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The World Bank Board supports the Government of South Africa’s efforts to promote long-term energy security and a low carbon transition with a $1 billion Development Policy Loan (DPL). The loan endorses a significant and strategic response to South Africa’s ongoing energy crisis, and the country’s goal of transitioning to a just and low carbon economy.
“This operation comes at a crucial time for South Africa as it will provide much needed fiscal and technical support, enabling us to pursue our policy priorities in the energy sector including easing the electricity crisis in the long term, stimulating private sector engagement and creating jobs in the renewables space,” says Mmakgoshi Lekhethe, Deputy-Director General: Asset and Liability Management, of the National Treasury of South Africa.
Automotive sector calls for greater policy support to roll out EVs (Engineering News)
Panellists discussing the automotive manufacturing sector during the Manufacturing Indaba on October 25 agreed that South Africa needs a strong directive and specific targets related to infrastructure development for electric vehicles (EVs).
Currently, there is no roadmap envisioned for the transition to EVs in South Africa, with the Automotive Masterplan only making reference to a target of achieving 1% of global production and the National Development Plan only speaking in broad terms about the energy transition overall.
“We need direct policy supporting the automotive sector with clear targets over five- and ten-year terms. In Norway, for example, government policy has helped the country to breach the price parity gap between EVs and internal combustion engine (ICE) vehicles, using a number of instruments,” explained nonprofit organisation Electric Mission executive director Hiten Parmar.
President Hage Geingob yesterday told the world that Namibia will no longer export unprocessed mineral products. Speaking at the European Union and Namibian Business Forum taking place in Belgium, Geingob’s statement came after Cabinet decided to prohibit the exportation of Namibia’s critical minerals in raw form. This is in a bid to create more local jobs, more local value and to boost domestic industrialisation efforts.
Namibia’s economy is intricately linked to the extraction and processing of minerals for export, contributing significantly to its gross domestic product (GDP) and foreign exchange earnings. This applies to minerals such as unprocessed crushed lithium, graphite, cobalt, manganese and rare earth elements. Geingob was speaking at the opening of the first EU-Namibia business forum, taking place under the theme, ‘Mobilising quality investment and value addition for green growth in the EU-Namibia partnership’.
Zimbabwe’s economy has continued its post-COVID recovery, but enhancing its longer-term growth potential would require strong reform efforts. Real GDP is projected to grow by around 4.8 percent in 2023, supported by strong activity in the mining sector and—reflecting the beneficial impact of structural reforms—in agriculture and energy sectors. Growth is expected to slow to 3.5 percent in 2024 due to weaker global demand for minerals and a weather- related slowdown in agriculture.
Structural reforms aimed at improving the business climate and reducing governance vulnerabilities are key for promoting sustained and inclusive growth and would bode well for supporting Zimbabwe’s development objectives embodied in the country’s National Development Strategy 1 (2021-2025). Sustainable development will also require a resolution of debt overhang. The Fund continues to provide policy advice and extensive technical assistance in the areas of revenue mobilization, expenditure control, financial supervision, debt management, economic governance, and macroeconomic statistics.
Pakistan beats the US and Netherlands, to become Kenya’s largest export market (Business Insider Africa)
A breakdown of Kenya’s export earnings revealed that Pakistan purchased Kenya goods worth Ksh48.28 billion ($321.44 million) in the first 8 months of 2023. This represents a 19.29% bump over Ksh40.47 billion ($269.44 million) in the same period in 2022.
According to further analysis by Kenya’s National Bureau of Statistics (KNBS), the Netherlands, in the same period under review accounted for Ksh43.94 billion ($292.5 million) of Kenya’s export earnings and the US accounted for Ksh42.89 billion ($285.6 million). Pakistan has acquired a taste for Kenyan tea and has become the number one consumer of the product, alongside small quantities of leather, coffee, and spices.
