is aiming to produce 7 million carats of diamonds this year, and the sector is targeting an annual revenue of 1 billion U.S. dollars.
Industrialists Target Concessionary Credits For MSMEs, Ecosystem Players (Leadership News)
The industrialists under the auspices of the Lagos Chamber of Commerce and Industry, (LCCI) are advocating concessionary credits for Micro, Small and Medium Enterprises (MSMEs) to enhance sustenance of the private sector. This is as the Nigerian Association of Small and Medium Enterprises (NASME) has unveiled a substantial N2 billion empowerment fund dedicated to transforming the Micro, Small and Medium Enterprises (MSMEs) sector.
The president of LCCI, Dr. Michael Olawale-Cole recommended that, to reduce shocks from supply chain disruptions of raw materials, the Central Bank of Nigeria (CBN) should ensure that targeted concessionary credit to the private sector is sustained for MSMEs, while it embarks on tightening monetary policy to tame inflation. The chamber also said, the cost of logistics had gone up due to the poor state of roads and the lack of connectivity amongst farms, factories and markets.
Tunisia expects its economy to grow by 2.1% in 2024, up from 0.9% in 2023, and plans almost the same subsidies for fuel, electricity and food while raising taxes for banks, hotels and liquor firms, a bill on its budget showed on Tuesday. The bill included no reference to an agreement with the International Monetary Fund (IMF).
Tunisia’s President Kais Saied this year rejected what he called IMF ‘diktats’ saying they could lead to social protests, casting doubt on the IMF deal.
Tunisia last year reached a staff-level deal with the IMF for a $1.9 billion loan, but it has already missed key commitments and donors believe the state’s finances are increasingly diverging from the figures the deal was based on. The government said it aims to reduce the public wage bill from 14.4% of GDP in 2023 to 13.5% next year.
African Development Bank Group President Dr Akinwumi Adesina toured the road during a recent visit to the West African nation. He expressed satisfaction that the bridge has increased economic integration and trade between Senegal, The Gambia, and other countries in the region.
Gambian President Adama Barrow has commissioned the 24-kilometer Senegambia Bridge access road co-financed by the African Development Bank and the European Union, saying it is a critical link that will help boost trade between Gambians and the rest of Africa.
He said the Trans-Gambia Corridor Project, which included the construction of the Senegambia Bridge, had eliminated delays and difficulties in ferry crossings that had previously occurred between Yelli-Tenda and Bamba Tenda. It used to take at least two days to get on a ferry to cross the Gambia River. Now it takes 10 minutes for vehicles to cross the river across the bridge.
Africa can produce more energy than it requires within the next 30 years if it takes advantage of its natural resources. This is according to Minister in the Presidency for Electricity, Dr Kgosientsho Ramokgopa, who was delivering a keynote address on Green Hydrogen at the Africa Energy Week held in Cape Town.
“We can see that by smelting African iron ore locally, we are likely going to create much needed jobs and therefore the skills that are required to support that transition. In that way, in addition to broadening the industrial base, we are really getting people in good quality jobs…this is in addition to the decarbonisation agenda,” he said.
“We need to have a Pan African view in the exploitation of this energy carrier and our view is that by 2040 Africa can produce up to 50 times more energy from renewables than the world’s estimated demand. “This is as a result of our location advantages. I think we have some of the radiation levels of any parts of the world and we also have some of the best wind speeds along the coastal areas,” he said.
Maritime institute to enhance safety in the EAC region (Kenya News Agency)
The East Africa Community (EAC) is set to benefit from an ultra-modern maritime training facility as the region moves to tap into blue economy opportunities.
Domiciled at the Fisheries Training Institute (FTI) in Entebbe, Uganda, the facility, which is under construction at a cost of USD 1.45 million courtesy of the African Development Bank (AfDB), targets to train and build capacity for vessel operators in both navigable water bodies and the oceans. The facility, the first of its kind in the region, comes with state-of-the-art facilities, including marine training, a swimming pool bridge simulator for marine navigation and engineering training, equipped laboratories, and a medical first aid facility.
