tralac Daily News
Economy moves ‘sideways’ with marginal 0.2% contraction in GDP (Engineering News)
Statistics South Africa (Stats SA) has reported a marginal 0.2% contraction in gross domestic product (GDP) for the third quarter, compared with the second quarter, and a contraction of 0.7% compared with the third quarter of 2022, prompting Stats SA economic statistics deputy director general Joe de Beer to call “very much a sideways movement” in the economy.
In terms of the percentage contribution of industries to the total value added to the economy, finance represented the largest slice of the pie at 24%. Second was personal services at 16%, with manufacturing at 15% and trade at 14%. Government represented 9%, with transport at 8%, mining at 7%, and electricity, gas, and water at 4%. Agriculture and construction each only represented 2% of the total contribution to total value added.
Net exports also contributed negatively to expenditure on GDP in the third quarter. Exports of goods and services increased by 0.6%, largely influenced by increased trade in vehicles and transport equipment, pearls, precious and semi-precious stones, precious metals, and vegetable products. Imports of goods and services decreased by 8.6%, which was largely influenced by decreased trade in machinery and electrical equipment, as well as chemical products, artificial resins and plastics, base metals and articles of base metals, vegetable products, and vehicles and transport equipment.
South Africa recorded a preliminary trade balance deficit of R12.7 billion in October 2023. This deficit was attributable to exports of R170.3 billion and imports of R183.0 billion, inclusive of trade with Botswana, Eswatini, Lesotho and Namibia (BELN). The year-to-date (01 January to 31 October 2023) preliminary trade balance surplus of R28.5 billion was a deterioration from the R180.8 billion trade balance surplus for the comparable period in 2022.
South Africa’s agricultural exports amounted to $3.9 billion in the third quarter, lifting by 4% over a year, according to data from Trade Map. Agricultural Business Chamber (Agbiz) chief economist Wandile Sihlobo said products that dominated the export list this quarter were citrus, maize, apples and pears, nuts, wine, soybeans, sugar, and fruit juices.
“This solid export activity was both a function of improvement in volumes and prices, specifically of fruits. This more than offsets the effects of lower grains and oilseed prices, which have declined notably from their 2022 levels. Overall, South Africa’s agricultural exports amounted to $10.2bn in the first nine months of the year, up 1% from the same period in 2022,” he said.
Agbiz said the export activity was mainly before the intensified challenges at the South African ports. However, given that the inefficiency challenges at the ports and on railway lines were not new, the agricultural exports’ success resulted from continued collaboration between the industry and Transnet to improve logistics at the ports.
Agbiz optimistic about market expansion to new Brics members (Engineering News)
“Funding smallholder farmers in the current environment has become quite difficult, particularly when we are relying on external resources,” Chris Hart, executive chairman of Impact Investment Group South Africa, told attendees to the sixth annual African Agri Investment Indaba (AAII) forum.
Africa’s agricultural sector is a complex web of challenges, many which are currently exacerbated by global geopolitics and macroeconomic upheavals. While solving the myriad of challenges facing the sector is a herculean task, one factor has remained constant – agriculture is not short in terms of support.
Africa remains food insecure; about 20% of the population faces hunger. The continent also spends a staggering $80 billion of scarce forex on food imports annually. Another hard fact is that approximately 80% of Africa’s food supply still comes from small-scale farmers, many of whom are still practicing subsistence farming; yet the continent holds of 60% of the world’s uncultivated arable land.
During the AAII forum, it emerged that lack of partnerships and collaborations is one of the biggest missing links in transforming agriculture in Africa. In fact, the overarching theme of the AAII forum was “Achieving food security through private sector investment: The battle of narratives.”
With the end of 2023 drawing near, President Hage Geingob and his administration reflected on the events of the year yesterday. During a press briefing held in the capital, the government discussed both the achievements attained and the challenges that lie ahead. Central to these discussions is Namibia’s green transition, a matter which has attracted the attention of international energy stakeholders. Geingob pointed to this as a key highlight of the year.
In April this year, Geingob visited South Africa at the invitation of president Cyril Ramaphosa. The two governments addressed issues about the Southern African Customs Union (SACU). “That is also a problem; we are like beggars there. We had to discuss that seriously because we cannot industrialise. Look at the Peugeot plant, it is closing down. As long as these SACU tariff issues are not reconciled and democratically decided as South Africa is playing the game, we have to look at the future of SACU. Are we still together, or are people planning something else, and we are just sitting with our hands folded, not doing anything?” he asked concerned.
