Search News Results
tralac Daily News
Local news
Localisation strategies must identify, remove constraints for local producers (Engineering News)
Effective localisation strategies must start by identifying the constraints on local producers that make it harder for them to compete with foreign suppliers, a report issued by economic research firm Trade and Industrial Policy Strategies (Tips) on June 10 states. Tips identified several constraints to localisation, such as inadequate information about market opportunities; high-cost or poor-quality infrastructure, inputs and skills; lack of access to markets locally and abroad – for instance because they cannot get into the relevant retail chains – and prohibitive initial investment costs.
Transport and logistics on the mend, but load shedding, inflation still hurting economy (The Citizen)
The transport and logistics sector is picking up but still has a long road to recovery ahead, after the floods in KwaZulu-Natal which devastated the Durban-South area, causing major disruption in the Port of Durban, the fourth largest in the Southern African Development Community (SADC) region. The overall Ctrack Transport and Freight Index for April 2022 declined by 0.4% compared to March, but was still up by 8.6% compared to a year ago, although this represents a setback compared to March’s strong 12.4% year on year increase, says Hein Jordt, CEO of Ctrack.
According to the Index, three of the six sectors it measures declined in April, with the biggest contractions in sea freight and rail, both particularly hard hit by the floods as it also affected surrounding roads, forcing activities to a halt for a few days.
RMB says Rail Policy White Paper lays foundation for private investment (Engineering News)
Financial services provider Rand Merchant Bank (RMB) says the private sector stands ready to invest in South Africa’s rail industry, in partnership with government. Referring to the recently released National Rail Policy White Paper, RMB infrastructure finance public-private partnerships and concessions head Siyanda Mflathelwa says the paper reveals a much-needed localisation strategy for South Africa and an opportunity to strengthen manufacturing and export industries – one that the private sector can gladly get behind. The policy will serve as a starting point to facilitate private sector involvement in the rail sector.
“Regulation is a key determinant of the degree of openness of a railway market to private investment,” she notes, adding that in South Africa’s case, the regulation should create transparency.
Lesotho Revenue Authority (LRA) Launches E-Customs Tariff (African Business)
Delays in obtaining information on goods classification, applicable duties and taxes will now be a thing of the past. This, follows the government’s decision to launch the e-Customs Tariff, the launch was held in Maseru on Friday. On behalf of the Minister of Trade and Industry, the Deputy Principal Secretary (DPS), Mrs. Tšireletso Mojela said trade and customs play an interlinked and critical role in creating conditions for economic development across frontiers. She said both the Ministry of Finance through the Lesotho Revenue Authority (LRA) and the Ministry of Trade and Industry have a huge responsibility to facilitate trade hence making a real difference in people’s lives by helping to deliver jobs, growth and development that trade supports. She said the government of Lesotho undertook accession to the Trade Facilitation Agreement in 2016, saying LRA remains an integral arm for the country to implement the agreement as Lesotho is an inevitable partner in this journey.
Moreover, Mrs. Mojela said WCO through the Revised Kyoto Convention forms the basis for several provisions of the World Trade Organisation (WTO), Trade Facilitation Agreement (TFA), saying the organization provides support to the technical assistance agenda on trade facilitation, through the agreement the Mercator Program and several other instruments.
Kenya fresh tax on Uganda eggs sets stage for trade war (Business Daily)
Kenya and Uganda are staring at another round of trade wars after Nairobi reintroduced a levy on eggs imported from the neighbouring country. Uganda says Kenya is now taxing its eggs at a rate of Sh72 a tray, bringing back a levy that had been suspended last December following bilateral talks between Kampala and Nairobi. Ugandan traders have protested the move, saying it does not augur well for trade between the two countries. “The implementation of levies on Ugandan eggs by Kenya is a bad policy and in violation of the East African Community policy of free movement of goods and services originating from the member states,” Godfrey Oundo Ogwabe, the chairperson Uganda National Cross-Border Trade told the Daily Monitor. Livestock PS Harry Kimtai said the charges could be a normal levy that is imposed on imports.
Leveraging digital tech to combat counterfeits (Business Daily)
In July 2018, Kenya formed a multi-Agency team to combat illicit trade estimated to be at KES 826 billion at the time, a 12 percent increase from the previous year, and subsequently unveiled the National Action Plan and Implementation Framework. Moreover, a report by the Anti-counterfeit Agency ranked counterfeiting and piracy highly with 71 percent of complaints reported by Kenya government agencies being counterfeit products between 2016 and 2018.Globally, counterfeiting has been recognised as a dire activity that has a substantial economic and social impact. This negative impact is felt across the entire economic system — consumers who buy counterfeit products end up paying huge amounts for defective and sometimes harmful products, manufacturing companies lose their credibility, and the government misses out on tax revenues, which are instrumental for sustainable growth. That said, the safety and risk factors pose a challenge, especially with electrical products such as those that Eaton Electric provides, which require systematic assembling and have specific usage parameters.
Kenya asked to post tax officials to Tanzania to pre-clear goods (The Star, Kenya)
The East Africa Business Council wants Kenya Revenue Authority (KRA) officials to be posted to the key cities in Tanzania to facilitate the pre-arrival clearances to reduce traffic queues at border points. EABC chief executive officer John Bosco Kalisa said Kenya doing destination clearance of goods at Horohoro-Lunga Lunga One-stop Stop Border Point leads to delays and long queues of cargo trucks to Kenya. Kalisa spoke at the EABC Trade Facilitation Forum at Horohoro-Lunga Lunga OSBP. Tanzania has already posted Tanzania Revenue Authority (TRA) officials in Mombasa and Nairobi to facilitate the pre-arrival clearance of goods under the Single Customs Territory framework. Kenya’s exports to Tanzania for the first quarter January-March 2022 stood at $139.42 million while imports at $118.6 million.
The Africa Fertilizer Financing Mechanism (AFFM) will extend a $2 million partial trade credit guarantee to ETG Inputs Ghana Limited to support delivery of fertilizer to 200,000 smallholder farmers in Ghana’s Upper East, Savannah, Northeast, and Northern Regions. The move will ease the current shortages in supply and boost yields, food security, and incomes of farmers in the designated regions. Under the agreement ETG Inputs Ghana Limited, a subsidiary of agricultural conglomerate ETG, will enable delivery of 10,000 metric tons of fertilizer to wholesalers who will distribute it, via retailers, to farmers in the regions. The credit enhancement mechanism is expected to reduce risks associated with suppliers selling fertilizer to wholesalers on credit, which can result in farmers having limited access to good quality fertilizer.
The war in Ukraine has contributed to fertilizer shortages, driving prices higher, and reducing supplies. In Ghana, the fertilizer shortage has now affected 60% of the supply. The country has seen the cost of a 50kg bag of a commonly used nitrogen-, phosphorus- and potassium-based fertilizer skyrocket from $26 in November 2021 to $46 in April 2022, according to the Africa Fertilizer initiative, which compiles data, statistics, and information on fertilizers in Africa.
The trend is threatening agricultural production just as many countries head into the planting season. At the same time, imports of food staples into Africa, such as wheat and oilseed, are also being disrupted by the war.
LCCI seeks integration, bilateral trade to improve 12% Africa’s GDP (New Telegraph Newspaper)
The Lagos Chamber of Commerce and Industry (LCCI) has said that only the economic integration and bilateral trade among Nigeria and other countries could improve the abysmal 12 per cent Africa’s Gross Domestic Product (GDP). It noted that economic integration would play a vital role in the realisation of the Africa Continental Free Trade Area (AfCFTA) agreement initiative in the continent.
The Director-General of LCCI, Dr. Chinyere Almona, said in an interview on the upcoming 2022 Lagos International Trade Fair (LITF) in Lagos that AfCFTA was a key trade agreement the chamber would be exploring to bring together various exhibitors and investors within the continent to boost trade and GDP despite the challenges trailing the protocols agreements. She stressed that the chamber was not satisfied with the penetration of trade among the African countries, which had been responsible for the 12 per cent continental GDP trade, saying that LCCI was looking forward on the benefits of AfCFTA that could only be achieved via trade and economic ties.
Debt Servicing: Nigeria paid $156.29m to China, others in Q1 (New Telegraph Newspaper)
The Federal Government spent a total sum of $156.29million on servicing the debts owed to the Exim Bank of China, the World Bank and other International Financial Institutions (IFIs), in the first quarter of this year, latest data released by the Debt Management Office (DMO) shows.
According to the actual external debt service payments data for January –March 2022, published by the DMO last week, the country spent the sum of $67.91million servicing its bilateral debt during the period with $66.90million of the amount going to the Exim Bank of China.
Similarly, the data shows that the Federal Government spent the sum of $88.38million to service multilateral debt during the period under review, with payments to the World Bank’s International Development Association (IDA), amounting to $45.24million. This means that the nation spent the total sum of $156.29million to service its bilateral and multilateral debts in the first three months of this year.
Will Egypt be the locomotive of the African economy? (ZAWYA)
There is a necessity and utmost importance to enhance cooperation between Egypt and its brothers in the African continent in all fields, especially economy and development. This is to complete its active role in its regional environment, achieve African integration, revitalize trade between the countries of the brown continent, and integrate it into the global trade system. Egypt seeks to become the locomotive of the African economy. It operates on two levels; the first is to localize and develop basic industries, and the second is expanding into new markets. Therefore, Egypt currently seeks to expand its exports into the African market, through the application of a package of logistical facilities and shipping procedures, especially with the promising opportunities that the African market enjoys.
African trade and integration news
Akufo-Addo urges Africa to trade more with itself as AfCFTA is a game-changer (Ghana Business News)
African countries trade least among themselves, and trade more with countries on other continents, and President Nana Akufo-Addo says it is therefore not an accident that Africa being the continent that trades least with itself is the poorest. The President was speaking during a panel discussion at the opening of the Africa CEO Forum in Abidjan, Cote d’Ivoire, June 13, 2022. He pointed out that the African Continental Free Trade Area (AfCFTA) is a game-changer for the continent, and urged improvement in the quality of cooperation among African states. He said there must be linkages in the private sector and education, and called on African countries to align their thinking.
PPP, game changer for cross-border infrastructure development for AfCFTA (Ghana Business News)
Professor Festus Ebo Turkson, a Development Economist, says, Africa has the potential to build a strong infrastructure base through Public Private Partnerships (PPPs) to enhance cross-border trade on the Continent. Prof Turkson pointed out that there were deficits in both soft and hard infrastructure on the continent, a major bottleneck to the implementation of the AfCFTA. The hard infrastructure included ports, railways, roads, and airports, while the soft infrastructure was excessive checkpoints, burdensome administrative procedures, and inefficient processing at border crossings. However, these challenges could be addressed by harnessing opportunities PPPs offered to the continent to facilitate cross-border trade, thereby, encouraging investments to increase economic integration and cooperation among Africans, he said.
DRC to deposit EAC admission instruments this week: Mathuki (The East African)
The East African Community’s (EAC) newly admitted member, Democratic Republic of Congo (DRC), has completed internal processes of ratifying the EAC treaty it signed in April and will now deposit instruments of that approval to the Secretary-General this week.
After DRC signed the Accession treaty of the EAC on April 8, becoming the seventh member of the bloc, the country was given five months to complete the process, which would see it integrated into the region. Some of these processes included approval by Kinshasa’s parliament, and having its ministries and internal organs aligned with requirements of the EAC pillars such as the Customs Union and the Common Market Protocol.
Paris conference calls for African production network (New Business Ethiopia)
At the Africa Forum held in Paris, France, African and international leaders call for boosting Africa’s regional production networks to create more jobs The COVID-19 pandemic has derailed progress on Africa’s development efforts and pushed more than 29 million people into extreme poverty. Fast and challenging mutations in the global economy are reshaping the context for Africa’s economic transformation. The consequences of the Russia-Ukraine conflict has exacerbated food insecurity and instability; and could weaken Africa’s recovery.
Meanwhile, it is urgent to maintain open markets, refraining from export restrictions, and allowing grain and fertilizers to reach the countries in need. These measures must go hand in hand with actions to reduce the vulnerabilities of African economies. In particular, investing in local production and empowering SMEs in the transformation of African agriculture and industry is crucial to build resilience and generate decent, quality jobs for a young, fast expanding population.
“Stronger investment and trade links within Africa can drive production transformation, growth and employment generation: they should be a priority of the continent’s evolving international partnerships”, reaffirmed Ragnheiður Elín Árnadóttir, Director of the OECD Development Centre, welcoming the strong and expanding cooperation with the African Union and its member countries.
To achieve a fast, sustainable and job-rich recovery, the continent needs stronger networks of African firms that buy goods from regional suppliers and re-export higher value-added products, in the context of the African Continental Free Trade Area (AfCFTA).
Africa Needs Structural Change To Develop - Prof. Ackah (Peace FM Online)
An Associate Professor of the Institute of Statistical, Social and Economic Research, Professor Charles Godfred Ackah, has said that Africa needs accelerated growth and structural change in order to develop. That, he said, would be by creating decent jobs to deliver the people from poverty. He said structural change was the process of reallocation of economic activity across the sectors of agriculture, manufacturing and services. Prof. Ackah said this when he delivered a paper on “Promoting Structural Transformation through IntraAfrica Trade” at the Ghana Academy of Arts and Sciences public forum in Accra last Monday. The event, held in collaboration with UMB, was dubbed: “African Continental Free Trade Area (AfCFTA): Challenges and Prospects”.
Prof. Ackah said the main determinants of the nature of structural transformation were the industrial and trade policies implemented by the various governments, and that “the importance of industrial development in bringing about the needed structural transformation of African economies cannot be overemphasised”.
African economy upbeat despite pressures – Afreximbank (Vanguard)
Ahead of next week’s Annual Meetings of the African Import-Export Bank (Afreximbank), the institution has assured that the region’s economy would be on upbeat in 2022, despite pressures. The bank identified the post-COVID-19 and current Russian invasion of Ukraine as factors that would put a lot of pressures on the economies of African countries.
However, the regional body said in the report authored by the Chief Economist and Director of Research, Dr. Hypolite Fofack, that the region would witness a positive growth, with 16 countries (30%) expected to grow at more than 5 per cent.
The report was titled, ‘Africa’s 2022 Growth Prospects: Poise under Post-Pandemic and Heightening Geopolitical Pressures’.
African ministers of finance set to tackle new risks, challenges (African Business)
African ministers of finance, planning and economic development called for the reform of the international financial architecture to allow African countries to access resources more easily and at a lower cost from multilateral and regional financial institutions. In the final communique wrapping up the 54th UNECA conference held in Dakar, they commended the ECA, African finance ministers and the IMF for facilitating the establishment of a high-level working group towards this end. This came out of the final communique issued at the end of a week’s deliberations on the need for higher levels of financing for the post-Covid-19 pandemic recovery and to achieve the 2030 Agenda for Sustainable Development and goals of Agenda 2063, which have suffered significant setbacks from the pandemic. The group cited the impact of the Russian war with Ukraine, highlighting the impact it was having on prices of key commodities.
President Macky Sall calls for a better deal for Africa (African Business)
In a fiery speech in which he criticised international organisations for giving Africa a bad deal, Macky Sall, President of Senegal and current Chairman of the African Union, also recognised the leading role played by the African Development Bank and Afreximbank in supporting development. However, Sall argued that the current deal for Africa in the international system is a handbrake on its development. “The rules are unfair, outdated, and need to be disputed,” he told delegates attending the ECA’s Conference of African Ministers of Finance, Planning and Economic Development in Dakar’s plush conference centre yesterday.
Calls for reform of international system to better respond to crises (African Business)
Africa was a victim of global events in which it had no part, said Vera Songwe, ECA Secretary General and UN Under Secretary General. Speaking at the opening session of the Council of Ministers 2022 meting in Dakar, she said the continent was fighting many wars – against climate change, against poor governance, terrorism and on other fronts. “Ministers of finance have been at the forefront of many of these and have shown “legendary resilience”. She referred to the different crises which the continent now found itself facing. “We though it {Covid-19} was just a pandemic but then realised we also had an economic crisis.” Coupled with a new crisis – Russia’s invasion of Ukraine and the attendant effect on prices of key commodities – was affecting countries’ ability to plan and by extension, their trajectory towards growth and prosperity. “We are facing several exogenous shocks and because of them, we are going to have to see how we can reorient our course.”
Solutions included examining how the financial system can change. One area that needed to be tackled more decisively was the search for ways to strengthen domestic resources. “We have spoken about it a lot but have not even got to 30% of internal revenue mobilisation.”
Economic sovereignty important but Africa needs to collaborate more internationally – Osinbajo (Daily Trust)
Africa’s developmental aspirations can be actualised by deepening cooperation and collaboration with the rest of the world, according to Vice President Yemi Osinbajo, SAN. But the imperative of Africa’s economic sovereignty also exists as there are areas where public and private sector leaders must continue to strive for it. Osinbajo stated this while speaking at the opening panel of the ongoing Africa CEO Forum holding in the Ivorian city of Abidjan. The panel was themed- “Economic Sovereignty: From Ambition to Action.”
Africa loses more than $84bn in illicit financial flows annually (African Business)
UNECA estimates that more than $84bn is lost in illicit financial flows from Africa each year. “This is more than the annual health financing gap, twice the needs of the education finance gap and it is almost equal to the amount Africa receives in remittances each year,” said Hanan Morsy, Deputy Executive Secretary at UNECA. She was speaking at the panel Illicit Financial Flows in Africa: Regional Efforts to track, recover and return assets. However, efforts to curb the illicit practice continue to yield muted results, underscoring the need for a collaborative and comprehensive approach. Corporations and government officials, both local and international, are the main channels for the leakages that result in a significant portion of Africa’s wealth being smuggled out of Africa each year which makes it especially hard to crack down on illegal practices.
African Businesses Lose $5bn To Intra-African Trade Bottlenecks Annually (Leadership News)
The chief executive officer (CEO), Pan African Payment and Settlement System (PAPSS), Afreximbank, Mr. Mike Ogbalu, has stated that, African businesses lose over $5 billion every year to charges, payments and other related costs to intra-African trade barriers. He stated this at the breakfast meeting of the Nigerian American Chamber of Commerce (NACC) themed ‘1 year of AfCFTA (Opportunities, challenges and the Nigerian-American partnership)’ in Lagos. According to him, 80 per cent of payments that are destined for somewhere else on the continent, first of all has to travel somewhere else before getting to its final destination, saying, this is the reason why intra-African trade is still low at 15 to 18 per cent. He added that Africa trade more with rest of the world than it trade with itself. In his words: “If payment still needs to fly half way around the world to somewhere else around the globe before coming back to the continent, then we are not going to support intra-African trade.
Entrepreneurs seek new funding model for African SMEs (Businessday)
The All Africa Association for Small and Medium Enterprises (AAASME) has called for the introduction of an alternative finance model to enable 80 million small and medium enterprises (SMEs) to access finance in Africa. Ebiekure Jasper Eradiri, secretary-general of AAASME, said the Afrocentric Alternative Finance Model for SMEs has the capacity to uplift small businesses within the continent by improving their access to finance. Eradiri stated this at a stakeholder meeting on the African SME development platform held at the African Union Secretariat in Addis Ababa, Ethiopia. In a statement signed by Eradiri and made available to BusinessDay in Yenagoa, he lauded the efforts of the African Union Economic Affairs, Trade, Tourism, Industry and Mines for the growth of SMEs in the continent. He said the AU is poised at leveraging its convening power to engage member states, RECs and critical stakeholders in re-examining how to strengthen SMEs.
According to him, the AU move would also reinvigorate SMEs to achieve set goals as well as support the creation of an enabling environment for the development of SMEs.
Banks, fintechs partnership key to financial inclusion – eTranzact CEO (The Business & Financial Times)
Banks and fintechs should collaborate more to accelerate financial inclusion, says John Apea, Chief Executive Officer of eTranzact Ghana. He said by working together, traditional financial institutions and financial technology firms (fintechs) can leverage their unique capabilities to ensure that majority of Ghanaians are brought within the financially included bracket.
An effective collaboration between the two will also build solid foundation and systems that are relevant to the Ghanaian market. “Previously, we had a lot of unbanked people who couldn’t do transactions online, but what fintechs have been able to do is that they have been able to short-circuit us by enabling us to do what was previously not available. So your phone can be your bank; you can do transfers quickly.
“So fintechs have made the world much smaller in terms of including people who previously were financially excluded,” Mr. Apea told the B&FT.
No West African Country yet to meet ‘Eco’ currency requirement (Myjoyonline)
None of the 15 ECOWAS member states is yet to meet the primary convergence criteria for the adoption of the single common currency for the sub region. This is as a result of inadequate funding and other geopolitical factors identified as a setback for the adoption of the common currency. Speaking at a technical committee meeting on the ‘Eco’ in Nigeria, Commissioner for Macroeconomic Policy and Economic Research for ECOWAS, Dr. Kofi Konadu Apraku, said the criteria which was missed by all ECOWAS member states include annual average inflation rate of less than 10% and gross external reserves of more than 3.0 months of imports cover. He is however confident that since real GDP growth in ECOWAS improved to 4.2% in 2021, from -0.7 per cent in 2020, the ECOWAS economies can do better and meet the criteria in the future.
New cement production capacity in Africa might be preferable to high transport costs (Engineering News)
The rapidly rising cost of transport means that adding additional cement production capacity in Africa might be worth considering going forward. Before the outbreak of Covid-19, a long-term decline in shipping costs and the relative price of imported cement, which was also expected to gradually fall, had eroded the rationale for adding more cement production capacity in Africa, Gordon Institute of Business Science Centre for Africa markets and management research associate Francois Fouche said at the African Smart Cities Summit, in Midrand, on June 8.
Addressing unfair trade key to transforming African food systems (Chronicle)
UNFAIR trading practices have continued to characterize African agriculture and food systems for decades. Determining and setting prices for agricultural commodities remains a big challenge in most African countries including local markets where the majority of farmers, traders and consumers depend for their food and income. There have not been convincing answers to questions like: Who determines pricing, packaging, measurement and supply of commodities in food markets?
From a recent survey conducted by eMKambo in Uganda and Zimbabwe mass food markets, most farmers and traders indicated that setting a uniform price for agricultural commodities for the whole country is a recipe for unfair trading because production practices are not standard in different production zones.
Principles of fair pricing are often lacking because the majority of farmers and consumers cannot tell the difference between a fair price and an unfair one due to information asymmetry, among other push factors.
If the cost of getting reliable market information becomes too high for the majority of farmers, it contributes to unfair trading practices as those with information on prevailing market prices end up setting rules of the game for everyone.
Development of a Regional Food Balance Sheet at Advanced Stage (COMESA)
The Alliance for Green Revolution in Africa (AGRA) and COMESA are leading an effort to develop a digital Regional Food Balance Sheet (RFBS) that uses data from a variety of public and private sources to develop near real-time and forward-looking food balance estimates. Once fully developed and operational, the RFBS will inform data-driven decisions around production support, trade policy, and stock management by governments, business decision-making and investment by the private sector, and food assistance by donors and emergency response organizations. Six countries are so far involved in the pilot phase: Kenya, Rwanda, Malawi, Uganda, Zambia and Tanzania. This initiative was in response to the lack of reliable, timely, and accurate data for food and nutrition security related decision-making in many Sub Sahara Africa countries, a situation that was exposed by the COVID-19 pandemic. In recognition of these data gaps and needs, COMESA Council of Ministers, in 2020 directed COMESA Secretariat, to implement a COMESA-wide RFBS initiative.
Why EAC needs enhanced gender equality in food nutrition security (The New Times)
The East African Legislative Assembly has a given a nod to a motion by MP Françoise Uwumukiza urging Ministers in charge of EAC Affairs to recommend partner states to enhance gender equality in access to food nutrition security in the six-member bloc. While justifying her motion on Thursday, June 9, the Rwandan legislator noted that it was part of the commitment she made during a training on ”Achieving Gender Equality in Climate Change and Food Systems: Actions of Parliamentarians and Policy-makers,” from April 24 to May 6. “I’m moving this motion to call upon the Council of Ministers to address the observed gender inequalities in respect of food and nutrition security in the EAC,” she said. “Food insecurity and malnutrition give rise to many consequences for health and development with mothers and children being the most vulnerable to the devastating effects.”
West Africa Food Systems Resilience Program Launched (News Ghana)
ECOWAS, CILSS and CORAF launched the Food Systems Resilience Programme which aims to sustainably reduce food insecurity in West Africa with the financial support of the World Bank and other development partners, including the Kingdom of the Netherlands, the Global Agriculture & Food Security Programme (GAFSP) and the Global Risk Financing Facility (GRiF). Led by the Economic Community of West African States (ECOWAS), the Permanent Interstate Committee for Drought Control in the Sahel (CILSS) and the West and Central African Council for Agricultural Research (CORAF), FSRP aims to increase regional preparedness against food insecurity by pursuing a systemic regional-level approach. The innovative program will simultaneously increase agricultural productivity through climate-smart agriculture, promote intraregional value chains and trade, and build regional capacity to manage agricultural risk. The first phase of the program (2022-2026), which will be implemented by the three regional organizations and Burkina Faso, Mali, Niger, and Togo, amounts to more than USD$400 million.
Storm cooking over edible oil, dollar shortage in East Africa (The East African)
East Africa is facing a shortage of raw materials to manufacture cooking oil, soaps and cosmetics, with no clear signs of availability of such commodities in the next 10 days even as prices soar, adding to consumers’ pain. But it is the high prices and shortage of edible oil that is cooking up a storm across the region. Data available to The EastAfrican shows that no edible oil-related imports are expected in Kenya this month. According to the Mombasa port ship schedule, more than a dozen vessels are expected to dock laden with different products except for palm and vegetable oil, which are key ingredients in the manufacture of such products.
Consumers have endured rising prices of cooking oil, blamed on Covid-19, the ongoing conflict in Ukraine and a deficiency of dollars, which has seen at least two Kenyan oil manufacturers reduce operations due to the inability to pay suppliers and get raw materials.
How can Africa’s energy sector attract more investment? (African Business)
The announcement of a new African Energy Transition Bank in mid-May has highlighted the problems facing energy financing on the continent. The bank’s two backers, the African Export-Import Bank (Afreximbank) and the African Petroleum Producers Organisation (APPO) said they had been forced to establish the new institution because of “the co-ordinated withdrawal of international trade and project financing” for Africa’s oil and gas industry.
The significance of the announcement lies less in the arrival of a new lender, which may take some time to create, than in the recognition that financing hydrocarbon development in African countries is becoming increasingly difficult.
To date, the largest African exporters of LNG have been Nigeria and Algeria, followed by Egypt, Angola, and Equatorial Guinea. Recent discoveries may now bring Mozambique, Tanzania, Senegal, Mauritania, and South Africa into the game. Late last year, before the Russian invasion, the outlook for these fields might have been marginal, given the global policy move to cut carbon emissions. Europe’s push to diversify supplies has changed that calculus completely. Nonetheless, it is accurate to say that an increasing number of investors are moving out of hydrocarbon development. That does not, however, mean they are turning their backs on Africa. Rather, they are agnostic about where they seek new opportunities. This could be a boon for Africa or, alternatively, the continent could miss the boat.
Learning from Morocco: Funding green energy (African Business)
If Africa wants to build back better from the Covid-19 pandemic, it must significantly ramp up investments in energy – particularly green energy – said Jean Paul Adam, Director, Climate Change, Natural Resource Management and Technology at UNECA. “We have around 600 million Africans who don’t have access to electricity, so we have to significantly increase investments in energy projects to make sure that we meet the sustainable development goals (SDGs),” he said. One of the main barriers to investment is the undeveloped nature of Africa’s capital markets, preventing companies and sovereigns from easily raising capital. On the international markets, governments struggle to access affordable financing due to a risk premium attached to African debt.
Governance and Accountability in Africa: Progress and Road Ahead (IMF)
The issue of good governance and transparency is more than just about wasted money – it is about the erosion of a social contract and the corrosion of the government’s ability to grow the economy in a way that benefits all citizens. Of course, corruption has long been an issue. But today, as we face multiple crises at once – the COVID-19 pandemic, the war in Ukraine, and the ongoing challenges of climate change and the security situation in the Sahel – the need for good governance has only become more urgent.
These multiple crises have made it very clear that countries that have strong economic institutions could respond more effectively to these challenges and better prepare for a resilient recovery — and that is true across any level of development. We also recognize that addressing corruption is an international issue, given the role of professions that enable corruption and jurisdictions that provide safe harbor for the proceeds of corruption.
The 2022 U.S.-Africa Business Summit is Coming to Marrakech, Morocco (The Guardian Nigeria)
The Corporate Council on Africa (CCA) has officially launched the 2022 U.S. – Africa Business Summit website which is now open for registration. The Summit, themed ‘Building Forward Together,’ will be held in Marrakech, Morocco on July 19 – 22, 2022 in partnership with the Kingdom of Morocco and Africa50 (the pan-African infrastructure investment platform). The Summit will explore a renewed commitment by both public and private sector stakeholders to building stronger U.S. and Africa trade, investment, and commercial ties as we emerge from unprecedented health and economic challenges. The U.S.-Africa Business Summit is the first major in-person U.S.-Africa conference that meets the pent-up demand for countries and companies to re-engage and collaborate since the start of the COVID-19 pandemic. CCA has an exciting line-up of high level and panel discussions, networking opportunities, and activities that will allow attendees to meet face-to face to engage on key U.S.-Africa economic issues and re-establish important business contacts that were not possible over the past 2 years.
This year’s Summit will host African Heads of State, U.S. Government & African Officials, top CEO’s and Senior Executives from U.S. and African companies operating in sectors contributing to Africa’s economic growth and relaunch including infrastructure, ICT, health, energy, mining, and creative industries.
African Union is India’s 4th largest trading partner (Millennium Post)
The African Union is India’s fourth largest trading partner after the United States, China and the United Arab Emirates, propped up by diversification in Indian exports to the continent, a senior State Bank of India official has said at a seminar here. With a share of 8.52 per cent in global trade, India’s total trade with Africa in 2019-20 was valued at $68.33 billion. India has a negative trade balance with Africa, implying a dominance of imports over exports. In 2019-20, India’s trade deficit with Africa was valued at $9.1 billion, which accounted for nearly 6 per cent of India’s total trade deficit in the case of trade in goods, Syam Prasad, CEO of State Bank of India in South Africa said on Wednesday. In terms of bilateral trade, the African Union is one of India’s largest trading partners after the US, China, and the UAE, he explained.
India’s trade with Africa has been diversified from exporting mainly textile yarns to petroleum products, pharmaceutical products, chemicals and manufactured products, he asserted. At the same time, India’s import basket, though dominated by primary products and natural resources, is still diverse given the wide natural resource base in Africa, he said.
Russia preparing for second Africa Summit to build closer ties as it pivots away from the West
Russia is preparing for the second Russia-Africa summit, scheduled for October-November 2022 in Addis Ababa, Ethiopia, as it steps up its campaign to move closer to the African countries and pivot away from the West due to the latter’s extreme sanctions imposed after the start of the war in Ukraine. Russia was already heavily invested in Africa as part of President Vladimir Putin’s policy of fostering ties with the non-aligned nations of the developing world ever since relations with the West soured following Russia’s annexation of Crimea in 2014. But the need to develop deep trade and investment ties in Africa has been given a new urgency since the West has broken off almost all business ties with Russia this year. This year’s summit will be even more important as Russia looks for new markets and to expand existing ones after the West imposed extreme sanction on Russia following its invasion of Ukraine at the end of February.
Meeting today in Paris, in the margins of the Meeting of the OECD Council at the Ministerial Level (MCM), the Deputy Chairperson of the African Union Commission (AUC), Dr. Monique Nsanzabaganwa, and the Secretary-General of the OECD, Mathias Cormann, announced that the two institutions intend to scale-up their collaboration to address the most pressing global challenges through a strong and equal partnership based on trust and mutual understanding. The partnership will be developed following this week’s Meeting of the OECD Council at the Ministerial Level (MCM). The AUC and the OECD announced their intent to establish a mechanism for institutional coordination, including focal points to start in-depth consultations aimed at specifying the partnership’s strategic goals and its main areas of work.
Global economy news
Nigeria makes case for developing countries, least developed countries at ILC (Daily Sun)
Nigeria has raised the alert that achieving the SDG 2030 in developing countries and least developed countries (LDCs) is at great risk without the support of international agencies.
Addressing the plenary of the 110th International Labour Conference (ILC), Minister of Labour and Employment, Senator Chris Ngige, who was represented by the permanent secretary of the ministry, Kachollom Daju, said, with the state of growing gap of inequality in the world, Nigeria considers that the achievement of the SDGs by 2030 is at great risk.
“If the goal of ‘not leaving any one behind’ is ever to be realised, urgent effort, support and contribution will be required by all, in a renewed commitment to multilateralism and international cooperation,” the minister said.
Noting that the report of the director-general on the LDCs – crisis, structural transformation and the future of work is very appropriate for debate in view of the multiple implication of current global challenges, Ngige said just as in previous reports, the focus on LDCs is of concern to all as poverty anywhere constitutes a danger to prosperity everywhere.
Draft texts seek entry of private sector in WTO Talks (Economic Times)
The draft outcome documents issued by the World Trade Organization (WTO) seek to pave the way for the formal entry of the private sector in multilateral trade talks, as proposed by the European Union last year. Draft texts on WTO reform and pandemic response highlight the role of international organisations, much to the alarm of developing countries - including India and South Africa - since they would allow private companies a high seat at the WTO negotiating table and allow them to influence processes and outcome. The draft outcome text on pandemic response takes note of the work “undertaken by the WTO Secretariat, including in collaboration with other international organisations” such as analysis, including mapping of supply and demand regarding trade in vaccines, therapeutics, diagnostics and other essential medical goods and services as related to Covid-19. “These international organisations refer to the private sector. EU has been trying to get private companies a say in multilateral negotiations and the WTO Secretariat,” said an official, who did not wish to be identified.
Freedom and fairness more important than ever, Trade Secretary tells WTO (GOV.UK)
Freedom and fairness should be front and centre of the global trade agenda to ensure communities at home and around the world benefit from the power of free trade, the International Trade Secretary says today. Anne-Marie Trevelyan issued the clarion call as she prepares to lead a UK delegation attending the 12th World Trade Organization Ministerial Conference (MC12). While there, she will urge united global action to show solidarity with Ukraine, demonstrate Russia’s illegal assault will not undermine or weaken the rules-based international system, and push for reforms that will reduce our economic dependency on aggressors. UK will use the high-level WTO meeting to secure meaningful progress on long-standing global issues, including food security, over-fishing and tariff-free electronic trade, and drive forward international efforts to cope with the fallout from Russia’s actions and the Covid-19 pandemic.
Big week for the digital economy as world body meets to try not ‘break the internet’ (BusinessTech)
For the past quarter-century, the meteoric rise of the digital economy has been exempt from the kind of tariffs that apply to trade in physical goods. That era may come to a screeching halt this week as a handful of nations threaten to scrap an international ban on digital duties in a game-changing bid to draw more revenue from the global e-commerce market that the United Nations estimated at $26.7 trillion. If governments fail to reauthorise the World Trade Organisation’s e-commerce moratorium, it could open a new regulatory can of worms that could increase consumer prices for cross-border Amazon.com purchases, Netflix movies, Apple music, and Sony PlayStation games.
“Absent decisive action in the coming days, trade diplomats may inadvertently ‘break the internet’ as we know it today,” International Chamber of Commerce secretary-general John Denton wrote in a Hill opinion piece published last week.
some nations like India and South Africa argue that the growth of the internet justifies a rethink about whether the WTO’s e-commerce moratorium remains in their economic interests. In 2020, they introduced a paper that said the moratorium prevents developing countries from gaining tariff revenue from transformative technologies like 3D printing, big-data analytics, and artificial intelligence. While nations could draw somewhere between $280 million and $8.2 billion in annual customs revenue, new digital tariffs would also harm global growth by reducing economic output and productivity, according to the Paris-based Organisation for Economic Cooperation and Development.
WTO Have Let People Of Least Developing Nations Down: Piyush Goyal (Outlook India)
Reform World Trade Organisation to make it responsive - Alan Kyerematen (Myjoyonline)
Egypt submits draft resolution to WTO for enhancing response to food security challenges (Ahram Online)
Commonwealth Secretariat and WTO strengthen efforts to boost trade capacity of Commonwealth members (The Commonwealth)
Non-contributing countries seek ban on export curbs on World Food Programme (Mint)
While nearly 81 World Trade Organisation member countries led by Singapore are seeking a ban on export restrictions for the World Food Programme at the ongoing ministerial meeting taking place in Geneva, data shows that most of them have not contributed to the United Nation’s programme.
Although India has been opposing such a move to restrict its policy space to ensure domestic food security, it contributes to the WFP, and in fact was the highest contributor in 2015. Thirty-three countries have never contributed to the WFP, including Singapore, New Zealand, Albania, Bahrain, Brunei Darussalam, Chile, and Taiwan. It is suspected that traders in some of these countries are pressing for the ban on export restrictions, as these lead to price increases.
Beyond the Pandemic: Commonwealth Trade and Investment Prospects (Commonwealth Secretariat)
By June 2022, it will be nearly two and a half years since the outbreak of COVID-19. The impact of the pandemic on global trade and investment flows, including among the Commonwealth’s 54 member countries, is now becoming clearer. The trade collapse in 2020 was deeper than previously estimated (Commonwealth Secretariat, 2021). Collectively, Commonwealth countries’ exports fell by US$475 billion compared to 2019 and included an almost $100 billion drop in intra-Commonwealth trade. This was the result of economic recession in several major markets and severe disruptions to production and supply chains. Global trade rebounded in 2021 as many developed countries started to reopen their economies, facilitated by national vaccination efforts and stimulus spending. However, most developing and low-income countries lack equitable and affordable access to vaccines and other vital medical supplies, delaying recovery efforts.
Russia intends to remain in global food market as major exporter: Russian Minister at WTO (Republic World)
World’s major global food exporter, Russia, plans to remain in the global food market and does not intend to abandon it, Deputy Economic Development Minister Vladimir Ilyichev told TASS in an interview aired on Sunday. Speaking at the 12th ministerial conference of the World Trade Organization (WTO) that began in Geneva on June 12, Ilyichev said Moscow plans to discuss the issue of the food supplies and global crisis at length during the WTO conference. However, he reiterated that the views on what caused the staggering food crisis and critical shortage worldwide “differs significantly,” according to Russian state-affiliated news outlet Tass.
“As a major supplier of food on the world market, we intend to remain there, to supply our products to partners, our traditional consumers, and we are ready to take all the actions available to us to that end, which we have repeatedly stated,” Russia’s Ilyichev said. “But in order for the system to work, it’s necessary for all participants in the process to strive for results.”
Participants at the hybrid 114th Session of the Council of Ministers of the Organisation of African, Caribbean and Pacific States (OACPS), held from 8-9 June 2022, deliberated eleven Decisions and one Resolution arising from the Meeting, which took place at the Brussels-based Headquarters of the OACPS.
Ministers with responsibility for OACPS affairs discussed, inter alia, the finalisation of the new OACPS-EU Partnership Agreement; the EU list of non-cooperative tax jurisdiction and that of third countries regarding anti-money laundering and countering the financing of terrorism (AML/CFT), projects being undertaken by the five departments of the OACPS in the areas of trade, fisheries and aquaculture, as well as the upcoming 10th Summit of OACPS Heads of State and Government, to take place in Luanda, Angola in December 2022.
Ministers expressed serious concern about the delay in signing the new OACPS-EU Agreement as a result of EU internal procedures that require unanimity for entering into international agreements. They took note of the proposed 12-month extension of the transition measures to allow the continued application of the provision of the Cotonou Partnership Agreement pending the signing of the new Agreement. Ministers further urged the concerned EU Member State(s) blocking approval of the new Agreement to positively consider facilitating the normal functioning of the relations, such as the holding of regular joint meetings, as foreseen in the new OACPS-EU Partnership Agreement.
Reigniting Old Flames: The Liberalisation of Trade in Environmental Goods and Services (Commonwealth Secretariat)
This study traces the evolution of the World Trade Organization (WTO) negotiations on liberalising trade in Environmental Goods and Services (EGS). It explores the challenges and opportunities faced by Commonwealth small states and countries in Sub Saharan Africa (SSA) in participating in EGS discussions. Small states and SSA countries have been primarily absent from the multilateral discussions on EGS for reasons that include insufficient trade-related interests in environmental goods. Notwithstanding, these countries should partake in these discussions especially amid the changing economic and trading landscape of the 21st century and concomitant changes in the environment. International trade is not as it was in 2001 when these negotiations began and likewise environmental concerns like climate change now pose an existential threat to mankind. The study begins by mapping the progression of the EGS negotiations at the WTO including attempts at establishing a plurilateral environment goods agreement. Thereafter, the paper analyses the trade-related interests of Commonwealth small states and SSA countries in EGS. The challenges and opportunities they face in participating in negotiations on liberalising trade in EGS are then highlighted. The paper concludes by identifying the priorities that these countries might consider should they decide to participate in the WTO EGS discussions.
Related News
Twelfth WTO Ministerial Conference – Geneva: Resource page
WTO members secure unprecedented package of trade outcomes at MC12
WTO members successfully concluded the 12th Ministerial Conference (MC12), co-hosted by Kazakhstan, in Geneva on 17 June, securing multilaterally negotiated outcomes on a series of key trade initiatives. MC12 was originally scheduled to take place in June 2020 but the conference was postponed due to the COVID-19 pandemic. The package of outcomes confirms the historical importance of the multilateral trading system and underlines the important role of the WTO in addressing the world’s most pressing issues, especially at a time when global solutions are critical.
In welcoming the final “Geneva Package” delivered after five and a half days of marathon talks, the Director-General said the deal showed to the world that “WTO members can come together, across geopolitical fault lines to address problems of the global commons, and to reinforce and reinvigorate this institution.”
“The package of agreements you have reached will make a difference to the lives of people around the world. The outcomes demonstrate that the WTO is, in fact, capable of responding to the emergencies of our time,” said WTO Director-General Ngozi Okonjo-Iweala. “They show the world that WTO members can come together, across geopolitical fault lines, to address problems of the global commons, and to reinforce and reinvigorate this institution. They give us cause to hope that strategic competition will be able to exist alongside growing strategic cooperation.”
On this page:
Director-General’s Opening Remarks
WTO members were urged at the opening session of the 12th WTO Ministerial Conference in Geneva on 12 June 2022 to demonstrate that the WTO can deliver for the international community and the people it serves. As the world grapples with uncertainty and crises on multiple fronts, this is a time to show that multilateralism works, said WTO Director-General Ngozi Okonjo-Iweala during the Opening Session.
Selected excerpts
“As we grapple with uncertainty and crises on multiple fronts – the war in Ukraine and the inherent international security crisis that comes with it, the health, economic, environmental and geopolitical crises – this is a time to demonstrate that multilateralism works. A time to demonstrate that the WTO can deliver for the international community, and the people we serve.”
“Now, more than ever, the world needs WTO members to come together and deliver. We also need to deliver for those who seek to join us – the many countries, especially from Africa, Central Asia, and the Middle East who want to accede to the WTO.”
“Trade is an instrument for development, it's not an end in itself. In fact, tapping into international markets for value-added goods and services has been history's most proven path towards development. But too many of our members have not been able to start or stay on this path.”
pdf MC12 Opening Session: Statement by Dr Ngozi Okonjo Iweala, WTO Director-General (91 KB)
In closing, the Director-General stated that MC12 achieved an “unprecedented package of deliverables”. Furthermore,
“The package of agreements you have reached will make a difference to the lives of people around the world. The outcomes demonstrate that the WTO is, in fact, capable of responding to the emergencies of our time. They show the world that WTO members can come together, across geopolitical fault lines, to address problems of the global commons, and to reinforce and reinvigorate this institution. They give us cause to hope that strategic cooperation will be able to exist alongside growing strategic competition.”
pdf MC12 Closing Session: Speech by the Director-General (191 KB)
Thematic areas
MC12 has a number of thematic areas to be covered during the Conference. Briefing notes designed to provide background information on issues relevant to the Ministerial Conference are available to read online:
MC12 Documents, Decisions and Declarations
The following non-exhaustive list of outcome documents from MC12:
pdf MC12 Outcome Document (81 KB)
pdf Ministerial Statement on WTO reform (56 KB)
pdf Declaration of Ministers of the Group of Small and Vulnerable Economies (SVEs) (79 KB)
pdf Sanitary and Phytosanitary Declaration: Responding to modern SPS challenges (Revision) (82 KB)
pdf Statement on Inclusive Trade and Gender Equality (55 KB)
pdf G-33 Ministerial Statement on WTO Agriculture Negotiations (58 KB)
pdf Ministerial Declaration on Cotton (146 KB)
pdf MC12 Draft Ministerial Decision on the TRIPS Agreement (114 KB)
pdf MC12 Draft Ministerial Decision on Agriculture (88 KB)
pdf MC12 Draft Ministerial Declaration on Trade and Food Security (71 KB)
pdf Agreement on Fisheries subsidies: Draft text (131 KB)
pdf Agreement on Fisheries subsidies: Draft text – Addendum (267 KB)
Contributions from African countries and the African Group
African Trade Ministers have recognised the need to build coherence by ensuring that the African Group’s negotiating objectives at the WTO fully support continental objectives such as industrialisation, structural transformation and integration of the continent; taking note that, due to the unprecedented challenges facing African Countries, the existing rules based multilateral trading system is in need of a reform that addresses the structural deficiencies in the system while re-enforcing the principles of fairness, transparency and equity. They have committed to strengthen coordination in the African Group at the WTO on our common positions and to ensure that development is an integral component of all negotiating outcomes for all African economies.
Relevant documents and statements are available to download below.
pdf Statement by H.E. Ms Assome Aminata Diatta, Minister of Trade and SMEs, Senegal (63 KB)
pdf African Ministers of Trade Declaration on WTO Issues (108 KB)
pdf Work programme on electronic commerce: Communication from India, Indonesia, South Africa (67 KB)
pdf Africa and Development: Communication from the African Group (80 KB)
pdf OACPS Ministerial Declaration (126 KB)
pdf EAC Trade Ministers Statement on WTO (79 KB)
Civil society contributions
pdf CSOs call on ministers to reject current draft of TRIPS Decision (unofficial version) (43 KB)
pdf International Chamber of Commerce (ICC) Statement (282 KB)
tralac Analysis and commentary
Gerhard Erasmus
Noncedo Vutula and Thembekile Mlangeni
Noncedo Vutula and Thembekile Mlangeni
Noncedo Vutula
Kedibone Machiu, Mpho Leseka, Noncedo Vutula, Thembekile Mlangeni
Related News
tralac Daily News
Local news
The party’s over as mining and manufacturing production crash in April (Daily Maverick)
The mining sector has been one of the star performers of the South African economy, but that is like being the highest hill in Holland. Nevertheless, the sector’s reboot in the early stages of the pandemic and red-hot metals prices translated into record company earnings and a tax windfall for the Treasury just when it needed it most.
Among other things, this has been reflected in hefty current account balances, which in turn have kept the rand afloat, South African Reserve Bank data on Thursday showed. The surplus on the current account of the balance of payments widened to R143-billion in the first quarter of this year from R132-billion in the fourth quarter of last year. This is a good thing and helps, for example, to keep the prospects of an International Monetary Fund bailout at bay. South Africa’s trade balance also widened in Q1 to R360-billion from R336-billion in the previous quarter, and the country’s terms of trade improved as well. So it is deeply concerning that production in the mining sector, and its contribution to gross domestic product (GDP), has been in a state of steady decline. Statistics South Africa (Stats SA) said on Thursday that mining production fell by almost 15% in April on a year-on-year basis, and by 4.3% compared with the previous months.
SA to participate in agricultural negotiations in Geneva (SAnews)
Agriculture, Land Reform and Rural Development Minister, Thoko Didiza, will be attending the World Trade Organization (WTO) Ministerial Conference on agricultural negotiations, scheduled to take place in Geneva, Switzerland, from 12 to 16 June 2022. The negotiations are based on Article 20 of the Agreement on Agriculture, which provides for the continuation of the negotiations on issues relating to agricultural support and protection. The last major decision relating to agricultural negotiations was taken at the Nairobi WTO Ministerial Conference held in December 2015, with the elimination of export subsidies.
“To date, progress has been limited with members mainly repeating known positions. The divide remains largely between developed and developing member states,” the department said in a statement. The department said that South Africa’s priority in agricultural negotiations is to achieve a substantial and real reduction of trade distorting domestic support and to ensure sufficient policy space to carry out developmental policies that seek to address poverty, inequality and low economic growth.
“South Africa’s view is that market access negotiations should start once substantial progress has been made with domestic support. This is to ensure that historical imbalances are addressed and the playing field is levelled before engaging in further market access negotiations. “Approximately 70% of South Africa’s agricultural exports are already duty free, incorporating the Southern African Development Community (SADC) Trade Protocol, the Economic Partnership Agreement (EPA) with the European Union, African Growth and Opportunity Act (AGOA) with the United States of America and the African Continental Free Trade Agreement (this agreement is not yet implemented),” the department said.
Sh32bn terminal pushes Kenya’s harbours to top five in Africa (Business Daily)
Kenya now is among the countries with the five largest harbours in Africa after completion and handover of a Sh32 billion container terminal in Mombasa. The Japanese contractor handed over the second container terminal to the Kenya Ports Authority this week in a major boost to maritime trade. The new terminal put up by Toyo Construction Company, brings on board an additional annual capacity of 450,000 Tonnes Equivalent Units (TEUs) to the Mombasa port, a move that will increase turnaround time for ships talking at the facility.
“We shall put our best foot forward to ensure optimal utilisation of this facility for the benefit of Kenya and the region,” said KPA acting MD John Mwangemi. With the completion of the project, the authority has achieved its target of expanding capacity ahead of demand. By 2023, the Port of Mombasa is expected to handle approximately 1.7 million containers up from the current 1.4 million.
Half of small millers shut down on maize shortage (Business Daily)
Half of the small-scale millers have shut their businesses due to a lack of maize in a move that is likely to see consumers pay more for flour. United Grain Millers Association chairman Ken Nyagah said the maize shortage forced processors to shut since the beginning of this month as they lack the financial muscles to import the grain compared with their large-scale counterparts
The maize shortage has also hit large-scale processors that are not milling continuously as they should but at least they are still operating because of the purchases that they are making from Zambia and Malawi. “At least 50 percent of our members have closed because of an acute shortage of maize in the market at the moment. Locally there are hardly in stocks that we are getting from farmers,” said Mr Nyagah. The government allowed millers to import maize outside of the region duty-free but the processors argued that the produce from the world market is more expensive and not economically viable to ship in at the moment. As such, millers are now importing the grain from Malawi and Zambia, with a 90-kilogramme bag landing at Sh5,200 in Nairobi.
Lamu port livestock exports start in 2023 (Business Daily)
Kenya plans to use the Lamu port in exporting livestock to the Middle East by next year as the country seeks to extend its reach to the world market. Livestock PS Harry Kimtai said the government had set aside Sh500 million for the construction of a livestock facility at the Lamu port. The PS said Kenya has signed various sanitary protocols with the Middle East countries to facilitate the export of livestock products. “We want to establish facilities at the Lamu port that will support the docking of ocean vessels to allow the loading of livestock using the right procedures that take into consideration the issue of animal welfare,” said Mr Kimtai. Kenya has mainly been exporting high-value products such as butter, ghee, powder and long life milk product such as UHT to the Arab nations as it sought to diversify its market beyond the East African region. The Lamu port is ideal for livestock exports because of its proximity to the key animal production areas in northeastern Kenya.
Kenyatta, Mohamud talks clear way for miraa trade, flights resumption (The East African)
Kenya will resume exports of miraa (khat) to Somalia in two weeks following a thawing of relations that saw President Uhuru Kenyatta make his first trip to Mogadishu Thursday since the renewing of diplomatic ties between the two countries last June. Kenya’s Agriculture Secretary Peter Munya said Mr Kenyatta brokered the deal with new President Hassan Sheikh Mohamud on Thursday that will see the lifting of a two-year ban.
Mr Munya said the new Somalia regime had promised improved diplomatic relations. He said the trade talks were cemented after the Kenyan delegation, in which he was part, led by President Kenyatta, attended Mr Mohamud’s inauguration in Mogadishu Thursday. Mr Munya said talks were complete and what was remaining was the signing of the agreement that will also see Somalia sell seafood and other produce to Kenya.
Somalia closed access to its market for Kenya in 2020 following a political fallout between the two countries under former President Mohamed Abdullahi “Farmaajo”. The ban led to a loss of more than 50 tonnes of Kenyan khat valued at more than Ksh20 million ($171,000) a day.
Tanzania exports to Kenya hit Sh272.7 billion in first quarter (The Citizen)
Tanzania exported goods worth $ 118.6 million in the first quarter (January to March) of this year, it was revealed on Wednesday. The increased exports to the neighbouring country has forced the Tanzania Revenue Authority (TRA) to post its officials to Mombasa and Nairobi to facilitate pre-arrival clearance of goods.
During the period Kenya exports to Tanzania were valued at $139.4 million, according to the East African Business Council (EABC).Kenya is also mulling deployment of officials from its taxman, Kenya Revenue Authority (KRA) to the Horohoro-Lungalunga border to facilitate pre-arrival clearance of exports.
Speaking at the EABC Trade Facilitation Forum at Horohoro-Lunga Lunga One Stop Border Post (OSBP), EABC executive director John Bosco Kalisa decried delays at the border. He said it was a pity that clearance of goods at Horohoro OSBP by the Kenyan clearing agents has led to delays and longer
Nankhumwa irked by intended sale of maize to Zimbabwe, pens President Chakwera (Malawi Nyasa Times)
Leader of Opposition in Parliament, Kondwani Nankhumwa, has written President Lazarus Chakwera asking him to intervene and stop the sale of maize by the Agriculture Development Corporation (ADMARC) to Grain Millers of Zimbabwe saying the decision will likely negatively impact Malawi’s food security situation.
He said what is suspect about the decision to sell the maize is the fact that not long ago Minister of Finance, Sosten Gwengwe assured Malawians that ADMARC will not proceed with the deal after it was exposed by the media.
Nankhumwa said the general prediction by experts as well as ordinary Malawians is that there will be hunger this year, adding that the decision to sale the maize therefore defies logic. “Mr. President, you may be well aware that many experts, as well as ordinary Malawians, are against this sale of maize by Admarc precisely because all indications are that many households are likely to face hunger this year due to an anticipated low yield,” said Nankhumwa in the letter.
He said it is a fact that food security in this country is largely determined by the availability and accessibility of maize because it is a staple crop, which is consumed by almost all Malawians on a daily basis.
Take advantage of expanded market created by AfCFTA — President Akufo-Addo urges Ghanaian Industries (GhanaToday)
President Nana Addo Dankwa Akufo-Addo has called on Ghanaian manufacturing industries to take advantage of the access to expanded markets created by the African Continental Free Trade Area (AfCFTA) agreement. President Akufo-Addo said one of the main challenges that have affected Africa’s industrialisation drive is the lack of access to expanded markets. He said economies of scale were an important tool for industrialisation but with small fragmented markets in Africa, industrial development had always been a problem. President Akufo-Addo said this on Wednesday in Tema when he commissioned Nestlé Ghana’s Ghc175.4 million-expansion plant for the production of Cerelac, an infant food, for export to countries in West and Central Africa.
Delay in passing standards law slowing Industry growth (News Ghana)
Ghana’s quest to become the number-one trading hub in Africa could end up in an anticlimax if the Standards Authority Bill currently before Parliament is not passed into law with a sense of urgency. The Bill would address the critical issues of Standardisation and Conformity Assessment by empowering the Ghana Standards Authority (GSA) with the requisite legal backing needed to address the current variations of the age-long challenge of substandard goods that flood the country’s markets. Not only does the presence of such crappy goods pose a grave danger to consumers but they also erode the confidence of consumers in patronizing goods from the Ghanaian markets altogether. It is a double jeopardy which the GSA has struggled to address because as it stands now, the Authority lacks the legal mandate. It is a shocking reality that has been ignored for far too long.
FG intensifies efforts to remove Nigerian exports from EU’s restriction list (The Guardian Nigeria)
The Nigerian Export Promotion Council (NEPC) has stated that the Ministry of Industry Trade and Investment, has inaugurated a committee composed of the NEPC and other regulatory agencies to ensure the removal of Nigeria from the European Union’s (EU) restriction list. The Executive Director and Chief Executive Officer, NEPC, Dr. Ezra Yakusah, on the sidelines of its advocacy programme on export trade house, Cairo Egypt, said the committee which has less than two months to go, was specifically set up to make recommendations on how to remove Nigerian products from the EU list. According to him, the Council is also taking proactive measures to ensure that some of these products are removed from EU restrictions by ensuring these products meet stipulated EU requirements. In his words: “Sometimes the problem is due to poor packaging and a lack of mandatory or voluntary certifications. So we decided to take the challenge by deploying our ‘go global, go for certification’ programme to train over 150 Small and Medium Enterprises (SMEs) free of charge. We want to ensure that these products are removed from the EU list.
Egypt extends ban on staples including wheat, flour and corn for three more months - document (Reuters)
Egypt has extended the ban on the export of wheat, flour, corn, lentils, pasta, fava beans and all kinds of vegetable oil for three more months, its trade ministry said in a document seen by Reuters on Wednesday. The ministry said it would allow exports of any excess of the local market’s needs of these goods but only after approval from the ministry. This excess amount would be estimated by the ministry of supply. Egypt banned exporting these staples in March.
Libya oil shutdown expands with threat to close new port (Al Arabiya)
A blockade of Libyan oil output by groups aligned with forces in the east of the country expanded on Thursday and Friday with the closure of two more export terminals, a threat to close another, and reduced production at a major field, engineers said. On Thursday exports were halted at the ports of Ras Lanuf and Es Sider.
Libyan oil output had already fallen by about half to 600,000 barrels per day after groups closed the major Sharara and El Feel fields last month, though work at Sharara briefly resumed this week before stopping again. Groups closing the facilities have demanded that Tripoli-based Abdulhamid al-Dbeibah hand over the role of prime minister to Fathi Bashagha, who the eastern-based parliament backed for that post in March.
UAE wants to boost trade with Morocco via faster shipping: Economy minister (Al Arabiya)
The United Arab Emirates wants to bolster trade with Morocco to reach $7 billion within 10 years from $800 million in 2021, UAE Economy Minister Abdullah bin Touq al-Marri said on Thursday in Rabat.F or that purpose, the two countries will speed up container shipping to seven days from 40 days, al-Marri told Reuters before a visit to Africa’s largest port in Tangier, northern Morocco.
The UAE minister said he would discuss a trilateral deal with Moroccan officials to step up trade between Morocco, the UAE and Israel. The UAE and Israel have a free trade agreement.” This will offer great opportunities for traders and investors,” he said.
Addressing European Energy Security Through Equatorial Guinean LNG Exports (Africa Newsroom)
Rich with 1.5 trillion cubic feet of natural gas reserves and with an objective to become a regional gas processing hub, Equatorial Guinea’s gas journey has been both ambitious and highly successful. A number of exploration campaigns, large-scale project developments and regional partnerships have served as key drivers of the country’s gas expansion agenda, and now, using the African Continental Free Trade Agreement as well as its strategic location on Africa’s west coast, the country is gradually positioning itself as a regional Gas Mega Hub (GMH) as well as global exporter.
What separates Equatorial Guinea from other gas producing countries in Africa is the Ministry of Mines and Hydrocarbons’ GMH initiative, a comprehensive development model to utilize unexploited offshore gas resources to drive energy security and economic growth. Since the launch of the GMH in 2018, the country has made significant progress to enhance exploration and production as well as the development of gas infrastructure and processing facilities, strengthening the country’s export capacity. In addition to processing domestic resources from fields including the 580 billion cubic feet offshore Alen Gas Project, Equatorial Guinea’s Alba Liquefied Petroleum Gas and Punta Europa onshore facility serve as the official processing platform for the entire region. Through partnerships with neighboring producers including Cameroon, Nigeria and the Republic of the Congo, Equatorial Guinea not only processes its own resources but regional reserves, converting gas into liquefied natural gas (LNG), ready for export.
Structural reforms stimulate Somalia’s investment climate (Daily Sabah)
Since the 2012 establishment of the Federal Government of Somalia (FGS), a number of structural reforms have been put in place to boost domestic business and foreign direct investments (FDI). The reforms have, over the last four years, mainly focused on fixing impediments faced by potential investors such as the lack of a comprehensive legal framework, a civil and commercial justice system, weak dispute resolution mechanisms, enforcing contracts and inefficient public financial management systems. The overall enabling climate for investment similarly revolves around issues like land management, public procurement and disposal arrangements, banking regulations, contract management regulations, bilateral trade agreements, as well as free and responsible media. In all these areas, priorities have over the years been identified for policy, legal and regulatory improvements to remove these bottlenecks.
African trade and development news
Investment flows to Africa reached a record $83 billion in 2021 (UNCTAD)
Foreign direct investment (FDI) to African countries hit a record $83 billion in 2021, according to UNCTAD’s World Investment Report 2022 published on 9 June. This was more than double the amount reported in 2020, when the COVID-19 pandemic weighed heavily on investment flows to the continent. Despite the strong growth, investment flows to Africa accounted for only 5.2% of global FDI, up from 4.1% in 2020. While most Africa countries saw a moderate rise in FDI in 2021, around 45% of the total was due to an intrafirm financial transaction in South Africa. “If we exclude this transaction, the increase in FDI flows to Africa, while still positive, would be more in line with what we observed in other developing regions,” said James Zhan, director of UNCTAD’s investment and enterprise division.
-
FDI to Southern Africa increased almost tenfold to $42 billion. The strong increase was due primarily to a large corporate reconfiguration in South Africa – a share exchange between Naspers and Prosus in the third quarter of 2021. New project announcements in the country included a $4.6 billion clean energy project finance deal sponsored by UK-based Hive Energy and a $1 billion greenfield project by US-based Vantage Data Centers to build its first African campus.
-
West Africa sees FDI increase by 48% to $14 billion. Nigeria, West Africa’s largest recipient of FDI, saw its flows double to $4.8 billion, mainly because of a resurgence in investments in the oil and gas sectors.
-
Investment flows to East Africa increased by 35% to $8.2 billion Ethiopia, a central hub for China’s Belt and Road Initiative, saw FDI flows rise by 79% to $4.3 billion in 2021. Four out of five international project finance announcements in the country were in renewables.
-
Central African FDI remained flat at $9.4 billion While investment flows to Central Africa remained flat, FDI to the Democratic Republic of the Congo rose by 14% to $1.9 billion, with investment trends remaining positive primarily because of flows to offshore oil fields and mining.
-
FDI to North Africa declined by 5% to $9.3 billion in 2021 Investment flows to Morocco rose by 52% to $2.2 billion in 2021 while Egypt saw its FDI drop by 12% to $5.1 billion. Despite the decline, Egypt was Africa’s second-largest FDI recipient.
Mo Ibrahim: Africa must be allowed to use gas in energy transition (African Business)
Across three days in late May, the 2022 Ibrahim Governance Forum brought together world leaders, climate experts and African youth to discuss the nuances of the climate crisis in Africa and began to articulate the continent’s unique position ahead of Cop27 in Egypt.
Forum founder Mo Ibrahim, the Sudanese-British telecoms billionaire, tells us why he believes Africa needs to be allowed to use its gas resources as a transition fuel to close the energy supply gap.
“Africa’s case” can be articulated around three main points. First, as the least industrialised continent, Africa is the continent least responsible for climate change. However, as, like Covid, the climate crisis knows no borders, this also means that Africa is the most vulnerable to its impact, with less adaptation means.
Second, we need to strike the right balance between climate protection and access to energy for all people on the planet, between climate justice and energy justice.
Last but not least, Africa’s potential in biodiversity, renewable energy sources, and minerals key to low-carbon economy, is to be seriously considered. The continent can play a pivotal role in a green sustainable economy, provided the relevant hurdles are correctly addressed: financial and human capacities, infrastructures, governance.
Cop27 is therefore an opportunity for Africa to put these considerations forward to the global community, and to ensure that the climate debate is inclusive of the continent’s specific needs and potential.
Africa’s development agenda cannot move forward without addressing the continent’s energy gap and at present, there is no other viable alternative to using gas, the least polluting of all fossil fuels, as a transition fuel to close this gap.
global supply chains contribute to carbon emissions through transportation of raw commodities one-way, and processed products back the other – sea freight being by far the worst, as a recent report published by the AFC (Africa Finance Corporation) highlighted. In Africa, boosting local processing of raw commodities and local manufacturing for growing local markets can definitely contribute to lowering carbon emissions at global level. This means a better integrated continent, where intra-African trade is consequently upgraded.
Sub-Saharan Africa’s big companies still resilient to Ukraine war, China slowdown (ZAWYA)
Countries in Sub-Saharan Africa (SSA) still struggle to return to pre-pandemic economic growth, although most rated companies in the region have remained resilient to the impact of the war in Ukraine and slowdown in Chinese economy, according to the latest analysis. So far, many businesses in SSA, particularly exporters, continue to see moderate impact from the ongoing turbulence and don’t see the urgency to tap into capital markets yet, as higher commodity prices tend to offset rising costs, S&P said. ”Increasing commodity prices are benefiting many key countries, but high debt burdens, elevated cost of debt and limited fiscal flexibility remain a drag on sovereigns’ credit quality, while rising food and energy prices, alongside a busy election cycle, will delay fiscal consolidation,” the ratings agency noted. Commodity and energy prices have skyrocketed and financial conditions have tightened due to the Russia-Ukraine conflict, fuelling recession fears. According to the World Bank, food and energy will remain expensive for the next three years.
As for the economies in SSA, there are no signs that the course will change soon. According to S&P, the region’s recovery from the pandemic is still lagging that in other markets.
China’s trade ties with Africa continue to strengthen (Namibia Economist)
Trade between China and Africa is growing. The General Administration of Customs of China recently noted that bilateral trade between China and Africa amounted to US$254.3 billion in 2021, an increase of 35.3% from 2020. In the first quarter of 2022, China’s Customs Data confirmed that trade between the two regions increased by 23%, to US$ 64. 8 million.
Africa exported goods worth US$ 105.9 billion to China, an increase of 43.7% from the previous year. China is increasingly importing agricultural products and manufacturing goods from Africa, in addition to its continued strong focus on oil, precious minerals and metals. African imports from China mainly focus on manufactured goods such as electronics, clothing and appliances, and technology.
Data from the Chinese Ministry further revealed that over the last 20 years, China’s trade with Africa has risen 20-fold, showing that China is one of Africa’s biggest bilateral trading partners. To balance the trade gap, China has also pledged to import US$ 300 billion of African products by 2025. The country has also increased the number of products that can be exported to China tariff-free.
Electronic Certificate of Origin to Facilitate Trade in SADC Region (SADC)
Challenges which traders and customs officials have been facing in using the manual Certificate of Origin (CoO) in the Southern African Development Community (SADC) will be resolved as soon as the SADC Electronic Certificate of Origin (e-CoO) becomes operational. The SADC e-Certificate of Origin Framework was approved by the Committee of Ministers of Trade in 2019. The Framework will help to facilitate the application of the CoO electronically, thus easing cross-border trade in SADC. This will result in the smooth movement of goods across the Region to end consumers.
Implementation of the eCoO is expected to contribute to the reduction of non-tariff barriers to trade and enhance participation of SADC Member States in the regional value chain and ultimately, support successful implementation of the SADC Industrialisation Strategy and Roadmap (2015-2063) in the consolidation of the SADC FTA. For the implementation of the e-CoO concept regionally, the Regional eCoO Framework will facilitate to harmonise the process of automation for registration, issuance, approval and transmission of the CoO.
The eCoO systems is equipped with security features such as online e-CoO authenticity verification, optical watermarking technology to distinguish between original and copies of CoOs issued. The e-CoO is being considered under the SADC Free Trade Area (FTA) whose objectives are to further liberalise intra-regional trade in goods and services; ensure efficient production; contribute towards the improvement of the climate for domestic, cross-border and foreign investment; and enhance economic development, diversification and industrialisation of the Region. Currently preparation for launching of the SADC eCoO is underway for July 2022 and it is expected that all Member States will implement the eCoO by 2024.
ECOWAS advocates enabling policy for Africa’s agric devt (New Telegraph)
The Economic Community of West African States (ECOWAS) has said that agribusiness development in Nigeria and other countries in Africa requires the provision of an enabling policy, legal and economic environment. The Head of Agriculture Division, ECOWAS Commission, Mr. Ernest Aubee, explained that agriculture in the continent remains one of the most important sectors, saying that the share of agriculture in the continent’s Gross Domestic Product (GDP) had increased to 19.9 per cent in 2020/2021 from 17.8 per cent in 2019/2020.
He stressed that agribusiness contributed approximately 25 per cent of Africa’s GDP and provided 70 per cent employment, while agriculture-based products accounted for over 50 per cent of all exports from Africa. Aubee noted at an African agribusiness webinar in a paper titled: “Sustainable Agribusiness in Africa,” that increased public and private sector investments on the continent was critical, adding that agribusiness has the potential to drive the socio-economic development of Africa. He said: “Agribusiness refers to the enterprises, industry and field of study of value chains in agriculture and in the bio-economy. It refers to a combination of agriculture and business activities that seek to achieve specific objectives of profitability efficiency and effectiveness and embrace the value chain concept of agriculture from production to consumption.
“However, challenges are access to finance for smallHolder farmers; poor infrastructure from farms to markets, (processing, packaging and markets), inadequate transport networks (road, sea, air), limited agricultural technologies, availability of relevant macro and sectoral policies and regulations to drive the sector; lack of commitment to investments in agriculture in accordance with SDG, AU Agenda 2063/Malabo Declaration, ECOWAP etc. “Also, there is limited local private sector engagements and education and modernisation of agribusiness in Africa.” He recommended building human capacities in the agribusiness value chain with emphasis on women, youths and the poor.
Guest blog: Global warming and the “Africanisation” of International Investment Law? (ICC)
In August 2021, the United Nation’s Intergovernmental Panel on Climate Change published a report on climate change based on more than 14,000 studies developed by scientists around the world. Issuing a “code red for humanity”, the report makes clear that global warming will only intensify over the course of the next 30 years.
This threat is particularly acute for the African continent. The World Meteorological Organization’s State of the Climate in Africa 2019 report indicates that increasing temperature and sea levels, changing precipitation patterns and more extreme weather are threatening human health, safety, food, and water security on the continent. Now more than ever African States must ensure that the promotion of foreign direct investment through the conclusion of international investment agreements (IIAs) does not undermine environmental protection measures or exacerbate the impending climate crisis. Thus, African States are increasingly incorporating environmental provisions in their IIAs. The breadth of these reforms across the continent, and their influence globally has led some commentators to refer to the “Africanisation” of international investment law.
One example is the 2012 Model BIT of the Southern African Development Community (SADC), which was among the first to impose obligations and responsibilities on investors as opposed to just States, expressly “seeking an overall balance of the rights and obligations among the State Parties, the investors, and the investments” under the agreement. The 2012 Model BIT includes numerous articles that impose obligations on investors concerning the environment, human rights, and corruption. Subsequently, in December 2016, Nigeria and Morocco concluded a BIT that included many of the environmental obligations for investors proposed by the SADC Model BIT and the ECOWAS Supplementary Act on Investments.
Global economy news
Global Supply Chain Disruptions : Competition Policy Implications (World Bank)
This note complements prior World Bank work analyzing the technical drivers of supply chain disruptions from 2021 onwards. The focus of this note is to shed light on the role of market structure and dynamics by: (a) analyzing how market dynamics and industry structure may have contributed to the current situation; (b) outlining implications for value chains in developing countries; and (c) suggesting further policy and research priorities. On the demand side unexpected demand spikes in the United States have created disruptions due to the sheer volume of logistics throughput needed and the sudden, unexpected rebound in demand that is contributing to the “bullwhip effect.” On the supply side, capacity constraints with respect to port-hinterland connections have been the main bottleneck rather than maritime shipping per se. However, this note raises the concern that industry structure and alliance practices within the maritime shipping, shipbuilding, and container manufacturing sectors may be contributing to the extreme reaction of shipping prices. In the short term, policy makers in developing countries can help mitigate the effects of rising shipping costs and decreasing service levels by extending the timeframes of trade finance and removing barriers to overland trade. Although there is little that governments outside of China, Europe, and the United States can do to directly solve the process bottlenecks, market characteristics suggest that the global logistics industry may be susceptible to collusive outcomes, which exacerbate price spikes. Thus, governments could pay closer attention to potential anticompetitive behavior, especially in maritime shipping and hinterland logistics. In the medium to long term, policy makers, regulators, and researchers should more carefully consider efficiency–resilience tradeoffs in the global logistics industry. Key topics to explore include investigations into potential anticompetitive behavior by shipping lines and increased scrutiny over mergers and alliance practices among logistics service providers and the supplying manufacturing industries. Public-private and private initiatives to facilitate data sharing may also help improve forecasting, which could help mitigate the effects of demand volatility. This note was predominantly prepared before the invasion of Ukraine by the Russian Federation, which started in February 2022. In the short term, the war is likely to exacerbate the congestion at European ports and disrupt Asia-Europe rail links, potentially leading to higher shipping prices. In the long term, it remains to be seen whether decreases in global demand due to the war will lower shipping demand and prices. Nevertheless, the long-term structural constraints to competition in the sector highlighted in this note remain the same overall.
Grain shipping trade navigates turbulent waters (World-Grain.com)
COVID-19 lockdowns and the invasion of Ukraine by Russia have created uncertainty across shipping trade lanes. Indeed, perhaps not since the Cold War have supply chain resilience and geopolitical turmoil loomed so large in global trade. The disruptions have arguably impacted the grain shipping trade more than any other, with grain prices and shipping costs soaring. The war in Europe has resulted in Ukraine’s exports of wheat and other agricultural products being largely shut off from the world due to the ongoing Russian blockade and/or its control of export facilities in the Black Sea. This is inflating global food prices and threatening social disintegration in some of the poorest countries of Africa and the Middle East, which depend on Black Sea exports and are struggling to find replacements.
Grain supply chains are not just being affected by the direct impact of war on grain exports from the Black Sea. Tight availabilities of fertilizers amid sanctions on Russia and Belarus have been a major issue for some countries, especially in South America and Africa, Cooper said. “Some countries are trying to resolve supply disruptions via switching to other producers, for example, Nigeria’s purchase of potash from Canada,” he said. Additionally, logistics in the container sector remains difficult, which especially hampers the rice trade between India and Africa and also has been hampering US containerized exports of agricultural products.
Despite the crises, bulk handling companies maintain good results (Logistics Update Africa)
Following two years of playing a central role in maintaining global trade during the pandemic, bulk handling companies are proving their strength and resilience once again in the face of the Russian-Ukrainian conflict. Saving time and lowering the operating costs for their customers, the benefits are numerous, and illustrative of strong and resilient players who support a sector in full rebound.
The current rise in transportation costs is creating uncertainty for many businesses. A study by Economist Impact found that the effect on trade will be most pronounced in Africa and South America. Faced with these rising prices and the need to maintain trade flows, some businesses are trying to reduce costs and transit times by working with companies like Nectar Group, one of the largest providers of integrated unloading and bagging services.
AU Chair Urges Ukraine to Demine Odesa Port to Ease Wheat Exports (VOA)
Senegalese President and African Union Chair Macky Sall on Thursday urged Ukraine to demine waters around its Odesa port to ease much needed grain exports from the war-torn country. Russia’s invasion of Ukraine and Western sanctions have disrupted grain deliveries from the two countries, fueling fears of hunger around the world. Cereal prices in Africa, the world’s poorest continent, have surged because of the slump in exports, sharpening the impact of conflict and climate change and sparking fears of social unrest. If wheat exports do not resume from Ukraine, Africa “will be in a situation of very serious famine that could destabilize the continent,” Sall told French media outlets France 24 and RFI. Russia and Ukraine produce 30% of the global wheat supply. But grain remains stuck in Ukraine’s ports because of a Russian blockade and Ukrainian mines, while Western sanctions on Moscow have disrupted exports from Russia.
WTO Ministerial Conference preview: four key issues to be resolved (The Institute of Export and International Trade)
Next week sees the start of the pivotal 12th World Trade Organisation Ministerial Conference, with decision-makers from around the world coming together to review the current functioning of the multilateral trading system and future priorities for the Geneva-based body. The war in Ukraine and the ensuing global food crisis means this will be “no ordinary ministerial conference,” Business Standard reports.
The IOE&IT here looks at the four most pressing policy issues that are likely to be discussed.
1) The global food crisis
2) Tariff moratorium on e-commerce
3) Environment and trade
4) Covid IP Waiver
At-risk nations seek cash for climate losses, fear UN ‘talk shop’ (Thomson Reuters Foundation)
The surging costs of climate change-driven destruction have made vulnerable nations poorer by about one-fifth, 55 such countries said on Wednesday, as fears grow that U.N. discussions on money for states to repair and avoid harm could become a “talk shop”. “Loss and damage” caused by more extreme weather and rising seas is a key issue at mid-year U.N. climate talks in the German city of Bonn, as negotiators launched a three-year dialogue this week on a topic that has long divided rich and poorer economies. The “Glasgow Dialogue” emerged after a push for a new loss-and-damage fund for vulnerable countries floundered at the U.N. COP26 summit in Scotland last year due to resistance from donors including the United States and some European governments. But small island states and other countries that are already bearing the brunt of a warming world - from more powerful storms in Madagascar to disappearing islets in the Marshall Islands - urged wealthy governments not to hold back progress in Bonn.