Ghana sets itself as beacon of climate change advocacy (BusinessGhana)
Ghana is passionate to be a global beacon of advocacy for climate mitigation and adaptation for a liveable planet, climate prosperity, and debt sustainability. This comes as the country prepares to host the global Secretariat of the governments of the Climate Vulnerable Forum (CVF) and the Vulnerable Twenty Group of Finance Ministers (V20).
“Having the main advocacy for climate change adaptation and mitigation coming from our country, joining the African Continental Free Trade Area (AfCFTA)will have an incredible benefit going forward, Mr Ken Ofori-Atta, Finance Minister, said, signalling that Ghana is beginning to build an international centre for climate mitigation and adaptation.
Already, the IMF has called on the international community to scale up climate financing to ensure that important efforts to tackle climate change do not crowd out basic needs, like health and education. Ghana is seeking to strengthen policies to adapt to and mitigate climate change through investment in resilient public infrastructure, particularly, in agriculture, urban development and coastal protection. The country is expected to soon set up a Climate Division at the Finance Ministry to tap into financial resources being dedicated by multilateral development finance institutions and climate investors across the world.
A staggering $1.8 trillion is allocated to environmentally harmful subsidies, with food systems receiving only 3 percent of total public climate finance. Coupled with the reality that over half of the world’s total GDP ($44 trillion) is moderately or highly dependent on nature, it is imperative we align public and private investments with scientific priorities and guardrails for healthy, sustainable food systems.
The global food system presents a huge business and investment opportunity with an estimated asset value of US$14 trillion, equivalent to between 16 percent to 20 percent of global GDP. Unfortunately, it is also causing negative impacts on people and planet. The vast majority of the hundreds of billions of dollars invested annually in food systems is misaligned and driving negative outcomes, generating $12 trillion in hidden social, economic, and environmental costs.
The current model of food production and consumption is driving widespread environmental degradation, climate impacts, and diet-related diseases. The global food system accounts for approximately one third of anthropogenic emissions, while 60 percent of deforestation is attributed to agricultural commodity production and land use change. Global support to agricultural producers could reach nearly $1.8 trillion in 2030 - but this support is heavily skewed towards measures that are distorting, unequally distributed and harmful to the environment and human health, according to the Food and Agriculture Organization. Therefore, transforming food systems is critical to achieve global targets including the Sustainable Development Goals (SDGs), objectives of the Paris Agreement, and the Kunming-Montreal Global Biodiversity Framework.
67 FAO Member Countries are now active Hand-in-Hand participants, and 35 ministers from the 31 countries participating in the four-day Forum, which facilitates pitching scalable agrifood investments to possible investment partners ranging from the private sector to important non-profit foundations and includes a range of global, regional and subregional multilateral bodies and financial institutions.
The second Hand-in-Hand Investment Forum began today, intent on quadrupling the more than $3 billion in fresh resources proposed in the inaugural event in 2022 to invest in poverty reduction, improved food security and sustainable agrifood systems that benefit the poorest.
“Without innovation and investment there is no future,” said QU Dongyu, Director-General of the Food and Agricultural Organization of the United Nations (FAO), which runs the Initiative and is hosting the Forum during the World Food Forum. He emphasized the importance of all stakeholders and especially the private sector in improving productivity and efficiency for the people who need it most. Qu urged participants to engage in the Forum as a “heartfelt” at a time when “heartbroken” news is too common. Shifting the narrative requires using our hands, he said.
With the overarching theme of “Agrifood systems transformation accelerates climate action”, the Forum will see over the week a diverse array of experts, dedicated changemakers, and visionary leaders from various sectors, and intergenerational. The WFF aims to address the pressing issues surrounding agrifood systems and forge new paths towards a more sustainable, resilient, inclusive, and hunger-free future. “Transforming agrifood systems must be a central part of the global climate solution,’’ Qu highlighted.