Mr Divine Kutortse, Programme Officer at the National Africa Continental Free Trade Area (AfCFTA) Coordination Office, has emphasised the significance of trade information in conducting successful business. He said to give prospective investors and entrepreneurs the necessary and sufficient information to help them make decisions, AfCFTA had created a site called Ghana Trade Information Repository portal Mr Kutortse, speaking at the Second Volta Young Entrepreneurs Summit, urged the youth to position themselves well to increase their competitiveness in the business world.
He added that to investigate market prospects in other regions of the continent, such as Northern, Southern, and Eastern Africa, AfCFTA also instituted a project called Market Entry Expedition.
Ghana shining example in AfCFTA implementation – Secretariat (Modern Ghana)
UNCTAD eWeek 2023 kicked off on 4 December, gathering in Geneva and online more than 3,000 participants from over 130 countries to address one of the major challenges facing the world: Turning digital opportunities into shared development gains. The week-long event convenes in a global context marked by a climate emergency, geopolitical conflicts and economic shocks that have reversed progress on the Sustainable Development Goals (SDGs), only 15% of which are on track to be met by 203
UNCTAD Secretary-General Rebeca Grynspan emphasized in her opening statement that the week’s theme, “Shaping the future of the digital economy”, is a call for urgent action. Time is of the essence, Ms. Grynspan said. “Countries at the frontlines of development are being left behind.” “Issues such as data privacy, ethical AI, and cyber security are not just technical issues, but societal ones,” she added. “Innovation is key, but so is regulation.”
The International Air Transport Association (IATA) released data for October 2023 global air cargo markets indicating the third consecutive month of stronger year-on-year demand. Global demand, measured in cargo tonne-kilometres (CTKs*), increased by 3.8% compared to October 2022. For international operations, the demand lagged slightly at 3.5%. Capacity, measured in available cargo tonne-kilometres (ACTKs), was up 13.1% compared to October 2022 (11.1% for international operations). This was largely related to the growth in belly capacity. International belly capacity, for example, rose 30.5% year-on-year on the strength of passenger markets.
AGOA isn’t the political leverage Washington thinks it is (Ventures Africa)
On 9th June 2023, the US, with Australia, Canada, Japan, New Zealand, and the United Kingdom issued a statement that began with the sentence: “The use of trade-related economic coercion and non-market-oriented policies and practices threatens and undermines the rules-based multilateral trading system and harms relations between countries”.
Less than six months later, however, on 1st November, the US announced a plan to delist Gabon, Niger, Uganda, and Central African Republic (CAR) from a special trade scheme it has with up to 35 African countries known as the Africa Growth and Opportunity Act (AGOA). The announcement came a day before the start of the 2023 AGOA forum in South Africa, designed to discuss a potential renewal of AGOA from 2025 onwards. By blacklisting these countries the US was using AGOA as a stick, a tool of economic coercion to achieve political objectives. The problem is, not only was this hypocritical but AGOA has never been a big enough economic carrot. Both these factors – if not addressed – pose major challenges to US foreign policy going forward.
The chair of the fisheries subsidies negotiations, Ambassador Einar Gunnarsson of Iceland, on 4 December opened the final “Fish Week” of 2023 with the aim of advancing work towards an outcome by the 13th Ministerial Conference (MC13). The chair presented draft language in an effort to bridge members’ views on key provisions, noting that members’ efforts this week will be crucial to achieve the goal of completing text-based work this month ahead of MC13.
COP28 and related updates
Flagship climate projects fast-tracked at COP27 between the UK and Kenya have reached milestone achievements ahead of COP28 with multiple projects making progress since last year’s climate summit. The UK has also supported the design and development of President Ruto’s new industrialisation initiative for Africa – the Africa Green Industrialisation Initiative (AGII). The projects support this initiative by creating jobs, increasing economic growth and boosting trade. The investments are flagship projects of the UK-Kenya Strategic Partnership – an ambitious five-year agreement which is unlocking mutual benefits for the UK and Kenya.
The KES 12.5 billion Menengai Geothermal project – which will generate 35MW of electricity, providing approximately 750,000 Kenyans with affordable, clean energy and create 200 jobs during construction, is proceeding to financial close with construction expected to begin shortly after. A KES 31 billion agreement has also been reached with the Kenyan Development Corporation and UK-funded investor United Green to establish an area bigger than Nairobi National Park for climate-smart farming – this will save Kenya $200m annually on food imports and help reduce Kenya’s trade deficit.
