INTERNATIONAL

OECD : Foreign Direct Investment and Trade in Agro-Food Global Value Chains – This paper seeks to shed light on this topic by mapping the landscape of agro-food FDI, and estimating its impact on participation and domestic value creation in GVCs. It also aims to improve our understanding of the strategic factors that drive multinationals’ investment decisions, as well as the role of policy in influencing cross-border investment. Agro-food FDI is explored by observing variations across sectors, countries and geographic regions in cross-border mergers and acquisitions (M&As) between 1997 and 2017. The results indicate that the landscape of agro-food FDI has evolved significantly over the past two decades, with important implications for the development and transformation of agro-food GVCs.  FDI in the agriculture and food sectors remains small relative to industry and services. Within the agro-food value chain, however, food processing accounts for the lion’s share of cross-border investment activity, with large multinational food and beverage companies playing a critical role in driving FDI activity. Investments in primary agricultural production, while smaller in size and number, are propelled by the oil seeds, forestry, fishing and raw milk sectors. The services sector (which includes a diverse range of business activities ranging from wholesale and retail trade, to transport and logistics, other business services, and investment and holding companies) is the largest source of FDI inflows in agriculture and the second-largest source of inward investment in food. (OECD)

Key Words: OECD, FDI, Agro-Food Global Value Chains

Export restrictions: a negative-sum policy response to the COVID-19 crisis – Many countries, including China, European member states, the European Union, India and the United States have put in place measures to restrict exports of medical products as part of their response to the COVID-19 pandemic. The objective is to allocate domestic supplies to national healthcare systems and citizens. These policies break supply chains that rely on sourcing of inputs from different countries, reduce access to critically needed supplies and foster excessive price spikes and volatility, and generate foreign policy tensions. Experience with widespread use of export restrictions by food exporting countries in times of market disruption and supply shortages suggests a priority for the G20 should be to work with industry to put in place systems to enhance access to information on production capacity, investments to boost supplies and address supply chain bottlenecks affecting production and trade in essential medical supplies.  (Chatham House)

Key Words: COVID-19, Export, Trade

COVID-19: How social and economic sectors are responding – In a series of briefs  the ILO has captured the impact of the crisis on several social and economic sectors, including public emergency services (PES), health services, education, food retail, automotive, tourism, civil aviation, agriculture, maritime shipping and fishing, and the textiles, clothing, leather and footwear (TCLF) industries. The briefs reveal a picture of courage shown by the public emergency and health workers that fight the pandemic, and by the teachers, seafarers, shop keepers and other essential workers that keep our societies functioning. They also reveal massive losses, both of output and jobs across all sectors. Developing countries will be hit hardest, and poverty is on the rise. The analysis also outlines the drastic measures taken by governments, employers and workers to contain the virus and limit the damage to enterprises, livelihoods and the wider economy. These measures have focused on four immediate goals: Protecting workers in the workplace; supporting enterprises, jobs and incomes; stimulating the economy and employment; and relying on social dialogue based on international labour standards to ensure that countries and sectors recover quickly and better. “Many of our member States are taking unprecedented measures to protect frontline workers and to lessen the impact on businesses, livelihoods and the most vulnerable members of society,” said Alette van Leur, Director of the Sectoral Policies Department of the ILO. “We must increase investment in safe and decent working conditions for frontline workers and ensure that this pandemic does not leave long-lasting scars on economies, people and jobs.” (ILO)

Key Words: ILO, Global Economy, COVID-19

COVID-19: How Do We Re-open the Economy? – Five key steps are needed to achieve a high degree of public confidence in any reopening plan. First, enough progress must be made in suppressing the virus and in building public health capacity so the public can be confident any new outbreak will be contained without reverting to another full-scale lockdown. Moreover, the general public needs to feel that the treatment capacity of the health system is at a level where the risk to life if someone does fall ill with the virus is at an acceptably low level. Achieving this requires the government to demonstrate the necessary capabilities - testing, contact tracing, quarantine facilities, supplies of face masks and other forms of PPE (personal protective equipment) - are actually in place and can be sustained, rather than relying on future commitments. It also needs to be clear on the role to be played going forward by handwashing and other personal hygiene measures.

