INTERNATIONAL

UK provides £1.4 million more for trade facilitation initiatives – The United Kingdom government, through its Department for International Development, has injected an additional £1.4 million ($1.7 million) to UNCTAD’s work on trade facilitation, extending its support to March 2022. The new funds represent a 40% increase in funding from the previous £1 million ($1.2 million). At a time when it is increasingly crucial to facilitate trade to keep global supply chains thriving and international commerce moving, improving trading procedures around the world could not be more urgent and timelier. Critical goods must reach destinations in time to meet pressing needs and governments trade procedures need to meet new challenges of the century. The additional funding will enable UNCTAD to continue helping countries establish and maintain national trade facilitation committees (NTFCs), which are key to the implementation of the Trade Facilitation Agreement (TFA) of the World Trade “Thanks to the UK government’s commitment and funding for the past five years, we’ve been able to bring substantial support in trade facilitation to a number of developing and least developed countries,” said Shamika Sirimanne, director of UNCTAD’s division on technology and logistics. The new funding phase is the second extension of the collaboration between the UK’s customs authority, the World Customs Organization and UNCTAD to build the capacity of developing and least developed countries towards implementing trade facilitation reforms and meeting their obligations under the TFA. The UK has supported UNCTAD’s trade facilitation programme since 2015. (UNCTAD)

Key Words: UNCTAD,  Trade Facilitation, UK

Heads of WTO, WHO cite importance of open trade in ensuring flow of vital medical supplies - Joint statement by WTO Director-General Roberto Azevêdo and WHO Director-General Tedros Adhanom Ghebreyesus  - Extract - WHO and WTO are working together to support efforts to ensure the normal cross-border flow of vital medical supplies and other goods and services, promoting them where possible, and to resolve unnecessary disruptions to global supply chains, in furtherance of the International Health Regulations (2005) and WTO rules.  The purpose of the International Health Regulations is to prevent, protect against, control and provide a public health response to the international spread of disease in ways that are commensurate with public health risks, with a view to minimizing interference with international traffic and trade. WTO rules provide governments with the flexibilities they may need to address essential medical supply shortages and/or public health challenges. But any measure taken to promote public health that restricts trade should be “targeted, proportionate, transparent and temporary”, consistent with recent calls from world leaders.  Governments need to avoid measures that can disrupt supply chains and negatively impact the poorest and most vulnerable, notably in developing and least developed countries that are typically reliant on imports of medicines and medical equipment. We call on our Members to continue to share information about their measures with WHO and WTO, in line with the established transparency mechanisms, which are now especially valuable in supporting a coordinated response. To ensure that health technologies, including diagnostics, medicines, vaccines and other medical supplies vital to treating patients infected by COVID-19, reach those in need quickly, we emphasize the importance of streamlining conformity checks based on regulatory cooperation and international standards.   (WTO)

Key Words: WTO, WHO, COVID-19, Trade

UN agencies issue urgent call to fund the global emergency supply system to fight COVID-19 - Following is an extract of the text of the open letter: The UN Secretary-General on 25 March launched the COVID-19 Global Humanitarian Response Plan, requesting US$2 billion to boost the global response. You have been fast and generous in your funding and have extended lifelines to those who were already caught up in war, poverty and the worst effects of climate change – especially at a time when your own populations are suffering from the impact of the virus. Around $550 million has generously been made available to implement the Plan so far, with significant additional resources being mobilized and pledged. The Central Emergency Response Fund (CERF) has also released $95 million to kick-start the COVID-19 response, help contain the spread of the virus, maintain supply chains, and provide assistance and protection to the most vulnerable people, including women and girls, refugees and internally displaced persons. But more needs to be done. To get more deliveries off the ground, the UN World Food Programme (WFP) is setting up the vital logistics backbone that will help save lives and help halt the spread of the virus. WFP now urgently needs additional funding to establish the necessary transport hubs, charter vessels and provide aircraft for cargo, health workers and other essential staff. All elements of the Global Humanitarian Response Plan are crucial and need continued funding, but without these logistics common services, the global response could stutter to a halt. Now is not the time to slow down. No one is safe until everyone is safe. We, humanitarian organizations from across the world, therefore, call upon you to urgently support this global emergency supply system with an initial $350 million to enable a rapid scale-up of logistics common services. (OCHA)

