INTERNATIONAL

Defending competition in the markets during COVID-19 – Under normal circumstances competition is needed in markets to keep prices low, but with the COVID-19 crisis wreaking havoc on markets the world over, collaboration has taken precedence. The pandemic’s sweeping economic impact has left governments balancing between defending competition, so prices do not become prohibitive, and granting exemptions to competition rules to ensure the survival of entire economic sectors. “Many authorities are adjusting the enforcement of competition laws to serve the greater public interest during this crisis,” said Teresa Moreira, head of UNCTAD’s competition and consumer policies branch. For example, the United States’ Department of Justice and the Federal Trade Commission have allowed collaborations among competitors in the health sector based on previous measures taken in the aftermath of hurricanes Harvey and Irma. The United States has enacted strict guidance on collaboration in a time of emergency. Likewise, Canadian and German authorities have allowed pro-competitive agreements between companies competing in the same market if they have good justifications. While Germany has given the green light for collaboration in the retail industry and for supermarkets, Canada has allowed collaboration to support the delivery of affordable goods and services. Similarly, the competition and markets authority in the United Kingdom has temporarily allowed retailers to collaborate to ensure the continuity of food supplies. Some governments have enacted sector-specific legislation granting different levels of exemptions from anti-collusion rules to businesses to mitigate the pandemic’s ripple effect on economies. For instance, South Africa has approved a specific list-based block exemption from antitrust rules in the health-care sector to allow cooperation. Norway has granted a three-month exemption from the national antitrust laws to the airline transport industry. (UNCTAD)

Key Words: COVID-19, UNCTAD, Markets

WTO, WCO chiefs pledge joint efforts to facilitate trade in essential goods – The COVID-19 pandemic, while above all a public health crisis, presents the world with unprecedented social and economic challenges.  Emergency measures needed to curb the spread of the disease have unintended impacts on the world economy and trade, including the global supply chains that produce and distribute essential goods such as medical supplies, food, and energy. To support the ongoing efforts to mitigate the social and economic effects of the pandemic, we, the Secretariats of the World Customs Organization (WCO) and the World Trade Organization (WTO), agree to work closely together to minimize disruption to cross-border trade in goods — in particular those essential to combat COVID-19 — while safeguarding public health. We commit to provide appropriate support to all relevant stakeholders.  Within our respective mandates, we have already invited Members to increase transparency by sharing information on new trade and trade-related measures introduced in response to the COVID-19 pandemic. To the extent appropriate, we are making such information publicly available through our respective websites.   We are also willing to establish a coordinated approach in support of initiatives that facilitate cross-border trade in goods, in particular those key to combat COVID-19. This would allow that essential goods can quickly reach those most in need, including in least developed and land-locked countries. As COVID-19 continues to spread globally and governments consider new measures to protect the health and well-being of their citizens, we urge Members to ensure that any new border action is targeted, proportionate, transparent and non-discriminatory — as agreed by G20 leaders. (WTO)

Key Words: WTO, WCO, Trade

ICC has issued two guidance publications to help governments and regulators deal with trade finance market disruptions caused by COVID-19 – Responding to the urgent need to address the disruptions facing the trade finance market as the world grapples with the novel coronavirus (COVID-19) pandemic, the International Chamber of Commerce (ICC) has today provided holistic guidance to the market, governments and regulators through two official publications. Trade finance transactions rely almost exclusively on hard-copy paper documentation to process payments and, ultimately, clear the release of goods to buyers. This is because, in many jurisdictions, electronic trade documents are either prohibited or their legal status is unclear. Yet with banks unable to handle documents in-person as government authorities seek to limit COVID-19 transmission, there is a risk that the underlying trade in goods, including essential medical and food products, will be further disrupted. ICC has responded to this issue with both technical guidance to practitioners and a roadmap for regulatory reform for policymakers. The first ICC publication, Guidance paper on the impact of COVID-19 on trade finance transactions issued subject to ICC rules, provides technical guidance to the market on elements to consider in adapting ICC rules for specific trade finance instruments, gives a certain level of flexibility in the monitoring of transactions in respect of ICC rules, and outlines common scenarios experiences in the delivery of documents during the public health measures undertaken in response to COVID-19. Comprehensive in its guidance, the paper reviews provisions from several ICC rules, namely the Uniform Customs and Practice for Documentary Credits (UCP 600) and its eRules (eUCP 600 2.0), the Uniform Rules for Demand Guarantees (URDG 758), the Uniform Rules for Collections (URC 522) and its eRules (eURC 522), the Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits (URR 725) and the Uniform Rules for Bank Payment Obligations (URBPO 750). (ICC)