EAC rising carbon emission still low in global terms (Tanzania Daily News)
The region’s strong economic growth, which means expansion of economic activities, has also triggered the rapid growth of energy consumption and carbon dioxide emissions which however remains low in global terms. However, previous carbon accounting studies have never focused on the region. At the start of the 21st century, all the countries of East Africa were agrarian and actively exploring differentiated ways to revitalise their economies. Large economies such as Kenya and Tanzania set industrialisation as an important goal in their national economic development plans.
In the East African Community (EAC) region, Kenya and Tanzania, the two largest economies are also leading in carbon dioxide emission. Kenya is leading in carbon dioxide emissions the EAC region with annual emission of 19.88 million metric tonnes in 2021 followed by Tanzania with 13.06 million metric tonnes. The rest of the EAC member states follow the two economic power houses in a distant with Uganda at 5.78 million metric tonnes, DR Congo (2.61 million metric tonnes), Rwanda (1.75 million metric tonnes) and South Sudan (1.58 million metric tonnes).
However, carbon emissions from the region are still low in global terms. None of the EAC member states is in top ten carbon emitters led by South Africa contributing, contributing 435.9 million tonnes, followed by Egypt, with 249.6 million tonnes, and Algeria, responsible for 176.2 million tonnes.
As the climate crisis continues to grip the world’s attention, discussions at the COP28 UN climate conference have expanded beyond environmental strategies to include innovative financial solutions. A groundbreaking dialogue held as a side event at the conference shed light on the role of finance in shaping Africa’s future, with insights from speakers who are driving transformative initiatives on the continent.
Kicking off the discussion, Mr. Shonibare presented a visionary “moonshot” idea aimed at transforming Africa’s financial landscape. He proposed the establishment of a Bank of African Settlements and the introduction of a new currency backed by commodity reserves, including oil. Addressing concerns about the inclusion of oil, Shonibare noted, “While the inclusion of oil might raise concerns in the context of climate change discussions, it’s essential to understand that the proposal aims to leverage Africa’s commodity wealth to create a new financial architecture.”
Amplify the voice of African countries globally and provide a space and platform to highlight the continent’s challenges, opportunities and responses -- this was the focus of Africa Day on 2 December 2023. The day opened with a high-level session at which several African leaders called for “increasing climate finance and green growth in Africa”, the theme of the event.
The President of Senegal, Macky Sall, agreed fully: “African young people’s future is on the continent of Africa. Africa has a legitimate need for development and industrialization to become part of global value chains, rather than being merely a reservoir of raw materials. We must create added value to provide our young people with jobs.
The fundamental challenge in Africa is to be able to finance cheap energy, especially through green industry. The continent must benefit from a fair energy transition. Partners have to support this transformation towards a low-carbon economy. We need adequate funding to develop our potential,” concluded the Senegalese President.
Africa delivers powerful agenda at climate forum (People Daily)
When the leaders of African nations set out to attend the United Nations Climate Conference (COP28) in Dubai, UAE, they had a strong clear agenda. The African leaders’ agenda, spelled out at the inaugural Africa Climate Summit held in Nairobi, Kenya in September, called for urgent action by developed countries to reduce carbon emissions. The Nairobi Declaration also proposed a new financing mechanism to restructure Africa’s crippling debt and unlock climate funding, stressing the importance of decarbonising the global economy for equality and shared property.
The greenhouse gas emissions linked to intensive livestock production have escalated climate disasters in Africa and the larger global south, derailing the transition to a resilient and green future, campaigners said Tuesday. Speaking during the virtual launch of a report by World Animal Protection (WAP), an international animal welfare charity in Nairobi, campaigners urged a moratorium on factory-based livestock farming to curb the emission of planet-warming gases.
“Factory farming poses a core obstacle in achieving the targets laid out in the Paris Climate Agreement and casts a dark shadow over the prospect of a climate-safe future,” said Tennyson Williams, director for Africa at WAP. In its report, “How Factory Farming Emissions Are Worsening Climate Disasters in the Global South,” WAP states that attaining net-zero targets could be a mirage unless demand for animal-based protein dips significantly. The report notes that factory farming contributes at least 11 percent to global greenhouse gas emissions, escalating climate disasters like heatwaves, cyclones, droughts, and flooding.