Related News
tralac Daily News
Local news
Minister Thoko Didiza attends World Trade Organisation 12th Ministerial Conference on Agricultural Negotiation in Geneva, Switzerland, 12-16 Jun (South African Government)
Minister Didiza to attend the World Trade Organisation 12th Ministerial Conference on Agricultural Negotiation in Geneva, Switzerland from the 12th to the 16th June 2022The Minister of Agriculture, Land Reform and Rural Development, Ms. Thoko Didiza, MP will from the 12th to the 16th of June 2022 attend the World Trade Organisation Ministerial conference on agricultural negotiations in Geneva, Switzerland. The last major decision related to the agricultural negotiations was at the Nairobi Ministerial Conference of the WTO in December 2015 with the elimination of export subsidies. At the Ministerial Conference in Buenos Aires in December 2017, no joint declaration or work program could be agreed by the WTO membership. To date, progress has been limited with members mainly repeating known positions. The divide remains largely between developed and developing members. In addition, there are huge differences between the USA and China and India.
South Africa’s priority in the agricultural negotiations is to achieve a substantial and real reduction of trade distorting domestic support and to ensure sufficient policy space to carry out developmental policies that seeks to address poverty, inequality and low economic growth. For South Africa, the negotiations need to follow a certain sequence with domestic support as a priority. Market access negotiations can only start once substantial progress has been made with domestic support. This is to ensure historical imbalances are addressed and the playing field is leveled before engaging in further market openings.
Approximately 70% of South Africa’s agricultural exports are already duty free incorporating the SADC Trade Protocol, the EPA agreement with the EU, AGOA with the USA and including the African Continental Free Trade Agreement (this agreement is not yet implemented). South Africa’s major challenges regarding market access are in the SPS field and those are not negotiated with the Agreement on Agriculture.
Cabinet approves public consultations on illegal metals trade (SAnews)
Cabinet has approved that public consultations be undertaken on proposals to restrict the trade of illegally obtained scrap and processed metals. Addressing reporters following this week’s Cabinet meeting, Minister in the Presidency, Mondli Gungubele, said the theft of scrap metal and copper cable from public infrastructure hinders the performance of the economy by imposing enormous costs.
“Some of the disruptions include the supply of energy and rail services due to vandalised rail tracks. They impose additional transport costs on commuters due to disrupted commuter transport. Vandalised and unsecured electricity cables pose safety risks to communities, especially children.”
Japan-South Africa business forum a boost for SA economy (SAnews)
Minister in the Presidency, Mondli Gungubele, says strengthening ties with Japan can present increased economic opportunities for South Africa. The Minister was briefing media on Cabinet decisions on Thursday. This after the Japanese government, together with the Department of Trade, Industry and Competition (dtic), launched the Japan-South Africa Business Forum last week.
“Japan is one of our most important trade partners and a leading investor in a number of South African sectors, ranging from automobiles to advanced mining machinery, and from agribusiness to financial services. “Cabinet welcomed the outcomes of the recent Japan-South Africa Business Forum, which agreed to an ambitious work programme that includes collaboration on green industrialisation, electric vehicle technologies and green hydrogen.
“SA exports to Japan increased from R61 billion in 2011 to R150 billion in 2021. Last year, SA imported R34 billion worth of goods... resulting in a R114 billion trade surplus in South Africa’s favour with Japan,” the department said.
Kenya to begin exports of livestock products from Chinese-built port in 2023 (CGTN Africa)
Kenya will begin to export livestock products from the Chinese-built Lamu Port in 2023, a government official said Wednesday. Harry Kimtai, the principal secretary of the Ministry of Agriculture, Livestock, Fisheries, and Cooperatives, told journalists in Nairobi, the capital of Kenya, that the government has allocated 500 million shillings (4.27 million U.S. dollars) for the construction of an efficient transport corridor for livestock at the port. “We want to establish facilities at the Lamu port that will support the docking of ocean vessels to allow the loading of livestock using the right procedures that take into consideration the issue of animal welfare,” Kimtai said. Lamu Port, which is being built by China Communications Construction Company, can handle vessels with a capacity ranging from 12,000 to 18,000 twenty-foot equivalent units (TEUs). Kenya commissioned the first berth of the Lamu port in May 2021, which is part of the Lamu Port South Sudan-Ethiopia Transport (LAPSSET) corridor.
Tanzanians can now invest in SADC without BOT waiver (IPPMedia)
TANZANIANS can now invest in Southern Africa Development Community (SADC) countries without seeking waiver from the Bank of Tanzania (BOT). “This is expected to increase investor base and competition in government securities market,” said a statement by the Monetary Policy Committee after its meeting on 6th June 2022 to assess the conduct of monetary policy in March and April 2022, recent global and domestic economic situation. However, according to the regulations, government securities purchased shall not be transferred to a resident within six months from the date of purchase.
US-Ghana Business Forum comes off on June 16, 2022 (Myjoyonline)
The U.S Chamber of Commerce and the American Chamber of Commerce Ghana will organize the 3rd high-level meeting between US and Ghanaian Government Officials and Businesses on the official visit of the Deputy Secretary of Commerce, Don Graves.The U.S.-Business Forum is aimed at deepening diplomatic and commercial partnerships between Ghana and the United States for successful implementation of the African Continental Free Trade Agreement (AfCFTA).The theme for 2022 U.S.-Ghana Business Forum is: “Leveraging the AfCFTA to Promote U.S-Africa Commercial Partnerships.” This event is in line with the drive by the AfCFTA Secretariat to engage the private sector, the African diaspora, and other strategic partners for the effective implementation of the Agreement.
The 2022 Forum aims to strengthen trade and investment, promote business partnerships, and opportunities between U.S. and Ghanaian businesses and review the manufacturing and digital sectors as enablers for implementation of the single market project in Africa. At the end of the conference, it is expected that U.S.-Ghana commercial partnership will be projected and enhanced, focused on improving the investment climate in Ghana and the African continent.
DRC may hold key to prosperity in East Africa (China Daily)
In Africa’s COVID economic recovery strategies, countries need to embrace the trinity of unification, regionalism and multilateralism to spur industrialization, economic growth and development. As Africa as a whole is one of the most affected economies in the world, the World Bank estimates that approximately 40 million people on the continent have been pushed into extreme poverty due to the pandemic’s devastating impact. However, the pandemic merely triggered compounded issues that Africa has suffered from for decades.
The Democratic Republic of Congo is one country that has chosen unification, regionalism and multilateralism over unilateralism. On April 8, the DRC signed a treaty of accession to the East Africa Community, becoming the seventh member of the regional bloc, which also includes Burundi, Kenya, Rwanda, South Sudan, Tanzania and Rwanda.
Faced with the challenge of immense poverty, the DRC has about 60 million people who live on less than $1.90 a day, the international poverty line. This comes at a time when the country with a population of more than 94 million has ample natural resources such as gold, diamonds, aluminum, cobalt and copper, significant arable land and hydropower, as well as immense biodiversity and the world’s second-largest rainforest.
The East Africa Community, which aims to strengthen the ties among its member states through a common market and a common customs tariff to help achieve economic growth in the region, faces a tall order in the re-engineering of the economy of the DRC-a country that was once ravaged by conflict and war. However, will the DRC have an impact on the East Africa Community?
How taxes are driving illicit trade in Kenya (BusinessLIVE)
A rapid rise in the cost of living in Kenya — brought on by inflation on essential goods and heavy taxes — is thought to be fuelling the illicit trade in goods. Timothy Kamau* is a trader in the Kenyan town of Bungoma, near the border with Uganda. He’s ready to shut up shop, he says, as buyers have taken their custom to the store next door, where goods that have been smuggled into the country are sold more cheaply. Or he needs to find a way into the illicit economy himself. “I am looking for a connection in Uganda so that I can start getting goods from there to keep me afloat,” Kamau tells the FM.
Malawi Must Step Up Efforts to Address Critical Gender Gaps to Unlock Untapped Economic Potential and Empower Women (World Bank)
Malawi’s efforts in closing the gender gap require urgent improvements in schooling rates for girls at the upper secondary level, lowering maternal mortality rates, further decreasing the fertility rate, ending child marriages, and addressing constraints on access to various assets that affect women’s productivity as farmers, entrepreneurs, and wage workers, according to two new World Bank reports. The new Malawi Gender Assessment and Gender-Based Violence Assessment reports show that with more than 12 laws, 10 policies, and nine international or regional treaty obligations related to advance gender equality, Malawi has an enabling environment anchored in a progressive Constitution and relevant legislation. However, low and fragmented allocation of resources to support implementation of existing laws, policies, and programs, continues to constrain efforts to close the remaining gender gaps and prevent GBV.
Ghana Can Leverage Trade Policies to Accelerate Export Diversification and Economic Transformation for Jobs (World Bank)
Ghana’s merchandise trade competitiveness declined over the last decade, resulting in a reduction in the number of exporting firms and their participation in Global Value Chains (GVCs). However, improvements in transport logistics and access to ICT infrastructure over last decade can be leveraged for expanded trade and economic transformation; a key pathway to the creation quality jobs, says the World Bank’s latest trade analysis for the country. The newly released Ghana Trade Competitiveness Diagnostic- Strengthening Ghana’s Trade Competitiveness in the Context of AfCFTA, notes that trade in services and foreign direct investments are also important for ensuring deeper integration into GVCs and efficiency of the manufacturing sector.
“The potential benefit offered by the AfCFTA (about 0.5% additional GDP growth per annum over next ten years) – is very significant, says Pierre Laporte, World Bank Country Director for Ghana, Liberia and Sierra Leone “This should motivate Ghana to harness the transformative potential of trade by cultivating export-oriented activities in both manufacturing and services and following up with the outstanding negotiations and implementation of the AfCFTA protocols.”
AGI pushes for duty exemption on raw material imports (The Business & Financial Times)
Producers want a review of import duty on raw materials meant for production so as to make locally-made products competitive. Ideally, the Association of Ghana Industries (AGI) – which is the umbrella-body of leading local manufacturers – says such taxes are paid after production and not directly on import of raw materials, as it is the case in this country.
“We want importers of raw materials to be considered, because elsewhere producers do not pay duty on imports,” said AGI’s Chief Executive Officer, Seth Twum Akwaboah.
He spoke during the 11th Association of Ghana Industry and Quality Awards launch in Accra, and lamented that making producers pay duty on imported raw materials and then also taxing the final product constitutes an unwarranted double tax burden on them. He said these taxes end up being passed on to the final consumer, and are part of the reason domestically-made goods are uncompetitive in their pricing relative to imported ones.
Ghana Moves Motion On Role of African Parliaments In Accelerating Intra-African Trade at Ongoing 52nd CPA Regional Conference (Peace FM Online)
Ghana’s delegation at the 52nd CPA Africa Regional Conference has moved a motion on the role of African Parliaments in accelerating Intra-African trade. The motion which was moved by the Majority Leader, Osei Kyei-Mensah-Bonsu on behalf of the Rt. Hon. Speaker, Alban Sumana Bagbin and the Parliament of Ghana as a whole is expected to fashion out ways to stimulate local and intra-African trade in a bid to reduce the shocks of the global crises being felt by African countries. Hon. Osei Kyei-Mensah-Bonsu in moving the motion outlined the significance of the trade agreement which he said will turn around the negative to extremely low economic growth being witnessed on the African market as well as its unsustainable fiscal deficits and the constant increase in rising debt levels. “As a direct consequence of COVID-19, African economies experienced negative to extremely low economic growth, unsustainable fiscal deficits, rising debt levels, huge populations being pushed below the poverty brackets and balance of payment problems. As African economies were about to emerge from the shocks of COVID-19, entered the war in Ukraine which is affecting food, fuel, and steel products prices as well as access to international finance.”
“Besides, to achieve the Sustainable Development Goal (SDGs) and the African Union’s Agenda 2063, intra-African Trade will undoubtedly play a key role in ameliorating the poor living conditions of the disadvantaged and repositioning them towards medium to long term inclusive and sustainable growth.”
The United Nations Industrial Development Organization (UNIDO), Global Affairs Canada and the Government of Ghana, through the Ministry of Environment, Science, Technology & Innovation (MESTI), have launched the Ghana Circular Economy Centre Project to support the country’s just transition to a circular economy. “As Ghana seeks to diversify its economy, create export revenue and improve labour and capital productivity, it is also aiming to become a global leader in the transition to circular economy”, said Dr. Kwaku Afriyie, Minister for Environment, Science, Technology and Innovation (MESTI), during the launch event. He reminded stakeholders about the need for all to contribute to environmental protection by thinking and acting circular at all times, “Transitioning to a circular economy will be advantageous to Ghana and will help the country generate green decent jobs, reduce inequality, minimize the impact of climate change on the environment, and provide the economy with a competitive advantage”.
That controversial duty on imported vehicles (The Guardian Nigeria)
The controversy surrounding the recent imposition of 15 per cent National Automobile Commission (NAC) levy on imported used vehicles by the Nigeria Customs Service (NCS) is not unexpected, given the struggling economic condition of Nigerians, and the complications that are bound to attend the levy. Stakeholders such as the African Association of Professional Freight Forwarders and Logistics and the Association of Nigerian Licensed Customs Agents, among others have bluntly rejected the new tax while a few others are largely indifferent in this regard. The NCS, on its own part has indicated that the reported increases are as a result of the migration of the Service from the old version of the ECOWAS Common External Tariff (CET) to the new one commencing in 2022, in line with the World Customs Organisation. This has raised some issues in relations to the conduct of import trade in the country.
The situation needs to be properly reviewed given that while the Customs Services in many other African countries are reducing taxes, the NCS is introducing new ones with the backing of the Federal Ministry of Finance. All these have significant impact on the price of used cars and other related goods in the Nigerian economy. The quest for more revenue by government should not lead to some unnecessary crisis at the ports.
How nanotechnology can revive Nigeria’s textile industry (The Conversation)
Nigeria’s cotton production has fallen steeply in recent years. It once supported the largest textile industry in Africa. The fall is due to weak demand for cotton and to poor yields resulting from planting low-quality cottonseeds. For these reasons, farmers switched from cotton to other crops. Nigeria’s cotton output fell from 602,400 tonnes in 2010 to 51,000 tonnes in 2020. In the 1970s and early 1980s, the country’s textile industry had 180 textile mills employing over 450,000 people, supported by about 600,000 cotton farmers. By 2019, there were 25 textile mills and 25,000 workers. The industry competes in a global textile market that was valued at US$ 993.6 billion in 2021 and is expected to grow at a rate of 4.0% from 2022 to 2030. Once the continent’s leader, Nigeria spends on average US$4 billion a year to import textiles that it could produce itself. Imports put pressure on foreign exchange reserves, jobs and local demand for cotton. Technical innovation could make the textile sector more competitive – not only by improving cotton production but also by improving textile quality. This can be achieved in Nigeria.
Nowadays, textiles’ properties can be greatly improved through nanotechnology – the use of extremely small materials with special properties. Nanomaterials like graphene and silver nanoparticles make textiles stronger, durable, and resistant to germs, radiation, water and fire. Adding nanomaterials to textiles produces nanotextiles. These are often “smart” because they respond to the external environment in different ways when combined with electronics. They can be used to harvest and store energy, to release drugs, and as sensors in different applications.
At the moment, Nigeria is not benefiting from nanotextiles’ economic potential as it produces none. With over 216 million people, the country should be able to support its textile industry. It could also explore trading opportunities in the African Continental Free Trade Agreement to market innovative nanotextiles.
Optimizing U.S. Strategic Policy: A Regional Approach to Ethiopia (The Strategy Bridge)
The world order that emerged after the collapse of the Soviet Union is fading. The economic, political, and security interests of the United States are being challenged globally. Between the war in Ukraine, heightened tensions in the South China Sea, hostile rhetoric and behavior from North Korea and Iran, and a “wildfire of terrorism” in Africa, policy development and resource management have become a bewildering exercise. Within such a complex environment, the U.S. risks being caught off-guard by regions lower in policy priority that hold enormous potential to increase global instability.
The U.S. government’s approach to the unresolved conflict and weaponization of hunger in Ethiopia highlights these dilemmas, frustrating interventions rather than resolving them.
The opportunity exists in Ethiopia for the U.S. to change how it approaches foreign aid, conducts bilateral relationships, and facilitates regional security roles in Africa. U.S. policy should focus on enhancing the capacity of African-led regional bodies to moderate and reconcile closely linked political, economic, and security issues that often degenerate into humanitarian crises. A regional approach in Ethiopia and elsewhere in Africa can help to protect U.S. interests from hurried unilateralism and excessive burdens on limited national resources, if stewarded effectively. Ethiopia is a potential model and case study for the viability of regionally-led solutions to threats against U.S. interests abroad.
African trade and integration news
The 2021 African Integration Report issued under the theme “Putting Free Movement of Persons at the centre of Continental Integration”, is based on the African Multidimensional Regional Integration Index (AMRII). The Index was developed by the African Union Commission (AUC) and the Regional Economic Communities (RECs), with the participation of the Association of African Central Banks and national statistical agencies. The 2021 Africa Regional Integration Index (ARII) assesses the regional integration status and efforts of African countries. ARII compares each country to the other countries in its regional economic community and to the countries of Africa as a whole.
The report captures the opportunities and challenges that come with these significant developments in the African regional integration agenda and provides a comprehensive and structured review of the status of integration and gives innovative policy recommendations for accelerating the ongoing regional integration process.
The overall assessment score for the integration process within the continent is 0.62 on a scale of 0 to 1. The overall AMRII scores for each of the RECs are the arithmetic mean of the scores obtained in the 8 dimensions of the index. These scores are a reflection of the efforts made within each of the RECs. The RECs which are making the most effort are, the East African Community (EAC); the Economic Community of West African States (ECOWAS); the Common Market for Eastern and Southern Africa (COMESA); the Economic Community of Central African States (ECCAS). Overall, they have scores exceeding 0.6 in a rating range between 0 and 1. On the other hand, the Intergovernmental Authority on Development (IGAD); the Community of Sahel-Saharan States (CEN-SAD); and the Arab Maghreb Union (AMU) are just above the average value of 0.5. The fact of not having defined plans or programmes in certain dimensions of integration such as free movement, financial and monetary integration is one reason for the poor overall performance of these RECs.
The Report shows that the average progress of the RECs in the implementation of free movement of persons is moderate at 0.68 on a rating scale between 0 and 1. ECOWAS and EAC stand out from other RECs in the evaluations, with respective ratings of ECOWAS (100%) and EAC (96%); all the other RECs score below 65%. This can be explained by the difficulties experienced in either implementing the regional free movement protocols or the abolition of visas in their Member States.
VITAL INDEX: Standard Bank launches its Africa Trade Barometer to plug information gap (Daily Maverick)
Economies in sub-Saharan Africa have struggled to regain their growth momentum after Covid-19. The region is not rising, nor collapsing, but it is decelerating, says Dr Albert Zeufack, the World Bank’s chief economist for Africa. In particular the region’s three largest economies — Nigeria, South Africa and Angola — are experiencing sluggish growth momentum. Beyond the short-term shocks inflicted by the pandemic and Russia’s invasion of Ukraine, reviving Africa’s fortunes requires deeper structural changes that will transform subsistence agriculture, support the creation of smart cities and accelerate maths and science education. These objectives seem so Herculean that they often lead to paralysis. However, recognising that trade is Africa’s heartbeat and that stimulating trade would drive economic growth, it’s possible to ask a smaller, more targeted question: what can be done to stimulate trade? One answer, from Standard Bank, is to provide business owners, investors and policymakers with detailed information on trade happening across the region. The result is the inaugural publication of Standard Bank’s Africa Trade Barometer, which will be released biannually.
“Trade is deeply rooted in Africa’s DNA and integral to its history and future development,” says Philip Myburgh, head of Trade and Africa-China at Standard Bank.
“Insight is key to leveraging trade to build resilience,” he says. “In a world of disrupted local and global supply chains — and on a continent with significant development and infrastructural challenges — businesses face an array of both new and perennial risks. Understanding and resolving pain points in this landscape requires insight.”
AfCFTA: Why regional support is crucial for effective implementation (The New Times)
In order to support the implementation processes of the African Continental Free Trade Area agreement, Regional Economic Communities (RECs) need to make informed choices about how to reap the benefits presented by the agreement, while at the same time managing the challenges that may be encountered in the course of the implementation. Wamkele Mene, Secretary-General of the AfCFTA Secretariat, stressed this Tuesday, June 7, on the occasion of the second coordination meeting of the CEOs of RECs, on the implementation of the AfCFTA held at the EAC Headquarters, in Arusha, Tanzania. The meeting sought to take stock of the progress made since the last meeting in Accra in 2021. Mene said the implementation of the AfCFTA will likely influence future trade policies of the RECs. “In this regard, effective collaboration between the RECs and the AfCFTA Secretariat is necessary to ensure that the AfCFTA outcomes are consistent with regional advancements in trade integration made thus far and the projections for the future,” Mene said. “Therefore, the coordination meetings offer us an opportunity to listen to one another, to better understand our areas of difference, and to work together to build consensus around common positions critical to our success at creating an African Economic Community.”
Afreximbank Backs Titan Trust Bank with a US$300 Million Intra-African Investment Finance Facility (Afreximbank)
African Export Import Bank (Afreximbank) has announced the disbursement of a US$300 million Intra-African Investment Financing Facility to Titan Trust Bank (TTB) to support its acquisition of a majority stake in Union Bank Plc, Nigeria (UBN). The deal will enhance the competitive dynamics of the Nigerian banking sector, while maintaining confidence in the country’s financial services and broader financial stability. The recently disbursed financing will complement the funds required for the proposed acquisition. Afreximbank’s financial support enables TTB to secure the acquisition of a well-capitalised bank with an extensive network, enabling the entity to better serve vital economic activities of the public sector, companies, and small and medium-sized enterprises.
Afreximbank will continue to support the new merged entity in trade finance to promote intra- and extra-African trade through its broad range of programmes and initiatives, including the Afreximbank Trade Facilitation Programmes (AfTRAF) and AfPAY, the Bank’s international payment services. The development impact of the acquisition is immense as TTB will leverage the merged entity to provide financing of about US$3 billion over the medium term of which over US$600 million will directly support intra-regional trade finance.
AfcFTA: 28 banks join $500m pan-African settlement platform (Daily Trust)
One year after the take-off of the African Continental Free Trade Agreement (AfCFTA), no fewer than 28 banks in Africa joined the Pan-African Payment and Settlement System (PAPSS), which took off with a $500m facility with an additional 24 banks on the waiting list. PAPSS is a creation of the African Export-Import Bank (Afreximbank) to facilitate intra-African trades through the settlement of transactions in local currencies in the light of the AfCFTA take-off. Daily Trust reports that there are over 40 different currencies in the African continent and over time many traders within the continent would be demanding for payment in foreign currencies, especially dollars.
The pilot scheme of the payment system took off with $500m in West Africa while 28 banks have so far joined the platform even as 24 others are on the verge of signing into the platform.
Ogbalu disclosed that the target is to bring the over 500 banks in Africa on board while there are plans by the Afreximbank to increase the contribution to $3bn as soon as the pilot scheme in West Africa completes.
AFCFTA-Anchored Pharma Initiative Holds Virtual Induction of National Pharma Consultants (UNECA)
The United Nations Economic Commission for Africa (ECA)’s led AfCFTA-anchored Pharmaceutical Initiative held a virtual induction meeting for the six (6) recently appointed National Pharmaceutical Consultants from 6 (six) of the 10 pilot countries (Djibouti, Ethiopia, Kenya, Rwanda, Seychelles & Sudan), spread out over a 5-day period. The induction focused on the three key pillars, namely, Pharmaceutical Pooled Procurement, Localized Pharmaceutical Production, Regulatory Harmonization as well as Partnership & Resource Mobilization and Communications, commencing with a general introduction to the project, a discussion on administrative procedures, as well as what is expected from the consultants.
The Assembly of Heads of State and Government of the African Union held its 35th Ordinary Session on the 5th and 6th of February 2022 in Addis Ababa, Ethiopia. Discussions were held on several issues to meet the Agenda 2063 Aspirations for the “Africa We Want”:
The Assembly endorsed 2022 as the African Union Year of Nutrition under the theme “Strengthening Resilience in Nutrition and Food Security on The African Continent: Strengthening Agro-Food Systems, Health and Social Protection Systems for the Acceleration of Human, Social and Economic Capital Development”.
The Assembly adopted the proposed reforms of the organizational structures of the AU Organs, Representational, Technical and Specialized Offices including the Secretariat of the African Continental Free Trade Area (AfCFTA), the Economic, Social & Cultural Council (ECOSOCC), African Peer Review Mechanism (APRM) and the African Space Agency (AfSA)
Urged for signing and ratification of the legal instruments establishing the African Monetary Fund and African Investment Bank; and, in the case of the African Central Bank, advocate for rapid attainment of macroeconomic convergence to lead Africa towards Pan-African economic and monetary union.
The Assembly noted the progress achieved since the start of trading under the AfCFTA on 1 January 2021, and directed the AfCFTA Secretariat to implement the AfCFTA Private Sector Engagement Plan. The Assembly also held deliberations on other key issues: Migration; Adoption of Legal instruments; The 4th Mid-Year Coordination Meeting; The Summit on Industrialization and Economic Diversification; AU Humanitarian Summit and Pledging Conference; and Extraordinary Summit on Terrorism; and Key Appointments.
The future of African oil and gas: Positioning for the energy transition (McKinsey)
Africa’s oil and gas industry is entering a new era. As the world looks to accelerate its transition away from fossil fuels, the pressures on the continent’s oil and gas producing nations are mounting. Our analysis has found that most are highly exposed to the global energy transition, as their economies depend on oil and gas revenues, while their reserves both cost more to produce and are, on average, more carbon-intensive than oil and gas from other regions. At the same time, energy demand on the continent threatens to outstrip supply. Over the next two decades, rapid population growth and industrialization are expected to drive strong energy demand growth across the continent—including for fossil fuels. McKinsey modeling estimates that African energy demand in 2040 could be around 30 percent higher than it is today, compared with a 10 percent increase in global energy demand
While these dynamics bring challenges that will need to be negotiated, they also create a clear opening for the continent to take stock and reconsider its energy approach. If oil and gas producing countries in Africa consider steps to create enabling environments, improve access to available capital pools, and attract the right skills and capabilities, they could both meet the energy needs of their developing populations and position themselves strongly in a new energy landscape.
Africa seeks far-reaching climate policy and finance (African Business)
Many regions of Africa felt the health impacts of the Covid pandemic less strongly than other parts of the world, but the economic and social effects have still been keenly felt – and none more so than in efforts to tackle climate change. Construction of projects vital to the greening of the power system dropped behind schedule, while companies charged with supplying solar panels and clean cooking equipment struggled to keep going in the face of disrupted supply chains, movement restrictions and a fall in financial support from the international donor community. At the same time, Africans on low incomes seeking to buy clean energy products such as household solar panels deferred their purchases in the face of an uncertain future. But there are signs of a revival in the clean energy sector as Covid restrictions ease and business and daily life return to something approximating normal. But it remains to be seen whether the mechanism likely to bring the greatest improvement in climate outcomes on the continent – the UN climate change process – can be cranked up to full speed.
African leaders acknowledge that agreement over reducing the use of coal as a feedstock in power stations – responsible for about 40% of annual global CO2 emissions – is also a positive for the climate-vulnerable counties on the continent. But there was disappointment that China and India had weakened the wording of the commitment to ‘phasing down’ coal use, rather than pledging to phase it out in the near term. However, South Africa, the continent’s largest coal producer, did secure investments and loans of $8.5bn from international partners to transition from coal to green energy – said to be the largest single tranche of climate finance made to date.
At the same time as pushing coal usage down, South Africa also intends to invest in the growing green hydrogen economy, seeking to become a global hub by harnessing its copious solar and wind resources to produce hydrogen using electrolysis, a power intensive but clean method of production compared to commonly used methods using fossil fuels with carbon emissions as a by-product. South Africa has an added incentive to develop green hydrogen because it is a major source of platinum, which is used as a catalyst in the electrolysis process.
But overall, international support for climate change measures in Africa has fallen short of expectations. Developed countries still haven’t met a target set in 2009 to invest $100bn a year to help meet developing countries’ climate adaptation and mitigation needs – and many believe that even that amount is not enough.
Why E. Africa had a swift recovery from Covid impact (The Citizen)
The East African economies registered increased growth last year despite the devastating impact of Covid-19 in 2020.The growth averaged 5.9 percent in 2021 compared to an average of 2.3 percent in 2020 when the pandemic hit the region. This is contained in the bloc’s ‘Economic Performance and Outlook’ released ahead of last week’s tabling of the 2022/23 budget estimates. The speedy recovery is largely attributed to public investments and strong performance in the productive sectors. The growth (in 2021) was also largely supported by increased removal of Covid-19 related restrictions, mainly in the travel sector. Compared to 2021, projections are that the economic growth in the East African Community (EAC) bloc will decrease to 5.3 percent this year. The EAC budget estimates for 2022/23 fiscal year were tabled before the East African Legislative Assembly (Eala) on Thursday last week. The regional organisation intends to spend a total of $91.5 million, out of which $37.4 million will be raised by the development partners.
Turn EAC into a single tourism destination, Uganda lawmakers (Dailynews)
A group of Ugandan MPs visiting the country have urged East African Community (EAC) partner states to collectively promote and market the Community as a single tourist destination. Led by Richard Muhumuza Gafabusa, an MP for Bwamba County, the lawmakers said it was important for the partner states to harmonize their national laws on tourism and related sectors, a move he said will attract more tourists to the region. “It is very important to market EAC as a single tourist destination as the sector boasts of huge potential in natural resources,” observed the lawmaker. Despite the difference in resources, flora and fauna, the legislator insisted it was still possible to have EAC as a single tourism destination. “There is a need of fast-tracking the ratification of the Protocol on Tourism and Wildlife Management and for the EAC to provide additional resources for the Tourism and Wildlife Management Unit,” explained Mr Gabafusa, from the Uganda Tourism Board (UTB) pavilion here recently.
Iran eyes implementing barter trade with Africa (Tehran Times)
Iranian Trade Promotion Organization (TPO) deputy head for export markets development has said his organization is looking for ways to implement barter trade mechanisms with the country’s African trade partners, the TPO portal reported. “Given the implementation of barter trade mechanism by the Trade Promotion Organization with several countries, we hope to benefit from this platform with African trade partners as well,” Ahmad-Reza Alaei Tabatabaei said. The official noted that the TPO has prepared a list of 1,100 commodity items that can be included in the barter trade with African countries. Referring to the TPO plans to expand trade with Africa, Tabatabaei announced the improvement of export infrastructure and strengthening of the presence of Iranian commercial attachés in the said continent.
According to the official, the most important challenge for Iranian businessmen regarding Africa is the lack of knowledge and familiarity with its markets. He further noted that another important challenge in the way of expanding trade with African countries is transportation and logistics, especially the need for developing maritime transportation infrastructure.
Global economy news
It’s time to rebuild the WTO and make international trade a lever for sustainable development (Equal Times)
The World Trade Organization (WTO) is holding its twelfth ministerial conference from 12 to 15 June in Geneva, Switzerland, against a background of conflictual international relations. Mired in its own existential crisis, the WTO has become incapable of fulfilling the role entrusted to it when it was created in 1995 – negotiating world trade rules and resolving trade disputes. This crisis is an opportunity to rebuild a WTO that supports ecological transition, decent work and the fight against pandemics.
As a result of the WTO’s paralysis, trade negotiations are taking place outside its framework through dozens of bilateral and regional free trade agreements, which have continued to steadily rise in number. The new WTO Director-General, Ngozi Okonjo-Iweala, aims to restore the WTO’s status.
The WTO’s existential crisis is an opportunity to reshape it to make world trade more consistent with sustainable development objectives. Firstly, negotiations will not break the deadlock unless they take into account the interests of developing countries. While the latter want to strengthen the “special and differential treatment” they enjoy, the developed countries want to reduce its scope. The WTO grants not only specific treatment to the 46 least developed countries, but also preferential treatment to all developing countries, which can generally be given more time than developed countries to implement liberalisation agreements.
Secondly, a solution must be found to resolve the trade disputes between Western countries and China.
Thirdly, the paralysis of the WTO Appellate Body is an opportunity to reform it and to strengthen the possibility of using anti-dumping measures.
Extending safeguarding measures to social and environmental issues would give states sufficient scope for action to curb dumping and make international trade a lever for sustainable development.
Finally, the majority of trade now takes place under preferential agreements, as a result of the proliferation of bilateral and regional free trade agreements. These are allowed under Article XXIV of the General Agreement on Tariffs and Trade, but they lead to a fragmentation of the international trading system. The fundamental problem with these bilateral free trade agreements is that they guarantee binding rights for transnational corporations and investors, but not their obligations with regard to social and environmental standards.
Manufacturing sector recovery continues but future is unpredictable (UNIDO)
The most recent data on global manufacturing production, covering the fourth quarter of 2021, confirm the recovery of the world economy and its manufacturing sector, albeit with seasonal, regional and sectoral differences. High technology industries had a better production performance and, therefore, recovered faster. It is clear from the data that the economic situation keeps improving as many countries gradually phase out economic and social restrictions, although new trends in the pandemic may still jeopardize the fragile recovery, as shown by recent events in South-East Asia.
The latest UNIDO World Manufacturing Report, published by the United Nations Industrial Development Organization (UNIDO), includes the most recent official data on global manufacturing production. The Quarterly Report points to a recovery with a year-over-year growth of 3.3 per cent in the fourth quarter of 2021, but also shows a different pace of recovery across regions and sectors.
The UNIDO report also reveals varying trends across industrial sectors. Currently, medium-high- and high- (4.7 per cent), as well as low-technology industries (3.8 per cent), achieved a better production performance than industries using medium-low technology (1.4 per cent), such as manufacturing of mineral products or basic metals. Many of the higher-technology industries have already reached and exceeded their pre-pandemic production levels. However, one exception to this is the manufacturing of motor vehicles. The sector has not been able to return to production levels prior to the pandemic and even faced a year-over-year output reduction of 9.1 per cent this quarter due to supply chain difficulties.
WTO report highlights role of trade in meeting SDGs and assisting economic recovery (WTO)
In its report to the 2022 HLPF, the WTO emphasizes the contribution of trade to improving people’s livelihoods and achieving the five SDGs under review.
On SDGs 14 and 15, the report highlights that WTO rules provide space for accommodating environmental concerns, such as measures aimed at protecting life below water and on land, in trade policy considerations. At the WTO, negotiations are under way, the report underlines, on curbing harmful fisheries subsidies while groups of members are discussing three new environmental initiatives: (i) Trade and Environmental Sustainability Structured Discussions (TESSD), (ii) Informal Dialogue on Plastics Pollution and Environmentally Sustainable Plastics Trade (IDP) and (iii) Fossil Fuel Subsidy Reform (FFSR).
Leaders and decision-makers in the rapidly evolving digital sphere have affirmed their commitment to harness new and emerging technological solutions for the good of all of humanity. This year’s World Summit on the Information Society (WSIS) Forum, building on a wide-ranging international policy discussion process started in 2003, reasserted the vital link between digital technologies and global action to ensure sustainable development. Information and communication technology (ICT) experts and implementers fostered ground-breaking partnerships, showcased the latest innovations, exchanged best practices, and announced new tools and initiatives, particularly in the Forum’s intense final week in Geneva, Switzerland.
“Digital technologies offer solutions to all these challenges,” said Houlin Zhao, Secretary-General of the International Telecommunication Union (ITU), one of the Forum’s main organizers. “In these past 11 weeks, the WSIS Forum has brought to life the many benefits of ICTs in areas as critical and diverse as education, health, financial inclusion, climate change, accessibility, cybersecurity, smart cities, and many more.”
War in Ukraine threatens to unleash ‘unprecedented wave’ of global hunger and destitution (UNCTAD)
More than three months since the start of the war in Ukraine, people globally are facing a cost-of-living crisis not seen in more than a generation, with escalating price shocks in the global food, energy and fertilizer markets – in a world already grappling with the COVID-19 pandemic and climate change. An estimated 1.6 billion people in 94 countries are exposed to at least one dimension of the crisis, and about 1.2 billion of them live in “perfect-storm” countries which are severely vulnerable to all three dimensions – food, energy and finance – of the cost-of-living crisis, according to the latest findings of the United Nations Secretary-General’s Global Crisis Response Group (GCRG) on food, energy and finance systems.
New UN Food Outlook report: World’s most vulnerable are paying more for less food (FAO)
The global food import bill is on course to hit a new record of US$1.8 trillion this year, but higher prices and transport costs rather than volumes account for the bulk of the expected increase, according to a new report released today by the Food and Agriculture Organization of the United Nations (FAO).”Worryingly, many vulnerable countries are paying more but receiving less food,” FAO says in its latest Food Outlook. The global food import bill is projected to rise by $51 billion from 2021, of which $49 billion reflects higher prices. Least Developed Countries (LDCs) are anticipated to undergo a 5-percent contraction in their food import bill this year, while sub-Saharan Africa and the group of Net Food-Importing Developing Countries are both expected to register an increase in total costs, despite a reduction in imported volumes. “These are alarming signs from a food security perspective, indicating that importers will find it difficult to finance rising international costs, potentially heralding an end of their resilience to higher prices,” the report notes.
“In view of the soaring input prices, concerns about the weather, and increased market uncertainties stemming from the war in Ukraine, FAO’s latest forecasts point to a likely tightening of food markets and food import bills reaching a new record high,” said FAO economist Upali Galketi Aratchilage, lead editor of the Food Outlook.
FAO has proposed a Food Import Financing Facility to provide balance-of-payment support to the low-income countries most reliant on food imports as a strategy to safeguard their food security.
DG Okonjo-Iweala and negotiations chair join call to ‘stop the fish meltdown’ on Ocean Day (WTO)
With only days before the MC12, which will be held on 12-15 June in Geneva, DG Okonjo-Iweala and Ambassador Wills welcomed joint efforts of over 180 environmental organizations to draw attention to ongoing WTO negotiations for new global rules on fishing subsidies that will combat the depletion of fish stocks and secure the livelihoods of people who depend on them.
Under the mandate from the previous Ministerial Conference and the UN Sustainable Development Goal Target 14.6, negotiators have been given the task of securing agreement on disciplines to eliminate subsidies for illegal, unreported and unregulated fishing and to prohibit certain forms of fisheries subsidies that contribute to overcapacity and overfishing, with special and differential treatment being an integral part of the negotiations.
Related News
tralac Daily News
Local news
Just transition holds opportunities, but also risks for South Africa’s liquid fuel value chain (Engineering News)
A just transition of the liquid fuels value chain to a low- and zero-carbon value chain presents opportunities for South Africa, but also holds risks in terms of timing and the impact of the transition on workers and employment. These were some of the impacts discussed by researchers and industry practitioners and experts during a virtual event hosted by economic research institution Trade and Industrial Policy Strategies (TIPS) on June 7.
Shipping industry disruption trends and the impact on insurance (COVER Magazine)
As factories and supply chains come back to life after years of pandemic-related lockdowns, it is causing transport bottlenecks, rising shipping costs, and shortages of commodities. South Africa also faces large-scale congestion and logistical challenges at its ports, due to decaying railway infrastructure, as well as damage from the floods in Kwa-Zulu Natal. What is the impact on insurance during such an unprecedented time? There is a perfect storm brewing in the shipping industry. Brought on by an extraordinary set of global and local circumstances, it is having the domino effect of driving global and local inflation to levels not seen for decades, with significant cost implications on the transportation of goods, as well as the goods themselves.
“The impact of this situation on South Africa could undermine post-COVID-19 economic recovery. Consumers and businesses may have to make difficult trade-offs when it comes to the transportation of goods, paying an inflated price for these items, and coping with shortages,” says Boyd.
Govt probes energy price impact (New Era)
Finance minister Iipumbu Shiimi said government has embarked on a study to fully comprehend the overall impact of elevated energy prices on food prices and supplies. The study aims to mitigate the impact of increasing energy prices and aims to determine any additional measures government has to take to reduce the burden on businesses and consumers. Shiimi made these remarks on Monday at the press briefing where government officials provided feedback on the just ended World Economic Forum in Davos, Switzerland. Consumers have been struggling with massive increases in food prices and more expensive bank loans, factors forcing them to tighten their belts even more. On top of this, the country has experienced massive fuel price increases.
In order to mitigate the local impact of rising international oil prices, the mines and energy ministry temporarily reduced fuel levies by 50%. In April 2022, Cabinet approved the ministry’s recommendation to temporarily reduce these levies from May to July 2022. Fuel levies and taxes make up 34% to 45% of the cost of Namibian fuel per litre.
Specific levies imposed on Namibian petrol and diesel prices include a customs and excise duty for the SACU Revenue Pool; National Energy Fund Fuel Levy (comprised of the fuel equalisation levy, Namcor levy and National Oil Storage Facility levy); road user charges, which go to Road Fund.
KQ eyes more cargo flight for Kisumu route (Business Daily)
Horticulture business in the Lake Region is set to get a boost as the national carrier, Kenya Airways plans to increase cargo flights at the Kisumu International Airport. Kenya Airways also plans to triple cargo flights to the Netherlands and United Kingdom. “We are likely to have more frequencies of shipment being lifted from Kisumu,” said Kenya Airways Cargo officer Joseph Omwanda.
Some of the fresh produce in the Lake Region include avocados, fish, chilies, mangoes, pineapple, peanuts, bananas and traditional green vegetables. The news come as the region plans to resume the export of chili from Kisumu. The shipment of the produce had taken a break due to low supply.
Uganda has reached middle income status, says Museveni (Monitor)
Uganda has reached the middle income status despite an onslaught of crises in the past three years, President Museveni said on Tuesday. According to official data, the nation’s economy stood at about $45.7billion by the exchange rate method or $131billion by the Purchasing Power Parity (PPP) system- one week to the FY2022/23 Budget Day. “This means that the GDP per capita is $1046. We have now passed that figure of middle income status ($1,030),” Mr Museveni observed as he delivered the annual State of the Nation Address in Kampala. Speaking in-person to mainly ruling NRM party legislators, Mr Museveni June 7 expressed confidence that Uganda would maintain its spot above the middle income status GDP per capita minimum of about $1,030.
Tanzania to spend $3b to service debts: Finance minister (The East African)
The Tanzanian government is planning to spend Tsh9.09 trillion ($3.9 billion) on debt servicing during the financial year 2022/23, Finance and Planning Minister Mwigulu Nchemba has said. The amount is part of the Tsh14.94 trillion ($6.4 billion) that he requested Parliament to endorse for his ministry’s budget for the next financial year that is set to kick off on July 1, he said on Tuesday. Dr Nchemba told Parliament that out of the Tsh14.94 trillion ($6.4 billion), about Tsh13.62 trillion ($5.8 billion) is meant for recurrent expenditures, with the rest being channelled into development projects
Ghana moves motion on accelerating Intra-African trade at ongoing 52nd CPA Regional Conference (GBC Ghana Online)
Ghana’s delegation at the 52nd CPA Africa Regional Conference has moved a motion on the role of African Parliaments in accelerating Intra-African trade. The motion which was moved by the Majority Leader, Osei Kyei-Mensah-Bonsu on behalf of the Rt. Hon. Speaker, Alban Sumana Bagbin, and the Parliament of Ghana as a whole are expected to fashion out ways to stimulate local and intra-African trade in a bid to reduce the shocks of the global crises being felt by African countries. Mr. Kyei-Mensah-Bonsu in moving the motion outlined the significance of the trade agreement which he said will turn around the negative to extremely low economic growth being witnessed on the African market as well as its unsustainable fiscal deficits and the constant increase in rising debt levels. “As a direct consequence of Covid- 19, African economies experienced negative to extremely low economic growth, unsustainable fiscal deficits, rising debt levels, huge populations being pushed below the poverty brackets, and balance of payment problems. As African economies were about to emerge from the shocks of Covid-19, entered the war in Ukraine which is affecting food, fuel, and steel products prices as well as access to international finance.”
Nigerian seaports to undergo upgrade, boost trade (The Guardian Nigeria)
Nigerian seaports have experienced decades of infrastructural decay and reduction in commercial shipping activities. At a recent media parley, the Managing Director of the Nigerian Ports Authority (NPA), Mr. Muhammad Bello-Koko, decried the long years of abandonment and highlights the authority’s efforts to make ports real catalysts of trade.
We have very old ports. One of the major problems of the Eastern ports is the decay in infrastructure. Tin Can Island port is practically collapsing. Therefore, we took a holistic review of those decaying infrastructures and decided to focus our budget on the rehabilitation of the quay walls and others.
We must rehabilitate Tin Can, Apapa and other ports. What we have done was to start talking to lending agencies, but we don’t intend to borrow from them. We are asking the terminal operators if they have operated in this place for 10 to 15 years, especially as some of them, their leases are about to expire, we need to know how much money are they going to put back into this.
Nigeria Air: NCAA Re-Echoes SAATM, AfCFTA Benefits (The Will)
The Director-General of the Nigerian Civil Aviation Authority (NCAA), Capt Musa Nuhu, has advised that, for Nigeria to benefit fully from the Single African Air Transport Market (SAATM) initiative, the country has to build strong airlines. Speaking at the presentation of Air Transport Licence (ATL) to interim management of Nigeria Air on Monday in Abuja, Capt Nuhu said that ATL was a prerequisite for the airline to acquire Air Operation Certificate (AOC) to start operating. According to him, the NCAA works and supports all operators currently existing and aspiring in the industry to get necessary documents after meeting all the requirements.
Informing that the regulator works with the operators, he emphasised that “As a regulator, we work with operators. That is a goal to promote the growth of the industry. It is important to have strong airlines in Nigeria in view of the Single African Air Transport Market.”
Inside Dongo Kundu’s plan to create regional industrial hub (Business Daily)
The Dongo Kundu Special Economic Zones Authority (SEZ) is set to start in July, kicking off a chain of events that are expected to make Mombasa a regional logistics and manufacturing hub. The centre will comprise an export-processing zone (EPZ), industrial parks, free trade zones, as well as other auxiliary services such as tourism, meeting, conferencing and exhibitions. It will also have zoned residential areas for workers. “Phase one consisting the industrial park - one of the projects whose detailed designs have been completed—will include, the port, the free trade zone, power supply, as well as water reservoir,” said Kiyonori Matsushima the Special Economic Zone Development Advisor at JiCA.”Already a port access road inside the zone and SEZA administration block are under construction. The latter is set for completion within the year.”
Tunisia Plans Gradual Subsidy Cuts in 2023 as IMF Deal in Focus (Bloomberg)
Tunisia will begin gradually reducing food and energy subsidies in 2023, its trade minister said, as the cash-strapped North African nation readies for fresh talks with the International Monetary Fund. The move will reduce subsidy spending that has risen to 4.2 billion dinars ($1.4 billion) in 2022 from 3.2 billion dinars the year before, minister Fadila Rabhi said Tuesday at a press conference. Cash transfers will be disbursed to people on lower incomes, she said.
African trade news
Instant payment systems are key for cross-Africa commerce (The East African)
The high cost of sending and receiving payments from one region to another is proving to be one of the biggest challenges to trading within Africa even as the continent eyes increased commerce and investment from a free trade area. The Africa Continental Free Trade Area (AfCFTA) is projected to increase the volume of exports in Africa by 29 percent and intra-Africa trade by 81 percent, lift over 60 million Africans from extreme poverty and raise the continent’s real income by seven percent to $450 billion by 2035.In East Africa, according to the United Nations Economic Commission for Africa (UNECA), AfCFTA will create at least eight million new jobs and yield an estimated $35 billion in welfare gains. But the high cost of cross-border transactions may haul the prospects of the continental trade agreement, added to the jitters of partial implementation of the terms of the same and persisting non-tariff barriers.
Private sector firms yet to leverage AfCFTA (BusinessGhana)
Majority of private sector firms in the country are yet to develop a corporate strategy to gain competitive advantage of the Africa Continental Free Trade Area (AfCFTA), nearly 18 months after trading started. A Senior Partner of AB & David Africa, a law firm, David Ofosu-Dorte, described the situation as worrying and urged the firms not to hesitate to come up with the strategy to enable them to benefit from the initiative. Mr Ofosu-Dorte, who was addressing the Ghana Academy of Arts and Sciences (GAAS) Forum 2022 in Accra last Monday, said the failure to develop a corporate strategy by businesses was not the lack of knowledge of the AfCFTA, but the lack of ability to take advantage of the initiative and see Africa as a big market for their products.
Rwanda to host Poultry Africa again, event takes place in October 2022 (Feed Navigator)
The Africa focused trade show, showcasing feed to food innovation for the poultry industry in Sub-Saharan Africa, started in 2017 as a biennial B2B international trade show, and this year’s event, in Kigali, Rwanda, will be the third edition. The show will be located in the Kigali Convention Centre (KCC), one of the largest venues in the region.
Africa’s poultry industry is set for strong growth over the next decade, according to forecasts from Rabobank. It says the industry could grow at a compound annual rate of around 4.7% from a current valuation of US$25bn, with markets such as South Africa, Nigeria, Algeria, Ethiopia, and Morocco leading the charge.
Global economy news
OECD Economic Outlook reveals heavy global price of Russia’s war against Ukraine (OECD)
Russia’s invasion of Ukraine immediately slowed the recovery from the COVID-19 pandemic and set the global economy on a course of lower growth and rising inflation. The OECD’s latest Economic Outlook projects global growth to decelerate sharply to around 3% this year and 2.8% in 2023, well below the recovery projected in the previous Economic Outlook last December.
The economic and social impact of the war is strongest in Europe, with many of the countries hardest hit in Europe, given exposure through energy imports and refugee flows.
“Countries worldwide are being hit by higher commodity prices, which add to inflationary pressures and curb real incomes and spending, dampening the recovery,” OECD Secretary-General Mathias Cormann said during the presentation of the Outlook. “This slowdown is directly attributable to Russia’s unprovoked and unjustifiable war of aggression, which is causing lower real incomes, lower growth and fewer job opportunities worldwide.”
DG Okonjo-Iweala urges members to seize opportunity at MC12 to deliver meaningful outcomes (WTO)
“Many gaps remain but we are making progress. Let us keep on the pressure, let us keep up the work at this critical juncture,” DG Okonjo-Iweala said in her role as Chair of the Trade Negotiations Committee (TNC). “The next hours will be critical. We need to use each hour effectively to close as many gaps as possible. The success of this whole endeavour is in our hands. Let us deliver. The people outside are waiting for us and, believe it or not, I really think we will do it.” Following the reports from chairs and facilitators of the respective negotiating bodies working on potential MC12 deliverables, the DG summarized the state of play of what she characterized as the “four pillars plus”: fisheries subsidies, agriculture, the WTO response to the pandemic (including the waiver to the Agreement on Trade-related Aspects of Intellectual Property Rights) and WTO reform, plus development and least-developed country (LDC) issues. Members have agreed on the need to close the remaining gaps before MC12 in these areas, she said, and ministers should be able to work in Geneva “with a manageable agenda and ensure productive ministerial engagement.”
Chair introduces streamlined agriculture negotiation texts for MC12 (WTO)
“We are on the verge of something positive,” the Director-General told the meeting. She once again urged members to show restraint in their comments, with a view to improving prospects for reaching consensus on the texts before the 12th Ministerial Conference (MC12), which begins on 12 June. The chair said the four-page document further streamlined the three draft negotiating texts, which comprise a draft ministerial decision on agricultural trade, a draft ministerial declaration on trade and food security, and a draft ministerial declaration on exempting from export restrictions food purchased by the UN’s World Food Programme (WFP) for humanitarian purposes.
She said the revised draft decision on agricultural trade sought to strike a balance across negotiating topics, without prejudicing any future proposals that members might want to table for discussion.
Plastic pollution: Can aid for trade help least developed countries tackle this crisis? (Trade for Development News)
As governments prepare for negotiations on a global treaty on plastic pollution, aid for trade can support LDC efforts to tackle this pollution crisis across the life cycle of plastics. Several pathways for cooperation can be pursued at the World Trade Organization. Plastic pollution is a major threat to the environment, human health, and sustainable development. In March 2022, governments adopted a landmark resolution at the United Nations Environment Assembly (UNEA) to launch negotiations on a legally binding international instrument on plastic pollution. The ambition is to conclude a treaty by the end of 2024. Importantly, the resolution addresses the full life cycle of plastics. In 2019, the value of international trade across the life cycle of plastics—from feedstocks and primary forms of plastics through to manufactured products and plastic waste—reached over US$1 trillion. This underlines the centrality of trade to the global plastics economy.
WTO updates joint indicative list of critical COVID-19 vaccine inputs (WTO)
The revised version of the list incorporates feedback received from industry and reflects 13 new critical inputs that were identified. These are mostly products relevant for the process of vaccine manufacturing such as consumables and specific equipment. In addition, the revision updates the indicative tariff codes to take into account the introduction of the changes resulting from the Harmonized System (HS) 2022 version.
Rich countries falling short on half their promised $40bn climate adaptation finance, research says (Sky News)
Rich countries are delivering little more than half the $40bn a year they promised to poor countries to help them adapt to impacts of climate change, according to new analysis.
Research by climate think tank the International Institute for Environment and Development (IIED) suggests developed countries and multilateral organisations are on track to channel $21.8bn in climate adaptation finance a year by 2025, more than $18bn short of the sum promised at last year’s COP26 climate talks.
“Climate change is now a reality,” said Madeleine Diouf Sarr, climate lead in Senegal’s environment ministry and chair of the Least Developed Countries (LDC) group of 46 vulnerable nations at COP talks. She told Sky News the latest report from United Nations scientists the IPCC showed the impacts are “worse in poorest countries like LDC countries, small island countries”, and highlighted the resources gap “between what is needed and what is actually available”.
It comes as negotiators meet in Bonn to examine progress made since COP26, and just before the G7 leaders summit where the UK - which retains the COP presidency until COP27 in November - will hope to put pressure on other rich countries.
Europe turns to Africa as energy crisis worsens (Voice Online)
EUROPEAN NATIONS are increasingly turning to Africa for energy resources as they attempt to wean their reliance off of Russian gas and oil amid the war with Ukraine. Algeria, Congo and Nigeria are already just some of the countries to have reportedly signed new deals across the continent. Earlier this month, the President of Senegal, Macky Sall, announced to the German Chancellor Olaf Scholz that the west-African country was “ready to work” on supplying liquid natural gas (LNG) throughout European nations. Along the border of Mauritius, it is understood that Senegal is in possession of the largest deposits of natural gas. It comes after African leaders and European oil giants met at the African Energy Summit in London last month to strike new oil trade deals which is expected to leave many African countries in debt.
Wheat exports ban to cut access for international speculators, says S Jaishankar (Moneycontrol)
India imposed a ban on wheat exports to protect the domestic market and to cut access for speculators, Indian External Affairs Minister, Subrahmanyam Jaishankar, told the Globsec 2022 Bratislava Forum on June 3.Lower output coupled with strong domestic demand had pushed the Indian government to impose a wheat ban on exports on May 14. However, trading firms that had already secured letters of credit (LCs) to export grain before the ban were allowed to proceed with those sales. The government had also made abundantly clear that it would continue to cater for the genuine need of neighbouring countries and food-deficit nations through government-to-government deals and fulfil supply commitments already made. “What we saw was that the low-income buyers were being squeezed out, the wheat was growing, but was actually being stopped from being traded, in a way our goodwill was being used for speculation. So, we had to do something to stop that, because it was also impacting us at home - prices were going up,” explained Jaishankar.
The role of industrial zones in SME growth in emerging markets (Oxford Business Group)
As governments across Africa look to bolster the economic potential of small and medium-sized enterprises (SMEs), industrial parks and special economic zones (SEZs) are emerging as key enablers of their development. SMEs are the backbone of the global economy, particularly in emerging markets, where they make up 90% of all businesses and create 50% of all jobs. The impact is higher in Africa, where SMEs employ around 80% of the continent’s workforce. But while SMEs are a major economic driver, there is also significant room for further growth.
Given their economic potential, supporting SMEs is seen as a key path to expanding the middle class and achieving more inclusive economic growth in emerging markets. Although SMEs have long been central to national growth and development plans, this focus has intensified as a result of the pandemic.
Related News
tralac Daily News
Local news
South Africa’s economy is now back to pre-pandemic levels (BusinessTech)
South African gross domestic product (GDP) expanded by 1.9% in the first quarter of 2022, representing a second consecutive quarter of upward growth. The size of the economy is now at pre-pandemic levels, with real GDP slightly higher than what it was before the Covid-19 pandemic, Statistics South Africa said on Tuesday (7 June). However, the release covers the first quarter of the year, which means that the economic impact of the devastating floods in KwaZulu-Natal, which occurred during the second quarter in April, will only reflect in the GDP results due for release in September. The release also largely ignores South Africa’s recent intense round of load shedding – which primarily occurred in March and April.
On the production side of the economy, eight of the ten industries recorded positive growth in the first quarter, with manufacturing the key performer. The sharp increase in manufacturing output was mainly driven by a rise in the production of petroleum and chemicals, food and beverages, and metals and machinery, StatsSA said. “Finance, real estate and business services, as well as trade, also made sizable positive contributions to GDP growth. Trade activity was buoyant in the first quarter, with positive results from wholesale, retail, motor trade, and catering and accommodation. “After a strong fourth quarter, agriculture growth was more subdued in the first quarter, edging higher by 0,8%. The rise in the first quarter was mainly underpinned by increased horticulture production.” On the downside, both mining and construction contracted in the first quarter.
IMF worried about impact of South Africa’s growth outlook on poverty (Engineering News)
The International Monetary Fund (IMF) said on Tuesday at the end of a visit to South Africa that its staff were increasingly concerned about the country’s economic growth outlook and the implications on employment, poverty and inequality. Africa’s most industrialised economy has recovered from the Covid-19 pandemic faster than many analysts had predicted, with data on Tuesday showing first-quarter output reached pre-pandemic levels.
Kenya’s Growth Expected to Slow in 2022 Due to Ongoing Drought, Ukraine Crisis (World Bank)
Kenya’s real gross domestic product (GDP) is projected to grow by 5.5 percent in 2022 and 5.2 percent on average in 2023–24. This growth rate, while still strong, will be a moderation following a remarkable recovery in 2021 from the worst economic effects of the pandemic, when the country’s economy grew by 7.5 percent, much higher than the estimated average growth in Sub-Saharan Africa of 4 percent. According to the 25th edition of the World Bank Kenya Economic Update, Aiming High: Securing Education to Sustain the Recovery, the impact of the war in Ukraine is weighing on the global economic recovery from the pandemic. Domestically, a key risk to the outlook is a further worsening of the current drought, which is having a devastating effect on food security and livelihoods in affected parts of the country and is necessitating increased social spending on food assistance. For example, using the Integrated Food Security Phase Classification, it is estimated that 3.1 million Kenyans (out of 13.6 million) living in counties with arid and semi-arid land are food insecure. The baseline economic projections assume that below average rains will hamper agricultural performance and accounts for the downside effects of the ongoing war in Ukraine through increased global commodity prices.
Coffee trade risks disruption in July as new rules start (Business Daily)
Kenya’s multi-billion-shilling coffee trade is at risk of disruption starting July as the Capital Markets Authority (CMA) and Nairobi Coffee Exchange remain mum over the establishment of the Direct Settlement System (DSS) as the old regulations come to an end this month. The CMA had extended the use of the old coffee regulations to June 30 in the absence of DSS in place. The platform is meant to facilitate payment between farmers and coffee brokers. The new law — the Capital Markets (Coffee Exchange) Regulations 2020 — was to be effected in July 2020 but since then it has been postponed twice amid fights between the CMA and the Ministry of Agriculture.
Ghana to lose out on AfCFTA gains due to high cost of doing business – AGI (BusinessGhana)
As the cost of doing business continues to rise in the country, the Association of Ghana Industries (AGI), is cautioning that Ghana could miss out on the expected benefits from the much-touted African Continental Free Trade Area (AfCFTA).
Data from the Ghana Statistical Service shows that the year-on-year producer price inflation which measures the average change in the prices of goods and services received by domestic producers for their production activities increased to 31.2%.
The 31.2 % year-on-year producer price inflation for all industries indicates that between April 2021 and April 2022, prices received by domestic producers for the production of their goods and services increased by 31.2 %.
In April 2022, two out of the sixteen major groups in the manufacturing sub-sector recorded inflation rates higher than the sector average of 38.6 percent. Manufacture of coke, refined petroleum products and nuclear fuel recorded the highest inflation rate of 76.1 percent, while the Publishing, printing and reproduction of recorded media recorded the least inflation rate of 2.6 percent
AFREXIM, NACC, experts seek solutions to challenges impeding AfCFTA (Businessday)
African Export-Import Bank (AFREXIM) and other trade experts have charged the Nigerian government to deploy mechanisms aimed at maximising the opportunities of Africa Continental Free Trade Area (AfCFTA), one year post-implementation. The experts gave the advice on Tuesday during a Breakfast Meeting organised by the Nigerian-American Chamber of Commerce (NACC) in Lagos. The meeting had the theme: “One Year of AfCFTA: Opportunities, Challenges and the Nigerian-American Partnership”. They said the call became pertinent following observations that the country was not harnessing the benefits of the AfCFTA due to structural and trade-related issues such as inadequate payment system integration, logistics and trust. Mr Mike Ogbalu, Chief Executive Officer, Pan-African Payment and Settlement System (PAPSS), said there was a need for Nigeria to utilise the efficient payment system to facilitate Intra-African trade.
He said the platform if utilised would save African traders about 5 billion dollars annually in currency convertibility. “Intra-African trade is about 15 to 18 per cent which is by far the lowest intra-continental trade globally. “High cost, high dependence on foreign exchange and inefficient payment systems contribute to these poor statistics. “Cross-border transactions are very expensive leading to an estimated five billion dollars in payment charges annually. “Most cross-border payment transactions originating from African banks are cleared outside the continent with less than 20 per cent of the total payment flows being cleared in Africa.
Egypt’s exports to EU, int’l blocs rise by 77% in 2021 (Egypt Today)
Egypt’s exports to the international blocs of which the African country is not a member rose by 76.9 percent in 2021 to reach $20 billion up from $11.3 billion in 2020, the Central Agency for Public Mobilization and Statistics (CAPMAS) has reported.
Egypt’s exports to the European Union (EU) ranked first among these blocs as they rose by 85.9 percent from $7.8 billion in 2020 to $14.6 billion in 2021, the country’s statistical agency said. This was followed by the Egyptian exports to North American Free Trade Agreement (NAFTA) bloc, which amounted to $3.4 billion in 2021 against $2.4 billion in 2020, up by 44.4 percent. The European Free Trade Association (EFTA) came last regarding the Egyptian exports, which declined by 65.9 percent to reach $51.6 million down from $151.1 million in2020.
On the other side, Egypt’s imports from these blocs rose by 14.2 percent to amount to $38.1 billion in 2021 compared to $33.3 billion in the previous year.
Egyptian Ministries Sign Export Deals to African & Arab Nations (Cairoscene)
Four landmark agreements were signed with various Egyptian entities at the 47th Annual Meeting of the Islamic Development Bank Group in Sharm El Sheikh, including the Ministry of International Cooperation, the Ministry of Planning and Economic Development, and the Ministry of Trade and Industry. These deals include the establishment of the Export Academy under the Aid for Trade Initiatives for Arab States plan, which is hoped to increase exports to USD 100 billion annually. The other agreements involved signatures from other members of the Arab Africa Trade Bridges (AATB) Program, which will help enhance Egyptian exports across Africa by organising Egyptian trade missions, bringing Egyptian companies into trade fairs and economic forums in African nations, and involve Egyptian entities in workshops and meetings amongst exporters and importers all throughout the continent.
Djibouti strategically placed to become global ICT center, says Adesina (AfDB)
African Development Bank Group President Dr. Akinwumi Adesina met with President Ismail Omar Guelleh of Djibouti and senior government officials at the weekend to discuss the country’s economic progress and opportunities. Adesina was on a two-day official visit to the Horn of Africa nation. For more than two hours, he and President Guelleh discussed ways of transforming Djibouti’s economy as the country strives to achieve its vision of becoming an information, communication and technology (ICT) hub in the region.
Adesina said: “Djibouti needs to look beyond the port, diversify its economy and scale up development. Flying over the country, one sees huge tracts of dry land. But it is only when one meets and talks to the people in this country that one realizes, there is no drought in terms of ideas, creativity, passion and determination.”
SMEs Minister calls on businesses to use the WTO platform (Business in Cameroon)
The Cameroonian Minister of SMES, Achille Basilekin III, issued a note on May 30 to inform local economic operators of the existence of the TRADE4MSME platform. The latter was launched by the World Trade Organization (WTO) to accompany businesses and help them boost exports. “This important tool for promoting SMEs provides a set of information and useful data on export opportunities to growth markets, and informs on the regulatory and operational procedures relating to import and export, to enable micro, small, and medium enterprises to position themselves effectively in the international market,” the official said. This platform is presented as an aid to decision-making for SMEs in Cameroon.
Sierra Leone’s economy was severely impacted by COVID-19 in 2020 and the first half of 2021. Fiscal slippages, the war in Ukraine, and concerns about global growth pose renewed challenges. The surge in international fuel and food prices has set back a nascent recovery and projected growth in 2022 has been revised down to 3.6 percent, from 5.9 percent at the time of the 3rd/4th review in July 2021. The shock has added pressure in several areas, such as poverty and other key development indicators, inflation, exchange rate, foreign exchange reserves, as well as an already highly constrained fiscal position. Inflation has been revised up to 22.1 percent (end-of-period, 2022) from 12 percent, given higher import prices and exchange rate depreciation.
“The medium-term outlook remains challenging on account of the deteriorating terms of trade, more uncertain global prospects, and remaining COVID-19 risks. A global supply shock resulting from the war in Ukraine is negatively impacting global growth and accentuating inflation, with spillovers to Sierra Leone. Further increases in already high global fuel and food prices could deteriorate budget and external balances, as well as development outcomes.
African trade and integration news
Trade Barometer: Trade index (Standard Bank)
Launched in 2022, Standard Bank’s Africa Trade Barometer seeks to provide the analysis and insight to intelligently inform and grow Africa’s trade ecosystem.
The report focuses on Angola, Ghana, Kenya, Mozambique, Namibia, Nigeria, South Africa, Uganda, Tanzania and Zambia – and presents one of the most comprehensive views of actual trade, as experienced on-the-ground by real African businesses transacting within and between these 10 markets, as well as globally.
The Africa Trade Barometer serves as evidence of our ambition to become Africa’s leading trade bank, by providing the market insight to drive client growth across the continent.
Africa’s regional integration still lagging behind other regions (African Business)
Africa’s trade with the rest of the world far outweighs the level of trade between African countries, reducing the continent’s ability to deal with external shocks, said Stephen Karingi, Director of Regional Integration and Trade Division at the United Nations Economic Commission for Africa (ECA). A UNCEA report found that all regional economic communities in Africa, except the East African Community (EAC) and the Intergovernmental Authority on Development (IGAD), are importing more from the European Union than from within their own respective communities. “The most shocking thing is that only 11% of Africa’s agricultural produce is traded inside the continent,” said Karingi, reinforcing the need for the continent to shorten supply chains as agricultural commodities face supply constraints due to Russia’s invasion of Ukraine.
The African Continental Free Trade Area (AfCFTA) presents an enormous opportunity for Africa to boost intra-African trade, eliminating 90% of tariffs on goods and creating a single market of more than one billion consumers with a total GDP of more than $3trn. However, even though the AfCFTA was signed in 2018 there is still “a long way to go” to implement the free trade deal across African Union member states, Karingi said.
African countries must strengthen their efforts to absorb shocks – Songwe (African Business)
The Covid-19 pandemic has reversed two decades of development in Africa, driving an estimated 55 million people into extreme poverty in 2020, said Vera Songwe, Under-Secretary-General of the United Nations and Executive Secretary of the Economic Commission for Africa (ECA).
AfCFTA: Border hurdles dampen free trade deal expectations (The East African)
African traders and companies are facing challenges operating across the borders despite the opening up of a $1.2 billion market in January 2021.The latest study by the United Nations Economic Commission for Africa (UNECA) on selected African countries shows that things are not working on the ground after the African Continental Free Trade Area (AfCFTA) agreement came into effect on January 1 last year. The survey conducted in seven countries — Angola, Côte d’Ivoire, Gabon, Kenya, Namibia, Nigeria and South Africa — shows companies have a neutral to slightly negative perception of the investing and trading environment across Africa. The AfCFTA Country Business Index survey, which was launched in 2018, shows that the private sector has a negative perception of trade in goods, suggesting that more work needs to be done to remove tariff and non-tariff barriers. According to the survey, firms in the sampled countries appear to have negative perceptions of unauthorised charges, customs procedures and additional fees.
Regional parliament wants Rusumo border trade bottlenecks addressed (The New Times)
Members of the East African Legislative Assembly (EALA) on Tuesday, June 7, decried the numerous challenges traders face at the Rusumo border crossing between Rwanda and Tanzania. Lawmakers stressed that regional countries should swiftly tackle issues at the border, and at other EAC borders, with urgency so as to better facilitate trade and the movement of people. Unharmonised tax rates, limited access to essential utilities, as well as lack of laboratory and testing equipment from the Tanzania Bureau of Standards, Tanzania Food and Drug Authority, and even a medical laboratory to facilitate respective inspection tasks, among others, was observed by members of the Assembly’s standing Committee on Communication, Trade and Investment, during an oversight activity in October 2021.
ECA implements key recommendations from CoM2021 (African Business)
On regional integration, the ECA has helped 10 African countries implement AfCFTA strategies and overseen the formulation of seven new national strategies.... It also developed a Country Business Index tool that uses high-quality data to assess the impact of the AfCFTA on the private sector, which was deployed in five countries.
Fresh Impetus to Implement COMESA Protocols on Free Movement (COMESA)
The COMESA Protocols on free movement have over the years faced slow pace of implementation, with many decisions of the Council of the Ministers calling on Member States to speed up ratification. The protocols are on the Gradual Relaxation and Eventual Elimination of Visa Requirements (commonly known as the visa protocol) and on the Free Movement of Persons, Services, Labour and the Right of Establishment and Residence.
Concerned at the slow pace of implementation, the COMESA Council of Ministers have made several decisions to spur action on this front. This led to the creation of two COMESA Task Forces on the implementation of the legal instruments, the COMESA Council of Ministers Decisions and capacity building on the COMESA programme on free movement protocol.
Implementation of the protocols is critical in deepening COMESA’s regional integration for economic development under the Free Trade Area. This is in respect to trade in goods and services, in the context of the COMESA Trade in Services Protocol which requires movement of labour, among others, as a factor of production and service providers. Once validated, the draft strategy and roadmap/ action plan will be presented to the COMESA Ministers responsible for immigration for adoption and subsequent implementation.
Enforcing competition would ease food price hikes in east and southern Africa (Moneyweb)
Small and medium-scale farmers and agri-businesses in east and southern Africa are getting a raw deal. To succeed they need fair and integrated regional markets. Research by the Centre for Competition, Regulation and Economic Development has highlighted the need for better integration of regional economies as a step towards food security in the region. Powerful commercial interests, high transport costs and poor access to facilities such as for storage mean that small and medium-scale farmers are often not getting fair prices for the food they grow. Fair prices are those that meet demand and cover reasonable costs of supply including transport across borders.
The fragile food systems in the region, combined with increasing concentration at multiple levels of key value chains, calls for a regional competition policy for resilient and sustainable regional value chains. A stronger regional market referee to monitor and enforce competition rules would level the playing field for fairer food markets.
Report: COVID-19 slows progress towards universal energy access (WHO)
The COVID-19 pandemic has been a key factor in slowing progress toward universal energy access. Globally, 733 million people still have no access to electricity, and 2.4 billion people still cook using fuels detrimental to their health and the environment. At the current rate of progress, 670 million people will remain without electricity by 2030 – 10 million more than projected last year. The 2022 edition of Tracking SDG 7: the energy progress report shows that the impacts of the pandemic, including lockdowns, disruptions to global supply chains, and diversion of fiscal resources to keep food and fuel prices affordable, have affected the pace of progress toward the Sustainable Development Goal (SDG 7) of ensuring access to affordable, reliable, sustainable and modern energy by 2030. Advances have been impeded particularly in the most vulnerable countries and those already lagging in energy access. Nearly 90 million people in Asia and Africa who had previously gained access to electricity, can no longer afford to pay for their basic energy needs. The impacts of the COVID-19 crisis on energy have been compounded in the last few months by the emergency in Ukraine, which has led to uncertainty in global oil and gas markets and has sent energy prices soaring.
Africa remains the least electrified in the world with 568 million people without electricity access. Sub-Saharan Africa’s share of the global population without electricity jumped to 77% in 2020 from 71% in 2018 whereas most other regions saw declines in their share of the access deficits. While 70 million people globally gained access to clean cooking fuels and technologies, this progress was not enough to keep pace with population growth, particularly in sub-Saharan Africa.
The report finds that despite continued disruptions in economic activity and supply chains, renewable energy was the only energy source to grow through the pandemic. However, these positive global and regional trends in renewable energy have left behind many countries most in need of electricity. This was aggravated by a decrease in international financial flows for the second year in a row, falling to US$ 10.9 billion in 2019.
African Development Bank Group President Dr Akinwumi Adesina wrapped up his official visit to Kenya on Friday, meeting with African diplomatic envoys and international development partners in Nairobi. He called for joint collaborative support to help accelerate Africa’s development. “Africa’s pace of development must be accelerated. We must work together for the continent to prosper, be competitive, and address the challenges facing it,” he said. Adesina said Africa was the continent being impacted the most from climate change. He said as the world prepared for the next global climate summit (COP27) in Egypt this November, many African countries could still not access green climate financing because they had not developed required national determined contributions and long-term strategies. So far, only three African countries—Benin, Morocco and South Africa—have developed long term strategies.
The African Development Bank has been pushing for the channelling of International Monetary Fund Special Drawing Rights to African countries through the Bank. The president explained that in this manner, they could be leveraged by a factor of four on the international capital market. He said this could help African countries deal with debt issues and allow them to invest more in transformative developments.
The Ministers Responsible for Gender and Women’s Affairs from the Southern African Development Community (SADC) Member States will be in Lilongwe, Republic of Malawi on 10 June 2022, to review progress on the implementation of the gender and development programmes in the region. Honourable Patricia Kaliati, Minister of Gender, Community Development and Social Welfare of the Republic of Malawi, will chair the meeting in her capacity as the Chairperson for SADC Ministers Responsible for Gender and Women’s Affairs. The Ministers will track the progress in implementation of the SADC Protocol on Gender and Development, through the review of the 2022 SADC Gender and Development Monitor on Women in Politics and Decision-making, focussing specifically on Article 12 on Representation, Article 13 on Participation, and Article 5 on Special Measures of the Protocol.
As part of implementing the SADC Regional Multi-dimensional Women Economic Empowerment Programme (RMD-WEEP) 2020-2030, the Ministers will review the progress on the SADC Industrialisation and Women’s Economic Empowerment Project (IWEE Project), a project aimed at increasing women-owned businesses’ and female entrepreneurs’ participation in value addition for selected sectors and regional value chains (RVCs).
Global economy news
Global Economic Prospects June 2022: Stagflation Risk Rises Amid Sharp Slowdown in Growth (World Bank)
Compounding the damage from the COVID-19 pandemic, the Russian invasion of Ukraine has magnified the slowdown in the global economy, which is entering what could become a protracted period of feeble growth and elevated inflation, according to the World Bank’s latest Global Economic Prospects report. This raises the risk of stagflation, with potentially harmful consequences for middle- and low-income economies alike. Global growth is expected to slump from 5.7 percent in 2021 to 2.9 percent in 2022— significantly lower than 4.1 percent that was anticipated in January. It is expected to hover around that pace over 2023-24, as the war in Ukraine disrupts activity, investment, and trade in the near term, pent-up demand fades, and fiscal and monetary policy accommodation is withdrawn. As a result of the damage from the pandemic and the war, the level of per capita income in developing economies this year will be nearly 5 percent below its pre-pandemic trend.
“The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid,” said World Bank President David Malpass. “Markets look forward, so it is urgent to encourage production and avoid trade restrictions. Changes in fiscal, monetary, climate and debt policy are needed to counter capital misallocation and inequality.”
800% increase in UN appeal needs for extreme weather-related emergencies over last 20 years – new Oxfam research (Oxfam International)
The amount of money needed for UN humanitarian appeals involving extreme weather events like floods or drought is now eight times higher than 20 years ago — and donors are failing to keep up, reveals a new Oxfam brief today. For every $2 needed for UN weather-related appeals, donor countries are only providing $1. Average annual extreme weather-related humanitarian funding appeals for 2000-2002 were at least $1.6 billion and rose to an average $15.5 billion in 2019-2021, an 819 percent increase. Rich countries responsible for most of today’s climate change impacts have met only an estimated 54 percent of these appeals since 2017, leaving a shortfall of up to $33 billion. The countries with the most recurring appeals against extreme weather crises — over 10 each — include Afghanistan, Burkina Faso, Burundi, Chad, Democratic Republic of Congo, Haiti, Kenya, Niger, Somalia, South Sudan and Zimbabwe.