Key Words: COVID-19, ICC, Trade Finance

How can we help small business affected by the COVID-19 crisis? – As COVID-19 moves from a health crisis to an economic crisis, we are trying to anticipate how small businesses around the world will weather this storm and where we need to focus our efforts. ITC works with micro, small and medium-sized enterprises (MSMEs), primarily in the developing world. The typical small business we work with employs between 10 and 20 people, is close to or is already export-ready, and wants to grow internationally. These MSMEs represent 60%-70% of jobs in developing countries and around half of economic activity¹. Moreover, they tend to employ young people and women. It is still too early to estimate how deeply the pandemic will affect our core constituency. Small businesses are already or will soon face a liquidity crisis, which could wipe out whole segments of the economy. In the next few months, they will face a range of challenges that will depend, to a large degree, on how policymakers react to the crisis today. How big is the coming wave? The world as a whole is likely to enter into a recession in 2020, according to latest estimates from the International Monetary Fund (IMF)². Some sectors will suffer more than others, with the travel, accommodation and food services sectors being hit particularly hard. Businesses themselves are likely to travel through a four-phase process: shutdown, supply-chain disruption, demand depression and finally, recovery. The severity and disruption caused by each stage of the process will depend on the policies adopted by governments. We know the impact will be severe; what we do not know is how long the crisis will last. As they move from shutdown to recovery, MSMEs will face a combination of threats to their survival. (ITC)

Key Words: COVID-19, Business, Trade

COVID-19 - WCO updates – On 30 January 2020 the World Health Organization (WHO) declared that the outbreak of novel coronavirus (2019-nCoV) constituted a Public Health Emergency of International Concern (PHEIC). On 11 March 2020 the WHO characterized the novel coronavirus disease (COVID-19) as a pandemic.  Facing this global challenge, it is expected that the movement of relief goods (supplies, medicines and medical equipment) across borders will increase dramatically in the coming weeks. Moreover, as the WHO notes in its 29 February 2020 Updated WHO recommendations for international traffic in relation to COVID-19 outbreak, “… restrictions may interrupt needed aid and technical support, may disrupt businesses, and may have negative social and economic effects on the affected countries.”  It is critical that Customs administrations continue to facilitate, not only relief goods, but goods in general, to help minimize the overall impact of the COVID-19 outbreak on our economies and societies. Customs administrations are strongly urged to establish a coordinated and proactive approach with all concerned agencies to ensure the integrity and continued facilitation of the global supply chain. This section of the WCO web-site is designed to compile information about the instruments, tools, initiatives and databases that can be utilized in the efforts to address the various COVID-19-related challenges faced by our Members and their stakeholders worldwide. (WCO)

Key Words: WCO, COVID -19, Business

After Trump threat, India lifts export ban on COVID-19 treatment drug – India has partially lifted a ban on the exports of a malaria drug after U.S. President Donald Trump sought supplies for the United States, according to government officials with knowledge of the matter. Exports of hydroxychloroquine and paracetamol will be allowed depending on availability of stock after meeting domestic requirements and existing orders, said the government officials, who asked not to be identified citing rules. Shipments will be restricted and permission will be on humanitarian grounds, they added. The spokesman for the trade ministry was not immediately available for comment. Normally used to treat malaria, hydroxychloroquine yielded promising yet inconclusive results in a small coronavirus trial. While Trump has said the drug is safe, it carries significant side effects. China, Europe and South Korea recommend it as one of several treatments for COVID-19 patients, while India itself advocates health-care workers take the drug regularly as a preventive measure. Still, some top scientists, including White House COVID-19 task force member Anthony Fauci, have called reports that the drug might work anecdotal, saying that there needs to be further study before its use is encouraged. Trump said at the White House on Monday he was unaware Indian Prime Minister Narendra Modi had banned the export of the drug, and noted that he’d asked Modi to ensure supplies of the medicine. If New Delhi declined to ship the drug there may be retaliation, the president said. India’s export ban had cut off half of U.S. supplies of the medication.  (Japan Times)

Key Words: COVID – 19, India, US

Countries launch investment policies to counter COVID-19 – UNCTAD's latest Investment Policy Monitor (IPM) shows that investment policy responses to the coronavirus pandemic vary from country to country. They include measures supporting investors and domestic economies in general and policies to protect critical domestic infrastructure and industries, particularly in the health sector. At the international level, the Group of Twenty (G20) and Group of Seven (G7) leading economies have issued statements in support of investment and global value chains. The pandemic is expected to have a lasting impact on future investment policymaking. The IPM shows that during the pre-crisis review period (November 2019 - February 2020), investment liberalisation, promotion and facilitation accounted for three-quarters of newly adopted policy measures - a ratio broadly in line with the longer-term policy trend. At the same time, a further increase in measures related to the screening of foreign investment for national security reasons was observed. Countries signed at least three international investment agreements (IIAs) during the review period, bringing the total number of IIAs to 3,292. Newly concluded agreements continue to include reform-oriented provisions, according to the IPM.  Owing to the COVID-19 pandemic, many investment-focused initiatives and events, including high level meetings and summits, have been cancelled or postponed. The crisis may also have implications on negotiations of international investment agreements. (UNCTAD)