Second, the authorities need to set out clear priorities on which parts of the economy are to open first and why. This needs to take account of both supply side and demand side factors, such as the importance of a particular sector to delivering essential supplies, a sector’s ability to put in place effective protocols to protect its employees and customers, and its importance to the functioning of other parts of the economy. There is little point in opening a car assembly plant unless its SME suppliers are able to deliver the required parts. Detailed planning of the phasing of specific relaxation measures is essential, as is close cooperation between business and the authorities. The government also needs to establish a centralised coordination function capable of dealing quickly with any unexpected supply chain glitches. And it must pay close attention to feedback from health experts on how the process of re-opening the economy sector-by-sector is affecting the rate of infection.  

Third, the government needs to state how the current financial and economic support measures for the economy will evolve as the re-opening process continues. It is critical to avoid removing support measures too soon, and some key measures may have to continue to operate even as firms restart their operations. It is important to show how - over time - the measures will evolve from a ‘life support’ system for businesses and individuals into a more conventional economic stimulus. (Chatham House)

Key Words: COVID-19, Global Economy, Business

PAN AFRICA

Coronavirus: We must keep trade with Africa flowing – A commentary analysis by   Erastus Mwencha, Former Secretary-General of the Common Market for Eastern and Southern Africa and former Deputy Chairperson of the African Union Commission and by Tom Pengelly Director of the Secretariat for the UK All Party Parliamentary Group for Trade Out of Poverty. When G20 Trade and Investment Ministers met virtually recently, at the instigation of UK Trade Secretary Liz Truss, they agreed to do everything possible to keep trade flowing across the world and ensure that any necessary emergency measures taken to tackle COVID-19 do not create unnecessary barriers to trade or disruption to global supply chains. As encouraging as this sounds, unless these pledges are actually fortified into the global trading system, it is too easy for governments to pledge one thing publicly, only for the policy to be ignored in favour of more protectionist measures driven by domestic public pressures. Using its new independent voice at the WTO, the UK should lead a call to action focused on three areas.

1. First, the UK must continue to lead by example and hold all other members of the G20 to their promise not to erect unnecessary trade barriers. The WTO is one forum to do this, as the multilateral trading system already has well-established rules and surveillance systems. African countries can be supported to raise their concerns and analyse potential impacts of trade barriers.
2. Second, the UK should leverage its world-class aid infrastructure and long-standing partnerships with African countries to rapidly put in place schemes to ensure African supply chains are safe and kept open. A key asset here is TradeMark East Africa (TMEA), established by the UK a decade ago and now a leading player on trade and development in Africa. TMEA has announced the launch of a US$20 million Safe Trade Emergency Facility, providing short to medium-term measures in support of continued trade. This will help contain COVID-19, whilst still enabling trade to flow. The UK and other aid agencies must now channel more funding urgently to this type of initiative, so that they can be quickly scaled-up across the continent.
3. Finally, the UK should intensify its dialogue with Africa to plan for returning to a prosperous, more resilient, future. This can be done by establishing a UK-Africa Prosperity Commission to chart out the future direction for a new economic partnership covering safe trade, green investment and technology, and aid for trade. Bringing together UK Government Ministers with African Governments and the African Union, as well as those at the forefront of existing initiatives working to boost economic activity on the Continent, the Commission would examine how the UK and Africa can ‘build-back-better’ after the COVID-19 pandemic.

Around the world, one billion people have been lifted out of extreme poverty since 1990, as a direct result of international trade. (The Africa Report)