Key Words: UN, COVID-19, Global Emergency Supply

Renewable energy to support economic growth, says IRENA – IRENA’s director-general Francesco La Camera said, “Governments are facing a difficult task of bringing the health emergency under control while introducing major stimulus and recovery measures. The crisis has exposed deeply embedded vulnerabilities of the current system. IRENA’s Outlook shows the ways to build more sustainable, equitable and resilient economies by aligning short-term recovery efforts with the medium-and long-term objectives of the Paris Agreement and the UN Sustainable Development Agenda.” “By accelerating renewables and making the energy transition an integral part of the wider recovery, governments can achieve multiple economic and social objectives in the pursuit of a resilient future that leaves nobody behind.” The Global Renewables Outlook examines building blocks of an energy system along with investment strategies and policy frameworks needed to manage the transition. It explores ways to cut global CO2 emissions by at least 70 per cent by 2050. Furthermore, a new perspective on deeper decarbonisation shows a path towards net-zero and zero emissions. Building on five technology pillars, particularly green hydrogen and extended end-use electrification could help replace fossil-fuels and slash emissions in heavy industry and hard-to-decarbonise sectors. Low-carbon investment would significantly pay off, the outlook has showed, with savings eight times more than costs when accounting for reduced health and environmental externalities.The outlook has looked at energy and socio-economic transition paths in 10 regions worldwide. Despite varied paths, all regions are expected to see higher shares of renewable energy use, with Southeast Asia, Latin America, the European Union and Sub-Saharan Africa poised to reach 70-80 per cent shares in their total energy mixes by 2050. (African Review)

Key Words: Renewable Energy, Economic Growth, IRENA

PAN AFRICA

The G20’s action on debt is an important first step; now for the hard part – A commentary by Brahima Sangafowa Coulibaly, Donald Kaberuka, Louise Mushikiwabo, Ngozi Okonjo-Iweala, Strive Masiyiwa, Tidjane Thiam, Trevor Manuel, Vera Songwe - A viable and proven option for mobilizing additional resources includes Special Drawing Rights Allocations (SDRs). The endorsement of an initiative allocating more of the existing and unused SDRs to countries in need or even creating new ones—$500 billion, for example—would provide much-needed liquidity to central banks, the corporate sector, and SMEs. Foreign exchange liquidity for the continent has dried up with capital flight and the collapse of commodity, notably oil, prices and trade, and tourism. Many countries are down to less than two weeks of reserves. The currencies of African countries have depreciated by 20-30 percent. There is also an urgent need to shore up some central banks. The African corporate sector does not have access to liquidity, as most funding sources have become unavailable or their requirements onerous. In addition, many companies—especially those in airlines, hotels, and tourism—have obligations to foreign commercial entities. Indeed, the regional African airline companies need about $1 billion to honor leasing obligations and other services alone. For businesses trying to avoid bankruptcy, there is need for working capital as well. To adequately confront this funding crisis, we must be bold and innovative. We believe a special purpose vehicle could be created to serve as a bridge finance facility to be accessed on a voluntary basis. If adequately structured, participating countries would benefit from a lowering of their cost of debt whilst keeping their hardearned market access, and investors would hold paper that would be much more liquid and with enhanced credit. The multilateral institutions working with the IIF and Africa should be tasked to explore this option as they develop work outs for the bilateral debt. (The Africa Report)

Key Words: G20, COVID-19, Africa

How Africa Can Fight the Pandemic – Many African governments have signaled a readiness to respond to the pandemic. But designing measures that reflect reality, and ensuring that they are effective, will be difficult. Under South Africa’s national lockdown, for example, the country’s most vulnerable social groups are struggling to feed their families, cannot wash their hands regularly because they have no access to clean water, and cannot self-isolate if they live in crowded slums. Other African countries – with far less developed social-welfare systems than South Africa – face even bigger challenges. According to the World Health Organization, the continent has just 1.06 nurses and midwives for every 1,000 inhabitants. And current evidence suggests that the belief that Africa’s tropical climate will help to suppress the coronavirus is a myth. In the coming weeks and months, millions of Africans may become infected with COVID-19. Researchers at Imperial College London recently estimated that, even under the most optimistic scenario, the virus would kill 300,000 people in Sub-Saharan Africa – not to mention the immense economic costs it would impose, owing to lost export revenues, severed supply chains, and plummeting demand. African governments therefore must make COVID-19 their top priority, and urgently design and implement ambitious, well-informed policies to combat it. After all, international support – although much-needed – is no substitute for resolute national action. For starters, African leaders must learn from countries that have already experienced the pandemic, in the way that South Africa is drawing lessons from South Korea. Furthermore, it is vital that governments collaborate effectively, share their experiences of tackling the virus, mobilize experts – both local and from the diaspora – and strengthen their coordination with the WHO.  (Project Syndicate)