Key Words: UNCTAD, COVID-19, Investment Policies

PAN AFRICA

7 key opportunities for Africa during the Coronavirus outbreak – With the wind of Coronavirus change, a global economic fallout has and will continue to reverberate around the world. Africa is however strategically positioned to capitalize and not fall during this time for the following reasons:- 1. We are currently in the position to write our own narrative with good policies that ensure we stem the pandemic from further reaching and expanding on our shores so that the virus does not cause major infection and fallout throughout Africa.  Our motivations being that we are not prepared to absorb such devastating catastrophe therefore the short term loss of staying at home will lead to the long term gain of re-entering world markets. 2. We can ensure that essential industry carries on, with people also working from home and connecting with individuals abroad online as the West realigns their economic focuses and allegiances, turning to Africa for some of that solution. 3. We can map and tap into the industries that are going to do well despite the change that has come: gold, wellness, grocery, online education, remote work apps, entertainment (gaming and non-gaming) etc. 4. We can create opportunities with the knowledge that in every economic downturn globally, there are winners and losers, therefore we must choose to win and to win big in order to improve our currencies; define with more clarity who enters and doesn’t enter our territory and altogether establish the type of sovereignty foreseen by Nkrumah and those that founded the African Union. 5. Africa is familiar with pain and suffering, therefore, we have become stronger in knowing how to adapt in the face of adversity. Therefore in planning, strategizing, capitalizing and reaping rewards that were not previously available to us, we will turn this continent around for the greater good of our nations. 6. We can plan ahead for when our African borders reopen since with the coming into force of The African Continental Free Trade Area (AfCFTA) in multiple African countries we will be able to strategically take advantage of this massive free trade area in due course. (Ghana Web)

Key Words: AfCFTA, COVID-19, Trade

Communiqué of the African Union (AU) Bureau of Heads of State and Government Teleconference Meeting held on 3 April 2020 – The Heads of States noted with satisfaction progress made in operationalising the African Union Covid-19 Response Fund established on 26 March 2020 to which members pledged the sum of US$12.5 million and an additional US$4.5million to the Africa CDC. It was agreed to establish continental ministerial coordination committees on Health, Finance and Transport to coordinate in order to support the comprehensive continental strategy. The Heads of States underscored the need for a comprehensive and coordinated continental approach, and to speak with one voice on Africa’s priorities. Cognizant of the devastating socio-economic and political impact of the pandemic on African countries, the Bureau reiterated the need for rapid and concrete support as pledged by the G20 and other international partners, including the World Bank and the International Monetary Fund. It is critical that these institutions review their current disbursement policies to display flexibility and speed, including raising the availability of IMF Special Drawing Rights (SDRs). The Bureau also echoed the call for a comprehensive stimulus package for Africa, including, deferred payments, the immediate suspension of interest payments on Africa’s external public and private debt in order to create fiscal space for Covid-19 response measures. Lifesaving supplies including PPEs, masks, gowns, and ventilators and other support devices are urgently needed. The Bureau commended the rapid action coordinated by Ethiopian Prime Minister Abiy Ahmed and the Jack Ma Foundation in mobilising and distributing, with the support of the World Food Programme (WFP) and Africa CDC, over one million diagnostic tests, six million masks and 600,000 PPE items to all African Union member states in less than a week. The Heads of States and Government strongly urged for the immediate lifting of all economic sanctions imposed on Zimbabwe and Sudan to allow them to adequately respond to the pandemic and save lives. (AU)