Mozambique – adding value through industrialisation (Freight News)
“With its considerable mineral reserves, vast arable land, extensive coastline and harbours, transport corridors, and revenues from megaprojects in coal and gas, Mozambique has good prospects for advancing industrialisation,” writes Kasper Vrolijk of the German Institute of Development and Sustainability in a country report. Constraints include “skills shortages, inadequate infrastructure and issues around the regulation of labour, access to land and finance, taxation, investment and customs”.
While commodities make up around 95% of total exports, value is added to 20% by Mozal aluminium in the form of ingots.
Since 2014, further value has been added locally by Midal Cables International, which exports aluminium wire and overhead conductors for power transmission and distribution. Responses to global warming bring fresh opportunities. “We have all the conditions to implement green industrialisation, which we have already started with – for example, the construction of the Mphanda Nkuwa hydroelectric dam and solar power projects all over the country.” Trade and Industry Minister Silvino Moreno told the 28th Conference of Senior Officials of the United Nations Council for Southern Africa (Uneca).
According to the World Bank’s latest Algeria Economic Update, Algeria’s economy has reached its pre-pandemic level in 2022, the recovery extending to the first half of 2023. Algeria’s growth is expected to retrieve its pre-pandemic trajectory by 2024, notably supported by the hydrocarbon and agricultural sectors. Higher investment, including in large industrial projects, assisted economic activity in the first quarter of 2023, and it is expected to keep supporting growth between 2023 and 2025. Sustained efforts to enhance Algeria’s business environment and attract private-sector investment will be key to maintaining this trend.
Kamel Braham, the World Bank’s Resident Representative to Algeria, commented, “Algeria has the potential to diversify its economy, reduce its dependence on imports, and increase non-hydrocarbon exports while sustainably creating private sector jobs. Although it is too early to attribute it to recent reforms, the sustained economic performance is encouraging, and efforts to stimulate private sector investment should be strengthened.”
Tracking the decline in oil and gas prices since mid-2022, Algeria’s export revenues declined markedly during the first half of 2023, but the trade balance remained positive, and foreign exchange reserve accumulation continued. Lower hydrocarbon revenues and rising government spending, notably on civil service wages, are expected to be cushioned by the announced large dividends from Sonatrach. The budget deficit is nonetheless expected to expand albeit it will be partly financed by savings from oil revenues accumulated since 2021.
Document transfer solutions provider CargoX announced it has been chosen to support Uganda’s Presidential Advisory Committee on Exports and Industrial Development (PACEID) as it looks to build out a platform to service the country’s export growth. PACEID reported in late August that it had signed a memorandum of understanding with technology supporters to launch its trade facilitation platform TradeXchange.
In Tuesday’s announcement, a technology consortium including Technology Associates and CargoX explained the platform would be built off of CargoX’s blockchain document transfer solution. “We are pleased to work with CargoX, who already does work in [the Common Market for Eastern and Southern Africa (COMESA)] and many other parts of the world, to bring fresh thinking on how to gather, build and utilize data for our exports from Uganda. Our target of [$6 billion] in five years would be difficult to attain without more [work on] our hard infrastructure as well as the soft one in digital performance,” said Odrek Rwabwogo, chairman of PACEID. This is CargoX’s second sizable partnership aimed at bringing more efficient import and export practices to global markets.
The East African Community (EAC) has applauded the decision by the Republic of Uganda and the Democratic Republic of Congo (DRC) to waive visa fee requirements for citizens travelling across their borders. The decision which was taken during the 8th Ordinary Session of the Joint Permanent Commission between the two Partner States in Kinshasa, DRC, on Saturday, 21st October, 2023 will significantly enhance trade which is the driving force behind the integration process. Uganda becomes the third EAC Partner State to waive visa requirements for DRC citizens after Kenya and Tanzania.
The EAC Secretary General, Hon. Dr. Peter Mathuki, said that the move by Uganda and DRC to waive visa fees for their nationals was in harmony with the provisions of the EAC Common Market Protocol, which among other freedoms and rights, provides for the free movement of persons and workers across the region. Dr. Mathuki said that the waiver of the visa entry requirements was a sign of political goodwill among the Partner States in moving forward integration, adding that it would go a long way in promoting intra-regional trade that currently stands at just 15%.