The report, “Footing the Bill”, says that the increasing frequency and intensity of extreme weather events due to climate change is putting more pressure on an already over-stretched and underfunded humanitarian system. The costs of the destruction from these storms, droughts and floods are also increasing inequality; people in poorer communities and low-income countries are the worst hit yet they lack the systems and funding that wealthier countries have to cope with the effects. The richest one percent of people on Earth are emitting twice as much carbon pollution as the poorest half of humanity.
M-Pesa to transact in 200 countries after deal with Visa (Business Daily)
Millions of M-Pesa customers can now pay for goods and services in more than 200 countries under a deal with Visa that further cements the platform’s leading position as a mobile money service provider. Safaricom inked the deal with Visa to form M-Pesa GlobalPay Visa Virtual card that allows them to transact up to Sh150,000 per payment and Sh300,000 per day. The deal is set to lift the profile of M-Pesa at the international stage as it takes on global giants. “By partnering with Visa to provide the M-Pesa GlobalPay Visa virtual card, we are looking to bridge the gap for our customers who would like to use M-Pesa anywhere across the world,” Safaricom CEO Peter Ndegwa said.
LDC Group demands emission cuts and climate finance in Bonn (EnviroNews Nigeria)
Six months since COP26 in Glasgow, Parties to the UN Framework Convention on Climate Change (UNFCCC) are meeting at the Bonn Climate Change Conference to take forward negotiations on the global response to the escalating climate crisis.
Ms. Madeleine Diouf Sarr, who represents the 46 least developed countries (LDCs) at the talks, sets out the LDC Group’s expectations, saying: “The climate crisis is worsening: our people and communities are suffering from the devastating impacts of climate change, while emissions continue to rise. In Bonn, governments must commit to fair and ambitious action to cut emissions and provide adequate support to the poorest and most vulnerable, so we can adapt to the impacts of climate change and address the loss and damage it causes.” Key issues up for discussion at Bonn include a new goal for climate finance to support developing countries address climate change; a work programme for scaling up countries’ emissions reductions targets to match the level needed to limit warming to 1.5°C; finance to address loss and damage caused by climate change; and the beginning of a “global stocktake” to assess progress on the implementation of the Paris Agreement.
Ms. Sarr said, “The issue of finance to address losses and damages already being experienced in our countries because of climate change deserves more than a dialogue. Countries with much greater responsibility and capabilities than ours must close the funding gap so that when the impacts of climate change hit – when houses and hospitals are washed away, when crops are destroyed, when islands sink and when whole communities are displaced – the costs don’t land on the already vulnerable households. A failure to cut emissions and provide adequate finance for adaptation is increasingly causing loss and damage in our countries, and we’re paying for it.”
Related News
tralac Daily News
Local news
Wamkele Mene: South Africa’s jitters about free trade rules are ‘not supported by evidence at all’ (Daily Maverick)
South Africa’s small and medium businesses have nothing to fear when trading finally starts under the African Continental Free Trade Area (AfCFTA), says Wamkele Mene of the free trade area’s secretariat . Some feel they could be swamped by the asymmetrical rules that will be applied in the first 15 years to protect less-developed countries – of which South Africa isn’t one. “It is not supported by evidence at all,” Mene tells DM168 in his office in Accra, with reference to the free trade that already exists between South Africa and its neighbours in the Southern African Development Community. “If your market is not swamped by products from within your free trade area, who is going to swamp your market from outside your proximity [when you extend duty-free access]?” he asks.
Fruit exports: Russian trade gap now a major advantage (Food for Mzansi)
Many South African citrus growers who exported to pre-war Russia have already found alternative markets. But one leading export and distribution company has pushed through the chaos and maintained trade relations. As a result, Pomona Fruit has benefited from a lucrative gap in the Russian market. Owner Francois Hugo tells Food For Mzansi that a window of opportunity was created when Mzansi’s citrus trade with Russia – South Africa’s fifth biggest export market – was blocked due to the invasion of Ukraine and subsequent sanctions. When trade resumed a few weeks later, a number of exporters had suspended dealings with Russia because of payments, shipping delays and spiralling shipping costs. “Unlike other export companies, our company’s strategy was to push through the chaos instead of identifying alternative markets,” says Hugo. “The other exporters who diverted left a gap in the market, thus creating a much higher demand for fresh produce.”
Namibian exports shrink (New Era)
The value of exports in April 2022 decreased by 36.4% to N$5.5 billion from N$8.7 billion reported in March 2022. In addition, when compared to N$6.5 billion recorded in April 2021, exports decreased by a notable 15.4%.According to the Namibia trade statistics bulletin for April 2022, imports stood at N$8.8 billion, reflecting a decrease of 5.2% month-on-month and an increase of 43.1% when compared to the same month the previous year. Namibia Statistics Agency (NSA) released the bulletin last week, adding that following these movements in both flows, Namibia’s total merchandise trade (exports plus imports) with the rest of the world decreased by 20.3% from its March 2022 level of N$18 billion. When compared to the same month the previous year, total trade increased by 13%.
Looking at the trade balance, according to NSA, during the month under review, Namibia recorded a trade deficit to the tune of N$3.3 billion. This reflects a worsened deficit when compared to the N$619 million recorded the previous month and an inferior trade deficit when compared to a surplus of N$365 million recorded in the month of April 2021. The trade balance compares the country’s trade flow with the rest of the world in terms of export earnings and expenditure on imports. Over the period (April 2021 to April 2022), Namibia recorded a deficit averaging N$2.5 billion and only recorded a trade surplus in April 2021.
Namport records a 6% cargo increase amid global challenges (Namibia Economist)
Namibia’s Port Authority (Namport) said the total year on year cargo handled amounted to 6.5 million tons, indicating an increase of 6%, amid challenges such as the COVID-19 pandemic, global container shortage and blank sailings. This was confirmed by Namport CEO, Andrew Kanime in a Namport bulletin released last week Friday, where he also highlighted that vessel visits also increased by 289 vessels or 22%. “The increase in vessel calls was predominantly due to an increase in petroleum vessels, Namibian and foreign fishing vessels, foreign tugs as well as research vessels,” Kanime added.
Kanime said this increase was mainly due to increased containerized commodities such as copper, charcoal, frozen fish, marble, frozen poultry, sugar, chemicals, scrap steel and wooden products.
Zimbabwe’s US$3bn platinum deal all but collapses in a shambles (Bulawayo24)
IT was noisily touted as a game changer for Zimbabwe’s mining sector, and the economy; a centrepiece of government’s ambitious yet unrealistic US$12 billion target for the industry by next year and catalyst to transform Zimbabwe into a knowledge-driven industrialising upper middle income economy by 2030.In its Vision 2030 document, titled Towards a Prosperous & Empowered Upper Middle Income Society by 2030, government says: “This will be realised through support for local processing of Zimbabwe’s diverse mineral resource endowment, with thresholds for beneficiation and value addition spelt out. Envisaged investments involve beneficiation of such minerals as platinum, chrome, lithium, nickel, diamond cutting and polishing, copper, gold and coal, with strengthening of linkages along the mineral value chain.
However, the Great Dyke Investments (GDI) project in Darwendale, 65 kilometres west of the capital Harare, which has the potential to become one of the world’s biggest platinum mines with capacity to reboot Zimbabwe’s collapsing economy, has stalled and now faces collapse for myriad reasons.
Traders in Kenya feel pain of dollar shortage (The East African)
Relentless depreciation of the Kenyan shilling is raising concern among importers and businesspeople who are experiencing first-hand the pain of a dollar shortage that has seen them part with up to Ksh120 per dollar against the quoted rate of Ksh116.The Kenya Association of Manufacturers on May 30 expressed worries over the dollar shortage, claiming members, who mainly rely on imported raw materials, cannot access dollars at the official market rates.
In the past year, the shilling has fallen by $0.0007 from about $0.0093 to $0.0086, meaning that what Kenyans could buy at $100 previously now costs at least $8 more, without factoring in inflation.
Kenyan economist Kwame Owino told The EastAfrican that the higher depreciation rate of the shilling could be due to internal policies and regulations constricting the inter-bank forex market.
URA eases restrictions on the importation of used cars (New Vision)
Uganda Revenue Authority (URA) has reviewed restrictions imposed on the importation and warehousing of old cars in the country. According to the URA Commissioner General, John Rujoki Musinguzi, the move to review the warehousing restrictions on old motor vehicles has been occasioned by the current global economic trends and inflation. “Considering the current global economic, geo-political trends that caused creeping inflation in Uganda, URA has adopted a more gradual but progressive approach to the restriction of warehousing of used motor vehicles,” Musinguzi said during a meeting with leaders of used motor vehicle importers and car dealers. The new measure, URA officials said, will take effect on July 1, 2022.
ECA and partners support interbank market development in Zambia (UNECA)
The Economic Commission for Africa (ECA), in collaboration with Bank of Zambia (BOZ), and Stichting Frontclear Technical Assistance Program (Stichting FTAP), a foundation for money market development initiatives and partner of ECA, organized a 2-day workshop to kick-off the Tradeclear Feasibility Study in Zambia.
Money markets in many African countries face the challenge of segmentation and are underdeveloped. Tradeclear is an Umbrella Guarantee Facility that would mitigate the counter-party credit risk in interbank transactions and improve market participation, depth, and liquidity. It is designed to resolve market segmentation and build trusted credit lines. By doing so, funding and risks are better distributed in the financial system, improving monetary policy transmission, and contributing to the overall resilience of the economy.
It is against this backdrop that ECA launched the technical assistance project on Tradeclear feasibility study for Zambia, in collaboration with Frontclear. The workshop was an opportunity to introduce the concept and structures of Tradeclear to over 40 participating bank stakeholders and to begin data and information gathering.
Rising cost of doing business, production could hamper Ghana’s AfCFTA benefits – AGI (GhanaWeb)
The Association of Ghana Industries (AGI) has cautioned Ghana could likely miss out on the expected gains from the implementation African Continental Free Trade Area (AfCFTA). According to the Greater Accra Regional Chairman of the Association, Tsonam Akpeloo, the increasing cost of doing business and production in the country could hamper Ghana’s efforts in the free trade regime.
Speaking in an interview with Citi Business News, the AGI regional Chairman called on government to adopt pragmatic measures to help drive down the cost of doing business and production citing an example such as countries like Kenya.
“Dividends from the recent increase in excitement around the AfCFTA may not be realized. This is because producing locally in Ghana is not competitive compared to other African countries. The cost of inputs is increasing at a rate that can’t be compared to anywhere else in the sub-region,” he is quoted by Citi Business News
For us to be competitive and for us to favourably trade and benefit from the AfCFTA we need to make sure steps are taken to produce cheaply because at the end of the day consumers in the open market will only consider price and quality. Our competitors in other countries like Kenya are receiving massive support which makes us uncompetitive,” Tsonam Akpeloo added.
UNCTAD organizes workshop on contribution of SEZs to boost economic diversification in Africa (BusinessGhana)
UNCTAD in collaboration with African Union and German corporations has organized a two-day workshop on the contribution of Special Economic Zones (SEZs). The symposium is to boost economic diversification in Africa in the context of AfCFTA. The programme was organised at Labadi Beach Hotel on June 2nd and 3rd. The workshop dubbed “Special Economic Zones In Ghana As A Tool For Industrialization And Diversification” was aimed at sharing best practices on special economic zones development and to contribute to the process of the implementation of the AfCFTA.
The workshop presented the main lessons learned from the development of SEZs in Africa and the implementation of SEZs-targeted policies. It addressed the key factors that contribute to the success of zones through the evaluation of key success stories in the continent.
Crude oil, urea, cocoa beans, electricity top Nigeria’s export list in Q1 2022 (Nairametrics)
Nigeria exported merchandise worth N7.1 trillion in the first quarter of 2022, rising by 23.13% compared to N5.77 trillion recorded in the previous quarter and 137.88% higher than the N2.98 trillion recorded in the corresponding period of 2021. This is contained in the foreign trade report, released by the National Bureau of Statistics (NBS). The increase in Nigeria’s export earnings turned the foreign trade balance in favour of Nigeria for the first time since Q2 2021 and the highest since Q3 2019. Notably, Nigeria recorded a foreign trade surplus of N1.19 trillion in review quarter compared to N173.96 billion deficit recorded in Q4 2021.
Chad experienced a second consecutive year of recession in 2021. The country has struggled to fully recover since the 2016 recession that followed the 2014-15 oil price shock. In 2020, the COVID-19 pandemic and the related oil prices fall hit Chad, throwing it off the growth recovery trajectory it had been on since 2018. The COVID-19 crisis has had an impact on the livelihoods of poor and vulnerable households. According to the high frequency phone surveys conducted in 2020, two-thirds of households reported a loss in their total income, 57 % of households receiving transfers saw a decline in this source of income, and a fifth of households seeking health care were unable to access it.
The report states that a gradual economic recovery is projected as oil prices peak in global markets and international trade and economic activity recover in agriculture and industry. Moreover, a successful debt restructuring process under the G20 Common Framework would provide substantial relief to Chad by helping restore a sustainable fiscal balance, which in turn would allow the country to increase social and investment spending over the long term.
Egyptian government signs agreements to support exports (Egypt Independent)
Egypt’s government signed some action programs, documents and memoranda of understanding with international institutions to support exports and enhance the role of the Egyptian export sector. Egypt plans to establish an export academy to increase exports to US$100 billion annually. On the sidelines of the annual meetings of the Islamic Development Bank 2022, held in Sharm el-Sheikh, Prime Minister Mostafa Madbouly witnessed the signing of a work program between the Ministry of Trade and Industry, the International Islamic Trade Finance Corporation, the Islamic Corporation for the Insurance of Investment and Export Credit, and the African Export-Import Bank, in favor of Egypt. This comes under the Bridges Program for Arab-African Trade, as part of a framework to implement projects that support the economy and enhance the export sectors during 2022-2023.
The work program aims to enhance the benefit of the Continental Free Trade Agreement; the proposed activities of the program include organizing trade missions to several African countries.
The program also aims to support the participation of companies in economic forums and trade fairs in the countries of the continent, secure exports and investment projects in Africa, and provide financing and guarantees for exports.
African trade and integration news
The African Continental Free Trade Area (AfCFTA) agreement entered into force in 2019. It aimed to increase intra-African trade by eliminating import duties. Its planners hoped to double intra-African trade if non-tariff barriers were also reduced. It was a major milestone in the continent’s regional integration. Inadequate transport infrastructure and services could hamper the realization of AfCFTA’s benefits. The urgent need to improve transport connectivity in Africa in the context of AfCFTA has created new research demands. This report explored the effects of AfCFTA on trade flows in the African region and asked how the AfCFTA signatories could reap the agreement’s full benefits through the integrated planning of trade and transport. The report’s specific objectives were to forecast the demand for different modes of transport—road, rail, maritime and air because of AfCFTA; Estimate the infrastructure investments required for different modes of transport; Estimate the impact of improvements in transport infrastructure and services on the volume of intra-African trade; Forecast the demand for equipment for different modes of transport—trucks for roads, rolling stock for railways, aircraft for air transport and ships for maritime transport—because of AfCFTA. The study constructed four scenarios based on the factors that have the highest impacts and are most uncertain. Such factors fell into two categories: AfCFTA implementation and socio-economic development; Transport services and infrastructure.
AfCFTA: Diverse Payment Channels are the Foundation of Enhanced Intra-African Trade (TechEconomy.ng)
Eighteen months since the commencement of the African Continental Free Trade Agreement (AfCFTA), and despite less than ideal circumstances due to the COVID-19 pandemic, 43 African states have ratified the agreement. What’s more, nearly 90 percent of negotiations on product-specific rules have been concluded, covering more than 70 percent of intra-African trade. But while the foundations for enhanced exchanges between African markets may be laid, the emphasis is now on implementation, which demands that attention be placed on the continent’s payment landscape.
Private sector calls EA to harmonise rules of origin with Africa FTA (The East African)
Private sector players want the criteria used to determine the origin or nationality of a product under the East African Community reviewed in light of the African Continental Free Trade Area (AfCFTA) agreement. According to the East African Business Council, the rules of origin could be a game changer for the continent as long as they are simple, transparent, predictable and business friendly. Despite the region having adopted EAC Tariff Offer for Category ‘A’ products, amounting to 90.2 percent, the region is yet to trade with the rest of the continent under the AfCFTA that came into force last year. The rules of origin define the conditions that firms must comply with in order to authenticate that their goods originate from the Free Trade Area (FTA) and are thus eligible for preferential treatment.
They are a “passport” enabling goods originating within the FTA to circulate duty-free in the area.
Regional assembly roots for business friendly laws (Dailynews)
THE East African Legislative Assembly (EALA) has laid emphasis on creating laws that will improve the business environment in the region. Speaking during the courtesy visit to East African Business Council (EABC) recently, EALA Chairperson Christopher Nduwayo noted that the regional assembly was committed to formulating business-centric laws to spur intra-EAC trade and investments.
In his rejoinder EABC Policy and Trade advisor, Adrian Njau applauded the EAC partner state for adopting 35 per cent tariff as the fourth band of the EAC Common External Tariff a move set to boost regional value chains and industrialisation. Mr Njau further expounded that tax distortions impede the free movement of goods, services, service suppliers, labour and capital and urged the MPs to champion ratification of the ‘EAC Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income’ in a bid to reduce the cost of doing business and attract more investments. “Non -Tariff Barriers continue stifling intra-EAC trade and arise from protectionist measures by partner states,” he stated.
According to Mr Njau, overdue operationalisation of the EAC Trade Remedies Committee tasked to handle matters relating to the application of Rules of Origin and trade disputes, anti-dumping measures, subsidies and countervailing measures, safeguard measures has aggravated the problem of resolving NTBs in the region.
Costs, competition drive truckers to innovate (The East African)
Stiff competition from the standard gauge railway (SGR) coupled with the increasing cost of fuel, taxes and insurance premiums has forced Kenyan truckers to be innovative to remain afloat. The government directed that all cargo delivered at the Mombasa port be exclusively railed inland to Nairobi via the SGR although this is being contested in court. Some truck owners have converted their vehicles into specialised trucks to ferry out-of-gauge cargo that could not be hauled by the SGR while others have moved to neighbouring countries where there is still business.
Among businesses that have taken advantage of the heavy infrastructural developments in the region to transport out-of-gauge cargo such as oversize containers and reefers is Transtrailers, Simpet Global Logistics and Seven Stars, which have invested heavily in modern technologies for handling over-size cargo.
East Africa’s economic recovery prospects facing headwinds (The East African)
East African countries face more hurdles in efforts to recover from the effects of the Covid-19 pandemic, signalling hard times for households and businesses. Rising public debt, mounting inflationary pressures, falling revenue collections, weakening currencies, and the Russian invasion of Ukraine have combined to slow down the pace of economic recovery. East Africa’s situation is compounded by rising political temperatures in Kenya ahead of the August 9 General Election, as neighbouring countries fear possible disruption of the supply chain on the Northern Corridor linking the landlocked Great Lakes Region with the seaport of Mombasa.
According to the Uganda central bank, private sector credit growth remains weak and below historical trends despite the full reopening of the economy in January as rising commodity prices continue to dent consumer0s’ perception of the economy and its near-term outlook.
Ministers meet to give Congo entry in EAC nod (The East African)
The East African Community Council of Ministers will meet on June 8 to finalise admission of the Democratic Republic of Congo into the bloc. The 42nd Ordinary Meeting of the Council of Ministers scheduled from June 8-11 is also expected to discuss the deployment of an election observer mission to Kenya, make a decision on who will host the East African Monetary Institute, and receive EAC Audit report. The EAMI whose role is crucial for the implementation of the Monetary Union protocol. The DRC formally joined the EAC on April 8, 2022 when President Felix Tshisekedi signed the deed of Accession to the Treaty establishing the EAC. The draft roadmap for DRC integration features three more major priorities across the organs and institutions of the EAC.
“The EAC is developing a roadmap that details how the DRC will implement various EAC commitments such as Customs Union, Common Market, Monetary Union and Political Federation and join various areas of cooperation,” said Dr Peter Mathuki, EAC Secretary General.
Create enabling environment for agribusiness to thrive – ECOWAS (Blueprint Newspapers)
The Head of Agriculture Division in the ECOWAS Commission, Mr. Ernest Aubee, has stated that, agribusiness development in Africa requires provision of enabling policy, legal and economic environment. This is even as he said increased public and private sector investments in the continent is critical. Aubee stated this recently while presenting a paper with the title, “Sustainable Agribusiness in Africa”, during an Africa agribusiness webinar”.
He said agriculture in the continent remains one of the most important sectors, saying the share of agriculture in continental GDP increased to 19.9% in 2020/2021 from 17.8% in 2019/2020 with agribusiness contributing approximately 25% of Africa’s GDP and 70% employment while agriculture based products accounts for over 50% of all exports from Africa. According to him, agribusiness has the potential to drive socio-economic development on the Continent.
Africa cocoa nations unite for fair prices as bad harvests and fertilizer shortages bite (Food Ingredients First)
Ghana, Côte d’Ivoire and most recently Nigeria have allied in an effort to boost cocoa farmers’ incomes, denouncing foul play in the cocoa trading market. The move comes as the world’s largest cocoa-growing countries ramp up efforts for fair treatment, pay and to eliminate adverse practices in the industry, for good. The cocoa regulatory authorities in western Africa claim that since the COVID-19 pandemic began, some companies have been bypassing payments of a living income differential (LID) of US$400 per metric ton of cocoa beans. The LID initially came into effect in 2020 to level the playing field and ensure fair payment to cocoa farmers.
The Conference of the States Parties (CoSP) to the African Medicines Agency (AMA) Treaty, held their First Ordinary Session in Addis Ababa, Ethiopia from 1 to 2 June 2022. The meeting sought to establish the Conference of the States Parties’ Rules of Procedure as well as deliberate on the AMA Headquarters Assessment Report and make recommendations on the Agency’s host country. Representatives of the African Union Commission and the African Union Development Agency (AUDA-NEPAD) participated in the meeting.
H.E. Minata Samate Cessouma, Commissioner for Health, Humanitarian Affairs and Social Development representing H.E. Moussa Faki Mahamat, Chairperson of the AU Commission, reaffirmed the Commission’s commitment in providing all the necessary support to the States Parties to the AMA Treaty towards the operationalization of the AMA at the earliest. Furthermore, the Commissioner highlighted the importance of the first meeting to the operationalization of the AMA, in order to enhance the capacity of the States Parties and AU recognized Regional Economic Communities (RECs) to regulate medicines, medical products and technology. Thus, enhance their efforts in the fight and elimination of the sale, and consumption of falsified and substandard medicines, medical products and technologies.
A call to introduce the Seed Index into the Comprehensive African Agriculture Development Programme (CAADP) Biennial Review (BR) process was unanimously endorsed at the 3rd Steering Group meeting of the African Seed and Biotechnology Partnership Platform (ASB PP), held from 23-25 May 2022 in Kampala, Uganda. It is to be recalled that the 40th Ordinary Session of the Executive Council held on 2-3 February 2022 in Addis Ababa, Ethiopia endorsed the African Seed and Biotechnology Partnership Platform and accompanying Operational Guidelines as the coordination mechanism for the implementation of the African Seed and Biotechnology Programme (ASBP): the strategic framework for the development of the seed sector in Africa
The deliberations were graced by Dr. Godfrey Bahiigwa, Director of Agriculture and Rural Development Directorate at the African Union Commission, as the Chair of the Steering Group. In his opening remarks, Dr. Bahiigwa noted that Seed sector development has been on the agenda of Heads of State and Government since 2005, who underscored access to quality seed in enhancing agricultural production and productivity. Hence, “the introduction of the Seed Index in the CAADP BR will allow us to report on progress made in seed sector development in Africa to the African Union Assembly,” he added.
Global economy news
DG Okonjo-Iweala: Time for members to show restraint and agree on texts for MC12 (WTO)
At an agriculture negotiating meeting for delegation heads on 1-2 June, Director-General Ngozi Okonjo-Iweala and the chair of the agriculture negotiations, Ambassador Gloria Abraham Peralta (Costa Rica), heard members’ feedback on three draft texts that emerged from an informal consultation process which the DG has led since early May. With the 12th Ministerial Conference (MC12) fast approaching, the DG urged members to restrain their comments to the extent possible so that “simple, short, beautiful and balanced” texts could be sent for ministers’ consideration.
The three texts include a draft ministerial decision on agricultural trade reforms, a draft ministerial declaration on trade and food security, and a draft ministerial declaration which would exempt from export bans food bought by the UN’s World Food Programme (WFP) for humanitarian purposes.
Devex Newswire: A critical moment for the TRIPS waiver (Devex)
Next week, negotiators will take another shot at an intellectual property rights agreement for COVID-19 vaccines. What’s the state of play? As negotiations within WTO over a compromise intellectual property waiver on patents for COVID-19 vaccines continue, activists have accused rich countries of trying to introduce further restrictions. That includes efforts by the U.K. government to extend the waiver only to finished products and not the ingredients and tools needed to produce COVID-19 vaccines, says Fatima Hassan, founder of Health Justice Initiative. A Geneva-based insider confirmed that delegates are still grappling over the scope of the waiver.
A group of U.K.-based civil society organizations issued a statement last week criticizing their government for refusing to clarify its position on the TRIPS waiver “beyond the repeated assertion that IP rules were responsible for the rapid development of COVID-19 medical tools and do not present a barrier to access.” Hassan is calling on supporters of the original waiver proposal to respond in kind.
Russia mulls easing wheat exports, sets stage for price drop (Business Daily)
The news that Russia may allow the resumption of wheat exports along the Black Sea has raised hopes that rising consumer prices of bread and flour in the local market will ease in the short term. The movement of grain along the Black Sea, which accounts for 34 percent of global wheat supply, was completely interrupted following the invasion of Ukraine by Russia in March, locking out millions of tonnes from being exported to the world market. About 66 percent of wheat that Kenya imports come from the two countries and the current blockade has seen the price of a 400g loaf of bread rise to Sh55 from Sh50 with a two-kilogramme packet of flour retailing at Sh202 from Sh150 in April.
“We have seen some sorts of stability in the world market and it will be good news for consumers should the prices fall,” said Bimal Shah, chief executive officer of Broadways Bakeries. The price of wheat jumped 28 percent between April and May after India announced banning the export of produce to protect its local stocks.
Kenya Association of Manufacturers and a host of other stakeholders in the grain industry said the government should remove duty for the next year to cushion consumers from high costs.
WTO-World Bank publication stresses key role of trade in responding to health crises (WTO)
“This report underscores how trade is a force for good in terms of enabling access to medical goods and services – but also points to where we can improve,” DG Okonjo-Iweala said. “It is a timely reminder, a week ahead of our 12th Ministerial Conference, of how trade is part of the solution to many of the big challenges of our time, whether in public health or the environment.”
“A main lesson of the report is that trade plays an important role in ensuring access to medical goods and services both in normal times and, as the past two years have shown, in times of crisis,” DG Okonjo-Iweala added.
ITU/UNESCO Broadband Commission urges faster global action on digital development (ITU)
The Broadband Commission for Sustainable Development met in Kigali, Rwanda, this weekend to pinpoint new actions that can drive faster progress towards universal meaningful access to digital networks and services. The high-level advocacy group came together for its annual Spring Meeting at the invitation of the Commission Co-Chair, H.E. President Paul Kagame of Rwanda, ahead of the landmark digital development conference held every four years by the International Telecommunication Union (ITU): the World Telecommunication Development Conference (WTDC).In his opening remarks to the meeting, President Kagame told Commissioners: “We are still living in tough times, economically, politically, and in terms of global public health. The immediate future is full of uncertainties and risks. But one thing is sure: All of the challenges we face can be handled faster, better, and more equitably, by investing in universal, affordable broadband.”
Commissioners and Special Guests representing government leaders, heads of international organizations and private sector companies, along with civil society and academia, discussed the power of digital transformation to create broad and positive socio-economic impact and looked at ways to rapidly increase access to broadband, foster innovative partnerships, empower youth, and build trust in online spaces. In particular, they confronted chronic connectivity challenges and discussed how to ensure affordable, sustainable, and equitable access to digital services across regions, especially in the world’s 46 Least Developed countries, where 17% of the population is still without a mobile broadband signal, and hundreds of millions more kept offline by high prices, lack of digital skills and awareness, and a dearth of usable, relevant and accessible content.
Enter the Platform World: What Are the Prospects for the Global South? (RIAC)
The regional integration projects of the Global South have advanced notably in the past several years with AfCFTA and RCEP among the most significant achievements. At the same time, there is tremendous scope for a far greater variability and diversity in the platforms that may be launched by Global South economies, the most sizeable and comprehensive of which could include the aggregation of CELAC (Latin America), African Union (Africa), SCO (Eurasia). A more diverse set of regional blocs that targets deeper integration could feature a BRICS+ platform that comprises the South African Development Community (SADC), MERCOSUR, BIMSTEC, China-ASEAN FTA, Eurasian Economic Union (EAEU).
The world economy is entering a stage in which platforms are becoming key aggregation vehicles at the level of corporates, countries and regions. The Global South countries are starting to play catch-up vis-à-vis the advanced economies in building such platforms, with substantial advances made in building regional platforms in Africa and Asia in the past several years. The world economy needs greater platform diversity as well as greater optionality in trade/investment flows and an expansion in the array of reserve currencies something that could emanate from greater activism in this area coming from the Global South.
The regional integration projects of the Global South have advanced notably in the past several years with AfCFTA and RCEP among the most significant achievements.
World Environment Day: Earth ‘cannot keep up with our demands’ (UN News)
“It is vital we safeguard the health of its atmosphere, the richness and diversity of life on Earth, its ecosystems and its finite resources. But we are failing to do so,” said the UN chief. “We are asking too much of our planet to maintain ways of life that are unsustainable,” he cautioned, noting that this not only hurts the Earth, but also its inhabitants.
By providing food, clean water, medicines, climate regulation and protection from extreme weather events, Mr. Guterres reminded that a healthy environment is essential for people and the Sustainable Development Goals (SDGs). “It is essential that we wisely manage nature and ensure equitable access to its services, especially for the most vulnerable people and communities,” Mr. Guterres underscored.
The recent Stockholm+50 environment meeting reiterated that all 17 SDGs rely on a healthy planet to avert the triple crises of climate change, pollution and biodiversity loss. The Secretary-General outlined recommendations to activate renewable energy everywhere by making renewable technologies and raw materials available to all, cutting red tape, shifting subsidies and tripling investment.
Related News
tralac Daily News
Local trade news
National rail policy to support local industry, manufacturing (Engineering News)
The National Rail Policy White Paper has a deliberate bias towards local manufacturing to ensure industrialisation and the local production of steel, railway lines, rolling stock and supplies, and the State and private sector operators should procure all supplies from South African manufacturers, Transport Minister Fikile Mbalula said this week. “The obsolete state of much of our rail infrastructure and rolling stock, and the limitation imposed by narrow gauge tracks, as well as the underuse of the existing rail network, are some of the most notable challenges facing the sector,” he stated.
The Consulate-General of South Africa in Lubumbashi, Democratic Republic of Congo, Ms Nosicelo Mbele says the DRC Mining Week presents an opportunity for South African businesspeople to network and create ties that can be translated into exports of their products and services. Mbele was addressing the South African business delegation that is currently showcasing at the DRC Mining Week show which started today and will end on Friday, 3 June 2022.The twenty mining exporters are supported by the Department of Trade, Industry and Competition (the dtic) to participate and exhibit their products and services at the DRC Mining Week, through its Export Marketing and Investment Assistance (EMIA) Scheme. The objective of the scheme is to develop export markets for South African products and services and to recruit new foreign direct investment into the country.
“There are huge unexploited opportunities for South African exporters to increase exports of capital goods into the DRC’s mining industry with potential exports of mining equipment and related products estimated to be around R569 million. The country holds a wealth of opportunities, not just in mining, but as well as in agriculture and retail, telecommunications, mining and construction, logistics and other services, electricity and infrastructure,” said Mbele.
Zimbabwe’s trade balance narrows by 68% (NewZimbabwe.com)
THE gap between Zimbabwe’s imports and exports narrowed down by 68% in April, partly attributed to surging manufacturing output, Zimbabwe National Statistics’ (ZIMSTAT) recent trade report has established. The document released Wednesday, shows that the latest trade balance at minus US$49,9 million is far below the minus US$156,27 million recorded in March, signifying a 68,04% decline. The statistics are in sync with recent data by ZIMSTAT, indicating that the country’s manufacturing sector capacity utilisation increased to 66% for the fourth quarter of 2021.
During the period, the country’s main exports included semi manufactured gold (30.1%), nickel mattes, including platinum group of minerals (PGMs) (22.8%), nickel ores and concentrates (14.7%), tobacco (11.5%), industrial diamonds (5.0%), among others. “South Africa remained Zimbabwe’s major trading partner, with exports standing at 40,6% compared to 42,9% in March 2022. Exports to the United Arab Emirates constituted 34,1% in April 2022 compared to 313% in March 2022. “During this period, the value of exports to China increased to 9,9% on 2 April 2022, from 5,9% in March the same year,” the report said.
Zimbabwe abandons debt relief initiative (The Zimbabwe Mail)
The Zimbabwe government has abandoned its plan to access a debt relief facility under the Highly Indebted Poor Countries (HIPC) initiative, meant to resolve its unsustainable debt, Business Times reported. HIPC could have seen Zimbabwe’s unsustainable debt with international financial institutions cancelled. The latest development was revealed by the permanent secretary in the Ministry of Finance and Economic Development, George Guvamatanga on Tuesday this week. He said the government was now working on a new strategy to clear its debts. “The strategy we are pursuing now does not consider HIPC. I think it is a hybrid strategy which we think is fit for purpose,” Guvamatanga told Business Times on the sidelines of the European Investment Bank and First Capital Bank event in the capital on Tuesday.
IMF Executive Board Concludes 2022 Article IV Consultation with Kingdom of Lesotho (IMF)
Since early 2020, Lesotho has been hit simultaneously by the pandemic, declining transfers from the Southern African Customs Union (SACU), climate shocks, and the impact of the war in Ukraine. Despite a swift response by the authorities, the fallout from the pandemic—including delays to large infrastructure projects, supply chain disruptions, layoffs in the textiles sector, and weak external demand—has weighed on social and economic development, amplifying legacy structural challenges. Growth has been revised down to 2.1 percent in FY21/22 after contracting by 6 percent in FY20/21, and is forecast by staff at 2.7 percent in FY22/23 and 1.4 percent on average thereafter. The war in Ukraine has hindered food imports, exacerbating agricultural disruptions due to floods and the pandemic. Global price increases in food and fuel, which account for over half of the consumer basket, are hurting the vulnerable, with inflation expected to reach 6.8 percent in FY22/23.
Tanzania seeks to be key rice producer in Africa (The Citizen)
Tanzania is racing against time to become Africa’s rice hub. To begin with, the country wants to meet East Africa’s total rice demand, a senior government officer has said. Tanzania – which is the 4th largest producer of rice in Africa and the second-largest in Eastern and Southern Africa - has put in place plans and measures to increase rice production annually in an effort to reach a tipping point in 2030 and thus be able to feed the region and beyond, according to the director of the Mechanisation Division in the Ministry of Agriculture, Ms Anna Mwangamilo. “We have adopted a transformative technology-dependent agricultural system model for rice, which includes mass adoption of improved seeds usage and other tools, including modern irrigation,” Ms Mwangamilo told journalists in Dar es Salaam yesterday.
She noted the provision of substantial market opportunities for smallholder farmers in the last three years, has led to assured national self-sufficiency and a sizeable surplus for export, making rice one of the most significant cash crops in Tanzania.
Nigeria has low capacity to galvanize youths for economic development – NEPC boss (Vanguard)
The Executive Director of Nigeria Export Promotion Council, NEPC, Ezra Yakusak, on Thursday, said one of the challenges bedeviling the nation is low capacity to galvanize the youths into productive ventures for economic development. Yakusak said that the country is blessed with a large portion of youthful population ready to contribute in building a strong and prosperous economy. “However, the challenge has always been low capacity to galvanize the youths into productive ventures for economic development”, he added.
Nigeria takes step towards gas pipeline deal with Morocco (The Arab Weekly)
Nigeria’s government has directed its state-run oil company NNPC to press ahead with a deal on a gas pipeline to Europe through Morocco. Africa’s gas resources are increasingly in the spotlight as the European Union looks to wean itself off Russian supplies following the invasion of Ukraine in February. Approval for a memorandum of understanding on the gas project with West African regional bloc ECOWAS was given after a cabinet meeting, Nigeria’s Petroleum Minister Timipre Sylva told reporters in Abuja late Wednesday.
Nigeria is Africa’s top oil producer and a major supplier of gas and liquefied natural gas. The minister said: “This gas line will take gas to 15 West African countries and to Morocco and through Morocco, to Spain and to Europe”.
After cyclones, conflict and Covid-19, recovering Mozambique prepares next five-year strategy (AfDB)
The African Development Bank has launched preparations for its next five-year Mozambique country strategy after a trying period that included cyclones, security challenges and the Covid-19 pandemic. The African Development Bank, in coordination with Mozambique’s Ministry of Economy and Finance, hosted a workshop on 12, 13 and 16 May 2022 on the Bank’s 2018-2022 Country Strategy Paper completion report, which will detail the results of the strategy. The event also covered the new 2023-2027 Country Strategy Paper and a review of the Bank’s portfolio of projects in Mozambique.
Minister of the Economy and Finance, Ernesto Max Elias Tonela, said the national economy was beginning to recover from external shocks and the economic contraction witnessed in 2020. “The country has experienced considerable macroeconomic and political stability, which has attracted greater volumes of domestic and foreign investment, including the valuable contribution of the African Development Bank. I would like to reaffirm our commitment to strengthen cooperation with the African Development Bank,” the Minister said. He said the government’s strategy was in line with the pillars defined jointly with the African Development Bank for Mozambique.
Why government should consider going to the IMF – Dr. Yamson (GhanaWeb)
Economist, Dr Ishmael Yamson, has detailed reasons Ghana should consider an International Monetary Fund programme amidst the current economic crisis. According to Dr Yamson the Fund has all Ghana needs to solve its crisis. Ghana’s economy is currently facing a critical economic crisis due to the COVID-19 crisis and the Russia-Ukraine crisis. The Economist posits that even though the government had earlier stated that it would not opt for an IMF programme, the best solution to tackle these issues is to apply for an IMF.
Ghana-UK trade relations: UK plans to increase its £800m FDI (The Business & Financial Times)
The United Kingdom (UK) government says it will continue to increase its bilateral trade in Ghana – an investment which is currently more than £847million in key areas of the country’s economy – for the next decade. Briefing the B&FT on a recent quest by the two countries to deepen trade and bring more investment into Ghana, High Commissioner of the UK to Ghana, Harriet Thompson, said the over-£800million investment in the country remains the top FDI from Europe and one of the biggest in this generation. She said the two countries have renewed pacts to increase trade and investment and chart new paths which will consolidate their bilateral ambition.
Madagascar launches safeguard investigation on paints (WTO)
Where information requested from interested parties in this investigation is not provided within the time allowed, decisions will be made on the basis of the best information available. “All persons having substantial interest and wishing to be considered as interested parties in this investigation must make themselves known and may request a questionnaire from the ANMCC, the authority in charge of the investigation, within 30 days of from the start of the investigation.
African trade and development news
Africa’s access to financing at competitive rates is vital for the continent’s recovery (allAfrica.com)
In an environment of elevated debt vulnerabilities exacerbated by increased fiscal exposure to the pandemic, extreme weather events and rising food and energy prices, improving Africa’s access to financing at competitive rates is vital for the continent’s recovery from the pandemic. Concessionary financing from multilateral and bilateral sources remains the dominant source of Africa’s development financing. However, notwithstanding their low-cost of use, concessional financing is lacking in scale and scope to adequately respond to Africa’s financing needs. For instance, with respect to scale, the continent’s SDG financing gap of $345 billion annually is about a third of the IMF’s total balance sheet of $1 trillion.
Rising financing needs, inadequate concessional financing and declining eligibility for such resources have compelled several countries to access capital markets to close their development financing gaps. But this has come at a cost.
Why Kenya is backing fresh UN agency calls for debt service relief (Business Daily)
Kenya has welcomed a renewed push by African ministers of finance backed by the UN Economic Commission for Africa (UNECA) for rich countries to extend debt service relief for regional countries to help their economies recover from the Covid-19 pandemic and weather the impacts of the Ukraine war. Echoing calls by the UN agency and the African ministers, Kenya says calls for debt relief are timely and if heeded would provide a “breathing space” to help Kenya and other African countries cushion regional economies from the fallout caused by the latest Russia and Ukraine war crisis. Debt servicing obligations are feared could crowd out other critical expenditures by African governments in response to the economic fallout from the latest crisis, according to analysts.
East African states rush to impose new taxes on imported goods (The East African)
Following the May 5 decision by East African Community Finance ministers to adopt a 35 percent rate for the fourth band of the region’s common external tariff (CET), member countries are working to identify, review and impose new taxes on imported goods to protect local industries. The new tax whose implementation starts from July 1 will affect commodities such as iron, steel, dairy and meat products. Other affected imports are cereals, cotton, textiles, edible oils, beverages and spirits.
The CET’s four bands include one for raw materials, which attract zero percent tax, intermediate goods that attract 10 percent tax; secondary intermediate goods charged at 25 percent tax and finished goods, the fourth band, which now stands at 35 percent. “The process of identifying which products fall in the fourth band is now complete. Most of the products under this band are readily available in the region and, therefore, will attract more tax to import,” said Betty Maina, Kenya’s Cabinet Secretary for Trade, Industrialisation and Enterprise Development.
Finished goods that cannot be produced in the region have been allocated the third band, she added.
Deepening economic integration, strengthening regional peace and security mechanisms, and implementing the road map for the attainment of the EAC Monetary Union are some of Hon. (Dr.) Peter Mathuki’s key priorities in steering the regional integration agenda in the next year. The EAC Secretary General underscored these priorities during a virtual forum dubbed, ‘State of the EAC Forum - SG’s 1 year in office,’ seeking to share the progress, achievements, and challenges of the EAC in the last year, and the way forward. The Secretary General listed the admission of the Democratic Republic of Congo (DRC) into the bloc, adoption of 35% as the 4th Band of the EAC Common External Tariff, and resolution of 23 pressing Non-Tariff Barriers (NTBs) among the key achievements the Community registered during the last year.
Further, he shared that five EAC Partner States, had launched their own Trade Information Portal (TIP). The portals map out all imports, exports and transit procedures, including fees and time in the respective Partner States in an effort to enhance regional trade.
Liberia, DRC, South Sudan, Chad, provide lessons on promoting resilience in Africa (AfDB)
The Independent Development Evaluation (IDEV) unit at the African Development Bank has published two evaluation reports that examine the relevance, effectiveness, efficiency and sustainability of the Bank’s work in transition states, countries where the main development challenge is fragility. The first report analyzed the implementation of the Bank’s 2014-2019 Strategy for Addressing Fragility and Building Resilience in Africa. During the evaluation period, the Bank approved 354 operations in 22 transition states, representing an overall investment of $6.48 billion. Four countries, Liberia, Democratic Republic of Congo (DRC), South Sudan and Chad, served as case studies in the evaluation. The report draws lessons from the experiences of the Bank and makes recommendations that informed the Bank’s recently approved new Fragility Strategy for 2022-2026.
A second evaluation examined the ability of the Bank’s Transition Support Facility to reduce fragility and build resilience in eligible countries. At the heart of the lessons captured by IDEV are the four main principles that form the fragility lens adopted by the Bank: flexibility to adapt operations and objectives to various contexts; responsiveness to unforeseen urgent needs; selectivity to achieve the greatest impact; and staying engaged across the spectrum of fragility.
The African Development Bank affirmed its commitment to supporting African countries to harness their mineral resources at the recent Mining Indaba held in Cape Town. The African Development Bank and the African Legal Support Facility (ALSF) took the opportunity to compare notes with governments, investors, partners, and other collaborators involved in the African mining industry at the Indaba. The Bank delegation convened a side-event to discuss ways to finance the development of Africa’s green minerals and effective African participation in the global battery and electric vehicle value chain. “Africa needs to promote policies that enable the creation of more value on the continent through resource-based industrialization, build productive capacities and develop intra-African exports and trade by leveraging on the African Continental Free Trade Area (AfCFTA),” said Dr. Vanessa Ushie, Acting Director of the African Development Bank’s African Natural Resources Centre.
The discussions were premised on Africa’s significant green mineral resources, which provide a unique opportunity for the continent to contribute to the energy transition, and attracted a large audience from various African countries, industry, development finance institutions, commercial banks, and mining professionals.
How Are “Africa’s Business Heroes” Reshaping Entrepreneurship on the Continent? (Forbes Africa)
Entrepreneurship in Africa is booming. There is enormous potential for small businesses and entrepreneurs to become a transformative force in powering both local impact and economic growth. At the Jack Ma Foundation, we believe that the future will be built by entrepreneurs. That is why, four years ago, we launched the Africa’s Business Heroes prize competition to spotlight and support talented entrepreneurs across Africa. Each year, 10 “heroes” win a share of a $1.5 million grant and gain access to unparalleled mentoring, networking, and training opportunities. Through their ventures, these outstanding entrepreneurs are generating positive impact for their communities. As we launch our fourth competition, we’d like to reflect on the achievements of our Heroes thus far. Collectively, our Heroes have created over 2,000 jobs and raised over $10 million USD. They’ve launched new products and services, expanded geographically and highlighted the transformative power of entrepreneurship.
Global economy news
Factbox: What could the WTO ministerial conference achieve? (Reuters)
Ministers from across the globe are convening for a conference at the World Trade Organization in Geneva for the first time in more than four years from June 12-15. It comes at a critical juncture for the body and for global trade. read more The meeting, delayed twice by COVID-19, is a chance for the 27-year-old body to prove it can respond to what Director-General Ngozi Okonjo-Iweala has described as a “polycrisis” of economic, health, environmental and security challenges. Nobody expects a package of deals but Okonjo-Iweala has urged negotiators to work continually to get “at least one or two” concrete outcomes.
Grain supply tops Putin-African Union head talks agenda (ABC News)
Russian President Vladimir Putin hosted the chairman of the African Union, Senegal's President Macky Sall on Friday for talks expected to focus on how to get grain supplies stuck amid the fighting in Ukraine moving again. African countries imported 44% of their wheat from Russia and Ukraine between 2018 and 2020, according to U.N. figures, and wheat prices have soared around 45% as a result of the supply disruption, according to the African Development Bank.“Africa has no control over production or logistics chains and is totally at the mercy of the situation,” Sall said recently.
Russia, the world's largest wheat exporter, has urged the West to lift sanctions imposed over its military action in Ukraine so that grain starts flowing freely to global markets. While food and fertilizer are exempt, sanctions have targeted Russian shipping and made international shipping companies reluctant to transport Russian cargoes.
Stronger Trade Systems for Better Health (World Bank)
Governments used a wide range of trade and trade-related policies to bolster domestic availability of critical medical goods and services. Measures to liberalize imports and limit exports of medical goods surged in the first two quarters of 2020. According to an analysis conducted for this report, these measures increased average trade costs for medical goods by about 60 percent. Governments also adopted emergency measures to facilitate trade, ease regulatory bottlenecks, and promote the diffusion of health technologies. To reduce physical contact between traders and border authorities, many countries expedited a transition from paper-based to electronic documents. Countries also simplified trade procedures to facilitate the flow of critical supplies. The pandemic uncovered gaps in international cooperation, including a lack of information on the stocks and availability of critical inputs; a lack of mechanisms to mobilize financing to develop vaccines and therapeutics; and barriers to the rapid movement of certified medical products across borders.
International trade statistics: trends in first quarter 2022 (OECD)
Following six quarters of sustained growth, the value of international merchandise trade for the G20 reached a new high in Q1 2022. Exports and imports increased by 3.6% and 5.8%, as compared to Q4 2021 and measured in current US dollars. The increase is largely explained by rising commodity prices, as the war in Ukraine and COVID-19 containment measures in East Asia placed further pressure on the prices of traded goods and on already strained supply chains. Growth in exports and imports of services for the G20 are estimated at around 2.0% and 1.1% in Q1 2022, respectively, compared to the previous quarter and measured in current US dollars. The preliminary estimates are well below the rates of 6.2% and 3.1% recorded in Q4 2021 for exports and imports, reflecting weaker trade in the transport sector in East Asia and a general slowdown in services trade across most of the G20 economies for which data are available.
Cloud tools help minimise supply chain disruptions (Business Daily)
Manufacturers and distributors can leverage cloud enterprise resource planning (ERP) tools to revolutionise the way they do business and manage disruption as the impact of the global pandemic, regional instabilities, and natural disasters continues to cause supply chain volatility. Supply chain disruptions have resulted in the need for highly agile organisations that are responsive to ever-changing market needs. A recent survey shows that 70 percent of manufacturing and distribution businesses experienced supply chain disruptions and 60 percent of businesses were unable to engage and collaborate with customers and suppliers in real-time. While collaboration and supply chain disruptions have been the biggest areas of impact, only 45 percent of businesses have the systems in place to address these disruptions and effectively collaborate with external suppliers and customers.
Fast-tracking implementation of eTrade Readiness Assessments: Second edition (UNCTAD)
The COVID-19 pandemic has been accompanied by a surge in e-commerce and uptake of digital solutions by businesses and consumers. It has also underscored the significant divides that exist in terms of digital readiness, hampering many countries’ ability to harness e-commerce and the digital economy. UNCTAD’s eTrade Readiness Assessments (eT Readies) have already helped 29 countries, mainly Least Developed Countries (LDCs), to identify the main barriers and opportunities for e-commerce development. But the assessments are only the beginning. Their real value comes to fruition when moving from policy recommendations to implementation. That is why UNCTAD set up the eT Ready Implementation Support Mechanism (ISM) in 2020. Since then, several capacity-building, knowledge sharing and stakeholder engagement activities have been organized to strengthen incountry implementation capacities and better empower in-country Focal Points, that are playing a pivotal role in mobilizing national stakeholders from both the public and private sectors, although not without challenges.
Report: COVID-19 Slows Progress Towards Universal Energy Access (World Bank)
The COVID-19 pandemic has been a key factor in slowing progress toward universal energy access. Globally, 733 million people still have no access to electricity, and 2.4 billion people still cook using fuels detrimental to their health and the environment. At the current rate of progress, 670 million people will remain without electricity by 2030—10 million more than projected last year. The 2022 edition of Tracking SDG 7: The Energy Progress Report shows that the impacts of the pandemic, including lockdowns, disruptions to global supply chains, and diversion of fiscal resources to keep food and fuel prices affordable, have affected the pace of progress toward the Sustainable Development Goal (SDG 7) of ensuring access to affordable, reliable, sustainable and modern energy by 2030. Advances have been impeded particularly in the most vulnerable countries and those already lagging in energy access. Nearly 90 million people in Asia and Africa who had previously gained access to electricity, can no longer afford to pay for their basic energy needs.
Africa remains the least electrified in the world with 568 million people without electricity access. Sub-Saharan Africa’s share of the global population without electricity jumped to 77 percent in 2020 from 71 percent in 2018 whereas most other regions saw declines in their share of the access deficits. While 70 million people globally gained access to clean cooking fuels and technologies, this progress was not enough to keep pace with population growth, particularly in Sub-Saharan Africa.
Legal Barriers to Women’s Economic Empowerment (IMF Finance & Development Magazine)
When women begin to participate more in the economy, good things happen. There’s more growth, less inequality, and greater financial stability. So, why is women’s labor force participation still so low in so many countries? Katharine Christopherson is an Assistant General Counsel in the IMF Legal Department and coauthor of some new research that looks at the legal impediments to women’s economic activity across the globe. In this podcast, journalist Rhoda Metcalfe and Katharine Christopherson discuss the outdated laws that hold women back and what drives countries to reform them.
WTO members discuss key findings of Aid for Trade Monitoring and Evaluation Exercise (WTO)
The responses reveal that trade remains prominent in governments’ development strategies in 2020 and highlight its role in addressing the impact of the COVID-19 pandemic and in assisting in economic recovery. WTO members and their Aid-for-Trade partners were able to reorient their strategies to meet the challenges arising from the pandemic, with high priority now being given to trade facilitation, growth of micro, small and medium-sized enterprises (MSMEs), trade connectivity, women’s economic empowerment, e-commerce and green economic growth. Introducing the latest figures on Aid for Trade, the Organisation for Economic Co-operation and Development reported an increase in global Aid-for-Trade disbursements and noted that Aid for Trade represented 30 per cent of Official Development Assistance worldwide. Disbursements amounted to USD 48.7 billion in 2020, up 3 per cent from 2019. Commitments have also increased, up 18 per cent from 2019 to USD 65 billion in 2020. The highest share of Aid-for-Trade flows — 38 per cent — was directed to Africa, with 35 per cent to Asia.
Related News
tralac Daily News
Local news
Copper could be the ‘new gold’ for South Africa: CEO (BusinessTech)
Big Tree Copper chief executive Jan Nelson expects a steady climb in demand for the red metal over the next three decades. This, as the world, has turned its full attention to sustainable energy and a greener economy. Recent panic over the conflict in Ukraine and its subsequent threat to Europe’s reliance on Russian energy saw a surge in the metal trade to around $10,900 per ton (R169,700). Pricing has since eased to what Nelson calls a ‘more realistic level’ but he said that over the next few decades demand should steadily increase with a long-term view of 500% growth by 2050.
Nelson said demand is expected to exceed supply with an expected upward trajectory of around 16-20% by the end of the decade. At current production rates, a deficit of at least 6 million tons is forecast, he said.
Given the metal’s history in the market, Nelson believes that the wild-card nature of copper’s pricing will continue to see short and near term fluctuations but a longer view forecasts an incremental upward trajectory.
Role confirmed for local green entrepreneurs in economic recovery, just transition (Engineering News)
There are number of opportunities for local green entrepreneurs in South Africa and they can play a pivotal role in the country’s economic recovery and just energy transition; however, it is imperative that challenges in the ecosystem be addressed and for support for participants to be bolstered. This was indicated by speakers during economic research institution Trade & Industrial Policy Strategies’ (TIPS’s) webinar, titled “Unpacking the Green Economy Ecosystem: Business Development Support Services for Local Green Entrepreneurs”, on June 1.
Zimbabwe: Mozambican Government Bans Meat Imports From Zimbabwe (allAfrica)
The Mozambican government has prohibited, as of Wednesday of the current week, the import of animals, and animal products and by-products from Zimbabwe due to the resurgence of cases of foot-and-mouth disease in that country. The measure comes after the Zimbabwean Tax Authority notified the Mozambican authorities last Friday, about the outbreak of foot-and-mouth disease in Mashonaland Central province, Mbire district, which borders Mozambique. The government has also decided to ban the import wild ungulates, and of fodder for cattle, goats, pigs and sheep. The Mozambican government is also carrying out the supervision of the movement of animals and targeted products along the main borders and other road entry points into the country.
The Economic Commission for Africa (ECA), Sub-Regional Office for Southern Africa (SRO-SA), in collaboration with the Common Market for Eastern and Southern Africa (COMESA) with Permanent Secretaries (PS) of Commerce and Industry from Zambia and Zimbabwe held a two-day high-level meeting to discuss the implementation of a common agro-industrial park (CAIP) between the two countries. The objective of the meeting was to update the two Permanent Secretaries on the progress on the implementation of the industrial cooperation programme between the two countries focusing on the common agro-industrial park; discuss the funding opportunities for activities in the park; propose a possible location of the park; review the draft harmonized policy, legal, regulatory, and institutional framework for the park and agree on a roadmap for the initiative’s subsequent phases.
Kenya’s plan to call the shots in LPG logistics (Business Daily)
Kenya seeks to dominate in the supply of Liquefied Petroleum Gas (LPG) by constructing the biggest import and storage gas facility in Mombasa and licensing more private companies to compete with Tanzania which has dominated the business for years in the region. The announcement to construct a 25,000 tonnes storage facility by the Kenya Pipeline Company (KPC) which will connect to the Sh42 billion new Kipevu Oil Terminal 2 (KOT) at the port of Mombasa comes few days after Kenya banned imports of gas from Tanzania through the Namanga border. The facility in Mombasa once completed will quicken the loading of cooking gas for distribution by trucks which will help to cut demurrage costs.
Uhuru hails direct coffee export by farmers (The Star, Kenya)
President Uhuru Kenyatta has termed the direct export of coffee by smallholder farmers as remarkable sector reform that is earning them double dividends. Speaking during the Madaraka Day celebrations in Nairobi, the head of state said his government has over the last three years eliminated the barriers created by the overly complex coffee industry structure that denied farmers their rightful share. This is the second time in less than a week Uhuru is hailing reforms in the coffee sector that have seen six coffee unions licensed by the Capital Markets Authority as brokers. Last week during the G25 African Coffee Summit, he cited a case where KipKelion District Cooperative Union earned double returns for being the first farmers-led broker to directly export coffee to South Korea.
“This is a historic achievement for small-scale coffee farmers across the country. Farmers from Kericho, Nandi and Bomet counties earned an average rate of Sh116 per kg of Cherry compared to an average of Sh76,’’ Uhuru said. He added that those market gaps must be sealed to make farming cool.
Buy your raw materials from Ghana Agric Minister tells importers of organic fertilizer (GhanaWeb)
Minister of Food and Agriculture, Dr. Owusu Afriyie Akoto is urging importers of organic fertilizers to start patronizing their raw materials from local sources. This according to him will boost efforts being made towards the production of more organic fertilizer even as imports have been distorted due to the Russia-Ukraine crisis. Farmers have in recent times, a shortage in the supply of fertilizers and the increment in their prices as well. The Agric Minister noted that government is working to support the use of organic fertilizer in the country.
Rising gold prices could offer windfall revenue (The Business & Financial Times)
The mining sector could once again be the economy’s saviour, as gold prices continue to firm up in the face of a global economic crisis.
Price of gold, which is known to gain momentum during economic crisis as investors often consider it as safe haven, averaged US$1,866 per ounce between January and April 2022 from US$1,788 per ounce within the same period in 2021, with the Ghana Chamber of Mines expecting this positive price trend to continue. This, coupled with expected higher output from large-scale gold miners according to the Chamber’s projections, means government could be in for a revenue windfall in what could be a huge boost in the face of tightening fiscal space, falling revenues from other sectors against rising expenditure.
Barriers to trade, barriers to poverty reduction? How Nigeria can harness trade to lift people out of poverty (World Bank Blog)
Nigeria’s aspiration to lift all of its people out of poverty by 2030 presents a serious challenge. Even before COVID-19, 4 in 10 Nigerians lived below the national poverty line – some 80 million people. The global pandemic, rising inflation, and ongoing uncertainty related to the war in Ukraine – combined with relentless population growth – have made Nigeria’s poverty-reduction goals more challenging than ever. Many potential poverty-reducing policies for Nigeria are considered in detail in a new report, A Better Future for All Nigerians: Nigeria Poverty Assessment 2022.
Trade presents one vital – but often untapped – pathway to poverty reduction. Through its effects on investment, technology transfer, and competition, trade can help growth – boosting job creation, increasing domestic value added, and reducing the price of goods that Nigerians buy along the way. All of these effects may contribute to reducing poverty.1
Yet trade may have different impacts on households depending where in the country they live, what jobs they do, and whether they are rich or poor : even if trade leaves people better off on average, some households could lose out.
Development Bank Ghana’s entry is timely for banks, entrepreneurs—GCB MD (BusinessGhana)
The Managing Director of GCB Bank PLC (GCB), Mr. Kofi Adomako, says the arrival of the new Development Bank Ghana (DBG) is timely for banks like GCB and also for the growth of Small and Medium-sized Enterprises (SME) in the country.
Mr. Adomako who was speaking to the collaboration between GCB and DBG, stated that “DBG is actually not going to be a commercial bank or behave like one; rather it is a wholesale bank and will typically on lend, like many other development banks, to commercial banks to intervene in markets. DBG has come at the right time in a country like Ghana. It is true we have had other banks who tried to play the role of development banks but DBG comes with a big difference. The difference DBG brings is its independence, governance and the way it was set up.” He explained that, “the development partners that DBG brings to the market are immense. I think the Bank has come at the right time and it is going to be a different bank from what we have seen in the past.
DBG is not going to compete with commercial banks but it is going to bring out the value in commercial banks in the sense that it is going to on-lend over much longer terms, in both foreign currency and Cedis which commercial banks have lacked for a long time and has stifled the growth of SMEs. So, DBG coming into the market is timely for a bank like GCB Bank. We see them as a unique partner, who will help us deepen our focus in the market and help us develop those areas in agribusiness, ICT, tourism for which much needed funding is required.”
Ethiopian Airlines convert passenger planes into cargo aircraft (CGTN Africa)
Ethiopian Airlines is accelerating efforts to convert passenger planes into freight aircraft as demand for cargo movement continues to rise. Africa’s leading airliner is keen to expand its cargo business which has surged after the pandemic-induced disruptions in supply chains.
The airline owns one of Africa’s largest and globally competitive Maintenance, Repair, and Operation divisions. So far the Ethiopian MRO, which was launched in April this year, has excelled in converting air crafts into freighters.
The Addis Ababa based aircraft wing is now converting passenger planes including this Boeing 767 aircraft into a cargo jets as it eyes a bigger slice of the cargo trade. According to Ethiopian Airlines Group CEO Mesfin Tasew, the Cargo business is expected to bring increased opportunities for the carrier which is boosting its capacity.
Morocco’s Southern Mega Projects to Boost Africa’s Trade Development (Morocco World News)
Morocco’s major infrastructure projects in its southern regions, especially the new Dakhla Atlantic port and the Tiznit-Dakhla highway, are set to contribute to the development of African trade as well as regional trade, a former Senegalese official has said.
CSOs Seek Suspension Of Taxes, Import Duties On Sanitary Pads, Petition Lawmakers (The New Dawn Liberia)
Several civil society organizations (CSOs) including Community Healthcare Initiative (CHI), Paramount Young Women Initiative (PAYOWI) and others have called on President George Manneh Weah to issue an Executive Order suspending taxes and import duties on sanitary pads. They believe that this will impact women and girls’ access to sanitary pads, making them more affordable and accessible.
A recent UNESCO study on sub-Saharan Africa showed that 1 in 10 girls misses school during their menstrual cycle, and the missed days equal 20% of a school year. “We ask the Government, through the Legislature, to amend the Revenue Code removing all taxes applicable to the importation and sale of sanitary pads in Liberia,” the CSOs’ petition noted.
Gambia, Equatorial Guinea sign accords to build diplomatic ties, trade (The Point)
The Gambia and Equatorial Guinea, Sunday, 29th May 2022 signed four bilateral agreements to establish diplomatic and trade links between the two countries, at a ceremony in the Presidential Palace in Malabo. The agreements are the Joint Communique on the establishment of diplomatic relations between The Gambia and Equatorial Guinea, Cooperation Framework Agreement between The Gambia and Equatorial Guinea, MOU on Diplomatic Consultations between the Foreign Ministries and Agreement on Reciprocal Exemption of visas for holders of diplomatic and service passports. The Cooperation Framework Agreement establishes the Joint Commission for Economic, Commerce, Scientific and Technical Cooperation.
During the ceremony, President Adama Barrow and his counterpart H. E. Teodoro Obiang Nguema Mbasogo, President of the Republic of Equatorial Guinea, affirmed the mutual benefits of establishing relations between the two countries would yield. President Barrow said the two countries could gain a lot when they work in partnership to exploit their natural resources for the benefit of their people.
World Bank Supports Economic Recovery through Resilient Tourism and Blue Economy Investments in Cabo Verde (World Bank)
The World Bank approved today an International Development Association credit in the amount of US$30 million for the five-year Resilient Tourism and Blue Economy Development in Cabo Verde Project. Complementary co-financing of US$5 million will be provided through a grant from the Global Program for the Blue Economy Multi-Donor Trust Fund. Cabo Verde’s tourism sector has seen exceptional growth in the last two decades and is a crucial driver of growth and job creation, reaching an estimated 25 percent of GDP. The Covid-19 pandemic represented a major setback with arrivals collapsing by 75 percent in 2020, affecting tourism and ancillary sectors particularly hard. In addition to the unparalleled economic shock, the pandemic also highlighted structural challenges in the tourism sector, including overconcentration of arrivals in two islands and a single market segment, weak local supply chain linkages, and environmental sustainability issues—particularly in coastal areas.
As Growth Slows, Madagascar Needs a New Reform Drive To Steer Clear of the Economic Storm (World Bank)
The latest economic update for Madagascar suggests that the economy is facing new headwinds following bouts of COVID-19 (coronavirus), a series of extreme weather events and the fallout from the conflict in Ukraine at the start of 2022. An economic recovery had started in Madagascar in 2021 but was interrupted in 2022 by a sequence of domestic and international shocks which are expected to result in growth slowing to 2.6 percent in 2022 (from 4.4 percent in 2021), with the poverty rate now expected to remain close to 81 percent. According to the Madagascar Economic Update: Navigating Through the Storm, the crisis is Ukraine is expected to affect Madagascar mainly through slowing demand from key trading partners and rising oil prices, which are projected to lead to growing fiscal pressures due to a lack of adjustment of regulated fuel prices and growing losses of the national utilities company JIRAMA. Beyond conjunctural factors, the decline in private investment and job creation since the outset of the crisis are expected to constraint in the growth potential of the economy moving forward. In this context, growth is expected to pick up to a slower than expected 4.2 percent in 2023 and 4.6 percent in 2024.
Morocco economic rebound threatened by drought, Ukraine war (RFI)
The North African kingdom had bounced back last year after a sharp recession in 2020 due to the coronavirus pandemic, and the government of gas tycoon Aziz Akhannouch had forecast growth this year topping three percent. But since Russia’s invasion of Ukraine he has been forced to slash that figure to at most 1.7 percent, telling parliament that “sudden external events and climate change” were to blame. The International Monetary Fund has forecast even lower growth of 1.1 percent. Morocco has pumped resources into diversifying its manufacturing sector, particularly by attracting auto giants such as Renault. But those efforts “have not changed the structure of the economy”. That is the conclusion of a 2021 report by a commission on the “New Model of Development” (NMD), a strategy announced last year which sets out ambitious plans including slashing Morocco’s wealth gap and doubling per capita economic output by 2035.
African trade and integration news
Transport and logistics infrastructure essential to AfCFTA implementation (The Business & Financial Times)
Industry players have acknowledged the need to prioritize transport supply chain logistics simultaneously with the implementation of the AfCFTA in order for the continent to achieve optimum benefits from the Single Continental Market agreement.
Speaking at the 2022 Charted Institute of Logistics and Transport Africa Forum in Accra, a Deputy Minister of Trade and Industry, Herbert Krapa said the AfCFTA offers the opportunity to develop intra-regional value chains that to goes beyond only exploiting and exporting raw materials from the smallest supplier to big manufacturers.
“We must develop linkages that enhance our ability and capacity to feed industry in a sustainable way if we are to reap the full benefit of our integration agenda, much of our efforts must be to ensuring that all participants are on the right side of the value chains,” he said.
Cote d’Ivoire repositions for AfCFTA with globally-fit workforce and infrastructure dev’t (The Business & Financial Times)
Francophone nation, Cote d’Ivoire, is repositioning itself for the African Continental Free Trade Area (AfCFTA) with ongoing developmental projects and strategic investments aimed at building ready and skilled workforce across the trade and logistics value chain, including the teaching of trade-related courses in English.
According to Senior Regional Procurement Officer West and Central Africa for IFAD, and Chairperson of CILT-WiLAT Cote d’Ivoire, Ms. Carine Toure Yemita, the move will position Cote d-Ivoire to take advantage of the single continental market with its competitive and globally-oriented graduates or workforce.
“Capacity building is something everyone will need but especially in Africa, we need to improve the capacity levels of our people. Based on our strategy, we’re confident that the future will be better.
African Development Bank (AFDB) Proposes Industrial Hubs To Make Africa A Manufacturing PowerHouse (Tekedia)
In a bid to make Africa a manufacturing powerhouse, the African Development Bank (AFDB) has proposed that the continental free trade agreement, CFTA, moves beyond trade to industrial manufacturing zones that create jobs for African citizens. Speaking at the AFDB annual meetings held in Accra Ghana, the President of the Bank Mr. Akinwunmi Adesina suggested that the African region should not just be a trade region, but also a region where more value-added manufacturing products are traded. In his words, “I think African Continental free trade (AFCTA) should not just be a trade region, but an industrial manufacturing zone where we trade value-added manufacturing products from national and regional value chains that are competitive globally”.
He stated that the AFCTA should drive the creation of zones that will offer infrastructures, facilities, and incentives that drive manufacturing in the continent as it is done in Asia and South America to create jobs. He further disclosed that the AFDB is working to ensure that Africa transitions to sustainable energy that can drive factories to drive manufacturing. Mr. Akinwunmi revealed that 86 percent of AFDB investments in power generation will go into renewable energy.
EAC on track to achieve single currency by 2024, says Kadaga (Monitor)
First Deputy Prime Minister and Minister for East African Community Affairs (EAC) Rebecca Kadaga has said that if everything goes according to plan, the EAC will by 2024 have a Single Currency. Speaking during the Uganda-DR Congo Business Summit in Kinshasa, Ms Kadaga said member states are now working on the finer details to choose a country to host the East African Monetary Institute that will later become the East Africa Central Bank
“By the end of this year, we should be knowing which country is hosting the monetary institute. The institute will be the East African Central Bank … We expect that if we move according to plan, by 2024, we shall have a Single Currency,” she told more than 200 delegates at the summit.
EAC tables US$91.5 Million Budget Estimates before EALA for the 2022/2023 Financial Year (EAC)
The East African Community (EAC) has tabled before the East African Legislative Assembly (EALA) the budget estimates for the 2022/2023 Financial Year totaling US$91,579,215. Presenting the speech before the Assembly, the Chairperson of the Council of Ministers and Kenya’s Cabinet Secretary for EAC and Regional Development, Hon. Betty C. Maina, said that the budget estimates for the Financial Year 2022/22023 are being presented at a time when the world’s economic recovery from the COVID-19 pandemic is under threat from the rising prices of fuel and other commodities, occasioned by the Russian - Ukrainian conflict. “Economic growth in the EAC region averaged 5.9 percent in 2021, compared to an average of 2.3 percent in 2020. The strong regional economic growth in 2021 was largely supported by increased removal of COVID-19 related restrictions, public investments and strong performance in the productive sectors,” said Hon. Maina.
“Global economic growth is expected to slow down from 6.1 percent in 2021 to 3.6 percent in 2022. Economic growth in the EAC region is projected to decline from an average of 5.9 percent in 2021 to 5.3 percent in 2022 and 5.7 percent in 2023,” she added.
The 2022/2023 Budget is themed ‘Accelerating Economic Recovery and Enhancing Productive Sectors for Improved Livelihoods.’
Post-harvest losses: EAC steps in to help farmers (Food for Mzansi)
Post-harvest losses occur in hugely concerning percentages in six East African countries where food security is under threat. To address this, an intergovernmental organisation has developed an action plan to help farmers reverse post-harvest loss. The United Nations’ Food and Agriculture Organization (FAO) estimates that an annual third of the world’s total agricultural industries deals with post-harvest loss. In the East African Community (EAC), post-harvest loss accounts for 50% in tubers and root vegetables, nearly 70% in fruits and vegetables and 30% in cereals.
According to EAC deputy secretary-general for the productive and social sector, Christophe Bazivamo, they have adopted a fruit and vegetables strategy, as well as a management action plan. This forms part of their efforts to find solutions to reducing post-harvest losses.
A detailed article published on FoodForAfrika.com explores the negative impacts of post-harvest loss and the four pillars of food security that must be realised. According to the article not only does it negatively impacts a country’s food security, but it also has a knock-on effect on levels of nutrition. The article furthermore details practical ways in which the EAC plans to reduce these losses.
Enforcing competition would ease food price hikes in east and southern Africa (The Conversation)
Small and medium-scale farmers and agri-businesses in east and southern Africa are getting a raw deal. To succeed they need fair and integrated regional markets. Research by the Centre for Competition, Regulation and Economic Development has highlighted the need for better integration of regional economies as a step towards food security in the region. Powerful commercial interests, high transport costs and poor access to facilities such as for storage mean that small and medium-scale farmers are often not getting fair prices for the food they grow. Fair prices are those that meet demand and cover reasonable costs of supply including transport across borders.
During the course of our research we came across examples of how the odds are stacked against most small and medium-scale farmers. Take the experience of Endrina Maxwell, a small producer in Malawi.
Investors assess regional railway prospects (The New Times)
Potential investors are weighing income prospects in financing the implementation of the Standard Gauge Railway (SGR) project, according to the African Development Bank (AfDB) Director General for Eastern Africa, Nnenna Lily Nwabufo. Currently, Rwanda has two route options on the table, the Kenyan Standard Gauge Railway route for the northern corridor and Isaka-Kigali Standard Gauge Railway for the central corridor.
She disclosed that investors are looking at the likely volume of services and trade attached to the railway project and whether there is enough income to be generated from that to be sure of investment viability. Nevertheless, she said that the intention is to “raise more money internally” as each involved country will have to make a commitment of the amount of money they will allocate to the project from the funding they get from the bank.
Ghana ranked 1st, 2nd in West Africa, Africa as best destination for investments, trade – Fitch Solutions (Myjoyonline)
Ghana has been ranked 1st in West Africa and 2nd in Sub Saharan Africa by Fitch Solutions, research arm of ratings agency Fitch, as the best destination for investments and trade. With a Trade and Investment Risk score of 50.9%, the country outperformed the West Africa average of 36.4%.Despite the challenges facing the economy, the country also placed 88th out of 201 markets globally in terms of competitive environment for investments and trade. For Economic Openness, Ghana scored 58% and 50% for Trade and Investment Risk. In terms of Government and Legal Intervention, the nation scored 45% each respectively. Similarly, with a Crime and Security Risk score of 51%, Ghana outperformed the West Africa average of 33.3% and ranks in 1st place regionally and in 90th place out of 201 markets globally.
The report pointed out that Ghana’s markets have strong fundamentals, including a track record of private investment in energy infrastructure, comparatively high political stability and security, and a relatively diverse competitive landscape. It however expressed worry about the depreciation of the cedi which it said will in the near term make private investors more reluctant to invest in Ghana’s infrastructure sector. It therefore do not expect private investments to meaningfully cushion the negative impact of subdued public infrastructure spending on the market’s construction industry growth.
28th Conference of Directors General of Customs of the West and Central Africa Region (WCO)
The 28th Conference of Directors General of Customs of the WCO West and Central Africa (WCA) Region was held on 26 and 27 May 2022 in Brazzaville, Republic of the Congo.
The Conference was aimed at evaluating progress with the implementation of the Region’s Strategic Plan and the recommendations made by the Directors General of Customs at their 27th Conference, which took place virtually on 30 November 2021. It was also convened to examine the reports of the WCO Secretariat, the Office of the Vice-Chair, the regional entities and the regional (IT) working group, as well as to review a draft proposal to restructure Members’ contributions to the regional fund and discuss other emerging topics.
The WCO Secretary General, in his opening remarks, thanked the authorities of the Republic of the Congo for their hospitality, before outlining the WCO Data Strategy and inviting participants to rise to the challenges of this year’s theme, namely “Scaling up Customs Digital Transformation by Embracing a Data Culture and Building a Data Ecosystem”. Later in the Conference, he delivered a keynote speech covering the items on the Agenda of the upcoming Policy Commission and Council sessions, aimed at addressing the concerns raised by Members during the regional consultations on the Strategic Plan. In this context he touched upon various topics that the Secretariat has been working on, including Green Customs and Fragile Borders.
India-Africa relations prospering on mutual respects & co-operations among others (NewsOnAIR)
Dating back several centuries, the relations between India and African countries are driven and shaped by a number of factors, including trade and investments, cultural, historical and political engagements.
India and Africa’s historical links and relations have experienced a revival in recent years and both sides understand the fact that it is a win-win situation as growing relations are mutually beneficial. India-Africa trade has grown to around 66.7 billion US dollar in 2019-20. Around 8% of Indian imports are from Africa and around 9% of Africa’s imports are from India. The investment of India’s public and private sector enterprises are increasing in Africa, making it the 8th largest investor in African.
In recent years, besides loan and investment, India has also given ample amount of aid to Africa to fight the Covid-19 pandemic. Under the Vaccine Maitri initiative, India supplied 24.7 million doses of Made of India Covid vaccines to 42 countries in Africa.
Clearly, India looks to engage with Africa meaningfully, focusing much on its core competencies like human resource development, training and skill development, IT, ITES, education and healthcare services unlike China who focuses majorly on developing manufacturing capacities and infrastructure in Africa. While, China’s economic model of engagement with Africa looks attractive and has also paid rich dividend in recent years, the fascination for India’s support for democratic practices, processes, institutions and people to people engagement is high in Africa.