Key Words: COVID-19, Trade, Africa

Wellcome and DFID support Africa COVID-19 continental response with € 2.26 million – Wellcome and the United Kingdom Department for International Development (DFID) have awarded a grant of EUR 2.26 million to the Africa Centres for Disease Control and Prevention (Africa CDC) to support the COVID-19 response by African Union Member States. The grant was awarded as part of the DFID/Wellcome Epidemic Preparedness for Coronavirus grant and it is to support implementation of the Africa Joint Continental Strategy for COVID-19 Outbreak. Dr Josie Golding, Epidemics Lead at Wellcome said: “Having research at the centre of the COVID-19 response is critical if we must end the pandemic. COVID-19 has reached every corner of the world and is overwhelming even the most advanced health systems. Through our partnership with the DFID, Wellcome is supporting the important work of Africa CDC and countries across Africa to deal with the rapid spread of COVID-19.”Africa recorded its first COVID-19 case on 14 February 2020. While the pandemic affected and killed thousands of people in Asia and Europe, Africa’s leaders met and developed a comprehensive response strategy as a continent. The strategy was later approved and adopted by the Bureau of the African Union Heads of State and Government during its special meeting on 26 March 2020, as the overarching framework for Africa’s COVID-19 preparedness and response.The strategy aims to enhance coordination, collaboration, cooperation and communication on COVID-19 by Member States and partners. It focuses on six major technical areas and has guided Africa CDC in its support to Member States on the outbreak. The technical areas are laboratory and subtyping, surveillance and enhanced port of entry screening, infection prevention and control, clinical case management, risk communication, and supply chain management. (AU)

Key Words: COVID-19, Trade, Africa

The UK must do all it can to keep trade out of Africa flowing – First, the UK must continue to lead by example and hold all other members of the G20 to their promise not to erect unnecessary trade barriers. The WTO is one forum to do this, as the multilateral trading system already has well-established rules and surveillance systems. African countries can be supported to raise their concerns and analyse potential impacts of trade barriers. Second, the UK should leverage its world-class aid infrastructure and long-standing partnerships with African countries to put in place rapidly schemes to ensure African supply chains are safe and kept open. A key asset here is TradeMark East Africa (TMEA), established by the UK a decade ago and now a leading player on trade and development in Africa. TMEA has announced the launch of a $20m (£16m) Safe Trade Emergency Facility, providing short to medium term measures in support of continued trade. This will help contain Covid-19, while still enabling trade to flow. The UK and other aid agencies must now channel more funding urgently to this type of initiative, so that they can be quickly scaled-up across the continent. Finally, the UK should intensify its dialogue with Africa to plan for returning to a prosperous, more resilient, future. This can be done by establishing a UK-Africa Prosperity Commission to chart out the future direction for a new economic partnership covering safe trade, green investment and technology, and aid for trade. Bringing together UK government ministers with African governments and the African Union, as well as those at the forefront of existing initiatives working to boost economic activity on the continent, the Commission would examine how the UK and Africa can "build-backbetter" after the Covid-19 pandemic. (tralac)

Key Words: UK, Trade, Africa

Remarks by African Union Chairperson President Cyril Ramaphosa at the virtual meeting of the AU Bureau of Heads of State and Government Meeting with African Business Leaders - Extract : “I have convened this meeting with business leaders of major African companies to brief you about the AU strategy to combat COVID-19 and seek your support for the effective and successful implementation of the strategy. Our work is underpinned by the principles of pan-African unity, solidarity and coordination. The private sector is a vital part of Africa’s efforts to combat the coronavirus and develop continental cooperation on stimulus measures to manage the economic impact of the pandemic. The Bureau of the Assembly of Heads of State and Government has met on two occasions since the spread of the novel coronavirus into Africa. In these meetings, leaders acknowledged COVID-19 as an unprecedented public health disaster and that urgent action is needed to stem the tide of the virus on the continent. We agreed on the need for a comprehensive and coordinated continental approach, and that the AU, Regional Economic Communities and all health institutions should redirect their efforts to stopping the spread of the virus. We recognised critical role of the Africa Centres for Disease Control and Prevention in the fight against communicable diseases in Africa in general and the fight against COVID-19 in particular. The Bureau made pledges of $4.5 million towards boosting the capacity of the Africa CDC. The Bureau agreed to the establishment of an African COVID-19 Fund to which Member States of the Bureau initially contributed $12.5 million as seed funding and called on all AU Member States, the international community and philanthropic entities to contribute to this Fund.” (gov.za)

