INTERNATIONAL

Africa needs a Marshall plan to ride out Covid-19 crisis; prepare for uncertain times – African nations are forced to address the immediate health and livelihood challenges. They must ride out the emergency and prepare for uncertain times as we confront a fundamentally changed economic landscape. Africa is in the path of a fast-approaching storm with indications pointing to the pandemic hanging over the continent in slow devastation not dissimilar to the way Hurricane Dorian ravaged Abaco Island in the Bahamas last year. At the eye of this storm is a stark challenge: How do we undertake a basket of measures deemed necessary to flatten the curve of infection and death while limiting the hit on economic life? How do we embrace policy actions to save lives, if they appear likely to shatter livelihoods? The standard practice is to give priority to life. This is what developed countries are doing. But complete shutdowns have been possible in those countries because personal savings, unemployment benefits, ambitious stimuli packages, public kitchens and helicopter money to vulnerable people and enterprises have been unleashed at phenomenal speed. For people living off daily earnings, operating on the margins of poverty without savings and no access to public subsidy, an extended disruption of economic life threatens death by starvation or by associated poor people’s ailments. Experience around the world has shown that people with pre-existing health conditions are most at risk from the virus. We have also seen from the plight of African Americans, poverty is a pre-existing condition for suffering the worst of the coronavirus disease. As we ramp up health emergency response, the shame of our unpreparedness comes into sharp view. With four ICU beds, two of which are currently out of commission, South Sudan has the unenviable statistic of having more vice presidents than ICU beds. (UNCTAD)

Key Words: UNCTAD, COVID-19, Africa

The Private Sector Consultative Group outlines solutions to humanitarian, government and business needs amidst the COVID-19 pandemic – On 13 April 2020, the Chairperson of the WCO Private Sector Consultative Group (PSCG) submitted a paper to the WCO Secretary General outlining some observations, priorities and principles to be considered by the WCO and its Members during this unprecedented time of the COVID-19 pandemic. These observations and recommendations are divided in four categories, namely (i) expediting the clearance of essential goods and key workers to support and maintain vital services; (ii) applying the “social distancing” principles to border processes; (iii) striving for efficiencies and simplification in all clearance procedures; and (iv) supporting business resumption and recovery. “I greatly appreciate the useful contribution from the PSCG that merits serious consideration by Customs and other border agencies.  In these challenging times, it is critical that we work even harder together in the spirit of Customs-Business partnership”, said the WCO Secretary General Dr. Kunio Mikuriya. The PSCG was established 15 years ago with the objective of informing and advising the WCO Secretary General, the Policy Commission and WCO Members on Customs and international trade matters from the private sector perspective. Over the past month, the PSCG, who represents a wide range of businesses and industry associations, have been holding virtual weekly meetings, with the WCO Secretary General, Deputy Secretary General and Council Chairperson in attendance. These meetings enable the Members of the group to provide status updates relevant to their respective industries, discuss the impact of the COVID-19 pandemic on international trade and the global economy, and table for discussion proposals for a course of action by the global Customs community. In the paper, the PSCG commends the WCO for reminding the global Customs community to apply internationally agreed procedures and processes to facilitate the cross-border movement of goods, conveyances and crew.  The Group also points out that the crisis has shed light on the sound work carried out by the WCO over recent years and has demonstrated the benefits and value of efficient Customs reform and modernization efforts, which the Organization has long been advocating. (WCO)