Key Words: Policy Response, COVID-19, Africa

Working through regional blocs will help Africa fix virus-hit economies – African governments should initiate the following three meetings to incorporate vital aspects into their policy and strategic plans to rebound from the coronavirus-crisis:

• The regional blocs — The Southern African Development Community (Sadc), East African Community (EAC), and Economic Community of West African States (Ecowas) — should discuss follow-up strategies on the varying initiatives to deal with the outbreak and devise strategies to jumpstart member country economies. The agenda should include sharing country-specific recovery plans and how the rest of the world should be engaged to help Africa rebound and recover.
• The AU should initiate a meeting that engages Africa’s Brics allies. Given the extent to which China, India, and Russia are engaged on the continent, this is a no-brainer. Brics countries account for 40% of the world’s population and 30% of the global economy. There is substantial economic firepower in this group. This strategic alliance should be mobilised so that its member states and allies can co-operate and co-ordinate their respective efforts to move their countries towards recovery.
• Talks should be held with the leaders of the G20 and multilateral institutions. Jump-starting the global economy requires a global agenda. African leadership should angle talks to ensure that the global response is not a top-down approach. Trickle-down strategies generally result in those at the bottom being trickled on. Everything from debt forgiveness to fiscal support should be on the table. Up until 2001 African countries were growing at an enviable clip. Since then there have been three major shocks to the global economy — 9/11, the 2008 financial meltdown, and the coronavirus-crisis. None of these were Africa’s fault, yet the continent has had to bear a disproportionate share of the burden.

The World Bank is proposing a $14bn fast-track fund to shore up immediate containment efforts and $160bn over the next 15 months to assist with the overall recovery of the continent.  (Business Day)

Key Words: Africa, Economy, Regional Integration

Finding Africa’s path: Shaping bold solutions to save lives and livelihoods in the COVID-19 crisis – African countries have acted fast to contain the spread of this virus, and this has helped delay the course of the pandemic on the continent. But there is much uncertainty about how the outbreak will progress; case growth and severity will depend on many factors. It is not simply about the choice of policy measures implemented by governments. Outcomes will depend on policy adherence and efficacy. For example, robust isolation and physical distancing may be less implementable in the context of dense urban environments with high poverty rates. Other demographic and environmental factors also matter. Case severity in Africa could be positively affected by a younger population—the median age in Africa is 19.7 years—but negatively affected by higher rates of comorbidities, such as HIV, tuberculosis, and malnutrition. Evidence is still emerging on the impact of a wide range of environmental factors, from temperature and humidity to levels of Bacillus Calmette–Guérin (BCG) vaccination. In short, it is critical that efforts be intensified to contain the COVID-19 outbreak in Africa. Bold measures must be taken, including a significant scaling up of testing, to prepare health systems for a scenario in which infection rates increase rapidly. Alongside the urgent steps needed to strengthen health systems and protect lives, rapid, far-reaching action is needed to safeguard livelihoods. Our analysis shows that the jobs or incomes of 150 million Africans, across the formal and informal sectors, are vulnerable in the crisis; this is equivalent to one-third of the entire labor force. Moreover, our modeling suggests that the economic stimulus required to mitigate the economic damage will potentially be much larger than African governments have announced to date. Careful targeting of this stimulus could help protect the economy and jobs—and provide urgent support to vulnerable households. (Mckinsey & Company)

Key Words: Policy Response, COVID-19, Africa

NORTH AFRICA

Can the COVID-19 Crisis Actualize a Paperless Morocco? – The COVID-19 pandemic is reshaping the world, changing work habits, and reprioritizing industries. In Morocco, the coronavirus crisis could be a long-awaited chance for the country to make a leap from the paper age to a digital era. Several institutions, such as ministries, universities, utilities, and other administrations, launched digital platforms to ensure the continuity of their services amid the national lockdown, implemented on March 20 to restrict the movement of citizens. The new digital services are not only protecting citizens from COVID-19 but also making their lives much easier. Procedures that usually took long hours, if not days, to be accomplished can now be done with a few clicks, without having to move from the comfort of one’s home or to stand in long queues. In the private sector, digitization was already starting to become the norm, but the growth of this trend in the public sector as well, thanks to the coronavirus, would open the door for limitless opportunities in Morocco’s business sector, leading it to a new phase of prosperity. Company incorporation in Morocco, for instance, the legal process of forming a corporate entity, could become a simple task thanks to digitization, encourage local entrepreneurs to start businesses, and attract foreign investors to launch their projects in the country. While there are already legal texts supporting the procedure’s transition to a fully online process, their implementation is still facing challenges. Businesspeople in Morocco are hoping the COVID-19 crisis would help accelerate the implementation. (Morocco World News)