Key Words: COVID-19, AU, Economic Growth

African Development Bank Group approves Gender Equality Trust Fund and Risk-Sharing Mechanism to improve women’s economic empowerment in Africa – The Board of Directors of the African Development Bank Group have approved a new Gender Equality Trust Fund (GETF) aimed at pushing forward gender equality and women’s empowerment across the continent. Funded by donors, the GETF will support the delivery and scale-up of the Bank’s Affirmative Finance Action for Women in Africa (AFAWA) programme and promote gender transformative lending and non-lending operations. It is the first thematic fund on gender in the Bank Group’s history. The Fund will be established for an initial period of 10 years. AFAWA is the Bank’s flagship pan-African initiative which aims to bridge the $42 billion financing gap facing women in Africa. Through AFAWA, the Bank is spearheading a major push to unlock women’s entrepreneurial capacity and economic participation for maximum development impact. Also on Tuesday 31 March, the Board of Directors of the Bank approved a Risk-Sharing Mechanism – an innovative financial instrument to de-risk women-empowered businesses, enhance their profile with banks and support them to grow and thrive as entrepreneurs. Anchor investors in the GETF are the governments of France, the Netherlands and the United Kingdom. “It’s a great day for us as a Bank. It is a great day for the continent and the women of Africa as this facility provides innovative ways to tackle the access to finance challenges for African women business owners,” said African Development Bank President Akinwumi Adesina. The African Guarantee Fund (AGF) has been chosen as the first implementing partner to facilitate access to finance for women-owned small and medium-sized enterprises (SMEs). AGF is a pan-African entity that provides financial institutions with guarantees and other financial products to support SMEs in Africa. AGF has a network spread out over 42 African countries and 150-plus financial institutions, which AFAWA will leverage. This first transaction is expected to unlock up to $2 billion in credit for women-empowered businesses across the continent. (AfDB)

Key Words: AfDB, Women’s Economic Empowerment, Africa

Impact of the Coronavirus (COVID-19) on the African Economy – Declared a pandemic by the World Health Organization (WHO) on 11 March 2020, COVID-19 has become a global emergency, given its impact on the entire world population and the economy. According to scenario simulations of the International Monetary Fund (IMF), global growth could fall by 0.5 for the year 2020. Several other sources are also predicting a fall in global growth due to the direct effects of the COVID-19 outbreak. The global economy may enter a recession at least in the first half of the year 2020, when adding the direct and indirect effects of the crisis (e.g. supply and demand shocks, commodity slump, fall in tourism arrivals, etc.). However, as the pandemic progresses slowly on the African continent, studies by international organizations have less addressed the economic impact on individual African countries. Indeed, Africa is not immunized from COVID-19. As of 3 April, according to COVID-19 Surveillance Update: 3 April 2020 9:00 am of Africa CDC, the spread of the virus has reached 50 African Union Member States: 7,028 cases, 561 recoveries and 284 deaths; and is showing no signs of slowing down.[1] Africa, because of its openness to international trade and migration, is not immune to the harmful effects of COVID-19, which are of two kinds: endogenous and exogenous. The exogenous effects come from direct trade links between affected partner continents such as Asia, Europe and the United States; tourism; the decline in remittances from African Diaspora; Foreign Direct Investment and Official Development Assistance; illicit financing flows and domestic financial market tightening, etc. The endogenous effects occur as a result of the rapid spread of the virus in many African countries. On one hand, they are linked to morbidity and mortality. On the other hand, they lead to a disruption of economic activities. This may cause, a decrease in domestic demand in tax revenue due to the loss of oil and commodity prices coupled with an increase in public expenditure to safeguard human health and support economic activities. It is important to assess the socio-economic impact of COVID-19, although the pandemic is at a less advanced stage in Africa due to its lesser quantity of international migrants’ arrivals relative to Asia, Europe, and North America, and strong precautionary measures in some African countries. African economies remain informal and very vulnerable to external shocks. In this study, three scenarios are constructed based on the description of specific key economic indicators in order to evaluate the potential impact of the pandemic on various dimensions of African economies. The impact on the African economy for each of the scenarios is presented, with a discussion of some of the key measures being taken by selected African Union Member States to mitigate the negative effects. (tralac)

Key Words: COVID-19, African Economy, Business

Covid-19: African competition authorities respond to crises – The increase in confirmed Covid-19 cases in Africa has led to innumerable complaints of anti-competitive conduct from customers and consumers across the continent, who have expressed concerns over sudden price hikes of healthcare and hygiene products as well as identified essential products.  This has prompted rapid responses from African competition authorities. In South Africa, competition and consumer protection authorities are collaborating in efforts to examine complaints from customers and consumers implicating companies for excessive and/or exploitative pricing of essential products.  Such essential products include facemasks, toilet paper and hand sanitisers. In addition, South Africa's Department of Trade, Industry and Competition has introduced new regulations, which together with existing competition regulations on excessive pricing, deal with pricing and supply matters during the national disaster. These regulations do not prevent market players from implementing necessary price adjustments, their objective being to prevent unjustified price hikes and facilitate the collaboration of essential service providers in a regulated manner. In Namibia, the Namibian Competition Commission (NaCC) concluded a market analysis, which revealed that the price of immune boosters, hand sanitisers and 3ply facemasks have substantially increased due to growing demand for these essential products. In response to this, the NaCC formed a dedicated task team under its Enforcement, Exemptions & Cartels Division, which will continue to investigate and prioritise price exploitation complaints in relation to essential healthcare and hygiene during the Covid-19 crisis.  (IOL)