Trade can be a powerful tool in the fight against climate change, global leaders said on 4 December as they launched “Trade Day” at the COP28 climate summit in Dubai, United Arab Emirates. This was the first time the UN’s annual climate conference dedicated an entire day to trade, highlighting the growing recognition of the need to put trade front and center in climate action.
The global production and distribution of goods and services contribute to roughly a quarter of all carbon dioxide emissions. Trade also plays a key role in tackling climate change by increasing the flow of green goods and services and making it easier for countries to access the technologies and knowledge needed in the low-carbon energy transition.
“Climate and trade policies need to work together,” UNCTAD Secretary-General Rebeca Grynspan said. “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.” At Trade Day’s opening, Ms. Grynspan joined global leaders to outline a roadmap of trade policy options for a just and ambitious response to climate change. At the opening event, Ms. Grynspan underlined the need for a multilateral approach to avoid a “spaghetti bowl” of climate and environment regulations that small businesses and vulnerable countries cannot navigate.
Trade policy tools can help countries increase low-carbon goods uptake by reforming import tariffs, rethinking government procurement and promoting trade facilitation, said Director-General Ngozi Okonjo-Iweala on 4 December. Speaking at the launch of “Trade Day” at the United Nations Climate Change Conference (COP28) in Dubai, DG Okonjo-Iweala stressed this thematic day should inspire world leaders to make fuller use of trade as part of the climate action toolkit.
DG Okonjo-Iweala highlighted that the international community remains well short of the Paris Agreement targets. She said that the trillions of dollars of low-carbon investments needed to achieve those targets are now facing higher borrowing costs. Against that background, she stressed that trade can help deliver greater emission reductions for each dollar spent and repurpose harmful subsidies to assist climate action. “The fact is, we cannot get to net-zero without trade because it is indispensable for spreading low-carbon technology to everywhere it is needed,” she noted.
The effort to combat climate change is also an opportunity for least developed countries (LDCs) to leverage their advantages and benefit from trade opportunities offered by green specialization, Deputy Director-General Jean-Marie Paugam said on 3 December. Speaking at a Trade House event at the COP28 climate summit in Dubai, DDG Paugam noted that many LDCs enjoy significant potential in renewable energies, low-emission agricultural production and alternatives to fossil fuel-based products. But seizing these opportunities requires a strengthened WTO, he said.
Inside the negotiating rooms and on the sidelines of the COP28 climate talks, simmering tensions over wealthy countries’ “green trade” policies have been bubbling to the surface, with developing nations fearful they will be penalised. A particularly sore point has been the European Union’s new carbon border tax, which sets a price on imported goods based on the emissions involved in creating them.
While the EU deems the tax necessary to ensure everything entering the bloc meet its climate goals, powerful emerging economies at COP28 have labelled such policies as protectionist, saying they disadvantage poorer trading partners.
Concerns have also been raised that these kind of climate policies may -- even though they cut emissions from one country -- make it harder for another nation to sell their goods or access clean energy technology. “Trade regulations can have unintended consequences, and we should be a little thoughtful about that,” World Bank president Ajay Banga told a side event packed with prime ministers, business executives, trade bosses and diplomats at the talks in Dubai.
Food systems shifts features prominently in COP28 agenda (Daily Maverick)
Food systems and land use present significant opportunities for both adaptation and mitigation. Governments globally have made commitments to transform food systems and mitigate the risk of exceeding the 1.5°C temperature target. Failure to overhaul global food systems could have severe consequences for food and nutrition security, as well as for livelihoods and income generation. The 2023 Intergovernmental Panel on Climate Change (IPCC) report underscored that effective solutions to mitigate and adapt to climate change can be achieved through climate-resilient development and holistic measures, particularly in the food and agriculture sectors.
Africa’s food systems are confronted with various obstacles and are exposed to external factors, which include climate change, severe weather conditions, pest and disease outbreaks, and insufficient access to and utilization of yield-boosting technologies. As a result, the capacity to cater to the food requirements of Africa’s expanding populace has been challenged, leading to a surge in malnourishment cases. Current FAO statistics indicate that around 670 million individuals (which makes up 8% of the world population) will still be struggling with hunger in 2030.
This year’s UN climate conference, underway in the United Arab Emirates’ largest city, Dubai, opened its second full week hearing a diverse cross-section of women leaders and activists raise their voices to call for ending existing gender gaps and mitigating the worsening impacts of climate change on women and girls.