 Key Words: COVID-19, WCO, Private Sector

WTO members discuss use of virtual platforms during COVID-19 lockdown - In-person meetings at the WTO and other Geneva-based international organizations have been suspended since mid-March, in line with Swiss government recommendations to curb the spread of the virus. While different WTO bodies have continued with smaller-group conference calls and written exchanges since the lockdown started, this was the first virtual meeting of the entire membership. In his remarks, the Director-General said the virtual meeting responded to the desire expressed by a large number of members to find ways forward on WTO work during the lockdown. He also noted that several delegations had underscored the challenges involved in maintaining proper consultations with officials and other stakeholders, both in capitals and in Geneva, during the pandemic. He therefore invited delegations to indicate whether they would be comfortable conducting informal meetings and information exchange through virtual platforms. He also asked if they would be open to formal decision-making through virtual meetings or written procedures until traditional in-person gatherings can resume.“The idea for today is to give members a chance to provide their views on whether they feel this online format is viable for some types of work until we can resume normal meetings,” he said. “We are facing the deepest recession of our lifetimes, so we cannot lose sight of the big picture. But today’s meeting is about smaller-scale practicalities — about how we can advance work in the weeks ahead,” DG Azevêdo added, noting that the United Nations General Assembly had agreed on a written process for adopting resolutions. The Director-General briefly addressed the economic consequences of the pandemic, which include severe disruptions to global trade. He pointed to the recent forecast by WTO economists projecting that global merchandise trade would shrink sharply in 2020 and emphasized that maintaining open markets for trade would be critical, along with fiscal and monetary measures, in laying the groundwork for a strong recovery. (WTO)

Key Words: WTO, COVID-19, Virtual Platforms

PAN AFRICA

African Union Commission, Afreximbank, AfroChampions and UNECA Joint Communique on the Need for A Holistic and Coordinated Trade and Investment Response to the COVID-19 Pandemic - African Union Member States with multifaceted development challenges stand the risk of prolonged agony as a consequence of these disruptions. Coming on the back of declining commodity prices, rising protectionism and heightened debt service burdens, the crisis threatens to wipe away decades of gains. There is hence need for an equally unprecedented and coordinated trade and economic policy response from African institutions and governments to ensure that the worst impacts of the pandemic are mitigated, and to position for the inevitable post Pandemic economic restructuring. In particular, the Pandemic and the attendant challenges in sourcing critical medical supplies and equipment have highlighted the critical gaps in Africa’s productive and manufacturing capacities, as well as the need to build domestic, regional and continental value and supply chains. African Union Member States must therefore resist the temptation to adopt nationalist and protectionist measures and postures, imposing restrictions to trade and disrupting value and supply chains, but must look instead to coordinating regional and continental responses and measures to address the health and economic challenges. Pooled and integrated intermediate industrial inputs procurement strategies, for instance, are no longer academic; they are an indispensable element of the urgent imperative. So also is the need to recognize the opportunities afforded by cooperation in harnessing the likely resilience of services trade even as the continent strives to support the current levels of cross-border trade in goods.  In this connection, the AfCFTA must be the rallying initiative to drive the post Pandemic economic recovery and the strengthening of African domestic, regional and continental value and supply chains.  (AU)

Key Words: AfCFTA, COVID-19, AU

COVID-19: Data for a resilient Africa – The United Nations Economic Commission for Africa (ECA) and the Global Partnership for Sustainable Development Data (GPSDD) have unveiled an initiative to strengthen Africa’s data ecosystems in the face of COVID-19. “Tackling the pandemic requires data and information to ensure that policies, resources and technology are deployed in the right place and time to make the biggest possible impact,” said Vera Songwe, ECA Executive Secretary. Ms. Songwe noted, however, that data systems for health and other areas of policy in Africa are often fragile and frequently inadequate.  “Critical gaps in coverage and timeliness can leave governments uncertain of where the risks of infection are highest and how to deploy resources in the most effective way, as well as where food aid is needed the most in particular for women and children” she added. The COVID-19 pandemic has caused untold suffering, disrupted billions of lives, and endangered the global economy.Wealthy countries have been worst affected thus far, but as the Global Partnership for Sustainable Development Data’s CEO, Claire Melamed, explains, the vulnerability of low-income countries is more alarming. “The lack of adequate shelter, sanitation, and health systems in low and lower-middle-income countries puts us at the precipice of the worst humanitarian crisis in 100 years. Getting timely, accurate data to get the pandemic under control in Africa is critical for the success of global efforts, and will help build strong data systems for the long term,” said Ms. Melamed.  Over the past few years, development partners have helped to build the foundations of robust data ecosystems that can respond to crises like this. As a result, there are multitudes of tested, scalable solutions that can be deployed, and a range of institutions contributing to data-driven decision-making that can expedite the fight against COVID-19.  Areas, where better data can save lives during COVID-19, include: population - understanding who is most at risk, to allocate resources effectively; health infrastructure and staffing; virus monitoring; and tracking the economic impacts, including business closures, the impact on agricultural production, and on trade and public spending, to put in place the right support and avoid long-term devastation.  (UNECA)