Key Words: COVID-19, Africa, Business

Protecting the vulnerable and excluded in the financial sector –As smaller lenders go out of business and larger institutions reduce lending activity, small business, often already credit constrained and likely to have turnover affected by the general contraction in economic activity may see credit dry up. The good news is that many countries are already taking measures to shore up the economy through the financial sector and particularly to address a lack of credit. For example, South Africa’s central bank has reduced capital requirements to free up liquidity. Competition regulators have eased restrictions in order to enable financial institutions to coordinate action to support consumers. The IMF’s “Policy Responses to COVID-19” tracker indicates that many other central banks have also lowered capital requirements, provided liquidity, provided guidance or regulation around debt relief, especially for SMEs and introduced measures to encourage the use of digital payments and electronic money.[1] Algeria, for example has reduced capital requirements, while the Central Bank of West African states has taken measures including adding liquidity, increasing concessional loans, refinancing credit given to SMEs and encouraging mobile money usage. Most countries have reduced the policy rate and where interest rates are controlled, in some places, such as Egypt and Mauritania, these are being reduced. In other cases, planned capital requirement increases have been delayed. Nigeria has announced a suspension of repayments for credit given to low-income traders and farmers, and manufacturers and agribusiness.[2] Ghana has also reduced capital requirements for banks and required that overdue microfinance loan repayments be classified as ‘current’.[3] There are some bright spots for the financial sector arising from the pandemic. The social isolation and concerns about infection from handling cash are accelerating the adoption and use of digital payments in places like Italy where restrictions on movement have been in place for some time.[4] Closer to home, governments have been introducing measures to encourage the use of digital payments. For example, Next Billion reports that the Central Bank of Kenya ordered a reduction in mobile money fees and the Central Bank of Ghana is reported to have done the same, as well as eased ‘know your customer’ requirements for mobile money accounts enabling consumers to access new digital wallets without having to prove their identity in person. [5] The Bank of Zambia has also taken measures to reduce cash usage.[6] Telecommunications providers, such as MTN in Uganda and Safaricom in Kenya have also contributed, reducing or eliminating mobile money charges.[7] Payments fintechs, such as Paga in Lagos are also reported to have dropped fees.[8] (tralacBlog)

Key Words: Tralac, Africa, Financial Sector

Post-coronavirus, Rentokil to expand in Africa to meet new hygiene demands - Rentokil Initial, the global hygiene and pest control company, aims to expand in Nigeria, Ghana and Ethiopia once the coronavirus pandemic has been brought under control, Nkosinathi Solomon, the company’s managing director for sub-Saharan Africa, told The Africa Report. The company is targeting Lagos, Abuja, Accra and Addis Ababa as priority cities for expansion, Solomon said. Rentokil typically expands by acquisition, buying up local companies and then upgrading their operating standards to meet its global norms. Talks with possible partners in the target cities range from early stage to more advanced. The company aims to “move quickly after the virus ends”, Solomon said. “We have a strategy of growth in Africa.” Rentokil operates in South Africa, Kenya, Uganda, Mozambique, Mauritius and Tanzania. The shares, which are traded in London, have slumped with the rest of the market due to the economic standstill that coronavirus has caused. Rentokil on March 25 withdrew its full-year outlook for 2020 and suspended dividend payments as the pandemic worsened. The company has moved to conserve cash. Management have taken pay cuts, bonus schemes have been cancelled and a hiring freeze implemented. These and other steps with reduce costs by about 100 million pounds in 2020, says the company. In Africa, Rentokil is having a “very difficult period” in the short term as many of client businesses have been forced to close, Solomon said. “Our customers are not able to operate.” In South Africa, Rentokil has been classified as an essential service and is therefore allowed to remain open. Solomon said he hopes other countries such as Kenya and Mozambique adopt the same stance. He is encouraged by the response to the crisis from governments in South Africa, Kenya and Mozambique which has been “swift and productive overall.”(The Africa Report)