The private sector, key to trade development in Africa, has been urged to actively participate in the full implementation of the African Continental Free Trade Area (AfCFTA) to accelerate national and regional economic growth and development.
Opening the National Consultative Forum on the Development of the African Continental Free Trade Area (AfCFTA) Implementation Strategy for Botswana, the Acting Minister of Trade and Industry, Hon. Dumizwani Mthimkhulu, urged the private sector in Botswana to brace themselves for implementation of the AfCFTA. The private sector should take advantage of the opportunities to grow their business through regional value chains and cross border trade under the AfCFTA which has a market size of over 1.3 billion people in Africa, alone.
“The development of the Strategy resonates with Government’s aspiration for economic transformation through mindset change and changing the way we do business, if we are to graduate the county to a high-income status by 2036, “said Hon. Mthimkhulu, highlighting that the development of the strategy has to be driven from a private sector perspective as the active users of the Agreement.
Seven signatories for Lobito corridor extension MoU (International Railway Journal)
The African Development Bank (AfDB) and Africa Finance Corporation (AFC) have joined the United States, the European Union (EU), Angola, the Democratic Republic of Congo (DRC), and Zambia in signing a memorandum of understanding (MoU) to develop the Lobito Corridor and the new Zambia-Lobito line.
The AFC has been appointed lead project developer to work with the other signatories. The proposed line runs from Luacano in Angola to Kalumbila in Zambia, continuing to connect with the existing network at Chingola, which runs across the border to the DRC.
The MoU, signed on the margins of the Global Gateway Forum in Brussels, Belgium, on October 26, outlines the signatories’ intention to collaborate across multiple sectors to realise the full economic potential of the corridor, building on the Lobito Corridor Transit Transport Facilitation Agency agreement signed by the three African governments in January and anchored by previous investment in the new Zambia-Lobito line.
EU signs strategic partnerships on critical raw materials value chains with DRC and Zambia and advances cooperation with US and other key partners to develop the ‘Lobito Corridor’ (European Commission)
Today, at the Global Gateway Forum taking place in Brussels, the EU signed three Memoranda of Understanding (MOU) with partners to develop critical raw materials value chains and boost transport connectivity.
As a direct follow up to the G20 Summit in New Delhi in September 2023 and its commitment to the Partnership for Global Infrastructure and Investment (PGII), the EU – represented by Commissioner Jutta Urpilainen –, the United States of America, the DRC, the Republic of Zambia, the Republic of Angola, the African Development Bank and the Africa Finance Corporation signed today a Memorandum of Understanding to support the development of the “Lobito Corridor”. This transport corridor will connect the southern part of the DRC and the north-western part of the Republic of Zambia to regional and global trade markets via the Port of Lobito in Angola.
The Global Gateway strategy will play a central role in supporting the actions under the partnership on critical and strategic raw materials value chains with the DRC and the sustainable raw materials partnership with Zambia. The two Memoranda of Understanding signed today establish close cooperation in five areas: Integration of sustainable raw materials value chains; Mobilisation of funding for development of infrastructure; Cooperation to achieve sustainable and responsible production; Cooperation on research and innovation; Capacity building to enforce relevant rules.
Signing of the Memorandum of Understanding on the Development of the Lobito Corridor and the Zambia-Lobito Rail Line (United States Department of State)
Ms. Angele Makombo N’tumba, the Acting Executive Secretary (ES) of the Southern African Development Community (SADC), received a courtesy call from Ms. Leïla Farah Mokadem, Director General of the African Development Bank (AfDB) for Southern Africa on 23rd October 2023 in Gaborone, Botswana.
The courtesy meeting served as an introductory session for the consultative mission on the Combined Mid-Term Review and Regional Portfolio Performance Review of the Regional Integration Strategy Paper for Southern Africa (RISP 2020-2026), scheduled from 23 - 27 October 2023.
The RISP was approved in November 2022 and identifies infrastructure connectivity, market integration and industrialisation as key focal priorities that are operationalised the Bank’s High 5s themes on Regional Integration; Feed Africa; Light Up and Power Africa; Industrialise Africa; and Improve the Quality of Life for the People of Africa.