Key Words: COVID-19, Africa, UNECA

Will COVID-19 derail AfCFTA start of trading? - AfCFTA negotiations should continue via online and video-conferencing platforms. If done right virtual negotiations could prove to be even faster and cheaper than face to face meetings for certain aspects of the negotiations process. The July 2020 date for Start of AfCFTA Trading should not be postponed even if the pandemic persists into July. If AfCFTA trading can take off in the middle of this battle – even if symbolically – will send a strong signal; it should be one of the symbolic victories for Africa in the midst of a crisis. Initial AfCFTA trade can focus on critical goods needed to fight the pandemic such as pharmaceuticals and food products. Governments should ease border crossings for these goods. The AfCFTA can be one of Africa’s main weapons to beat COVID-19. The AfCFTA Secretariat, which is temporarily operating out of Addis Ababa, should continue with its staff recruitment and operationalize a fully functional virtual office with newly recruited teams working virtually from their homes across the continent. The African Union should convene a major virtual meeting of African trade ministers to deliberate on ways to keep the AfCFTA on track. A fully virtual mode of meetings should be activated to keep the process going. African Union should request Ministers of Trade to present COVID19-IMPACT reports of their proposed AfCFTA plans or their already prepared BIAT. Each of the member states that have ratified should be made to present a COVID-19-ADJUSTED plan to project how they plan to catch up in the post COVID-19 period. Africa must be proactive and united in fighting the pandemic; no country should be left behind in the fight. Otherwise borders, travel and trade will continue to be disrupted even if most countries recover and a few do not. Economic relief during the crisis is paramount and should be coordinated to include trade in goods critical to the fight against COVID-19. If economies sink too deep, recovery will be slow, and intra-Africa trade will suffer even more. Afreximbank’s US$3 billion COVID-19 facility and AfDB’s US$10 billion facility are laudable steps. These facilities should be targeted at national-level industries and regional value chains that are critical to the fight against the pandemic such as pharmaceuticals, medical equipment, food, agriculture, household consumables, key industrial inputs and transportation. (tralac)

Key Words: AfCFTA, COVID-19, Trade

Newly Sworn-In AfCFTA Secretary General, Wamkele Mene, Undertakes to Serve Africa with Resolute Determination – Mr. Wamkele Mene, first Secretary General of the AfCFTA) was sworn-in on 19 March 2020 at the African Union Headquarters in Addis Ababa, Ethiopia, in the presence of H.E Moussa Faki Mahamat, Chairperson of the AU Commission, H.E Albert M. Muchanga AU Commissioner for Trade and Industry and H.E Edward Xolisa Makaya, the Permanent Representative of South Africa to the African Union and Chairperson of the Permanent Representative Committee (PRC). The Ceremony was also attended by H.E. Mrs. Amma Adoma Twum-Amoah, Ambassador and Permanent Representative of Ghana to the AU, representing the host country of the AfCFTA Secretariat and H.E. Mr. Zakario Maiga, Ambassador and Permanent Representative of Niger, representing the Champion of the AfCFTA process. AU Staff, dignitaries, invited guests and the representatives of the media also witnessed this very solemn historic moment.   The Secretary General is expected to provide leadership and technical support to AfCFTA Secretariat and overall management of the day-to-day functioning of the Secretariat.He will be responsible for the management of the AfCFTA Secretariat, implementation of the AfCFTA Agreement and strategic collaboration; stakeholders’ engagement; and resources mobilization for the implementation of the AfCFTA Agreement. Amomg others. The Chairperson of the AU Commission, H.E. Moussa Faki Mahamat congratulated the SG on his election and underscored the challenges ahead: “You have been elected on the basis of your experience and skill. The task that awaits you is quite gigantic but exhilarating because you will be working on the most emblematic project in the history of the African Union. The African Free Trade Zone is a necessity for Africa to strengthen its integration”, said the AUC Chairperson. “Mr. Mene is entrusted with a huge responsibility to lead one of the key institutions of the African Union and to guide Africa to realize the Aspiration number one of the Agenda 2063 which talks to the attainment of ‘A prosperous Africa based on inclusive Growth and Sustainable Development”, said the PRC Chair.“We put the AfCFTA Secretariat in very capable hands under Secretary General Mene, we are assured of effective implementation of the AfCFTA Agreement”, said AU Commissioner for Trade and Industry. (AU)

