tralac Daily News
Zimbabwe is paying $400 million Afreximbank debt with platinum exports (Business Insider Africa)
The southern African nation’s reliance on its platinum resources to secure borrowing reflects the difficulty Zimbabwe faces in getting loans from international financiers, Bloomberg reported. In February, the government inked a $400 million loan agreement with Afreximbank for budgetary assistance and the funding of trade-related infrastructure.
The funding agreement comes with a 10.2% interest rate and a six-year maturity period, with the borrowing cost surging to 12.2% if a default occurs. Repayment of the loan involves using 35% of Zimplats’ export proceeds, overseen by the Reserve Bank of Zimbabwe (RBZ).
Zimbabwe, burdened by $18 billion in debt, continues to face ineligibility for new lines of credit from multilateral lenders, including the World Bank, the International Monetary Fund, and the African Development Bank. Zimbabwe is the only regional member country of the African Development Bank currently under sanctions from the Bank and other multilateral financial institutions because of debt arrears amounting to over $2.6 billion.
Kenyan MPs want bigger say on EAC import tax decisions (Business Daily)
Kenyan lawmakers now want a bigger role in the country’s tax decisions on goods entering the East African Community (EAC) bloc to protect traders against arbitrary changes. The National Assembly’s Committee on Finance and National Planning says decisions on taxes on imported items should be subjected to public participation.
“The current practice means that whenever an amendment or application for a stay of execution is being canvassed parliamentary approval is never sought and as a result, there are cases of misalignment of tax laws as enacted by the Parliament,” it said in a report on the proposed National Tax Policy (NTP).
Application of stay is made by a member state to suspend the prevailing common external tariff (CET) for the eight members of the EAC. A CET is a tax applied to imported goods by a group of countries that have formed a customs union. Kenya is one of the members of the EAC where customs management is governed by the East Africa Customs Management Act, of 2004.
Amendment or application for stay of provision within the EACMA Act is done through the Council of Ministers an organ of EAC as provided in East Africa Customs Management Protocol. “Therefore, the NTP under Section 4.8 be amended to provide that, any amendment to the East Africa Customs Management Act or customs administration in general should undergo public participation and Parliamentary approval, prior to the government making proposals to the EAC and upon enactment, the regulations should also undergo Parliamentary approval as per the Statutory Instruments Act,” added the report of the Finance Committee headed by Molo MP Kimani Kuria.
Mozambique’s $80 billion energy transition strategy will leverage the country’s vast renewable resources to position the country as a sustainable investment destination and deliver energy to its people, President Filipe Nyusi said at the COP28 summit in Dubai.
Speaking on the third day of the COP28 UN climate conference, President Nyusi said Mozambique will still harness the potential of its offshore natural gas reserves in a diverse energy mix that will also exploit its abundant hydroelectric, wind and solar resources. While transitioning to a decarbonised future, Mozambique must continue to grow and meet the needs of the half of its population that does not have access to electricity, he said.
The World Bank’s latest South Sudan Economic Monitor (SSEM) reveals that South Sudan’s economy experienced stagnation in fiscal year 2023 (FY23) due to the lingering impacts of flooding on oil production. South Sudan’s economy contracted by 0.4 percent in FY23, less than the negative 2.3 percent growth outturn in FY22. Despite slower global growth and the lingering effects of recent catastrophic floods on domestic oil production, economic activity in South Sudan was supported by a stronger private sector, a return to relative peace, and increased government spending.
The SSEM report emphasizes the importance of investing in human capital development as a foundation for economic growth, particularly in light of the low literacy rate in South Sudan. Growth is projected to gradually rebound and reach over 2 percent in the medium term. This outlook is primarily due to an estimated 3 percent decline in oil sector growth in FY24, followed by a gradual stabilization and recovery as oil production and value-added investments gradually resume. Growth in the non-oil sector is expected to remain relatively resilient at around 6 percent in FY24, supported by higher government wage outlays, expanding domestic credit, and moderate inflation. Farm output is also expected to improve as floods recede. Inflation is expected to be below 10 percent in the medium term as monetary policy remains tight.
Nigeria urged to leverage AfCFTA’s trade-in-services (The Guardian Nigeria)
Stakeholders have said that Nigeria is not harnessing the opportunities trade-in service offers under the African Continental Free Trade Agreement (AfCFTA) as it accounts for about 60 per cent of the gross domestic product (GDP) of the country. They said this during a roundtable on the AfCFTA and trade-in-services organised by the Centre for International Private Enterprises (CIPE) in Lagos.