Key Words: Morocco, COVID-19, Trade

EAST AFRICA

Ethiopian Airlines joins WFP to fight covid-19 in Africa – Ethiopian Airlines has secured a World Food Program contract to transport essential supplies and medicines across Africa to fight the current coronavirus pandemic. This will mitigate the losses currently being suffered by Ethiopian Airlines. The UN agency has selected Addis Ababa as one of eight global centers set up to facilitate the supply chain in the fight against the pandemic. According to the Airlines’ management, the choice of their company is justifiable by the availability of the company's aircraft for cargo service and the number of destinations it serves, the experience gained in effectively coordinating delivery within a short time frame, and the storage capacity of its cargo terminal of up to one million tons per year. In response to the current situation, Ethiopian Cargo, the group's second-largest revenue-generating unit, has extended its reach to 74 destinations worldwide, deploying both its cargo fleet (ten Boeing 777s and two 737s) and its passenger fleet. In March alone, the carrier transported more than 45,848 tons of cargo across the world. These deliveries included test kits and protective devices donated by Alibaba founder Jack Ma to nearly 50 African countries. Tewolde Gebremariam, the CEO of Ethiopian Airlines, said the airline has recorded revenue losses of about $550 million (since January) due to travel restrictions imposed in response to the pandemic. On scheduled flights, it now serves only 19 out of 110 international destinations. This new situation has resulted in 91 aircraft, or more than 70% of its fleet, being grounded. (Ecofin Agency)

Key Words: Ethiopia, WFP, COVID-19

Economic impacts of and policy responses to the coronavirus pandemic: early evidence from Madagascar – Many of Madagascar’s key industries and export goods are likely to suffer from a global decline in demand owing to the fall in activity and consumption related to COVID-19, as well as interruptions to supply chains because of unprecedented travel restrictions. While the surge in gold price as a result of investors buying more traditionally secure assets at a time of instability may help Madagascar partially stem losses of revenues on its exports, this will not protect the country from significant overall losses on its most traded exports, including vanilla, textiles and nickel. These are likely to trade at significantly lower quantities and prices as a result of the mass interruption of global supply chains. Madagascar usually welcomes 300,000 tourists per year. As tourism globally comes to a stop as a result of worldwide restrictions on international flights, Madagascar’s tourism industry, which usually contributes 16% of GDP, has ground to a halt.  The authorities are maintaining the flexible exchange rate regime. Based on the latest available data, the exchange rate has depreciated by about 3% since last month. FDI in Madagascar accounted for 2.5% of GDP in 2018. It is expected that FDI will be negatively affected globally by around -5% to -15%. Given the ill preparedness of a country like Madagascar to the scale of the crisis, we can expect FDI to be more negatively affected than in other countries. News outlets are beginning to reference job losses in tourism, as international flights are cancelled, as well as inflation of prices for essential goods. Tourism is directly responsible for the employment of 238,000 people and in total nearly 800,000 people as of 2018 (around 3% of the population). The IMF Article IV Consultation, which was finalised in January of this year, noted satisfactory performance with solid growth, moderate single-digit inflation and a robust external position. However, it notes Madagascar is vulnerable to exogenous shocks in terms of trade. The COVID-19 pandemic has resulted in an urgent balance of payments gap in Madagascar as a result of the impacts on its key industries. The IMF has approved a support package but urged further support from donors to close the BOP gap. (ODI)