Key Words: AfCFTA, COVID-19, AU

Intra-African trade, the African Continental Free Trade Area (AfCFTA) and the COVID-19 pandemic – Promoting intra-regional trade in agri-food products is crucial, both as a short- and long-term policy objective in Africa. Reducing vulnerabilities to COVID-19-related market disruptions and mitigating its impacts on the poor would require immediate efforts by African countries to ensure that agri-food supply chains and trade channels remain open. In the medium to long run, given the rapidly growing populations, incomes and levels of urbanization in African countries, substantial growth in food demand is expected, providing significant market potential for African producers. The entry into force of the AfCFTA in 2019 will likely expedite regional integration efforts and promote intra-regional trade in agri-food products, which is projected to expand by 20-30 percent by year 2040.  The role of intra-regional trade as a catalyst for agricultural development has been recognized in both the 2003 Comprehensive Africa Agricultural Development Programme (CAADP) and the 2014 Malabo Declaration. The AfCFTA provides a concrete and timely mechanism to realize such continental agricultural policy commitments.  As a way forward, this implies that African policy-makers would commit to avoiding policy responses to COVID-19 that may undermine the AfCFTA Agreement: it would be important to avoid both import and export-restricting measures, both in keeping with the spirit of the AfCFTA, and more immediately, to ensure food availability and access in the region.  • Avoid blanket import restrictions: Many countries in Africa have imposed import restrictions as part of border closures to manage the disease outbreak. However, as many countries are import-dependent, it is important to establish safe trade and travel corridors according to WHO guidelines, to minimize the impacts of COVID-related disruptions and keep food supply chains alive.  • Avoid ad hoc export restrictions: In the past, countries have responded to market uncertainties by imposing export restrictions. While such measures can increase domestic food supply and help control domestic prices in the short term, lower and volatile prices and an uncertain policy environment can create disincentives for producers to invest in the long run. Moreover, they can be particularly damaging to poor import-dependent countries within the continent, particularly if similar measures are taken by a number of countries at the same time.   (FAO)

Key Words: COVID-19, AfCFTA, Intra-African Trade

EAST AFRICA

Trade in uncertain times: Prioritizing regional over global value chains to accelerate economic development in East Africa - Recent global trends like the COVID-19 pandemic, the climate change crisis, and heightened trade disputes among the world’s leading trade partners have highlighted the vulnerability of global value chains (GVCs). At present, the scale of the disruption in East Africa is quite dire—imports from China (a common source of intermediate goods) through the Mombasa Port declined by a drastic 20 percent shortly after the onset of the pandemic, between January and February 2020. In light of these trends, governments and industries in East Africa should consider rapidly shifting from focusing on global value chains (GVCs) to regional ones (RVCs). Given the region’s past difficulties with entering global value chains and consolidating the gains from regional integration processes, heightened emphasis on regional value chains could reap compounding benefits. The time is ripe: As documented in our recent report, the recently signed and ratified African Continental Free Trade Area (AfCFTA) can be the great enabler of that shift. The literature on GVCs emerged in the 1990s, after which the development community began to frame development success in terms of the ability of countries to insert themselves into these GVCs. Although not uncontested, academic research provided evidence of the benefits to workers and improved prospects for poverty reduction from participating in GVCs. However, the current shortcomings of GVCs predate the COVID-19 crisis. Indeed, ever since the global financial crisis of 2008-2009, GVCs seem to have lost their momentum. The reasons are complex but tied up with the post-2009 slowdown of global growth and investment, as well as the stalling of multilateral trade liberalization. Moreover, many GVCs have already matured, making further specialization challenging and creating additional difficulties for developing countries to enter those value chains. By contrast, intra-African trade, albeit at a low level, has been buoyant and rising rapidly since the global financial crisis.  (Brookings)