The consultant, Economic Community of West African States (ECOWAS), Common Investment Market, Prof. Jonathan Aremu, lamented that Nigerians are only familiar with the trade of goods, but not used to services, which contributes about 60 per cent to the country’s GDP.
“We are familiar with import duty, cross-border trade of goods and various processes in terms of exporting goods and documentation. Trade in services is becoming a dominant sector that is contributing very close to 60 per cent of GDP despite oil. That is the sector people know nothing about and where we have a huge comparative advantage when we talk of AfCFTA. It is a sector we need to encourage as a lot of people are not aware,” Aremu added.
How Angola is transforming its economy through commerce (Africa Renewal)
Rwandan consumers upbeat as World Congress kicks off in Nairobi (The New Times)
More than 300 delegates including influential leaders from government, business community, and civil society have gathered in Nairobi, Kenya, to discuss the policy, good practice, and accountability required to protect consumers, globally, at the Consumers International Global Congress 2023.
The three-day Global Congress, which kicked off Wednesday, December 6, is held every four years as a pivotal event for people committed to improving consumers’ lives. The latest event themed “Building a resilient future for consumers” covers four cross-cutting areas: digital futures, fair finance, sustainable consumption, and strengthening consumer protection worldwide.
A February-April survey indicated that 48 percent of African micro, small, and medium enterprises (MSMEs) report that customers lack trust in online marketplaces and websites.
African Export-Import Bank (Afreximbank) announces that the third Intra-African Trade Fair (IATF2023) held in Cairo from 9 to 15 November witnessed the conclusion of business deals and transactions valued at US$43.8 billion.
In final tallies released in Cairo, the organisers of the continental event said that the amount represented the value of 426 deals concluded in 21 sectors covering 52 countries. At a press conference to announce the results, Mrs. Kanayo Awani, Executive Vice President (Intra-African Trade Bank) at Afreximbank, also announced that 130 countries participated in the trade fair, which attracted 1,939 exhibitors and 28,282 participants who attended physically and through the IATF virtual platform.
One of the notable transactions included the Export Agriculture for Food Security Framework executed by several African countries (as Origin Countries) and ARISE Integrated Industrial Platforms, Arise IIP (as Anchor Investor) to which Afreximbank committed US$2 billion to boost production, processing, and intra-African trade in agricultural products and to provide African farmers and agribusinesses with opportunities to access larger markets across the continent.
The East African Legislative Assembly Women Parliamentarians Caucus (EALA-WC) has launched its first ever strategic plan with a call for funding to actualise the plan aimed at bridging gender gaps in the community. The 5-year strategic plan (2022-2027) developed through consultations, outlines the Caucus’s strategic objectives around the theme of “Accelerating Economic Recovery through Climate Action and Enhancing Food Security for Improved Livelihoods”. These include: To achieve Gender-Responsive Governance: Through women’s equal political participation, advancing Women’s role in peace and security and promoting good governance, promote an inclusive, equitable and gender-responsive EAC Common Market process.
CEMAC announced securing investment promises of €9.2 billion (about $10.04 billion) for thirteen regional integration projects during a roundtable held on November 28 and 29 in Paris. The funds pledged exceed the regional institution’s initial target of €8.8 billion to finance infrastructure projects aimed at enhancing regional integration and economic diversification.
Over two days, CEMAC officials presented thirteen “integrative” projects, including roads, a dry port, railway lines, and electrical interconnection infrastructures, to investors and techno-financial partners. These projects, part of the “infrastructure” component of the Regional Economic Program (PER), aim to boost regional trade, increase local processing of natural resources, further industrialize economies, and enhance resilience to future shocks.
Africa’s producers urged to consider the wider single market of AfCFTA (Ghana Business News)
Mr. Silver Ojakol, the Chief of Staff of the AfCFTA Secretariat, has called on producers on the African continent to consider the prospects of the African Continental Free Trade Area Agreement (AfCFTA). He said the vast resources of the Continent alongside its large human population should encourage producers to come onboard the single market being offered by the AfCFTA, Africa’s most ambitious continent-wide trade consolidation initiative in modern times.