Global economy news
Closed-down ports, held-up containers, and waiting ships in Odesa, Shanghai, or Los Angeles have an impact on supply chains and consumer prices around the world. As shipping markets are global, it is above all the smaller and more vulnerable economies that are more negatively affected by capacity shortages and freight rate increases.
As maritime transport freight rates go up, consumer prices will increase as well. Although it is often said that the shipping costs make up only a small proportion of the final price of high street shop prices, the historically high freight rates – especially for containerised shipping – do trickle down and lead to higher inflation.
Already in our UNCTAD Review of Maritime Transport 2021, we had simulated that the high freight costs will be passed on and lead to an additional increase in consumer prices by 1.5 percentage points globally, with Small Island Developing States and Least Developed Countries experiencing significantly higher surges. Latest data by the IMF confirms that our earlier simulation was spot on.
An update of this assessment for an upcoming UNCTAD expert meeting show that the situation is not improving: As inflation has now reached us all, the contribution of container shipping costs to the price increases is rising. Globally, consumer prices are expected to go up by 1.6 percentage points; in Least Developed Countries the simulated increase is 2.4 percentage points, and in Small Island Developing States it reaches plus 8.1 percentage points.
IMF says it’s looking at ways to channel SDRs to development bank (BusinessLIVE)
The African Development Bank (AfDB) is lobbying rich nations to use their rights to International Monetary Fund (IMF) reserve assets to help it raise funding to support poorer countries, the first such initiative undertaken by a multilateral lender. “We’re pioneering for Africa but also pioneering for multilateral development banks,” which can complement and magnify the work of the IMF, AfDB CFO Hassatou Diop N’Sele said in an interview. The IMF injected a record $650bn into the global fiscal system in 2021 to mitigate the impact of the coronavirus by releasing special drawing rights (SDRs) to its member states.
The AU has called for an additional $67bn to support the continent, with part of it channelled through its regional lender. Under an AfDB proposal, wealthy nations would lend their SDRs to the Abidjan-based bank, which could account for these assets as equity and leverage them to raise three to four times as much funding to support African economies.
Western sanctions policy mindless: Russian official (The Herald)
THE chairperson of the Federation Council of the Federal Assembly of the Russian Federation, Ms Valentina Ivanovna Matvienko, who arrives in the country today for a three-day official visit, has described the Western sanctions policy as mindless. Ms Matvienko is set to have high-level meetings and engagements with President Mnangagwa and other heads of national institutions on how Russia and Zimbabwe can elevate their strategic co-operation in the face of Western sanctions. Both Russia and Zimbabwe have been targeted by Western countries through sanctions for their preference of a fairer world where sovereign countries can determine their destinies within the confines of international law.
Speaking to The Herald prior to her visit, Ms Matvienko emphasised that “developing relations with African countries is one of Russia’s foreign policy priorities”.
Confronting a perfect long storm (IMF Blog)
The pandemic, war in Ukraine, the threat to food security, and the resurgence of global poverty. Heatwaves, droughts, and other extreme weather events. These are not random shocks. Nor are they a perfect storm in the conventional sense, a one-off conjuncture of bad events. We face instead a confluence of lasting structural insecurities—geopolitical, economic, and existential—each reinforcing the other. We have entered a perfect long storm.
There is no lack of private and market finance. But channeling it to meet the needs of the commons requires a proactive public sector and well-designed frameworks for risk-sharing with the private sector. Policies and standards to rapidly scale up the deployment of clean energy technologies that are already proven, and to incentivize large scale infrastructural investments such as in smart transmission and distribution grids, will be critical to achieving significant cuts in emissions by 2030. However, almost half the technologies needed to reach net zero by mid-century are still being prototyped. Governments must put skin in the game to leverage private sector R&D, and promote demonstration projects, to accelerate the development of these technologies and bring them to market. Besides getting to net zero on time, they should aim to spur major new industries and job opportunities.
A more fragmented world (IMF Blog)
The rare confluence of geopolitical, economic, and technological forces now confronting the world may reverberate for generations.
The war in Ukraine is thrusting us into a fraught period of geopolitical realignment, supply disruptions, food and energy insecurity, and more volatile financial markets. These shocks could shake social and political stability in some countries while weakening the ability of the world as a whole to confront its foremost long-term challenge, climate change. A more fragmented world, says Singapore’s Tharman Shanmugaratnam, makes greater investment in global public goods even more urgent—an effort he argues will require unprecedented public-private collaboration and a stronger, more effective multilateralism.
New report highlights positive impact of WTO technical assistance activities (WTO)
This document shows the swift reaction of the WTO Secretariat to the COVID-19 pandemic, WTO Deputy Director-General, Xiangchen Zhang, said in the foreword to the report. He stressed that, with innovation and flexibility, the WTO Secretariat was able to continue providing support to developing countries and least-developed countries despite the constraints posed by the pandemic, such as travel restrictions.
Related News
tralac Daily News
Local news
SA companies could boost exports to EU by R350bn a year, research shows (Daily Maverick)
South African companies are missing out on R350-billion a year in export opportunities to the European Union (EU), new research shows. Under the Economic Partnership Agreement (EPA), which it signed with South Africa and five other southern African countries in 2016, the EU allows 96.2% by value of SA exports into its market duty-free and 2.5% under reduced tariffs. Conversely, South Africa and the other Southern African Customs Union members allow 74.1% of EU exports into their market duty-free, and 12.5% under reduced tariffs. The EPA has been a boon for many South African exporters.
Roberto Cecutti, the head of trade at the EU embassy in Pretoria, told a media briefing last week that in 2021 SA’s exports to the EU increased by 30% and SA recorded its first trade surplus – of some R15-billion – with the EU since the first free trade agreement between SA and the EU began in 2004. He noted that SA exported a lot more value-added goods to the EU than to the rest of the world. About 33% of SA exports to the EU were in manufactured goods, including vehicles, compared with just 13% of those categories as a share of SA’s exports to the world as a whole.
United front for South Africa on freight rates (Fruitnet)
A steep rise in shipping rates is causing mayhem among fruit growers and exporters around the world. In South Africa these increases, which are regarded as unreasonable, unacceptable, and short-sighted, are uniting fruit growers, exporters and logistics service providers as never before. Sources have said that industry stakeholders are united in their view that shipping lines should be aware of the risks they are placing on the long-term sustainability of exports. These sources believe that shipping lines are working from incorrect assumptions in pursuing increases in freight rates.
South Africa’s citrus industry has already stated that the recent increases represent the single most important threat to the long-term sustainability of the industry.
Shipping lines have argued that despite higher freight rates they are still getting bookings from exporters. “They assume that this is because it remains financially viable for growers and exporters to ship at the higher freight rates,” commentators have said. “The reality is that this is not the case. 2021 was already an extremely difficult year for many in the industry. If one notes what is going on around you, you will see that many businesses have gone into business rescue or liquidation. Many companies survived to 2022 based on the reserves they had built from 2019/2020, in the hope that things would improve.”
South Africa’s unemployment rate dips to 34.5% (Daily Maverick)
The good news is that the unemployment rate is falling. The bad news is that it is still more than 34% against the backdrop of inflation as winter sets in. The latest Quarterly Labour Force Survey, from which the numbers are derived, also showed that the unemployment rate by the wider measurement – which includes discouraged jobseekers – fell to 45.5% from 46.2% previously. “These results indicate that 370,000 jobs were gained between the fourth quarter of 2021 and the first quarter of 2022,” said Stats SA.
However, there were job losses in Private Households (186,000), Finance (72 000), Construction (60,000) and Agriculture (23,000). The total number of people employed was 14.9 million in the first quarter of 2022.”
“With expectations of decent citrus, summer grains and oilseeds harvests, and fairly good activity in other subsectors of agriculture, we believe primary agriculture employment could remain at these robust levels this year,” said Wandile Sihlobo, Chief Economist at the Agricultural Business Chamber, in a note on the data.
Namibia Pushes for Improved Bilateral Relationship with Nigeria (This Day)
Namibia has expressed its willingness to extend bilateral relationship with Nigeria. According to the country, it would use the hosting of the fifth session of the Namibia-Nigeria Joint Commission of Cooperation holding in Windhoek in August, 2022, to push for improved bilateral relationship between the two African countries. Addressing a press conference in Abuja, yesterday, the High Commissioner of Namibia to Nigeria, Mr. Humphrey Geiseb, said the present volume of trade between the two countries needed to be improved.
“In 2000, Namibia and Nigeria established the Namibia-Nigeria Joint Commission of Cooperation. In August 2022, Namibia will host the 5th Session of this Joint Commission to elaborate on mutually beneficial projects between Namibia and Nigeria. “This Joint Commission has stood the test of time and has provided a platform to execute great projects between our two countries.”
Geiseb added: “Presently, Namibia exports salt worth around $10 million a year to Nigeria and also some electronics. A factory to build Namibian electronics in Lagos is under way. Two Nigerian companies – Premier Charcoal in Outjo and King Charcoal in Walvis Bay – are operating in Namibia owned by Nigerian investors.”
He noted that: “There is tremendous potential for increasing trade. Definitely, Namibian producers can still export Salt and hopefully in future, Namibian grapes, dates, wine, and once restrictions are lifted, Namibian beef and lamb.
Namibia, USA to explore avenues to grow businesses further at upcoming annual trade mission (Namibia Economist)
The Ministry of Industrialisation and Trade (MIT) together with the Embassy of Namibia in Washington, DC, will host a USA delegation from 06 to 10 June. The visit is part of the Annual Trade Mission to Namibia headed by the Ambassador, Margaret Mensah-Williams. According to a statement, MIT is preparing to receive a multi-sectoral business delegation from the USA to explore and follow up on possible business opportunities locally. “The gathering aims to yield tangible results where the American businesses can explore the diverse opportunities existing in Namibia,” the MIT added. “We have an investment culture and we urge all local businesses to take advantage of such opportunities and grow opportunities at home,” the ministry added.
Meanwhile, the mission will promote trade and investment in the following sectors: Education; Mining and Mineral Beneficiation; Logistics and Container Terminal; Agriculture and Agro-processing; Low-cost Housing; Tourism and Hospitality; Water and Power Generation; Creative industry and Culture; Pharmaceutical and Medical supplies, including Herbal Medicine; Marine Resources; Natural Cosmetics, etc.
Namibia solidifies intent to be logistics gateway - Third and last section of the Windhoek to HKIA road gets off the ground (Namibia Economist)
The Minister of Works and Transport, John Mutorwa on Monday took part in the official groundbreaking ceremony for the upgrading to dual carriageway standards of Phase 2B of the Windhoek to Hosea Kutako International Airport road.
The project which forms part of Namibia’s regional trunk routes includes the construction of the 21.3 kilometres of the dual-carriage freeway, three interchanges, two river bridges and drainage structures.
“Namibia is positioned as a gateway for imports and exports to and from landlocked neighbours in the SADC region and the Chinese government is assisting us with strides in expanding our road network to achieve the goals for transport as set out in Vision 2030,” he said.
IMF Staff Completes 2022 Article IV Mission to Botswana (IMF)
“The 2022 Article IV consultation discussions take place in a context of high volatility in global commodities, and COVID-19 outbreaks in Botswana’s key trading partners. Commodity prices have surged following the Russian invasion of Ukraine. While higher demand for and prices of diamonds could result in some windfall for Botswana, higher food and energy prices will weigh on fiscal and external balances and threaten food security and energy affordability for the most vulnerable populations. At the same time, COVID-19 outbreaks in China, supply chain disruptions, and tighter financial conditions are projected to reduce global growth to 3.6 percent in 2022, from 6.1 percent in 2021.
Botswana’s economic recovery from the pandemic should continue into 2022 amid higher prices and demand for diamonds, good rainfall in some parts of the country and increasing international tourist arrivals. Growth is projected at 4.3 percent in the current year. Robust diamond production, favorable terms of trade, improvements in tourism, and smaller portfolio outflows should further strengthen Botswana’s external position. Buffers, particularly those held by the government, should continue to recover.
Flower exporters eye sea freight as air costs shoot up (Business Daily)
The high cost of shipping horticultural produce by air is now pushing traders to adopt sea freight which is relatively cheaper. Freighters from the Jomo Kenyatta International Airport (JKIA) are charging $5.8 for a kilo of cargo, forcing exporters to seek other alternative means. The charges, argues chief executive officer of Kenya Flower Council Clement Tulezi, have made produce from countries like Ethiopia sell at competitive prices in the world market because of lower freight rates. For instance, Ethiopia is charging $2.5 for a kilo of produce shipped to the world market, making goods ferried by the carrier cheaper in the world market. The sea freight is projected to lower the cost to at least $2.8 a kilo. On Monday, the Kenya Flower Council (KFC) and the Embassy of the Kingdom of the Netherlands signed a framework of cooperation that is set to accelerate the shift to sea freight for perishables in Kenya.
“It is however important to incorporate the supply chain requirements of perishable goods in new infrastructures. For instance, Standard Gauge Railway (SGR), ports, container depots as well as realising efficient customs clearance procedures of perishable goods leaving Kenya,” said the Flower Council.
Kenya: Current account deficit widens on import costs (Business Daily)
Kenya’s current account deficit as a percentage of GDP widened to 5.1 percent in April from 4.8 percent a year earlier, due to higher import costs for fuel, food and industrial goods that outweighed higher inflows from agriculture exports and diaspora remittances. The ongoing conflict between Russia and Ukraine has pushed up costs of key food items such as wheat, and also caused a jump in the price of crude oil in the international market. Oil prices, which had fallen to decades lows of $19 per barrel at the height of the Covid-19 pandemic in 2020, have now gone up to $120.Constraints in the global supply system due to pent-up demand after the easing of Covid restrictions have also increased the cost of importing goods significantly.
“The wider deficit reflects a higher import bill, particularly for oil, which more than offset increased receipts from agricultural and services exports, and remittances,” said the Central Bank of Kenya (CBK) in a market bulletin.
Horticulture exports decline by Sh2.8bn on avocado restrictions (Business Daily)
Horticulture exports retreated by Sh2.8 billion in the 12 months to April 2022, weighed down by lower avocado sales in a period when the country instituted export restrictions aimed at stopping sale of immature fruit. The latest data from Central Bank of Kenya (CBK) released yesterday shows that horticulture sales dipped to $1.04 billion (Sh121.9 billion) from $1.07 billion (Sh124.9) in the 12-months to April 2021.This was in contrast to other agriculture exports, where tea exports rose from $1.2 billion (Sh140 billion) to $1.22 billion (Sh142.4 billion), while coffee sales rose by $41 million (Sh4.8 billion) to $278 million (Sh32.5 billion). The increase in receipts from tea exports reflects improved prices attributed to demand from traditional markets, the CBK said. “We understand there were some problems in exports of avocados, which gave rise to this decline instead of the increase that we were expecting. But that problem has now been resolved, and we understand that now the exports are finding their way to the market,” said CBK governor Patrick Njoroge in a briefing.
The CBK also noted that manufacturing exports had underperformed in the period against expectations of much higher growth.
NEPC eyes $2.7tn African market through e-commerce (Punch Newspapers)
The Nigerian Export Promotion Council, NEPC, is targeting the $2.7 trillion African market through the instrumentality of e-commerce. Speaking at the launch of Agogo Africa supported by NEPC and African Union on Tuesday in Abuja, the Chief Executive Officer, NEPC, Dr Ezra Yakusak, said e-commerce had become a big industry, citing a report by an online platform, ecommercedb.com, which said that Nigeria was ranked 35th largest market for e-commerce globally and recorded a yearly growth of 42 per cent. The report, according to him, also noted that 26 per cent of Nigerians bought products online as at 2020.
He said e-commerce was one of the fastest growing industries in the global economy, noting that the estimated yearly growth was put at 23 per cent and the industry was projected to hit $27 trillion by the end of this decade.
DRC needs to dig deeper in mines for electric cars battery minerals (The East African)
Electric vehicle (EV) sales hit a record high in 2021, accounting for 10 percent of all vehicles sold globally and putting a strain on the scarce minerals — cobalt, lithium and copper — needed to make their batteries. A report by Paris-based International Energy Agency (IEA) released on May 23 shows that 6.6 million electric vehicles were sold in 2021 bringing global sales to 16.5 million.
Pressure is now on mineral-rich countries such as the Democratic Republic of Congo (DRC) to help meet growing demand for copper, cobalt and lithium, critical in producing electric vehicle batteries as sales rise in a push to meet the global net zero ambitions. “The rapid increase in EV sales during the pandemic has tested the resilience of battery supply chains, and Russia’s war in Ukraine has further exacerbated the challenge,” IEA said in the report.
The DRC, which produces about 68 percent of the world’s cobalt annually, and over 1.8 million tonnes of copper (the fourth-largest in the world) will now have to dig deeper into its mines to meet the growing demand.
Consider public interest in tariffs review —Chief of Staff implores PURC (GhanaToday)
The Chief of Staff at the Presidency, Madam Akosua Frema Osei-Opare, has advised the Public Utilities Regulatory Commission (PURC) to consider the public’s interest in its impending tariffs review. Madam Frema-Opare said that even though there was the need to strengthen and regulate utility companies to become financially viable, there was the need to also consider the economic challenges facing Ghanaians amidst its multiyear tariffs review.
Sudan’s trade balance deficit nearly tripled in the past year (Radio Dabanga)
The deficit in the trade balance for the first quarter of this year rose to $1.22 billion, an increase of nearly two times over the same period last year when the deficit was $477 million, further threatening Sudan’s economy. According to a report by the Central Bank of Sudan, exports in the first quarter amounted to $1.39 billion and imports $2.62 billion.
In an interview with Radio Dabanga’s Sudan Today programme, Professor of Economics at El Nilein University in Khartoum Dr Hasan Bashir said that a significant rise in the trade balance deficit despite the end of the Covid-19 pandemic is an indication of the stifling crisis in the Sudanese economy. Dr Bashir explained that export volumes could have been 10 times the size of current exports and highlighted the continued smuggling of large quantities of gold from the country.
African trade news
Trudi Hartzenberg is the Executive Director of the Trade Law Centre (tralac). She is responsible for development of the tralac strategy, resource mobilisation and engagement with African governments, regional, continental and international organisations. She currently serves on the WTO Chairs Advisory Committee and is a member of the Committee for Development Policy of the United Nations Economic and Social Council (ECOSOC). She supports women’s economic empowerment: focusing on women traders in national and regional business associations, and also heads up SheGovernsTrade – an empowerment programme for young women trade policy makers. Her research areas include international trade, competition policy, industrial development and Africa’s integration agenda. She has a special interest in capacity building. She designs and delivers academic and tailored short courses, a broad range of trade-related topics, investment, competition policy and industrialisation.
Rwabwogo: We Must Rebuild Intra-Africa Trade Linkages to Cease Being ‘Supermarket for Products of the West’ (Softpower)
Odrek Rwabwogo, Special Presidential Advisor for Special Duties and Chairman of the Presidential Advisory Committee on Export and Industrial Promotion, has delivered a keynote address at the Uganda-DRC Business Summit currently ongoing in the Congolese capital Kinshasa. In his speech delivered Monday at Fleuve Hotel, Rwabwogo interested the over 200 participants in the investment opportunities in Uganda. He narrated how Uganda and DR Congo have traded with each other for so many years. “…That trade was so successful that many tribes joined and opened up the country to foreign trade.”
African Development Bank financing for Kenya roadway boosts local economy and regional integration (AfDB)
Kenya is making rapid progress in the construction of its part of the Great Trans-African highway that runs from Cairo in Egypt to South Africa’s Cape Town. The 84km Kenol-Sagana-Marua highway, which runs through central Kenya, is being upgraded from a single lane road to a dual carriageway. It is expected to be completed in six months, two years earlier than scheduled. The roadway connects Nairobi with major commercial and agriculturally important towns in central, upper eastern and northern Kenya. Plans for this section of the Great Trans-African highway began nearly 40 years ago. However, construction began only after the African Development Bank stepped in in 2019 to finance the project.
Africa’s resilience to economic shocks requires domestic solutions — Prof Urama (BusinessGhana)
Professor Kevin Chika Urama, Vice President for the Economic Governance and Knowledge Management Complex, African Development Bank (AfDB), has asked African Governments to focus on building their economic fundamentals through domestic solutions. This includes increasing domestic revenue mobilisation, building strong internal relationships and trade, and patronising made in African products. In addition, African countries must boost productivity and shift from being mainly producers of raw materials, create and indigenous stabilisation Fund and address leakages in its public financial management systems.
Prof Urama, who is also the Acting Chief Economist at AfDB, said, these would make African economies resilient against global shocks like the COVID-19 pandemic, Russia-Ukraine conflict and future shocks.
It would also make Africa, which is the second-largest and second-most populous continent in the world, have sustainable development, create jobs, particularly for its teaming youth and reduce poverty and inequalities.
UN Global Compact launches new hub for Africa (Africa Renewal)
The Africa Regional Hub will mobilize, accelerate and scale-up the impact of responsible business across Africa and drive forward the Africa Strategy 2021-2023 of the UN Global Compact.
With 1.3 billion people and a combined GDP of $3.5 trillion dollars, Africa is the world’s biggest growth market. African businesses are primed to play a pivotal role in the corporate sustainability movement. The UN Global Compact’s Africa Strategy 2021-2023 provides a roadmap to galvanize large and small businesses across Africa to uphold the Ten Principles. The UN Global Compact’s principles-based approach means that businesses operate in ways that, at a minimum, meet fundamental responsibilities in the areas of human rights, labour, environment and anti-corruption.
Strengthening resilience in nutrition and food security in Africa (Africa Renewal)
For too long, nutrition, food security, conflicts, climate change, ecosystems and health have been treated as separate issues. But these global challenges are deeply interconnected. Conflict creates hunger. The climate crisis amplifies conflict. Economic insecurity is heightened by the pandemic and by inequalities in resources allocated for recovery. These problems are systemic; and they are getting worse. Decades of progress on hunger are being reversed. After improving steadily in all regions between 2000 and 2016, hunger has sharply increased in recent years. Over 281 million Africans – one in five – were undernourished in 2020. Sixty-one million African children are affected by stunting, which can impact their physical and mental health throughout their lives. As always, women and girls are the most affected. When food is short, they are often the last to eat; and the first to be taken out of school and forced into work or marriage.
The Three Issues That Will Make or Break the Prosper Africa Initiative (Carnegie Endowment for International Peace)
The U.S. government’s Prosper Africa program, launched in 2019, aims to double two-way trade and investment between the United States and African countries and, in doing so, to put a new face on American foreign policy in Africa. Despite the initiative’s embrace by two separate administrations, it has so far been slow to live up to expectations. The Prosper Africa Act, a draft piece of bipartisan legislation put forward in the U.S. House Foreign Affairs Committee, now languishes in Congress, overshadowed by other crises and attracting little attention. Allowing the legislation to expire is a mistake. To help ensure its success, the Prosper Africa Act’s sponsors should address three key issues around its scope, strategic positioning, and diaspora engagement.
Today’s shifting geopolitical landscape makes the goals of Prosper Africa more important than ever before. U.S.-Africa relations have historically focused on humanitarian and security concerns, but Africa’s major economies have grown rapidly and should play a much broader and more strategic role in U.S. foreign policy.
Recent disruptions in the global economy further reinforce the salience of Prosper Africa’s objectives. The increased financial flows and business engagement it envisions could be pivotal in helping African countries recover from massive economic shocks brought on by the coronavirus pandemic and by Russia’s invasion of Ukraine. They could also be essential for building infrastructure and public services to support economic transformations underpinning both U.S. and African interests, including clean energy transitions.
The success of Prosper Africa may ultimately depend on how the initiative and the draft bill in Congress put forward to back it address three key issues.
China’s pivotal role in supporting post-COVID growth in Africa (White & Case LLP)
2013 marked a pivotal milestone, as China overtook the United States (US) as the largest equity investor nation into the African continent, measured in terms of new foreign direct investment. Since 2000, all the African nations (except Eswatini) have conducted formal inter-government collaboration with China through FOCAC. In his keynote speech at the 8th Forum on China-Africa Cooperation (FOCAC) summit in Senegal in November 2021, President Xi Jinping proposed that over the next four years, China and Africa should collaborate on: Fighting the COVID-19 pandemic Opening new prospects for China-Africa cooperation, expanding trade and investment, poverty reduction, strengthening cooperation on digital economies and promoting entrepreneurship by young Africans, and the development of small- and medium-sized enterprises Promoting green development in the face of climate change, working to implement the Paris Agreement and strengthening capacity for sustainable development Upholding equity and justice and promoting true multilateralism At this FOCAC summit, a “China-Africa Cooperation Vision 2035” was published that specifies nine programs across a wide range of sectors earmarked for implementation during the first three years of this initiative.
In economic terms, 2013 marked a pivotal milestone, as China overtook the United States (US) as the largest equity investor nation into the African continent, measured in terms of new foreign direct investment (FDI flows). FDI flows to Africa from the European Union (EU) countries collectively continue to dwarf those of both China and the US, though. In 2020, the top African destinations of Chinese FDI were Kenya, the Democratic Republic of the Congo, South Africa, Ethiopia and Nigeria.
Trade between China and Africa has increased steadily in recent years. China has been Africa’s largest single national trading partner for the past 12 consecutive years, although trade between Africa and EU nations collectively continues to significantly exceed Africa’s trade with either China or the US. According to the latest data released by the General Administration of Customs of China, the total bilateral trade between China and Africa reached US$254.3 billion in 2021, up 35.3 percent from 2020, and African exports to China reached US$105.9 billion dollars in 2021, up 43.7 percent from 2020. The bulk of this trade is with only five countries: South Africa, Angola, Kenya, Nigeria and Egypt.
Japan-Africa relations critical to safeguard development gains as fallout from war in Ukraine (BusinessGhana)
United Nations Assistant-Secretary General and UN Development Programme’s Regional Director for Africa Ms. Ahunna Eziakonwa highlighted the unique role government and private sector partners in Japan could play in support of African countries as the war in Ukraine generates new economic shocks across the continent. “We have never experienced a greater challenge or pressure on our ability to sustain development in Africa. Reinforced multilateralism and strong partnerships, including with Japanese government entities and private sector, will be decisive in supporting African countries’ aptitude to respond to the new economic shocks caused by the war in Ukraine, at a time when they were already reeling from the impact of the COVID-19 pandemic,” Ms Eziakonwa said. “This new crisis has direct implications including food and fuel price hikes, trade disruption, and overall macroeconomic instability, which indirectly will lead to economic stress that could trigger violent protests and unconstitutional transfers of political power, especially in already fragile regions.”
Global economy news
Trade Regionalization: More Hype Than Reality? (Harvard Business Review)
While experts have been predicting a shift away from global trade towards more regionalized patterns, recent data suggest a more skeptical take is in order: An analysis of trade data based on four different regional definition shows a clear trend toward less regionalized trade between 2003 and 2012, and no consistent trend in more recent years. Since 2004, trade flows have generally stretched over longer distances, a trend that increased during the pandemic. Looking forward, while geopolitical tensions, technological trends, and environmental concerns all have the potential to contribute to an increase in trade regionalization, other forces, such as decreased container shipping costs and the ongoing improvement of technologies that ease long-distance transactions, will continue to favor long-distance trade. When deciding whether to regionalize, leaders should focus on the economic fundamentals that have always guided such decisions.
or more than a decade, experts have been predicting a shift to more regionalized trade patterns, as companies adopt nearshoring strategies to produce goods closer to the markets where they will be sold. Many expected Covid-19 to turbocharge this trend. But recent data suggests a more skeptical take on trade regionalization. Trade flows have stretched out over longer distances, even during the pandemic. While trade regionalization may increase moving forward, we wouldn’t bet on a transformational shift from global to regional business.
Ground Handling Makes Progress Towards Standardization, Boosting Safety and Efficiency (IATA)
The International Air Transport Association (IATA) reported that the IATA Ground Operations Manual (IGOM) Portal and IATA’s Safety Audit for Ground Operations (ISAGO) are successfully driving greater standardization of ground handling processes around the world. This is particularly important for the rapid build-up of operations as COVID-19 restrictions are lifted. “IGOM and ISAGO complement each other in driving much-needed harmonization across the ground handling sector. And the boost in participation in both programs as the industry ramps up its operations is good news for both safety and efficiency. The aim of both is to reduce risk, avoid ground damage and enable standardized, sustainable operations,” said Monika Mejstrikova, IATA’s Director of Ground Operations.
“The goal is global adoption of ground handling standards. The efficiency and safety gains from global standardization have been proven throughout aviation’s development. The IGOM portal is helping achieve this by making it easier for airlines and GSPs to manage and monitor implementation of standards and to understand variances. With 69 organizations already using the portal the drive for greater standardization is getting a boost,” said Mejstrikova.
Gender equality is key to transform agrifood systems and fight hunger (FAO)
Overcoming gender inequality can play a key role in freeing the world from hunger and malnutrition, the Director-General of the Food and Agriculture Organization of the United Nations (FAO), QU Dongyu, said today amid evidence that the food security gap between men and women has widened. “Women are key actors across agrifood systems, and key contributors to agricultural and rural development,” said Qu in his address to the inaugural High-Level Dialogue, which was brought together by the Food Coalition and was entitled The impact of global crises on food security: women as key agents in transforming agrifood systems. “But if we want to build agrifood systems that benefit all people, leaving no one behind, we must overcome gender inequality,” Qu added.
The Director-General also noted that women comprise nearly half of the rural workforce in low-income countries. Yet “everywhere, rural women face gender-based constraints that limit their potential,” Qu said.
Unlocking the Triple Returns from Social, Tech and Green Jobs (WEF)
New insights and initiatives at the World Economic Forum’s Annual Meeting 2022 seek to launch a jobs recovery to strengthen resilience and dynamism in economies, businesses and societies in the midst of a turbulent outlook. Investing in education, health and care jobs can yield a triple dividend – boosting economic activity, expanding employment opportunities and generating social mobility. New modelling of the United States economy suggests that investing $1 in social jobs would yield a $2.3 return. The model estimates that $1.3 trillion in the social jobs of tomorrow could unlock $3.1 trillion in GDP returns and create 11 million jobs by 2030. These jobs include 4.2 million teaching jobs, 1.8 million jobs for personal care and service workers, and 900,000 jobs in healthcare. These are the key findings of the World Economic Forum’s new report Jobs of Tomorrow: The Triple Returns of Social Jobs in the Economic Recovery, published at the World Economic Forum Annual Meeting 2022 today.
The report finds that the associated increases in productivity, increased GDP and tighter labour markets will lead to a parallel increase in real wages. Aided by technology and better skills, the jobs of tomorrow have the potential to lift living standards globally. After more than two years of turmoil in the global economy and a continued uncertain outlook, leaders need to support workers in pivoting towards a future which works for everyone. Higher wage, higher-quality, future-ready jobs are possible and benefit companies, workers and economies alike.
As many employers and workers seek a “new normal” after the disruptions of the past few years, there is an opportunity to develop a new vision for the future of work, one that is ready for the new economy and society. Five key issues have emerged that need to be addressed to ensure better work for workers and employers alike: volatility in wages and the cost of living; divergence on the demand for flexibility; silent pandemic in well-being; an erosion of diversity, equity and inclusion gains; and the need for a reskilling revolution.
IPCC Mitigation Report, 2022: What it Implies for Developing Countries (IDN IndepthNews)
There is no doubt that climate change needs to be addressed by all countries in a concerted manner. The fact remains, however, that there is a wide variance among countries both in terms of capacity to address and culpability for the problem. Developing and least developed countries are likely to suffer disproportionately the effects of climate change. The recently released IPCC report ‘Climate Change 2022: Mitigation of Climate Change’, which is part of its Sixth Assessment Report, acknowledges this gap and unequivocally places the larger responsibility of mitigation on developed economies. While countries, rich and poor, are required to step up their mitigation efforts, reading the report from a developing economy perspective reveals that there are limitations and hindrances that these countries must overcome before they can adopt and implement the recommended measures.
Related News
tralac Daily News
Local news
Significant strides made in creating a conducive environment for investment in SA (the dtic)
The Head of Invest South Africa (InvestSA), Mr Yunus Hoosen, has lauded success in the first phase of the work done to create a conductive environment to attract domestic and foreign investment into South Africa. InvestSA is an agency of the Department of Trade, Industry and Competition (the dtic) and hosted a session at the Protea Hotel Fire and Ice in Menlyn, Pretoria to assess progress in the Investment Climate Reform Programme.
The Programme has been running over the past 4 years and is a partnership with the dtic and the International Finance Corporation (IFC) of the World Bank Group being the main partners.
“In Competition Policy and Market Regulation, the programme produced tools to enforcement action to address cartel behaviour as well as reduced costs for customers for a range of essential services. Through this development, we have also witnessed the deployment of electronic platforms such as Bizportal and City of Johannesburg’s online construction permits system. These are pioneering e-government initiatives with the potential to have their functionalities replicated across government departments.”
The IFC’s Country Manager for South Africa, Mr Adamou Labara, said the runaway successes of the four investment conferences held in South Africa are testament to the county’s ability to articulate a clear investment proposition and deliver on investment commitments through
SA’s trade with Africa surpasses exports to EU block (SAnews)
Deputy Minister of International Relations and Cooperation, Alvin Botes, has told a sitting of the National Assembly that South Africa’s exports to Africa have surpassed those to the European Union in 2021. Botes said this when he participated in a debate on Africa Day at the Good Hope Chamber in Parliament on Wednesday. “We are committed as the South African government to work towards halving of poverty through agriculture by 2025, working amongst others, with countries such as Ghana and Morocco and in terms Malabo [Declaration] commitment five: the boosting of Intra-Africa Trade, we know that the trade figures in South Africa have increased remarkably,” he said.
Among the commitments made at the meeting was Malabo Declaration Commitment five, which speaks to African states committing to boosting intra-African trade in agricultural commodities and services – by tripling trade in this area and by fast-tracking the continental free trade area and transition to a continental common external tariff scheme.
SA leaving trade money on the table, says the EU | Fin24 (Fin24)
While the EU is SA’s biggest export market by a long way and SA benefits from a large number of duty-free items, trade relations with the EU could be exploited to far greater benefit, the head of the trade and economic section of the EU delegation to SA, Roberto Cecutti, said on Thursday. The study, which modelled products with preferential access against the potential demand globally, and particularly European countries, was conducted by consultancy Trade Advisory. It found that R350 billion worth of products had potential for export in the short term, in the medium term R280 billion, and the long term R210 billion.
In the short term, motor vehicle components and food and agricultural products held the most untapped potential. In the medium term and long term, food and agricultural products, basic iron and steel, metal products, primary agriculture, and textiles had the largest export growth potential.
The EU has an asymmetrical economic trade partnership (EPA) with the SADC region, with 96% of SA products carrying no duties with 2.5% of products restricted and 1.3% excluded from free trade. On the other side of the relationship, 13.8% of EU goods are excluded from free trade.
African market is important for sustainable growth (SAnews)
With May celebrated as Africa Month, the Coega Development Corporation (CDC) has identified the rest of the African continent as an important market for sustainable growth. This is consistent with its strategic plan 2020-2025, but also as part of the African Continental Free Trade Area (AfCFTA) agreement. “In the next financial year, the CDC will focus on fast-tracking the implementation of projects in the Central African Republic (CAR) and Zimbabwe, whilst marketing its services to increase the portfolio of clients,” CDC Programme Director Idriss Mouchili said on Wednesday. The Department of Trade, Industry and Competition (the dtic) in the Special Economic Zone (SEZ) Strategic Framework 2020-2030, has identified cross-border exchanges with the rest of Africa as a key pillar of the implementation of reconfiguring and expansion of existing SEZs.
The CDC has expanded its non-SEZ services to other markets in countries that include Zimbabwe, Nigeria, Cameroon, Central African Republic, Democratic Republic of Congo and Senegal under the Coega Africa Programme (CAP). Through its African Trade and Investment Solutions Strategy, the CDC is championing the country’s renewed push for business exchanges between South Africa and the rest of the continent.
US looks beyond delayed free trade deal in commercial ties with Kenya (Business Daily)
The US government is looking beyond a delayed trade deal with Kenya to expand commercial ties between the two countries amid Nairobi’s mounting frustration with Washington’s slow pace to conclude the deal. In a new report submitted to the US Congress by Joe Biden’s top trade diplomat Katherine Tai, the US government revealed it would pursue “other means” of deepening trade engagements with Kenya in the absence of a free trade agreement (FTA). “(We will) engage with Kenya to deepen bilateral trade, potentially through an FTA or other means, to spur Kenyan development and promote more equitable, worker-centric trade with Kenya,” said the United States Trade Representative Office (USTR) in the report seen by Business Daily outlining its objectives for this year.
The US government and Kenya early this month held another round of trade talks, which raised hopes of a fresh direction after the Biden administration froze Trump-era negotiations on the free trade agreement.
Increasing UK–Kenya trade and investment in the horticulture sector (GOV.UK)
The Kenyan horticultural sector exports many high value products, such as vegetables, fruit and flowers, globally, including to the UK. The sector is vital for Kenyan smallholder farmer incomes, jobs, and foreign exchange, which support economic growth. As a major trading partner for Kenya, the UK imports Kenyan vegetables and flowers and supplies of finance and high-tech equipment. This 2-way trade is vital to Kenya’s horticultural sector, but it has been declining steadily since 2012.
Despite previously stagnant UK retailer prices and rising freight costs, Kenyan producers have struggled to deliver consistent quality and high volumes competitively. Poor trade facilitation, depreciation of the pound and uncertainty over post-Brexit food standards requirements have further reduced their market share.
Similarly, UK exports to the Kenyan horticultural sector including eg farm machinery have declined after competition from India, China, and Turkey. This is made worse because competitive credit terms have not been available for Kenyan importers.
New Financing to Improve Safety, Climate Resilience and Capacity of Tanzania’s Roads and Regional Airports (World Bank)
A new International Development Association (IDA*) credit of $550 million that will allow Tanzania to unlock critical road and airport bottlenecks, enhance its role as a transit country, and leverage more effectively its national parks for tourism. The Tanzania Transport Integration Project (TanTIP) aims to improve the safety, climate resilience, and capacity of key road corridors and regional airports. It will also help improve the capacity of relevant transport sector institutions to plan for and manage the sector. “Much of Tanzania’s development success over the past decade has been predicated on the critical advantages of its strategic maritime location, its rich and diverse natural resources, its socio-political stability, and its rapidly growing tourism industry,” said Mara Warwick, World Bank Country Director. “Investments under this project will contribute to wider government efforts to improve the integration of Tanzania’s economy and its connection with its neighbors and global markets, while ensuring adaptability of the infrastructure.”
Uganda: Microfinance reform comes to a dead end (Monitor)
A tiny sliver of lawmakers on the Budget Committee have objected to the decision to appropriate Shs35b to the Microfinance Support Centre (MSC) in the Budget for Financial Year 2022/2023. In a minority report, the five lawmakers claim that “MSC operations are marred with massive irregularities and without adequate supervision.” They go on to add that “it has veered off its operational guidelines.’’
“Continued budget allocation to the entity exposes the scarce public resources to the risk of further abuse,’’ the report reads, naming 10 Saccos that scooped huge sums anywhere between Shs700m and Shs3b.
Ghana and Uganda ban grain and food exports (DW)
Ghana and Uganda are among several African countries banning the export of grains and other farm produce, with the latter imposing high taxes to prevent food exports to neighboring countries. The Ghanian government has extended a ban on grain exports. A temporary ban on exporting maize, rice, soybeans, and other grains — which took effect in September last year — will now run until September 2022. The original ban was put in place to ensure food security and increase local poultry and livestock production. The extension of the ban comes as grain prices soar, partly because of Russia’s war on Ukraine. But some farmers are unhappy with the extended ban, saying they would get better prices if they could sell their crops outside of Ghana. So they want the government to lift it.
Zambian MPs want drugs be manufactured in Africa (IPPMedia)
A ten-member delegation of Zambian legislators just through a visit to Tanzania made this appeal after a tour of Kairuki Pharmaceuticals Industry Ltd (KPIL) at Zegereni in Kibaha, Coast Region, at the weekend. Heading the team was Dr Christopher Kalila, acting chairperson of the standing committee for Health in the country’s legislature, who remarked shortly after the tour that a strong private sector has immense potential of playing a decisive role in helping make the pharmaceutical subsector more high-tech. This would fast-track investments, improve the production and distribution of drugs while cutting production costs, he stated.
“If African countries can produce medicinal drugs locally, they will have greater capacity to transport and reach their people faster and more easily, especially during pandemics like Covid-19,” he asserted. He remarked that Tanzania was leading the way in the Southern African Development Community (SADC) zone in “laying the ground” for enhanced local production of pharmaceuticals.
Border reopening: Importers, manufacturers groan as Benin imposes N9m levy on transit goods (Daily Sun)
Despite the recent decision of the Federal Government to reopen additional four land borders, Nigerian importers and manufacturers are still forced to pay over N9 million levy on transit goods by the Benin Republic. This development has made it difficult for manufacturing firms that engage in cross-border trade to freight their products to the neighbouring countries, especially to Ghana through the Seme border corridors.
However, a source at the Manufacturers Association of Nigeria (MAN) disclosed that Nigerian manufacturers are made to pay the N9 million mandatory transit levy per truck, hence, any truck that refuses to pay would not be allowed to go through the Benin border despite Nigeria being a signatory to the ECOWAS Trade Liberalisation Scheme (ETLS).
AfDB to reduce wheat importation in Nigeria by 40% in 2023 (Farmers Review Africa)
The African Development Bank (AfDB) is set to reduce the importation of the wheat in Nigeria by 40% by 2023.
According to the Ms Beth Dunford, AfDB’s Vice President, Agriculture, Human and Social Development, the mission will be achieved through the wheat production technology being supported by the Bank in Nigeria, that aims to boost wheat production in the country. According to Dunford, the technology is presently being used in Nigeria, where it is being cultivated on 87,000 hectares, with the potential to expand to 250,000 hectares this season. She stated that the Bank was now trying to determine how much of the money will be awarded to each country, emphasizing that the fund was open to all countries on the continent. The assistance aimed at smallholder farmers would help them increase production.
“This is the basis of the 1.5 billion dollars Africa Emergency Food Production Facility that was just approved by the Board. This facility will be supporting the African government to reach 20 million farmers with improved technologies like the heat-tolerant wheat to produce 38 million tonnes of food on the continent,” she said.
Djibouti identified its priority sectors in the context of the AfCFTA (UNECA)
The ministry of trade and tourism of Djibouti in collaboration with ECA validated its national strategy for the implementation of the African Continental Free Trade Area (AfCFTA) on 9 May 2022 in Djibouti.
Mr Mohamed Warsama Dirieh, Minister of Trade and Tourism, said “The willingness expressed by the President of the Republic H.E. Ismael Omar Guelleh through our accession to the AfCFTA comes at a crucial time marked by the socio-economic setbacks that our countries are experiencing due to the COVID-19 pandemic but also the ongoing financial, economic and food shocks.” He further added: “Despite the challenges, the strategy with a priority action plan should allow our country to analyse in detail the tasks to be accomplished to take advantage of the AfCFTA.”
Mr Souleymane Abdallah, Economic Affairs Officer of the ECA, emphasised the need to pay particular attention to supply-side constraints, which have also been important non-tariff barriers to intra-African trade. “A key element is the lack of investment in infrastructure and logistics that will facilitate market access. This brings us back to the imperative of mobilizing resources to finance investment on the continent” he noted.
Egypt plans to double exports to $100 bln in next 3 years: PM Madbouly (Al Arabiya English)
Egypt plans to double its exports to $100 billion within the next three years, Egyptian Prime Minister Mostafa Madbouly told Emirates News Agency WAM on Sunday. “We are working to increase and double exports to bring Egypt’s exports to more than $100 billion over the next two or three years,” the Egyptian Prime Minister said on Sunday. Madbouly’s comments come after he visited the United Arab Emirates on Saturday to meet with his Jordanian counterpart Bisher al-Khasawneh and the UAE President Sheikh Mohamed bin Rashid to launch the ‘Industrial Partnership for Sustainable Economic Growth.’
Freight transport on the Douala-Ndjamena Corridor fell 10% YoY in 2020 (Business in Cameroon)
Throughout 2020, 900,000 tons of goods transited on the Douala-Ndjamena corridor. Compared to a year before, the volume is down by 100,000 tons or 10%. In a recent note, the Ministry of Transport revealed that this decline, which is due to the Covid-19 pandemic, has broken a growth dynamic observed since 2018. During that year, the document says, 800,000 tons of goods transited the corridor. The number then grew to one million tons in 2019, before dropping to 900,000 tons in 2020.
According to the World Bank, the Douala-Ndjamena corridor “accounts for 35% of the GDP of the two countries and serves 20% of the population of Chad and 35% of that of Cameroon. However, transporters often complain about police harassment due to the high number of checkpoints where they are forced to pay bribes. Also, all these controls delay the flow and fluidity of transport on this road.
To facilitate the traffic, Cameroon has decided to remove 39 irregular checkpoints of the 66 identified on its territory. This will leave 27 regular mixed checkpoints.
African trade and economy news
African governments tasked to look within the continent in their bid for transformation (BusinessGhana)
As part of efforts to boost trade in Africa, stakeholders are tasking African governments to look within their countries and the continent as a whole in their bid for economic transformation. It is for this reason that these industry players are organizing the ‘Kwahu Summit in Africa’s prosperity to provide the platform for various African Heads of state, business leaders and other prominent actors to chart actionable steps towards realizing the objectives of the African Continental Free Trade Area (AfCFTA). Sub-Saharan Africa’s success in the global market rests on deepening regional integration to scale up supply capacity and build regional value chains. The establishment of the Africa Continental Free Trade Area presents opportunities to boost intra-African trade, strengthen the complementarities of production and exports, create employment, and limit the impact of commodity price volatility on the participants. It is for this reason that the Kwahu Summit on Africa’s Prosperity is being organized under the theme ‘AfCFTA: From Ambition to Action, Delivering Prosperity through Continental Trade’.
Pan-African integration has made progress but needs a change of mindset (The Conversation)
This year’s celebration of Africa Day provides another opportunity to assess how far continental integration has progressed. Integration would mean a truly united Africa – either a federalist “United States of Africa” or the African Union (AU) exercising binding powers over member states. At present the AU merely serves as a platform for coordinating the interactions of its 55 member states. Although some progress has been made, more needs to be done to achieve the goal of integration.
Member states need to move beyond paying lip service to unity, and empower critical AU organs. This requires a shift in mentality. States need to appreciate the need to sacrifice some autonomy for common socioeconomic and political gains. Lacklustre commitment to continental integration is connected with Africa’s peripheral position in global dynamics.
Why World Bank is pushing against subsidies in E. Africa to deal with crises (The East African)
Samuel Munzele Maimbo, the World Bank director for development finance, spoke to Nelson Naturinda on how the bank is helping regional economies deal with global crises. There has been an outcry over high commodity prices. Countries such as Kenya, Rwanda and Tanzania have given economic subsidies for fuel but the World Bank is reported to be against these.
Context matters. We must consider the state of the global economy. Global economic growth has been declining from 5.5 percent in 2021 to 4.1 percent currently.Covid-19 destabilised the economies of developing countries that have lost a lot. On top of that, the war in Ukraine has taken wheat from Ukraine and Russia off the market.Any government thinking about a response has to look at short-term and long-term needs. Short-term needs could be food and fuel and long term needs would be education.
East Africa has a lot to do to balance trade with the EU (Quartz)
Member states of the east African trade bloc will have to work on a number of requirements that they are scoring low if they are to fully benefit from European Union’s 447 million market. During a workshop organized by the Stockholm Environment Institute (SEI) and the East African Science and Technology Commission, it emerged that the eight members of the East African Community are showing progress but are still unable to erase critical trade inhibitors. A scoping report presented by SEI disclosed that the bloc is struggling with job creation, taming corruption, climate resilience, innovation, infrastructural development, attracting foreign direct investment and controlling currency volatility.
“On average, east Africa is scoring low in the EU and Carbon Border Adjustment Mechanism (CBAM) policy indicators for macro economy, environment, social protection and governance,” Dr Anderson Kehbila of SEI told attendees.
To achieve optimum trade balance with the EU, Kenya, Tanzania, Uganda, Rwanda, Burundi, Democratic Republic of Congo, Ethiopia and South Sudan will need to show more efforts in prosecuting corrupt trade players in the East Africa Court of Justice while domesticating laws enacted by the East African Legislative Council, participants said.
“Trade laws should not be made in isolation. Rules of origin, fair trade, carbon emission requirements, currency volatility revaluations and financing frameworks need strengthening,” said Caroline Cherop, head of trade at KNCCI.
The ECOWAS Regional Competition Authority (ERCA) organized a meeting of a Working Group for the review of the Draft AfCFTA Protocol on competition, prior to the fifth meeting of negotiations between African Union States Parties that is scheduled to hold in Accra, Ghana from 30 May to 2nd June 2022 on the said draft. The meeting took place from 19 to 21 May 2022 at Hotel Flamboyants in Saly, Republic of Senegal.
The purpose of the meeting was to bring together a number of ECOWAS Member States (Gambia, Nigeria, Senegal) and ERCA officials for a brainstorming on the draft AfCFTA Protocol on competition in order to ensure that all Member States adopt a common position on all the provisions of the draft AfCFTA Protocol to be shared with Member States’ negotiators and other regional organizations.
ESREM Project Closes on a High Note (COMESA)
The Enhancement for a Sustainable Regional Energy Market (ESREM) Project is closing on 30th May 2022 after being in operation for the past five years. Through the support of the European Union, the Project has endeavored to create a favorable regulatory environment and tools for regulatory oversight in the Eastern Africa -Southern Africa-Indian Ocean (EA-SA-IO) region. This is expected to stimulate increased power trading and bring a new horizon of cross border power trade opportunities for the countries in this region.
The overall objective of ESREM was to enhance a sustainable regional energy market in the EA-SA-IO region, which would be conducive to investment and sustainable development of the energy sector. The project was also meant to achieve a harmonized, efficient and gender-sensitive regulatory environment and it sought to capacitate regional regulatory associations and power pools to oversee and stimulate increased regional power trade more effectively.
Heads of Africa’s leading regional and continental bodies on Thursday met to discuss how to fast-track the continent’s development plan, known as Agenda 2063. Covid-19 and rising fuel, food and fertilizer prices in the wake of the Russia-Ukraine war, have raised the stakes, and the urgency to speed up recovery. The roundtable was organized by the African Development Bank Group, on the sidelines of its 2022 Annual Meetings, currently under way in Accra, Ghana. It was attended by representatives of the African Union Commission, the African Continental Free Trade Area (AfCFTA), regional economic communities, Africa50, and other regional development banks. African Development Bank Acting Senior Vice President Yacine Fal, who moderated the meeting, said it offered participants the opportunity to strengthen partnerships, mobilize more resources, as well as to take stock of the status of regional integration in Africa.
n opening remarks, African Development Bank chief Akinwumi A. Adesina noted that Africa would need $484 billion to support recovery efforts, with an additional $7 billion to $15 billion annually to deal with climate change. Infrastructure, which would drive that growth, requires another $68 billion to $108 billion, Adesina said. “Where are we going to find that money? The answer is quite simple: by collaboration and determination. We must pull together and push through,” he said.
Adesina commended the African Continental Free Trade Area (AfCFTA) which became operational in January 2021, marking a major milestone in Africa’s regional integration agenda. He said the institution had broken ground in establishing the legal, regulatory, and institutional arrangements that will allow Africa to become a single, $3.4 trillion market. “We must make the most of the strengths of every institution around the table to succeed in our goals,” he said.
Africa Investment Forum showcases major projects, including $15.6 billion Abidjan-Lagos Highway (AfDB)
On the margins of the African Development Bank Group’s 2022 Annual Meetings, the Africa Investment Forum convened investors to promote the power of the platform to draw critical investment to the continent. The investor roundtable on 25 May came at a time when capital flows are in flux in the aftermath of the Covid-19 pandemic. Such discussions are integral to the Africa Investment Forum, connecting project sponsors, investors, and financiers, as well as the public and the private sector.
The investment roundtable, held at the Kempinski hotel in Accra, Ghana, included AIF’s founding partners, development finance institutions, commercial banks, high net worth individuals, family businesses, representatives from venture capital and private equity firms.
On transport infrastructure, the $15.6 billion Abidjan-Lagos Highway project, led by the Economic Community of West African States (ECOWAS) Commission took centre stage. This is the largest investment opportunity that was discussed – and oversubscribed – at the 2021 AIF Boardrooms. This project, part of the Programme for Infrastructure Development in Africa (PIDA), is a critical public-private partnership that will link Abidjan to Lagos, via Accra, Lomé, and Cotonou along the West African coast.
AfDB defends financing of natural gas power projects (Business Daily)
The African Development Bank (AfDB) will continue financing natural gas projects despite environmental lobbyists claiming degradation, its president Akinwumi Adesina said. Although natural gas produces about half as much carbon dioxide (C02) when burned as coal, some critics say that rising production of the commodity is emerging as one of the biggest drivers of climate change and that plans for industry expansion could stifle efforts to stabilise climate. Dr Adesina, however, downplayed the concerns about the impact of natural gas on the environment and maintained that AfDB would continue financing such projects. “Renewable energy alone cannot power Africa…natural gas must remain part of Africa’s stable energy system,” Dr Adesina said last week during the bank’s annual general meeting in Accra.
Africa’s mobile money taxes could push poor out of digital economy (Thomson Reuters Foundation)
Cash-strapped African nations are rolling out an e-levy on mobile money transactions to boost revenues, but the policy could hurt the poorest as the cost of living rises and reverse impressive gains made in boosting economic inclusion.
Ghana is the latest in a growing number of African nations to impose a tax on mobile phone-based transactions, but critics say the levies are hurting millions of small-business owners and other low-income groups, just as the cost of living rises. The charges threaten to reverse the impressive gains made by mobile money in boosting economic inclusion, they warn. “Mobile money has been a great enabler, especially for the marginalised. It’s a main driver of financial inclusion for the poor, women and rural communities across Africa,” said Angela Wamola, head of sub-Saharan Africa at telecoms industry body GSMA.
IACO State Members Sign Nairobi Declaration to have Coffee Anchored as Strategic Commodity Under AU (CEO East Africa)
25 coffee producing African countries under the Inter- African Coffee Organisation (IACO) have officially signed the Nairobi Declaration to have coffee anchored as a strategic agricultural commodity under the African Union, in harmony with AU Agenda 2063. The ongoing Summit is being held under the theme “Sustainable Development and Economic Growth in the African Coffee Sector”. The African coffee producing countries consequently requested the African Union (AU) to adopt Coffee as strategic Agricultural Commodity in harmony with the Africa Agenda 2063.
According to the G25 African Coffee Summit Nairobi Declaration on the adoption of coffee as a strategic Agricultural Commodity in the AU Agenda 2063
he adoption of coffee as a strategic commodity in the AU will give Africa the leverage to address the challenges faced by the coffee farmers and other actors across the value chain under the auspices of the African Union to build a united and integrated Africa. The G25 African Coffee Summit also requested “The AU Commission to urgently develop an evaluation framework to track down the socio-economic impact on coffee farmers in relation to alleviating poverty and enact the AfCFTA to facilitate cooperation between African countries to encourage inter-African trade to explore the untapped coffee markets within Africa.”
The Summit also resolved to support production and research, enhance transparency and traceability of origins; encourage youth employment and empower the role of women; allocate more land for coffee production; incentivize farmers; support coffee research; offer technical assistance to farmers.
Countries in Kisumu declaration, endorse UN, African new urban agenda (The Guardian Nigeria)
With a total of 20 resolutions pledging renewed commitment to tackling key issues relating to growing role of cities on implementation of the United Nations 2030 Agenda and the African Union Agenda 2063, city managers and high level officials of government ended the 9th edition of the Africities summit in the city of Kisumu in Kenya. Given the change in pattern of settlements in Africa from being a continent mainly rural 30 years ago and one which will become mainly urban in the upcoming 10 years; they plan to make intermediary cities the structuring clusters of sustainable development in Africa by granting them a prominent place in spatial planning and creating new territorial dynamics that promote exchanges and linkages between the rural and urban environments. By 2050, 50 per cent of all Africans will live in urban areas. Today, more than 64 per cent of the urban population lives in informal settlements. There is a deficit of housing and finance with only 15 per cent of urban dwellers in Africa able to purchase their own homes.
The summit in its Kisumu declaration, acknowledged that small and intermediary cities currently host 60 per cent of urban dwellers and account for nearly 50 per cent of the African Gross Domestic Product (GDP); the delegates pledged to give priority to urban planning as an instrument for controlling the growth of urban and peri-urban areas by putting in place the institutional, legal, regulatory, and operational instruments, as well as the conditions for a participatory dialogue with the people.
Is UK-Africa trade strategy for charity or business deals? (This Day)
The UK government’s new International Trade Strategy directly links Britain’s aid budget to trade deals – and as a result has been criticised for offering “aid for trade” and accused of putting “politics before poverty” and being “a double whammy against the world’s poor”. One opposition politician called the policy “short-sighted and wrong”; another claimed, “the UK’s proud reputation as a development superpower has been comprehensively trashed.”
One path sees nations in Africa, with something of a perpetual colonial status, eternally dependent on handouts from former rulers. The other sees us raised up – and raising ourselves up – to the status of equals. At the heart of the strategy is a decision that the British government’s contributions to multilateral organisations will decrease in favour of bilateral partnerships. This means favouring individual aid packages aimed at, in the words of the strategy, “supporting partner countries to grow their economies sustainably” through investment “in particular for cleaner and more reliable infrastructure.”
Canada releases $78m for smallholder food producers in Africa (The East African)
The Canadian government has announced a $78 million contribution to a funding kitty of the African Development Bank (AfDB) to aid local food producers improve their yield. The money, to be disbursed as concessional loans, will target small and medium enterprises involved in agribusiness especially those founded and run by women. The money was announced this week as the Bank launched its Emergency Food Production Facility, a $1.5 billion project aimed at raising African yield of food production to 38 million tonnes by end of 2022.
The Bank said it will raise an initial $1.3 billion and partners will raise the rest to support up to 20 million farmers across the continent with soft loans worth of certified seed, fertiliser and technology necessary to improve yield. The money will be disbursed as part of the Assistance Innovation Programme which the Canadian government uses to support private enterprises involved in Sustainable Development Goals such as fighting hunger or climate change.
Pak-Africa current $4.18 billion trade below then it’s potential: Zafar Bakhtawri (Associated Press of Pakistan)
Former President Islamabad Chamber of Commerce (ICCI) and senior leader of United Business Group (UBG) of FPCCI Zafar Bakhtawri said the current $4.18 billion annual trade volume between Pakistan and Africa was far below then it’s potential in the Africa region, which could be doubled in the next three years. Exploring new markets and trade diversification policy in Africa is critical to increasing annual trade, he said.
Global economy news
International trade statistics: trends in first quarter 2022 (OECD)
Following six quarters of sustained growth, the value of international merchandise trade for the G20 reached a new high in Q1 2022. Exports and imports increased by 3.6% and 5.8%, as compared to Q4 2021 and measured in current US dollars. The increase is largely explained by rising commodity prices, as the war in Ukraine and COVID-19 containment measures in East Asia placed further pressure on the prices of traded goods and on already strained supply chains.
Growth in exports and imports of services for the G20 are estimated at around 2.0% and 1.1% in Q1 2022, respectively, compared to the previous quarter and measured in current US dollars. The preliminary estimates are well below the rates of 6.2% and 3.1% recorded in Q4 2021 for exports and imports, reflecting weaker trade in the transport sector in East Asia and a general slowdown in services trade across most of the G20 economies for which data are available.
Globalisation, not localisation, is the key to post-pandemic prosperity (VoxEU)
In recent years, extreme weather events and trade tensions spurred by growing economic nationalism and protectionism have tested the resilience of global value chains (GVCs). The sudden and massive Covid-19 induced drop in global trade in the first half of 2020 dealt them another blow, prompting predictions that the pandemic would result in restructuring of the GVCs, shortening the supply chains, and leading to reshoring. Then, as the world economy was still recovering from Covid-19, the war in Ukraine caused more major disruptions to GVCs, hitting developing countries particularly hard.
Recent studies suggest that GVCs transmit shocks to production and trade from one country to another. On the other hand, participation in GVCs may soften the blow of a domestic shock such as a lockdown or natural disaster like the 2011 earthquake in Japan, by ensuring access to critical inputs when foreign markets are closed. GVCs can also drive a recovery, spreading the benefits as countries emerge from lockdowns or lift trade restrictions at varying paces. What further shocks to GVCs should we expect in coming years? Is it possible to design policies to help developing countries enhance resilience to trade shocks without endangering growth?
In a new paper, we couple ENVISAGE, a state-of-the-art global economic model, with the GIDD microsimulation framework to simulate three scenarios: (1) high-income economies and China raise barriers to imports and increase domestic subsidies to re-shore production (‘Reshoring leading economies’), (2) wider localisation when developing countries join the reshoring efforts (‘Reshoring all’), and (3) developing countries seek to reduce trade costs and make it easier to use imports in domestic production (‘GVC Friendly Liberalisation + Trade Facilitation (TF)’).
UN “Deeply Troubled” by Impending Cuts on Development Aid by Rich Nations (Inter Press Service)
The four-month-old Russian invasion of Ukraine, which has triggered a hefty increase in military spending among Western nations and a rise in humanitarian and military assistance to the beleaguered country, is now threatening to undermine the flow of Official Development Assistance (ODA) to the world’s poorer nations. In an advance warning of the upcoming cuts, the UN’s Deputy Secretary-General Amina Mohammed told a recent meeting of the Economic and Social Council (ECOSOC): “As Chair of the United Nations Sustainable Development Group, I am deeply troubled over recent decisions and proposals to markedly cut Official Development Assistance (ODA) to service the impacts of the war in Ukraine on refugees”.
UN Secretary-General Antonio Guterres, who was equally concerned about the impending reductions, has urged donor nations to reconsider making cuts that will affect the world’s most vulnerable. He said ODA is more necessary than ever, and called upon all countries to demonstrate solidarity, invest in resilience, and prevent the current crisis from escalating further.
Europe turns to African oil suppliers as Russia shifts to Asia (BusinessLIVE)
Russia’s invasion of Ukraine has reconfigured the global oil market, with African suppliers stepping in to meet European demand and Moscow, stung by Western sanctions, increasingly tapping risky ship-to-ship transfers to get its crude to Asia. The reroutings mark the biggest supply-side shake-up of the global oil trade since the US shale revolution altered the shape of the market about a decade ago and suggest Russia will be able to navigate a EU oil ban, provided Asia and China continue to buy its crude. Sanctions imposed on Moscow after the conflict in Ukraine kicked off in February, including a US ban on its oil imports, have prompted Russia to pivot away from Europe, where its crude is shunned, to customers in India and China who are picking up cargoes at a steep discount, according to industry data and traders.
Russian exports were back to pre-invasion levels in April, according to data from the Paris-based International Energy Agency and oil prices have stabilised at about $110 after hitting a 14-year high above $139 a barrel in March. Even if the EU agrees to an oil ban in its next round of Russian sanctions, analysts said the impact could be tempered by demand from Asia.
Analysis: How the Ukraine conflict is reshaping global oil markets (Reuters)
Russia’s invasion of Ukraine has reconfigured the global oil market, with African suppliers stepping in to meet European demand and Moscow, stung by Western sanctions, increasingly tapping risky ship-to-ship transfers to get its crude to Asia. The reroutings mark the biggest supply-side shakeup of the global oil trade since the U.S. shale revolution altered the shape of the market around a decade ago and suggest Russia will be able to navigate a European Union (EU) oil ban, provided Asia and China continue to buy its crude.
Sanctions imposed on Moscow after the conflict in Ukraine kicked off in February, including a U.S. ban on its oil imports, have prompted Russia to pivot away from Europe, where its crude is shunned, to customers in India and China who are picking up cargoes at a steep discount, according to industry data and traders.
IFC, Partners for Growth Join Forces to Support Growth-Stage Companies in Emerging Markets (IFC)
IFC and US-based fund manager Partners for Growth (PFG) are uniting to provide much-needed debt capital to innovative early- to mid-stage companies in emerging markets, with a focus on fintech, software, e-logistics, health, and life sciences firms.IFC, a member of the World Bank Group, will invest $30 million in a new investment vehicle managed by PFG. The vehicle will be PFG’s first managed account dedicated solely to global emerging markets and IFC’s first investment with a private debt manager focused on venture and growth stage markets. PFG will collaborate with its long-time strategic partner, Silicon Valley Bank, on the initiative.
“The COVID-19 pandemic has heightened uncertainty and risk aversion in emerging markets, limiting the amount of credit available for small- to mid-sized companies,” said Paulo de Bolle, Global Senior Director of IFC’s Financial Institutions Group. “Our partnership with PFG will play a key role in improving access to finance for deserving high growth technology businesses.”
The adoption of digital business has accelerated tremendously in the last two years as the world adapted to the pandemic. Nowhere is the scope for impact greater than in emerging markets as they rebound in the coming years. This partnership will support the growth of small and medium enterprises across the technology sector and allow new financial services providers to thrive. Deepening capital markets is an essential element to improving the economic recovery. By providing scarcely available private credit to innovative businesses in developing countries, the partnership with PFG is aligned with IFC’s strategy of scaling up investments to reverse economic decline, foster technological innovation, and mobilize private capital at scale.
Five things you should know about the Commonwealth Business Forum (The New Times)
The preparations to host the Commonwealth Business Forum (CBF) in Rwanda, are in high gear, according to officials. Slated to take place between June 21 and 23, CBF is one of the flagship events of the Commonwealth Heads of Government Meeting (CHOGM), which will be hosted in Rwanda in June 2022. For Rwanda, hosting the forum fourteen years since it was last hosted in Africa, the country sees it as a great platform to strengthen trade and investment with the rest of the Commonwealth members.
According to the Commonwealth Secretariat, the Commonwealth Advantage, with its shared values, regulatory systems and language, has the potential to increase intra-Commonwealth trade by 20 percent. It can also reduce the cost of doing business between member countries by up to 19 percent. Revised estimates indicate that bilateral trade costs between Commonwealth country pairs are 21 percent lower, on average, compared with non-Commonwealth countries.
Neither by Land nor by Sea: The Rise of Electronic Remittances during COVID-19 (World Bank)
Despite concerns that the COVID-19 economic collapse would torpedo international remittances, formal remittances to several developing countries ballooned early in the pandemic. This increase might, however, have reflected a shift from informal channels to formal ones rather than a change in actual flows. This paper employs Mexican data to explore this and finds that remittance channels did change. The rise in formal inflows was larger among municipalities that were previously more reliant on informal channels (for example, near a border crossing). Households there also experienced a disproportionate increase in bank accounts opened after lockdown measures. The paper also rules out hypotheses related to the US Coronavirus Aid, Relief, and. Economic Security Act and altruism.
Blockchain can drive financial inclusion and climate resilience (Thomson Reuters Foundation)
Crypto and blockchain solutions can be tailored to meet the specific needs of the world’s underbanked, and enable an inclusive and equitable global financial system.
Today, some 1.7 billion people around the world lack access to one of the most basic building blocks of prosperity: a bank account. As the use of crypto and blockchain technologies expands globally, there’s an opportunity to drive financial inclusion and climate resilience by transforming the core infrastructure that affects how financial products and services are delivered. For people without access to any form of financial services, the inability to save money safely or trade beyond cash in hand can leave them caught in a poverty trap that’s almost impossible to escape. Meanwhile, the World Bank predicts that by 2030, climate change will push 100 million more people into poverty, with low-income countries bearing 75%-80% of climate impact costs. This is where crypto and blockchain come in.
The End of the Digital Gold Rush: How to Make Money on Bitcoin’s Collapse? (IT News Africa)
Bitcoin is often referred to as “digital gold”. Back in 2010, BTC was worth 5 cents, and its price reached $69,000 at its peak in November 2021. It is clear that the prospect of quickly and easily turning $100 dollars into $138,000,000 attracted a huge mass of people willing to get rich quickly. So what happened in the last 10-12 years can be called the “Digital Gold Rush”, by analogy with the Gold Rush in the USA in the second half of the 19th century. But then many, instead of getting rich, on the contrary, lost their money. The same can be observed now: bitcoin has returned to the values of December 2020, having lost about 60% of its value in just 6 months.
According to the Bloomberg Billionaires Index, Coinbase CEO Brian Armstrong’s net worth has decreased from $13.7 billion to $2.2 billion. This was not only due to the fall in digital asset prices, but also due to the fall in Coinbase shares, the price of which fell by more than 80%. The capital of the CEO of the FTX crypto exchange Sam Bankman-Fried has halved and now stands at $11.3 billion. The well-known founders of the Gemini cryptocurrency trading platform, the brothers Cameron and Tyler Winklevoss, have individually lost more than $2 billion, which is equivalent to almost 40% of their total fortune.
The Crypto Fear & Greed Index is firmly entrenched in the Extreme Fear zone. And the president of Euro Pacific Capital Peter Schiff predicts the fall of the main cryptocurrency to $8,000. “We have a long way down,” the billionaire wrote.
Green trade crucial to economic security and net zero, says International Trade Secretary (GOV.UK)
Green trade is crucial to growing the UK’s economy, achieving net zero and driving our future prosperity, the International Trade Secretary will say today (18 May). In a speech at Bloomberg, Anne-Marie Trevelyan will set out the UK’s pioneering role in harnessing trade to combat climate change, and how driving renewable energy can cut reliance on Russian oil and gas and reinforce the UK’s energy security. The UK’s green economy is projected to grow by 11% per year out to 2030, and by 2050 over 1.2 million people could be directly employed in low-carbon goods and services sectors – a six-fold increase from today.
The International Trade Secretary will also announce a new Green Trade and Investment Expo in the North East this autumn, hosted alongside the Department for Business, Energy and Industrial Strategy. The Expo will bring together UK businesses and global investors to capitalise on the commercial opportunities from our drive to net zero.
5 things you should know about the UN Ocean Conference, a chance to save the planet’s largest ecosystem (United Nations)
The Ocean is the planet’s largest ecosystem, regulating the climate, and providing livelihoods for billions. But its health is in danger. The second UN Ocean Conference, due to take place in June, will be an important opportunity to redress the damage that mankind continues to inflict on marine life and livelihoods. With delegates from Member States, non-governmental organizations, and universities attending, as well as entrepreneurs looking for ways to sustainably develop the “Blue Economy”, there are hopes that this event, taking place in the Portuguese city of Lisbon between 27 June and 1 July, will mark a new era for the Ocean.
Related News
tralac Daily News
Local news
SA poultry producers missing out on export market with lax livestock health standards (Engineering News)
The South African poultry industry is “missing a massive opportunity” to export products as a result of it not meeting the health and safety standards required by trade blocs such as the European Union (EU), says the South African Association of Meat Importers and Exporters (AMIE).
A robust and successful poultry export market for South African chicken could bring material value to the entire value chain, from local producers and their shareholders, to medium-sized and small-scale farmers, exporters, processors and consumers, the organisation says.
AMIE CEO Paul Matthew notes that, while various parties (local industry, importers and government) signed and agreed to a Poultry Master Plan in 2019, very little progress has been made in achieving the targets set out in the master plan to date.
For South Africa to export poultry to the global market, several criteria need to be urgently addressed, including gaining access to countries with which South Africa has preferential trade agreements and meeting the international health and safety standards and requirements of countries to which South Africa will export.
South African terms of trade boon provides unique opportunity for the economy (Engineering News)
South Africa is currently enjoying a terms of trade boon, with export prices outpacing import prices, market research firm Intellidex director and capital markets research head Peter Attard Montalto said on May 25. “It’s an unusual situation, driven by metals prices and helped by the fact that South Africa is a net exporter of food at the moment. We’re seeing that, even though we have very high oil prices boosting the import basket, the export side is more than offset,” he said.
‘Lifting ban on imports commitment to AfCFTA’ (The Herald)
THE Government’s lifting of the import ban on selected basic commodities is testimony to the country’s readiness and commitment to fully implement the dictates of the Africa Continental Free Trade Area (AfCFTA) agreement to which Zimbabwe is a signatory.
Industry and Commerce Minister Dr Sekai Nzenza said Zimbabwe was still finalising its tariff offer under the AfCFTA and hoped to reap huge benefits from the agreement. Earlier this month, the Government through the Ministry of Finance and Economic Development, issued measures to promote the availability of basic commodities as a measure to counter the recent spike in prices of locally manufactured goods. This position has since sparked a massive outcry amongst local industry players as it allowed the flow of basic commodities onto the local retail market.
Kenya’s roadmap to double fish yield, create marine jobs (Business Daily)
Kenya’s fishing sector is set for a major boom after the government drafted a set of regulations to empower industry players. The implementation of the new rules is expected to double fish catch to 300,000 metric tonnes. According to the Draft Marine Fisheries (Access and Development) Regulations 2022 and Lake Turkana Fisheries Management Plan, Kenya will earn at least Sh100 billion and create 240,000 jobs annually once the new regulations are fully implemented. The reforms are expected to bring investment certainty in marine fisheries because fishing rights will be issued “for a sufficiently long time, allowing prudent and profitable planning of investments”.
Higher flour prices loom as millers snub maize imports (Business Daily)
Millers have snubbed maize imports on the back of high landing cost for the produce and a shorter window provided for shipping the commodity, a move that will likely subject consumers to higher cost of flour. Processors argue that currently they can only get good stocks of non-Genetically Modified Organism (GMO) maize in Mexico and it will take at least 45 days for the first consignment to arrive after orders have been placed. The government last week waved 50 percent duty levied on maize outside the East African region and allowed millers and traders to ship in 540,000 tonnes in order to check the current high prices of flour. “We have the challenges that make it nearly unfeasible to import maize in the window provided. Three months is a short time to bring in any substantial quantities,” said Rajan Shah, chief executive officer Capwell Industries. Mr Shah said the international price of maize also makes the landing cost so high that millers would find it difficult to justify affordability, hence defeating the purpose of importing at this time.
Kenya’s push for a purely formal seed system could be bad for farmers (The Conversation)
Kenya’s government wants farmers to grow crops from licensed seeds only. These are hybrid seeds that are certified free of various seed-borne pests and diseases. The Seeds and Plant Varieties Act makes it a crime to plant and exchange uncertified seeds. But many small-scale farmers rely on informal exchanges of seeds with their neighbours to secure their food supply.
Kenya is one of the leading countries in Africa when it comes to formal seed distribution. The second seed distribution channel is informal. This largely involves the production and exchange of seeds among small-scale farmers. This system is characterised by a lack of seed testing, formal registration or quality control.
Tanzania economy feels the heat from Ukraine war (The East African)
Tanzania has admitted its current account is hurting after it registered a deficit of $1.31 billion in the first three months of 2022, compared with the $352 million it recorded in the corresponding period last year. According to the Bank of Tanzania, this is due to “a steady increase in the import bill, particularly for refined white petroleum products,” signalling how supplies to the region have been hurt by the Ukraine invasion. “The external sector has been affected by challenges associated with the Russia-Ukraine war coupled with the residual effects of the Covid-19 global pandemic,” the Bank of Tanzania said in its 2022 Q1 report released on May 16.
The import bill and a rising debt also meant the country spent more than it earned. Total national debt rose a further $399.8 million from December to $37.84 billion by the end of March 2022 with the external debt alone accounting for $28.35 million by March.
prices of agricultural commodities increased from December 2021 due to “persistent supply disruptions, increasing demand for food from neighbouring countries and low or delayed short rain season harvests.”
Samia: Tanzania gearing up to connect countries through rail, road (The East African)
Tanzania is ready for regional integration and is in the process of completing road and railway networks with the goal of linking neighbouring countries, hence contributing to continental integration efforts, President Samia Suluhu Hassan has said.
However, the country will need more external funding to finance the construction of the next phases of the Standard Gauge Railway (SGR) as well as proposed highways to Kenya, Democratic Republic of Congo and Burundi, she said on Wednesday in Ghana after receiving an award for her country’s recent infrastructure projects.
Angola Takes Charge of Downstream Sector Developments (Energy Capital & Power)
As the second largest oil producer in sub-Saharan Africa, with production levels most recently estimated at 1.22 million barrels per day (bpd), the Republic of Angola continues to make strides across the upstream segment of its hydrocarbon sector. However, more recently it is the southern African country’s downstream sector that has been gaining faster momentum, with many large-scale projects underway. By prioritizing these downstream mega-projects, the government of Angola aims to improve domestic capacity, reduce refined petroleum imports and begin to firmly establish the country as an energy secure and independent hydrocarbon market.
Currently, 80% of the country’s refined petroleum products are imported, costing Angola $1.7 billion per annum to meet domestic demand. With this reality sharply in focus, the government is accelerating energy security and self-sufficiency ambitions, and with 8.2 billion barrels of its own oil reserves, there is a strong case for both the upgrade of current facilities and for the construction of new refineries countrywide.
to strengthen Angola’s downstream infrastructure, particularly with regards to the efficient transportation of both oil and gas, the government is ensuring investments in associated infrastructure programs, such as pipelines. In this respect, the Angolan government signed a $5 billion deal with the government of Zambia in 2021, for the construction of an oil pipeline that will link the two southern African nations. The pipeline will enable Angola to supply Zambia with finished petroleum products, strengthening regional petroleum trade.