Key Words: Trade, COVID-19, East Africa

How COVID-19 is accelerating digital transformation in Rwanda – For a long time teleworking technologies have existed and certain sectors have used them mostly in the consulting and in the BPO (Business process outsourcing) industry, however the global lockdown aimed to contain the spread of COVID19 has accelerated the adoption in other industries. Alex Ntale, Chief Executive Officer of the Rwanda ICT Chamber, said that in Rwanda, there has been accelerated adoption mostly in education tech enabling e-learning, e-commerce especially small and media enterprises as manufacturers are signing up to online trading. As a result this is also putting an increased need for connectivity. He said, when the Government decided to invest in internet infrastructure more than 10 years ago, it was not necessarily hoping that the investment would come to its rescue in a crisis but it was doing the right thing. Same thing when investments were made in laptops for education - one laptop per child and similar initiatives.  “So the evolution of the digital world is nudging all of us to adopt technologies that have for a long time been around but we’ve for one reason or the other been slow in adopting them. We all use mobile money but few of us use the full potential of digital financial services including; online banking for SMEs in preference of cheques however with limits on cash transactions, we’ve seen more interest in adoption.” Ntale observed that: “although though we still have a long way to go to be fully digital considering our population’s economic capacities, we have prepared infrastructure and policies to get us started.” Leveraging the crisis for further tech advancement There have been partnerships between Government and the private sector in enabling zero-rated mobile money transfers as well as zero-rating of education websites. These are efforts that are playing a big role to reduce cost of adoption and as such leverage the situation. (The New Times)

Key Words: COVID-19, Rwanda, Digital Transformation

WEST AFRICA

Nigeria and the Implementation of the AfCFTA: Key Issues and Policy Options, By Ese Owie - While the commencement of the AfCFTA’s operational phase calls for celebration, much work remains, as critical parts of the Agreement are yet to be completed – including countries’ schedules of tariff concessions and services commitments, negotiations on rules of origin, investment, intellectual property, competition policy, and a possible protocol on e-commerce. Nevertheless, the Covid-19 pandemic and its attendant effect on global trade implies that it would be a key consideration when appraising the preparedness for the commencement of the implementation phase of the AfCFTA, especially in the event that the pandemic and its trade disruptions persist past the expected date of take-off of AfCFTA – 1 July 2020. In December 2019, the government of Nigeria inaugurated the National Action Committee on the Implementation of the AfCFTA. The Committee, under the chairmanship of the honourable minister of Industry, Trade and Investment is tasked with setting out, extensively, the scope and reach of Nigeria’s strategy of aligning its trade and economic policies with extant continental integration efforts. In terms of proposed immediate action that would unlock the AfCFTA’s immense potential in Africa’s largest economy, a labyrinth of regulatory hurdles need to be addressed and a number of enabling intertwined actions reqire to be considered by all stakeholders. Most importantly, from a trade policy perspective, the National Action Committee and the National Office of Trade Negotiations (NOTN) must take a number of strategic steps, especially against the backdrop of the global COVID-19 pandemic. First, they must keep continental integration in focus through stakeholder engagement and communication. Granted that the idea of institutionalising an African single market is very popular on the continent and within Nigeria, protectionist sentiments abound. Consequently, the Committee must raise awareness of the AfCFTA to the general public. (Premium Times)

Key Words: Nigeria, AfCFTA, Regional Integration

Ghana: COVID-19 presents opportunity to restructure economy –  persistence of the COVID 19 pandemic threatens to erase the gains achieved with major implications for the economy, particularly, revenue mobilization as import duties and other tax revenues are expected to decline. Shortfalls in petroleum revenues along with an increase in healthcare expenditure, will likely result in a decline in growth of GDP. This therefore reinforces the need to restructure Ghana’s economy through implementation of the following measures: Firstly, the setting up of a Post COVID 19 Economic Recovery Team (PCERT) to fashion out a bridge to recovery by coordinating fiscal policy, bearing in mind that it takes about three (3) years for countries to come out of a recession, which is a huge possibility considering the current state of the Ghanaian economy. The PCERT should include stakeholders from the Central Bank, Ministry Of Finance, Ministry Of Planning, National Development Planning Commission, and Security & Exchanges Commission, among others to develop a medium to long-term growth and sustainability action plan for the economy as well as put in place measures to safeguard the economy against future unexpected shocks. Secondly, government should take advantage of the Africa Continental Free Trade Area (AfCFTA) to meet demand for goods and services in post COVID 19 markets across the continent. Government can mitigate the shocks imposed by the pandemic and strengthen Ghana’s economy by empowering local industries such as pharmaceuticals to boost production for local consumption and to take advantage of the disruption in global supply chains for exports. This will also likely boost intra-regional trade and reinforce Ghana’s status as a regional hub for pharmaceutical manufacturing, distributing to over 300million people in the ECOWAS sub region. (Ghana Web)