The 2023 World Food Forum (WFF) kicked off today with a dynamic opening ceremony at the headquarters of the Food and Agriculture Organization of the United Nations (FAO) in Rome. The flagship event, a vibrant global platform that unites individuals from all walks of life and sectors, is dedicated to reshaping the future of agrifood systems.
Today’s opening ceremony was an important display of unity, emphasizing the global commitment to addressing the challenges related to agrifood systems and the climate crises. It featured inspiring speeches from influential leaders and youth activists who stressed the urgency of the situation and the need for collective action.
Growth without gains (UNDP)
Millions more face food insecurity in Africa (CAJ News)
In a bid to assess the progress made in the implementation by mobile operators in the region, the ECOWAS Commission convened a meeting of focal points from the NRAs in Abuja, Nigeria on 12th and 13th October 2023. The meeting of the NRAs was preceded by a training sponsored by the Smart Africa Secretariat to reinforce the capacity of the focal points on their understanding of international mobile communications and roaming ecosystem. The training was delivered from 9th to 11th October 2023.
Mr. Aliyu Yusuf Aboki, Executive Secretary of the West Africa Telecommunications Regulators Assembly (WATRA) with his remarks painted a vision of a West Africa where everyone has access to affordable and seamless telecoms services regardless of location and stated that the ECOWAS Regulation on Roaming is an essential vehicle for the achievement of this vision. He reminded the meeting of the role the Regulation in the facilitation of the African Continental Free Trade Area, bringing together the African countries of the opening of the African market for trade in goods and services, including ICT goods and services and digital trade. He therefore admonished Member States to continue collaboration towards addressing the persistent challenges.
The Heads of Anti-Corruption Agencies in the Southern African Development Community (SADC) convened in Swakopmund, Republic of Namibia, from the 11 to 13 October 2023 to discuss and share experiences on emerging issues and trends in corruption in the Region. The workshop, among others, discussed the linkages between Illicit Financial Flows (IFFs) and Corruption, the Continental Perspective on Combating IFFs, the SADC Region efforts to combat IFFs, the role of multi-stakeholder collaboration in addressing Corruptions, financial Crimes, and other Transnational Organised Crimes.
Speaking at the same event, the Chairperson of the Erongo Regional Council Management Committee, Honourable Benitha Imbamba said discussions on illicit financial flows, transnational organised crime and strengthening collaboration with other stakeholders in the fight against corruption were critical for the workshop to identify the challenges and shortcomings in the regional drive against corruption and transnational organised crime. She highlighted that these crimes cost economies financial resources that could have been channelled to the implementation of various national developmental programs.
An agreement has been reached with the aim of boosting economic activities between member states of the Organization of Islamic Cooperation and those of the Eastern and Southern African Trade and Development Bank.
This TDB and the International Islamic Trade Finance Corp., a member of the Islamic Development Bank Group, signed a memorandum of understanding during the World Bank Group and International Monetary Fund annual meetings in Marrakech, Morocco. Under this MoU, both organizations will collaborate to provide trade finance solutions, with the aim of better serving their respective member countries in Africa, as stated in a press release.
These solutions encompass various investment products, including Murabaha, syndications, co-financing, risk-sharing, and Islamic factoring.
Negotiating services, goods as a basket to boost Africa trade (Business Daily)
At times, one has to travel to provide them (doctor) or consume (a tourist), resulting in a proximity burden— a need for physical contact. Other times, it is a simple click like downloading a music video. Contrary to goods prone to levies or paperwork, services trade is mostly associated with “beyond” taxes at the border that are not black and white any more.
Africa’s trade negotiators have in the past relegated services to the last stage in regional agreements despite the recent awakening that they are embedded. The intrinsic interconnectedness is hard to extricate, say, when a car is sold with a financing scheme and maintenance contract. This way, services and goods are kindred spirits because they have to be traded together. But they are also distinct. Services are borderless and intangible, unlike goods.
Recent research titled “Intra-Africa trade in services and the AfCFTA” by researchers from the University of Nairobi and the International Livestock Research Institute (Ilri), has amplified the need to focus more on “hard” factors compared to “soft factors” for leap-frogging growth in services trade in Africa. Simply put, it is a clarion call to develop digital, information, and communication infrastructure that extends internet coverage and mobile and broadband subscriptions.