Key Words: Madagascar, COVID-19, Policy Responses

WEST AFRICA

Nigeria to lose over $160 million to cocoa, cashew exports over COVID-19 - About 280,000 metric tonnes of cocoa beans are produced annually in Nigeria, and about 90% of this exported. That means the impact of the development would be felt more on Cocoa, as it is particularly vulnerable. It stated, “Over the last decade, cocoa has been the top-performing non-oil export product in Nigeria. Commodity markets have taken a major hit, and this does not apply solely to crude oil. The price of Nigerian cocoa beans stood at $2880.63/tonne on 03 February 2020 (source: ITC market price information). It has now fallen to $2440.94/tonne as of 30 March 2020 (source: ITC market price information). This is a fall of $439.69 per tonne. “Assuming production stays the same this year, this translates to a loss in export earnings of around $110.8 million across the year. However, if the lockdown in Nigeria in Lagos, FCT and Ogun state, spreads to cocoa producing states such as Ondo and Cross river, then production will evidently fall, generating a further loss in foreign exchange.”Meanwhile, the demand for Nigerian cocoa is at risk of recording a further decline. For instance, Europe remains the epicentre of the COVID-19 pandemic and over 81% of Nigerian cocoa was exported to Europe in 2018, with 65% going to the Netherlands and Germany alone.bThough the price change seen in Sesame seed has not been drastic as cocoa, the value has also dropped by $60 per tonne from $1.270 per tonne to $1,210/tonne. On its own part, Cashew exports have been on the increase after NEPC targeted the scale-up production in Nigeria. “Production is now around 200,000 metric tonnes, with semi-processing plants common around the country. However, as of 2018, 90.5% of cashew exports were still raw cashew nuts, accounting for over $162 metric. (Nairametrics)

Key Words: Nigeria, Export Sector, COVID-19

SOUTH AFRICA

Ramaphosa considers R1-trillion Covid-19 stimulus proposal for SA’s frail economy- President Cyril Ramaphosa is considering a R1-trillion stimulus proposal that will be at the centre of the government’s economic intervention to limit the catastrophic fallout of an extended Covid-19 lockdown on SA’s economy, which is expected to plunge into a deep recession during 2020. The proposed R1-trillion stimulus package, which is nearly the equivalent of SA’s spending budget for fiscal year 2020/21 of R1.95-trillion, was discussed at a Nedlac meeting chaired by Ramaphosa on 17 April 2020 and attended by business, labour and community representatives. The proposed package is expected to be similar to the enormous $2-trillion scheme recently approved in the US, as SA’s government might target sectors hardest-hit by the lockdown by offering assistance to financially distressed companies. The assistance might come in the form of loans offered by commercial banks with favourable interest rates and other terms or loan guarantees offered by the National Treasury.  Targeted sectors under the stimulus package include certain aspects of manufacturing, retail, hospitality and tourism, which are expected to record many job losses because they are not essential service providers, resulting in their operations being shut during the lockdown. This is according to Matthew Parks, the parliamentary coordinator for labour federation Cosatu, who attended the Nedlac meeting and said the stimulus package proposal was unanimously endorsed by labour and business. “The president [Ramaphosa] has been calling for a massive R1-trillion stimulus fund, which we agree with completely because the economy is already in a recession and unemployment numbers will rise,” Parks told Business Maverick this weekend. (Daily Maverick)

Key Words: South Africa, COVID-19, Policy Response

Mitigating impact of COVID-19 on Africa regional trade - There has been a slight uptick in trade on the African continent as some restrictions on the movement of food products have been lifted. This was according to Dr Sifiso Ntombela, senior agricultural economist at the National Agricultural Marketing Council, who added that this trend was likely to increase as African countries seek to improve the levels of their food stocks. However, he said restrictions on imports of key commodities such as rice, wheat and poultry could become a problem going forward. “Countries such as South Africa and other [Southern African Customs Union (SACU)] members, which depend 100% on imported rice could find themselves in a situation of high domestic prices for these products.” Ntombela said the coronavirus disease (COVID-19) pandemic, however, had the potential to increase regional trade, particularly in processed products. “This potential increase in processed products will likely exist beyond the pandemic, which suggest that countries that invest in agro-processing technology and infrastructure will benefit significantly in the medium- to long-term.” In addition, he said the most serious barriers to regional trade were non-tariff measures such as poor trade facilitation and logistics, which cause delays at borders. “Policies focusing on modernising custom procedures and electronic exchange of monies, as well as trade documents will enable better regional trade.”Tinashe Kapuya, value chain analyst at BFAP said: “Generally, the African continent is a net food importer, and in the region, priority has been given to cross-border movement of food. Restrictions have mainly been on cross-border movement of people.” (Farmer’s Weekly)

Key Words: Africa, COVID-19, Regional Trade