Key Words: Ghana, AfCFTA, COVID-19

SOUTH AFRICA

SADC Regional Response to COVID-19 Pandemic – The Southern African Development Community (SADC) recorded its first case of COVID-19 in early March, and since then, the numbers have been increasing. As of 15th April, 2020, fourteen (14) of the sixteen (16) SADC Member States have been affected by COVID-19 – Angola, Botswana, Eswatini, Democratic Republic of Congo, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, United Republic of Tanzania, Zambia and Zimbabwe. In addition to the measures put in place by Member States, SADC has put, and will continue putting in place, regional measures that are critical in responding to the COVID-19. So far, SADC has undertaken ten (10) regional coordinated actions to contain the spread of COVID-19 and mitigate its social and economic impacts on the region. These regional actions pertain to strengthening Disaster Risk Management; suspension of regional face-to-face meetings; coordinating and monitoring the implementation of the SADC Protocol on Health, utilization of the SADC Pooled Procurement Services for pharmaceuticals and medical supplies and the adoption of regional Guidelines on Harmonisation and Facilitation of Cross Border Transport Operations across the Region during the COVID-19. Download:  pdf SADC Guidelines on Cross-Border Transport during COVID-19 - adopted on 6 April 2020 (390 KB). Other actions include, mobilisation of regional support towards containment and mitigation of the socio-economic impact of COVID-19 pandemic on the SADC region; and partnering with the United Nations Educational, Scientific and Cultural Organization (UNESCO) to ensure continuity of education and learning programmes. The SADC Secretariat is also monitoring and analysing the socio-economic impact of the COVID-19 on SADC economies as well as providing weekly Regional Status reports and daily updates on the status of COVID-19 in the region.(tralac)

Key Words: SADC, COVID-19, Policy Responses

End of lockdown prospects and stimulation boost markets – Financial markets continued to improve, due to reopening plans in the US indicated guidelines on restarting the economy. Germany announced a progressive lifting of its lockdown to begin early next week by opening its motor production plants.  As a result risky investors moved out of gold and the dollar and back into equities and bonds during last week.  Equity and bond markets across the world had a third week in a row recovery as signs of a more flat Covid-19 infection and death curves emerge. South Africa also started with a slow process of lifting lockdown rules at its harbours to assists in exports of agriculture and resources will start with normal services. Mines will also restart with controlled production next month.  Domestically the “unexpected” meeting by the Monetary Policy Committee (MPC) this past Tuesday came as a surprise, although economists and analysts did expected another cut in the repo rate by at least 100 basis points next month.  The bank had adjusted South Africa’s economic growth rate for the year to -6.1percent, compared to -0.2percent just three weeks ago.  The central bank, however, also expects a U-shape growth trajectory with the economy starting to recover during the last part of the year and economic growth is expected to increase to 2.2percent in 2021 and 2.7percent in 2022.  The MPC also forecasts that South Africa’s inflation rate for 2020 will be about 3.6percent, with inflation starting to increase again during the middle of the year due to imported inflation as the rand stays under pressure and the oil price may start to move upwards again.  Despite these, there are strong perceptions that another cut in the repo rate is on the cards when the MPC is set to meet in July.  The news last week that the US jobless claims had jumped considerably from 210000 three weeks ago to 22.5million on Thursday, contributed to some negative sentiment in financial markets, but the announcement of the stimulus packages plan by the Trump administration on Thursday evening boosted share prices in the US at the opening on Friday.  (IOL)

Key Words: Markets, COVID-19, World Economy