Low oil output barely enough to cover petrol imports – Nigeria FinMin (Engineering News)
Low crude oil production means Nigeria is barely able to cover the cost of imported petrol from its oil and gas revenues, Finance Minister Zainab Ahmed told Reuters on Thursday. Ahmed added in an interview at the World Economic Forum in Davos that she hoped Nigerian oil production would average 1.6-million barrels a day this year, up from around 1.5-million barrels a day in the first quarter.
Next Africa: A Nation’s Cryptocurrency Gamble Draws Fire (Bloomberg)
The Central African Republic’s adoption of Bitcoin as legal tender and plan to set up a crypto hub has confused donors and angered the country’s neighbors. The nation has a barely functioning economy and is riven by conflict. Only 11% of its citizens have access to the internet and there is very little electricity generation — two pre-requisites for the use of cryptocurrency. The initial announcement of Bitcoin’s adoption — only the second country to do so after El Salvador — drew a rebuke from the regional central bank and concern from the International Monetary Fund. But CAR hasn’t stopped there. The next step is to allow the purchase of land with Bitcoin and create a cryptocurrency economic zone known as Sango — The Crypto Island.
Tunisia Forum for Enhancing Economic Cooperation between Libya, Tunisia and Korea discusses developing trade with the rest of Africa (Libya Herald)
Libya’s (Tripoli-based) Minister of Economy and Trade, Mohamed Hwej discussed yesterday ways to expand the horizons of trade cooperation between Libya, Tunisia and Korea towards the rest of Africa. The Minister indicated that the State of Libya is looking forward to strengthening cooperation with Korea to develop infrastructure, reconstruction, technology and the communications sector and implement investment projects in all sectors, calling on companies and businessmen from Korea to return to complete and resume their work as soon as possible, stressing the keenness of the Ministry of Economy and Trade to provide the necessary facilities to companies Korean and provide a suitable work environment.
African trade and development news
Africa urged to harmonise production processes (Chronicle)
ZANU-PF Second Secretary, Cde Kembo Mohadi has urged African countries to urgently harmonise their production processes leveraging on the continent’s rich natural resources to create wealth so that they are able to compete with developed nations.
In an interview on Wednesday, Cde Mohadi singled out Africa as one of the richest continents in the world, saying it is capable of developing using its own collective resources.
“We need to use our own resources as Africa to develop ourselves so that we are able to compete at the same level with other continents,” he said.
AfCFTA targets 30% trade growth, to create African Customs union – Anatogu (Businessday)
Francis Anatogu, the special adviser to President Muhammadu Buhari on public affairs, says effective implementation of the African Continental Free Trade Area (AfCFTA) agreement will double intra-African trade which currently stands at 15 percent. Speaking via Zoom at the recent public presentation of the Nigerian Logistics and Supply Chain Industry Report in Lagos, Anatogu, who doubles as the secretary of the national action committee on AfCFTA, said the global supply chain has been disrupted in recent years by the outbreak of COVID-19, Russia-Ukraine war and nationalistic trade policies. According to him, African countries are now in a good position to take advantage of some of these disruptions to grow their supply chain industry.
Launch of Digital Policy Working Group (Afreximbank)
Afreximbank, in collaboration with the African Union Commission (AUC) and African Continental Free Trade Area Secretariat (AfCFTA), has established a digital policy working group to serve as a high-level platform and point of contact for public-private sector engagement on African Digital policy issues in the context of the rapidly evolving digital economy of Africa.
The working group comprises digital “scale-ups”; mature digital ventures in Africa with clear trade-enabling products and services, operations and business models that transcend a single domestic market and provide services across the continent – working alongside representatives of the AfCFTA and AU member states. The working group will provide AU Member States and AfCFTA State Parties with a direct line of sight to the African digital economy and the opportunities that exist within it, as well as insight into the challenges facing the companies operating in the market.
The launch of this working group will help guide digital and ecommerce policy in the region, informed by the insights and experiences of the venture companies, and leveraging on the relationships established by Afreximbank, the African Union and the AfCFTA. The working group will deepen the relationship between African venture companies and the sovereign nations in which they operate, as well as their supporting multilateral institutions, leading to the continued exponential growth of the African digital ecosystem.
The working group will initially focus on key digital policy areas that hold potential to transform Africa’s digital environment and support African development under Agenda 2063; at the inaugural workshop, the group deliberated policy and regulatory considerations that need to be addressed to accelerate Scale-Up participation in Africa, based on the insights and challenges faced by its African venture founders.
Trade bodies urged to leverage digitalisation (Graphic Online)
Trade promotion organisations (TPOs) have been urged to leverage digitalisation to boost trading across the world. The organisations have also been charged to work hard to increase trade flows to ensure sustainable growth and development.
The Chief Executive Officer of the Ghana Export Promotion Authority (GEPA), Dr Afua Asabea Asare, said the world could not wait for the current overlapping global crises of war and COVID-19 and their attendant disequilibrium to simmer down before taking action.
She said digitalisation had been a positive outcome of the pandemic and urged members of the network to consider it as a fulcrum to boost trade.
African Export-Import Bank (Afreximbank) has renewed its technical and financial support to the Coalition for Dialogue on Africa (CoDA). After two years of successful collaboration, the two institutions have embarked on a new three-year partnership.
This support has helped CoDA to propel several initiatives across Africa, including national action on Illicit Financial Flows (IFFs), capacity building to implement continent-wide asset recovery through the Common African Position on Asset Recovery (CAPAR), as well as support for the establishment and implementation of the African Continental Free Trade Area (AfCFTA). This new multi-year funding cycle will enable CoDA to support medium- to long-term actions on these and other issues across the continent.
The multi-year support from Afreximbank is aimed at strengthening the capacity of CoDA to fulfil its mandate of increasing domestic resource mobilization by facilitating actions to reduce IFFs from Africa, supporting economic integration through the holistic implementation of the AfCFTA, and improving people’s lives through support for several developmental initiatives across Africa, including Africa’s ambitions in vaccine manufacturing.
African Union head to push Russia, Ukraine to unblock grain exports (Reuters)
Senegal’s president and African Union chairman Macky Sall said on Wednesday that when he visits Russia and Ukraine in the coming weeks he will push them to unblock exports of grains and fertilizer to avoid widespread famine. Africa is suffering from disruptions in food supply and soaring prices of basic goods and risks “disastrous consequences” if the situation endures, Sall said during a conversation with philanthropist Mo Ibrahim at the Ibrahim Governance Forum. Nearly half of Africa’s 54 countries rely on Russia and Ukraine for wheat imports, according to the United Nations Food and Agriculture Organization. Russia is also a major supplier of fertilizer to at least 11 countries.
If food supply blockages were to continue and there was a famine, Sall said: “The world would not be able to contain the consequences because it would be massive on immigration. It would be dramatic for African countries.”
Study highlights potential export markets for South African, SADC products (Engineering News)
A study, undertaken as part of the European Union (EU) and Southern African Customs Union (SACU) Economic Partnership Agreement (EPA) on trade in goods, has highlighted specific opportunities for various industries to grow and/or diversify their exports and, in the process, help to offset some export risks some industries face. The study, undertaken by market research company Trade Research Advisor, modelled trade opportunities for companies trading out of Southern Africa into the EU, and vice versa, in terms of transportation, economic, commercial and socioeconomic metrics, Trade Research Advisor MD Martin Cameron revealed this week.
“We categorised the outcomes in terms of short-term opportunities, including export promotion opportunities where there are capabilities to export and it is mainly a question of marketing and diversification, and in terms of medium-term opportunities, mainly focused on export development in industries that are less mature in global trade terms.
Companies need to be aware of the opportunities in countries, whether in Southern Africa or Europe, which is what the study aimed to reveal.
“Different regions and their societies also have different tastes, which present additional trade opportunities when companies start delving into individual countries and export opportunities,” said Cameron.
“Trade relies on multiple, overlapping components. Trade is not either/or, but rather and, and, and. To successfully reap the benefits of trade, there must be infrastructure in place, services, a robust and stable legal and regulatory framework, and supply and demand,” he said.
This is key to understand in the African context, as deficient infrastructure to serve the needs of people negatively affects Africa’s economies’ growth by 2% a year. The provision of services is a more important determinant for trade than only where the opportunities lie, highlighted Cameron.
East Africa Business Network marks the dawn of a new era (EIN News)
As the African Continental Free Trade Area AfCFTA work to create a single, continent wide market for goods and services, ushering in reforms to enhance long term growth, the East Africa Business Network (EABN) is accelerating international trade and investment opportunities. “The EABN is focusing on the human to human connection across a global community.” says Mr. Bill Morgan, Vice Chairman of the East Africa Business Network and Avistas CEO & Founding Principal: “As the AfCFTA works to harmonize free trade across the continent of Africa, the EABN formerly known as the East Africa Chamber of Commerce (EACC) continues in its 17th year of facilitating public and private investments and trade between the East African Community (EAC) and the rest of the world to enhance the human condition and quality of life with integrated entrepreneurial endeavors.”
Harmonize domestic taxes to attract investments in the EAC bloc (EABC)
The East African Business Council CEO, Mr. John Bosco Kalisa has urged EAC Partner States to harmonize domestic taxes to attract more investments into the EAC region. Speaking during the Webinar on Domestic Tax Regimes and Proposed measures for 2022/23 Budgets Mr. Kalisa said the Treaty for the establishment of the East African Community obliges the Partner States to harmonize their tax policies with a view of removing tax distortions in order to bring about a more efficient allocation of resources within the Community.”
The Vice-Chairman of EABC Mr. Simon Kaheru, said “Under EAC Customs Union which came into in January 2005, the EAC Partner States agreed to apply harmonized customs duties on products imported from the rest of the world into the EAC region. This is implemented through uniform application of the East African Community Common External Tariff (CET).”
EABC Vice Chairman, Mr. Simon Kaheru applauded the EAC Minister responsible for trade, industry, finance and investment who in April 2022 finally agreed on 35% as the Maximum Rate for the new four-band tariff structure.
Development Partners reaffirm support to the EAC, as the bloc embraces new development strategies (EAC)
The EAC’s quest to strengthen its partnerships and strategically refocus to respond to East Africans’ needs, has today been affirmed by development partners, who committed to support key priorities under the 6th EAC Development Strategy. This follows the 3rd East African Community Development Partners Group (DPG) Forum held at the EAC Headquarters in Arusha, Tanzania, providing a platform for the EAC to share critical priorities anchored in the EAC Vision 2050, the 6th EAC Development Strategy, the Comprehensive COVID-19 recovery plan, and funding needs of the EAC Programmes and Projects.
Kenya GDP growth forecast to trail East African peers (Business Daily)
Kenya’s real GDP growth will next year trail the performance of its East Africa Community (EAC) partners except Tanzania and Burundi, new projections by the African Development Bank (AfDB) show, partly hurt by inflationary pressures. The bank’s newly released annual Africa economic outlook report shows that Kenya’s GDP growth is projected to slow down to 5.7 percent in 2023 from 5.9 percent this year—the third-lowest within the seven-member bloc. The outlook shows that Rwanda will retain the fastest GDP growth in 2023 at 7.9 percent, followed by South Sudan and the Democratic Republic of Congo (DRC) tied at 6.5 percent, Uganda (6.2), Kenya (5.7), Tanzania (5.6) and Burundi (4.6).
Financial resilience in small states: Lessons from Eswatini (Brookings)
Small states are particularly exposed to the financial impacts of shocks, varying from natural disasters to the ongoing COVID-19 pandemic and man-made events such as the Ukraine war. The shocks disproportionally and recurrently affect small states due to their peculiarities. They have small populations and economic bases combined with geographically concentrated economies, which makes them particularly vulnerable to shocks. They tend to be geographically isolated, which creates challenges in mobilizing resources to respond to shocks. Furthermore, their growth trajectories tend to rely on few sectors (undiversified) or large neighboring countries. These dynamics highlight the central importance of strengthening financial resilience in small states when driving toward development and poverty alleviation.
Integrate Capital Markets For Faster Economic Recovery, Development – VP Bawumia (The Presidency, Republic of Ghana)
A faster and deeper integration of Capital Markets is crucial if the West Africa sub-region is to recover from the double hits of the Covid 19 pandemic and the ongoing Russia-Ukraine conflict, Vice President Bawumia has stated. Speaking at the second edition of the biennial Conference of the West Africa Markets Conference (WACMaC), organized by the West Africa Securities Regulators Association (WASRA) in Accra on Tuesday, May 24, 2022 Vice President Bawumia said such integration would not only facilitate cross-border trade, but also help raise the needed capital for local development. “A well-integrated West Africa Capital Market can accelerate the mobilization of resources for Sub-regional and continental infrastructure needs which is estimated by the African Development Bank (AfDB) to be about $130-$170 billion a year (AfDB, 2019 report). This can be supported or supplemented by funds raised across the region and the continent. “An integrated capital market can also help to attract capital and stem the rapid tide of capital flight from Africa which has hit unprecedented proportions. In this case, capital will begin to work within the continent as bankable projects would be initiated locally,” he explained.
Africa’s Recovery Remains Uneven; More Resources Are Needed - African Development Bank Report (AfDB)
An African Development Bank report released Thursday shows that the institution was pivotal in 2021, delivering timely investments that are helping millions of Africans overcome the unprecedented challenges caused by the Covid-19 pandemic.
Titled “Returning Africa to its Development Path,” the 2022 edition of the report notes that the Bank Group pressed ahead with its projects in 2021 despite shutdowns, supply chain disruptions, and a global economic slump. Across the continent, the Bank’s investments expanded access to electricity, improved transport, boosted agricultural productivity, fuelled industrialization, and integrated regions.
According to the report, however, economic recovery remains uneven and fragile, even as the easing of Covid-19 restrictions has put many regions of the continent back on a growth trajectory. The report estimates that continued vulnerabilities and new health measures pushed an additional 30 million Africans into extreme poverty in 2021.
But the pandemic, and its far-reaching consequences, is not the only crisis facing the continent today. African countries are also grappling with the climate crisis, insecurity in the Sahel and the Horn of Africa, and the impact of the war in Ukraine, particularly its impact on food prices. Investments need to accelerate.
The United Kingdom may channel some of its International Monetary Fund Special Drawing Rights (SDRs) to Africa through the African Development Bank, revealed UK Minister for Africa, Latin America and the Caribbean Vicky Ford yesterday.
Ford was speaking during a discussion seminar organized by the African Development Bank to advance a push to empower multilateral development banks to act as channels for reallocated SDRs. SDRs are an international reserve asset –not a currency—through which the International Monetary Fund supplements member countries’ official reserves. The seminar—titled Breaking down barriers around the use of SDRs to support Africa’s sustainable development—featured a discussion of a proposal to channel reallocated SDRS via multilateral development banks. Currently, the IMF’s Poverty Reduction and Growth Trust and its recently approved Resilience and Sustainability Trust are the sole channels for SDR reallocation.
Nicolas Kazadi, Minister of Finance of the Democratic Republic of the Congo said: “Now we have a unique opportunity with these SDRs to make a difference, and it is so important because it is not only a matter of development or poverty reduction. It is also a matter of climate challenges, and if we do not make it for Africa, we are all lost.”
Africa records strong recovery in remittances despite high cost (The East African)
Remittances to sub-Saharan Africa grew 14 percent to $49 billion in 2021, the strongest gain since 2018, even as the continent remained the costliest developing region to send money. According to the latest World Bank Migration and Development Brief dated May 2022, aggregate regional remittance costs averaged 7.8 percent between October and December last year. The average cost of remitting $200 from countries in the least expensive corridors amounted to 3.4 percent while costs for the most expensive corridors registered 31.5 percent during the same period, an increase of 12.3 percent from the year earlier. The report titled “A war in Pandemic: Implications of the Ukraine Crisis and Covid-19 on Global Governance of Migration and Remittance Flows,” notes that though intraregional migrants in Africa comprise more than 70 percent of all international migration, remittance costs are high due to the small quantities of formal flows and use of black-market exchange rates.
African nations leading the way on ‘food systems transformation’: Guterres (UN News)
António Guterres said for too long, nutrition, food security, conflicts, climate change, ecosystems and health have been treated as separate concerns, “but these global challenges are deeply interconnected. Conflict creates hunger. The climate crisis amplifies conflict”, and systemic problems are just getting worse. He noted that after more than a decade of improvements, one in five Africans were undernourished in 2020, while 61 million African children are affected by stunting. Women and girls bear the brunt, and when food is scarce, “they are often the last to eat; and the first to be taken out of school and forced into work or marriage.” Mr. Guterres said that UN humanitarians and partners were doing their utmost to meet Africa’s needs amidst crisis, but aid “cannot compete with the systemic drivers of hunger.”
Other “external shocks” were exacerbating the situation, such as an uneven recovery from the pandemic and the war in Ukraine, with African countries among the most heavily impacted by grain shortages and rising debt.
Africa coffee industry seeks to succeed without foreign influence (Independent)
African coffee-producing countries have gathered in Nairobi to chart ways of improving the continent’s coffee sector and cushion it from global shocks. These include the effects of pandemics, trade barriers, and market dynamics like unfair taxes and trade restrictions among others. The first G25 Coffee Summit also has the study of Uganda’s production success story top of the agenda, under the theme: “Sustainable Development and Economic Growth in the African Coffee Sector.” This comes at a time when Uganda is in the spotlight for various reasons including achieving a sharp increase in coffee production over the last five years, the decision to withdraw from participation in the International Coffee Organization’s current agreement, as well as the controversial agreement with a foreign company to process and export Uganda’s coffee.
Terming Africa a priority continent for India, the Ministry of External Affairs on Friday said the continent has a huge potential of joining collaboration in the exploration of Oil and Gas, especially in Western Africa. Dammu Ravi, Secretary (Economic Relations), MEA, while addressing a special briefing on the next week’s visit of Vice President M Venkaiah Naidu to Gabon, Senegal and Qatar said: “West African countries have lots of natural resources like oil and gas and have not been fully exploited. There is a lot of potentials for our companies to join collaboration with Gabon and Senegal.”
African leaders signal support for African Development Bank’s emergency food production facility (AfDB)
African governments and international development institutions have voiced support for the African Development Bank Group’s $1.5 billion emergency food production facility to help avert a looming food crisis across Africa. The Bank Group’s board approved the facility on 20 May. At a virtual meeting convened by the African Union Commission on Thursday, government ministers and development partners commended the initiative, which will boost domestic production of essential grains. Imports of these staples have been hit by the ongoing Russia-Ukraine war.
Green, Social, and Sustainable bonds to serve Africa’s sustainable investment needs (UNECA)
Green, Social, and Sustainable (GSS) bonds market remains a new frontier for Africa that will help the continent build a deeper, resilient and sustainable financing, according to policymakers, regulators, and peer sovereign issuers from across West Africa.
Hanan Morsy, ECA’s Deputy Executive Secretary said, “As an innovative finance instrument, GSS bonds help fill the SDG financing gap. While sharing characteristics with traditional bonds, GSS bonds exclusively direct financing to projects with positive climate and environmental outcomes across energy, transportation, construction, agriculture and water sectors.”
Jean-Paul Adam Director, Technology, Climate Change and Natural Resources Management Division at ECA said Africa faces today multiple challenges that include, debt burden and historical high cost of borrowing; recovery post Covid ; climate change related issues; energy and food shortages due to the Ukraine war. These challenges makes it even more necessary for African States to benefit from new ways to raise money from Private Investors in a transparent and efficient framework and at reasonable rates
Global economy news
Exports of intermediate goods see continued growth in fourth quarter of 2021 (WTO)
World IG exports increased by 21 per cent year on year in the fourth quarter of 2021, continuing the upward trend observed throughout the year. However, growth was slower than the 27 per cent recorded in Q3 and the 47 per cent in Q2. The pace of trade in IGs, which range from crops used in food production to textiles and metals needed to produce goods, is an indicator of the level of activity in supply chains.
Asian and African exports of industrial inputs to supply chains increased by more than 24 per cent year on year in Q4, while European exports of inputs grew by 18 per cent.
Weathering a ‘perfect storm’ of cascading crises (UNCTAD)
Climate change, COVID-19, the war in Ukraine – these crises threaten to derail development for 1.7 billion of the world’s most vulnerable people. The international community must take swift, coordinated action now to put the SDGs back on track.
In just two short years, a double whammy of external shocks has knocked global development off track and mired the ambitions of the 2030 Agenda in uncertainty. In the aftermath of the COVID-19 pandemic, developing countries were left exceptionally vulnerable and exposed – a situation which the war in Ukraine has now tuned into a “perfect storm” of cascading crises. The consequences are worrying, not just for developing countries themselves, but also for the success of sustainable development globally.
Following a robust though unequal economic recovery in 2021, marked by disrupted supply chains and multi-decade rises in inflation, the war in Ukraine caught the world economy off guard, roiling global markets for food, fertilizers, and fuels in which both Russia and Ukraine play an oversized role. This led to historic rises in commodity prices, and a general tightening of global financial conditions.
The challenge facing our international financing architecture today is that it was built primarily to protect the global economy from crises at the individual country level. But faced with the “perfect storm” of cascading crises – including climate change, pandemics, and war – hitting so many developing countries at the same time, the system is limited in how it can offer a systemic, global response that supports all countries along all dimensions.
‘Think resilience’ to protect against climate and other catastrophes (UN News)
More countries must “think resilience”, and urgently adopt and improve early warning systems to reduce risks from an increasing number of disasters across the world, a UN disaster forum concluded on Friday.
DDG Paugam: WTO is actively participating in efforts to preserve global food security (WTO)
There are three lines of action that appear closely aligned with the proposals presented in the EU FARM initiative and the German G7 Global Alliance on Food Security.
The first line of action is about keeping markets transparent. This is extremely important because in the short term, we know that food is there: the question is about physical and economic access, rather than availability.
The second line of action is about keeping markets open. Several initiatives are under way now at the WTO to prepare declarations that could be adopted during our ministerial meeting. Some are plurilateral (such as the FARM initiative). But we also have some Members discussing a multilateral declaration on food security, which appears to be a very real possibility.
Food for all to free for all: Unconcerned WTO make matters worse (Down to Earth Magazine)
As the world hurtles towards another food crisis, due to the Russian invasion of Ukraine, the spotlight has again shifted to the World Trade Organization (WTO) and its role in impeding the food security concerns of a host of developing countries. A central question that has divided economists, policy makers and humanitarian organisations is whether WTO has been the chief villain of the food crises in the new century. Has its complex and asymmetrical rules on subsidies embedded in its 1995 Agreement on Agriculture (AoA) exacerbated the vulnerabilities of poor developing countries while allowing the developed countries to continue with their lavish grants to farmers and exporters, and perpetuate the distortions it was pledged to reform?
Plastics dialogue discusses MC12 plans, next steps to implement Ministerial Statement (WTO)
Ecuador and China, co-coordinators of the IDP outlined some major developments in international fora in parallel with the IDP, notably the launch of negotiations at the UN’s Environment Assembly (UNEA) in March, which have the aim of reaching a global deal on plastics pollution by 2024.
DDG Paugam pointed out the importance of addressing plastic waste across the full life cycle of plastics, stressing that the initiative generates trade solutions and supports complementary international processes and activities. To that end, transparency is crucial, he said, suggesting that the IDP establish a global plastic value chain portal to monitor plastic trade flows and to share trade-related policies and measures. Many participants expressed strong support for the data portal.
Climate finance for SIDS is shockingly low: Why this needs to change (UNCTAD)
Small island developing states (SIDS) are the most economically vulnerable of all groups of developing countries, according to the Economic Vulnerability Index.
They are particularly vulnerable to natural, economic and health-related shocks beyond domestic control. The growing frequency and intensity of these climate shocks is a direct consequence of being in climate-sensitive areas or seismic zones, as well as the islands’ smallness. From commodities to manufactured spare parts, these states also rely heavily on imports of food and fuel, leaving them at the mercy of price spikes and shortages of essential goods.
For SIDS, enhancing resilience to more frequent and intense natural disasters means mobilizing more domestic and foreign resources for adaptation and mitigation. However, the COVID-19 pandemic has deprived many SIDS of tourism revenues – a crucial source of income for disaster risk reduction. In this context, climate finance is of particular interest to SIDS policymakers because of its role in funnelling resources to building climate-related resilience. However, at present, SIDS have little access to climate finance. Despite being hit hard by climate change while only contributing to 1% of global carbon dioxide emissions, they only had access to $1.5 billion out of $100 billion in climate finance pledged to developing countries in 2019.
Related News
tralac Daily News
Local news
Red tape is strangling small businesses (Mail & Guardian)
The fundamental impact of governance failure, overregulation, and burdensome taxation in South Africa is that productive entrepreneurship as well as innovation have been crowded out. For example, early-stage entrepreneurial activity declined from 7.8 percent in 2008 to five percent in 2009, significantly lower than countries with a similar GDP per capita — but interestingly, similar to the entrepreneurship rate in Russia, an economy resource-rich and struggling with rent-seeking and corruption and where innovation has, as in South Africa, declined during the commodity boom.
What is clear from the evidence is that South African entrepreneurship has been on a seesaw journey, but largely declining for a long time. This is especially troubling because entrepreneurship is an engine of economic growth. It promotes the innovation needed to exploit new opportunities, promote productivity and create employment, while also addressing societal challenges, which now include the economic shock wave created by the Covid-19 pandemic.
Infrastructure must be maintained with climate change in mind (SAnews)
Public Works and Infrastructure Minister, Patricia de Lille, says recent flooding in the Eastern Cape and KwaZulu-Natal has highlighted the importance of building and maintaining public infrastructure with the mitigation of changing climate patterns in mind. The Minister was presenting the department’s budget for the 2022/23 financial year in the National Assembly on Tuesday afternoon.
“Recent events have again laid bare the importance of infrastructure and ensuring that we not only build new infrastructure but maintain existing infrastructure. We must build and maintain infrastructure taking the severe impacts of climate change into consideration,” she said.
Stats SA says tourism boosted trade at restaurants, takeaway outlets (IOL)
The increased tourism activity appear to have been good news for sales in the food and beverage sector.
The data shows income generated by the food and beverage industry, led by takeaway and fast-food outlets was closely followed by restaurants and coffee shops increased by 13.6%.
Stats SA said positive annual growth rates were recorded for income from food sales and the sector saw a strong improvement in activity with seasonally adjusted income rising 5% month on month in March, after a small 0.3% fall in February.
Egypt, S.Africa committed to advancing bilateral, continental cooperation as they resume joint committee (Ahram Online)
The ministers have agreed to hold the joint committee between Egypt and South Africa once every two years alternately in the two countries, as well as mid-term reviews at the level of senior officials.
During the meeting, Shoukry and Pandor said their governments are determined to establish an Egyptian-South African business council and remove nontariff barriers undermining trade between the two countries. The council will aim at encouraging the business communities in the two countries to make use of the multiple opportunities for trade and investment in each country, the ministers noted. They also urged activating cooperation between the authorities concerned with investments and commerce chambers in Egypt and South Africa to encourage and facilitate the participation of the private sector in the two countries’ economies.
The ministers agreed on taking further steps to achieve economic integration in the continent, including through boosting cooperation among existing sub-regional economic groupings. This is in addition to activating the Tripartite Free Trade Area (TFTA) agreement between the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC) and therefore activating African Continental Free Trade Area (AfCFTA).
China’s economic slowdown could hurt Namibia – Analysis (Namibia Economist)
The World Economic Outlook 2022 report released by the International Monetary Fund in April predicted that China’s economic slowdown could set back the economic recovery in emerging markets and developing countries, especially commodity exporters like Namibia. According to Theo Klein, an Economist at Simonis Storms, the Chinese government has embarked on a journey of transforming the economy from an investment-driven, export-oriented growth model to a sustainable development model since last year. He stressed that any decrease in demand for commodities from China will have a negative impact on Namibia’s exports, as China is Namibia’s second-largest trading partner on average. Over the last 5 years, China’s share of Namibia’s exports has averaged 19.1%.
Namibia mainly imports capital, consumer and intermediate goods, as well as clothing and textiles. With regards to SACU revenue, China is South Africa’s biggest importer and second-biggest importer of Namibia. “So, any major decrease in trade with China as a result of an economic slowdown in China will reduce SACU receipts and add pressure on public finances,” Klein said.
Uganda – DRC trade (The Independent)
Private Sector Foundation Uganda representing private sector business associations in partnership with Government of Uganda will hold the first ever Uganda- DR Congo Business Summit between May 31 and June 8 in Kinshasa and Goma located in the Democratic Republic of Congo. The summit is expected to attract more than 200 participants from Uganda and DRC and will open up new business frontiers as well consolidate trade relations between Uganda and DR Congo through discussions of business linkages, trade fairs and engagements between governments and businesses.
Speaking ahead of the Summit on May 19 at a media conference in Kampala, the PSFU Executive Director, Stephen Asiimwe, said the entry of DRC into the East African Community now provides the Uganda business community with an opportunity to trade in a market that has a population of more than 90 million people. The Uganda business community, he said, was yet to take full advantage of the opportunities that arise out of DR Congo, noting that it is also important to engage in high levels of innovation and creativity to diversify exports beyond food commodities and informal cross border trade.
“We can maximise trade by developing deeper links between domestic producers and external markets such as DR Congo,” Asiimwe said. Uganda’s trade with DRC has been growing over the years, increasing by an average of 10% annually.
During 2017, for instance, Uganda exported goods worth $188.98m (Shs685bn) to DRC while imports from DRC to Uganda stood at $156.5m (Shs567bn). However, this has exponentially grown, with Uganda’s exports to DRC increasing to $338.56m (Shs1.2tn) in 2021. The DRC is one of Uganda’s biggest trading partners in East Africa, with Uganda exporting mainly cement, palm oil, beer, sugar, iron and steel, rice, iron and steel (scrap), cocoa beans and natural rubber.
Dar, Accra trade volume notches 47bn/- (Dailynews)
TRADE volume between Tanzania and Ghana stood at 20.2 million US dollars (approximately 47bn/-) between the year 2016 and 2021, in which the former exported 6,434 metric tonnes of manufactured goods to the West African country.
Tanzania’s High Commissioner to Nigeria, who is also accredited to 15 countries in West Africa including Ghana, Dr Benson Bana, explained during an interview that balance of trade was in favour of Tanzania, which exported goods worth 15.2 million US dollars (about 34.9bn/-). On the other hand, Ghana exports to Tanzania stood at 2,533 metric tonnes with a total value of 5 million US dollars (about 11.5bn/-) during the period.
a two-day high-level meeting to discuss the implementation of a common agro-industrial park (CAIP) between the two countries. The objective of the meeting was to update the two Permanent Secretaries on the progress on the implementation of the industrial cooperation programme between the two countries focusing on the common agro-industrial park; discuss the funding opportunities for activities in the park; propose a possible location of the park; review the draft harmonized policy, legal, regulatory, and institutional framework for the park and agree on a roadmap for the initiative’s subsequent phases.
In her official opening remarks, Ms. Chalwe Chuulu, PS Ministry of Commerce, Trade and Industry (Zambia) welcomed the signing of the MOU on the joint industrialisation programme between the two countries under which CAIP was being implemented noting that it reinforces bilateral ties and that the initiative cements the strategic partnership between the two states.
he alluded to the central role of ECA, COMESA, United Nations Industrial Development Organization (UNIDO), African Development Bank (AfDB) and Afreximbank in promoting agro-industrialization through the park observing that the park had a regional significance as a model for cooperation and industrial development.
Dr. Mavis Sibanda, PS, Ministry of Commerce and Industry, Zimbabwe, noted that the meeting provided an opportunity to achieve a common understanding of the findings and recommendations of the prefeasibility study and lead to the identification of a possible location for the park, “let us take advantage of the Joint Industrialization Cooperation Programme as we anticipate opportunities coming out of the AfCFTA. Pooling resources will ensure economies of scale and will enable the two neighbouring countries to compete favourably on the market”.
Ghana and Mozambique agree to cooperate (Ghana Business News)
Ghana and Mozambique on Monday signed a joint permanent cooperation agreement to boost cooperation between the two countries. The two countries are looking to collaborate in the areas of agriculture, tourism, oil and gas, energy, education, trade and industry, environment, science and technology.
President Akufo-Addo emphasized that the COVID-19 pandemic and the on-going Russian war in Ukraine had established the fact that African countries should collaborate, share ideas and trade more among themselves to withstand the shocks of such occurrences in future.
AfCFTA: Nigerian trade structure threatens $450bn potential (New Telegraph Newspaper)
Despite coming late into the regional trade pact involving 55 African countries, indications emerged yesterday that Nigeria is on the verge of losing out in the $450 billion African Continental Free Trade Area (AfCFTA) agreement. Emerging developments indicate that lack of preparedness and unnecessary tariff barriers are some of the factors already putting a wedge in the free run of the unprecedented trade fellowship aimed at boosting the continent’s Gross Domestic Product (GDP). Other foreseen challenges are general political instability, inadequate trade infrastructure, transportation, poor port facilities and inconsistent agreement among member states.
Goving indication to this effect yesterday in Lagos, a freight forwarder, Mr Francis Omotosho, said Nigerian economy was plagued by microeconomic challenged as a result of poor infrastructure, poor access to capital and increased contractions in the Gross Domestic Product (GDP) growth in the post- COVID-19 era. He said this had led to competitive devaluation, adding that trade barriers were posing great obstacles to AfCFTA implementation.
“Payment providers currently have difficulties providing services. They include trade barriers manifested in form of discriminatory regulations, treatment of foreign providers, requirements for local incorporation, licensing, prohibition on cross border services or limitations in the movement of capital as well as intra trade barriers, difficulty in transmitting money from one country to another due to cross-border connection or the payment systems in either country.”
Buhari advocates closer synergy to address economic challenges (Daily Trust)
President Muhammadu Buhari has urged executives of banking institutions in West Africa to forge a closer collaboration to tackle economic challenges confronting the sub-region. The president made the call on Tuesday while receiving a delegation from the West African Bankers Association (WABA) led by its President, Thierno Seydou Nourou Sy.
President Buhari, who said over time global trade had become more complex and organised, expressed confidence that the rollout of the African Continental Free Trade Area (AfCFTA) would be a turning point in how African countries traded with one another.
Mali Economic Update: Resilience in Uncertain Times - Renewing the Social Contract (World Bank)
According to the World Bank Mali Economic Update 2022 entitled Resilience in Uncertain Times: Renewing the Social Contract, the country’s growing insecurity and socio-political crisis resulted in a timid, lower than expected, economic recovery in 2021. Growth prospect for 2022 has been further undermined by the economic sanctions, regional food insecurity, and the war in Ukraine.
The report points out that the Malian economy rebounded only slightly in 2021 (real growth estimated at 3.1% or 0.2% per capita) driven by the recovery in the sectors of agriculture and services, after the 2020 recession (-1.2%). The improvement in terms of trade during 2019-2020 as a result of the surge in gold prices, has considerably tampered in 2021 and removed one the main growth momentums.
African trade and economy news
Africa’s gross domestic product has recovered strongly in the last year, but the lingering effects of the Covid-19 pandemic, Russia’s invasion of Ukraine and the ensuing war could pose considerable challenges in the medium term. This is according to the 2022 African Economic Outlook, released by the African Development Bank on Wednesday.
Rising oil prices and global demand have generally helped improve Africa’s macroeconomic fundamentals, the report found. But growth could decelerate to 4.1% in 2022, and remain stuck there in 2023, because of the lingering pandemic and inflationary pressures caused by the Russia-Ukraine war. Both countries are major grain suppliers to Africa.
The theme of the 2022 African Economic Outlook is “Supporting Climate Resilience and a Just Energy Transition in Africa.” It highlights a growing threat to lives and livelihoods in Africa. The Bank launched the report during its Group Annual Meetings in Accra, Ghana.
Growing Intra-Africa Trade through Digital Transformation of Customs and Borders (WEF)
The digital transformation of customs and borders in Africa could improve efficiencies in processes, such as administration at customs and borders, and yield trade gains on the continent of $20 billion a year. A new report by the World Economic Forum, Growing Intra-Africa Trade through Digital Transformation of customs and borders, launched today at the Annual Meeting 2022 in Davos, provides a pragmatic perspective on the non-tariff barriers in border and customs services that can be exponentially improved through digital transformation to increase intra-Africa trade.
Kavitha Prag, Africa Lead, Enterprise Technology and Performance at Deloitte Africa, said: “The African Free Trade Area agreement can be a great catalyst for Africa’s growth and development, but its full realization hinges on the introduction of efficiencies, including the improvement of customs processes. Digital transformation of border posts and customs is thus a crucial and necessary step in the implementation of the protocol, especially for many of Africa’s landlocked countries.”
The report highlights insights from the Logistic Performance Index as well as key insights from case studies demonstrating the quantifiable value of digital reforms in countries such as Ghana, Kenya and Uganda. The paper is a call to action for more integrated digital reforms that can drive higher impact through public-private partnerships that sets the course for Africa’s post-pandemic recovery and growth.
Growing Intra-Africa trade through digital transformation of customs and borders
Lower trade barriers, Mpango tells Africa (Dailynews)
THE Vice-President Dr Philip Mpango has urged African governments to lower trade barriers and enhance infrastructure to benefit from the African Continental Free Trade Area (AfCFTA) opportunities. Dr Mpango further said that AfCFTA offers the continent’s countries a great potential for economic growth and development.
“Investing in technology that facilitates trade and financial transactions, as well as forming relationships with the private sector, international organizations and other governments is critical in increasing industrial productivity,” he said.
AfCFTA loses us5bn yearly to third party payment systems (The Business & Financial Times)
Economies of the African Continental Free Trade Area (AfCFTA) lose US$5billion in transactional cost to third-party foreign payment systems each year, the African Union Commissioner for Economic Development, Trade, Tourism and Industry, Albert Muchanga, has disclosed. Mr. Muchanga, who was speaking to the B&FT at the 6th Ghana International Trade and Finance Conference (GITFiC) in Accra, said the continent has made the right choice in adopting the Pan African Payment & Settlement System (PAPSS) as solution to the challenge. “Each payment that comes from the continent has to go to New York for processing and this costs Africa about US$5billion in transactional fee each year according to data from the African Union (AU),” he said.
Mr. Muchanga, however, affirmed that PAPSS presents an opportunity to trade and make direct payments in local currencies without going through any intermediaries which would exert extra cost on businesses in Africa.
Message of the Chairperson of the African Union Commission on the occasion of the celebration of Africa Day on 25 May 2022 (African Union)
The date of May 25 has a double evocative power. On the memorial level, it takes us back to the youthful freshness of the first moments of the OAU. At the geopolitical and institutional level, it constantly questions our individual and collective capacity to build the Africa then dreamed of by our founding fathers.
for the past ten years, Africa has been confronted with the challenges of terrorism, violent extremism and transnational crime (human trafficking, drug trafficking, arms trafficking).
The Continent is also faced with the disasters generated by bad governance, which can no longer be concealed by the demand for transparency imposed by a population that is increasingly open to the world through the new information and communication technologies.
Massive youth unemployment and the persistent precariousness of the women of the Continent are other challenges that call for urgent responses, because this category of the African population no longer accepts to be a passive spectator of its destiny. In addition to all these constraints, there is the economic crisis which is burdened by the debt, the climate and energy crisis which, in turn, affects food prices through the exorbitant cost of transport, while the health crisis following the outbreak of COVID-19, weakens the production capacities of the various economic agents.
The most emblematic sign of these fragilities is the food crisis following the climatic disorders, the health crisis of COVID-19, amplified today by the conflict in Ukraine. This crisis is characterised by a shrinking world supply of agricultural products and a soaring inflation of food prices.
So, what to do in the face of all these challenges? There is, for example, the courageous Institutional Reform of the African Union undertaken since 2016 and whose aim is to improve the governance of the Institution and make it a key player in multilateralism. Then there is the African Continental Free Trade Area (AfCFTA), which entered into force in 2021, making Africa the largest common market in the world and accelerating Continental integration. It reinforces the measures taken in terms of free movement of persons and goods.
Use AU Day to remove hindrances to AfCFTA - Victor Yaw Asante (Graphic Online)
Governments, regulators and other relevant stakeholders in Africa have been asked to use the African Union (AU) Day to forge a fresh collaboration that will help remove all trade barriers from the continent. That will help further the African Continental Free Trade Area (AfCFTA) agreement.
“We believe that Africans have not been able to trade among themselves enough and this is the reason AfCFTA was designed to encourage intra-African trade, but more than a year after trading began, there are still challenges which need a collaborative approach from all stakeholders to address,” Managing Director (MD) of FBN Bank, Victor Yaw Asante stated.
Pan-African integration has made progress but need (Modern Ghana)
Africa Day 2022 (UNWTO)
Africa is endowed with 70% of arable land and agriculture is one of the most important economic sectors in the continent. To be sure, there are many challenges to address to transform the sector, to make it more sustainable and to secure food access and distribution. But we have good reason to be optimistic about the future. Africa is home to the fastest growing urban populations on Earth and its growth is being driven by a buoyant youth possessing incredible talent and ingenuity. Moreover, tourism is returning across Africa, and our sector has the power to deliver positive change and inspire transformation.
Africa is rich in immense natural and cultural resources and the diversification of the economy through tourism will be key to build resilience against external shocks and so build economic stability and greater food security. Domestic and regional intra and inter tourism are valuable sources of income and can boost infrastructures. The African Continental Free Trade Area (AfCFTA) and the Single African Air Transport Market (SAATM) are paramount for advancing Africa’s agenda on sustainable development.
Africa Day 2022 – Africa’s Year of Nutrition (African Business)
Africa Day is observed annually to commemorate the founding of the Organisation of African Unity (OAU), which was created on 25 May 1963. It was the precursor of the African Union (AU). Africa day provides an opportunity to celebrate the socio-economic achievements of the continent and in line with the African Union Theme for the year 2022 “Strengthening Resilience in Nutrition and Food Security on the African Continent”, the development agency of the African Union Auda-Nepad held an online celebration focusing on moving forward this agenda.
“I would like to call on all of us to work together and do the right thing for the constituencies and people that we serve. We owe it to our constituencies and our people, explicitly the children – they are the future leaders of tomorrow. We cannot groom a leader that is malnourished and does not have the capacity to perform. We should talk less and do more,” said Boitshepo Bibi Giyose, senior nutrition office at Auda-Nepad.
The general objective of the AU Year of Nutrition for 2022 is to secure greater political commitment and investment in nutrition to address ongoing nutrition challenges.
Africa provides a ‘home for hope’, despite new challenges: Guterres (UN News)
Egypt works side by side with African countries to achieve sustainable development: Sisi on Africa Day (Ahram Online)
‘Africa Rising’ - law and investment quotes in celebration of Africa Day (Bizcommunity)
On 25 May 1963, the Organisation for African Unity was established in Addis Ababa, Ethiopia to promote unity, solidarity, collaboration and development amongst African member states. To celebrate this important day, Baker McKenzie partners and its African Relationship Firm colleagues share some of their thoughts on the many opportunities that the continent offers.
“Recent developments across the African continent show that the idea of ‘Africa Rising’ remains true and alive. With trade liberalisation through the Africa Continental Free Trade Area Agreement (AfCFTA), a fast growing population and increased technology penetration, the opportunities in Africa’s key markets continue to expand. What many see as challenges in Africa, are in a manner of speaking, Africa’s greatest strength for investments and growth.” - Ijeoma Uju, Partner, Templars, Nigeria.
ERCA to coordinate ECOWAS Member States’ positions on Draft AfCFTA Protocol (News Ghana)
The ECOWAS Regional Competition Authority (ERCA) organized a meeting of a Working Group for the review of the Draft AfCFTA Protocol on competition, prior to the fifth meeting of negotiations between African Union States Parties that is scheduled to hold in Accra, Ghana from 30 May to 2nd June 2022 on the said draft. The meeting took place from 19 to 21 May 2022 at Hotel Flamboyants in Saly, Republic of Senegal. The purpose of the meeting was to bring together a number of ECOWAS Member States (Gambia, Nigeria, Senegal) and ERCA officials for a brainstorming on the draft AfCFTA Protocol on competition in order to ensure that all Member States adopt a common position on all the provisions of the draft AfCFTA Protocol to be shared with Member States’ negotiators and other regional organizations. During the opening ceremony and in welcoming the participants, the Executive Director of ERCA, Dr Simeon Koffi informed the delegates that the meeting was convened to consider the draft AfCFTA Protocol on Competition Policy and harmonise and coordinate the position of Member states on the Protocol.
Kagame pushes for AfCFTA full realization at WEF (The New Times)
President Paul Kagame has said that even with the current trading under the African Continental Free Trade Area (AfCFTA) agreement, there is need to tackle a number of things, especially non-tariff barriers. The head of state was speaking in Davos, Switzerland at a breakfast gathering of African leaders and friends of Africa on the AfCFTA and the bloc’s role in fast-tracking economic growth and transforming the continent. The ceremony is part of sideline events at the ongoing World Economic Forum (WEF) Annual Meeting that kicked off Monday, May 23.
President Kagame said that for so many decades in history, there have been African leaders who tried to unite Africa, and also making sure that the continent can also trade within itself and countries with each other among others.
However, President Kagame observed, with time, there was a huge improvement that Africa accepted reforms and also accepted that first, we need to have even private sector-led economies where the private sector started taking center stage.
President Mnangagwa calls for Africa to prioritise food security (The Herald)
The African continent’s priority today is to secure food security since its regions have enough fertile land to feed its people, President Mnangagwa has said. Speaking today at the ongoing World Economic Forum in Davos, Switzerland, during a discussion on the Africa Continental Free Trade Area (AfCFTA) running under the theme “Friends of the African Continental Free Trade Area”, which he was co-chairing, President Mnangagwa said to secure food for the continent, Africa has to adopt the “eat what you kill” philosophy as well as not to “reinvent the wheel.” This philosophy, according to President Mnangagwa, will work if there is cooperation from those who have developed, industrialised and mechanised agriculture and have access to technology. He added that Africa also has to put in place mitigatory measures against climate change, a key focus area at AfCFTA.
His comments come as the world is currently facing serious food shortages, brought by changing climate change and the supply chain disruptions brought about by the Covid-19 pandemic as well as the ongoing conflict between Russia and Ukraine.
The later has sent global food prices skyrocketing. Africa can, however, secure food security if there is cooperation among nations.
Focus on Africa’s interest: President charges states, financial institutions (Graphic Online)
President Nana Addo Dankwa Akufo-Addo has challenged African nations and their financial institutions to come up with a new economic model that will serve the interest of their peoples and not profit advanced nations. That, he explained, was necessary because “profits from our resources have benefited foreign creditors for far too long, while we suffer abusive borrowing cost on the international capital markets”.
Premier: Investments in remote areas paved way for early Covid-19 recovery (The New Times)
Prime Minister, Edouard Ngirente, has said that the government’s investments in rural areas were part of the drivers of rapid economic recovery from the Covid-19 effects. He was speaking during the presidential dialogue on ‘Africa’s Development Challenges and Opportunities’ at the opening ceremony of the 57th African Development Bank Annual Meeting in Accra, Ghana on May 24. “During the pandemic, cities were not working properly because of different lockdowns, but in some remote areas there were not many cases of Covid-19, so we decided to go and invest there,
He said that the overall process of economic rebound was driven by four key components of the recovery programme. These include; the Economic Recovery Fund— which was designed to help the most hit sectors such as hospitality, transport and other economic activities; the Manufacture and Build to Recover Programme; subsidies given to the agriculture sector; and an ongoing project to set up a bulk blending fertilizer and storage plant in Bugesera Industrial Park.
Digital connectivity an economic imperative for East Africa (The East African)
Digital connectivity provided by Telco’s and Mobile Network Operators (MNOs) is well placed to make a positive impact on the access to resources by women, ‘formalise’ informal employment and improve on the access to education for all. Communication and internet access are transformational, they empower citizens to meaningfully contribute to their countries’ economies, and shape sustainable economic futures. “The ever evolving supply of technology gives rise to life enhancing opportunities. The more technology penetrates into our communities, the more we can expect everyday problems to be resolved by its use. One fascinating example is of tele-medicine where patients need not travel vast distances to reach doctors, rather get to a connected centre and get consultations and in some cases, have surgeries performed remotely,” said Sitholizwe Mdlalose, Vodacom MD
African Union head to push Russia, Ukraine to unblock grain exports (Successful Farming)
Senegal’s president and African Union chairman Macky Sall said on Wednesday that when he visits Russia and Ukraine in the coming weeks he will push them to unblock exports of grains and fertilizer to avoid widespread famine. Africa is suffering from disruptions in food supply and soaring prices of basic goods and risks “disastrous consequences” if the situation endures, Sall said during a conversation with philanthropist Mo Ibrahim at the Ibrahim Governance Forum. Nearly half of Africa’s 54 countries rely on Russia and Ukraine for wheat imports, according to the United Nations Food and Agriculture Organization. Russia is also a major supplier of fertilizer to at least 11 countries. “We have pleaded for a ceasefire, for an end to the war and for the release of all food products ... so that the world doesn’t know a famine after two years of COVID and almost three months of war,” said Sall. Russia invaded Ukraine in late February.
“There are multiple initiatives to call on countries that have (grain) stocks to liberate them ... and to ensure that Russia can authorize the export of cereals from Ukraine and can also export itself. This is the African position,” he said.
The African Development Bank Group’s annual meetings officially opened on Tuesday with a ringing endorsement of the institution by the Ghanaian government and a call on member countries to back the institution as the main engine for the continent’s economic growth.
Speaking at the formal opening ceremony, Ghanaian president Nana Dankwa Akufo-Addo spoke of the continent’s ongoing fiscal and socioeconomic challenges and the importance of the African Development Bank to the continent’s development goals.
“What is clear is that the resulting damage cannot be cured so easily with the limited fiscal tools at our disposal and national policy adjustments. Therefore, I reiterate my call for an elevated role for Africa’s premier bank, the African Development Bank,” Akufo-Addo said.
Ghana’s finance minister, Kenneth Ofori-Atta, who is at the end of his term as current chairman of the African Development Bank Group’s board of governors, said the stakes were high and spoke of the risk of a lost decade. Africa’s economic growth contracted by 3.2% in 2020 and debt-to-GDP ratios edged up from 60% to 71.1%, Ofori-Atta noted. The minister said, however, that it was not all bad news.
The theme for the African Development Bank Group’s 2022 Annual Meetings is “Achieving Climate Resilience and a Just Energy Transition for Africa.”
Akufo-Addo, Adesina, others chart new path to Africa’s economic freedom (The Guardian Nigeria)
Prominent African leaders, yesterday, took turns to examine the continent’s development agenda, admitting the future is in danger if it does not take its affairs into its hand and chart a new course.
They warned that there is no better time to take proactive actions and secure long-desired economic freedom, noting that Africans could only turn to western countries for support at their own peril. They spoke at the opening ceremony of AfDB’s Annual General Meeting (AGM) held in Accra, Ghana, with a focus on the most troubling challenges facing Africa: climate change adaptation, just energy transition and food crisis.
After the opening ceremony, the leaders dissolved into a presidential dialogue where they debated extensively on the overwhelming challenges facing the continent: rising sovereign debts, narrowing financing options, energy shortage, low infrastructure, climate change vulnerability and food crisis.
Akufo-Addo, the chief host of the AGM, sought the collaboration of African leaders to expand the role of AfDB in the development agenda of the continent and warned that the skewed global financial system cannot support its aspiration for economic emancipation.
Make positive impact on the continent - African Trade, industry players urged (News Ghana)
The Ghana International Trade and Finance Conference (GITFiC) has organised its 6th conference in Accra with a call on participants to use the knowledge gained to make positive impact on the Africa continent.
“We are in the face of transition towards a brighter future for Africa, towards deepening relationships, towards fulfilling intra-Africa trade and transition from the pandemic.”
Mr Tsonam Cleanse Akpeloo, Chairman, Association of Ghana Industries (AGIs)
Said. The transition signified hope and potential for tremendous change and that the AGIs held the key to transforming Africa continent by impacting the lives of ordinary African, nations and generations.
The two-day conference would have panel discussions on the first day on the topic: “Towards an Effective and Efficient Mobile Money Transactional Penetrations in Africa; A Catalyst to solving Cross Border Payment and Settlement, an Anticipated – Barrier within the AfCFTA; – The Role of Financial Regulators and Stakeholders.”
“Measuring the Acceptability and Adaptation Level of the AfCFTA on the African Continent a Year after Implementation of the 1st Phase; – Where do we stand in terms of Trade in Goods, Tradce in Service, and Dispute Resolution Protocol (Policy Direction) with focus on the Role of Africa’s Local Governance Structures in preparing their various Business Communities to take advantage.”
Building models for climate resilience and a green recovery (UNECA)
The COVID-19 pandemic led to a great disruption of lives and livelihoods, and therefore a substantial economic shock globally. This was especially true for the countries of Africa, many of which had very low institutional capacity to deal with a sudden public health crisis, and low budgetary capacity to fund a pandemic recovery stimulus thereafter.
But one way of thinking about a recovery from such a sudden and multidimensional crisis is to treat it like a model, or bridge, to building resilience for the future effects of climate change. The impacts of climate change are expected to be much more considerable (albeit unfolding at a slower pace) and certainly more long-lasting. Only a small share of the fiscal stimulus packages is explicitly green. Yet recent global economic studies suggest that green spending can secure both greater growth and a greener future.
Kragha oil gas experts offers solutions to cleaner petroleum refineries across Africa (Vanguard)
Without this, the stakeholders who gathered at the second Refining & Specifications Virtual Workshop organised by the African Refiners and Distributors Association (ARDA) noted that achieving net-zero, Paris Agreement and other agreements targeting cleaner environment may remain elusive.
With growing divestment and capital reallocation away from hydrocarbons and into renewables/energy transition, the stakeholders noted that consideration for Environmental, social, and governance (ESG) is the downstream segment of Africa’s petroleum industry now remained a key leeway to the over $15.7 billion required for the continent to improve its refineries.
Regional business community upbeat about CHOGM (The New Times)
Rwanda’s High Commission in Tanzania and the East African Business Council (EABC) and other stakeholders on Tuesday, May 24, organised a roundtable with regional business executives in Dar es Salaam in preparation for the upcoming Commonwealth Heads of Government Meeting (CHOGM) slated for June 21 to 26, in Kigali.
John Bosco Kalisa, CEO of the EABC added: “The major outcome is the commitment of the CEOs to participate in the event and share insights and knowledge on the doing business in the region as well as at continental level taking advantages of the EAC Customs Union and Common Market [protocols] as well as the AfCTA. And building synergies and partnerships in areas of trade, technology, energy, environment as well as regional and continental value chains.”
The EAC is negotiating AfCFTA as a bloc and, the latter on February 18 made a huge step forward by adopting the bloc’s tariff offer for Category A products amounting to 90.2 per cent to be liberalised in 10 years after the start of trading under the continental trade deal.
UNDP: New crises looming in Africa in wake of War in Ukraine (UNDP)
In a new report, the United Nations Development Programme (UNDP) warns of the direct and indirect impacts of the war in Ukraine on the African continent, which could further stall the continent’s development trajectory already significantly jeopardized by the COVID-19 crisis. This report, entitled “The Impact of the War in Ukraine on Sustainable Development in Africa”, reinforces findings of the Global Crisis Response Group (GCRG) that the war in Ukraine is pushing the 2030 Sustainable Development Goals and the aspirations of the African Union’s Agenda 2063 further out of reach, and provides key recommendations for actions that need to be taken immediately, to avert further crises in Africa.
According to the report, some of the direct impacts of the crisis in Africa include trade disruption, food and fuel price spikes, macroeconomic instability, and security challenges. African countries are particularly affected due to their heavy reliance on imports from Russia and Ukraine.
UNDP’s new report proposes three main areas of action that could mitigate the impact of the war in Ukraine on Africa.
Global economy news
New study looks at challenges and opportunities of LDCs’ accession to WTO (WTO)
The report — “Accessions of Least-developed Countries to the WTO — Challenges and Opportunities” — summarizes the commitments undertaken by the nine LDCs who have acceded to the WTO under Article XII of the Marrakesh Agreement. It also looks into the challenges and opportunities for LDCs regarding WTO membership, including the importance of participating in WTO activities. The paper also briefly examines the economic performance of recently acceded LDC members to see how they have fared since joining the WTO.
The impact of the war in Ukraine on Trade Policy (Lexology)
The war in Ukraine will change the world in many ways. One change that deserves more attention is how it is impacting trade policy and thus changing trade flows and creating trade opportunities.
Economic sanctions are traditionally considered to be coercive measures that are designed to bring about a change of behaviour. The point is not to punish but to change behaviour. They are also normally designed to maximise the economic pain on the target while minimising that on the parties imposing the measures.
For this reason, trade measures are traditionally designed to be temporary with built-in expiry dates and sanctioned assets are normally frozen, not confiscated.
Trade sanctions are most effective where they are universal. Unilateral sanctions can be avoided by trade diversion, especially in the case of commodities and other fungible goods. For this reason, many sanctions regimes are applied extraterritorially, although there are often legal and practical limits to this.
Most Favoured Nation Treatment (“MFN”) is the foundation of the GATT/WTO system and exceptions are limited and well-defined. There is no WTO mechanism for suspending or removing MFN status or even for ejecting a member from the organisation. There are security exceptions that allow restrictive trade measures on both goods and services trade to be taken against a WTO Member, notably “in time of war or other emergency in international relations”. A number of countries including the G7 and the EU have announced that they have suspended MFN treatment of Russia. What they mean by this is that they consider the restrictive measures concerning goods and services that they are taking against Russia are justified by the national security exceptions.
New Initiative to Strengthen Cross-Border Investment in the Digital Economy (WEF)
A pioneering effort to facilitate cross-border investment in the digital economy was launched this week at the World Economic Forum Annual Meeting 2022. The new initiative on digital foreign direct investment, the Digital FDI initiative, will implement projects in several countries to help grow Digital FDI, as the reforms to attract such investment must take place at a country level. The first digital FDI project will take place in Nigeria.
Attracting Digital FDI requires creating digital-friendly investment climates through targeted and country-specific policies, regulations and measures. These investments involve new business models, often based on data and technology, and platform economies, as well as using non-traditional assets. The Digital FDI initiative will aim to identify and implement enabling reforms through public-private projects in emerging markets and developing countries.
“As the first and only global multilateral focused on enabling digital prosperity for all, the DCO is partnering with the Forum on a Digital Foreign Direct Investment initiative to help countries develop digital FDI-friendly investment climates. We invite digital innovators with a commitment to economic development and inclusion to join us,” said Deemah Al Yahya, Secretary-General, DCO.
Advancing Digital Cooperation (WEF)
In 2023, the United Nations aims to agree a Global Digital Compact, a multistakeholder understanding between states, the private sector and civil society on how to achieve the Roadmap for Digital Cooperation. In the broader context, digital cooperation spans topics such as connectivity, artificial intelligence, Internet governance, safety and security, and data governance; all of which mandate the involvement of all stakeholders, not only governments. Will digital cooperation change the way we think about governing?
Middle East and North Africa’s Commodity Importers Hit by Higher Prices (IMF)
The war in Ukraine and related sanctions have triggered a sharp increase in commodity prices, which will add to the challenges facing countries in the Middle East and North Africa—particularly the region’s oil importers.
After leaping to a peak of $130 per barrel following Russia’s invasion, oil prices are expected to settle at an annual average of around $107 in 2022, up $38 from 2021, according to the IMF’s latest World Economic Outlook. Similarly, food prices are expected to increase by an additional 14 percent in 2022, after reaching historical highs in 2021.
This surge in prices comes at a precarious time for the region’s recovery. In our Regional Economic Outlook, we revised up our forecast for growth in the Middle East and North Africa as a whole by 0.9 percentage points to 5 percent, but this reflects improved prospects for oil exporters helped by rising oil and gas prices.
For oil-importing countries, we marked down our projections, as higher commodity prices add to the challenges stemming from elevated inflation and debt, tightening global financial conditions, uneven vaccination progress, and underlying fragilities and conflict in some countries.
Middle East Container Ports Are the Most Efficient in the World (World Bank)
World Bank and S&P Global Market Intelligence container port performance index shows ports in the Middle East and East Asia responded best to the heavy volume growth and service volatility caused by impacts of the global pandemic
“Increasing the use of digital technology and green fuel alternatives are two ways countries can modernize their ports and make maritime supply chains more resilient,” said Martin Humphreys, Lead Transport Economist at the World Bank and one of the researchers behind the index. “Inefficient ports represent a significant risk for many developing countries in that they can hinder economic growth, harm employment, and increase costs for importers and exporters. In the Middle East, heavy investments in container port infrastructure and technology are proving to be effective.”
Agriculture negotiators strive for results in final stretch to Ministerial Conference (WTO)
Amb. Abraham Peralta told the meeting that Director-General Ngozi Okonjo-Iweala has suggested a three-track informal process focusing on: a food security declaration as an immediate response to current challenges; a proposed Ministerial Decision that would exempt food bought by the World Food Programme (WFP) from export restrictions; and an outcome that would guide negotiations on all agriculture topics after the Ministerial Conference has ended.
FTI report highlights importance of urgency on energy transition (Engineering News)
This year represents a critical inflection point in the way that energy is perceived, and the global systems needed to find, produce, deliver and decarbonise it, a new report by global business advisory firm FTI Consulting emphasises. “Significant, era-defining events are happening all around us, all around the world, and all at a breakneck pace – shaping both short- and long-term structural considerations around energy and sustainability,” the company says.
Report: State and Trends of Carbon Pricing (World Bank)
providing an important source of funds to help support a sustainable economic recovery, finance broader fiscal reforms, or invest in communities as part of the low-carbon transition future, according to the World Bank’s annual “State and Trends of Carbon Pricing” report released today.
“The past year has seen some very positive signs, such as the significant increase in revenue that can be invested in communities and in supporting the low carbon transition. There is also good progress towards resolving cross-border issues related to carbon pricing and the adoption of new rules for international carbon markets that was agreed at COP26 in Glasgow, which helps set a clearer policy direction,” said Bernice Van Bronkhorst, Global Director for Climate Change at the World Bank. ”It is important now to build on this momentum and really ramp up both the coverage and the price levels to unlock the full potential of carbon pricing in supporting inclusive decarbonization.”
Key topics covered in the State and Trends of Carbon Pricing 2022 include cross-border approaches to carbon pricing, challenges and opportunities from rising energy prices, and new technologies and governance frameworks shaping carbon markets.
Related News
tralac Daily News
Local news
Perfect storm has hit this industry in South Africa – and in turn, consumers (BusinessTech)
South Africa is staring down the barrel of yet another huge fuel hike in June – as much as R3.50 per litre – due to stubbornly high oil prices, and a volatile rand. This has created the perfect storm in the road freight logistics sector, according to Gavin Kelly, chief executive officer of The Road Freight Association. “No one would have thought that we would see such increases in the fuel price as we have experienced over the past six months. “As we reel from these increases, the possibility of one of the greatest price increases that we have ever seen is looming,” he said.
The Russia-Ukraine conflict and resultant sanctions on Russia have disrupted global energy and food trade, increased logistics costs, and fanned inflationary pressures, creating a challenging environment for businesses and policymakers alike.
“Trade with Russia and Ukraine will suffer, adding to already strained global supply chains. Longer-term, sanctions and a reduction in trade with Russia, could result in the redrawing of some supply chains and trade routes, but this all takes time and comes at a cost,” said captain Rahul Khanna, global head of Marine Risk Consulting at AGCS. Ships need fuel, and those costs are rising, said Kelly. There are still fewer ships at sea due to the pandemic, and there are constraints in the global logistics chains that not only articulate into delays, but into demand, which has an upward price-pressure effect, he said. “Once goods are landed, they then find their way to either consumers or manufacturers via the dependable road transport network, and that is where the next leg of the logistics journey is impacted by fuel increases. We have all felt, and will continue to feel for some time, the effects of more expensive fuel.”
South Africa Seeks Indian Investments In Special Economic Zones (Businessworld)
Indian companies can reduce their lead time to access the African market to three days from eight days by investing in South African Special Economic Zones, said a top official from the South African consular office in Mumbai. “There are more than 13 Special Economic Zones in South Africa, where Indian companies can invest and export to entire Africa, USA and European Union, with which we have trade agreements,” said Andrea Kuhn, Consul General, Consulate General, South Africa in Mumbai. She was speaking at an interactive session organised by MVIRDC World Trade Center Mumbai and the ‘All India Association of Industries’.
Dean Hoff, Consul Economic, Consulate General, South Africa, “In agro-processing, we are negotiating with the Indian government to export avocado, table grapes and litchis.” Indian companies can invest in the agriculture value chain in South Africa as we are a major producer of citrus fruits, maize, corn, soyabean, sugar and dairy products, Hoff said.
“But still bilateral trade volume is around USD 15 billion, which can be enhanced with the dynamic initiatives of the South African Consul General in Mumbai. In order to stimulate trade and investment with South Africa and the entire African continent, WTC Mumbai and AIAI proposes to organize an Africa Conclave in association with all the trade missions of African countries in India in future,” Kalantri said added.
Namibia ready to work with other African countries for the realisation of Agenda 2063 – DPM (Namibia Economist)
Namibia is ready to work with other African countries for the realization of Agenda 2063, an official said Monday at the commencement of the Discover Namibia Intra – Africa Expo and Business Summit at the coastal town of Swakopmund.
Speaking at the event, the Deputy Prime Minister and Minister of International Relations and Cooperation, Netumbo Naandi-Ndaitwah in a statement said the government supports proactive initiatives, like the establishment of the Africa Economic Leadership Council and its programmes such as the summit. “Such unique initiatives add value to the Africa Continental Free Trade Agreement (AfCFTA) and provides practical meaning to the implementation thereof,” she added. Naandi-Ndaitwah believes that such initiatives will empower more young people, thus enabling them to play a significant role in the mainstreaming of the economy as that is the main objective of African leaders.
“The implementation of the AfCFTA provides an opportunity for job creation and greater market access. As well as the further support of the regional and continental goals on regional integration in respect to the SADC within the AU roadmaps of development,” she added.
“If we continue the culture of exporting raw materials out of the continent without value addition happening in Africa, we must know that we are exporting African jobs to other countries. These, leaves African youth in poverty, forcing them to risk their lives on the high seas running after their jobs whereby, they will be labelled as illegal immigrants,” she said.
Kenya coffee output set to fall 10pc on fertiliser crunch (Business Daily)
Kenya’s coffee production in the 2022-23 season is projected to drop by 10 percent to 700,000 bags on the back of rising prices of fertiliser, the US Department of Agriculture (USDA) says in a newly published report that tracks coffee production in the country. The surge in global fertiliser prices began at the beginning of 2021 due to the impact of the Covid-19 pandemic. The ongoing war between Russia and Ukraine has worsened the situation. Currently, fertiliser prices in Kenya stand at Sh6,000 per 50 kilogramme bag, a 71 percent increase from a year earlier. The rise in prices is also due to producer countries such as China, Russia and Turkey restricting exports to protect their farmers compounded by heavy consumption demand from India, Brazil and US buying up large quantities, hence reducing available global supplies.
Uganda leads East Africa in fully switching to e-passport (Business Daily)
Uganda has become the first East African Country to fully shift to the new electronic passport, beating fellow EAC members who have been deferring the implementation deadline for the new secure documents. Ugandans who have not acquired the new generation passport now cannot travel out of Entebbe after the country phased out the old document reading machines. The decision to adopt a new generation of passports and phase out old ones was reached by the EAC heads of state in March 2016 in Arusha, Tanzania. Kenya has pushed the deadline for acquiring new generation passports to November after it missed out on an earlier one that had been set for December last year. EAC Secretary General Peter Mathuki in a recent news conference urged members state that have not implemented the e-passport requirement to fast-track the implementation.
“We are encouraging all member states to adopt the new passport in line with the EAC directive,” said Mr Mathuki in a virtual news conference with the journalists.
Poor value addition culture limits Nigeria’s export benefits (Businessday)
Nigeria’s export benefits despite its potentials are limited by poor value addition culture in the country, as focus is placed more on the instant profits received from exporting raw materials alone, data has shown. The global economy business and economic data for manufacturing value added ranks Nigeria 40th out of 153 countries with 38.32 percent which is below the average mark of 50 percent signifying that more efforts need to be made in growing the value addition culture. According to the Nigerian export promotion council (NEPC), Nigeria is the fourth largest producer of cocoa worldwide covering 6.5 percent share of global production with cocoa beans accounting for almost 90 percent of the $804 million of Nigerian cocoa exports.
However, data from the Nigerian Export-Import Bank (NEXIM), shows that Nigeria poor engagement in value addition activity is causing Nigeria to lose from the global cocoa and chocolate market as it shows that the global value of raw cocoa export is $10 billion while the total value of all finished goods from cocoa annually is $200 billion with chocolates alone having $100 billion.
This means that despite providing 73 percent of global cocoa production, Africa (Nigeria inclusive) is simply scratching the surface in terms of profits as it enjoys less than 5 percent of the wealth obtained from the value addition process.
Textile Industry: Still on the Brink (This Day)
Stakeholders in the Nigerian textile industry have argued that only urgent intervention by the federal government would save the industrial sector
The President of the Nigerian Textile Manufacturers Association (NTMA), Mr. Folorunsho Daniyan, arrived at the scheduled press conference on the state of the textile industry on May 12, 2022, conscious that the textile industry in Nigeria is on the verge of collapse.
He said: ”Ordinarily, the year marking our 65th anniversary (which is this year) should have been time for celebration and popping of champagnes. But this, sadly, is not our situation. If the truth must be said, our industrial sector is dying and needs urgent interventions from the federal government to keep it alive.”
Nigerian textiles used to be a key manufactured product that was exported through the formal channels and by way of cross-border trade in West and Central Africa. However, the export of textile products suffered a setback between 2003 and 2008. Textile exports touched their lowest ebb in 2006 however recovered some lost ground in 2007and 2008. Today, the situation is even worse as our exportability is next to zero.”
Nigeria Imports Refined Petroleum Products Worth $28bn Yearly, Says Energy Consultant (This Day)
The cost of importing petroleum products of all kinds into Nigeria has soared to over $28 billion on an annual basis, Blackgold Energy Authorities, an oil and gas consulting and advisory firm, has revealed. The Principal Consultant, Blackgold, Dr. Oladunni Owo, disclosed this yesterday in Lagos at the ongoing two-day Nigerian Content Midstream/Downstream Oil and Gas Summit, with the theme: “Towards Maximising Potential in the Midstream and Downstream Oil & Gas Sector – A Local Content Perspective.” “Nigeria’s total import for petroleum products is about $28 billion per annum. Nigeria is the largest producer of crude in Africa and third largest importer of refined products in Africa. “Nigeria’s per capita refining is about 0.002 barrels per day, that’s very embarrassing,” she stated.
No Plan to Withdraw Naira Notes from Circulation, Nigeria’s Central Bank Clarifies (Arise News)
The Central Bank of Nigeria (CBN) on Saturday debunked reports that it planned to replace the conventional Naira notes in circulation with digital currency, otherwise known as the eNaira, in due course. This is as the African Development Bank (AfDB) Group’s Board has approved a $ 1.5 billion facility to support African countries deal with the impact of the Russian-Ukraine war impacting food prices and availability. CBN’s Director of Corporate Communications Department, Mr. Osita Nwanisobi, said the misleading statement purportedly made at a stakeholders’ engagement on eNaira adoption in Asaba, Delta, was misconstrued and therefore, urged the public to completely disregard it.
Nwanisobi further explained that the digital version of the Naira is meant to complement the existing currency notes and therefore, would circulate simultaneously with the conventional Naira notes as means of exchange and store of value.
He said the adoption of the digital legal tender, aside from its safety and speedy features, would also ensure greater access to financial services by the underbanked and unbanked populace thereby enhancing financial inclusion. He urged the public and business owners to embrace digital currency as it offers more possibilities.
An increased role for private sector: Mozambique’s new regulatory policy in the off-grid energy sector (Brookings)
Recently, Mozambique’s growth trajectory has been driven by pandemic-related restrictions, the conflict in Cabo Delgado, extreme damage by tropical storms, and by commodity output and prices. Moreover, the hidden debt scandal in 2016 also impacted external funding in the country. Not all is negative—at the same time, new opportunities in the energy sector are opening doors for an economic boost. More specifically, the country is taking steps into a new direction toward creating an environment that enables private investment in the off-grid sector leading the country towards a more positive trajectory.
Mozambique’s electricity sector has traditionally been state-directed and in the recent years, the energy sector’s efforts have strongly focused on the development of gas reserves in the northern part of the country. It also faces structural challenges such as non-cost-reflective tariffs that limit its ability to direct sufficient investment into increased energy access. The country aims to achieve universal energy access by 2030 and major investments are needed. The important role of off-grid solutions and the private sector in contributing to the national goal of universal energy access is outlined in various sector policies, but the policy environment has not been conducive to this developmental trajectory due to lack of a specific licensing regime.
WTO accession for the Comoros moves towards final stages (WTO)
Mr Mzé Abdou Mohamed Chanfiou, Minister of Economy, Industry and Investment, and WTO chief negotiator noted that despite the recent successive external shocks suffered by his country, which is a net importer of more than 60 per cent of its basic necessities, the Comoros remains committed to the bilateral and multilateral aspects of negotiations, with a view to concluding the accession process in a timely manner.
“The accession process is making remarkable progress, to the point of having concluded bilateral negotiations with Japan, Brazil, Canada, the United States and the European Union, opening the prospect of the Comoros’ formal accession to the WTO this year, 2022.
“We must recognize and salute the Comoros’ determination, dedication and dynamism,” said the chair, who also recognized the contribution by WTO members by actively engaging with the Comoros and ensuring that this accession file continues to receive due attention. In addition, trade-related technical assistance provided by international development partners has contributed enormously to the process of accession.
Soy, the magic bean of Togo’s economy (Trade for Development News)
In 2020, Togo, a tiny country squeezed between Ghana and Benin in West Africa, was the first exporter of organic soybean to the European Union, ahead of China and India. This was unthinkable just five years ago.
Soybean is not indigenous to Togo. It was introduced to the country in the 1980s by the German Development Cooperation (GIZ) to provide protein-based food supplement to reduce malnutrition. Testing the different types of beans is important to selecting the varieties best matched to Togo’s soil and climate. In 2015, the Government of Togo partnered with an agricultural research center to test new varieties of seeds and select the most promising ones.
World Bank Support for the Development of Morocco’s Blue Economy (World Bank)
The World Bank has approved a US$350 million loan to support the Government of Morocco in the launching of its Blue Economy program. The program aims to improve job creation and economic growth, as well as the sustainability and resilience of natural resources and food security, which has increased in importance given the impacts of the war in Ukraine. Building on past World Bank engagement in coastal development in Morocco, the Blue Economy Program for Results (PforR) aims to develop institutional frameworks, improve the integrated management of natural resources, and strengthen selected sectors for a climate-resilient blue economy in targeted areas.
“Bordered by the Mediterranean Sea and the Atlantic Ocean, Morocco’s potential for developing its Blue Economy is strong. Its coastal areas already contribute to more than 50% of GDP and jobs in the country, and there is more untapped potential in both existing and emerging blue sectors like aquaculture, seaweed farming, and renewable marine energy. As laid out in the diagnosis of the New Development Model, Morocco has the opportunity to develop coastal clusters that attract investments and creates jobs while ensuring sustainability,” said Jesko Hentschel, World Bank Maghreb Country Director.
African trade news
Kagame in Davos for World Economic Forum (The New Times)
President Paul Kagame has arrived in the Swiss town of Davos where he joins over 50 Heads of State for the World Economic Forum annual meeting. Convening over 2000 leaders and experts after two years without in-person events, the forum is centred around the theme “History at a Turning point: Government Policies and Business Strategies,” which comes against the backdrop of the Covid-19 pandemic. According to a statement, President Kagame will co-chair a session “Forum of Friends of the African Continental Free Trade Area” to discuss the progress made in the implementation of the AfCFTA. The head of state will also speak on preparing for the next pandemic alongside Bill Gates and leaders in the field of health.
Boosting Intra-African Agricultural Trade through Harmonisation of Seed Regulatory Frameworks (COMESA)
With the launch of the African Continental Free Trade Agreement, Member States stand to benefit from wider market access for seed trade. This will lead to competitiveness of the seed industry and pricing given the ongoing efforts by the African Union Commission and partner organizations in seed policy and regulatory harmonization on the continent. Sharing the success story on the status of harmonization efforts in the Common Market for Eastern and Southern Africa (COMESA) region, the interim Chief Executive Officer of the Alliance for Commodity Trade in Eastern and Southern Africa (ACTESA), Dr John Mukuka, stated that achieving regional seed security, would essentially require Member States to leverage on harmonised regional seed regulatory frameworks that offer opportunity to support and facilitate exchange of germplasm and/or varieties among countries, audit one another’s seed production systems including reduction in costs of varietal certification.
Countries with less developed seed systems will access improved varieties from neighbouring countries with better supply system while those States with well-developed seed system will benefit from simplified processes and wider markets. This implies that countries with high comparative advantage in the production of certain seed crops will be encouraged to produce surplus.