Key Words: COVID-19, Business, Africa

Why Is China Investing in Africa? Evidence from the Firm Level – China’s increased trade with, and investment in, Africa have boosted the continent’s economic growth but have also generated considerable controversy. The aggregate data on China’s overseas direct investment (ODI) in African countries reveal that China’s share of the stock of foreign investment is small, though growing rapidly. China’s attraction to resource-rich countries is no different from Western investment. China’s overall ODI is uncorrelated with a measure of rule of law, whereas Western investment favors the better governance environments. As a result, Chinese investment in strong and weak governance environments is about the same, but its share of foreign investment is higher in the weak governance states. Micro data from MOFCOM’s database on registered Chinese firms investing in Africa between 1998 and 2012 provide a different perspective. Key words in project descriptions are used to code the investments into 25 sectors. This database captures the small and medium private firms investing in Africa. Contrary to common perceptions, there are few projects in natural resource sectors. Most projects are in services, with a significant number in manufacturing as well. Country-sector-level regressions based on firms’ transaction-level data find that Chinese ODI, both horizontal and vertical, is profit-driven, like investment from other countries. In particular, regressions show that Chinese ODI is relatively more concentrated in skill-intensive sectors in skill-abundant countries but in capital-intensive sectors in capital-scarce countries. These patterns are mostly observed in politically unstable countries, suggesting stronger incentives to seek profits in tougher environments. (World Bank)

Key Words: China, Investment, Africa

Iran: Trade With Africa at $570m in 11 Months – Iran’s commercial exchanges with African states amounted to $570 million during the 11 months to Feb. 19 to witness a 6% decline compared with the corresponding period of the year before, according to the director general of Trade Promotion Organization of Iran’s Arab-African Affairs Office. Farzad Piltan added that exports saw a 22% growth in tonnage, ILNA reported. Iran’s main exports to Africa include liquified gas, iron and steel products, cement, floorings, Vaseline, urea, raisins, paraffin, engine oil, bitumen, biscuits and chemicals.  The main commodities imported into Iran from Africa are cacao bean, sunflower oil, palm oil, tea, phosphate, sesame seed, tobacco, fruits and legume. Iran’s main export destinations in the African continent are Egypt, Kenya, Sudan, South Africa, Mozambique, Nigeria, Tunisia, Ivory Coast, Libya, Ethiopia, Tanzania, Somalia and Djibouti. Top African exporters to Iran include Ghana, Ethiopia, South Africa, Tanzania, Sudan, Egypt, Kenya, Tunisia and Zambia.  (Financial Tribune)

Key Words: Trade, Africa, Iran

EAST AFRICA

Kenya shields dairy farmers with import levy – Kenya has introduced a 10 per cent import levy on dairy products to protect the industry from unfair competition. The Ministry of Agriculture published dairy industry regulations that introduce stringent conditions for the importation of dairy products to stop dumping, particularly from Uganda. Recently, milk imports from Uganda have been impounded at the border. The regulations are a departure from the controversial draft published last year, which was shelved after farmers termed it punitive and draconian. In the revised regulations, milk processors in Kenya will no longer set and adjust farm gate prices at will, which they apply when there is either a shortage or a glut. The new regulations are meant to cushion dairy farmers whose fortunes have been on a decline in recent years, raising fears of a collapse of the once thriving sub-sector.  The government also plans to introduce price controls to protect farmers from exploitation by processors. “We have been pushing for predictable pricing for raw milk and farmers will not complain if the prices are set fairly,” Gideon Birgen, Kenya Dairy Farmers Association chief executive told The EastAfrican.  (The East African)

Key Words: Coronavirus, Business, Kenya

Ethiopia is opening up its mobile money market to new players – Ethiopia is going to allow new entrants to offer mobile money services as part of its $10 billion home-grown economic reform agenda. The National Bank of Ethiopia says the new directive will help it offer licenses to mobile money service providers requiring they put up 50 million Ethiopian Birr ($1.6 million) as a minimum  requirement. The amount is to be deposited in a blocked account but no individual, other than government is allowed to hold more than 20% of the shares of any licensed mobile money service provider. In addition, any company other than a government enterprise is also required to have a minimum of 10 shareholders. The hope is these moves, part of a wider set of promised economic reforms under prime minister Abiy Ahmed will help open up the Ethiopian economy. The government is also looking at privatizing Ethio Telecom and Ethiopian Airlines.  It is hoped this banking reform will help ramp up financial inclusion in Africa’s second most populous country. “The reality is, 60% to 70% of Ethiopia’s population do not use conventional financial services and the status quo has not been working”, says Henok Assefa, manager partner of Precise Consult based in Addis Ababa. “The new system allows non-banks to avail themselves to be an alternative, including Ethio Telecom that can reach 40 million of its customers to the banking fold”. The new directive also states the maximum individual electronic money account balance is to have a minimum of 5,000 Birr ($166.60), while the total liabilities of mobile money service providers should not exceed 5 million Birr ($166,666). In 2018, the Ethiopian government held advanced talks with Kenya’s Safaricom to expand its M-Pesa service, one of Africa’s leading mobile money services with more than 23 million users in Kenya alone. It also operates in Tanzania and Uganda among others.  (Quartz Africa)