Delegates pointed to the link between poverty and conflict and stressed the importance of finding a path to peace through sustainable development at a moment when Africa is plagued by food insecurity and violence, as the General Assembly today debated the causes of conflict on the world’s second-largest continent.
Africa holds great promise for peace and prosperity, said General Assembly President Dennis Francis (Trinidad and Tobago), as he opened the meeting. “If given the opportunity and with support from the international community, the continent would be indeed unstoppable.” However, holding it back are cascading and overlapping challenges, he said. The severe debt crisis translates into the loss of $500 to $600 billion annually, more than the gross domestic product (GDP) of 35 African countries combined, he noted.
The representative of Tunisia, speaking on behalf of the African Group, said the prevalence of the informal sector, weak tax administration systems and illicit financial flows cost Africa an estimated $89 billion annually in lost revenue. “It is crucial to tackle the structural and institutional challenges that constrain African countries from maximizing the use of their resources,” he said.
Moreover, the soaring cost of borrowing and debt distress have strained public finance with severe consequences on social spending, he said, adding that the “decent work deficit” in Africa is closely linked to the prevalence of the informal sector, which employs about 84 per cent of workers, rising to 95 per cent in the case of youth employment.
The event also addressed the $4 trillion SDG investment gap, as today only 15 per cent of SDGs are on target to be met by 2030, with the investment gap in the developing world growing from $2.5 trillion per year in 2015 to $4 trillion today.
The weeklong forum, organized by the UN Conference on Trade and Development (UNCTAD), focuses on the challenges faced by developing countries amid today’s overlapping global crises .The Secretary-General urged participants – including national and business leaders, sustainable stock exchanges, sovereign wealth funds and finance experts – to put the Sustainable Development Goal (SDGs) Stimulus Package into effect and work towards delivering $500 billion annual investment for developing countries.
They emphasised the need for international coordination involving both public and private sectors given the scale of the investment needs.
The Working Group on Trade and Transfer of Technology discussed two proposals at its meeting on 13 October. They aim to reinvigorate the Working Group’s deliberations and to propose recommendations to increase the flow of technology to developing countries.
At the meeting, members discussed proposals from the African Group and the United Kingdom. The African Group’s proposal was on the role of the transfer of technology in building resilience. Egypt, on behalf of the African Group, recommended restructuring the Working Group’s agenda to address the specific topics listed in the proposal, including the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights, trade facilitation, agricultural resilience and climate change. The communication from the United Kingdom, on intellectual property and voluntary licensing, explored improving future pandemic preparedness and equitable access to health products by facilitating voluntary licensing and technology transfer partnerships between developed and developing countries
The energy transition will require massive amounts of investment. To limit global warming to 1.5° Celsius over the pre-industrial norm, the world needs about 1.5 times today’s global GDP in investment between now and 2050.
The investment needs are much higher in developing than in developed economies, relative to their existing asset bases. In developing countries, energy investment is needed not only for the transition, but also to ensure access to sustainable and affordable energy for all. As an example, installed capacity in renewable energy needs to increase by a factor of 2.5 in the most advanced economies, and by a factor closer to 25 in LDCs.
But Africa receives only 3.5% of total FDI in the world. And much less if we narrow it to renewable energies. To date, 31 developing countries, including 11 LDCs, have not yet registered a single utility-sized international investment project in renewables or other energy transition sectors since the Paris Agreement was approved in 2015.
Now Africa has a great opportunity here not only for his energy transition but for the energy transition of the rest of the world as we clearly state in our Economic Development African Report 2023. Africa is by right the start of many of the renewable energy supply chains of the future. Africa is home to 48% of the world’s reserves of cobalt and manganese, 80% of the world’s reserves of phosphate rock, and 92% of the world’s reserves of platinum-group metals. All these critical minerals are key in areas such as electric cars, lithium-batteries and hydrogen batteries.