He observed that a functioning seed system is one with seed policy instruments, functional institutions to regulate seed certification, variety release processes, production and distribution channels. He further noted that there were more similarities than differences in the seed trade harmonization efforts among Regional Economic Communities (RECs) in Africa implying that they have a lot in common, and hence it is time to consider continental harmonization in view of the African Continental Free Trade Area (AfCFTA).
How governments across Africa defend troubling seeds regulations (Down to Earth Magazine)
Governments in African countries justify rush to formalise the seed sector citing acute food scarcity in the continent
Africa is grossly food-insecure and a net importer of food. According to the United Nations, the continent will have the world’s highest number of people living in hunger — 433 million — by 2030. It spent $35 billion on importing food in 2020 and the amount is estimated to increase to $100 billion by 2030 as the gap between demand and local production widens. How the agriculture sector performs has ramifications for the economy. The sector accounts for 32 per cent of Africa’s gross domestic product and employs more than 60 per cent of the continent’s labour force, largely in the poorest countries. Nearly three-fourths of sub-Saharan Africa’s (SSA) population is small and subsistence farmers, but it accounts for over 75 per cent of the agricultural output. According to The Seed Sector in Africa: Status Report and Ten-year Action Plan (2020-2030), a report published by the African Union Commission (AUC) in 2021 to guide the continent’s agricultural policy: “At the farm level, yields must increase if surpluses available for trade are to be realized.
The AUC assessed that increasing area under agriculture was not sustainable. So, it suggested: Key to increasing productivity is adoption of high-yielding varieties, fertilizers, and other inputs. Of all the inputs, high-quality seed is perhaps the most important, as it determines the upper limit of what farmers can achieve. Improving access to new high-yielding and climate-smart hybrid varieties requires increasing seed production and expanding distribution through increased competition in the seed system.
Africa Must Digitalize to Achieve 4th Industrial Revolution (Walta Information Centre)
Africa must develop high computing capacity to achieve the 4th industrial revolution, said Paul Tiyambe Zeleza, Associate Provost and Professor, Case Western Reserve University, Cleveland Ohio. Prof Zeleza was the key speaker at this year’s ECA Annual Adebayo Adedeji Lecture session at the 54th Africa’s Conference of Ministers of Finance, Economic Planning and Development (CoM2022) in Dakar, Senegal. The 4th industrial revolution, he noted, is an agenda for everyone as it will transform all sectors from education to technology and health.
“Africa was marginalized in the previous three industrial revolutions and the continent should ensure it’s not left behind in the fourth industrial revolution,” said Prof Zeleza. “Africa must promote digitalization, rethink capital expenditure, and develop holistic online curriculum system to achieve its economic, digital transformation. We must walk the talk on constructing integrated, inclusive, innovative and sustainable developmental institutions,” said Prof Zeleza.
The fundamental structures of African economies, he said, have remained the same since colonial times. In fact, dependency on primary commodity production and export has increased.
COMESA and UNCTAD Train Customs Experts in ASYCUDAWorld (COMESA)
Twenty-one customs experts from the COMESA Secretariat and eight Member States have completed a three-months training on the Automated System for Customs Data (ASYCUDA)World Functional and Technical Courses. ASYCUDA is supplied by the United Nations Conference on Trade and Development (UNCTAD). Over the years, the system has evolved through various versions and the current one is known as ASYCUDAWorld. Through this system, UNCTAD developed advanced software applications for Customs Administration and the trading community to comply with international standards when fulfilling import, export and transit related procedures.
As of 2022, thirteen COMESA Member States namely Burundi, Comoros, Djibouti, DRC, Eritrea, Eswatini, Madagascar, Malawi, Rwanda, Seychelles, Sudan, Uganda, Zambia and Zimbabwe use different versions of ASYCUDAWorld and one Member State Eritrea is using ASYCUDA++ to facilitate merchandise trade as well as providing national and regional trade statistics.
In consideration of this provision and the regional action plan towards the Digital Free Trade Area, COMESA Secretariat and UNCTAD signed a Co-delegation Agreement in 2018 under the European Development Fund (EDF 11) Trade Facilitation Programme to develop and implement a Customs Automation Regional Support Centre (CARSC) and Trade Information Portal (TIP) at the Secretariat. This training on ASYCUDAWorld Functional and Technical Courses is among activities on the development of the CARSC.
Northern Corridor Complements LAPSSET - Ambassador Meles (Walta Information Centre)
A delegation headed by Ambassador Extraordinary and Plenipotentiary of the Federal Democratic Republic of Ethiopia to Kenya, Meles Alem, and representatives of the Governments of Kenya and South Sudan with regards to the Lamu Port-South Sudan-Ethiopia- Transport (LAPSSET) Corridor Project paid a scoping mission to the Northern Corridor Transit and Transport Coordination Authority (NCTTCA) Permanent Secretariat, Kenya Port Authority (KPA) and the Northern Corridor Infrastructure including SGR and the Mariakani Weighbridge in the Coastal Kenyan City of Mombasa. As development partners in the LAPSSET Corridor Project, representatives of the United Nations Economic Commission for Africa (UNECA) and New Partnership for Africa (NEPAD) Kenya were also part of the scoping mission.
Ambassador Meles Alem underscored the fact that the Northern Corridor that is adjacent to LAPSSET complements the latter while providing Southern Ethiopia with more port options in the region.
Ambassador Meles noted that KPA needs to promote the Port of Mombasa in the Ethiopian market as it is a landlocked yet most populous country in the region. He said, Ethiopia and Kenya have jointly inaugurated the Moyale One-Stop-Border-Post, the Moyale-Hawassa Highway, and the first three berths of Lamu port, which are part and parcel of LAPSSET and KPA needs to further expedite the untapped Ethiopian market.
Burundi Reaffims Support to COMESA (COMESA)
President Evariste Ndaishimiye of Burundi has reaffirmed his government’s commitment and support to COMESA’s regional integration agenda and called for deeper trade within the 21 Member States. He has urged the region to focus on implementing programmes that benefit the people by encouraging the growth of businesses and interaction. He said this during a meeting with a delegation from COMESA Secretariat led by Secretary General (SG) Chileshe Mpundu Kapwepwe in Bujumbura.
“Our government believes in the ideals of COMESA and we are determined to continue working to deepen trade and integration with the other Member States,” said President Ndaishimiya during the meeting held on 18 May 2022 at the Presidential Palace.
African Coffee Summit to be held in Nairobi (The Standard)
Kenya is set to host the first G25 African Coffee Summit (ACS) in Nairobi starting tomorrow. The conference dubbed Sustainable Development and Economic Growth in the African Coffee Sector will bring together Heads of State from 25 coffee-producing countries who will re-evaluate the overall performance of the sub-sector. Agriculture PS Francis Owino said the summit will provide a platform for the coffee-growing countries to address the challenges they face. “Coffee has contributed immensely to national GDPs and the socio-economic development in rural infrastructure, education, health, employment, and poverty eradication,” Dr Owino said. He added: “It is a major source of raw materials to the agro-processing industries and contributes to narrowing trade imbalances between Africa and her trading partners.”
AFI summit: Evaluating Africa’s aviation safety, security performance (New Telegraph)
Africa’s aviation safety and security recently came under the searchlight of the global aviation regulatory body, the International Civil Aviation Organisation (ICAO). The continent, despite doing so much, still has a lot of gaps to close, just as the liberalisation of air transport in Africa, otherwise known as Single Africa Air Transport Market (SAATM), came under focus at the summit, writes WOLE SHADARE
Africa’s aviation industry took the centrestage in Abuja, last week, as the International Civil Aviation Organisation (ICAO), Directors- General of Civil Aviation in Africa, the African Civil Aviation Commission (AFCAC), the representative of the Singaporean Government, among other groups of aviation intelligentsia, gathered to discuss the myriad of problems confronting aviation safety, security and the liberalisation of air transport in the continent. ICAO Secretary-General, Juan Carlos Salazar, while addressing Africa’s aviation leaders last week in his opening of the 2022 AFI Aviation Week, highlighted the tremendous potential future for aviation in Africa that could be achieved through the realisation of regional commitments and underscored the critical role aviation should play in states’ pandemic recovery planning.
The secretary-general highlighted that air transport growth rates in Africa were among the fastest in the world prior to COVID-19, noting, however, that “we must also recognise together that recent results could have been much more robust if not for persisting regulatory barriers, financial constraints, and the slow pace of air transport liberalisation here.”
The Director-General of Nigerian Civil Aviation Authority (NCAA), Capt. Musa Nuhu, said the AFI Aviation Week was the biggest regional conference that ICAO has for the African region and the Indian Ocean, stressing that it comprises a lot of regional plans for Africa.
One of the key components of the AU Agenda is SAATM, which is a flagship project of the African Union Agenda 2063, an initiative of the African Union to create a single unified air transport market in Africa to advance the liberalisation of civil aviation in Africa and act as an impetus to the continent’s economic integration agenda. SAATM will ensure aviation plays a major role in connecting Africa, promoting its social, economic, and political integration, and boosting intra-Africa trade and tourism as a result. The International Air Transport Association (IATA) fully supports this initiative, which will open up Africa’s skies and promote the value of aviation throughout the continent. Openair arrangements boost traffic, drive economies and create jobs.
Africa’s leading financial institution will avert looming food crisis (AfDB)
The African Development Bank Group’s Board of Directors has approved a $1.5 billion Emergency Food Production Facility to help tackle the global food crisis sparked by the Russian-Ukraine conflict. The funds will help 20 million African farmers produce an extra 38 million metric tons of food to address growing fears of starvation and food insecurity on the continent.
Overcoming Africa’s challenges includes building back from Covid-19. Early in the pandemic, the Bank provided a crisis response facility of up to $10 billion to African countries to help overcome its social and economic impacts. It also launched a $3 billion Covid-19 social bond on the global capital markets, at the time, the highest ever US dollar denominated social bond. According to the Bank’s president, Dr. Akinwumi Adesina, this helped provide social protection to about 30 million vulnerable people.
Vulnerable Africa faces heavy climate finance shortfall (The New Times)
Africa needs about $1.6 trillion to address climate change annually from 2020 to 2030, however it only gets three per cent of the total global climate finance, according to Akinwumi A. Adesina, President of African Development Bank Group. He said while addressing the media on May 23 in Accra, Ghana, to kick off the Bank’s Annual Meetings that will go through until May 27.
Under a theme dubbed “Achieving Climate Resilience and a Just Energy Transition for Africa” central bankers from Africa will convene to share climate change and energy transition challenges that their countries face and showcase policy responses to tackle these challenges. Africa, which accounts for just four per cent of the global greenhouse gas emissions, is short-changed by climate finance. “Africa is not getting enough resources to tackle climate change. Climate financing mobilised globally falls short of Africa’s needs by $100-$127 billion per year since 2020-2030,” noted Adesina.
According to him, data has it that Africa loses about $7-15 billion due to climate change annually and it is expected to rise to $50 billion a year by 2040.
African Economy Development Policy In Practice – Lessons From South Korea’s Development Experience (AfDB)
The developmental state model and the experiences of South Korea present at least four propositions for Africa’s aspiring late industrializers. First, although successful cases of developmental states are concentrated in East Asia, their development process was by no means coincidental. It was demonstrably autonomous, driven by the need for rapid development, and can been replicated in other regions. Second, the industrialization and economic transformation that the developmental state requires can be gained within a relatively short time-span if policies are coherent and the institutions implementing them rigorous enough. Countries such as South Korea, Singapore, and Taiwan were literally catapulted from abject poverty to relative affluence in less than half a century by focused and determined governments. Third, the developmental state is the product of a social compact for development, which can only be assembled in the presence of long-term commitment. It requires institutional discipline and effort in research and development, supervision and coordination, and implementation, monitoring, and follow-up. It demands unrelenting support from the political leadership as well as the private sector. Fourth, while the developmental state must be grounded in realism, South Korea’s success partly lay in the ability of its leaders to stake out an ambitious development agenda and dare their country to “dream big”.
How currency sanctions on Russia could disrupt trade with Africa (Brookings Institution)
Financial sanctions tend to hurt both the sanctioned and the sanctioner, but they also threaten to hurt countries that are financially interlinked with the sanctioned country. Recent sanctions levied on Russia by the United States and the European Union in response to Russia’s invasion of Ukraine are disrupting global trade and financial networks across the world, including in Africa. The sanctions prevent U.S. and eurozone banks, their foreign affiliates, and Russian banks based in the U.S. and eurozone countries from facilitating dollar and euro transactions on behalf of Russian entities. The problem for Africa is that roughly 95 percent of all trade is invoiced in these two sanctioned currencies alone and that a vast majority of Africa’s $14 billion trade with Russia is likely denominated in these two currencies.
This paper uses a recently released dataset that measures the currency of trade invoicing to estimate the share of African trade that will be disrupted—that is, current financing pathways rendered inexecutable—due to the sanctions levied by the U.S. and eurozone countries on Russia (we call these effects “disruptions,” rather than losses, because they have not yet been realized, and it is uncertain how trade partners in Russia and Africa will respond to reduced financing options). We find that currency sanctions alone have the potential to disrupt 1.8 percent of all African trade and, for some countries, upwards of 5 percent of trade revenue.
VDMA: “Free trade can bring Africa and EU together” (The NewsMarket)
Many African countries are modernizing their economies at a rapid pace, particularly to meet the challenges of climate change. “European machine technology can play an important role in moving African countries forward economically. The expansion of renewable energies is a good example of this,” says Ulrich Ackermann, head of the foreign trade department at VDMA, on the occasion of German Chancellor Olaf Scholz’s trip to Senegal, Niger and South Africa. It is precisely for the major challenges such as adapting to climate change, the sustainable use of water and marine resources, the introduction of circular economy systems, and the reduction of environmental pollution that European machinery and plant manufacturers provide the technical solutions. In this way, they can contribute to the sustainable further development of the African industrial structure as well as to the creation of local jobs - also with suitable skilled labor development.
Although the mostly medium-sized mechanical engineering companies from Germany and Europe have recognized Africa’s growing market potential, many are still hesitant about entering the market. Exports to Africa so far account for only a good 2 percent of all German exports in the mechanical and plant engineering sector, with by far the most shipments going to South Africa and Egypt. Investments on the African continent, which require an established business, are only available in manageable quantities.
As a result of the global Corona pandemic and the looming conflicts between the U.S. and China, many companies in the machinery and plant engineering sector will now try to position themselves more resiliently and review their supply chains to do so. “This can bring the two neighboring continents of Europe and Africa closer together. Africa wants to advance free trade and thus has similar goals to the EU,” emphasizes Ackermann.
Global economy news
DG Okonjo-Iweala underlines need to help African small businesses access trade finance (WTO)
DG Okonjo-Iweala highlighted Cote d’Ivoire’s proposals to the WTO on improving access to trade finance for small businesses in Africa and underlined the acute financial constraint, notably the lack of trade finance, that sub-Saharan Africa is facing.
Global surveys show that, while around 30% of international trade finance goes to SMEs, banks reject some 40% of applications from such companies. This rejection rate is higher than for any other type of companies. According to the African Development Bank, the rejection rate for letters of credit applications increased by 30% during the pandemic.” She stressed that the pandemic had accentuated trade financing gaps in Africa, which, prior to the pandemic totalled about USD 80 billion per year, representing about 20% of the African trade finance market.
DG Okonjo-Iweala said the lack of availability of trade finance or its availability at higher costs than the world market are major obstacles to the integration of African countries into world trade.
She concluded: “For countries to be successful in international markets, their logistics, transport, border-crossing and trade-finance costs must be competitive. Controlling these costs requires expertise and training, which eventually reduces transaction costs.” The workshop will contribute to achieving this goal, she added.
Goods barometer remains flat as Ukraine conflict, COVID-19 weigh on trade (WTO)
The latest outlook scales back the earlier optimism in the barometer from February, which suggested that trade might have been approaching a turning point, with stronger growth expected the near future. In April, the WTO forecasted 3.0% growth in the volume of world merchandise trade in 2022, down from the 4.7% growth predicted as of last October. The current barometer reading is broadly consistent with the April projection, but forecasts are less certain at the moment and should be interpreted with care.
Commerce Minister calls for cancellation of required documents for export from LDCs (Khmer Times)
Required documents for export from Least Developed Countries (LDCs) such as proof of non-manipulation or Certificate of Origin which increase the cost for export should be cancelled and replaced with self-certification.
The suggestion was made by Pan Sorasak, Minister of Commerce of Cambodia, while attending a discussion on “Solving trade barriers for recovery” as part of the World Economic Forum Annual Meeting 2022 in Davos-Klosters, Switzerland on May 23. Minister Sorasak laid stress on the significance and necessity to remove and reduce trade barriers through trade facilitation in the country, the region and the world, an important way for rapid economic recovery.
The World Economic Forum’s Community of Chief Economists expects lower economic activity, higher inflation, lower real wages and greater food insecurity globally in 2022, pointing to the devastating human consequences of the fragmentation of the global economy. Reversing previous expectations for recovery, the majority of respondents to the latest survey expect only a moderate economic outlook in the United States, China, Latin America, South Asia and Pacific, East Asia, sub-Saharan Africa and the Middle East and North Africa in 2022. In Europe, the majority expect the economic outlook to be weak.
“We are at the cusp of a vicious cycle that could impact societies for years. The pandemic and war in Ukraine have fragmented the global economy and created far-reaching consequences that risk wiping out the gains of the last 30 years. Leaders face difficult choices and trade-offs domestically when it comes to debt, inflation and investment. Yet business and government leaders must also recognise the absolute necessity of global cooperation to prevent economic misery and hunger for millions around the world. The World Economic Forum’s Annual Meeting this week will provide a starting point for such collaboration”, says Saadia Zahidi, Managing Director at the World Economic Forum.
With wheat prices expected to increase by over 40% this year and prices for vegetable oils, cereals and meat at all-time highs, the war in Ukraine is exacerbating global hunger and a cost-of-living crisis. Over the next three years, chief economists expect food insecurity to be most severe in sub-Saharan Africa and in the Middle East and North Africa. At the current trajectory, the world is on track for the worst food crisis in recent history, compounded by the additional pressure of high energy prices.
As supply chains enter their third year of disruption, governments and business are rethinking their approach to exposure, self-sufficiency and security across their supply chains. Chief economists consider it likely or highly likely that multinational companies will both localize and diversify their supply chains in the next three years, realigning them along geopolitical fault lines.
The November 2021 edition of the Chief Economists Outlook identified “deglobalization” as an emerging trend driven by the impact of the pandemic. The war in Ukraine and its geopolitical and economic fallout is accelerating these trends, with declining physical integration and increasing friction in the virtual space. A majority of the chief economists polled for May’s Outlook expect higher fragmentation in the markets for goods, technology and labour in the next three years, while most expect services to remain stable or be more globalized.
What’s next for economic globalization? (WEF)
There is little debate that globalization has created significant economic opportunities and lifted millions out of poverty. But its focus on growth and competitiveness has also been criticized as a source of inequality and economic disruption. Add to this the fundamental economic transformation the world has undergone since the pandemic began, the ongoing climate crisis and renewed geopolitical turbulence, and it’s clear that globalization is at a crossroads. A new white paper from the World Economic Forum’s Centre for the New Economy and Society takes a look at what our global economic future might look like. Four Futures for Economic Globalization: Scenarios and Their Implications puts forward four possible trajectories for the evolution of globalization by 2027. It considers how globalization may evolve as economic powers choose between multilateral integration and fragmentation, both at a political level and in their technology policies.
Disruption to world shipping likely to worsen warns global insurer (IOL)
THE MARITIME industry has warned that the war in Ukraine since March is likely to exacerbate ongoing supply chain disruption, port congestion and crew crises caused by the Covid-19 pandemic. Allianz Global Corporate and Specialty (AGCS) yesterday said the war had already caused widespread disruption to global shipping, with the loss of life and vessels in the Black Sea, disruption to trade with Russia and Ukraine, and the growing burden of sanctions. “Longer term, sanctions and a reduction in trade with Russia could result in the redrawing of some supply chains and trade routes, but this all takes time and comes at a cost.”
We need to grow collaboration on international investment (WEF)
When investing is sustainable from an economic, social, environmental and governance perspective, it can provide not only capital but also drive job creation, alleviate poverty, encourage technology transfer, and upgrade industries. It can increase peace and stability and advance climate and environmental goals, addressing some of the greatest challenges the world faces today. However, despite this potential, many of the frameworks that guide investment were designed in another era and have not been updated to reflect today’s realities and priorities. The challenge is to develop a coherent vision for international investment, under which different investment reform processes and initiatives can be aligned and mutually supportive. At the same time, capital earmarked for sustainable investment has been growing dramatically, even during COVID-19, reaching more than $35 trillion. Yet well over 95% of this pool remains in developed economies. The challenge is therefore not the availability of capital, but the flow of this capital to where it is most needed: productive investments in developing economies.
We are excited to announce the launch of the World Investment for Development Alliance (WIDA) at the World Economic Forum’s Annual Meeting 2022. By bringing all relevant stakeholders onto one platform, WIDA can enable conversations and coordination to identify opportunities for collaboration.
Russia’s economy is ‘imploding’ as exports to the sanctioned country plummet, trade experts say (Business Insider Africa)
Russia’s economy is collapsing as exports to the sanctioned country plummet in the face of President Vladimir Putin’s ongoing, unprovoked war in Ukraine, trade experts suggest. The “economy is imploding. We forecast a GDP collapse of -30% by end-2022,” said Robin Brooks, chief economist at the Institute of International Finance trade group, in a Sunday tweet. Brooks added that according to data compiled with help from IIF researcher Jonathan Pingle, exports from 20 countries to Russia were down 50% in April compared to the same time a year prior.
Monthly exports from Russia to other countries, however, were up 64% in April compared to the same time a year prior, Brooks said on Monday, as oil and gas sales become a bigger part of Moscow’s revenue.
Globalization for food security and ending world hunger (WEF)
The two years of unprecedented pandemic-produced shocks that stressed supply chains and saw the FAO Food Price Index for staples like vegetable oils and cereals increase by 182% and 68%, respectively, have been immediately followed by Russia’s invasion of Ukraine, exacerbating an already dire food security scenario. When farmers suddenly become soldiers in the world’s breadbasket – where the two countries, combined, produce more than a quarter of the world’s barley and wheat – it naturally sprouts concerns about the risks of having our food supply concentrated in a handful of countries. Many are asking… If a war in Ukraine is causing food insecurity in Egypt and Nigeria, is this really a system we want?
The Russia Ukraine war has impacted food security in countries like Egypt and Nigeria
Some have suggested that a major shift to “on-shore” food production is the logical solution. We have even seen some countries impose export bans on certain essential goods. But these solutions ignore the critical role that open markets play in preventing food shortages. Indeed, protectionism will only increase commodity prices across the board and contribute to a global economic downturn.
The era of trade liberalization not only produced better economic outcomes, but also reduced hunger and famine, and enhanced food security – all during a period of rapid population increase.
However, the current crisis has demonstrated that we may have over-optimized for efficiency in some cases by relying on concentrated centers of food production.
To strengthen resilience, we need to diversify our supply chains, especially for critical goods such as food. This will require us to improve access to services across borders that are essential to the production and transportation of agricultural products.
Related News
tralac Daily News
Local news
AfCFTA holds opportunities for South African industry (Engineering News)
With progress being made on negotiations for the implementation of the African Continental Free Trade Area (AfCFTA), South Africa’s steel industry could capitalise on opportunities emanating from AfCFTA agreement, once it is implemented. Tralac Trade Law Centre executive director Trudi Hartzenberg told delegates attending the Mainstreaming the Steel Master Plan Conference on May 20 that 43 African States that have signed the AfCFTA agreement have now ratified it. She clarified, however, that this did not mean that trade could start under the agreement immediately, given that there were some outstanding issues that needed to be resolved first.
Trade would continue within the continent under agreements that were already in place, and once AfCTA becomes operational, would run parallel to these. However, once AfCFTA was fully implemented, this would change the dynamics in terms of how countries like South Africa would trade with other important economies on the continent, such as Egypt and Nigeria, Hartzenberg outlined.
She also noted that there would be distinct benefits for South African producers. Hartzenberg outlined that there was considerable scope to improve the country’s steel export performance on the continent.
For Steel Master Plan to work all parties must come to the table, says Patel (IOL)
IF the government does not understand the spirit of the Steel Master Plan, it will not succeed. For it to succeed, there are micro-actions that need to be addressed, according to Minister of Trade and Industry Ebrahim Patel. He said this week that the business environment - including the challenges of energy and transport logistics, stimulating the economy with an infrastructure roll-out, and the broader reigniting of private investment in mining and manufacturing property - needed to be addressed.
Scrap metal draft policy on the way by late July, says Patel (News24)
Trade, Industry and Competition Minister Ebrahim Patel told Parliament that South Africa could expect a draft policy to address the illegal trade of copper cable and scrap metal by the end of July. Patel tabled a R10.9 billion budget vote for the Department of Trade, Industry and Competition in Parliament on Friday. The government has been grappling with the illegal trade of scrap metal, which has largely been fed by the theft from the country’s freight and passenger rail network. Earlier this month, Public Enterprises Minister Pravin Gordhan called for a temporary ban on the sale of scrap metal in the country to eliminate the external market for infrastructure that has been vandalised and stolen.
On Friday, Patel told Parliament that he and Gordhan were working together to build support structures for industries to address challenges, including energy challenges and stopping scrap metal syndicates. He said a scrap metal policy was in the works and would be drafted soon.
“We are building an enabling environment for industrialisation [that] requires securing our key network infrastructure, such as energy and logistics, and protecting our electrical grid and rail network from the continued threat of scrap metal syndicates.
“By the end of July, we will have developed and tabled a draft policy on scrap metal, which will introduce a blend of domestic and export measures to address illegal trade in copper cable and scrap metal,” said Patel.
Namibia Intra Africa Trade Summit kicks off today (New Era)
Speakers and exhibitors from various African countries will convene for the next three days in Swakopmund for the inaugural Discover Namibia Intra Africa Trade Expo and Africa Summit that will start today at the Swakopmund Hotel and Entertainment Hotel. The three-day Trade Expo & Business Summit is the brainchild of the Africa Economic Leadership Council (AELC), a pan African business organisation co-founded by Swakopmund local authority councillor Heinrich Hafeni and Percy Morapedi Koji from South Africa.
“The Summit aims to bring together political, business and economic leadership to discuss how best intra-African trade and business can be accelerated under the Africa Free Trade Agreement (AfCTA). The AfCFTA came into operation in January 2021 and promotes the formation of a single market for the free movement of goods across 54 African countries,” Hafeni explained.
The African continent has pronounced itself and is open for business. However, it is up to us entrepreneurs to take it further and create networks. We want to unpack opportunities that these networks create and tell Namibians and all other African entrepreneurs that there are opportunities outside their relevant countries,” Hafeni said.
Case for basic commodities imports (The Herald)
Following the announcement of import duty suspension on some basic commodities by the Permanent Secretary in the Ministry of Finance and Economic Development, Mr George Guvamatanga on May 16, there was a loud outcry from the expected quarters, who cited fears of the move affecting industry. The reaction demonstrated that those who cried the most did not have a full appreciation of the challenges that Zimbabwe is facing and were selfish or out rightly dishonest with the nation on the matter. The key basic products which resulted in the suspension of import duty were salt, cooking oil, rice, flour, sugar, margarine, mealie-meal, milk powder, infant formula, tea, petroleum jelly, toothpaste, bath soap, laundry soap and washing powder. People use these goods in their day-to-day lives. Among those organisations which were not happy with the move was Buy Zimbabwe, whose general manager, Alois Burutsa commented that the “development is likely to reverse the industrialisation gains that had been made by local industry in the supply of basic commodities.”
Other stakeholders questioned the rationale of Government opening the floodgates for imports at a time that products manufactured locally occupied 75 percent of the available retail space. It is only last week that the Confederation of Zimbabwe Industries (CZI) announced that last year the country’s capacity utilisation rose to 56,25 percent.
Kenya set to host 25 African coffee producing countries (Pulse Live Kenya)
The summit themed “Sustainable Development and Economic Growth in the African Coffee Sector,” will involve attendees discussing ways on how to boost domestic output and value-addition of the respective commodity. “The main objectives of the summit include marshalling consensus on a declaration to include coffee as an anchor commodity in the African Union in harmony with the AU Africa Agenda 2063,” revealed Inter-African Coffee Organisation (IACO). The summit which will be graced by President Uhuru Kenyatta will also see the attendees discuss on how to increase value addition and boosting domestic consumption and expanding coffee trading regionally under the African Continental Free Trade Area (AfCFTA) framework.
Kenya has been a member of the Inter-African Coffee Organization (IACO) since 1960 when IACO membership was 11 States, to 25 States today. According to the Kenya National Bureau of Statistics (KNBS) earned Sh24.2 billion (213million U.S. dollars) in the period January to November 2021, with the value surpassing the entire 2020 earnings that stood at 196million dollars.
Horticulture earnings fall Sh20 billion in first quarter (Business Daily)
Horticulture earnings dropped by Sh20 billion in the first quarter of this year on the back of low-quality avocados and a sharp decline in returns from flowers. The Kenya National Bureau of Statistics (KNBS) data indicates the export value of the produce declined to Sh26 billion in the period under review from Sh46 billion in the corresponding time a year earlier. Head of Horticulture Directorate Benjamin Tito said a good number of avocados that were exported were not mature enough, leading to low value and huge rejection of the produce in the world market, which would have lifted earnings.
However, Mr Tito said, export earnings for horticulture will pick from April going forward after the ban on harvesting of avocado was lifted in March. Flowers normally make the largest share of the total horticulture export earnings as they are high-value crops.
Cotton production hit as supplier of GM seeds pulls out (Business Daily)
An Indian firm contracted to supply genetically modified (GM) cotton seed to Kenyan farmers has stopped distribution of the planting material, dealing a big blow to President Uhuru Kenyatta’s manufacturing agenda. Agriculture Cabinet secretary Peter Munya said the Indian-based conglomerate Mahyco – the sole maker and distributor of the seed worldwide, has had running problems with supplying the product to local farmers. Kenya had in 2018 approved the cultivation of GMO cotton to boost production under the open field cultivation while commercialisation started in 2020 as the government sought to increase volumes of the crop to spur manufacturing, which is one of the items on the Big Four agenda.
“The challenge that we are having now is seed multiplication, a company that was given that role had some challenges but I think that is being addressed by the authorities,” said Mr Mugiira. Cotton production has been falling in the country since the 1980s with Kenya relying on imports to bridge the deficit.
High fuel, commodity prices dampen Museveni’s first year in his sixth term (The East African)
The high cost of living, a widening budget deficit, corruption and growth uncertainties continue to blot Ugandan President Yoweri Museveni’s sixth term in office. The president, expected to address the nation this weekend after the end of the first year of his current term, has been facing calls from businesses and the public to tame the escalating cost of commodities, especially fuel, whose retail price has risen over 70 percent in the past year.
Although the Bank of Uganda says the economy is recovering from the pandemic downturn, domestic growth weakened in March 2022 due to the rising prices of food and fuel. Juliet Najjinda, manager of tax services at PricewaterhouseCoopers Uganda, said it is time the government introduced a fuel subsidy to reduce pump prices, as the manufacturing sector is feeling the heat.
“The outlook of the country seems to indicate there are two countries in one; the greater North and South,” said Mr Kivumbi, the shadow minister of finance and economic planning. “If not addressed, it poses a threat to the security of and posterity of the country.”
Willis Bashasha, director of manifesto implementation in the Office of the President, said that they are facing challenges in carrying out their policies.
Kinshasa enters shipping business, set to rock EA boats (The East African)
The Democratic Republic of Congo is entering shipping business with eyes on East Africa’s two biggest ports in Kenya and Tanzania, signalling further intent by the bloc’s newest member to ease its importation channels. This week, officials from Kinshasa announced they had obtained yard spaces in Mombasa and Dar es Salaam to roll out offices for DR Congo’s new shipping line: The Lignes Maritimes Congolaises (LMC) that will start operations from June. The decision that came just about a month after the DR Congo was formally admitted into the East African Community reflects the country’s desire to tap into the benefits of being in the trade bloc, where it is now cheaper and easier to import as tariffs are headed for reduction.
The Kenya Ports Authority (KPA) is banking on the admission of the DR Congo to the East African Community to increase its business market in the region. LMC, the state-owned shipping line mandated with maritime transport and the operation of marine vessels in DRC, is targeting to channel more import-export cargo through the Port of Mombasa, as well as raise volumes in Dar.
“After a discussion on operational and logistics issues with KPA container terminal principal operations officer Michael Bokole and his team, we have agreed to start our operations from Mombasa starting next month. ‘‘This will help in creating more jobs and business opportunities not only for DRC but to Kenya,” said Dr Mulunda.
Opening address to EU-Zambia Economic Forum, Lusaka (European Commission)
Our Economic Partnership Agreement is a great tool. The Agreement removes trade barriers, encouraging healthy competition and lower prices for consumers. It can benefit both Zambia and Europe by helping our two regions to sustainably invest in each other and trade with each other, for improved food security and sustainability.
Another significant step forward in this direction is the African Continental Free Trade Agreement, which we fully support.
The Free Trade Agreement addresses a fundamental lesson we in Europe have learned through our historical experience: removing (some) tariffs alone does not guarantee the improved flow of trade. The trading partners must also harmonise their regulatory environment, allowing businesses to invest and trade across borders with a sense of legal certainty.
I am convinced that we can create a continent-to-continent free trade area between the European Union and Africa in the long-term, opening new perspectives for competitive businesses and healthy economies in both continents.
Dar port reaps from rising political heat ahead of Kenya polls (The East African)
The heat from Kenya’s campaigns ahead of the August 9 General Election is affecting the flow of goods on the Northern Corridor, with Tanzania benefiting from the windfall as more cargo destined for the Great Lakes region is diverted to the Dar es Salaam port.
With memories of the 2007/08 post-election violence that disrupted transport on the corridor still fresh — and a $63 million compensation award ordered by a Nairobi court still pending — many importers, especially Ugandans and Rwandans, are opting for the Central Corridor. Due to this cargo flight, transit volumes through the Dar es Salaam port to the Central Corridor have recently recorded significant growth as Mombasa registers plateaued or declining volumes of goods on the northern route. According to the latest Mombasa Port Corridor Community Charter report, transit volumes through the Dar es Salaam port grew at 21 percent in 2021 while those through the port of Mombasa declined 6.2 percent in the same period.
The decline is blamed on a move by importers in Uganda, Kenya’s largest transit market in the region, to divert more cargo to Dar es Salaam.
Strengthening Nigeria’s Border Policing, Mgt Mechanisms (Leadership News)
The federal government, in April, 2022, approved the reopening of Idiroko, Jibia, Kamba and Ikom land borders. This is coming three years after the government shut down the borders due to the incessant smuggling of arms and different contraband goods. Meanwhile, it has been noted that border closure control policy has not yielded the desired result. While the primary aim of the closures was to curtail food imports into Nigeria, they blocked other vital imports and exports from and to Benin, Niger, and Cameroon. Communities along the border and small and medium-sized businesses that trade over the boundaries lost their livelihoods overnight and saw their operations hampered by bureaucracy.
Stakeholders commended the reopening of the border, while calling for border policing and management mechanisms. To them, border management is a function of regime types in place for the purpose of maintaining border administration. It includes routine administration to be undertaken at the border and in border zones. Border management generally rests on governmental surveillance agencies like the immigration, customs and police forces to ensure a lawful movement of human and economic resources in the national interest.
Many small businesses depend on cross border trade for a living. Many manufacturers also leverage the ECOWAS Trade Liberalisation Scheme (ETLS) to boost their business. Many also source their raw materials from countries in the sub region.
“It is equally important to facilitate the competitiveness of products made in Nigeria. Huge disparities in operating and production costs relative to conditions in other countries of the sub region pose huge smuggling risks. We need to provide more incentives to Nigerian industries to achieve better competitiveness status,” said CEO of Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf.
Equatorial Guinea: Staff Concluding Statement of the 2022 Article IV Mission (IMF)
The COVID-19 pandemic in 2020, and Bata explosions in 2021, struck Equatorial Guinea at a time when its economic vulnerabilities had already been aggravated by a prolonged period of depressed hydrocarbon prices, and seven consecutive years of decline in real GDP. As a result, the shocks further adversely impacted economic activity, the banking system, fiscal revenue, and social outcomes. While non-hydrocarbon GDP is estimated to have increased by 1.3 percent in 2021 due to a deceleration in COVID-19 cases and easing of pandemic containment measures, real GDP is estimated to have declined by 3.5 percent.
Despite recent negative shocks, the near-term outlook has improved considerably. Real GDP is projected to grow by about 6 percent in 2022 due to base effects from the lower-than-expected gas production in 2021, and the start of Bata reconstruction. The recent relaxation of pandemic containment measures and higher international oil prices are helping boost government revenues, along with export earnings, narrowing the external current account deficit. However, high non-performing loans (driven by the government arrears with construction firms) and undercapitalization in the domestic banking system, are a hinderance to private credit expansion, limiting further growth in private domestic investment and non-hydrocarbon sector.
Policies need to balance short-term urgencies ¾ including to support food security and the banking system ¾ with long-lasting overarching reforms to ensure macroeconomic stability, improved social outcomes, and strengthened governance and transparency, delivering sustainable and inclusive economic growth.
African trade news
ECA launches Africa Trade Exchange platform to facilitate trading under AfCFTA (Ghana Business News)
The Africa Trade Exchange (ATEX), a business-to-business (B2B) e-commerce platform, was launched during the official opening of the 54th Conference of African Ministers of Finance, Planning, and Economic Development (CoM2022) on 16 May in Dakar, Senegal. The launch took place in the presence of Senegal’s president, Macky Sall, who is also the Chairperson of the African Union. The platform was developed by the Economic Commission for Africa (ECA) and the African Export-Import Bank (Afreximbank), in collaboration with the African Union and the AfCFTA Secretariat to serve as a B2B and business-to-government (B2G) digital marketplace. ATEX will enable pooled procurement of basic commodities to ensure countries have access to scarce supplies in a transparent manner. ATEX is connected to the digital ecosystem to support the implementation of the African Continental Free Trade Area (AfCFTA) Agreement and provide buyers and member States with quality products from verified suppliers in a more efficient way at average cost, thereby improving cross-border trade.
Local firms urged to tap into AfCFTA (Mmegi Online)
Local businesses have been urged to take advantage of the African Continental Free Trade Area (AfCFTA) to open themselves up to the opportunities available on the continent. Pan African Chamber of Commerce and Industry (PACCI) executive director, Kebour Ghenna told a Small Business Exporters conference this week that Africa should find another way of fostering prosperity by building economic solidarity that can become the base for progressive power needed to create a transformed African economy. “If we don’t get busy making the AfCFTA work and opening back up to the continent, we’ll be left on the outside looking in,” he said. “An AfCFTA that does not embrace solidarity is doomed to fail and fail swiftly. “An AfCFTA that expands inequality and only empowers the rich economies of the world should not be acceptable.”
Senegal’s Macky Sall: Multilaterals put Africa in ‘straitjacket’ (African Business)
Senegalese President Macky Sall has criticised the multilateral financial system and argued that the current deal for Africa is a handbrake on its development. “Explaining underdevelopment in Africa is very simple. The rules set up by international institutions have put us in a straitjacket… The rules are unfair, outdated, and need to be disputed,” he told delegates attending the ECA’s Conference of African Ministers of Finance, Planning and Economic Development in Dakar’s conference centre. “It is time for Africa to speak out. The voices should not just be those of leaders but of finance ministers and others affected by a system that works against the continent. We must look for innovative solutions.”
Africa not where it should be: Analysts (The Herald)
Advocates of pan-Africanism and decolonisation have urged African governments to invest in the creative industry and establish pro-African institutions to successfully defend the continent against neo-liberalism and its proxies coming in the form of non-governmental organisations (NGOs). The sentiments come after President Mnangagwa yesterday, writing in his column in The Herald’s sister paper, The Sunday Mail, warned the nation against a rising “new wave of fake nationalism” which is using all possible means to re-establish Western dominance in Africa. NGOs, mostly funded by Western countries, have been criticised for representing a continuity of the work of some of their precursors, the missionaries and voluntary organisations, that co-operated in Europe’s colonisation and control of Africa.
“Right now African borders are closed but there are three things that are supposed to move freely on this continent. The free movement of people, capital and goods and services was agreed in 1963 and there is no need for successive summits to implement these resolutions since 1963. We can defeat these NGOs and it is in our hands to do so. “Africa now needs to be more radical, courageous and unapologetic because we are not where we are supposed to be. We have Africans who cannot move freely on our continent with countries demanding visas while Europeans and Americans travel without any restrictions here,” said Ambassador Muzavazi.
“As a continent we need to acknowledge that the best way to have speedy growth in Africa will only be achieved through regional economic integration to achieve positive growth and development agenda. What African leaders need to work on is to invest in regional infrastructure, policy harmonisation and increased free movement of cross-border investments and labour. That will help us get where our founding fathers wanted us to be,” said Mr Muroiwa.
A new digital information system to monitor and speed up cross border truck movements and driver health checks at land borders in Eastern and Southern Africa was launched on 20th May 2022 at Tlokweng Border Post in Botswana. Part of the Team Europe’s Global Gateway initiative and response to the COVID-19 pandemic, the Corridor Trip Monitoring System (CTMS) was funded by a €1.6 million grant from the European Union (EU) and more than €500,000 from the Federal Republic of Germany. The CTMS has now been installed at major commercial border posts in Botswana, Namibia, Zambia, and Zimbabwe, along sections of three regional transport corridors, and will soon be installed in other Eastern and Southern African countries. The CTMS is spearheaded by the Southern African Development Community (SADC) on behalf of COMESA, EAC and SADC.
Once fully operational, the system will minimise the need for paperwork and speed up border procedures, reduce waiting and transit times and allow trucks to deliver essential goods more quickly, while ensuring health and safety measures under COVID-19 protocols.
The system equips border agents with hand-held devices to check, validate and register the COVID-19 health status of truck drivers and their crews, as well as the compliance of their vehicles with cross-border regulations and road safety rules. Transport operators will use a custom-made app to upload vehicle and driver health information onto the CTMS website. This information can then be instantly accessed by authorised border and law enforcement officials in the country of destination and transit by scanning QR codes shown by drivers. The CTMS also allows authorities and operators to monitor driver trip progression and deviations against pre-approved routes and designated rest areas.
The system builds on the achievements of the €21 million EU-funded Tripartite Transport and Transit Facilitation Project (TTTFP). Key results of the TTTFP include the development of the Guidelines for Transit of Essential Goods during the pandemic state of emergency and the two Tripartite Multilateral Agreements (the Vehicle Load Management Agreement and the Multilateral Cross Border Road Transport Agreement).
Zambia weighs in on SADC Model Law (Zambia Daily Mail)
STANDING Committees of the SADC Parliamentary Forum and the Regional Women’s Parliamentary Caucus (RWPC) have unanimously endorsed a draft SADC Model Law on Public Financial Management (PFM) and will soon commend it to the highest decision body of the Forum, the Plenary Assembly, for adoption. The endorsement happened at the end of a two-day consultation over the draft Model Law on PFM that took place in Johannesburg, South Africa, recently.
The validation was the climax of a series of similar engagements with different stakeholders over several weeks, as the SADC PF sought buy-in and strengthening of the model law, the first of its kind in the world. The range of consultations gave rise to a wide range of improvements to the model law reflecting the perspectives and objectives of a wide range of public and private professionals with involvement or interest in public financial management.
Zambia’s Minister of Finance and National Planning Situmbeko Musokotwane was the guest of honour at the final validation meeting, which took place on April 28-29, 2022. In a keynote address, Dr Musokotwane said the impact of public finances spent on community projects is important to Members of Parliament (MPs) because they are the interface with the communities they represent.
ECOWAS Revenue decreases by 5% - Commissioner (Federal Radio Corporation of Nigeria)
The Commissioner for Finance at the ECOWAS Commission, Mrs. Halima Ahmed says there was a 5% deduction of the revenue of the Economic Community of West African States, ECOWAS, in 2022. She made this known in Lome, Togo, where she gave an overview of the Community’s 2020 Consolidated annual financial report at the delocalized meeting of the joint committees of the ECOWAS Parliament which includes Public Accounts/Administration; Finance and Budget; Macroeconomic Policies and Economic Research; as well as Trade and Customs. According to Ahmed, the revenue accrued to the Community from all sources decreased by about 13 million UA (Unit of Account), representing 5 percent, from 257 million UA in 2019 to 244 million UA in 2020.
AfDB to lend $500 million to women in 2022, to raise $5 billion for women businesses in Africa (Nairametrics)
The President of the African Development Bank (AfDB), Dr. Akinwumi Adesina, says that the financial institution would lend $500 million to women in 2022. This is as the bank’s Affirmative Action for Women in Africa (AFAWA) is raising the sum of $5 billion with the support of the French President, Emmanuel Macron and G-7. This disclosure is contained in a statement posted on Sunday, May 22, 2022, by Adesina on his official Twitter account, where he also added that the bank paid out $483 million to financial institutions to lend to women businesses in 2021. Adesina, whose statement is coming as the bank commences its Annual Meetings for 2022, is commending the Board of Governors, Board of Directors, management and all the hardworking staff of the bank for all their relentless work.
The AfDB boss said the board had approved a crisis response facility of up to $10 billion based on rigorous risk assessments when the COVID-19 pandemic struck, adding that it launched a $3 billion COVID-19 social bond on the global capital markets, the highest ever US dollar-denominated social bond in world history.
Kigali Communique outlines principles for a just and equitable energy transition (UNECA)
During the global SEforALL Forum in Kigali from 17-19 May 2022, Ministers and high-level representatives from the Democratic Republic of Congo, Ghana, Kenya, Malawi, Morocco, Nigeria, Rwanda, Senegal, Uganda, and Zimbabwe met to discuss the requirements for a just and equitable energy transition in Africa. The meetings were facilitated by the Rwanda ministry of infrastructure, SEforAll and ECA. The outcome of this Ministerial meeting was the Kigali Communique from the 10 countries that expresses seven key principles to address development gaps, and to put Africa on a pathway, aligned with the Paris Agreement on climate change, to economic prosperity and Net-Zero.
With the communique, Rwanda and the other represented countries call on partners to align with these principles of a just and equitable energy transition in Africa, to turn their commitments into action, and to join them in working towards meaningful progress on an energy transition that will benefit our future generations.
Growing hunger, high food prices in Africa don’t have to become worse tragedy (Africa Renewal)
In the aftermath of the COVID-19 pandemic, world hunger increased substantially – estimates from the State of Food Security and Nutrition around the World (SOFI) reveal that as many as 161 million people fell into hunger between 2019 and 2020, bringing the world´s total to 811 million people facing food insufficiency. In other words, about one in 10 people in the world went to bed without enough nutrition in the first year of the COVID-19 pandemic.
Africa has been particularly vulnerable: about 21% of people on the continent suffered from hunger in 2020, a total of 282 million people. Between 2019 and 2020, in the aftermath of the pandemic, 46 million people became hungry in Africa. No other region on the world presents a higher share of its population suffering from food insecurity. Also, African households spend a large share of their income on food. According to a recent note in the Financial Times, citing estimates from the IMF, food represents 17% of expenditure in advanced economies, in sub-Saharan Africa the figure is 40%.
The stress signals are present, but the challenge of growing hunger in Africa does not need to become a worse tragedy: the world has learned from past experiences, and the sooner national governments and the international community act, the better the results.
Some actions have already been taken – others not taken. For example, food trade has not been severely halted as it was during the 2007-2008 food price spike. This is a good start. However, a complex problem with multiple causes and consequences needs a battery of policies and interventions, many of which have proven effective in the past.
The ability to access food via trade, production, work, or transfers change in time of crisis, especially for some vulnerable groups. Mr. Sen´s insight is so powerful because it recognizes that issues of hunger, starvation and malnutrition go well beyond food systems and depend on social arrangements (including the markets for food and labour, for instance), the economy, and the functioning of the state and governments.
Amid a looming food crisis, Ethiopia has emerged as an African country that has taken significant steps to achieve self-sufficiency in food production. With support from the African Development Bank’s agricultural Technologies for African Agricultural Transformation program, Ethiopia has not imported grain in 2022, African Development Bank President Akinwumi Adesina emphasized during a meeting with G7 development ministers meeting on Thursday. This comes as Africa faces a severe shortage of at least 30 million metric tons of food supplies arising from the Russia-Ukraine war. The war has especially affected wheat, maize, and soybeans imported from both countries.
Ministers from several African states, including Senegal, South Africa, Tunisia and Zambia attended the meeting, convened by Germany, which holds the current presidency of the G7. The African ministers played an active part in discussions on the core subject matter: “Response to Multiple Crises on the African Continent – focusing on Food Security.” Representatives of the African Union Commission, the International Fund for Agricultural Development, the International Monetary Fund, the United Nations Development Programme, the World Bank Group and the World Food Programme also took part in the meeting.
Albert Muchanga, commissioner for Trade and Industry of the African Union Commission, said despite efforts across Africa to resolve food production, Africa remained a net importer of food, and stressed that the time had come to end this.
African Development Bank Board approves $1.5 billion facility to avert food crisis (AfDB)
The African Development Bank Group’s Board of Directors on Friday approved a $1.5 billion facility to help African countries avert a looming food crisis. With the disruption of food supplies arising from the Russia-Ukraine war, Africa now faces a shortage of at least 30 million metric tons of food, especially wheat, maize, and soybeans imported from both countries. African farmers urgently need high-quality seeds and inputs before the planting season begins in May to immediately boost food supplies. The African Development Bank’s $1.5 billion African Emergency Food Production Facility is an unprecedented comprehensive initiative to support smallholder farmers in filling the food shortfall. The African Emergency Food Production Facility will provide 20 million African smallholder farmers with certified seeds. It will increase access to agricultural fertilizers and enable them to rapidly produce 38 million tons of food. This would be a $12 billion increase in food production in just two years.
Why Chinese demand for African imports might defy Covid lockdowns, supply chain snarls (Yahoo Finance)
China’s months-long lockdowns of Shanghai and other major cities amid a Covid-19 outbreak has sparked global logistics delays feared to last months, as well as concerns of a slowdown in the world’s No 2 economy. But there will be minimal impact on Chinese imports from Africa, especially of agricultural goods and industrial raw materials, even though exports to the continent will be hit, according to observers. Shanghai, home to the world’s busiest container port, has been under near-total shutdown for almost eight weeks. This has caused a huge backlog of cargo vessels offshore, with importers expected to face further delays after prolonged factory and port closures.
Most African countries are heavily dependent on China trade, with the resource-rich among them exporting most of their oil, minerals and metals to the country, while Chinese exports to the continent include electronics, machinery, fabrics, clothing and home appliances. “Given that Shanghai and the surrounding region is a major production hub of electronics, exports of these products to Africa will be heavily disrupted, possibly through the second and third quarter of this year,” said Tommy Wu, Hong Kong-based lead China economist at Oxford Economics.
China has promised to grow imports of African agricultural products, to offset the heavy domination of metals and raw materials, and improve the trade balance.
Why export to the UK (GOV.UK)
The UK and some African countries have trade partnership agreements, providing preferential trading terms. The UK government also funds various schemes to encourage businesses from Africa to export to the UK.
Trade agreements between 2 countries or groups of countries enable importers and exporters to trade under preferential terms, which reduces costs. For example, 2 countries may agree to charge each other low or zero tariffs on specific types of goods, or to recognise each other’s product standards. The UK currently has trade agreements, called Economic Partnership Agreements (EPAs), with these countries in sub-Saharan Africa:
The UK government has proposed new trading rules for developing nations under the Developing Countries Trading Scheme (DCTS). The DCTS aims to grow free and fair trade with up to 70 qualifying developing nations, supporting jobs and growth.
As well as supporting trade between the UK and Africa, the UK is looking for exports in sectors where economic development can have the greatest development effect in Africa.
Global economy news
Food Prices: Countries Urged to Expand Food Production as WTO Downgrade Trade Forecast to 3% in 2022 (This Day)
To prevent the acceleration of acute food insecurity trends in the coming months and years, the United Nations has stressed the importance of expanding food production at the country-level by providing cash and critical inputs for cereal and vegetable production, as well as protecting livestock with treatments, vaccinations, feed and water.
This was emphasized at a United Nations Security Council meeting, held in New York, and chaired by the U.S. Secretary of State Antony Blinken.
“Agrifood supply chains and value chains must be strengthened with the engagement of the public and private sector in support of smallholder farmers and households,” Director General, FAO, QU Dongyu said.
Forward Thinking on trade, vaccines, and sustainable and inclusive growth with WTO Director-General Ngozi Okonjo-Iweala (McKinsey & Company)
The pandemic has had far-reaching consequences, with unprecedented disruptions, including to the global economy and world trade. Talk us through the impact on global trade. Ngozi Okonjo-Iweala: We’ve seen the most visible kind of form of impact on global trade, which is the supply chain issues that we’re facing now. I can start there. I think when the pandemic struck, many investors, many businesses, perhaps decided that there was going to be a long or deep recession and pulled back on investment plans. Shipping companies left containers in the wrong places. They didn’t know that anything other than a deep recession would follow. And what happened is that with the massive amounts of fiscal stimulus we saw—particularly in the developed countries, particularly in the US, $26 trillion worth of fiscal stimulus—and monetary policy easing, money in the pockets of households and easing for businesses have led to unprecedented demand for goods. That was also heightened by the digital access to online or digital trading, to e-commerce. And so we have a supply-demand mismatch that has led to the kind of supply chain issues that we’ve seen.
INTERVIEW: Africa, Mideast will likely suffer most from reduced grain shipments - WTO director general (Ahram Online)
Amid the severe crisis in global trade came another major catastrophe on both the humanitarian and economic levels — the Russian-Ukrainian War, which continues to rage and shows no signs of ending any time soon.
The World Trade Organisation (WTO) has some solutions in response to the need for international cooperation and fruitful coordination between the countries of the world and dealing with export restrictions with some caution in order to alleviate the impact of these crises worldwide.
Global trade has been impacted significantly. Supply chain problems have worsened. Our economists have issued their trade forecast for 2022 and 2023, taking into consideration the war in Ukraine. They predict that global trade growth this year could be cut by one third, from the 4.7% the WTO forecast last October to 3%. Some regions will be more strongly affected by the conflict than others. Europe is the main destination for both Ukrainian and Russian exports and will likely experience the brunt of cuts in supply. But it is Africa and the Middle East that will likely suffer the most from reduced shipments of grains and other foodstuffs. This trade disruption will boost prices of agricultural goods and bring negative consequences for food security in poorer regions.
A Threat to Global Innovation at the WTO (Alice Echo News-Journal)
The World Trade Organization recently announced that the United States, European Union, India, and South Africa had finalized a proposal to waive intellectual property protections for Covid-19 vaccines. Soon, all 164 WTO member nations will vote on whether to implement the proposed waiver. The terms it outlines would be revolutionary — that is, in undermining the rules for intellectual property protection. The bedrock of this system is the Agreement on Trade-Related Aspects of Intellectual Property Rights, known as the TRIPS Agreement — which since 1995 has established explicit minimum standards WTO members must meet in respecting one another’s patents, trade secrets, trademarks, and copyrights.
Yet some nations in the developing world have long bristled at TRIPS and sought to modify it. This has especially been true in the case of medicines.
But the TRIPS Agreement includes a provision that addresses this concern. When a country is facing an “extreme urgency” — say, a public health crisis — and is unable to secure the medicine it needs or negotiate a voluntary license with a patent holder, it can issue a “compulsory license” to authorize local manufacturers to produce the needed medicine for its own population. But this safety valve does not invalidate the ownership of the patent-holder — thus preserving the core of IP protection.
Seven Finance Trade Lessons from COVID 19 for Future Pandemics (IMF)
Pandemics and epidemics pose risks to lives, societies, and economies, and their frequency is expected to increase as rising trade and increased human interaction with animals leads to the emergence of new diseases. The COVID-19 pandemic teaches us that we can and must be better prepared, with scope for much greater global coordination to address the financing, supply-chain, and trade barriers that amplified the pandemic’s economic costs and contributed to the emergence of new variants. This paper draws seven early lessons from the COVID-19 pandemic that could inform future policy priorities and help shape a better global response to future crises.
Container ships spend 20% more time in ports (Sunday Observer)
If you’ve never lived near a port or worked in one, you may be unaware of the vital role they play in our lives. Most of the products we consume daily travel through ports, making them a key link in the global production and supply chains we rely on. “Our livelihoods – food, jobs, energy – depend on functioning and resilient supply chains,” UNCTAD Secretary-General Rebeca Grynspan said. How ports are managed has implications for economic growth, crisis response efforts, environmental protection and gender equality, placing them at the heart of sustainable development. The efficiency of a port directly affects the economies of the countries it serves, since more than 80% of global trade is carried by sea. The percentage is even higher for many developing countries.
The World Economic Forum announced today the theme and details of its Annual Meeting 2022, to be held 22-26 May in Davos-Klosters, Switzerland. The theme is, History at a Turning Point: Government Policies and Business Strategies. After a two-year hiatus, the meeting will bring together nearly 2,500 leaders and experts from around the globe, all committed to the “Davos Spirit” of improving the state of the world. A list of confirmed public figures can be found here. Against the backdrop of deepening global frictions and fractures and a once-in-a-century pandemic, the unprecedented global context calls for purpose and resolve, and the meeting’s ambition is to rise to these challenges. Over the past two years, the World Economic Forum has strengthened its impact initiatives, which deal with issues ranging from COVID-19 and climate change to education as well as technology and energy governance.
With the world at such a critical turning point, global business and government leaders need to work together to develop long-term policies and strategies that will revitalize the hard-hit global economy, strengthen the progress made to advance the Fourth Industrial Revolution and tackle the single greatest threat to humanity, climate change.
Minister Mmamoloko Kubayi leads South African delegation to World Economic Forum in Switzerland, 22 to 26 May (South African Government)
Namibia joins 2022 World Economic Forum in Davos (Namibia Economist)
DDG González: “Trade is essential to win the fight against climate change” (WTO)
DDG González highlighted that trade is critically important for countries in Latin America and the Caribbean to access the goods, services and technologies needed to adapt to climate change and decarbonize their economies, adding that trade officials need to take a serious look at the barriers that may hinder the emergence of an efficient, globally integrated market for the clean technologies of today and tomorrow.
“We must make sure that trade and climate policies pull in the same, not in opposite, directions, because the wrong trade policies can set back efforts to achieve climate and other environmental goals,” she said.
If climate adaptation and mitigation measures aren’t taken seriously, the United Nations Conference on Trade and Development (UNCTAD) 2021 report puts developing countries in danger. Many developing nations, especially least developing countries (LDCs) and small island developing states (SIDS), will confront major hurdles in maintaining production, related employment, and export levels in these sectors in the future, according to the report. “Unless developing countries enhance their trade resilience ex-ante through adaptation measures and actions that reduce exposure and risk, they will export substantially less in climate-sensitive sectors ex-post as climate change impacts accumulate over time. When adaptation is neither possible or cost-effective, diversification within the sector, or economic restructuring to move resources to other less climate-sensitive sectors, can be pursued,” the report said.
Time to transform agrifood systems in response to multiple shocks and worsening food security (FAO)
The Director-General of the Food and Agriculture Organization of the United Nations (FAO), QU Dongyu, today made an urgent call for the transformation of agrifood systems, to make them more inclusive, economically viable and resilient to multiple shocks, as well as to produce better and more with less negative impact on the environment. Qu was addressing a ministerial meeting held at the United Nations in New York entitled “Global Food Security Call to Action.” Cumulative effects of multiple shocks related to conflicts, the climate crisis, the COVID-19 pandemic, economic downturn, rising food prices have increased people’s vulnerability and pushed hundreds of millions of more people to the brink of hunger, the Director-General said. According to the Global Report on Food Crises released earlier this month, in 2021 193 million people were acutely food insecure and in need of urgent assistance across 53 countries/territories. Projections point to around 329 000 people reaching catastrophic food insecurity (IPC 5) in Somalia, South Sudan and Yemen by the end of 2022.
At the Sustainable Energy for All Forum in Kigali, Rwanda, and amid increased pressure from the climate crisis and the war in Ukraine on the world’s energy systems, the UN Development Programme called for vastly increased public and private investment to transform energy systems in support of a just energy transition. “We are in a moment of profound global upheaval. The war in Ukraine has caused immense human suffering, and the ripple effect of that war – on our finance, food, and energy systems – threatens to tip millions more people into poverty and hunger,” says Achim Steiner, UNDP Administrator and Co-Chair of UN-Energy in his message at the closing plenary of the Forum. “The current geopolitical situation reminds us just to what degree energy underpins our aspirations for a more sustainable future for all. There are still viable pathways to reach a net-zero global energy system while finding solutions to vulnerable communities, but the window is narrowing fast. It requires an unprecedented transformation of the energy sector. All countries must now reset their energy systems and put people into the center – ensuring that these systems are cleaner, more secure, more resilient and totally inclusive.”
Related News
tralac Daily News
Local trade news
Inclusivity, resiliency focus of South Africa’s tourism sector recovery (Engineering News)
As South Africa rebuilds its Covid-19-devastated tourism sector, focus must be given to the development of an inclusive, resilient and transformed tourism industry and economy. Speaking to media prior to her Budget Vote on Thursday, Tourism Minister Lindiwe Sisulu said that as the Department of Tourism works to stabilise the sector and strategise for a path to recovery, it is engaging with stakeholders and drawing lessons on how to build a resilient and inclusive sector.
Steel Master Plan presents immediate opportunities for industry, govt (Engineering News)
There are a number of opportunities for both government and industry to capitalise on immediately while pursuing the implementation of the Steel Master Plan, speakers agreed during a panel discussion at the Mainstreaming the Steel Master Plan Conference on May 19. Manufacturing Circle executive director Philippa Rodseth mentioned municipal infrastructure as an example. As a result of the municipal infrastructure challenges facing the country, there is a lack of proper service delivery, impeding manufacturing.
Agri-food: Boosting agri-food trade to South Africa on EU agenda (Agriland)
With increasing opportunities for trade between the EU and South Africa opening up in South Africa’s food sector since the signing of the EU-South Africa Economic Partnership Agreement (SADC-EPA) in 2016, the EU is hosting day two of the seminar today (May 19) at a conference venue in Johannesburg. This interactive event – which is being streamed – will give South African food professionals a unique opportunity to hear first-hand from policy makers and industry experts as they uncover insights into how the safety, quality and sustainability of EU food and beverage products represent valuable opportunities for your business to win loyal customers in South Africa and beyond, according to an EU spokesperson.
Day one looked at ways to boost EU-South Africa agri-food trade, followed by presentations and breakaway sessions on the EU’s food safety and quality systems, including its Farm to Fork strategy to accelerate sustainability.
With the EPA also including the protection of 249 European Geographical Indications (GIs) covering foodstuffs, beer, spirits and wine, day two takes a deep dive into the opportunities of the GI system, using EU cheese as a case study.
India has put an immediate halt on wheat exports: What does this mean for SA? (IOL)
The US Department of Agriculture (USDA) anticipated lower wheat output for the current crop season in its latest May 2022 report, owing to tiny crops from Ukraine, Morocco, Argentina, the EU and China. Consumption, on the other hand, is expected to climb due to population growth, with trade expected to reach new highs, fuelled by imports primarily from Africa.
In the midst of the current conflict in Ukraine, which has resulted in a limited supply of sunflower oil and wheat, India was seen as one of the saviours, sending much-needed wheat with Australia. This came amid projections of higher-than-normal export stock.
However, due to a severe heatwave that began in mid-March 2022 in India, wheat output forecasts have been lowered. The lowered output forecast and rising domestic wheat prices led India imposing embargo and restricting exports.
South Africa requires around 1.4 million tons for the 2012/22 market season, which concludes at the end of September 2022. South African consumers may witness an increase in wheat prices in the second half of 2022, although this will be in line with global trends and market pressures.
What China’s stark economic slowdown means for South Africa (Daily Maverick)
All eyes have been on China’s fast-deteriorating economy over the past week, with exports, retail sales, new home prices and industrial production all coming in way below expectations. “There will be a global impact, since China is still the world’s factory,” says Old Mutual Multi-Managers investment strategist Izak Odendaal. And, he adds, “China matters greatly for South Africa.” Not only is China South Africa’s main trading partner, but industrial commodity prices depend on Chinese demand and, while still elevated and good for South Africa, they have come off as a result of Chinese lockdowns in March.
In the immediate future, the likelihood of South Africa continuing to benefit from higher commodity prices will depend on whether the upward pressures on commodity prices – namely the Russia-Ukraine war and supply issues – outweigh a reduction in China’s appetite for commodities as its economy loses momentum. For now, it still seems the upward pressures on prices will prevail. On a longer-term view, however, recent World Bank in-depth research into “commodity markets and their evolution, challenges and policies” highlights how important it is that countries relying on commodities to underpin their economy, like South Africa, put in place policies that address the asymmetric effects that commodity price shocks have on commodity exporters.
Rich nations offer debt guarantees on South African climate deal (Engineering News)
A group of the world’s richest nations offered South Africa debt guarantees as part of a proposed $8.5-billion deal designed to cut the nation’s reliance on coal for power generation, people familiar with the talks said, potentially resolving one sticking point in the negotiations. The guarantees would enable South Africa or companies such as state power utility Eskom Holdings to borrow money needed to close down coal-fired power plants and enable the generation of renewable energy, one of the people said. The people asked not to be identified as the talks aren’t public.
Botswana to ban more veggie imports (The Namibian)
Namibian exporters of vegetables to Botswana, especially those along the fertile Zambezi region, might have it tough if that country effects its plan to expand its ban on vegetables. Despite being a subscriber to the African Continental Free Trade Area, which calls for the free flow of goods and services, the Botswana government says it has no plans to lift its current ban on vegetable imports either. In fact, it reportedly plans to expand its list, which comprises 16 vegetables, over the next two years. The country’s list of banned commodities includes tomatoes, carrots, beetroot, potatoes, cabbage, lettuce, garlic, onions, ginger, turmeric, chilli peppers, butternut, watermelons, sweet peppers, green mealies and fresh herbs. Namibia also restricts the importation of vegetables, including some on Botswana’s list. The Namibian Agronomic Board (NAB) controls the flow of imports and exports in Namibia, and measures this in relation to expected harvests and local demand.
Pakistan overtakes Uganda as top market for Kenyan exports (Business Daily)
Pakistan overtook Uganda as Kenya’s biggest export destination in the first quarter of the year, boosted by growth in tea exports. Exports to the Asian country rose by 21.5 percent to Sh16.86 billion from Sh13.87 billion in the corresponding period of last year. The value of exports to Uganda marginally rose by 0.4 percent in the period to Sh16.68 billion. Pakistan is the largest buyer of Kenyan tea, and volumes were expected to increase after the removal of the 0.5 percent attestation fee charged on tea export by Pakistan in August 2021.Tea stakeholders had for years lobbied for the removal of the levy, which made Kenya’s tea more expensive in Pakistan compared with beverage from other countries. Other top export markets included the Netherlands and USA which recorded purchases of Sh15.83 billion and Sh14.78 billion respectively.
During the period, however, the country’s trade deficit increased by Sh34.2 billion or 10.8 percent in the first quarter due to a surge in imports led by fuel and industrial supplies. The country’s import bill rose by 16.6 percent to Sh591.6 billion, widening the trade gap to Sh351.54 billion despite a 26.3 percent growth in exports to Sh240.1 billion.
Rwanda reviews restriction on Ugandan imports (The East African)
Rwanda says it is reviewing its trade list with Uganda before its goods can be allowed on its market, almost four months after opening its main border. While free movement of people between the countries has resumed, there is still restriction on imports from Uganda. This week, Rwanda’s Prime Minister Edouard Ngirente told a press briefing that the process of reviewing the trade list is almost complete and the goods will soon be allowed in the market subject to quality checks. The review was necessary because Rwanda wants to enforce quality as well as protect local manufacturers who had started producing some goods that were previously imported from Uganda, he said. Ugandan products, the PM said, must comply with the set standards on the Rwandan market.
Ugandan importers and exporters will be required to apply for a licence from the Rwanda Food and Drugs Authority (FDA) for industrial- manufactured products and Rwanda Inspectorate, Competition, and Consumer Protection Authority (RICA) for agricultural products.
Budget: MPs outline their priorities on govt spending (The New Times)
While presenting the proposed Rwf4.6 trillion national budget for the 2022/23 fiscal year to legislators, Ndagijimana said that the budget, which will start on July 1, will focus on the implementation of the government’s strategies meant to speed up economic recovery from the Covid-19 pandemic. It also emphasises continued implementation of the ambitious national strategy for transformation (NST1) – a seven-year government programme running from 2017 through 2024.
MP Ntezimana said that the Made in Rwanda programme is needed as it has proven to promote import substitution. However, he said that the prices of the products made in the country are still high, which threatens their competitiveness compared to imported products. “For this to be achieved, the local businesses should be supported, including reducing taxes on the locally made products so that they become affordable,” he said, calling for booting exports.
Govt cuts Mtwara, Tanga port charges (IPPmedia)
Prime Minister Kassim Majaliwa said in his question and answer session in the National Assembly yesterday that the ports can attract more traders in neighboring countries such as Malawi, Zambia, Mozambique, Democratic Republic of Congo and even South Sudan, when their competitiveness is aligned with the port of Dar es Salaam. The government had sunk billions of shillings in their rehabilitation, he said in responding to Abdallah Chikota (Nanyamba) who demanded what the government intends to do to attract more transit goods traffic from member countries of the Southern Africa Development Community (SADC) apart from neighbouring EAC members. All levies upon port users will be deducted, while the government plans to buy cargo loading and off-loading equipment to speed up work, noting that the levy deductions will not be applicable to other ports as it only seeks to enhance competitiveness in the two ports.
Commendable Export Diversification Moves - EBR (Satenaw Ethiopian News)
For any developing country, foreign currency is a critical tool assisting not only with local grass-roots development but also contributing significantly to a nation’s overall economic health. For its forex flow, Ethiopia benefits tremendously from the support of its diaspora which contributed USD3.6 billion last fiscal year. Addressing the local business community recently, Prime Minister Abiy Ahmed (PhD) said “the crisis of hard currency will not be solved today, nor will it in the next 15 or 20 years.” The Premier pleaded for an urgent need for more cooperation with the private sector to find a solution, adding that remittances from the Ethiopian diaspora had reduced for political reasons.
He stated in his report that export trade earnings grew substantially—by USD37 million or 25Pct—but there’s still the need to diversify, especially into manufactured exports. Further, the country was able to save USD1 billion through import substitution by mostly reducing purchases of food, grains, and coal for cement manufacturers. Ethiopian export numbers are a mixed bag but far from fulfilling their promise.
Ivory Coast Leads West Africa’s Local Content Developments (Energy Capital & Power)
Historically, the Ivory Coast’s hydrocarbons industry has been a modest one with just 36,000 barrels of oil per day but with the 2021 discovery of two billion barrels of reserves and 57 cubic meters of natural gas by Italy’s Eni, a major mark was made for the future of the west African country. As its extractive industries ramp up, Ivory Coast’s newfound hydrocarbons wealth combined with its emerging economy, and important role in regional integration initiatives, may mean the right mix required for a powerhouse country in the making. With an average of 8% GDP growth for a decade, the country has been one of few sub-Saharan African nations to successfully maintain stable economic growth amidst the COVID-19 pandemic. The country is rated 110 out of 190 countries on the World Bank’s Ease of Doing Business index, ahead of almost every nation in the region. However, the Ivory Coast’s crucial strength derives not from its independent prowess but from its key participation in regional integration initiatives.
New Report Recommends Ways to Strengthen Tunisia Disaster Preparedness (World Bank)
A new report launched today by the World Bank, the Government of Tunisia, and the Global Fund for Disaster Risk Reduction and Recovery examines ways to improve the capabilities of Tunisia’s National Meteorological and Hydrological Services with the aim of supporting socio-economic development to save lives and livelihoods. Tunisia is highly prone to climate-related disasters, such as floods, droughts, extreme temperatures, and sea level rise. The latest World Bank’s disaster risk profile of the country estimates that floods alone cause an average annual loss of US$40 million (or 0.1% of Tunisia’s 2018 GDP). Underlying factors, including climate change, population growth, land use changes, and urbanization, increase the severity and frequency of these events. The report, Strengthening Hydromet and Early Warning Systems and Services in Tunisia—A Roadmap, proposes three successive development phases designed to transform meteorological and hydrological service providers in Tunisia into technically sound and modern entities that can meet their public service mandates. It shows that the benefits of weather, climate, and hydrological (hydromet) services outweigh the capital and operational costs of providing them.
African trade news
Deputy Secretary-General’s video message to the Opening Ceremony Africa Trade & Investment Forum Africities Summit Kisumu (African Business)
This first African Trade and Investment Forum of UCLG Africa aims to become a matchmaking platform between local authorities in Africa and investors, to identify business opportunities and investment strategies. Local investment needs can be structured to match and attract national, regional, and international investments – through the definition of pipeline of projects. Challenges range from institutional constraints, limited capacities, and regulatory hurdles to looming debt burdens and re-payments following the expiration of the Debt Service Suspension Initiative. At the global level, the Secretary-General has been advocating for greater debt relief and liquidity to support countries across Africa.
Today, I see four priorities: First, local governments’ capacities need to be strengthened to fully play their role as catalyzers in mobilizing public and private capital for growing cities. Second, local policies should be implemented to create an enabling business environment to facilitate investments – including by providing targeted public investments and skilled human capital. Third, we must accelerate the implementation of the African Continental Free Trade Area (AfCTA) in African cities and territories. The AfCTA is the largest trade area in the world since the formation of the World Trade Organization and is expected to boost intra-African trades by 52 percent in the coming 5 years. And business and trade will happen at the level of cities and territories. And fourth, cities need to venture into national and international bond markets. At present, only a few African cities have done so.
Lack of infrastructure hinders Africa’s intra-trade expansion (IPPmedia)
The intra trade in Africa remains at 15 percent lagging behind Europe whose intra trade stands at 70 percent respectively. The AU High Level Representative on Infrastructure Raila Odinga, made the remarks in Kisumu yesterday during the first day of the 9th Africities Summit at a High Level Dialogue on Infrastructure and Urban Development on Wednesday. “Infrastructure development is a priority and key ingredient for economic development. The major reason for low intra trade in the continent is the lack of infrastructure to connect its countries. There is a need to come with the African infrastructure fund to be self-sufficient in terms of funding,” said Odinga, who is also the Kenyan presidential candidate. Danny Faure who is former President of Seychelles called upon the need for Africa to choose the right infrastructure that will have an effective impact on the continent, citing the case of Botswana, where a new bridge has been built with its length at 71 meters all the way to Zambia providing a hub to Zimbabwe and Namibia. “The infrastructure is strategic and Africa needs it,” said Faure.
Future Manufacturing Africa: Trade Fair and Summit 2023 (Engineering News)
Exchanging valuable industry expertise to increase investment prospects in the African continent’s manufacturing sector. The manufacturing industry is crucial to the success of companies and their countries, as it is responsible for creating many goods, giving employment to millions of people, and making goods more affordable. Moreover, the African continent boasts high levels of global opportunities for investment across the manufacturing industry. The manufacturing export market in Africa has been growing. According to the World Bank, much of this growth can be attributed to the increased number of African countries that are now in the manufacturing sector.
We see growth spurts in key economic manufacturing countries and product drivers. Egypt, the biggest exporter of petroleum and petroleum products; Nigeria, the biggest exporter of flexible metal tubing; Ghana, the largest producer of cocoa beans in the world; are amongst budding African countries ready for investment and innovation. Other countries but not limited of interest are South Africa, Morocco, Algeria, Congo DRC, Kenya, Cote d’Ivoire and Uganda.
The continent is rich with raw materials and has a high demand for manufactured products. This trade show is an opportunity for companies to come and explore the potential of Africa. The purpose of the trade fair is to provide a platform for new and existing companies to share ideas, technologies, and equipment. The FMA Trade Fair and Summit 2023 connects investors, entrepreneurs and key stakeholders in the hope to create investment opportunities for possible partnerships and projects on the African continent.
Akufo-Addo urges African countries to work together and fully utilise AfCFTA (Myjoyonline)
President Nana Akufo-Addo has urged African countries to integrate more closely through competitive business, political cooperation, and investment to establish an African Beyond Aid agenda. According to him, African countries should make the most of the African Continental Free Trade Area (AfCFTA) by adding value to their resources before exporting them, in order to accrue more revenue. Speaking at the Academy of African Business and Development’s 22nd Annual Conference, President Akufo Addo said African economies can be transformed through value added industrialisation. “African countries need to work more closely, deeply and competitively through trade to enhance initiatives. Together, we need to build our continent and hold each other up.” “That’s the only way we can grow organically”, he added.