Key Words: AU, Trade, Business

Covid-19 in Africa: Navigating Short and Long Term Strategies – In Africa, Covid-19 takes its place in a long series of recent disease epidemics including Ebola, cholera, tuberculosis, plague, not to mention the omnipresence of malaria and HIV/AIDS. For instance, there is hope that countries that suffered badly from Ebola, such as the Democratic Republic of Congo and Sierra Leone, are able to use the medical infrastructure and trust in community care centres to isolate and treat the infected and lower transmission rates.The reasons for concern, however, are undeniably longer and will make it more difficult – if not completely unfeasible – for African countries to pursue a long-term strategy of recurring ‘shelter in place’ policies until a vaccine offers protection. For one, to follow the playbook in which all efforts are focused on preventing hospitals from being overwhelmed, Africa’s Covid-19 curve would need to be much ‘flatter’ than those in the US, France, or South Korea. The number of ventilators available are so despairingly low – in some places such as CAR, South Sudan and Liberia less than a handful – that demand will vastly exceed supply. Despite some recent aid from Chinese billionaire Jack Ma, who is stepping in a void of limited international aid to the region, the alarming shortage of PPE for doctors and nurses could speed up infection rates instead of driving them down.Second, both public and private means to weather the immediate income shock and the looming economic storm are limited. With circa 80% of Africans living on less than $6 a day, and more than 55% living in slums (World Bank 2020), the vast majority of Africa’s 1.2 billion people lack the personal resources (savings, food stocks, private access to drinking water) to endure a lockdown for even short periods of time. Especially large groups of urban dwellers that make ends meet through hustling jobs in the informal sector are at risk of immediate food shortages when their sources of income (temporarily) disappear. (African Arguments)

Key Words: COVID-19, Africa, Business

NORTH AFRICA

EBRD Lends BMCE Bank of Africa €145 Million to Support Struggling SMEs – The European Bank for Reconstruction and Development (EBRD) announced yesterday, April 22, a €145 million loan to Morocco’s BMCE Bank of Africa to support small- and medium-sized enterprises (SMEs). The ERBD aims to help Moroccan SMEs experiencing a decrease in activity, turnover, and profitability to address their liquidity needs. The European bank is also increasing an existing uncommitted multi-currency trade finance limit by €46.2 million to facilitate export and import transactions. The funding is part of the EBRD’s COVID-19 Solidarity Package, a response and recovery program mobilizing €1 billion to handle the economic fallout caused by the COVID-19 crisis. orocco is, as a result, the first EBRD country of operations to benefit from the bank’s coronavirus Resilience Program Framework. BMCE Bank of Africa is the third-largest bank in Morocco and listed on the Casablanca Stock Exchange. The Moroccan bank has been a partner of the EBRD since signing its first trade finance facility in 2013. Morocco is a founding member of the EBRD and became a country of operations in 2012. To date, the EBRD has invested €2.2 billion in Morocco through 64 projects. (Morocco World News)

Key Words: Morocco, COVID-19, SMEs

EAST AFRICA

Lobby urges EAC leaders to prepare joint recovery plan - The East African Business Council (EABC), a regional lobby for business and the private sector, said in a statement said that EAC member states should waive Customs duties and value added tax for medical devices and protective equipment from the region and other highly demanded goods in battling Covid-19.  The statement, issued at the end of the 76th Board Meeting of the EABC, said all six members of the EAC—Tanzania, Kenya, Uganda, Rwanda, Burundi and South Sudan —have been affected by the viral disease. Private sector organisations from Kenya, Tanzania, Uganda, Rwanda, Burundi and South Sudan also called for a common approach to businesses to safeguard the region’s jobs and exports. EABC chief executive Peter Mathuki said: “Given the intrinsic nature and level of integration of the EAC, the impact of Covid-19 poses high risks at the regional level regarding the recovery of tourism, SMEs, and manufacturing business sectors hence there is an urgent need for a common approach on the preparedness, response measures and recovery strategy for the EAC region.” “A common approach will safeguard current and future jobs, exports, businesses and offer quick economic recovery for the EAC bloc,” he added. The statement further says that EAC should ensure food security and supply of raw materials, enhance the supply of agricultural input and extension services to farmers, and promote agro-processing and urban farming. (The East African)