Mr. Ojakol, who was delivering the keynote address at the opening of the 6th Volta Trade and Investment Fair in Ho said the AfCFTA was to drive the development of the continent and that its seven protocols covered all areas of trade facilitation. “The single market means local producers should up their game. They must scale up their trading game if they want to take advantage. “Producers should look at a wider single market with a predictable trade regime,” he said.
African businesses are positive about the AfCFTA (African Business)
At a roundtable on the Sustainable Debt Coalition, Mr. Claver Gatete, Executive Secretary, UN Economic Commission for Africa (ECA), stressed the need to ensure that climate finance from both public and private sectors flows at the appropriate scale and pace to expedite sustainable development aligned with the Paris Agreement and meet the SDGs without burdening the already stretched fiscal capacity of developing countries.
Africa requires $2.8 trillion between 2020 and 2030 to implement its Nationally Determined Contributions (NDCs) under the Paris Agreement but only receives $30 billion annually for climate finance, he said. He added that increasing the number of investable climate and SDG projects, as well as improving their visibility to potential investors and financiers, especially in developing countries, will play a crucial role in attracting more financial support to the continent. Yet, there remains a disconnect between investors and projects in need of investment.
Climate, debt, and development are closely intertwined. Projections by the Economic Commission for Africa show that some African regions could face GDP losses of up to 15% by 2050 due to global warming. “High debt servicing costs constrain countries from making critical investments in climate adaptation and resilience to mitigate some of these losses,” said Mr. Gatete noting that various governments, institutions, and leaders are advocating for change - chiefly among them the UN Secretary-General Mr. Antonio Guterres, who introduced his ambitious SDG Stimulus in February this year.
China will provide zero-tariff treatment for six least-developed African countries, the Customs Tariff Commission of the State Council said on Wednesday. Starting from Dec. 25, 98 percent of taxable products from Angola, The Gambia, the Democratic Republic of the Congo, Madagascar, Mali and Mauritania will be exempt from tariffs when entering China, the commission revealed in a statement. The move aims to embody the spirit of China-Africa friendship and cooperation, and facilitate a high-quality China-Africa community with a shared future, the commission said.
In the next step, China will expand its zero-tariff treatment to all the least-developed countries with which it has established diplomatic relations, according to the commission.
A new vision is needed for Africa to harness its significant advantage in green mineral resources, experts say, and collaboration with Asian nations and learning from their successful experience in developing green mineral value chains is a crucial next step.
Many African countries possess significant reserves of green minerals, including aluminium, chromium, copper, cobalt, lithium, graphite and rare earth elements that play a vital role in the development of renewable energy technologies, including solar panels, wind turbines, green hydrogen production, electric vehicles and battery storage.
To explore the potential synergies between Africa and Asia, the Asia External Representation Office and the African Natural Resources Management and Investment Centre of the African Development Bank last month organized an online policy dialogue event titled “Enhancing cooperation between Africa and Asia in developing Green Minerals value chains“.
U.S. Chamber of Commerce Unveils White Paper on Empowering African Smallholder Farmers (U.S. Chamber of Commerce)
Today, the U.S. Chamber of Commerce unveiled its white paper, “Enabling Ecosystems: Fostering environments that support agriculture development for smallholder farmers in Africa.” ‘Enabling Ecosystems’ offers actionable recommendations that can transform the lives of Africa’s smallholder farmers, and explores how the private sector can be better utilized to increase the continent’s crop yields.
Kendra Gaither, President of the U.S. Chamber’s U.S.-Africa Business Center, said, “The time is now for global efforts to fulfill Africa’s agricultural promise and support the continent’s efforts to become a major breadbasket that can help meet worldwide food needs today and in the future. The solutions explored in this white paper—including creative applications of blended financing, higher-quality inputs, mechanization strategies, leveraging digital farming technologies, and supply chain development—can achieve a positive chain reaction of increased employment, rising incomes, and better nutrition throughout all of Africa.”
Ghana and other African countries could potentially generate around $82 billion annually from carbon credits, as indicated by the United Nations Economic Commission for Africa. The commission is urging African member states, currently convening at the 2023 United Nations Climate Change Conference COP 28 in Dubai, to establish a fully-fledged carbon market. The Government of Ghana has already authorized the transfer of mitigation outcomes for a second project to Switzerland during the ongoing Climate Change Conference (COP 28). This market could serve as a sustainable financing arrangement, replacing the traditional official development assistance.