Sixth GITFIC conference to leverage African development (Ghana Business News)
The Steering Committee for the sixth Ghana International Trade and Finance conference will map out strategies that will enhance African trade and leverage the development of the continent. The conference, which will take place in Ghana’s capital, Accra, on 23rd and 24th May, 2022, will seek to update the evidence base of what is currently available in terms of reviewing the AfCFTA, data on digital trade. A statement signed by Mr Selasi Koffi
Agricultural crops trade between African countries expected to grow by 33%: Cairo 3A Agriculture (ZAWYA)
In a report titled ‘Connecting Africa’, CNN Network featured Ali Al-Gamil — CEO of Cairo 3A Agriculture. The report focused on the amount of commerce in African markets as well as the aspirations of the most notable exporters for trade growth in the continent. Additionally, the research examined the most serious difficulties that two-way transactions face in Africa. The assessment also emphasised Cairo 3A Agriculture’s agricultural potential as a prominent player in the production of premium grade citrus that is sold internationally, as well as the company’s ability to manufacture a wide range of food products. According to Al-Gamil, Africa is the final frontier, and success in the continent now would decide the value of Egyptian produce in the next decades.
He added that the greatest impediment to mutual trade between African countries is a lack of infrastructure, which causes everyday logistical interruptions. However, current infrastructure projects may help to progressively increase mutual trade between African countries.
Regional Senior officials from Ministries and Agencies responsible for Trade and ICT, met remotely on the 12th of May 2022 to consider orientations for an ECOWAS E-Commerce Strategy. Mr. Mickson Opoku, Director for Bilateral, Regional and Multilateral Trade, Ministry of Trade and Industry, representative of Ghana, who served as the Chair of the meeting, noted the relevance of this next phase in preparing the ECOWAS E-Commerce Strategy. He noted how an E-Commerce Strategy for the region would allow ECOWAS Member States to better take advantage of the African Continental Free Trade Area (AfCFTA).
Participants considered the presentation by UNCTAD and provided their feedback on the orientations for the e-commerce strategy. Member States noted the proposed areas for intervention, which centred on the need to; i) Strengthen and coordinate actions of trade ministries of Member States to make e-commerce a contributor to national and regional industrial efforts; ii) Enhance trust of potential e-commerce actors through the harmonization and update of the legal framework; iii) Monitor, follow-up and accompany the e-commerce sector; and iv) Adapt the strategic framework to priorities, objectives and targeted actors (including women and youth).
In the context of its African Ministers of Finance conference, CoM2022, the United Nations Economic Commission for Africa (ECA) has given the details of a path for African international sovereign debt liquidity and sustainability – the Liquidity & Sustainability Facility (LSF) it established and with the support of BNY Mellon and Amundi.
In an environment characterized by increasing debt burdens, historically high cost of borrowing, difficult post- Covid recovery, climate change related issues and energy and food shortages, there was a consensus among participants at the conference that tackling debt sustainability was a key issue.
Finance and development ministers from throughout the continent, together with the ECA, have been at the forefront of discussions on innovative mechanisms that can be added to the mix of tools used to address their various financial challenges. Private sector demand for investment products that promote sustainable development has been rising steeply in recent years. These “sustainability-themed products” were worth $3.2 trillion in 2020. Despite the vast green resources of Africa and increased investor demand for sustainability-themed products, the continent accounts for less than 1 per cent of global green bond issuances.
African Union weighs financial capacity against impact of COVID-19 and Ukraine crisis (AU)
The African Union is convening a High Level Retreat to evaluate and explore avenues to enhance the financial sustainability of the African Union, following the adverse effects of the COVID-19 pandemic and the Ukraine crisis on the economies of its member states. Convened under the theme “Beyond COVID-19 pandemic and Ukraine Conflict: Enhancing the Resilience of African Economies and Financial Sustainability of the African Union”, the meeting will consider a raft of issues, among them; the financial status of the African Union following the impact of COVID-19 and the Ukraine crisis on the national economies of Member States and the implications on their capacity to honour financial obligations to the Union. Relatedly, the Ministers will also review the implementation of the nine Golden Rules for financial management and accountability principles and other decisions adopted on Financing the African Union.
The retreat will also evaluate the implementation status of the 0.2 percent import levy that was adopted in July 2016 in Kigali, and intended to facilitate the sustainable and predictable remittance of Member States’ assessed contributions, towards the gradual financing of 100% of the operational costs of the Union, 75% of the program budget, and 25% of peace support operations. As at December 2021, seventeen (17) countries were at various stages of domesticating the Kigali Decision on Financing the Union. Read the Status Report on “Towards the Financial Autonomy of the African Union.”
Experts Move to Adopt New Strategies to Boost Post-COVID-19 Air Transport in Africa (This Day)
For one week, aviation experts from Africa and Indian Ocean (AFI) region met in Abuja to brainstorm on how to revive air transport system in Africa, which has been devastated by huge losses incurred due to coronavirus pandemic and its attendant lockdown.
African Union Commissioner for Infrastructure, Dr. Amani Abou-Zeid, kicked off discussion on the COVID-19 pandemic, which he said has caused devastating impacts on the lives and livelihoods of countries all over the world and the aviation industry, leading to deep losses and reductions in GDP, jobs, access to finance, and industry revenue.
“In Africa, the total estimated amount of the financial relief measures provided to airlines in Africa was only $2,721,539,647 (almost $2.7 billion) by end of 2021. This included the government support in the form of providing loans, guarantees, wage subsidies, and direct cash injections to airlines: $2,638,765,827 (almost $2.6 billion),” Abou-Zeid said. He noted that the economic and social impacts of the pandemic on African countries and the industry become more severe such that waiting for a full vaccine roll out is not a sustainable option.
After a successful project launch event in March 2022 and a Technical Committee Meeting held on 21 April 2022, the first Steering Committee Meeting of the Institutional Support to ECOWAS (ISE) Programme was held virtually on 17 May 2022. The meeting was co-chaired by Mrs. Halima Ahmed, Commissioner of Finance, ECOWAS Commission and Mrs. Cécile Tassin-Pelzer, Head of Cooperation, European Union Delegation to Nigeria and ECOWAS.
Mrs. Cécile Tassin-Pelzer indicated that ECOWAS is well on its way to achieve ‘‘the main objective of the programme which is to contribute to the transparent and accountable management of both donor and ECOWAS internal resources, through compliance with international standards’’. She also encouraged the ECOWAS Commission to integrate the activities of the RAO Support Unit within its structure.
CSOs called upon to promote the AU’s Free Movement Protocol (African Union)
African Civil Society Organizations (CSOs) have been urged to support and promote the implementation of the African Union’s Free Movement Protocol (FMP) and the Migration Policy Framework for Africa (MPFA). This clarion call to CSOs was made during the opening of the Regional CSO Sensitization Forum on the Continental Free Movement Protocol
The FMP and the MPFA have been established by the AU as the primary policy frameworks to address, manage, and promote migration and mobility on the continent. The FMP, in particular, aims to curb and eventually eliminate barriers to regional border migration (to work, visit, trade, live, etc.) within the continent. Eliminating these barriers translates to economic growth on the continent as well as improved migration procedures for African citizens. Unfortunately, despite the existence of these migration policy frameworks, policy uptake among AU Member States and their popularization within African civil society remains low and has not achieved the desired impact.
The United Nations Economic Commission for Africa’s (ECA) Ms. Edlam Yemeru has told the first International Migration Review Forum yesterday that using high-quality data is critical to fostering inter-regional cooperation on the implementation of the Global Compact for safe, orderly and regular Migration (GCM).
$100m facility aims to unlock African supply chain finance (IT-Online)
British International Investment (BII), the UK’s development finance institution (DFI) and impact investor, has signed a $100-million risk-sharing facility for supply chain finance with Citi, a global leader in trade and supply chain finance solutions. The new facility will provide systemic liquidity and help Citi grow its supply chain finance product across Africa.
The facility will be targeting SME suppliers and those underserved or excluded businesses. It will boost Citi’s annual supply chain finance volumes in Africa by up to $400-million, with amplified capital support that will enable businesses to better manage cash flow and onboard new suppliers to the supply chain, ensuring the continued flow of goods and services. This will help expand the scope of local businesses and ensure productive and inclusive economic opportunities for diverse groups and communities.
EAC partner states’ blue economy policy to bolster economic growth (IPPmedia)
EAST African Community (EAC) partner states are working to come up with a common blue economy strategy that will align all the key sectors to boost its contribution to the Gross Domestic Product (GDP). This follows a move by the African Union (AU) to prepare a draft strategy on the blue economy, a programme which is overseen by experts in the fisheries sub-sector who are meeting in Dar es Salaam to discuss and improve the document before coming up with a final copy.
They are also discussing how to improve awareness on the potential of the sub-sector in Africa, identify policy and knowledge gaps among Regional Economic Communities (RECs) as well as how partner states will implement the blue economy strategy.
Inception of New Data-Driven Program to Promote Food Systems Transformation (News Ghana)
CORAF and the International Food Policy Research Institute (IFPRI) launched the fifth phase of the Agricultural Science and Technology Indicators (ASTI) program; Funded by the United States Agency for International Development (USAID), the fifth iteration of the program will provide actionable data on agricultural research and development in the twenty-three (23) countries in West and Central Africa (WCA), covered by CORAF; Policymakers and other stakeholders are expected to base their decision-making on the data generated through the program, to foster food systems transformation in WCA. CORAF and the International Food Policy Research Institute (IFPRI) officially launched the fifth phase of the Agricultural Science and Technology Indicators (ASTI) program on May 12, 2022.
“The ASTI program aims to provide information to stakeholders and generate knowledge on the inputs, performance and outcomes of agricultural research and development systems in low and middle-income countries. It builds a solid foundation for long-term monitoring of agricultural research and development investments and capacities,” said Dr. Gert-Jan Stads, Senior Program Manager at IFPRI. The ASTI program is an initiative of IFPRI that was launched in 2001.
Remarks by Managing Director Kristalina Georgieva
The war in Ukraine is gravely impacting Africa—and vulnerable people will suffer the most. The main transmission channels are well-known:
Sharply higher food and fertilizer prices are putting significant pressure on households—especially the poorest, for whom food accounts for 40 percent of consumption. And this is exacerbating the significant food security challenges that many countries in the region already face. Higher fuel prices will boost the import bill for oil importers. And this will make an already delicate fiscal balancing act even more difficult.
Together, these shocks will worsen external and fiscal balances—already strained by the pandemic—across many African countries.
Our projections show that the impact of the war in Ukraine on food and fuel prices threatens progress made by African economies in recovering from the pandemic. We expect growth in sub-Saharan Africa’s to slow to 3.8 percent in 2022 from 4.5 percent last year.
We know hunger is the world’s greatest solvable problem. Africa has tremendous potential to be a part of the solution. This requires progress on reforms that could rapidly and sustainably boost food production, including wheat, rice, and other cereal crops. These reforms would significantly help African economies become more resilient to shocks, more peaceful, and more prosperous—our common goals.
Towards an integrated and climate-resilient Africa and a just energy transition (AfDB)
Of all continents, Africa is least responsible for climate change. It has contributed only a minute part of the Greenhouse gas emissions that are responsible for the climate emergency the world faces today. Yet, Africa faces the same arduous battle as the rest of the world to tackle the impacts of climate change, and to make itself resilient to climate change. Today, Africa remains one of the most vulnerable and the least climate-resilient regions in the world. This is manifest across all corners of the continent. In the Horn of Africa, millions are threatened as a historic drought looms. In the Sahel, climate change is fueling insecurity because of increasingly scarce resources. And Southern Africa is experiencing lethal rain and floods. Action has never been more urgent. These climate change-induced challenges cut across many countries and subregions of the continent. With improved regional integration and deeper regional cooperation, African countries could rally around collective climate adaptation solutions and accelerate a just energy transition. The regional approach would elevate the individual voices of countries and facilitate access to increased global climate finance.
Experts Call for Sustainable Regional Energy Market (COMESA)
The regional energy market has immense potential in strengthening and deepening regional integration but for many COMESA countries, the generation capacity is not enough to cover the nations own needs and allow for cross-border trade. According to the Chairperson of the Regional Association of Energy Regulators for Eastern and Southern Africa (RAERESA) Mr. Daniel Bargoria, plans are underway to improve the transmission capacity across borders, but the same is not enough to secure unimpeded trade across the countries and regions. He said better energy infrastructure facilitates relations between countries, stimulating integration of the productive sectors as it brings close together economic spaces, reduces and/or eliminates the physical barriers to trade and transport costs and expands the market size.
In his statement, COMESA Assistant Secretary General for Programmes, Dr Kipyego Cheluget observed that trade in energy was as critical and beneficial as trade in goods and other services. “Energy trade allows all nations to benefit from their comparative and competitive advantages and from the advantages of the economies of scale and scope,” he said. “The power sector should be open for the private sector investment and ownership.”
Global economy news
TRIPS waiver: 30 members begin text-based talks, but differences remain (Economic Times)
Ahead of a key ministerial meeting of the World Trade Organisation (WTO) next month, 30 members of the agency, including India, have begun text-based negotiations to also cover diagnostics and therapeutics in a decision that seeks to waive patents on Covid-19 vaccines. The Trade-Related aspects of Intellectual Property Rights (TRIPS) Council met informally on Thursday to take stock of the talks on a proposal floated by India, South Africa, the US and EU to waive patents on Covid-19 vaccines.
According to a Geneva-based official, differences remained among delegations on the first two days of the talks, with the EU insisting that there is a “delicate balance in the text which should not be upset” in the current outcome document on vaccine patent waiver, while the African Group emphasised on diversified production not only of vaccines but also of therapeutics and diagnostics for at least five years.
Thinking About Current Views on Trade (American Enterprise Institute)
Globalization 2.0 Will Realign Trade and Make Things More Expensive (Bloomberg)
Over the past few years, the world has experienced an escalating series of trade disruptions — the US-China trade war, the Covid-19 pandemic, supply chain disruptions, Russia’s war with Ukraine, dueling sanctions and export controls. The cumulative effects of these crises are driving a deep rupture between free-market democracies and Chinese/Russian-style authoritarianism that’s dividing the global economy along geopolitical fault lines. “Fragmentation is going to stay,” says Bob Koopman, chief economist of the World Trade Organization, the Geneva-based institution formed 27 years ago to ensure nations abide by the rules of international commerce. ”What we’re going to see is this reorganized globalization.”
How digital multinationals are transforming global trade and investment (UNCTAD)
The international production footprint of digital multinational enterprises (MNEs), which was already expanding, has grown even faster during the COVID-19 pandemic. UNCTAD’s Global Investment Trends Monitor published on 27 April unveils new rankings of the top 100 digital MNEs, whose total sales were almost 160% higher in 2021 than in 2016, with an average increase of 21% per year. Their net income grew by over 60% between 2020 and 2021, in contrast to a flat trend for the traditional top 100 MNEs, excluding those in the technology sector. The top 100 digital MNEs include leading players such as Uber, Twitter and Meta. The report also looks at the impact of the world’s largest digital MNEs on trade and investment. “Digital MNEs can provide a boost to competitiveness across all sectors, new opportunities for business and entrepreneurial activity and new avenues for market access and participation in global value chains,” said James Zhan, UNCTAD’s director of investment and enterprise development.
Can blockchain offer solutions for cross-border trade and supply chain disruptions? (Kitco News)
As financial markets have taken a hit in recent weeks, cryptocurrencies have especially been under fire since their values appear to have devalued faster than traditional assets. In this context, some have dismissed cryptocurrencies as a speculative investment; however, the underlying blockchain technology upon which many of them are based should not be conflated with cryptocurrency and its perceived flaws. Worldwide, companies have experienced widespread sourcing disruptions since the start of the pandemic, and increasingly, actors along the supply chain are embracing blockchain and similar technologies in order to facilitate compliance, transparency, and efficiency in cross-border transactions and to alleviate some of the ongoing disruptions.
The technology can also help make trade less paper-intensive, as well as more compliant, inclusive, and socially responsible, thereby reducing costs. This is especially good for small businesses, which are disproportionately affected by red tape at the border, and for government agencies seeking to improve reliability and facilitate trade.
Members discuss potential outcome on cotton at MC12, World Cotton Day, Partners’ Conference (WTO)
At the WTO’s Cotton Days meetings on 11-12 May, the Cotton-4 (Benin, Burkina Faso, Chad and Mali) and other cotton-producing developing countries repeated the call for cotton trade reforms and an outcome on cotton at the 12th Ministerial Conference (MC12), scheduled for 12-15 June. WTO members were also updated on preparations for World Cotton Day 2022 and a Partners’ Conference in July. An information session shed light on supply chain disruptions and ways to build a more resilient cotton industry post-pandemic.
The G7 Development Ministers of Canada, France, the EU, Germany, Italy, Japan, the United Kingdom, and the United States of America convened in Berlin on May 19 under the theme “Response to Multiple Crises on the African Continent – focusing on Food Security”.
Participants reiterated their commitment to protecting open, inclusive, and rules-based international cooperation that leaves no one behind, and emphasized that a rules-based multilateral system is key to the solution of global challenges such as food insecurity and malnutrition, climate change and a just energy transition, land degradation and biodiversity loss.
The G7 Development Ministers and International Organisations called on their African partners to take full advantage of the African Continental Free Trade Agreement (AfCFTA) in order to increase food security and nutrition on the continent. Participants welcomed the upcoming meeting of African Ministers of Agriculture and Ministers of Finance on the African Emergency Food Production Plan organised by the African Union Commission and the AfDB. Participants furthermore welcomed the formation of the Coordination Group of the United Nations Economic Commission for Africa, Afreximbank, the African Union Commission and the AfCFTA, which aims at pooling procurement for food, fertilizers, and agricultural chemicals that will allow African economies access to items of first necessity at a lower cost.
Food insecurity threatens societies, exacerbates conflicts and ‘no country is immune’ (UN News)
Last year, most of the 140 million people suffering acute hunger around the world lived in just ten countries: Afghanistan, the Democratic Republic of the Congo (DRC), Ethiopia, Haiti, Nigeria, Pakistan, South Sudan, Sudan, Syria and Yemen – eight of which are on the Council’s agenda. “Let there be no doubt: when this Council debates conflict, you debate hunger. When you make decisions about peacekeeping and political missions, you make decisions about hunger. And when you fail to reach consensus, hungry people pay a high price,” Mr. Guterres spelled out. Though pleased to announce that the Central Emergency Response Fund is releasing $30 million to meet food security needs in Niger, Mali, Chad and Burkina Faso, he said sadly: “But it is a drop in the ocean”.
Chair’s Statement: Roadmap for Global Food Security – Call to Action (United States Mission to the United Nations)
We call on all United Nations Member States, international organizations, the private sector, and civil society and academia to urgently support the emergency response to address humanitarian needs and to also focus on building resilient and sustainable food systems particularly for those most vulnerable to food insecurity and malnutrition. We issue this Roadmap for Global Food Security–Call to Action to affirm our commitment to act with urgency, at scale, and in concert to respond to the urgent food security and nutrition needs of millions of people in vulnerable situations the world.
World Bank Announces Planned Actions for Global Food Crisis Response (World Bank)
The World Bank today announced actions it plans to take as part of a comprehensive, global response to the ongoing food security crisis, with up to $30 billion in existing and new projects in areas such as agriculture, nutrition, social protection, water and irrigation. This financing will include efforts to encourage food and fertilizer production, enhance food systems, facilitate greater trade, and support vulnerable households and producers. “Food price increases are having devastating effects on the poorest and most vulnerable,” said World Bank Group President David Malpass. “To inform and stabilize markets, it is critical that countries make clear statements now of future output increases in response to Russia’s invasion of Ukraine. Countries should make concerted efforts to increase the supply of energy and fertilizer, help farmers increase plantings and crop yields, and remove policies that block exports and imports, divert food to biofuel, or encourage unnecessary storage.”
The World Bank is working with countries on the preparation of $12 billion of new projects for the next 15 months to respond to the food security crisis.
Countries review progress on global migration compact (UN News)
Mr. Guterres was addressing the official opening of a meeting to review progress towards implementing the Global Compact for Safe, Orderly and Regular Migration, adopted by governments in 2018. The first International Migration Review Forum will also examine the interplay between migration and broader concerns, including the pandemic, conflict, development finance, and the climate emergency. “The COVID-19 pandemic has painfully demonstrated how far we still are from realizing rights-based, child-sensitive, and gender-responsive governance of international migration for all,” he said.
Related News
tralac Daily News
Local news
SA Cangegrowers calls on government to honour Sugar Masterplan commitments (Engineering News)
When Minister Ebrahim Patel delivers the budget for the Department of Trade, Industry and Competition (DTIC) on May 20, industry organisation SA Canegrowers says it hopes he will use it as an opportunity to provide an update on government’s action to implement its commitments under the Sugarcane Value Chain Masterplan. This plan was developed to address a number of serious challenges facing the industry and to ensure its long-term sustainability and profitability.
Collaboration needed to make South African mining globally competitive again – CSIR (Engineering News)
Concern about mineral resource scarcity is widespread and, at the same time, many countries, such as Australia, Canada and China, are investing significantly in strengthening their mining-related research, development and innovation (RDI) capabilities. “This makes cost and differentiation competitiveness a challenge for South Africa,” states Council for Scientific and Industrial Research (CSIR) CEO Dr Thulani Dlamini in an Op-Ed to Mining Weekly, in which he emphasises that it will require all mining RDI stakeholders – Minerals Council South Africa, mining companies, mining equipment suppliers, government and research institutions – to have an integrated plan for South Africa’s mining industry to become globally competitive in niche areas.
Momentous occasion as Lesotho, US sign US$300 million Compact II (Lesotho Times)
Today all roads lead to ‘Manthabiseng Convention Centre for the official signing ceremony of a US$300 million (about M4, 8 billion) grant to Lesotho from the United States (US)’ Millennium Challenge Corporation (MCC). In a statement, the US embassy in Lesotho this week said MCC CEO Alice Albright will sign on behalf of the corporation while Foreign Affairs and International Relations Minister ‘Matšepo Ramakoae will sign on behalf of Lesotho.
The compact has three proposed projects — Market-Driven Irrigated Horticulture (MDIH), Business Environment and Technical Assistance (BETA), and the Health System Strengthening (HSS) project, and each project has several components. The Compact II signing is a huge relief to Lesotho which has endured a five-year wait for a definite funding agreement.
The big infrastructural projects revamping the coastal economy (The Standard)
Deputy Director Kenya National Highway Authority, Eng Kungu Ndungu explains the Dongo Kundu Special Economic Zone construction plan.
Mombasa Port is the region’s biggest handler of sea cargo, with two berths handling 1.5m twenty-foot equivalent unit (TEU) per year. This is expected to rise. Conceptualised over 40 years ago, the roads with the three largest bridges in the country will be complete and in use soon.
The Mombasa Port Area Road Development Project - carried out in what the contractors have classified as Three Packages - is expected to improve efficiency and thereby increase capacity at the port with the expected linkages to the Special Economic Zone besides opening up the inaccessible hinterland.
The Mombasa Port’s capacity as the gateway to the Northern Corridor is being expanded. JICA partnered with Kenya in the construction of berths cover 33 per cent of the container cargo handling capacity of the country, which is expected to rise to 47 per cent once Phase 2 is completed.
“If Mombasa Port does not expand, it becomes a feeder port. That means other ports will receive the large ships and it can only get cargo from them. The double handling will be very expensive,” he said. The cost of maintaining containers stuck at sea due to slow processing will also be eliminated. Right across the port, on 3,000 acres of land, the Dongo Kundu Special Economic Zone is taking shape.
China’s Belt and Road Initiative in Kenya (Foreign Policy Research Institute)
Through trade, investment, and strategic diplomacy, China is re-shaping sub-Saharan Africa. Beijing has growing economic ties with Africa’s largest economies and Chinese firms dominate infrastructure construction projects. In 2020, nearly one-third of infrastructure projects in Africa worth at least $50 million were built by Chinese companies. In addition, China is, in many areas, replacing the United States and Europe as trade partners with Africa. Beijing has translated China’s growing economic footprint in Africa into geopolitical influence.
Some Western commentators have observed China’s growing economic footprint in Africa — especially its Belt and Road Initiative (BRI)—with skepticism and concern. They argue that Chinese investments are debt traps that will eventually lead to neo-colonialism. Despite this criticism, China’s influence on the continent continues to rise.
Is it true that Chinese infrastructure projects malicious are debt traps? Or is the BRI merely an extension of a partnership where China supports the economic development of African countries? Or is it some combination of both? While African elites
Kenya and Uganda agree on fuel supplies (Business Daily)
Uganda has struck a deal with Kenya, its main route for petroleum imports, after talks by officials from the two neighbouring countries in Nairobi.Last month, Kampala had demanded fixed monthly transit petroleum product quotas to ease shortages amid anxiety over a fuel crisis.Energy Cabinet Secretary Monica Juma met with Uganda’s top energy officials led by her counterpart Sidronious Okaasai.”We reaffirmed Kenya’s commitment, as the gateway, to service the fuel needs of the region and discussed ways of enhancing cooperation through joint and complementary projects that accelerate regional integration,” said Dr Juma in an update.
“We are hopeful that some of these action areas could enable us to address petroleum product supply problems in Uganda,” Ugandan Permanent Secretary Irene Batebe had said last month in a letter to her counterpart in Kenya, Andrew Kamau. Both Ms Batebe and Mr Kamau attended the talks.
Why Uganda’s critical minerals industry is important (The Observer)
Uganda is one of the many countries in the Great Lakes region that have committed to the Paris Agreement and the need to address the mineral intensive clean energy technologies for a transition to a 1.5oC - 2oC by 2050.
Recent developments in the mineral sector place Uganda at the centre of the energy revolution, both for its energy security needs, but also as a key player in shaping regional initiatives and the control of the international supply chains of critical minerals. These developments call for a regional collaborative solution as opposed to a one-state solution such as the presidential ban on the export of unprocessed raw materials imposed in 2011 by the Ugandan government. The critical minerals industry requires a special Afro-centric policy, fiscal and regulatory framework modelled on the East African Community vision, African Union Agenda 2063 and the Africa Mining Vision.
Domestic regulation and development of these resources must be data-driven to establish their commerciality, mine life, access to finance to establish the desired technology in Uganda and specific commodity feasibility studies to establish availability of regional sustainable supply of raw materials to sustain value addition initiatives within the East African Community and the Great Lakes region.
Rwanda pumps $150m to private sector for post-Covid recovery (The East African)
Rwanda has unveiled an additional $150 million in funding for businesses to stimulate growth and mitigate the prolonged impact of the coronavirus pandemic on the economy. The funds, drawn from its $250 million Economic Recovery Fund launched in June 2021, have been earmarked for the private sector, specifically manufacturing. This is set to boost production locally as the country seeks to contain rising prices and reduce imported inflation.
“The current global inflation is heavily impacting our economy…the government has invested in subsidies and attracted investors in the manufacturing sector to boost local production to reduce our dependence on imports,” Prime Minister Edouard Ngirente said. The government will also continue to add subsidies to essential commodities such as fuel to ease the burden of hiking prices. Rwanda heavily depends on imports with a trade deficit of $216.43 million in 2021, according to the National Statistics of Rwanda.
‘Our poultry industry could suffer greater shocks from fertilizer shortages’ – Akufo-Addo (GhanaWeb)
Growing concerns about the unavailability of fertilizer for agriculture production have contributed to the surge in the prices of food in Ghana and the continent. The poultry industry has also bemoaned the unavailability of feed and raw materials. President Nana Addo Dankwa Akufo-Addo has stated that these concerns could heighten as fertilizer shortages are being experienced across Africa. According to the President, the country’s maize and soy production could be affected noting that “our poultry industry could suffer greater shocks.”
Leveraging Locally Produced Goods for FX Accretion (This Day)
While Nigerians grumble over the increase in exchange rates, Ayodeji Ake presents the advocacy of business experts on patronage of locally produced goods to address import dependency putting an end to escalating issues of low foreign exchange Over the years, the Central Bank of Nigeria (CBN) has urged Nigerians to embrace homemade products to boost Nigeria’s economy and to save Naira from continuous depreciation in the parallel market. According to reported statistics, Nigeria’s capital inflows plummeted to a four-year low of $9.66 billion in 2020, sloped to $6.7 billion in 2021. Nigeria’s international trade balance for 2021 hit a deficit of N1.94 trillion, the largest on record. Nigeria’s exports climbed 51 per cent to N18.91 trillion in 2021, up from N12.52 trillion of the year before. However, the increase in export proceeds was not enough to offset the 64.1 per cent increase in import bills, which totalled N20.84 trillion.
As a result of the FX Outflows, a $5.26 billion negative balance of payment was made in 2021, putting even more pressure on the local currency and necessitating the use of the external reserve.
Highlights of Key Developments in Nigeria’s Maritime Industry in 2021 (JD Supra)
Despite disruptions caused by the Covid-19 pandemic, resulting to changes in global trade patterns and a supply chain crisis, Nigeria’s maritime industry made some gains in the year 2021. Compared to the year 2020 which saw a downtime in global trade, the year 2021 marked a rebound in commercial shipping activities around the globe with Nigeria receiving its fair share of value. According to the Maritime Transport Review 2021 – a flagship report published annually by the United Nations Conference on Trade and Development (UNCTAD) – Nigeria ranked highest among the top 35 flags of registration in terms of increase in its share of the world merchant fleet value which moved from 0.50 to 0.78 per cent1 . Nevertheless, the year 2021 was not without challenges. Besides the pandemic, the industry was severely constrained by rising exchange rate coupled with Dollar scarcity, incessant increase in Customs duty and policy inconsistency on the part of government. This paper highlights key developments that took center stage in the industry in the year under review.
Food Production: ActionAid tasks govt on 10% annual budgetary allocation to agriculture (Vanguard)
A non-profit making international organization, ActionAid Nigeria, AAN, Wednesday, tasked government at all levels on ensuring 10 per cent budgetary allocation to agriculture in order to boost food production in Nigeria. This was stated by the Country Director, AAN, Ene Obi, in an address of welcome at the ‘National Dialogue & Dissemination on Nigeria’s Performance at 3rd Biennial Review Exercise on the Implementation of the Comprehensive Africa Agriculture Development (CAADP)’.
Obi pointed that after the Malabo Declaration for 10 per cent of budgetary allocation to be for the agricultural sector across Africa, the Nigerian government’s budgetary allocation for the sector has not been encouraging, because it has remained between three and five per cent.
FG Urged to Create Basic Data Infrastructure to Attract Foreign Investments (This Day)
The Chief Operating Officer of MDXI, MainOne’s Data Centre business, Mr. Gbenga Adegbiji, has called on the federal government to revisit its policies and create basic infrastructure for data centre operations across Nigeria, in order to attract foreign investments in the Information and Communications Technology (ICT) sector. Adegbiji who gave the advice during an interview with THISDAY, said: “Investors do not invest based on what any government tells them, but they invest based on what the see, which has to do with growth indices and numbers. They look at the population report and the growth of the economy, including security of investments in the country, before they can invest in the country. “Attracting foreign investments, goes beyond what the Nigerian government is currently doing by mere visiting these investors in their countries to woo them to invest in Nigeria. They will surely come and invest if they see the need to invest in Nigeria, and a good example is the recent acquisition of MainOne by Equinix because MainOne has over the years, positioned its operations to a standard that is attractive to any foreign investor. Investments are made based on numbers, foreseeable return on investments, and risk that is associated with a particular country.”
Sanwo-Olu, Others Call for Increase in Investment to Bridge Nigeria’s $11trn Infrastructure Gap (This Dau)
For Nigeria to close the infrastructure gap in the critical sectors of the economy, about $11 trillion would be required, the Association for Consulting Engineering in Nigeria (ACEN), has revealed. To this end, the Lagos State Governor, Babajide Sanwo-Olu, professional engineers, experts and other stakeholders have advocated increased investment in the provision of infrastructure to foster real growth and economic prosperity on the continent. Sanwo-Olu alongside the professional engineers and experts, spoke at the opening of the 28th Annual FIDIC Africa Infrastructure Conference held on Monday in Lagos, with the theme, ‘Infrastructure Development in Africa’.
They called on governments across Africa to give attention to the provision of critical socio-economic infrastructure that could catalyse growth in the Gross Domestic Product (GDP) and stimulate prosperity.
South Sudan set to receive ‘cheap electricity’ from Ethiopia (The New Arab)
Ethiopia has agreed to send 500 megawatts of electricity, some of which will be sourced from its controversial Grand Renaissance Dam, to South Sudan over the next six years. The Grand Ethiopian Renaissance Dam (GERD) has caused long-standing disputes between Ethiopia, Egypt and Sudan over water rights [Getty] South Sudan will receive 500 megawatts of electricity from Ethiopia over the next six years following the construction of the controversial Grand Ethiopian Renaissance Dam (GERD), according to reports.
“[Ethiopia is] aggressively working to supply electric power to its neighbours as part of regional integration,” said the chief of Ethiopian Electric Power, Anadualem Siaa, to the country’s state media.
Ethiopia also has agreements to sell electricity to Kenya and Tanzania. There are plans to supply power to Rwanda, the Somaliland region of Somalia, and Burundi.
African trade news
AfCFTA is a start, but private sector empowerment is needed to unlock full free trade benefits (The Africa Report)
At a time when global transport and logistics systems are being disrupted and trade wars are raging, relying on the rest of the world for essentials has proven to be a risky bet. Africa learned this the hard way during the Covid-19 pandemic, with just 11% of Africans being fully inoculated against the virus due to inequitable vaccine distribution. The world is realising this again with the war in Ukraine and its impact on the price of oil and food security. Removing barriers to cross-border trade and championing the creation of regional manufacturing hubs that can produce vaccines and other essential goods is an urgent priority for Africa, and important progress is already being made across the continent.
Private sector investors are joining forces with development partners to promote vaccine manufacturing in Africa, for Africa.
In the last two decades, intra-African trade not only increased in volume but also in quality. Goods traded within Africa are more diverse and of higher value addition than those traded with the rest of the world.
2022 WTPO Conference: AfCFTA eyes continent’s $450 million untapped SME market (Myjoyonline)
The 13th World Trade Promotion Organizations Conference has opened in Accra with a high panelled forum which is focused on leveraging the economic potential of Small and Medium Enterprises (SMEs) for inclusive growth. Speaking at the Conference in Accra, Secretary General of the Continental Free Trade Agreement Area, Wamkele Mene, announced that the secretariat is shifting its focus from large industries to SMEs to ensure inclusive and sustainable economic growth through a signed Memorandum of Understanding (MoU) with the International Trade Corporation (ITC). It comes as Ghana and the rest of Africa risk losing an annual Gross Domestic Product (GDO) of $450 million if struggling SMES and social impact entrepreneurs are not cushioned from the economic impact of COVID-19, climate change and the war on Ukraine.
“It is vital that under the current circumstances, the SMEs are supported to survive and adapt, as they can be a key component on the road to economic recovery on the continent. Indeed, TPOs will be vital in providing assistance to SMEs to ramp up their export capabilities. In addition, it is crucial that you support them to understand and participate in regional value chains, for our “Made in Africa” revolution to be successful,” he stated.
Alan urges developing countries to prioritise trade in national development agenda (GhanaWeb)
Multi-modal transport network key to AfCFTA success – Dep. Minister (GhanaWeb)
Speaking on behalf of the Minister of Transport Kwaku Ofori Asiamah at the opening ceremony of the Chartered Institute of Logistics and Transport (CILT) Africa Forum held in Accra, the Deputy Minister said transport would play a key role in linking activities within the continent and beyond.
“On our part as policymakers, we remain committed to the facilitation of cargo and passengers across our borders and to other African countries through the development and enhancement of ground and air transport infrastructure. From airports, seaports and cargo terminals to maritime and air space management. In terms of infrastructure we have embarked on massive infrastructure development to improve all of our seaports and airports as well as railway connectivity.”
The Deputy Minister of Trade and Industry, Herbert Krapah also supported the call for improved multimodal transport network in order to meet the continent’s integration objectives.
Digitalisation of Africa’s smaller airports vital for economic recovery (BusinessLIVE)
As we emerge from the Covid-19 pandemic and demand for air transport starts to normalise, airports are among the first to feel the impact of the harm caused by the pandemic. However, this latest struggle holds important lessons and solutions for African airports.
The industry’s recovery in Africa has already been deferred a year thanks to the triple-whammy of the initially slow and still low vaccination rates, the discovery of the Omicron variant, and more recently the surge in fuel prices as a result of Russia’s invasion of Ukraine. There is a silver lining in that it gives Africa’s airports some time to acquire the capacity, systems and solutions to manage the recovery and future growth.
The solution is for all airports — from mega-hubs to small municipal and regional facilities — to digitalise and automate time-costly processes like passenger processing and baggage handling. Agile cloud technology platforms that are efficient, flexible and scalable to fluctuating passenger volumes can help alleviate the pressure. By empowering passengers to use their mobile phones as a remote control for travel, we can reduce bottlenecks and offer a more seamless passenger journey.
Deepen trade within Africa – Akufo-Addo challenges business leaders (Graphic Online)
President Nana Addo Dankwa Akufo-Addo has made a clarion call to African countries to increase trade within the continent for them to stand on their own feet. That, he said, was in view of the current derangement of the global commodities market, supply chains and logistics occasioned by the Russia-Ukraine crisis which had culminated in fertiliser shortages around the globe. He said the situation could affect maize and soya production in African countries, including Ghana, and had “greater shocks” in Ghana’s poultry industry. President Akufo-Addo made the call when he opened the 22nd Academy of African Business and Development Conference at the University of Professional Studies, Accra (UPSA) yesterday.
Ukraine war: A wake-up call for Africa to increase inter-continental trade (The Africa Report)
Over the past couple of months, Russia’s invasion of Ukraine has severely disrupted the supply of essential crops to Africa and led to significant price increases for agricultural goods and energy, with prices skyrocketing across the globe.
Most of Russia’s imports to Africa are agricultural goods, with 90% of these agricultural goods being made up of wheat and 6% from sunflower oil in 2020. Similarly, 48% of Ukraine’s agricultural exports to Africa were made up of wheat and 31% of maize.
Could Africa fill the global commodities gap? (Energy Capital & Power)
Forecasts suggest that the global economy is facing a ‘commodity gap’ in the near future as the demand for battery minerals could outstrip supply; could Africa be the continent to fill that gap? There is certainly good reason to see Africa making a valuable contribution to future supplies of mined commodities from lithium, cobalt, nickel and graphite to manganese, iron, copper, chrome, uranium and aluminum, according to SRK director and principal consultant Andrew van Zyl.
While there are considerable resources of these minerals available in Africa and even currently being mined, there remain challenges which prevent their economic extraction. “One of the reasons why the gold sector thrives in many parts of Africa, for example, is because it needs relatively little in the way of national or state-managed infrastructure,” said Van Zyl. “For better or worse, a gold mine can operate quite effectively as an ‘island’ of activity and prosperity – providing most of its own inputs to mine and process ore, and to transport the very compact end-product.”
The Manufacturing Indaba 2022 addresses the need for business to swiftly adapt and remain competitive in a post pandemic era (Pumps Africa Online Journal)
The Manufacturing Indaba Conference will discuss key issues critical to supporting the development of manufacturers. The conversation will take place at the upcoming Manufacturing Indaba taking place from the 21st to 22nd June 2022 at the Sandton Convention Centre, Johannesburg, South Africa. The conference aims to focus on the financing and economic recovery of businesses in the manufacturing industry in a post pandemic era. The event will provide information to support, revitalise and aid manufacturing growth and recovery.
Time to reduce dependence on foreign aid – Akufo-Addo (Ghana Business News)
President Nana Addo Dankwa Akufo-Addo Wednesday called on African researchers and policy makers to scale up policies that would reduce the Continent’s dependence on foreign aid. They should pursue a path of self-respect and take actionable steps to create the enabling environment to build prosperity and development to make Africa rich and resilient. “The time to pursue a path of prosperity and self-respect for the African Continent is now,” he said at the opening of the 22nd Academy of African Business and Development (AABD) Conference, at the University of Professional Studies, Accra.
President Akufo-Addo said the concept of “Africa beyond Aid” was about acknowledging development in a sustainable manner, ‘taking the bull by the horns’, and take responsibility for sustainable growth while perceiving fellow African countries as key stakeholders in development.
Africa demands ‘fair international finance architecture’ (The New Times)
Calls for an international finance architecture which is fair grew on Monday, May 16, in Dakar, Senegal. The call was led by President Macky Sall at the annual Conference of African Ministers of Finance, Planning and Economic Development, ECA’s largest annual event where participants debate key issues concerning the continent’s development. It also discusses the think tank’s performance in delivering on its mandate.
Sall noted that given prevailing conditions, the parameters that allow global economic governance are outdated and unsuited to reality. Besides the devastating impact of the Covid-19 pandemic, Africa is confronting a new food, fuel and fertilizer crisis reverberating across the world as the Russia-Ukraine war creates global trade and commodity disruptions. Food prices are reported to be 34 per cent higher than this time last year. Crude oil prices increased by around 60 per cent while gas and fertiliser prices more than doubled. African economies are in a state of general fatigue, Sall said.
“The least we can say is that our economies are in a state of general fatigue, the extent and duration of which, unfortunately, we are yet to measure. And that is a problem,” President Sall said.
Global lenders want a piece of East Africa’s retail banking market (The East African)
East Africa is becoming fertile hunting ground for foreign banks seeking to explore the booming retail market that has seen KCB and Equity banks assets rise to over Ksh1 trillion ($8.62 billion) each, buoyed by expanding customer numbers and loan books.
global players are eyeing the regional banking market, with Nigeria’s Access Bank Plc and Egyptian Commercial International Bank (CIB) acquiring Kenyan lenders as launching pads into the seven-member bloc comprising Kenya, Uganda, Tanzania, Burundi, Uganda, South Sudan and the Democratic Republic of Congo. “The banking model has shown that there is a merit to good expansion. If you are able to expand and grow your balance sheet then you are also able to increase your profitability and East Africa is where the next growth frontier is considered to be,” said Paul Mwai, the Chief Executive of AIB-AXIS Capital Ltd and vice chairman of the Nairobi Securities Exchange (NSE).
A survey conducted by consultancy firm PricewaterhouseCoopers (PwC) in 2019 showed that global lenders were expressing interest in the East African market as local banks become more competitive regionally with their mobile money solutions, agency models and digital platforms that appeal to East Africans.
EA ports expect more ships after drop in piracy cases in Indian Ocean waters (The East African)
More ships are expected to make calls at East African ports following a drop in maritime crime targeting shipping lines over the past 20 years. Cargo ships destined for Mombasa, Dar es Salaam, Jeddah and the port of Djibouti have previously had to use circuitous routes to avoid being attacked in the Indian Ocean. Others have had to pay higher insurance premiums or hire security escorts, which in turn made importation costly for the local consumer. Now, the Allianz Global Corporate & Specialty SE (AGCS) “Safety & Shipping Review 2022” report indicates that maritime piracy in the Indian Ocean has almost disappeared.
Sub-Saharan Africa turns to Argentinian wheat (Argus Media)
Argentina is set to replace most of the lost Black Sea wheat supplies to countries in Sub-Saharan Africa in May. Importers in the region seek to replace shipments from Russia and Ukraine, which have fallen following Russia’s invasion of Ukraine on 24 February.
Argentinian wheat totalling 242,650t has been loaded, shipped or is awaiting shipment to Angola, Burundi, Cameroon, Cote d’Ivoire, Guinea, Kenya, Nigeria, Rwanda, Senegal, South Africa and Tanzania in May, according to preliminary line-up data.
The surge in shipments of Argentinian wheat to Sub-Saharan Africa comes as major importers around the globe scramble to secure supplies to replace lost shipments from Ukraine, which have collapsed following the Russian blockade of the country’s Azov and Black Sea ports. Ukraine’s grain exports, 90pc of which were traditionally handled by vessels leaving the country’s sea ports, fell by more than 70pc in April, compared with the same period in 2021. There have been attempts to move agricultural products over Ukraine’s western borders by truck and rail but logistical issues continue to plague operations and so exporting pace has slowed significantly in recent weeks.
Maize shortage ‘biggest issue in Africa’ (SciDev.net)
Maize prices soar as Sub-Saharan Africa production hit by climate change, global conflict and fertiliser shortages. Maize yields are expected to be drastically lower this season than in previous years in drought-hit Sub-Saharan Africa. While the drop will affect the entire region, Kenya is facing the biggest struggle as one of the region’s largest importers of the staple food.
Mid-sized cities key to Africa’s economic development concludes a regional gathering (UNECA)
Local and national governments convening at the 9th Africities gathering in Kisumu from 17 to 21 May 2022 concluded that mid-sized cities spread the benefits of access to cities to a large and dispersed rural population in Africa, while offering critical advantages for agricultural transformation. During the gathering – the largest meeting of local governments in Africa, the United Nations Economic Commission for Africa in partnership with UN-Habitat convened a specific session to examine the role of intermediate – or midsized – cities in Africa’s economic development and actions needed to unleash their untapped potential.
US seeks African partnerships on climate change, health (The East African)
The US is seeking to create more “mutually beneficial” partnerships with African countries in addressing climate change, health and economic growth, US Under Secretary of State for Economic Growth, Energy and Environment Jose Fernandez has said. Mr Fernandez was speaking to African journalists on May 11 from Cape Town, where he gave a keynote address at the Mining Indaba, an investment conference dedicated to the capitalisation and development of mining in Africa.
“My message both here and in Zambia is that Africa is key to achieving some of the most important priorities of the Biden administration,” Mr Fernandez said, adding that the US government is ready to partner with African countries and private American firms to invest in key priority areas.
Dawn of a second Cold War and the ‘scramble for Africa’ (Brookings)
Ample empirical evidence shows that the African Continental Free Trade Area (AfCFTA) will boost the competitiveness of African economies and accelerate the diversification of sources of growth and trade to deepen economic integration in Africa and enhance the region’s assimilation into the world economy. However, realizing these potentials hinges on reversing the current trend of rising insecurity heightened by proxy wars in the new age of great power rivalries. This paper outlines policy options that draw on the political and trade economies of scale to optimize the allocation of scarce resources and strengthen the security and development nexus to implement the AfCFTA successfully for lasting peace and prosperity in Africa.
Global economy news
Members discuss e-commerce, trade concerns and LDCs’ participation in services trade (WTO)
The WTO LDC Group highlighted that implementation of the services waiver was one of the priorities for the 12th Ministerial Conference (MC12) identified by LDC trade ministers in a declaration issued in October 2021. The LDC Group called for members’ continued support on this issue, with a view to reaching agreement on improving the implementation of the waiver at MC12, which will take place from 12 to 15 June.
A total of 51 members have notified preferences for LDC services and service suppliers under the waiver, with the aim of boosting LDCs’ participation in world services trade. The waiver was formalized by a decision adopted at the 2011 Ministerial Conference.
Dispute Settlement at the WTO: How Did We Get Here and What’s Next for the Commonwealth States? (The Commonwealth Secretariat)
This issue of Trade Hot Topics examines the current state of WTO dispute settlement with a focus on repercussions for Commonwealth countries. Specifically, it begins by outlining the dispute settlement profile of Commonwealth states, and then turns briefly to the history of the Appellate Body, highlighting its successes and the criticisms it attracted, as well as the reasons for its demise. This is followed by a discussion of the technicalities of one proposed option to temporarily fill the void left by the Appellate Body’s absence, assessing its merits and explaining what it might portend for participating and non-participating members. It concludes with recommendations for the consideration of Commonwealth states as they seek to define and promote their dispute settlement interests in the current WTO environment.
Members review notification activity on national customs legislation (WTO)
The Chair of the Committee, Buddhi Prasad Upadhyaya of Nepal, shared with members the current notification status regarding customs valuation legislation. Members welcomed the Chair’s proposal to organize an experience-sharing session in the margins of one of the upcoming Committee meetings to exchange experiences regarding the implementation of the Customs Valuation Agreement.
The WTO Secretariat made a presentation on how the e-Agenda platform has been implemented in the Committee on Market Access (CMA). While acknowledging that some aspects of the CMA’s activities differ from that of the Committee on Customs Valuation, the Chair encouraged members to consider whether certain aspects of the platform relating to transparency and accessibility of documents could be useful in their work.
Fragile economic recovery from COVID-19 pandemic upended by war in Ukraine | United Nations (UN DESA)
The war in Ukraine has upended the fragile economic recovery from the pandemic, triggering a devastating humanitarian crisis in Europe, increasing food and commodity prices and globally exacerbating inflationary pressures, says the latest United Nations forecast released yesterday.
World Economic Situation and Prospects as of mid-2022
Global growth prospects have weakened significantly amid the war in Ukraine, rising energy, food and commodity prices, soaring inflation and tightening monetary policy stances by major central banks. The world economy is projected to grow by 3.1 per cent in 2022, marking a downward revision of 0.9 percentage points from our previous forecast released in January 2022 .
US, UK, and EU Transatlantic Trade Review Developments (The National Law Review)
The United States (US) and United Kingdom (UK) continued to impose sanctions against Russia over the first two weeks of May, while the European Union (EU) continued its debate over another sanctions package. The US Congress also continues to debate a new $40 billion assistance package for Ukraine. The UK introduced legislation that would bring the free trade agreements with Australia and New Zealand into force later this year. The European Parliament approved its negotiating stance on the proposal for Foreign Subsidies. Meanwhile, the second US-EU Trade and Technology Council (TTC) ministerial meeting concluded on 16 May in Paris-Saclay, France
Study shows COVID-19 effects on trade in biodiversity products (UNCTAD)
The impact of COVID-19 on trade in biodiversity-based products, such as coffee, cosmetics and honey, has been both positive and negative, according to an UNCTAD study published on 3 May. The study based on a survey of more than 300 biodiversity stakeholders, shows that the pandemic’s effects have varied greatly across regions, countries and sectors. Positive impacts from the pandemic were reported by a higher share of respondents from the private sector supporting or implementing UNCTAD’s BioTrade Principles and Criteria. BioTrade is when a product or service sourced from biodiversity is commercialized and traded in a way that respects people and nature. It can be a positive force to protect biodiversity. About 73% of the survey’s respondents said they support or implement BioTrade principles.
The study found that COVID-19 has “created challenges for the collection, production, processing, distribution, commercialization, certification, support and study of biodiversity-based products and services.”
This is how to counter the global digital divide (WEF)
Countering the global digital divide is an increasingly urgent imperative because several essential aspects of everyday life – including banking, health care, education, media, communications and even identity – depend on access to digital tools and technologies. Connectivity has become a conduit to information, communication, education and societal wellbeing. People who lack opportunities to go online and engage purposefully with the digital economy face a worsening cycle of disenfranchisement.
Unfortunately, that’s a lot of people. Despite some improvement in recent years, a third of the world’s population (some 2.9 billion people) suffers from the digital divide – even though 95% of the world’s population resides within range of a mobile broadband network.
Carbon pricing proposals redrawn to account for developing economies (TradeWinds)
The allocation of part of the proceeds of market-based measures (MBM) to developing nations is becoming a critical part of the International Maritime Organization’s negotiations on a carbon pricing scheme. The latest proposal which is to be debated at the IMO’s June meeting is from Japan and includes the option of allocating funds for least developed countries (LDCs) and small island developing states (SIDs).
‘Lifeline’ of renewable energy can steer world out of climate crisis: UN chief (UN News)
Greenhouse gas concentrations Levels reached a new global high in 2020 and continued to increase in 2021, with the concentration of carbon dioxide reaching 413.2 parts per million globally, a 149% increase on pre-industrial levels. “We have broken records in main greenhouse gases, carbon dioxide, methane and nitrous oxide and especially the record in carbon dioxide is striking; we haven’t seen any improvement despite of the lockdowns caused by COVID in 2020, so the concentrations continue growing”, explains WMO chief Petteri Taalas.
Declaration of the 7th Meeting of OACPS Ministers of Fisheries and Aquaculture (ACP)
High-level fisheries and aquaculture policymakers from the Member States of the Organisation of African, Caribbean and Pacific States (OACPS), as well as leading fisheries professionals and practitioners met in Accra, Ghana for the 7th Meeting of OACPS Ministers in charge of Fisheries and Aquaculture from 5-8 April 2022. Themed, “OACPS’s Blue Economy Agenda 2030 – Catalysing Sustainable Fisheries and Aquaculture Development for the Future”, the meeting was hosted by the Ministry of Fisheries and Aquaculture Development, Ghana. In his closing remarks at the Meeting, Secretary-General of the OACPS, mentioning the challenges facing the sustainable development of the fisheries and aquaculture sector as a result of fisheries governance challenges and human-induced challenges and pressures such as climate change, overfishing, pollution and environmental degradation, nevertheless applauded the considerable efforts by the Senior Officials and the Ministers at the 7th Session, resulting, most notably in the Declaration produced at the end of the Meeting.
Related News
tralac Daily News
Local news
SA still an investment destination of choice (SAnews)
The NDP may not be perfect, but it continues to be a guide in our vision to tackle poverty, inequality and unemployment, writes Phumla Williams. Under the stewardship of President Cyril Ramaphosa, his R1.2 trillion investment drive announced four years ago has reached an impressive 95% of this ambitious target. Both domestic and foreign investors continue to see SA as an investment destination. Numbers do not lie.
From the first SA Investment Conference in 2018 to the fourth earlier in 2022, the country has attracted over R1.14 trillion in commitments across a wide range of economic sectors. These investments are deliberate and calculated decisions by investors. They continue to view SA as a potential investment destination. The incoming investors display a strong vote of confidence in our ability to overcome our most pressing challenges, some of which are linked to the legacy of apartheid.
When engaging with potential investors the government has never extenuated the existing socioeconomic and political problems affecting the country. It openly and unstintingly acknowledges that it is gradually emerging out of a very difficult period where policy missteps and the unfortunate ruinous effects of state capture have retarded its progress. The ambitious investment efforts are emboldened by the high-profile political mandate, led by President Ramaphosa and his executive, to unequivocally build investor confidence and create a business-friendly environment. The President continues to lead this drive with honesty and keeping to his word in navigating through these challenges towards growing the economy and creating the much-needed jobs. As an economic hub and gateway for potential investors and tourists SA has unveiled the Economic Reconstruction and Recovery Plan (ERRP) to mitigate the socioeconomic setbacks that were aggravated by the COVID-19 pandemic.
Minister Patel Plans to make Export Promotion a Priority in all Work Streams of the dtic (the dtic)
The Minister of Trade, Industry and Competition, Mr Ebrahim Patel, says he wants to prioritise export promotion in all work streams of his department. He was addressing the virtual launch of the Black Industrialists Export Network. The network is aimed at strengthening efforts to boost the expansion of export markets for local businesses. This in turn is hoped will enable Black Industrialists to succeed in complex markets, and make it easier for them to access export finance, marketing avenues, and a flexible basket of advice and support suited to their unique needs. This initial meeting provided an opportunity to share ideas in respect of working together with black industrialists to facilitate entry of their products and services into export markets, highlight opportunities and challenges that they might be experiencing, as well as consider proposals on the workings and offerings of the export network.
He explained that exports provide the opportunity for industrialists to expand their markets beyond the South African market and there is therefore a need to expand the scope, through a focused export effort.
“The reality is that export markets are tougher than the South African market for business operators. That means that the effort that firms working with government put in should be quite considerable. It is important for us to succeed at this because export can help us achieve wider goals of economic growth and job creation. The Black Industrialists Export Network will combine efforts to break into new markets. This should give local black businesses scale,” he said.
Forum established to support informal economy (Engineering News)
The Informal Economy Development Forum (IEDF) is a new body that has been set up to drive growth within the sector, support informal economy workers and function as the conduit between government, corporate South Africa and the informal economy. The IEDF’s key objectives are to improve the business, labour and regulatory environment in which informal businesses operate, ensuring equitable access to skills development and training, finance and the removal and simplification of regulatory requirements that prohibit growth to benefit South Africa’s 5.2-million informal workers.
President Cyril Ramaphosa: Meeting with Durban Chamber of Commerce and Industry (South African Government)
The economic reconstruction and recovery underway across the country in the aftermath of the COVID-19 pandemic cannot succeed without the swift, comprehensive and sustainable recovery of the economy of KwaZulu-Natal. Declaring the floods as a national state of disaster has enabled us to mobilise more resources, capabilities and technical expertise within the necessarily timeframes.
Damage to key economic infrastructure such as roads, energy transmission and distribution, water and sanitation facilities and the port of Durban has had – and continues to have – a dire impact on your operations. Sectors that power the provincial economy such as manufacturing, FMCG, retail and wholesale, distribution, warehousing and freight have been particularly hard hit by these floods. Given the importance of the Port of Durban to the national and continental economy, restoring operations and rehabilitating damaged port and associated infrastructure has been a priority.
Twinning project to boost Namibia’s international trade (New Era)
Minister of Industrialisation and Trade Lucia Ipumbu on Friday officially launched the European Union (EU) funded twinning project, titled ’Providing support to the Namibia Standard Institution (NSI)’.The two-year twinning project aims to boost NSI’s capacity to carry out its mandate and extend Namibia’s involvement in international trade. The project is part of the Economic Partnership Agreement (EPA) Implementation Plan for Namibia, and it is supported to the tune of €1.6 million (N$27 million). This is the first EU twinning project in Sub-Saharan Africa, jointly implemented by a consortium of eight German and Swedish institutes with experience in trade policy, technical regulation, food safety, standardisation, accreditation, metrology and conformity assessment.
The NSI and the trade ministry are the project’s primary beneficiaries. Speaking at the occasion, the EU ambassador to Namibia Sinikka Antila narrated how “twinning” is a special concept by the EU to enhance institutional collaboration between public administrations, its member states, as well as beneficiary or partner nations. Through peer-to-peer operations, twinning programmes combine the public sector expertise of EU member states and recipient countries to provide concrete, mandatory operational outcomes.
Government acts to bring down prices (Chronicle)
Government has suspended with immediate effect and for the next six months, import duty on basic commodities in a move meant to counter escalating and unjustified price increases of locally manufactured products. There has been unjustified increases in the prices of goods and services in recent weeks, mostly being pegged using forex black market rates as the benchmark. The parallel market activities have fuelled the depreciation of the local currency and inflationary pressures. In June last year inflation was at 50,1 percent, a record low in two years, but climbed to 96,4 in April from 74,6 percent in March amid the exchange rate volatility. To cushion consumers, rice, flour, cooking oil, margarine, salt, sugar, maize meal, milk powder, infant milk formula, Tea (whether or not flavoured), petroleum jelly, tooth paste, bath soap, laundry bar, and washing powder will now be imported duty free.
Moi airport upgrade lifts exporters of fresh produce (Business Daily)
The Sh7.5 billion infrastructural upgrade at Moi International Airport, Kenya’s second-largest airport has led to increased export of fresh produce. The upgrade included the cargo terminal, cold room replacement of the airfield, ground lighting systems, and approaching lighting masts with fiberglass from the traditional steel. Fresh Produce Consortium of Kenya (FPCK) Chief Executive Officer Okisegere Ojepat said the upgrading of the airport is a major boost to Kenya’s export of fresh produce to the international market. Kenya Plant Health Inspectorate Service (Kephis) Coast Regional Manager Thomas Kosiom said there has been a steady rise in exports of fresh produce ranging from chilies, French beans, flowers, avocados and pineapples through the international airport. Kephis is the government parastatal whose responsibility is to assure the quality of agricultural inputs and produce to prevent adverse impacts on the economy, the environment and human health.
Milk supply plunge sees prices rising steadily for weeks (Business Daily)
Formal milk intake has been on a steady decline between January and March, piling pressure on consumer prices at the shelf. Data from the Kenya Dairy Board (KDB) shows that the volume of the commodity supplied to processors declined to 61.7 million litres in March from a high of 69.3 million and 66.4 million litres in January and February respectively. The decline has led to a sharp shortage in the market, which has pushed the price of a half-litre packet to Sh60 and resulted in absence of long-life milk on the shelves as processors concentrate on first moving fresh brands. Processors have been operating at half of their installed capacity due to a shortage in supply from farmers across the country.
Customers, stakeholders delight at enhanced ports’ efficiency (Dailynews)
Major shipping companies and maritime sector’s key stakeholders are delighted with enhanced efficiency at Tanzania’s principal port of Dar es Salaam, which is a gateway for approximately 95 per cent of Tanzanian trade. The Tanzania Ports Authority (TPA) has massively strengthened operations in the country’s major sea gateway, which is also the access route to six land-linked countries including Malawi, Zambia, Burundi, Rwanda, Uganda, and the Democratic Republic of Congo (DRC), resulting in increased cargo traffic and revenues for the government. Speaking on various occasions, officials from shipping agencies and traders commended improvement of the port’s operations, efficiency and competitiveness, noting that the TPA has sufficiently been meeting the logistical needs of its clients. Looking to turn the country’s ports into a hub for regional waterway transportation, the Government of Tanzania has and continues to commit huge investments in infrastructure, equipment, technology and expertise.
Petrol scarcity: FG, marketers trade blames over transport claims (Daily Trust)
Amidst raging queues for Premium Motor Spirit (PMS) also called petrol in Abuja and some states, federal government agencies in the petroleum industry, as well as the product marketers, have traded blame on claims of payment and product loading volume. Daily Trust reports that the queues in Abuja resurfaced last weekend when it was observed that among over 30 retail outlets, less than five were selling as vehicles lined up to buy petrol. The scarcity became worse on Monday as black marketers had a field day selling a 10-litre volume for N2,500 within the city centre.
“We have been seeing this sign since last week but it was not that bad. However, since Friday, the retail outlets have started drying up in my area around Lugbe,” said Silas John, a commercial driver.
Technology, policy: Nigeria’s energy transition pathway – FG (The Guardian Nigeria)
The Federal Government says it is following an energy transition pathway that combines technology, investment, business strategies and policy. The government says this will enable Nigeria to transition from its current energy system to a low-carbon energy system with natural gas playing a pivotal role over the next generation, between now and 2060. Chief Timipre Sylva, Minister of State for Petroleum Resources, made the assertion on Tuesday at the virtual Society of Petroleum Engineers (SPE) Lagos Annual Technical Symposium and Exhibition.
Sylva said natural gas was a key resource for energy transition and had all the credentials to support Nigeria and indeed Africa meet up with her commitment with the UN 17 Sustainable Development Goals (SDGs). He said as a major source of wealth and energy in Africa, the development of oil and gas resources proved critical for the continent’s economic growth and revenue expansion.
“First off, Africa and the world need oil (and gas for that matter). The world needs oil and gas because it is what the world relies on for its most basic needs. And that will not change overnight. “Therefore, African governments and leaders should continue to invest in oil and gas, even as we work to help speed progress to a lower-carbon future.
Why FG should expedite AfDB ‘s SAPZ takeoff (The Sun Nigeria)
The rapid rollout of the first phase of the Special Agro-industrial Processing Zones (SAPZ) programme of African Development Bank(AfDB) to support inclusive and sustainable agro-industrial development in countries across Africa has been clogged in Nigeria. This was even as stakeholders are calling on the Federal Government to see reasons for its quick takeoff.
Last December, the AfDB’s board of directors approved a $160-million loan to get the programme off the ground in seven states and the Federal Capital Territory (FCT). Additional co-financing for its first phase will come from the International Fund for Agricultural Development (IFAD) and the Islamic Development Bank (IsDB) in the amount of $150 million. The Nigerian government is expected to provide about $18.05 million toward the program’s rollout and implementation.
The project is a mega cluster-based infrastructure venture to aggregate farmers, processors and retailers to connect agricultural production to the market.
How US supports trade, investment in Nigeria – Consulate (The Sun Nigeria)
The U.S. Consulate and the Nigerian-American Chamber of Commerce (NACC) on Tuesday urged Nigerian businesses to take advantage of the U.S. mission’s trade initiatives for a greener economy. They made the call during the NACC May Breakfast Meeting with the theme: “U.S. Mission’s Current Commercial-focused Activities in Nigeria” held in Lagos.
According to him, some of the initiatives include Prosper Africa, African Growth and Opportunity Act (AGOA), West Africa Trade and Investment Hub, Networking with USA (NUSA) and initiatives targeted at women-led businesses. Russell said the Biden administration was focused on two-way trade between Africa and the U.S., adding that he was committed to revitalising partnerships based on dialogue, respect and mutually shared values.
Study to assess turnaround time in goods clearance underway (Graphic Online)
The Customs Division of the Ghana Revenue Authority (GRA) has initiated a project to assess the average turnaround time in the goods clearance process at the country’s seaports. The project, Time Release Study (TRS), is an internationally accepted strategic tool of the World Customs Organisation (WCO) to measure the actual time taken for the release and/or clearance of goods - from the time of arrival until the physical release of cargo. To be completed in the next six months, the study seeks to further improve effectiveness and efficiency of border procedures relating to imports, exports and transit movements of goods.
Speaking to the Daily Graphic at the workshop, the Deputy Commissioner of Customs in-charge of Petroleum Operations, Yaw Baffour Asare, said the project sought to identify associated bottlenecks objectively and address them in an efficient and effective manner. He said the WCO TRS was specifically referenced in Article 7.6 of the WTO Trade Facilitation Agreement (TFA) as a tool for members to measure and publish the average release time of goods. He said in recent years, the tool had been capturing a lot of attention worldwide; the international donor community and the WCO development partners were recommending it as a key performance measure to assess, evaluate, and enhance the implementation of the WTO TFA.
Nigeria holds a leading position in the African maritime sector ― Ambassador Akinkugbe (Tribune Online)
The Nigerian ambassador to Greece, Opunimi Akinkugbe, has said that Nigeria holds a leading position in the African maritime sector. According to her, Mrs Folorunsho’s mission is to explore opportunities in the maritime sector for African shipowners to be able to move cargo across the continent under the African Continental Free Trade Area (AfCFTA) that will create wealth and jobs.
“Naturally, so much needs to be done to bring this to reality,” Akinkugbe said. She added that Nigeria holds a leading position in the African maritime sector; and that Greece, as a maritime nation by tradition, can offer experience and expertise in the sector across the African continent. “Shipping has been a key element of Greek economic activity since ancient times,” Akinkugbe said. “Today, shipping is the country’s most important industry and it remains one of the world’s largest shipowning nations.”
Poor patronage, high production costs shrink textile firms to below 20 (The Guardian Nigeria)
Poor implementation of the patronage policy, high cost of production, high level of importation, smuggling among other challenges have continued to undermine Nigeria’s textile sector, shrinking the number of viable textile firms to less than 20 from 175 firms in 1985. According to the Nigerian Textile Manufacturers Association (NTMA), the textile sector, which used to be the highest employer of labour, lost at least 117,000 jobs within 26 years, with more losses underway without government’s intervention. The association noted that the industry’s declining export capacity, having led to the loss of preferential market access in the EU and US, was attributable to inconsistent implementation of Export Expansion Grant (EEG) policy, particularly, the perennial backlog of EEG claims, and the inconsistencies in the implementation of ECOWAS Trade Liberalisation Scheme.
The Federal Government (FG) of Nigeria has disclosed it was following an ‘energy transition pathway’ that combines technology, investment, business strategies and policy. Minister of State for Petroleum Resources, Timipre Sylva, said the aforementioned plan would enable Nigeria transition from its current energy system to a low-carbon energy system with natural gas playing a pivotal role over the next generation, between now and 2060.
Sylva opined that natural gas was a key resource for energy transition and had all the credentials to support Nigeria and indeed Africa meet up with her commitment with the United Nations (UN) 17 Sustainable Development Goals (SDGs). He stated that as a major source of wealth and energy in Africa, the development of oil and gas resources proved critical for the continent’s economic growth and revenue expansion, saying fossil fuels would remain relevant in the energy mix despite ongoing campaigns and global energy transition.
Togo opens land border with Ghana (Graphic Online)
Togo on Monday night opened its land border with Ghana, coming more than 50 days after Ghana reopened its land borders to neighbouring countries. When Graphic Online’s Volta Regional correspondent Alberto Mario Noretti visited the border post in Lome at about 8:30 am Tuesday [May 17, 2022] the metal gates which were closed between the two countries for two years in the wake of the coronavirus pandemic, were swung open. That, notwithstanding, both sides of the frontier remained desolate with little human movement and commercial activities across the border.
African trade news
13th WTPO conference AfCFTA, ITC sign MoU - AfCFA boss says trade networks can boost trade on continent (Graphic Online)
The Secretary General of the African Continental Free Trade Area (AfCFTA) Secretariat, Wamkele Mene, has asked African countries to leverage the platform provided by the trade pact to create regional trade networks and global affiliations. He said this would enable their markets to build resilience in the supply chains and reduce reliance on external markets.
“The COVID-19 pandemic has provided us a once in a lifetime opportunity to make bold decisions that will put us on a path to resilient, inclusive and sustainable economic recovery. “With the AfCFTA, Africa now has an important instrument to assist countries to look inward for solutions to their COVID-19 economic challenges,” he said during the opening of the 13th World Trade Promotion Organisations (WTPO) conference in Accra on May 17. “Indications are that the recovery will be an arduous and complex process as there are still many uncertain and changing factors, including Russia-Ukraine conflict, which has created new concerns. “Now is the time to rebuild our economies and secure Africa’s future,” he said.
Understanding the African Continental Free Trade Area and how the US can promote its success (Brookings Institution)
The significance of the AfCFTA cannot be overstated. It is the world’s largest new free trade area since the establishment of the World Trade Organization (WTO) in 1994. It promises to increase intra-African trade through deeper levels of trade liberalization and enhanced regulatory harmonization and coordination. Moreover, it is expected to improve the competitiveness of African industry and enterprises through increased market access, the exploitation of economies of scale, and more effective resource allocation.
My research has shown that the AfCFTA — and its accompanying increased market access — can significantly grow manufacturing and industrial development, tourism, intra-African cooperation, economic transformation, and the relationship between Africa and the rest of the world. In fact, under a successfully implemented AfCFTA, Africa will have a combined consumer and business spending of $6.7 trillion by 2030 and $16.12 trillion by 2050, creating a unique opportunity for people and businesses — and meaning the region can be the next big market for American goods and services.
Although there is a great momentum behind the agreement, its successful implementation is dependent on smart choices and thoughtful policy options. The United States can and should play an extraordinary role in promoting the AfCFTA’s success to increase intracontinental and global trade, as well as achieve mutual African and U.S. prosperity.
Landry Signé is a Senior Fellow at the Brookings Institution’s Africa Growth Initiative
The dice is loaded against Africa: ministers call for reform (UNECA)
African economy, finance and planning ministers, businesses and economists attending a conference in Dakar, Senegal, have made an impassioned case for a complete overhaul of the global financial architecture.
The Conference of Ministers (CoM2022) – organised by the United Nations Economic Commission for Africa (ECA) and hosted by the government of Senegal – heard from economists and executives who argued that these global arrangements, ostensibly meant to maintain stability in the international financial system, were outdated and unfair to many developing countries.
In Africa, they are “not fit for purpose,” said Vera Songwe, UN Under-Secretary General and Executive Secretary of UN Economic Commission for Africa. Giving the keynote speech at CoM2022, President Macky Sall of Senegal, said Africa was being dictated to although it had over a decade of good growth, only suffering a reversal, like the rest of the world, because of the coronavirus pandemic.
CoM2022 - Remarks by President Macky Sall, Senegal (UNECA)
Africa needs infrastructure development for sustainable, inclusive growth (Businessday)
Economic growth has been slow in Africa following varied growth rates in three of Africa’s largest economies – Angola, Nigeria, and South Africa, according to the World Bank latest report. Africa’s gross domestic product growth rate is estimated at 3.6 percent in 2022, representing a downward movement from 4 percent in 2021. One of the factors slowing down Africa’s economic growth rate is infrastructure deficiency. Adequate and quality infrastructure in all the African countries is critical for sustainable and inclusive growth in the continent. The African Development Bank (AfDB) estimated Africa’s infrastructure financing needs to be as much as $170 billion a year by 2025, with an estimated gap of about $100 billion a year. The infrastructure gap challenge has aggravated the problems of unemployment, low productivity, and poverty in Africa. According to the Programme for Infrastructure Development in Africa, the road access rate in Africa is only 34 percent, compared with 50 percent in other parts of the developing world and transport costs are 100 percent higher. Only 30 percent of Africa’s population has access to electricity, compared to 70-90 percent in other parts of the developing world. Water resources are underused with only 5 percent of agriculture under irrigation. The internet penetration rate is a mere 6 percent, compared to an average of 40 percent elsewhere in the developing world.
The insufficient stock of productive infrastructure in power, water, and transport services that allow firms to thrive in industries hinders industrialisation in Africa. Africa must industrialise to end poverty and generate employment for about 15 million young people who join its labour force every other year.
Increase investment for infrastructure development - Raila tells Africities conference (The Star, Kenya)
There is a need for increased investment towards the realization of infrastructural development, African Union’s high representative for infrastructure Raila Odinga has said. Raila expressed concerns over an infrastructure gap in Africa saying the trend had slowed down the development aspirations over the years.He noted that the region needed more investment in infrastructure to be able to tap available economic potentials through inter-trade opportunities as well as achieve full growth.
African ports eye increased trade as piracy threats drop (Business Daily)
African ports are expected to witness an increased number of ships and reduced cost of shipment as a result of a drop in piracy and armed robbery cases. This means cargo ships destined to the ports of Mombasa, Dar es Salaam, Jeddah, and Djiobuti will no longer have to use long routes in their bid to evade pirates. A new report, Safety and Shipping Review 2022, says reduced cases of piracy will see sea freight and maritime insurance premium for cargo going down thus reducing the cost of shipment. Shippers Council of Eastern Africa (SCEA) SCEA chief executive officer Gilbert Lagat said the reduced cost would not only save Kenya and other East African traders millions of dollars in insurance and security expenses, but it will encourage more ships to call at different ports. “Reduced risks as a result of improved surveillance will lower cost of importation and also encourage those shipping companies which suspended their operations along such route to resume,” said Mr Lagat.
Stakeholders draw roadmap for sector’s recovery (New Telegraph Newspaper)
The 10th Aviation Stakeholders Convention hosted by the African Airlines Association (AFRAA) and Kenya Airways kicked off today at the Emara Ole-Sereni hotel, Nairobi, Kenya. The two-day convention will provide a platform for showcasing new developments and innovations in aviation, discussing industry business trends, networking and forging new partnerships. The Convention, under the theme: “Beyond the crisis,” brings together over 500 delegates from 47 countries across the globe attending both physically and virtually.
The Convention is one of Africa’s major forums for air transport industry stakeholders to dialogue and exchange knowledge and experiences for the development of the travel ecosystem.
Mr Abdérahmane Berthé said: “I call upon stakeholders to join this noble initiative which will bring experts from various sectors to craft solutions to transform business in the region and ensure the efficient development of intra- Africa air transport,” he said.
Dr Joseph K. Njoroge, CBS, the Principal Secretary, State Department for Transport, Government of Kenya called for continued cooperation for resilient recovery and growth of the industry, noting that “among the industry actions for recovery by airlines is the enhanced cooperation and collaboration. This will establish stronger and more efficient airlines with business models that will allow them to compete internationally and improve Africa’s air traffic market share which is currently very low.”
Aid to Africa continues to be challenging (Africa Aviation News)
Aid relief in Africa faces a complex set of challenges; getting aid to the continent is one thing, moving it across various countries and the final ‘last-mile’ journeys can be incredibly difficult. “The challenges are amplified by natural disasters, conflicts, bureaucracy and often problematic transportation infrastructure,” according to a whitepaper by Danish carrier Maersk titled Delivering Relief: When it’s Needed, Where it’s Needed. The supply chain is thus a vital cog of all humanitarian responses, not least because over 70 percent of spending relates to it and cost-effective logistics is indispensable, the study said.
Africa is the world’s second largest, and second most populous continent in the world with an area covering 30.37 million km², across 54 countries that are home to almost 1.4 billion people. “With 20 of its countries currently considered fragile or conflict-affected, together with the impact of the Covid-19 pandemic in Sub-Saharan Africa, poverty, displacement and disease, aid and development are still critical. Private sector investment is one part of the solution towards recovery and resilience, according to the analysis.
Africa yet to succeed in internal mobilization of resources leading to prosperity (News Ghana)
The African continent has not succeeded in the internal mobilization of resources leading to prosperity due to the fight against the COVID-19 pandemic and climate change, UN Under-Secretary-General and Executive Secretary of the UN Economic Commission for Africa (UNECA) Vera Songwe said Monday in Senegal. Even though finance ministers and central bank governors have done a good job in the fight against COVID-19, but “to survive is not to achieve growth and prosperity”, she said, emphasizing that Africa must manage to have funding to operate a real revival of its economy. She pleaded for a transformation of the continent’s economies, with a policy of regional integration, good governance of resources and digital development.
African Development Bank Group President Akinwumi Adesina has urged international development agencies in Africa to rally behind his institution’s efforts to mobilize more resources to help build resilience for sustainable development across Africa. Adesina told diplomats and international agency representatives at a breakfast meeting in Accra last Thursday that African countries need more resources to fight climate change, to deal with insecurity, debt, and the impact of war in Ukraine. He said funds are also needed to address the massive infrastructure deficit, growing urbanization, and youth unemployment. .
“We are making the case for a strong 16th replenishment of the African Development Fund. It is crucial for Africa, and I will very much appreciate your advocacy for a substantial replenishment,” Adesina stressed. This year marks the 50th anniversary of the Fund’s establishment. Adesina said the Bank is committed to doing more to improve livelihoods on the continent. “We need to have a lot more to drive a just energy transition, climate adaptation, to invest in infrastructure, in food production and to build resilience for Africa.”