Key Words: Ethiopia, Mobile Money Market, Business

Fight covid-19, yes, but leave borders open for traders – As they responded to the growing number of Covid-19 cases, East African governments have progressively tightened the screws, throwing the region into a virtual lockdown. Having registered the region’s first case, Rwanda is kind of leading the way by designing the template on which others have based their own measures. After Kigali banned passenger travel between major population centres, Uganda suspended public transport from buses down to motorbike taxis. Travel in private vehicles was limited to a maximum of three passengers. Kenya imposed a dusk-to-dawn curfew. As has been amply demonstrated, lockdowns are an effective way of breaking the transmission chain of any pandemic. They are even more compelling in the African setting where the capacity to cope with even a limited outbreak, barely exists.  With the rich West that would normally come to the rescue nearly overwhelmed by their own Covid-19 crisis, Africa and East Africa in particular, can only hope that they can detect possible cases early to preclude uncontained spread. In the absence of alternative arrangements, the blanket ban on public transport meant a huge number of health workers could not reach their work stations. Until March 26, hundreds of commercial vehicles, some carrying perishable supplies, were trapped on the Ugandan side of the border because Kenya would not let them in. Closing borders will only add to the pain imposed by the health crisis and could, in some instances, even impede efforts to contain it. And if anything is important in this crisis, it is the need to keep supply chains open. Even in a lockdown and in the absence of functional social safety nets, people will still need food and essential supplies. (The East African)

Key Words: COVID-19, Trade, East Africa

WEST AFRICA

Status of the implementation of the AfCFTA in West Africa: Significant progress thanks to the support of the ECA and its partners – Signed by 52 African countries, the Agreement Establishing the African Continental Free Trade Area (AfCFTA), judging by the number of participating countries, is the most important trade agreement since the creation of the World Trade Organisation. As of April 1, 2019, just one year and ten days after its signature, the ratification threshold of 22 countries required for the entry into force of the Agreement had been reached. The pace of this ratification is unprecedented in the history of the African Union. Its first operational phase was signed last July in Niamey during the African Union Summit. This Agreement, which will allow the establishment of an internal market of 1.2 billion consumers, with a combined GDP of 3,000 billion dollars for goods and services produced on the continent, is strongly supported by the United Nations Economic Commission for Africa (ECA) which works in close collaboration with the African Union and other actors to support this grand process and to popularise it among the people and the private sector. "With the signing of the Kigali Declaration for the launching of the African Continental Free Trade Area, Africa has taken a giant step towards continental integration, the Pan-African Vision and the development of our continent," said Vera Songwe, Executive Secretary of the ECA. Speaking on the occasion of the official signing of the AfCFTA in Kigali, Ms. Songwe noted that this historic moment demonstrated the determination of African leaders to bring together the diversity of the continent and make this flagship project of the African Union Agenda 2063, a reality. In West Africa, the ECA, together with the African Union Commission (AUC), the International Trade Centre (ITC), the financial support of the European Union (EU), and in collaboration with national Governments, organised AfCFTA national awareness and advocacy forums and National Strategy validation workshops in Togo, Côte d'Ivoire, Guinea, The Gambia and Senegal.  (UNECA)

Key Words: UNECA, AfCFTA, West Africa

IMF Executive Board Concludes 2019 Article IV Consultation with Sierra Leone - The Executive Board of the International Monetary Fund (IMF) completed the 2019 Article IV consultation[1] with Sierra Leone on April 3, 2020. At the same time, the Board also completed the second review of Sierra Leone’s performance under their program supported by the IMF’s Extended Credit Facility (ECF) arrangement. A press release on the ECF review was issued separately. In recent years, macroeconomic conditions stabilized, and the economy had begun to cement its recovery. Since coming to office in early 2018, the Government implemented key reforms and launched a new National Development Plan with a strong emphasis on investing in education, infrastructure and improving governance. Growth stabilized at 3.5 percent in 2018 before picking up to an estimated 5.1percent in 2019, on the back of a broad‑based recovery of economic activity. At the same time, inflation moderated to under 14percent by end-2019. A focus on fiscal sustainability and prudent budget execution saw the overall budget deficit decline from 11.3percent of non‑iron ore GDP in 2017 to 7.7 percent in 2018 and an estimated 6.3 percent in 2019. This helped to stabilize domestic borrowing needs. The current account deficit also narrowed substantially, although pressure on the exchange rate persists. While the Sierra Leonean economy has great potential, the immediate outlook is overshadowed by the rapidly unfolding global COVID‑19 pandemic. Based on programmed policies, growth was projected to average around 4½percent over the medium term. However, prospects for the remainder of 2020 are subject to considerable uncertainty. (IMF)