At an official ceremony to sign the agreement, Minister for Environment, Science, Technology, and Innovation (MESTI) Dr.Kwaku Afriyie indicated that “Ghana is the only country in Africa to authorise two projects under the same agreement on Article 6 with Switzerland... The presentation of the letter of authorization for the “Integrated Waste Recycling and Composting for Methane Reduction in Ghana” project signifies the formal pre-approval of the project to achieve emission reduction, advance sustainable waste management and create green jobs”, he noted.
Speaking at the Africa Day sideline event at COP 28, Executive Secretary of the United Nations Economic Commission for Africa, Claver Gatete indicated that “there is a great potential in developing the African carbon Market carbon credit Market to unlock additional green financing for Africa.” He added that “Africa’s research shows that at $20 per ton of nature-based carbon credits could generate 82 billion on the annual basis which is about one and a half times the amount of money that we (Africa) get in terms of the official development aid.”
COP28: Panel discusses improving energy access in LDC and SIDS through renewables with storage (Emerging Technology News)
On Day 2 at COP28 in UAE, the International Solar Alliance (ISA) with the Asian Development Bank (ADB) in collaboration with India Energy Storage Alliance (IESA) and National Renewable Energy Laboratory (NREL) held a panel discussion on Universal Energy Access for LDC and SIDS through Solar and BESS: The Storage Perspective. The panelists deliberated on the challenge of energy access in the least developed countries (LDC) and Small Island Developing States (SIDS), shared learnings from projects, and discussed potential solutions.
Addressing the panel discussion virtually, Dr. Kuldeep Rana, Scientist/Director of Storage, Ministry of New & Renewable Energy (MNRE), Govt. of India highlighted the crucial role of energy storage technologies and the efforts made by the Indian government in encouraging storage deployment. Storage plays a key role in optimizing the utilization of renewable energy, expanding electricity availability in developing nations, and fortifying the resilience of the worldwide energy system. Speaking about the need for strong policies for encouraging storage, Rana said, “To achieve global sustainability, there is a need for strong policies that effectively utilize renewable energy through storage.”
Donors pledge $174 million to Least Developed Countries fund (The Independent Uganda)
Eight donor governments have pledged $174.2 million to the Least Developed Countries Fund (LDCF). The Least Developed Countries Fund helps countries like Uganda to address their short-, medium–, and long-term resilience needs and reduce climate change vulnerability in priority sectors and ecosystems.
The pledges were made by Belgium, Canada, France, Germany, Norway, Spain, Sweden, and the United Kingdom at the ongoing Un Climate Change Conference in Dubai. The amount pledged is higher than those pledged last year during COP27 in Sharm El-Sheikh. The Least Developed Countries Fund and Special Climate Change Fund (SCCF) are jointly managed by the Global Environment Facility (GEF).
The LDCF is the only dedicated climate adaptation fund for the urgent and immediate adaptation needs of Least Developed Countries (LDCs). To date, the LDCF has approved approximately $1.8 billion in grants for projects, programs, and enabling activities for high-impact adaptation projects.
Showcasing “WTO reform by doing”, members approved on 30 November a report capturing 127 concrete steps taken since the 12th Ministerial Conference (MC12) in June 2022 to improve the functioning and efficiency of the Council for Trade in Goods (CTG) and its 14 subsidiary bodies. As a follow-up to the MC12 mandate, members also adopted a draft report on the WTO response to the COVID-19 pandemic and preparedness for future pandemics, including lessons learned. The Council addressed 44 trade concerns.
EU Should Join Africa on WTO Reform to Counter China – IW Study (US News & World Report)
The EU should join forces with African countries to reform the World Trade Organization’s (WTO) subsidy rules as a way to counter Chinese market distortions and diplomatic influence, the German Economic Institute (IW) argued in a paper on Wednesday. The IW, which is financed by prominent German business associations and carries weight among Berlin policymakers, published the paper ahead of an EU-China summit in Beijing on Thursday and Friday.
The issue of unfair competition is expected to top the agenda, three months after the European Commission launched an anti-subsidy probe into Chinese electric vehicles. Reform is to be a key topic at the WTO’s 13th ministerial conference (MC13) in February, although it requires a full consensus to make any substantive changes.
The WTO’s Africa negotiating group has proposed reforming current subsidy rules to better support developing countries – for example allowing them to have local content requirements and to grant subsidies for environmental protection. The IW argues in its new paper, seen by Reuters ahead of publication, that the EU should expand this initiative to also tighten subsidy rules on the world’s top trading countries.