The consultative mission will undertake a review on the strategic relevance of the RISP to the regional priorities of SADC, take stock of progress on the implementation of the RISP and consolidate lessons for subsequent post-2026 regional strategy. The mission will be facilitated through technical consultations across sectors such as agriculture, trade, energy, water, transport, ICT, climate change and green growth, blue economy, disaster risk reduction, gender, finance, and investment.
The fifth review of the trade policies and practices of the Southern African Customs Union takes place on 25 and 27 October 2023. The basis for the review is a report by the WTO Secretariat and reports by the Governments of Botswana, Eswatini, Lesotho, Namibia and South Africa.
Patel expresses confidence about South Africa’s continued inclusion in Agoa (Engineering News)
Ahead of South Africa hosting the US-Africa Trade and Economic Cooperation Forum – also called the Agoa Forum – from November 2 to 4, Trade, Industry and Competition Minister Ebrahim Patel on October 26 briefed the media on the state of readiness for the forum, expressing confidence that the South African government’s relations with the US were strong. The Agoa Forum, which will be in its twentieth instance, will see the government of the US and those of Agoa-eligible countries, as well as representatives from the private sector, civil society and labour, engaging on trade and investment matters. South African stakeholders hope that the forum will reaffirm the US administration’s commitment to the African continent and provide opportunities to make Agoa more transformative.
Various South African stakeholders have been motivating for the extension and renewal of the African Growth and Opportunity Act (Agoa) US preferential trade framework for the next ten years; however, questions around South Africa’s dalliance with Russia amid its invasion of Ukraine have created uncertainty on whether the US will include South Africa in Agoa’s extension and renewal. Agoa in its current form is due to expire in 2025.
The theme of this year’s Forum is Partnering to Build a Resilient, Sustainable, and Inclusive AGOA to Support Economic Development, Industrialization and Quality Job Creation.
Bill could extend Agoa inclusion by two decades (Freight News)
For more info, see AGOA.info: AGOA Forum 2023 Resources
Today, the European Commission and the German development bank KfW signed an agreement for the African Local Currency Bond guarantee programme that will enhance access to long-term financing in local currency for African local businesses. In the framework of the programme, the Commission provides €100 million to cover KfW’s guarantees for investors in the African Local Currency Bond Fund that will further mobilise €820 million in private investments by 2027. The guarantee programme is part of the European Fund for Sustainable Development plus (EFSD+), a financing tool of Global Gateway. Commissioner Urpilainen and KfW’s Executive Board Member Laibach signed the agreement at the Global Gateway Forum that takes place in Brussels.
European Commissioner for International Partnerships, Jutta Urpilainen, said: “In recent years, our partner countries have faced multiple crises with stark economic consequences. To overcome current and future crises, we want to support partners in becoming more resilient through the Global Gateway investment strategy. Developing local and regional capital markets is crucial, as they play key role in financing necessities like affordable housing, renewable energy, agriculture, health and education. The African Local Currency Bond guarantee programme signed today will increase economic resilience in Africa by enhancing access to long-term financing in local currency for African businesses.”
At the Global Gateway Forum, European Commissioner for International Partnerships, Jutta Urpilainen, and Finnfund CEO, Jaakko Kangasniemi, have officially signed the Africa Connected Programme, a landmark guarantee agreement aimed at mobilising more than €1 billion in sustainable investments for digital infrastructure and digital service platforms in Sub-Saharan Africa. Finnfund becomes a first-time implementing partner of European Fund for Sustainable Development Plus, the Global Gateway’s financial arm.
Commissioner Urpilainen said: “The EU and Finnfund share a vision for a more connected and economically empowered digital future of Sub-Saharan Africa. The guarantee presented today will help mobilising sustainable private investment to realise that vision, also in Least Developed Countries.