Key Words: EAC, COVID-19, Policy Response

Kenya to begin mass-producing ventilators – Kenya is on the brink of producing ventilators, an industrial breakthrough that will be a huge boost to the war on the coronavirus. The Kenya Association of Manufactures (KAM) made public the prototype of the locally developed ventilator in Nairobi on Tuesday. The PumuaIshi 2.0 is designed to be a complete intensive care unit respirator. It is portable, robust, compact, economical and easy to use, KAM said. “The primary focus of the PumuaIshi 2.0 is to provide intermittent positive-pressure ventilation (IPPV),” said Ashit Shah, an expert on ventilators made using Israeli technology. “This is the process of manually or mechanically ventilating a patient exhibiting a brief stop of respiration as well as one who has difficult or laboured breathing.”He added that the ventilator can easily be used by untrained people and can operate continuously for up to four hours without power. KAM automotive sector chairman Niraj Hirani said 100 pieces would be made daily and 500 every week when mass production begins. Industrialisation Cabinet Secretary Betty Maina said the breakthrough is a result of the challenge to local manufacturers to help in the war against the deadly virus. Kenyatta University, Dedan Kimathi University of Technology and the Kenya Industrial Research and Development Institute are also in the process of mass-producing such gadgets. (Daily Nation)

Key Words: Kenya, Business, COVID-19

WEST AFRICA

ECOWAS Leaders hold Extraordinary Summit Virtually to Combat COVID-19 in the Region – The Authority of ECOWAS Heads of State and Government will be holding an Extraordinary Session through videoconference today April 23, 2020, scheduled to Start at 10:00am Universal Time. The Heads of State will be discussing the Situation and Impact of the Coronavirus (COVID-19) Pandemic in the ECOWAS Region. Preceding this Extraordinary Summit, the Ministers in Charge of Finance and the Governors of Central Banks from the Region held a virtual Extraordinary Session on April 21, 2020 on the COVID-19 situation. To address the COVID-19 Situation in the Region, ECOWAS had immediately made available financial support, in addition to assistance from international partners, for the purchase of medical supplies and equipment essential for the fight against the pandemic.
As of April 20, 2020, according to the West African Health Organisation (WAHO) data, the 15 Member States have recorded 5,474 confirmed cases, 1,567 recovered, 140 deaths, and 3,767 active cases. ECOWAS reaffirms its solidarity with Member States and welcomes all the measures already taken to contain the spread of the pandemic and care for the sick.  (ECOWAS)

Key Words: Nigeria, ECOWAS, COVID-19

Digital Platform Sparkle Joins Open Banking Nigeria – Sparkle, a digital bank for the retail sector, has joined Open Banking Nigeria. It has become the latest stakeholder in Nigeria’s financial services industry to join other fintechs, banks and accounting firms in the cause for the attainment of unified Open Banking standards to transform Nigeria and lead Africa into a future of enriched, customer-centric and personalised services. Sparkle, which provides mobile, simple and customised business support, lifestyle and financial services, disclosed this as it announced its partnership with Open Banking Nigeria, the advocate of opening banking in the country. Already impacting the financial experience of the everyday Nigerians through a suite of innovative lifestyle services, and with features no other finance platform provides today, the fintech—through this partnership—will collaborate with other players in the financial services industry to promote, develop and adopt industry-wide Application Programming Interface (API) standards. Sparkle is a mobile-first, retail-focused platform which connects retailers and consumers in Nigeria using artificial intelligence to influence purchasing decisions based on user-generated behavioural data. Open Banking Nigeria drives innovation and choice for customers, businesses, fintech companies and banks with the API standards in partnership with a growing body of providers and partners helping to transform banking in Nigeria. (NIPC)