Debt crunch: Africa is a net creditor to the rest of the world (Monitor)
Africa’s borrowing appetite has reached a level where something may have to give in. In an interview with Prosper Magazine’s Ismail Musa Ladu during the course of the second AFRODAD Media Initiative (AFROMEDI) held in Nairobi, the executive director of African Forum and Network on Debt and Development (AFRODAD), Mr Jason Braganza whose Pan-African organisation is committed to finding solutions to Africa’s challenges in debt, resource management and financial development, explained why the continent needs to start assuming the role of rule maker rather than rule taker to deal with debt issues.
We need to look at the structure of our economies in the continent and make it work more efficiently for us in terms of generating optimum returns. We are still producing very low value agricultural commodities, thanks to the weak value chain that does not facilitate value addition. This has an impact on revenue mobilisation. Also, most of our economies are heavily relying on primary commodity exports which are very vulnerable to price shocks and related development. The continent also needs to decide how to deal with the issue of fiscal (revenue) leakages. We lose billions of dollars every year through illicit financial flows (IFFs) and I think the latest estimates the continent is losing as a result of this fraud and related scam is in the range of around $100 billion a year. Illicit financial flows come in many shapes and forms. It could be tax related, crime, corruption or even debt related. Then we must end the obsessions with economic growth rather than the actual development.
Given the exploitation of our natural resources, both beneath and above the ground, and looking at how much we lose in form of IFF and related fraud – we are compelled to believe that Africa is a net creditor to the rest of the world. This is because estimates show that for any dollar that comes to Africa – three dollars leave the continent. Because of that, we deserve to sit at the table setting the development agenda at all levels when it comes to commerce, trade, finance and economics.
Curbing Illicit Financial Flows Needs Global Framework—Owasanoye (Business Post Nigeria)
The Chairman of Nigeria’s Independent Corrupt Practices and Other Related Offences Commission (ICPC), Mr Bolaji Owasanoye, has rallied a global action against Illicit Financial Flows (IFFs), including a call for a global framework on IFFs similar to corruption. Mr Owasanoye made this call at a side event of the ongoing hybrid 54th Conference of the United Nations Economic Commission for Africa (UNECA) taking place in Dakar, Senegal. According to a statement issued by the ICPC’s spokesperson, Mrs Azuka Ogugua, the conference would focus on regional efforts to track, recover and return stolen assets from Africa through the IFFs.
“The challenge we found ourselves today is that the rules have always been skewed in favour of those who export capital and against those who import capital. Corruption is a global issue and we have a global framework for corruption. “The IFFs is also a global issue but does not have a global framework. “A way out of the problem is to institute a global framework on IFFs which, among others, will address the huge financial losses suffered by African countries,” the ICPC chairman stated.
MSMEs Must Be Supported To Address Post-Covid Economy Challenges - Trade Minister (Peace FM Online)
Mr Alan Kyerematen, the Minister for Trade and Industry has tasked Trade Promotion Organisations worldwide to effectively support Micro, Small and Medium Enterprises (MSMEs) to address the challenges of the post-COVID economy.He said the assistance for MSMEs was now a development imperative because of their key role in employing majority of the world’s workforce. Mr Kyeremanten was addressing the opening session of the 13th World Trade Promotion Organisations conference and awards in Accra to discuss ways in which they could best support the private sector to enhance production and productivity levels.The conference is being held on the theme: “Bold solutions for Resilience and Recovery.”
“Trade must be mainstreamed in national development plans. Programmes and projects that enhance trade must be aggressively pursued by TPOs,” he said.
Mr Wamkele Mene, the Secretary-General, AfCFTA Secretariat, said Africa’s private sector, a key pillar of the economy, was severely affected by the pandemic as it took its toll on SMEs. “So, as we transition from the pandemic to a new normal marked by renewed efforts at continental integration, let us work together to strengthen our integration including through digitalization. This will enhance intra-African trade; build resilience to future crises; and ensure the continent emerges more connected and more inclusive.”
Good Governance in Sub-Saharan Africa: Opportunities and Lessons (IMF)
Sound institutions that guarantee integrity in the management of public affairs are critical on the path toward higher and more inclusive growth. Countries around the world that improved their governance systems, such as Botswana, Rwanda and the Seychelles in Sub Saharan Africa are reaping a “governance dividend.” Liberia, Sierra Leone, and Angola have demonstrated that reforms are possible, even in fragile environments. Countries with stronger institutions have also been able to mount more effective response to the pandemic. To discuss this issue and attempt to assess the importance of good governance and transparence in Sub Saharan Africa, the IMF published a book “Good Governance in Sub-Saharan Africa: Opportunities and Lessons“ on March 18.
Join us for the virtual launch of the book on Thursday, May 19 at 11:00 AM in Washington D.C (3:00 pm GMT) with African policy makers, civil society, and academics.
First workshop on Food Safety Data, Information and Knowledge Management System in Africa, held by African Union Commission (African Union)
The African Union convened its first workshop to deliberate on the enhancement of food safety information and knowledge management systems that should facilitate the effective data generation, analysis and knowledge exchange to support risk assessment, decision making, inform food safety policy formulation and harmonisation at national, regional and continental level and conversely boost inter-African trade within the context African Continental Free Trade Area (AfCFTA), as well as to improve food security and ensure consumption of safe food for better health of the populace.
Cross-country push: How few firms dominate African seeds market (Down to Earth Magazine)
Africa is now witnessing a continent-wide polarised battle between two seed management systems: Farmer seed systems, which is the dominant informal and indigenous system managed by small farmers, and the industrial seed sector, the formal trade dominated by a handful of multinational corporations along with local subsidiaries.
The newly adopted seed laws cover the formal industrial seed sector. Malawi’s new seed law is the latest development in this push to formalise, or industrialise, the seed sector in Africa, which has seen some 20 countries roll out seed policies in the past five years. The countries now seek to implemen
Joint Communique Between Afreximbank and APPO on the Need for the Establishment of an African Energy Bank (Afreximbank)
Considering the current discussions by APPO and AFREXIMBANK to jointly establish an African Energy Transition Bank, Concerned about the challenge posed to the African oil and gas industry and Africa’s economic development, by coordinated withdrawal of international trade and project financing from Africa’s oil and gas industry, Acknowledging the impact of climate change on Africa and aware that poverty fosters accelerated environmental degradation,
The two African institutions have resolved to work together to find an Africa-led solution to the challenge posed to the African oil and gas industry and an orderly energy transition in Africa by the withdrawal of funding by its traditional financiers. The two institutions have committed to taking necessary actions to promote a sustainable and balanced solution to the challenge of financing the oil and gas industry in Africa during the energy transition, through, among others, the establishment of an African Energy Transition Bank dedicated to supporting an Africa-led Energy Transition strategy that is consistent with the goal of preserving the environment and livelihoods.
What Can Be Done To Achieve Climate Justice For Africa (Forbes Africa)
Of all continents, Africa is least responsible for climate change. It has contributed only a minute part of the greenhouse gas emissions that are responsible for the climate emergency the world faces today. Yet, Africa faces the same arduous battle as the rest of the world to tackle the impacts of climate change, and to make itself resilient to climate change. Today, Africa remains one of the most vulnerable and the least climate-resilient regions in the world. This is manifest across all corners of the continent. In the Horn of Africa, millions are threatened as a historic drought looms. In the Sahel, climate change is fueling insecurity because of increasingly scarce resources. And southern Africa is experiencing lethal rain and floods. Action has never been more urgent. These climate change-induced challenges cut across many countries and sub-regions of the continent. With improved regional integration and deeper regional cooperation, African countries could rally around collective climate adaptation solutions and accelerate a just energy transition. The regional approach would elevate the individual voices of countries and facilitate access to increased global climate finance.
‘Green growth’ can help African countries address socio-economic inequalities: Report (Down to Earth Magazine)
Green growth can address inequity through the creation of decent jobs, better provision of basic services, improvement of air quality and enhancement of climate resilience
African countries need ‘Green Growth’ to address education and health-related inequalities that hinder socio-economic development on the continent and are likely to exacerbate the negative impacts of climate change, according to a recently released report. Green growth has the potential to address these inequalities through the creation of decent jobs, better provision of basic services, improvement of air quality and enhancement of climate resilience, the report added. Climate action and inclusive green growth were particularly important at the current moment, as economies around the world had been ravaged by the COVID-19 pandemic, according to the report. Africa Green Growth Readiness Assessment was launched May 11, 2022, during a side-event at the 15th session of the Conference of the Parties (COP15) of the United Nations Convention to Combat Desertification, underway in Abidjan from May 9-20.
India and Africa must respond to uncertain world: Jaishankar (The Times of India)
India and Africa must respond to the “volatile and uncertain” world and important lessons can be learnt from the COVID-19 pandemic and knock-on effects of the Ukraine conflict, External Affairs Minister S Jaishankar said on Tuesday. In an address at a book release event, Jaishankar said development partnership and capacity building is at the core of India’s relationship with the African continent and it speaks for New Delhi’s shared desire of developing together as “equals”. He said India was “very conscious” of the expanding threats of radicalism, fundamentalism and terrorism to African societies and both sides have been cooperating in dealing with the challenges. “Today, our ties too must respond to the volatile and uncertain world that we confront,” he said.
“There are important lessons to be learnt from the pandemic disruption. The stresses from the knock-on effects of the Ukraine conflict are also relevant,” Jaishankar said.
Referring to India-Africa trade cooperation, Jaishankar said the story on this front is also an encouraging one. “India is today the fourth largest partner for Africa registering trade of USD 69.7 billion during 2018-19. This has obviously been impacted during the Covid years but we are expecting a strong recovery,” he said. In terms of investment, India ranks fifth with a cumulative commitment of USD 70.7 billion in Africa, Jaishankar said.
Global economy news
WTO launches new WTO data portal (WTO)
The new portal allows users to navigate a wide range of WTO databases covering trade in goods, services, dispute settlement, environmental measures, trade-related intellectual property rights and more. One of the databases is the “WTO Stats portal”, which allows users to access and download time series statistics on trade in goods and services on an annual, quarterly and monthly basis. It also contains market access indicators providing information on governments’ bound, applied and preferential tariffs as well as non-tariff information and other indicators.
Upcoming report examines economic fallout from the war in Ukraine (UN DESA)
UN DESA’s World Economic Situation and Prospects as of mid-2022, set to be released on 18 May 2022 (today), will delve into the multitude of local, regional, and global economic consequences of the current war in Ukraine.
New World Bank Report Says MENA Labor Markets Need Level Playing Field (World Bank)
Ensuring the private sector can gain access to markets and compete equally with government-run businesses is vital for countries across the Middle East and North Africa (MENA) to create jobs in a region with the highest youth unemployment in the world, according to a new World Bank report. The report, titled “Jobs Undone: Reshaping the Role of Governments Toward Markets and Workers in the Middle East and North Africa,” offers policy recommendations for how MENA governments can overcome continuing labor market stagnation that undermines economic development and social progress a decade after the Arab Spring uprising. Crippling joblessness, especially among MENA youth and women, requires a more prominent and vibrant private sector as well as regulatory reforms for the labor and product markets, says the flagship report.
Healing the pandemics economic scars demands prompt action (IMF Blog)
The Group of Twenty economies continue their recoveries from the pandemic, but the unprecedented shock could still leave long-lasting scars that reduce economic prospects compared with their pre-crisis trends.
Pandemic-induced losses for both economic output and employment will be significant in coming years, as discussed in our April World Economic Outlook. Emerging market economies are likely to endure greater losses because they had relatively less access to vaccines and their pandemic-support packages were smaller. For many economies, the outbreak of the war in Ukraine is adding to the challenges.
Our new analytical work finds that, among the key causes of scarring from the pandemic are the prospective weak labor market recoveries in emerging market economies and the severe disruptions to schooling over the past two years across both advanced and emerging economies. Policymakers must act promptly to repair the damage from the crisis and prevent decades of diminished economic output from lost human capital.
Aviation sees rebound to pre-Covid levels earlier than projected (Business Daily)
The aviation industry is projected to return to pre-Covid levels earlier than expected following a recovery in business and easing of Covid-19 restrictions across the world. The International Air Transport Association (IATA) says the sector could return to pre-pandemic passenger traffic levels sooner than the 2024 date that had earlier been issued. IATA chief executive officer Willie Walsh told Reuters recently that the industry could reach 2019 traffic levels by next year. Mr Walsh said the ongoing war in Ukraine, prevailing restrictions in China, high oil prices, and travel delays from staff shortages are not denting the recovery. “I don’t think we should be distracted from the fact we are seeing a strong recovery and I think that recovery will gather momentum as we go through the rest of this year into 2023,” Mr Walsh said. Early this month, IATA said with barriers to travel coming down in most places, they were seeing the long-expected surge in demand across different regions.
International Migration Review Forum (IMRF) (UNDP)
Remittances to low and middle-income countries reached an all-time high of $589 billion in 2021 -- vastly exceeding Overseas Development Assistance. Yet, we are also seeing how migrants, especially women, are suffering from increased xenophobia and discrimination. In this context, I would like to highlight 3 Key Areas to set the stage for today’s roundtable.
First, the protection of migrants starts even before they move abroad. In this context, what are the economic, social and environmental factors that force people to leave their countries? Second, we know that minimizing the adverse drivers of migration should not be the central priority of migration policies. Third, to promote inclusive societies and enhance migrants’ contribution to sustainable development, advancing social cohesion is pivotal.
G20 Empower holds women leaders’ meeting to realize gender equality (ANTARA)
The government and business parties need to encourage further implementation of policies and practices as a form of support to women-owned MSMEs to handle existing challenge
The 2nd Plenary Meeting of G20 Empower scheduled a meeting between women leaders in the private and public sector to share their experiences to realize gender equality in the work environment. “G20 Empower is an important platform for advocates to share their experiences and practices,” Women’s Empowerment and Child Protection Ministry’s official, Eko Novi Ariyanti, stated through a press statement on Tuesday evening.
I welcome the report of the Independent Evaluation Office (IEO) on IMF Engagement with Small Developing States (SDS), which finds a substantive and well-tailored Fund engagement with SDS across modalities over the last decade. I broadly agree that, going forward, the Fund’s continuous high-quality engagement—cognizant of the unique characteristics and challenges faced by SDS—should help enhance traction with this group of members. With the Fund’s agenda already well-oriented toward supporting SDS, including through new workstreams, I concur that a targeted recalibration of the Fund’s work on SDS would be the most effective at this juncture. However, the four recommendations and their detailed suggestions must be weighed against their budgetary implications, which are inconsistent with the just-approved Medium-Term Strategy and budget. The report and its recommendations should also be careful to not impinge upon areas that are still unfolding, such as the RST, crisis response, and CD provision, to avoid unnecessary duplication of efforts and ensure that a coherent and evenhanded framework is in place. I offer qualified and/or partial support to the recommendations, as discussed below, to serve better our SDS members.
Related News
tralac Daily News
Local news
5 global export bans that shook SA agriculture (Food for Mzansi)
In less than two years South Africa’s agricultural sector has been dealt a few blows by countries who are seemingly weaponising trade policy instruments and banning exports during times of uncertainty to ensure adequate domestic supply.
However, according to Wandile Sihlobo, chief economist of the Agricultural Business Chamber of South Africa (Agbiz), countries should pull the plug on taking drastic self-interested policy measures. Instead they should focus on supporting farmers to increase production and fill the gap in supplies. Since last year, there’s been at least four bans impacting global agricultural trade. The war by Russia on Ukraine has also had a direct and more severe impact on the international market.
In 2020, the likes of Vietnam and Kazakhstan banned grain export. agriculture ministers from the G7 countries however criticised the move and the bans were subsequently reversed.
In July 2021, China went as far as banning exports of fertiliser in an attempt to ensure adequate domestic supply. According to Sihlobo, “Such inward-looking policy actions often have a notable disruption on the highly interconnected global agricultural market.”
Sihlobo explained that the first significant agricultural exporter to introduce restrictions this year was Indonesia at the end of April. Indonesia temporarily banned palm oil exports.
The impact of the Russia-Ukraine invasion has had a direct and severe impact on the agricultural market. This is because both countries contribute substantial volumes of grains, oilseeds and fertiliser exports.
The most recent country, India, has followed with similar steps announcing a ban on wheat exports.
“Overall, with heightened uncertainty, the ban on exports of essential commodities should not be a preferred policy instrument, especially by major agricultural producers such as India and Indonesia, among others,” said Sihlobo.
Mombasa Port: how Kenya’s auditor-general misread China’s Standard Gauge Railway contracts (The Conversation)
In December 2018, a leaked letter from the Kenyan auditor-general’s office sparked a rumour that Kenya had staked its bustling Mombasa Port as collateral for the Chinese-financed Standard Gauge Railway. Our new research shows why the collateral rumour is wrong. The former auditor-general, Edward Ouko, was completing the 2017/18 audit of the national ports authority. He warned that the port authority’s assets – of which Mombasa Port is the most valuable – risked being taken over by China Eximbank if Kenya defaulted on the US$3.6 billion railway loans. The profitable Mombasa Port is East Africa’s main international trade gateway. Launched in 2017, the railway was intended to seamlessly link the port to Kenya’s capital, Nairobi, and landlocked countries beyond.
Farmers to get training on avocado export rules (Business Daily)
The Avocado Society of Kenya (ASOK) has started sensitising farmers on the new avocado export regulations announced by the Horticulture Crops Directorate, chief executive officer Earnest Muthomi has said. Last week, the Directorate raised the minimum solid content for export avocados from 20 and 21 percent for Fuerte and Hass varieties respectively to 24 percent in order to comply with international standards. The horticultural regulator said the changes would ensure Kenyan fruits are competitive in the global export market.
“Some farmers don’t understand what these regulations mean in terms of their earnings and we have launched an initiative to educate them on the same. We are telling them that they are not being targeted unfairly and that the regulations are for their own good,” said Mr Muthomi.
“There has been stiff competition from the world market and our farmers should know that they have to produce quality fruits. The most serious problem is that farmers are enticed by brokers to harvest immature avocados which spoil Kenya’s reputation in the international markets and we want this to stop,” he added.
Inside Uganda, Tanzania power lines deal (The East African)
Uganda and Tanzania have committed to building the 400kV Masaka-Mutukula-Kyaka-Nyakanazi-Mwanza transmission line. Uganda will sell surplus power, and Tanzania will meet its demand for electricity. During her two-day state visit to Kampala last week, Tanzanian President Samia Suluhu and her Ugandan counterpart Yoweri Museveni witnessed the signing of an inter-governmental memorandum of understanding for the development of the 400kV transmission line linking the two countries.
Officials of the Uganda Electricity Transmission Company Ltd (UETCL) said it is too early to talk about the start, cost and completion details. “The MoU has just been signed meaning there is nothing really done yet [before] there is sourcing for funding, feasibility studies and all,” said Pamela Nalwanga Byoruganda, the UETCL spokesperson. With additional generation from Karuma and other smaller hydropower plants, Uganda’s total installed capacity will increase to nearly 2000MW, up from the current 1,346.6MW, against the country’s peak demand for electricity, of 794MW, the Electricity Regulatory Authority said.
National airline vital for aviation industry AfCFTA implementation Hassan Tampuli 1539503 (GhanaWeb)
Deputy Minister for Transport Hassan Tampuli has underscored the importance of a new national airline in improving the country’s economy. According to him, the setting up of a home-based carrier will not only boost the country’s aviation industry but will also open up other avenues under the African Continental Free Trade Area.
“In terms of infrastructure, we have embarked on massive infrastructure developments to improve all our sea ports, airports and railway connectivity. Currently, two of our regional domestic airports in Kumasi and Tamale are being upgraded into international status,” Tampuli said.
Traders justify sale of counterfeit goods (The Namibian)
Joyce Paolo has been selling brands of second-hand shoes and other high-end T-shirts from Vietnam for over nine years, from her house at Walvis Bay. After eight years of looking for a place to trade formally, she was able to secure a small shop on Sam Nujoma Avenue, where she has been trading since 2020. “We buy our things from overseas and the Democratic Republic of Congo. We don’t buy the original because no one in Namibia would be able to afford a pair of US$500 shoes from the real Nike shop. There is first hand and second hand, and we buy second hand which is affordable for our people,” she said.
“The only problem we encountered at the borders is when we import more than 20 pairs of shoes. This is not ideal because we have customers who have paid for their orders,” said Paolo. Walvis Bay community activist Knowledge Ipinge attributes corruption, bribery, poor intellectual property legislation and weak enforcement to what he terms favourable conditions for counterfeiting. He believes the country urgently needs a copyright bill.
Low prices, market access brew storm for EA tea industry (The East African)
East Africa’s tea sector is threatened by underperformance as its two key markets – Russia and Ukraine – remain closed. Observers worry that besides dealers not fully harnessing the quality of tea produced in the region, they are now going slow on production fearing it would lead to a glut that would push down prices that have been recovering after a pandemic slump. Rwanda’s tea prices at the Mombasa auction continued to fetch premium prices, having been on a recovery trajectory from $2.94 per kilogramme in 2021 to $3/kg in January 2022, and heading towards pre-pandemic prices of $3.05/kg of January 2020.Rwanda has grown its exports to 35.2 million kilogrammes a year.
But Mr Iruta says Rwanda’s key markets are not fully opened and now the Russian invasion of Ukraine threatens further logistical disruptions as both countries are some of the biggest consumers of tea.
Egypt records 29.4% decrease in trade deficit during February 2022 (Daily News Egypt)
Egypt recorded a trade deficit of $2.7bn in February 2022, down from February 2021’s $3.82bn — a decrease of 29.4% — according to the Central Agency for Public Mobilisation and Statistics’ (CAPMAS) monthly bulletin for foreign trade. However, the value of exports Increased by 41%, bringing in $4.12bn, up from $2.92bn. This is due to an increase in the value of some commodities such as other articles of textile materials by 76.8%, potatoes by 56.8%, Ready-made clothes by 19.5%, and fertilisers by 11.6%. Meanwhile, the value of some exported commodities decreased, including fresh oranges by 31%, miscellaneous edible preparations by 11.7%, dairy products by 6%, and carpets and Kelem by 4.3%.
Minister: Egypt Launches Initiative with African Union to support Transformation in Energy Sector (Sada El balad)
Eng. Tarek El Molla, Minister of Petroleum and Mineral Resources, participated in the meeting organized by the American Chamber of Commerce in Cairo with the delegation of American institutions working in the field of green energy investment (Greentech), who is currently visiting Egypt.
The Egyptian minister added that after passing that stage, Egypt adopted the use of natural gas, the cleaner fossil fuel as a transitional fuel towards the energy transition and the expansion of its uses of hydrocarbon until the percentage of its use reached 65% compared to 35% for other hydrocarbon sources. 167 duplicates removed
Under Secretary Fernandez Visits Zambia, Strengthens U.S.-Zambia Economic Partnership (U.S. Embassy in Zambia)
During his May 12-13 visit to Zambia, Under Secretary for Economic Growth, Energy, and the Environment Jose W. Fernandez met His Excellency President Hakainde Hichilema to discuss opportunities to enhance bilateral trade and investment, and support for Zambia’s economic recovery agenda and debt restructuring efforts. The Under Secretary and President Hichilema also discussed the importance of building stronger people-to-people ties to promote inclusive economic growth and prosperity. Under Secretary Fernandez visited one of Zambia’s largest mining operations and spoke to industry experts about how the United States can help promote efforts to build robust and responsible critical mineral supply chains.
Morocco, Spain reopen land borders after two-year COVID-19 closure (Al Arabiya English)
Morocco and Spain have reopened the land borders between the north African country and the Spanish enclaves of Ceuta and Melilla, two years after they were shut due to COVID-19 restrictions and a major diplomatic row. The enclaves on the Mediterranean coast in northern Morocco have the European Union’s only land borders with Africa.
At the Fnideq border post, smiles lit up the faces of the travelers crossing to see their families on the Moroccan side. The local economies on both sides of the borders depend on the crossing of people and goods.
African trade news
New tool to measure ease of inter-Africa trade launched (The New Times)
The Economic Commission for Africa (ECA) on Sunday, May 15, launched the first-ever comprehensive tool that measures how easy, or hard, it is to do business between African countries. The AfCFTA Country Business Index (ACBI) has three key objectives including assessing the perceived impact of the African Continental Free Trade Area on the private sector’s ability to trade and invest across African borders once the Area is operational.
“It will be used to identify key challenges that the private sector faces in its cross-border activities,” Stephen Karingi, Director of the Regional Integration and Trade Division of UNECA said.
AfCFTA risks losing its vision without good logistics – Krapa (BusinessGhana)
African countries have been asked to expand their logistics and transportation networks in order to keep the African Continental Free Trade Area (AfCFTA)’s goal alive, or risk losing its benefit. Member countries should enhance their regional value chains and build an efficient transportation system across the continent, a Deputy Minister for Trade and Industries, Herbert Krapa, has said. He called on African countries to build links that improve their abilities and capacities to feed industry in a sustainable manner, while speaking at the Chartered Institute of Logistics and Transports (CILT) African forum.
Report: Global Pandemic Increased Poverty in Africa (VOA Africa)
The global pandemic has pushed more than 55 million Africans into extreme poverty and reversed two decades of hard work in poverty reduction on the continent. The Economic Report on Africa for 2021 blamed the growing poverty on job losses, reduced income and the inability of households to manage the risks In a 150-page report launched in Dakar, Senegal, the United Nations Economic Commission for Africa said the coronavirus negatively impacted the continent’s economy.
Hanan Morsy, deputy executive secretary of the commission, said the pandemic eliminated 20 years’ worth of achievements made in fighting poverty. “The implication for the continent, one of the most critical implications of COVID-19, has been the reversal of very hard-won gains that the continent has managed to achieve in terms of reducing poverty,” she said. “So, we’ve lost two decades of hard-won gains of reducing poverty in Africa due to the pandemic.”
The economic decline caused by the lockdowns and the restrictions on people and the movement of goods has increased the number of newly poor on the continent by 55 million people and pushed 39 million others into extreme poverty.
Trading Aims: The Value of Africa’s Deep Integration Trade Agreement (EUBULLETIN)
Trade and investment relations with Africa are increasingly important to the European Union’s strategic goals. Given their geographic proximity and historical ties, the EU and Africa should both seek to build the foundations of comprehensive and mutually beneficial economic cooperation – as this would have economic and political benefits in everything from job creation, migration, and security to the green and digital transitions. The EU should engage in such cooperation: it is Africa’s most important trading partner, accounting for around one-third of African trade, and is a vital source of foreign direct investment (FDI) on the continent. Nonetheless, players such as China and Russia have an increasing influence on the African commercial landscape, and could weaken the position of the EU as Africa’s leading economic and political partner.
In this context, EU policymakers should view the recent creation of an Africa-wide market under the African Continental Free Trade Area (AfCFTA) as an opportunity to consolidate and strengthen commercial and geopolitical ties with Africa.
A renegotiation of current multilateral system needed to boost Africa’s recovery and growth (UNECA)
President Macky Sall of Senegal has called on Africa’s development partners to agree to a renegotiation of the terms of the current multilateral system in light of shocks dealt to the global economy by the COVID-19 pandemic and the war between Russia and Ukraine.
Cameroon: COBAC Bans Cryptocurrency In Cemac zone (Journalducameroun.com)
The sub-regional institutions continue to ban cryptocurrencies as a means of payment in the countries of the Economic and Monetary Community of Central Africa (CEMAC). Meeting on 6 May 2022 during an extraordinary session, it was the Banking Commission of Central Africa COBAC that categorically rejected any use of cryptocurrencies in financial transactions in the region. Cryptocurrencies are now banned in the Cemac zone (Cameroon, Central African Republic, Congo, Gabon, Equatorial Guinea). This decision results from the will of the Cobac to “guarantee financial stability and preserve customer deposits”. As a result, the COBAC prohibits any operation related to crypto-assets. It concerns “the subscription or holding of crypto-currencies of any kind for own account or for third parties”, says the financial institution. The ban also applies to “the exchange or conversion, settlement or hedging in currency or CFA franc of transactions relating to crypto-currencies”.
Cobac’s decision comes after bitcoin was formalised as a legal currency in the Central African Republic on 27 April 2022. The CAR becomes the 2nd country in the world after Salvador to grant this status to the virtual currency. In Cameroon, proposals have been made to regulate the use of cryptocurrency. But so far, there is no regulation in this area.
Digitalisation: Helping African businesses rise (The New Times)
There is strong potential for robust, sustained, and inclusive economic growth in Africa, and it is being fuelled by accelerated adoption of digitalisation. As Africa continues its transition to a digital economy, new technologies are positively disrupting sectors such as agriculture, manufacturing, financial services, urban development, transport, and logistics, resulting in the creation of new products, services, and jobs. The continent is also starting to see an increase in investment, the opening up of new markets, improved efficiencies — particularly within the supply chain — and cost savings across businesses.
Digital innovation has given rise to new goods and services, created opportunities for new business models and markets and has the ability to drive efficiencies in both the public and private sectors. Digitalisation is an enabler of e-commerce and provides many benefits to small and medium-sized enterprises (SMEs) and can help them integrate more easily into global markets. It can contribute to convergence of e-payment platforms, reduce transactions costs by providing quicker access to information, enable better tracking and management of logistics, and can provide advanced warning of potential delays or other issues to traders. It can also facilitate access to resources such as finance through peer-to-peer lending, and training.
According to the United Nations Conference on Trade and Development (UNCTAD) Economic Development Report for Africa (2021), thirty-four percent (34%) of African households are poor, living in some of the world’s most unequal societies with a regional Gini index of 0.40. Several African Union (AU) Member States have yet to develop efficient ways to support long-term growth and raise living conditions for most citizens who remain impoverished. The present rise of the 4th Industrial Revolution (4IR) holds immense potential for improving Africa’s sustainable development trajectory by creating more employment opportunities and promoting a level of entrepreneurship that reduce poverty.
Investing in Science, Innovation, and Technology (STI) is critical for Africa to achieve both Agenda 2063 and the 2030 Agenda for sustainable development. Research and innovation aim to boost the continent’s socio-economic development in the current knowledge-based and innovation led-economy. STI is a prerequisite for moving forward with the implementation of frameworks like the Science, Technology, and Innovation Strategies for Africa (STISA-2024) and the African Continental Free Trade Area (AfCFTA) which promote the attainment of both continental and global development goals. STISA-2024 supports a target pledged in the Lagos Plan of Action of 1980 requiring all AU member States spend at least 1% of their GDP on research to include national science, technology commissions, councils, and research institutions across African to keep up with the changing digital 4IR environment.
Despite the potentiality of the 4th Industrial Revolution, Africa appears to be lagging compared to other continents despite its wealthy youthful population and natural endowments. Fostering an innovation-driven and knowledge-based economy in Africa will be entirely dependent on how member States develop science and technology and innovation policies based on evidence.
Digital Earth Africa to deliver robust data infrastructure for the continent (UNECA)
Digital Earth Africa is steadfastly becoming the “connecting-the-dots” part of Africa’s efforts to harness information resources for the society and knowledge-led economy, says Oliver Chinganya, Director, Africa Centre for Statistics at the Economic Commission for Africa (ECA).
Positive impacts recorded in collaborative efforts between UN system and Africa (UNECA)
Opportunity and issues-based coalitions formed between entities under the UN umbrella on one hand, and the African Union (AU) and African countries on the other, were able to record significant successes over the last year.
ECA, Senegal share ideas on improving access to financing for Women and Youth in Africa (UNECA)
United Nations Economic Commission for Africa (ECA), through its Sub-regional Offices for North Africa and West Africa and the Institute for Economic and Development Planning (IDEP), in collaboration with the Government of Senegal, discussed on Saturday Innovative financing small and medium-sized enterprises for resilient recovery in Africa: a gender and youth perspective.
Call to Utilize COMESA Court Services (COMESA)
Zambia’s Attorney General, Mr. Mulilo Kabesha has urged businesspeople in the region to utilize the COMESA Court of Justice for arbitration of disputes. Addressing judges of the Court during their one-week annual retreat in Lusaka, Zambia, Mr. Kabesha observed that trade disputes are taken to other courts based in far flung areas, such as United Kingdom instead of using the COMESA Court which offers affordable services to aggrieved parties. He called for robust sensitization campaigns about the Court’s services in the region.
Egypt Calls for African Coordination Meeting Ahead of COP-27 (Ashraq Al-awsat)
Egypt on Sunday urged the African states to hold a meeting to coordinate the continent’s stances in preparation for the COP27 Climate Summit, which it will host in Sharm el-Sheikh next November. During a workshop held by Morocco via videoconference on “The challenges of mobilizing capital markets to finance the transition to a sustainable energy market,” Egyptian Ambassador to Ethiopia and the African Union Mohamed Omar Gad said Cairo invited the African states to hold the consultative session on the issues related to climate and energy before the Climate Summit. The workshop in Morocco comes on the sidelines of a conference for African ministers of finance, planning, and economic development, which will kick off Monday in the Senegalese capital, Dakar.
Egypt is seeking to increase its dependence on renewable energy from 18 percent to 45 percent by 2025, according to Gad, who urged the African states to focus on achieving just transition to renewable energy and providing sustainable energy to the green energy projects in Africa in addition to following up the implementation of commitments which Africa received in previous climate summits.
Africa Fintech Summit Washington D.C. 2022 — Where African and Global Fintech Stakeholders Met in April (Business Insider Africa)
Like every April edition before it, #AFTSDC2022 was scheduled to hold during the World Bank/IFC Spring meeting. This presented the summit with the opportunity to host fintech leaders already in town for the World Bank event alongside attendees billed to be at the fintech summit.
Further, the U.S.-Africa investment relationship meant that a summit in D.C. would connect African entrepreneurs with some of the U.S. investors responsible for 62% of the top twenty investment deals in Africa in 2021.
The main event kicked off with a keynote address by Deniece Laurent-Mantey, Director for Africa, White House Security Council. In keeping with the event’s theme centered around growth and expansion trends in Africa’s fintech industry, Ms. Laurent-Mantey touched on the potential for Africa’s technology industry to thrive in the coming years. In her words, this potential is limitless because “we are in the midst of an unprecedented revolution in the digital technology - one which is impacting every sector of the economy and social life, bringing people and nations closer together, and making the world a true global village.”
Following Ms. Laurent-Mantey’s keynote, various panel sessions took the better part of the day. There were 16 insights-driven sessions focused on fintech hotspots, including embedded finance, investment trends in the industry, web3 and cryptocurrency, diaspora banking and remittances, fintech regulatory best practices, the future of banking, and more.
Global economy news
How digital multinationals are transforming global trade and investment (UNCTAD)
The international production footprint of digital multinational enterprises (MNEs), which was already expanding, has grown even faster during the COVID-19 pandemic. UNCTAD’s Global Investment Trends Monitor published on 27 April unveils new rankings of the top 100 digital MNEs, whose total sales were almost 160% higher in 2021 than in 2016, with an average increase of 21% per year.
Their net income grew by over 60% between 2020 and 2021, in contrast to a flat trend for the traditional top 100 MNEs, excluding those in the technology sector. The top 100 digital MNEs include leading players such as Uber, Twitter and Meta. The report also looks at the impact of the world’s largest digital MNEs on trade and investment. “Digital MNEs can provide a boost to competitiveness across all sectors, new opportunities for business and entrepreneurial activity and new avenues for market access and participation in global value chains,” said James Zhan, UNCTAD’s director of investment and enterprise development.
How digitalization of industries can empower humanity (WEF)
5G can play a pivotal role in transforming industries to be more flexible, productive and sustainable. But the digital evolution will also affect human work – it will create new roles that do not exist today while making working environments safer, smarter and more creative. We should not see automation and digital transformation as a way to replace humans; it is about bringing out the best in humans, in collaboration with machines and algorithms.
DG receives letter from environmental groups seeking global deal on fishing subsidies (WTO)
“The negotiations are at a very critical juncture, as we are just four weeks away from our 12th Ministerial Conference. This is the moment our members cannot afford to miss,” DG Okonjo-Iweala said after receiving the letter addressed to the full WTO membership. “I therefore welcome your letter and your hard work in support of a successful conclusion of the negotiations,” she said. “Your call is an encouragement to deliver on UN SDG 14.6 and the tangible contribution the trading system can make to stop overfishing and help protecting marine life. The fish and the people that live from fish will be very happy.”
DG Okonjo-Iweala calls on LDCs to focus on most pressing priorities for MC12 (WTO)
Briefing ambassadors on the progress made in trade negotiations, DG Okonjo-Iweala said: “A successful MC12 is a necessary step in the long haul towards making the WTO fit for purpose for the 21st century. Delivering results will create a new dynamic for future discussions.” The Director-General talked about the response to the COVID-19 pandemic, agricultural reforms and fisheries subsidies.
Discussions also focused on how to strengthen the WTO to make it more responsive to the needs of LDCs. “As we prepare ourselves for the busy weeks ahead, let us all remember that the WTO is about people — about using trade as a tool to raise living standards, create jobs, and promote sustainable development. So, let’s redouble our efforts, let’s deliver results and let’s reinvigorate the WTO,” DG Okonjo-Iweala said.
UK development strategy panned as ‘aid for trade,’ missed opportunity (Devex)
Many hoped that FCDO’s much-awaited development strategy would provide direction to the United Kingdom’s international policy. But the document is not everything that observers would have liked it to be.
Davos 2022 convenes at a crucial time for Africa (African Business)
The World Economic Forum’s 2022 meeting in Davos, taking place in person for the first time since 2020, has come as a welcome, and timely respite as the world seems to be lurching into yet another crisis, with the war in Ukraine showing little signs of coming to an end. Appropriately, the theme for Davos 2022 is “Working Together, Restoring Trust”. We can only hope that the collective diplomatic skills of the organisation, honed over the decades, will encourage global political, social and business leaders to step back for a while from their own domestic concerns and take a clear and hard look at the state of the world today. In this report we focus on the issues facing Africa as the Forum takes place.
Will Proposed COVID-19 TRIPS Waiver Help Patients or Harm Innovation? (Biospace)
Changes to the World Trade Organization’s compulsory licensing regulations are coming for COVID-19 vaccines. Those changes are unlikely to help people in developing countries but could reduce innovation among biopharma companies and ultimately do more harm than good. A draft of the changes proposed to Article 31 of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreements states that WTO member nations: Needn’t contact the patent holder to try to gain authorization to use the patent Can invoke compulsory licensing by multiple means, including executive orders, emergency decrees, government use authorizations and judicial and administrative orders Can export any amount of the product The proposed TRIPS waiver is for COVID-19 vaccines – not just mRNA vaccines. As of March 16, 2022, nine vaccines have emergency use listings, according to the World Health Organization.
”The developing world needs more COVID-19 vaccination and more doses, but the WTO is applying the wrong Band-Aid. This is not an intellectual property issue,” Jürgen Schneider, co-chair of the intellectual property group of BIO Deutschland and VP, head of global IP and licensing at Qiagen, told BioSpace.
Related News
tralac Daily News
Local news
Investing in African Mining Indaba (Mail & Guardian)
The local mining industry is thriving, but infrastructure needs to be improved and changes need to be made for the sector to reach its true potential. This was the message from President Cyril Ramaphosa, who addressed attendees on the second morning of the Investing in African Mining Indaba 2022. “Across the world, most industries have had to adapt to new circumstances, confront new challenges and also prepare to seize new opportunities,” he said. The mining sector in Africa is no exception. Couple this with the benefits and potential risks of rapid technological change, shifts in demand, stresses caused by climate change, as well as massive geopolitical uncertainty, and the industry has a fair amount of work to do to develop and grow.
Diversifying the country’s energy mix demands that the government puts legislation in place to support renewables, minimise the effects of climate change and boost investment in sustainable energy supplies such as wind and solar, he said. In this forward march towards a low carbon future, the president stressed that the country’s efforts have to be both realistic, sustainable and don’t leave anyone behind. “As our reliance on coal reduces over time, it is critical that we create pathways towards new economic activity for affected workers, communities and industries.”
“South Africa plans to focus on future strategic metals like copper, nickel and cobalt. And, as a global leader in platinum group metals, South Africa is perfectly positioned to take advantage of the massive growth in demand for these resources.” The country can also play a key role in the hydrogen economy, and there are plans for it to be an important hub for the production and export of green hydrogen.
But this doesn’t mean that the mining industry should simply say goodbye to many of the minerals that have been the sector’s bread and butter for decades, he cautioned, stressing that the continent should rather protect and preserve its valuable natural resources. “As a continent with such a rich abundance of mineral resources, Africa needs to beneficiate its mineral endowments for the benefit of current and future generations.”
South African wineries set eyes on exploring massive Chinese market (Global Times)
“As a fast-growing market, China can’t be neglected by any winery,” Henriëtte Jacobs, the international sales manager of Spier Wine Farm, told the Global Times, adding that the company’s exports to China have continued to grow exponentially during the recent years, and the Chinese market is becoming one of the company’s most important strategic markets. Jacobs’ remark speaks for multiple wineries from South Africa, who have been adopting various strategies and tactics in a bid to get a slice of the emerging Chinese market.
The exports of Australian wine plunged by 95 percent at the end of 2020 after China imposed anti-dumping measures on the country’s wine exports, causing Australia to forfeit its leading position for wine imports in the massive Chinese market. Industry insiders noted that this could be a potential opportunity for South African wines.
Ford added that China and South Africa are important economies in Asia and Africa with very warm trade relations, while the quality of South African wine enjoys acclaimed reputation in the Chinese market. He hoped that more Chinese consumers will be able to appreciate the unique and high-quality South African wine in the future.
SA facing a sugar shortage with mills unable to meet demand (IOL)
South Africa is facing a shortage of sugar, the new “white gold”, with local mills unable to meet the local demand, Chris Engelbrecht, the chairperson of the Association of Southern Africa Sugar Importers (Asasi), warned. This is a further blow to South Africans, who are facing soaring food prices, exacerbated by supply chain woes due to the war in Ukraine, which has seen countries banning the export of key crops such as palm oil in the face of rampant inflation.
Kenyans urged to tap their potential in online trading (Capital Business)
Kenyans have been urged to tap on their high knowledge levels in online trading to gain maximum benefits from both local and global markets. Speaking to Capital Business, Scope Markets Chief Markets Analyst, James Hughes noted that in his over 20 years experience in the trading industry the Kenyan market base knowledge level in markets is quite high. “The Kenyan retail market is one of the best for us globally with higher knowledge levels than even the United Kingdom for beginners,” he said. Hughes noted that Kenya’s great potential can be seen with the number of licensed online forex traders setting up in the country.
He further noted that the pandemic which saw many people stay at home created a huge appetite for the online trading.
Manufacturers protest new KRA fuel, beer tax powers (Business Daily)
Manufacturers want the proposed powers to exempt excisable goods like fuel, beer and bottled water from annual price raises due to inflation to be taken away from Kenya Revenue Authority to the lawmakers, citing conflict of interest. The Kenya Association of Manufacturers (KAM) in a memorandum to the National Assembly argues the Public Finance Act gives Treasury secretary Ukur Yatani the power to waive taxes with no legal provision to transfer them to KRA Commissioner-General Githii Mburu. The amendments to Excise Duty Act, through the Finance Bill 2022, empowers Mr Mburu to exclude some products from annual inflation tax adjustment based on prevailing economic conditions. “We propose that the power to exempt specific products from inflation adjustment be granted to the National Assembly instead [of KRA Commissioner-General],” KAM’s outgoing chief executive Phyllis Wakiaga wrote in the memorandum on the Finance Bill before the august House.
Kenya’s tax agency works to resolve LPG trucks snarl-up at Namanga (The East African)
The Kenya Revenue Authority has refuted claims that the snarl-up of trucks at the Kenya-Tanzania border town of Namanga is due to an increment of taxes on liquid petroleum gas (LPG), even as the agency as seeks to hasten the resolution of the impasse. The taxman said on Wednesday that the LPG tax was reintroduced by the Kenyan government in July 2021, after being zero-rated in 2016, but had not been increased. Some importers were, however, undervaluing their LPG products to evade tax and have since been issued with notices to comply after which their trucks will be cleared from the border post, KRA said in a statement. “It is also significant to note that the LPG products in question are not sourced from the East African Community Partner States as reported,” read the statement signed by KRA’s Deputy Commissioner for Customs Revenue and Regional Coordination. The tax impasse at the Namanga border post has caused a build-up of transit trucks, some destined for as far as South Sudan. Some of the LPG trucks have reportedly started leaking, endangering the safety of the drivers, residents, and workers in the area.
KRA said it is aware of the inconvenience and security risks caused by the LPG trucks, adding that it is working with the affected importers to resolve the issue.
Kenya moves to secure duty-free trade deal with EU after stalled EPAs talks (The East African)
Kenya has put in place temporary measures for its exports to the European Union after the implementation of a duty free-quota free trade agreement with other EAC member states stalled. Classified as a lower middle income economy by the World Bank, Kenya aims to protect its trade interests with the EU after Tanzania, Uganda and Burundi declined to sign the Economic Partnership Agreement (EPA) citing various economic and political interests. The agreement, whose negotiations were concluded on October 16, 2014, provides for duty free-quota free access for Kenyan and EAC products to the EU market.
“We have the highest decision making organ called the Summit. For the past five years, the Summit has given guidance on the application of the principle of Variable Geometry, which allows trading partners to make certain progress as long as there is concurrence that the others can catch up later,” Johnson Weru, Kenya’s Principal Secretary in the ministry of Trade and Industry, told The EastAfrican last week.
Although Kenya has signed and ratified the agreement, the pact requires all countries to sign and ratify it as a bloc for it to take effect. Uganda, Rwanda, Burundi and Tanzania, which are considered Least Developed Countries, enjoy a preferential trade arrangement with the EU under the Everything but Arms arrangement.
Kenya to import maize outside EAC as flour hits historic high (Business Daily)
Kenya plans to allow maize imports from outside the East African Community to mitigate the current spike in flour prices now at a historic high of Sh150 for a two-kilo packet. Agriculture Cabinet secretary Peter Munya said the imports, which are expected to give consumers a reprieve, will also force farmers hoarding their produce to release it to the market. He said the decision on when the imports would start and volumes to be shipped in would be made in the next couple of days with the consignment expected to arrive in 45 days from the date that the orders would be made. “We are going to run out of maize in the next few months and to control the rising cost of flour, we need to import the produce,” said Mr Munya. This will be the first maize imports from outside of the EAC bloc since 2017.
Besides China, Kenya has other big market options in the East (The Standard)
For the last forty years, China has been getting all the airtime in East Asia. Ever since opening up to the rest of the world in 1978, the country has been a swirling vortex sucking in foreign investors. But unlike a black hole where nothing escapes, China’s exports move all over the world. Did you see the recently released first-ever picture of a black hole? China quickly relaxed its image as a communist state and is now better known for unprecedented economic growth, as the workshop of the world and more recently as the epicentre of the deadly Covid-19. Intoxicated by China, we have forgotten that the East is much more than China. Beyond its popular locations such as the forbidden city, Beijing and Shanghai lie other East Asia countries. Three stand out; the Philippines, Indonesia and Vietnam.
Nigeria’s Foreign Trade Jumps to N11.7trn in Q4 2021 (Business Post Nigeria)
Data on foreign trade revealed that in the last quarter of 2021, Nigeria’s foreign trade stood at N11.7 trillion, 74.7 per cent higher than the value recorded in the same period of 2020. According to the National Bureau of Statistics (NBS) in its Statistics Quarterly Report released in Abuja over the weekend, export trade in Q4 of 2021 stood at N5.77 trillion, 12.27 per cent higher than the preceding quarter and the value in 2021 also grew by 80.52 per cent over the corresponding period of 2020. On the other hand, total imports stood at N5.94 trillion in Q4, 2021, indicating an increase of 11.33 per cent over the preceding quarter and 69.41 per cent over the corresponding period of 2020.
“Export trade by region in Q4 of 2021 shows that Nigeria exported most products to Europe with goods valued at N2,408.39 billion or 41.76 per cent of total exports. “Asia was N1,875.56 billion, or 32.52 per cent of total exports and Africa was N773.83 billion or 13.42 per cent of total exports, of which N250.52 billion worth of goods were exported to ECOWAS countries.
The report revealed that during Q4 of 2021, Nigeria imported goods mainly from Asia, valued at N2,743.76 billion or 46.19 per cent of total imports. “This was followed by Europe at N2,422.41 billion or 40.78 per cent, America at N571.70 billion or 9.62 per cent, Africa at N161.47 billion or 2.72 per cent and Oceania at N41.24 billion or 0.69 per cent.”
FG approves N375bn expansion grant for non-oil export exporters (Businessday)
The Federal Executive Council has approved the sum of N375bn export expansion grant (EEG) to boost non-oil export. Ezra Yakusak, executive director/CEO, of the Nigeria Export Promotion Council (NEPC), who disclosed this during the second edition of the Export4Survival walk at the weekend in Abuja, said about 285 exporters who applied for the EEG will benefit from the fund. According to Yakusak, the approval also means that the backlog from 2006 till date has been cleared and “exporters should expect the N375 billion approved by FEC. Right now, it would be taken to the national assembly for assent.”
In addition to the grant, the executive director informed that the NEPC will introduce some initiatives to also encourage non-oil export. He informed that the commission is about to set up a project called ‘exporters handholding’ aimed at conducting physical training for new non-oil exporters, who newly registered with no knowledge about export. “We are going to match-make them with exporters to train them on the physical aspect of non-oil export; the rudiments, the procedures, to ensure that they export,” he added.
Port development: NPA to revoke concession agreement of 5 terminal operators (The Sun Nigeria)
The Nigerian Ports Authority (NPA) over the weekend has threatened to revoke the concession agreement of five terminal operators over a lack of commitment towards the development of the port terminals they operate in, even as the ports are collapsing. According to the Managing Director of the NPA, Mr. Mohammed Bello-Koko, five terminal operators are being monitored to ensure they do the right things as regards their commitment and obligations under the Port Concession agreement.
Nigeria Spends 86% Of Revenue On Debt Servicing (Economic Confidential)
Nigeria spent 86 per cent of its revenue on servicing debt in 2021, but South Africa spent only 20 per cent of its receipts on the same purpose.
According to the International Monetary Fund’s 2021 Article IV estimates, Africa’s most populous nation spent 85.5 per cent of its revenue on servicing the debt in 2021. On the other hand, South Africa’s budget office, situated in the National Treasury, estimated its debt service-to-revenue in 2021 at 20 per cent, explaining that for every five rand raised by the government, only one rand was spent on servicing debt. Nigeria’s total debt by end of December 2021 was only 30 per cent of South Africa’s debt, yet the former’s debt service appears too expensive, according to analysts. Nigeria’s total debt as at December 2021 was $94.166bn, according to the Debt Management Office, but South Africa’s total debt at the same period was $261bn, according to the country’s National Treasury and Bloomberg.
Nigeria is the continent’s largest economy. Latest estimates by the National Bureau of Statistics put the nation’s economic size at $420bn. On the other hand, South Africa is second largest economy on the continent with an estimated size of $320bn.
Central African Republic Economic Memorandum: Paving the way out of fragility for a brighter future (World Bank)
The Central African Republic (CAR) is at a critical crossroads. Despite its significant natural resources’ wealth, it remains one of the poorest and most fragile countries in the world. Cycles of political instability and a heavy reliance on natural resources have left the economy poorly diversified and with a small private sector. Almost a decade after the 2013 civil war, the country remains caught in a fragility trap, facing episodes of renewed insecurity and a substantial state-citizen divide. Supported by the 2015 peaceful transition of power, the authorities implemented several reform programs that helped restore macroeconomic stability and steered the economy on to a relatively sustainable path to recovery over 2015–2019.However, the pace of growth has been below that of other countries in the region that have had civil wars and been threatened by overlapping crises since 2020This Country Economic Memorandum (CEM) aims to support policymakers and stakeholders in their efforts to pave the way out of fragility through accelerated and inclusive economic growth through four chapters providing:
Somalia govt requests three-month extension of IMF facility to August 17 (The East African)
The Somalia government has asked the International Monetary Fund to delay its cut-off deadline on a key credit facility after the country failed to conduct elections on time. Finance Minister Abdirahman Duale Beileh and Governor of the Somali Central Bank Abdirahman Mohamed Abdullahi asked the IMF to extend the deadline by three months to August 17.
On March 25, 2020, Somalia was granted the ECF, which the IMF Board routinely approves for countries with protracted balance of payments problems. It is meant to support low-income countries, especially those emerging from conflict but are heavily indebted. The programme was part of the Heavily Indebted Poor Countries (HIPC) Initiative, which would cut the country’s debt to $557 million from $5.2 billion, as long as it completed certain reforms including taming corruption, raising local revenues and passing laws on good governance.
African trade
The Agreement Establishing the African Continental Free Trade Area officially became operational in 2021, making it the cornerstone of trade integration in Africa. The objectives of the Area are to create a single, continent-wide market and to enhance competitiveness at the enterprise level. The African Continental Free Trade Area Country Business Index is the first comprehensive tool based on a robust methodological framework in which data are collected in a way that allows businesses to express their views on implementation of the Area. Following the launch of the Index in 2018, the Economic Commission for Africa began piloting and refining it as a tool to measure and compare the views of businesses across Africa on implementation of the Area. The figure below shows the countries selected for the three phases of the pilot study. After phase 1, which was conducted in Cameroon and Zambia, the methodology was refined and surveys were conducted in seven more countries: Angola, Côte d’Ivoire, Gabon, Kenya, Namibia, Nigeria and South Africa. The present report includes results from this second phase of the roll-out. In the third phase, the Index will be rolled out in the Democratic Republic of the Congo, Egypt, Morocco, Rwanda, Senegal and Tunisia.
The disruptions caused by the COVID-19 pandemic pushed an estimated 55 million Africans into extreme poverty in 2020 and reversed more than two decades of progress in poverty reduction on the continent. This is according to the Economic Report on Africa 2021 (ERA2021) launched today on the margins of the Economic Commission for Africa’s annual Conference of Ministers of Finance, Economic Planning and Development (CoM2022) in Dakar, Senegal.
At CoM2022, experts address effects of Russia-Ukraine crisis on Africa
Commodities coming into African ports have little or no visibility (Logistics Update Africa)
The last week of April saw the Lagos-headquartered OnePort 365 raking in $5 million through its seed funding. The funds will be channelled to fuel OnePort 365’s plans to drive the end-to-end digitisation of freight management in Africa and support expansion into new markets across the continent. In OnePort 365’s own words, the company works to “leverage technology to drive your supply chain and business objectives.”
“What comes along with the expansion of e-commerce is a growing demand for distribution and warehouse management services. The service providers with a well-established local network will be particularly in need of facilitating last-mile delivery, which also provides local e-commerce marketplaces and retailers certain advantages in comparison with international e-commerce players. Furthermore, the expansion of the e-commerce market, especially cross-border e-commerce, can transform some areas into regional distribution hubs”
Citing a World Bank report, Upply comments, “According to World Bank’s analysis, the AfCFTA will boost intra-continental exports by over 81% and exports with non-African countries by 19% by 2035. In terms of sectors, manufacturing exports are anticipated to make the most gains: a 110% increase for intra-African trade and 46% for non-African trade. In contrast, service trade is envisaged to have the most modest rise (14% of intra-African trade).”
As for the digital enablement, an African Union report entitled, pdf The Digital Transformation Strategy for Africa (2020-2030) (1.80 MB) , expresses optimism when it comes to Africa’s digital era, “Africa presents a sea of economic opportunities in virtually every sector.”
The biggest challenge in Africa in terms of air cargo is connectivity (Logistics Update Africa)
Swissport Kenya’s CEO, Racheal Ndegwa speaks with Zinal Dedhia of Logistics Update Africa.
Q: I would like you to briefly talk about the air cargo market in East Africa, particularly Kenya
A: Africa’s air freight market contributes 1.9% of the world’s air freight traffic, according to the IATA 2021 statistics. For me, this percentage represents a great opportunity for growth of Swissport in Kenya and beyond. I believe the challenge we are facing in Africa in terms of air freight is connectivity – we must increase intra Africa traffic to allow more efficient and fluent air transport. With the launch of African Continental Free Trade Area (AfCFTA) and new trade flows that have emerged since the onset of the pandemic (eCommerce, PPE movement, vaccines), Africa is primed for a “very high level of growth” within the coming years. This will enable the intra African markets to develop, as currently only about 30% of the continent’s trade is accomplished internally. The enhanced trade will have a positive impact on all industries, including aviation and specifically air cargo.
ICCI for focusing on Africa to promote trade and exports (The Nation)
Muhammad Shakeel Munir, President, Islamabad Chamber of Commerce and Industry (ICCI) said that Africa is a huge market, which still remains untapped and urged the government to focus on African countries to boost its trade and exports. He said this while exchanging views with the Deputy Head of Missions of Morocco, South Africa and Nigeria during their visit to ICCI. Muhammad Shakeel Munir said that Pakistan has formulated the ‘Look Africa Policy’ which should be fully implemented to improve trade relations with African region.
He said that Pakistan has good potential to export many products to Africa including rice, engineering goods, electrical appliances, textiles, apparel, pharmaceuticals, sports goods, surgical instruments, cutlery, furniture and many more. He said that Pakistan can import many products from African countries that offer competitive advantage for import.
Ghanaian Finance Minister Ken Ofori-Atta on Thursday emphasized the nation’s partnership with the African Development Bank in its development as he addressed journalists at a press conference to publicize the institution’s upcoming annual meetings. Ofori-Atta described the meetings as seminal, in the context of a world seeking to rebalance in the wake of Covid-19 and the war in Ukraine. “The hosting is long overdue. Forty-one African economies are severely exposed to at least three concurrent crises – rising food prices, rising energy prices and tightening financial conditions – what finance ministers now call the dreaded three f’s,” Ofori-Atta said. Throughout Africa food prices are currently around 34% higher, crude oil prices 60 % and global inflation is affecting all countries, the minister said, with inflation in Ghana standing at around 23.6%.
“The newly poor in Africa has increased by 55 million and approximately 35 million formal jobs are at risk,” the minister said. “This toxic mix of challenges exist even as we try to recover from the Covid-19 pandemic.”
ICPC boss seek global action against illicit financial flows (Daily Sun)
The Chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), Prof. Bolaji Owasanoyejj, has rallied a global action against Illicit Financial Flows (IFF), including a call for a global framework on IFFs similar to corruption. Owasanoye made this call at a side event of the ongoing hybrid 54th Conference of the United Nations Economic Commission for Africa (UNECA) taking place in Dakar, Senegal.
“The challenge we found ourselves today is that the rules have always been skewed in favour of those who export capital and against those who import capital. Corruption is a global issue and we have a global framework on corruption.
Renewed push for use of Kiswahili by AU and UNESCO (Modern Ghana)
The renewed push for Kiswahili to become a lingua franca in Africa promises to benefit the continent and the world. The effort is set to reduce Africa’s reliance on foreign languages in official communications, lead to the recognition and spread of Kiswahili, and promote Pan-Africanism. The campaign, however, faces a number of challenges. According to experts, supplanting them could create diplomatic challenges.
For Kiswahili to gain acceptance and develop in such regions, adequate resources and political goodwill — including financial and economic inputs — are imperative to ensure it will serve people as well as, if not better than, the languages they speak today.
Commonwealth Africa Explores Ways of Combating Corruption (InDepthNews)
The 12th Regional Conference of Heads of Anti-Corruption Agencies in Commonwealth Africa convened in Kigali, Rwanda, from May 3-7 under the theme: ‘Combating Corruption for Good Governance and Sustainable Development in Africa’. The Conference was jointly organised by the Commonwealth Secretariat and the Government of Rwanda and brought together members of the Association of Anti-Corruption Agencies in Commonwealth Africa, senior government officials, relevant international organisations, policymakers, and development partners to address key priorities toward the achievement of Sustainable Development Goal 16. They shared knowledge and good practices and discussed the impacts of corruption on sustainable development in Africa and innovative approaches in the fight against corruption.
Over the years, corruption has been an unerasable characteristic feature of African politics and business, from the Maghreb down to the Southern African Development Community, from the East African Community and the Horn of Africa across the Sahel region to the Atlantic coastal West African States.
Most African countries have ratified African Union Convention on preventing and combating corruption and other international legal instruments on corruption. As required by international obligations, African countries have enacted national anti-corruption laws and established anti-corruption institutions. Almost every African country has a specialised anti-corruption agency to address specific crimes and malpractices including illicit flow, money laundering, embezzlement, and conflict of interest among others.
Africa needs tech, innovation to improve output (Monitor)
The Second Africa-wide Conference on Science, Technology and Innovation (STI) recently held in Kigali, Rwanda, concluded with an urgent call for African governments, regional economic communities and continental organs including, the African Union, African Development Bank, and United Nations Economic Commission for Africa to sustain the recognition of the role and importance of STI in socio-economic advancements.
The meeting also intensified calls for African states to ensure integration of STI in their respective development frameworks while reiterating the centrality of science and technology in socio-economic development including, transformation of rural livelihoods on the continent.
While African governments have often times reiterated the role of STI in the transformation of agricultural sector as an imperative engine to the continent’s survival and growth, the process has been slow amid continuous and emerging challenges. Post Covid-19 and out of these calls, evidence of new challenges have emerged and with them, opportunities to mitigate namely; efficiency, resilience, digitisation, agility and sustainability.
African technology startups scoop $2b funding (The East African)
Kenya ranks among Africa’ four biggest destinations for tech start-up funding after Nigeria, Egypt and South Africa. The African Tech Startups Funding Report (2021) shows that last year in the African tech start-up ecosystem, 564 businesses raised $2.14 billion in funding, the bulk of which took place in the “big four” markets – Nigeria, Egypt, South Africa and Kenya. According to the report the “big four” start-up destinations raked in a combined $1.97 billion over the course of the year, accounting for 92.1 per cent of the overall total funding. Ghana, Morocco and Tunisia start-ups secured more than 40 per cent of the remaining $170.6 million.
According to the report the number of investors in the African tech start-ups sector has been growing exponentially, with the number of new investors joining the business more than doubling to 771 in 2021 from 370 in 2020.
How Africa’s tech sector can thrive – and it’s not all about legalising Bitcoin (Euronews)
Speculation over which country would be the next to adopt Bitcoin as an official currency has largely centred on Central and South America, following El Salvador’s move seven months ago to become the first country to make the cryptocurrency legal tender. It would actually be the Central African Republic (CAR) that became the second country to vote in favour of adopting it – but it may be that the rest of the continent has the most to gain from cryptocurrency. One of the ways crypto can help CAR is that it can offer financial services to the vast majority of the population who are “unbanked”.
“The objective of Bitcoin and cryptocurrency is to cause disruption,” said Lacina Koné, Director General and CEO of Smart Africa, a pan-African institution endorsed by the African Union. The group works to enhance the digital landscape in Africa and works with the private sector and governments. It is also the brainchild of Rwanda’s president Paul Kagame.
Central African bank regulator reminds states of crypto ban (Reuters)
Central Africa’s regional banking regulator sent out a reminder on Friday about its ban on cryptocurrencies, weeks after the Central African Republic, a member state, made bitcoin legal tender. The Banking Commission of Central Africa (COBAC), which regulates the banking sector in the six-nation Economic and Monetary Community of Central Africa (CEMAC), said the prohibition was meant to ensure financial stability. The announcement came as cryptocurrencies nursed large losses on Friday after the collapse of TerraUSD, a so-called stablecoin, rippled through markets.
The Central African Republic’s presidency announced on April 27 that bitcoin had been made legal tender, making it only the second country to do so after El Salvador. read more At the time, analysts and crypto experts said they were puzzled by the move in one of world’s poorest nations where internet use is low, conflict is widespread and electricity is unreliable. The government has provided few details about its reasoning and questions remain about implementation.
Food insecurity becoming more prevalent in African countries, according African Union (SABC News)
The African Union Peace and Security Council (AUPSC) says it is concerned about the increase in food insecurity in Africa, especially in countries where conflict persists. The AU says prolonged fighting is affecting food production and many countries are failing to effectively feed their citizens. The situation has also been worsened by the effects of climate change. The African body says starvation levels on the continent are on the rise. The United Nations Food and Agriculture Organisations says there are over 280 million food-insecure people in Africa. The AUPSC is concerned that conflicts in parts of Africa are becoming a major root factor of starvation in the continent.
A report by the Food and Agriculture organisation, the World Food Programme identifies Ethiopia, Nigeria and South Sudan at high alert levels of food insecurity. Part of the reason for insufficient food supply in these countries is conflict.
The Joint Meeting of Ministers Responsible for Agriculture and Food Security, Fisheries and Aquaculture from the Southern African Development Community (SADC) was held on 13th May, 2022 at Bingu International Convention Centre (BICC) in Lilongwe, Republic of Malawi.
The objective of the meeting was to consider and review implementation of policies and strategies aimed at advancing the agriculture and food and nutrition security, fisheries and aquaculture production and productivity in the Region. The meeting took place against the backdrop of excess rains, which caused heavy flooding in some parts of the Region, cyclones and drought in others; outbreaks of transboundary animal and plant pests and diseases; major disruptions to supply chain and services due to the COVID-19 pandemic, rising inflation and record public debt that is constraining many countries’ ability to address the current socio-economic challenges and also the global food insecurity situation caused by the conflict between Russia and Ukraine.
Africa roundtable unites with European allies (DW)
Politicians from African and European countries gathered in Berlin on Thursday for The Africa Roundtable to discuss strategies to cope with common challenges. “We are in times of multiple crises and partnership in these days is more important than anything else,” said Ingrid Hamm, cofounder and CEO of event organizer Global Perspectives Initiative (GPI), in her opening remarks.
In his televised opening speech, Germany’s food and agriculture minister, Cem Özdemir, mentioned some of the current challenges facing Europe and Africa as a result the war in Ukraine — especially a lack of wheat imports from Ukraine and Russia. Shortages of food are happening at a time that ”around 280 million people in Africa are already undernourished today especially in the Sahel and the Horn of Africa due to severe draught and conflicts,” explained Özdemir.
Senegal’s economy minister, Amadou Hott, said in his keynote address that some African nations are not in a good position to deal with some economic challenges because of international issues. For example, he mentioned some of the bottlenecks faced by Africa in raising money from the capital markets in order to deal with the COVID pandemic and the war in Ukraine.
“Our economies together in terms of GDP we are the eight largest in the world, thus we deserve the seat at the table specially to give inputs when decisions are made that will impact Africa,” said Hott. The idea of including African countries at the G20 table was echoed by Professor Jaffrey Sachs, president of the UN Sustainable Development Solution Network. “Africa needs to be at the table and not as an invited guest politely present, but as G21st country,” said Professor Sachs.
Global economy news
DG Okonjo-Iweala shares views with international agency heads on key issues ahead of MC12 (WTO)
The Director-General attended the spring session of the United Nations Chief Executives Board (CEB) for Coordination in Vienna on 12 May 2022. This is the first time that the UN Secretary-General, António Guterres, who chairs the Board, convened an in-person session of the CEB since the start of the COVID-19 pandemic. The CEB meeting in Vienna was an opportunity for the DG and her counterparts to exchange views on global challenges and their possible solutions. During a conversation on the state of the world, DG Okonjo-Iweala pointed to the ongoing crises in international security, food, environment and climate, public health, and the world economy. She noted that the WTO had had to downgrade its trade forecast, with merchandise trade volumes now projected to grow 3% in 2022, compared to the 4.7% forecasted last October. Despite the economic and political headwinds facing trade, the DG said that “trade is very much part of the mix of policy solutions required to deliver the equitable growth, job creation, and environmental sustainability people around the world need.”
Global conference in Accra: Making the shift to sustainable trade (ITC)
Trade and investment promotion organizations around the world will meet in Accra on 17-18 May to explore Bold Solutions for Resilience and Recovery, the theme of this year’s conference. Firms that are more resilient to crisis often tap the services of these national trade bodies to build resilience to carry them through challenging times. The 2022 World Trade Promotion Conference (WTPO) will be hosted by the Ghana Export Promotion Authority (GEPA) and the International Trade Centre (ITC), a development agency of the United Nations and the World Trade Organization that connects small business to global markets. It brings together 200 leaders of national trade promotion organizations from around the world.
‘Good trade can drive socio-economic recovery that is inclusive and sustainable,’ says Pamela Coke-Hamilton, ITC Executive Director. ‘Trade promotion organizations can make all the difference in helping companies achieve good trade. They must help businesses to mitigate risks and embrace opportunities of a green transition. They must help women, youth and vulnerable groups join global value chains, and overcome systemic barriers that keep them from developing their businesses for export.’
India says open to exporting wheat to poor nations despite ban (Premium Times Nigeria)
The world’s second largest producer of wheat, India, has banned wheat exports, at a time the Russian invasion of Ukraine crippled the supply of the crop across the globe. India announced the ban on Saturday saying it exempted exports backed with letters of credit and countries requesting on the basis of food security. The ban is aimed at controlling rising domestic prices. The government was targeting record shipments this year, but heatwave reduced output and caused a rise in domestic prices. On Sunday, India’s Commerce Secretary B.V.R. Subrahmanyam said the government will allow private companies to meet previous commitments until July and will keep a window open to export wheat to needy countries, the Times of India reported.
The country initially planned to export 10 million tonnes of wheat this year. India exported a record 1.4 million tonnes of wheat in April and was set for another 1.5 million tonnes in May.
Global diamond trade fractures under the weight of Russia sanctions (Moneyweb)
Russia’s invasion of Ukraine is fracturing a billion-dollar trade that spans the permafrost-laden diamond mines of Siberia, secretive trade houses in Antwerp, dusty polishing powerhouses in India and New York’s glittering designer jewelry stores.
“Diamonds are not like oil, where some other country can jump in to make up for a shortfall,” Shah said. “No new mines are coming up elsewhere. Our dependence is huge.” Gems and jewelry are India’s third-largest source of export revenue, pulling in about $39 billion for the fiscal year that ended in March.
A delegation from Alrosa visited India last month and met customers and trade groups to discuss selling diamonds using that workaround, people familiar with the matter said. But talks were inconclusive, the people said, and officials remain sensitive to provoking the US, which sees India as a regional check on China’s power. Alrosa declined to comment. Amitendu Palit, a senior research fellow in South Asian studies at the National University of Singapore, said India faces a “tough, complicated balancing act” in managing “pro-Russia and pro-rest of the world stances.” American commerce secretary Gina Raimondo has likened a ruble-rupee arrangement to “funding and fueling and aiding President Putin’s war.” “Challenges are likely to increase if the conflict continues for a long time,” Palit said. “There will be tacit pressure on India to shift away from Russia for its trade.”
COVID-19 Challenges Highlight the Need to Revive Economic Integration: APEC (Tempo)
There is no better time than now for APEC members to revive work on integrating the Asia-Pacific and bringing new energy to the long-term prospect of a Free Trade Area of the Asia-Pacific (FTAAP).The APEC Policy Support Unit made the statement in a new policy brief. “The pandemic and the aftermath of COVID-19 have only stressed the significance of regional economic integration,” director of the APEC Policy Support Unit, Denis Hew, said, according to a release issued by the APEC Secretariat and received here on Saturday. “APEC policy makers need to address emerging trade-related issues and challenges in order to realize deeper regional economic integration,” Hew argued.
“Most importantly, any regional integration scheme, including free and/or regional trade agreements, could assist to overcome pandemic-related challenges,” Kuriyama added. The report identifies six main challenges affecting trade that are deemed most critical, namely disruption in accessing essential goods, disruption in trade in services, difficulties in supply chain logistics, digital transformation, transparency, and regulatory bottlenecks affecting trade in essential goods. While some of these disruptions were far more severe during the first stage of the pandemic, the challenges persist.
The global economy could increase by more than $140 trillion a year[1], or 1.5 times the annual global GDP, if the objectives of the United Nations Convention to Combat Desertification (UNCCD) are achieved, participants heard during a side-event at the 15th summit of the UNCCD. Camilla Nordheim-Larsen, Senior Partnerships and Resource Mobilization Coordinator at the UN Convention, noted that action in the land sector has the potential to generate up to $140 trillion a year and create 400 million new jobs, while failure to act can result in losses in the range of $44 trillion. The Sustainable Development Goal for Life on Land is least funded, but can contribute most to resilience, she said, speaking at an event on innovative finance mechanisms for sustainable landscapes, hosted by the African Development Bank and partners.
G7: FAO puts forward proposals to address current and future food shortages (FAO)
The head of the Food and Agriculture Organization of the United Nations (FAO) today called on G7 nations to help anticipate future food shortages, as the war in Ukraine squeezes supplies, pushes prices to record highs and threatens already vulnerable nations across Africa and Asia.”We need to actively identify ways to make up for potential future gaps in global markets, working together to foster sustainable productivity increases where possible,” Director-General Qu Dongyu told G7 Agriculture Ministers meeting in Stuttgart, Germany.
“It is in this dramatic context that we now face the war in Ukraine,” Qu said.Russia and Ukraine are important players in global commodity markets, and the uncertainty surrounding the conflict has caused prices surges, particularly of wheat, maize and oilseeds, as well as fertilizers. These increases come on top of already high prices driven by robust demand and high input costs as a result of the COVID-19 pandemic.
Countries that are heavily reliant on wheat imports include Egypt and Turkey, but also a number of Sub-saharan countries such as Congo, Eritrea, Madagascar, Namibia, Somalia and Tanzania. Meanwhile, countries that are heavily dependent on fertilizers imported from Russia include key cereal and high value commodity exporting countries like Argentina, Bangladesh and Brazil.
Climate-vulnerable countries gain resilience through disaster risk finance and insurance (UNDP)
In 2021, economic losses from disasters caused by natural hazards totalled almost US$270 billion. The impact of disasters can significantly undermine development progress and push communities deeper into poverty, making them less resilient to the next disaster shock. Recognizing the importance to plan and finance disaster response, UNDP’s Insurance and Risk Finance Facility (IRFF), a flagship initiative within its Sustainable Finance Hub, we are working together with our government partners to better protect vulnerable communities from socio-economic, climate and health-related disasters by significantly increasing the role of insurance and risk financing in development.
Yet, for many Least Developed Countries (LDCs) and V20 climate-vulnerable countries, insurance solutions remain out of reach. Mechanisms to rapidly mobilize finance for disaster response are often not integrated into budget processes and development plans, insurance companies are deterred by restrictive legislation, demand for insurance is also low due to a lack of awareness and/or trust in the insurance sector, there are also issues related to affordability of premiums. Together, these challenges result in a large protection gap, leaving vulnerable communities exposed to disaster risks and their lives and livelihoods unprotected.
Global GDP could gain $140trn if ... – UNCCD (Tribune Online)
The global economy could increase by more than $140 trillion a year or 1.5 times the annual global GDP, if the objectives of the United Nations Convention to Combat Desertification (UNCCD) are achieved, participants heard during a side – event at the 15th summit of the UNCCD.
Camilla Nordheim-Larsen, Senior Partnerships and Resource Mobilisation Coordinator at the UN Convention, noted that action in the land sector has the potential to generate up to $140 trillion a year and create 400 million new jobs, while failure to act can result in losses in the range of $44 trillion. Speaking at an event on innovative finance mechanisms for sustainable landscapes, hosted by the African Development Bank and partners, she said, the Sustainable Development Goal for Life on Land is least funded, but can contribute most to resilience,
“The benefits of taking action against land degradation largely outweigh the costs of sustainable landscape management. In Sub-Saharan Africa, it is by at least seven times. Inaction costs Sub-Saharan countries $490 billion per year, while according to the Economics of Land Degradation Initiative, action to reverse land degradation could generate benefits worth up to $1.4 trillion,” said Luc Gnacadja, former Executive Secretary of the UN Convention to Combat Desertification and former Minister of Environment of Benin, currently acting as a Co-Chair of the Adaptation Benefits Mechanism Executive Committee.
Rishabh Khanna, Chief Impact Officer at Earthbanc and a steering committee member of the Initiative of Land, Lives and Peace, presented a new initiative launched together with the UN Convention at the summit — digital sustainable land bonds, which allow carbon buyers to purchase at an earlier stage of development. The Adaptation Benefits Mechanism, piloted by the African Development Bank between 2019 and 2023, certifies and monetizes the environmental, social, and economic benefits of adaptation actions, including sustainable and resilient landscapes.
The impact of Russia’s invasion of Ukraine on food and energy supplies will be long-lasting, experts say (Business Insider Africa)
In the months since Russia ordered troops into Ukraine, a flurry of sanctions issued by Western countries has failed to curb the military assault. With a drawn-out conflict appearing more likely, the political determination to punish President Vladimir Putin’s nation suggests a prolonged period of sanctions lies ahead. Some experts say that the prospect of continued disruption to food and energy supplies as a result of the war will trigger a search for long-term alternatives to Russian imports. While the price shock of the conflict is felt globally, the disruption to energy supplies is most keenly felt in the European Union (EU), which sources a quarter of its oil imports and 40% of its natural gas from Russia (the US, by comparison, got about 3% of its crude oil from Russia in 2021). In its sixth round of sanctions against Moscow, the EU announced plans for a total ban on Russian oil and refined product imports by the end of the year.
While shifting away from Russian oil may prove difficult, Europe’s reliance on Russian natural gas provides policymakers and central bankers with a much bigger headache. In a recent round of sanctions, theEU continued to exclude any embargo on natural gas, although it has aired proposals to cut demand for Russian imports by two-thirds by the end of 2022.