Prevailing gender norms, existing inequalities and their unequal participation in decision-making processes often prevent women from fully contributing to climate solutions. Worryingly, a report launched today by UN Women suggests that by 2050, climate change may push up to 158 million more women and girls into poverty and see 236 million more face food insecurity.
But there is hope, however, as women can – and do – play an important role in climate solutions, as was highlighted on ‘Gender Equality Day’ at COP28, where women changemakers showcased how they are driving the action. A panel discussion on the ‘Women Rise for All’ platform was organized by the UN Office of Partnerships at Creator Hub, underscored the leadership of women in scaling up sustainable solutions aligned with the Paris Agreement.
Fossil fuel ‘phase out’ put on table for COP28 climate talks (The Business Standard)
Countries at the United Nations’ COP28 climate conference are considering calling for a phase-out of fossil fuels as part of the summit’s final deal, according to a draft negotiating text seen on Tuesday. Research published on Tuesday showed global carbon dioxide emissions from burning fossil fuels are set to hit a record high this year, exacerbating climate change and fuelling more destructive extreme weather.
A draft of what could be the final agreement from COP28, published by the UN climate body, kicks off negotiations around what is considered the summit’s defining issue: whether countries will agree to eventually end the use of fossil fuels. The draft text includes three options, which delegates from nearly 200 countries will now consider.
The Global Carbon Budget report, published on Tuesday said that CO2 emissions from coal, oil and gas are still rising, driven by India and China. Countries are expected to emit a total 36.8 billion metric tons of CO2 from fossil fuels in 2023, a 1.1% increase from last year, the report by scientists from more than 90 institutions including the University of Exeter concluded. The world’s overall emissions for this year, which reached a record high last year, have plateaued in 2023 due to a slightly better use of land, including a decline in deforestation. Emissions including land use are set to total 40.9 billion tons this year.
Bangladeshi CSOs seek realistic commitments at COP28 (The Business Post)
Climate Justice Alliance- Bangladesh — a coalition of 30 CSOs — at COP28, urged for a swift and equitable transition from fossil fuels while demanding responsible actions like mobilising needs-based finance, ensuring obligatory loss and damage finance, and upholding human rights in climate efforts. The CSOs are firm in their stance that the first-ever global stock take at COP28 serves as a pivotal moment for a reality check on the world’s progress in combating climate change, read a press release on Monday.
They highlighted the imperative of bridging existing gaps, evaluating current strategies, and delineating unequivocal roles and contributions to achieve the crucial 1.5-degree Celsius goal. Moreover, emphasis is placed on extending support to the Least Developed Countries (LDCs) and Most Vulnerable Countries (MVCs) for their adaptation and survival in the face of climate adversity.
CSOs from around the world convened at COP28 with an unequivocal call to action, urging global leaders to prioritize immediate and realistic measures to combat the escalating climate emergency .With a critical eye on past negotiations, these CSOs are determined to forge a path toward a sustainable, equitable, and transformative resolution in Dubai.
COP28 Finance Day unlocked significant progress on international financial architecture reform to support low-income and vulnerable countries fight climate change. Major international financial institutions and countries made new commitments to offer climate-resilient debt clauses (CRDCs) in their lending. These clauses allow debt service to be paused to provide breathing space when countries are hit by climate catastrophes.
The UK, France, World Bank, Inter-American Development Bank (IDB), European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD) and African Development Bank (AfDB) made new commitments to expand CRDCs in their lending. In total 73 countries called on donors to expand the use of these clauses by 2025.
Over 60 countries signed up to a so called ‘cooling pledge’ with commitments to reduce the climate impact of the cooling sector, that could also provide “universal access to life-saving cooling, take the pressure off energy grids and save trillions of dollars by 2050.”
The UN Environment Programme (UNEP) estimates that more than 1 billion people are at high risk from extreme heat due to a lack of cooling access – the vast majority living in in Africa and Asia. Moreover, nearly one-third of the world’s population is exposed to deadly heat waves more than 20 days a year. The cooling brings relief to people and is also essential for several other critical areas and services such as global food security and vaccine delivery through refrigeration.
But at the same time, conventional cooling, such as air conditioning, is a major driver of climate change, responsible for over seven per cent of global greenhouse gas emissions. If not managed properly, energy needs for space cooling will triple by 2050, together with associated emissions. In short, the more we try to keep cool, the more we heat the planet. If current growth trends continue, cooling equipment represents 20 per cent of total electricity consumption today – and is expected to more than double by 2050.