Key Words: IMF, Sierra Leone, COVID-19

Coronavirus: Our West Africa production not affected – Tullow Oil plc has said its West African production guidelines have not be impacted by the COVID-19 pandemic. In its latest update, Tullow said: “Production operations in West Africa have not been affected by COVID-19 as yet”, adding: “In addition to the existing Infectious Disease mitigation plans already in place, Tullow is requiring all personnel to self-isolate in Ghana for two weeks before transferring to our FPSOs to ensure that the risk of a COVID-19 outbreak offshore is minimised”. “In the event that a case of COVID-19 is discovered offshore, robust mitigation and personnel evacuation plans are in place to ensure that the impact of any outbreak is minimised and operations are maintained”, Tullow noted. The update also said the health and safety of Tullow’s staff continues to be the Group’s “top priority” and the company continues to “carefully monitor” the ongoing COVID-19 pandemic. “Tullow has experience of managing infectious diseases of this nature following the significant contingency planning put in place during the West African Ebola outbreak in 2014”, the company noted, adding: “In our principal offices, Tullow staff are currently working from home in line with Host Government guidelines with negligible disruption to the business”. (Ghana Web)

Key Words: West Africa, Ghana, Business

SOUTH AFRICA

Mozambique looks for solutions to place cashews on the market – Mozambique’s National Cashew Institute (Incaju) is seeking alternative markets, including the domestic market, to overcome the issue caused by the Indian government, which increased the import tax on cashew nut imports from 45% to 70%, said an Incaju official. Lúcia António, head of the Industrial section of Incaju, told daily newspaper Notícias that the Mozambican cashew industry is facing difficulties due to the decision, mainly because India, which is the main market and processor of cashews (around 1 million tonnes per year), is one of the main destinations of cashews from Mozambique. “To minimise the impact of the drop in Mozambican exports on the country’s economy, Incaju is seeking other markets, promoting the use of cashews in the food industry, to produce flour, milk and butter, among other products, as well as in the cosmetics industry,” she said. Alongside this, the Mozambican government is assessing with its counterpart in India the possibility of signing an extraordinary trade agreement to place broken cashew nuts on the market, under a quota scheme. António told the newspaper that cashew nuts are an important source of foreign currency for Mozambique and are exported both as raw materials and as a finished product. As an example, between 2017 and 2019, over 80,000 tonnes of raw cashew nuts were exported and the country netted US$116 million, and 76% of the total went to India and 24% to Vietnam. In the same period 24,000 tonnes of processed cashews were exported leading to revenues of US$155 million. Processed cashew nuts in Mozambique were sent to Europe (36%), the United States (30%), Lebanon (9.0%), South Africa (9.0%), Vietnam (10%) and India (6.0%).  (Macauhub)

Key Words: Mozambique, Market, Cashew Nuts

COVID-19 pandemic: Statement by the Southern African People’s Solidarity Network (SAPSN) – The impact of the COVID-19 pandemic has provoked a new global recession which is plunging economies around the world into crisis. For an export, heavily indebted and aid dependent Southern Africa the looming crisis will destroy livelihoods and further cripple already ailing SADC economies. The economic dimensions of this crisis require a comprehensive emergency response by SADC. We need, now more than ever, a regional response as opposed to countries responding in isolation because the virus knows no border and its implications are of a transboundary nature. The threat posed by COVID-19 cannot be treated solely as a health risk but must be seen as a threat to the overall development of Southern Africa. In this regard we are calling on SADC governments to implement a debt moratorium and divert resources meant for debt repayments towards rebuilding the public health system and investing in critical social service sectors including energy, water, sanitation and housing infrastructure to build the resilience of SADC people to withstand the impact of the crisis. SADC, like many corporations must declare force majeure, i.e. the existence of unforeseeable circumstances which make it impossible to fulfil the terms of trade and investment agreements that stand in the way of local production of vital health equipment, medicines and other inputs necessary to address the pandemic. SADC cannot continue to be bound by the Trade-Related Aspects of Intellectual Property Rights (TRIPS) and Trade-Related Investment Measures (TRIMS) embedded in various trade regimes such as in the World Trade Organisation (WTO) and the Economic Partnership Agreements (EPAs) Whilst SAPSN agrees that every effort must be directed towards flattening the curve of the spread of COVID-19, primarily through social distancing, exercising personal hygiene, we strongly believe imposing lockdowns without addressing the social welfare of workers and citizens is disastrous. Furthermore, social (physical) distancing during lockdown is difficult to exercise in the region’s populous high density suburbs. (CADTM)

Key Words: SADC, COVID-19, Regional Integration