The Africa Connected guarantee programme, entailing up to EUR 100 million in EFSD+ guarantee capacity, will serve to mobilise sustainable investment into digital infrastructure and digital service platforms in Sub-Saharan Africa. Africa Connected forms an integral part of the Global Gateway Strategy, enhancing the digital connectivity in Sub-Saharan Africa, especially in Least Developed Countries and countries in fragile context.
17 African countries join workshop to enhance access to climate change adaptation funds (Global Environment Facility)
Representatives from 17 African countries gathered recently at a Global Environment Facility workshop to share lessons on how to deal with the climate crisis unfolding across the continent as well as enhancing access to adaptation funding through the GEF-managed Least Developed Countries Fund (LDCF).
The four-day workshop held in Addis Ababa, Ethiopia from October 2 targeted the adaptation needs of African Least Developed Countries – where the climate crisis threatens to set back decade-long efforts to improve people’s lives by blocking development pathways.
Ethiopia’s Planning and Development State Minister Sandokan Debebe underscored how Africa is at the “forefront” of cascading climate effects. “Our continent faces consecutive droughts, floods, and locust infestations, endangering lives and livelihoods, hindering development gains, and impeding progress towards sustainable development goals,” he said.
Minister Debebe also indicated the resolve of African countries to counter these effects. “We are committed to addressing these challenges through national strategies and initiatives,” he said. The Minister highlighted how Ethiopia is taking action to bolster national climate resilience through the Green Legacy Initiative, a national tree planting program being unrolled across the country’s urban and rural areas.
UNCTAD, in partnership with the International Chamber of Commerce, the International Trade Centre and the World Trade Organization, will jointly host the “Trade House pavilion” at the 28th UN climate change conference (COP28) to spark discussions and advance consensus on trade-related measures that can help drive both climate and sustainable development actions.
COP28 is slated for 30 November to 12 December in Dubai, United Arab Emirates, and the pavilion will bring trade and climate policymakers and experts together for the first time in a UN climate conference. UNCTAD will also contribute to the COP28 Trade Day on 4 December, the first time the climate summit will dedicate an entire day to discussions on trade’s role in climate action.
“Climate and trade policies need to work together. As the world is coping with the devastating effects of global warming, it’s time for trade to play its role in shaping climate action that fosters inclusive and sustainable development,” UNCTAD Secretary-General Rebeca Grynspan said. “This starts with the international organizations with a trade mandate joining forces, and UNCTAD is pleased to work with our partners to host this first Trade House pavilion at COP28,” she added.
Chenai Mukumba: The current international financial system is no longer fit for purpose (Tax Justice Network Africa)
Tax Justice Network Africa (TJNA) Executive Director Chenai Mukumba has supported calls for the overhaul of the international financial system, saying it is no longer fit for purpose. Speaking as a key respondent during the High-Level Dialogue on Financing for Development at the 78th Session of the United Nations General Assembly (UNGA), Ms Mukumba noted that there was an urgent need for an intergovernmental forum on tax cooperation where all member states are able to participate on an equal footing.
She urged member states to adopt the proposal for a framework convention on international tax cooperation as it has the most potential to change the status quo for developing countries. She lauded the spirited efforts by the African Group that culminated in the adoption by consensus of the African Group resolution on the promotion of inclusive and effective international tax cooperation.
“The importance of reform of the global tax system is that while countries have a sovereign right to collect taxes, illicit financial flows through tax evasion and avoidance prevent the effective exercise of this right. Therefore, an ineffective international tax system limits the sovereign rights of our states,” she noted.
The African Union (AU) said Wednesday that combating illicit financial outflows from the continent will accelerate efforts to achieve inclusive growth and sustainable development. Patrick Ndzana Olomo, the acting head of the economic policy and research division at the Department of Economic Affairs of the AU Commission, told a regional forum in Nairobi, the capital of Kenya, that illicit financial outflows through theft or tax evasion reduce the ability of Africa to raise its own resources in order to achieve its development goals.
“Part of the reason for Africa’s financing deficits is the pervasive issue of illicit financial flows to jurisdictions outside the continent,” Olomo said during the 2023 African Parliamentary Network on Illicit Financial Flows and Taxation Conference.