Key Words: Nigeria, Digital Platform, COVID-19

SOUTH AFRICA

Govt sets aside P10m for informal sector – Government has set aside P10 million to provide loans to informal traders to be able to purchase the stock they need to resuscitate their businesses when normal economic activity resumes. Addressing a press conference through a Skype video April 22, Minister of Investment, Trade and Industry, Ms Peggy Serame said that was part of government’s effort to explore ways of assisting informal traders who, she said constituted a significant percentage of role players in the national economy. Ms Serame said government appreciated that the informal sector had been hard hit by the current extreme social distancing measures put in place to curb the spread of the COVID-19 pandemic. However, she said, while measures to relieve formal businesses were already in place, means of extending support to the informal sector were still being explored, owing to undocumented informal traders. Financial support, she explained, would be availed through the Citizen Entrepreneurial Development Agency (CEDA), adding they would engage other role players such as the private sector and development partners with a view of possibly increasing the amount offered. Ms Serame also indicated that the COVID-19 pandemic came at a time when measures were in place, through the Local Enterprise Authority (LEA), to assess the number of small and medium enterprises (SMEs) and informal traders operating in the country. She said LEA and Statistics Botswana would proceed with the task of documenting such traders. On other issues, Ms Serame noted that the process of transporting some goods imported from other countries, in particular South Africa, had become slow, adding however, the ministry was continuously engaging the office of the South African Minister of Trade and Investment over the issue. (Daily News)

Key Words: Botswana, COVID-19, Informal Sector

Namibia: February Trade Statistics Bulletin -Namibia’s exports continued with a downward trend since December 2019 recording an export value of  N$4,883 million in February 2020 compared to N$6,339 million in January 2020. On the other hand, total imports followed an opposite trend since December 2019, rising to N$8,200 million in February 2020 from N$7,520 million registered in the preceding month. South Africa emerged as Namibia’s largest export destination, accounting for 21.8 percent of all goods exported followed by China accounting for 14.3 percent of total exports. While on the demand side, South Africa remained the largest source of Namibia’s imports, accounting for 43 percent of total imports into Namibia. Zambia followed in the second position with a share of 13.4 percent of Namibia’s total imports.  The analysis of commodities revealed that manufactured goods were by far Namibia’s top export products with a share of 47.2 percent of total exports followed by food and live animal (23.1 percent), crude materials (10.8 percent), commodities and transactions not classified elsewhere in the SITC (8.4 percent) and machinery and transport equipment (4.7 percent).  In terms of imports, manufactured goods were the most imported products into the local market with a relative share of 26.1 percent of total imports, these were followed by mineral fuels, lubricants and related materials (18.1 percent), machinery and transport equipment (16.1 percent), crude materials (12.8 percent) and lastly food and live animals (9.4 percent).  In terms of regional composition, SACU was the leading destination for Namibia’s exports during the month, with a market share of 31.4 percent of domestic exports followed by BRIC with relative market shares of 18.9 percent. On the imports side SACU remained the main source of Namibia’s imports with a total share of 44 percent in February 2020 followed by COMESA with a share of 17.4 percent.  (Namibia Statistics Agency)

Key Words: Namibia, Trade Statistics, COVID-19

South Africa: African Development Bank, SA Taxi sign $100 million loan agreement to boost industrialization, enhance transport sector – The African Development Bank and SA Taxi Development Finance Proprietary Limited, a wholly owned subsidiary of SA Taxi Holdings Proprietary Limited (“SA Taxi”), have signed a $100 million loan agreement to support the firm’s growing strategy to empower taxi operators with limited access to finance from traditional financiers. The loan agreement, which carries an eight-year tenor and includes a six-month grace period,was signed on Monday, 16 March between the Bank’s Director of Infrastructure & Urban Development Amadou Oumarou, and Lorenzo Cardoso, Chief Financial Officer and Director of SA Taxi.“The funding transaction entered into with the African Development Bank is instrumental to SA Taxi’s medium and long term strategy. The tenor and size of the transaction will contribute towards the continued success of SA Taxi to empower SMEs and create opportunities that ensure the sustainability of the minibus taxi industry,” Cardoso said. “We are proud to be an internationally recognised African business.”The financial package, comprising a senior loan of $10 million and an associated facility of ZAR 1.4 billion (about $97 million), will provide a powerful boost to industrialization through improved urban mobility for working class South Africans. SA Taxi is a vertically integrated minibus taxi platform utilizing specialist capabilities, enriched proprietary data and technology, to provide developmental finance, insurance and other services to empower Small and Medium Enterprises (SMEs), thus enabling the sustainability of the minibus taxi industry. (AfDB)

Key Words: South Africa, AfDB, Industrialization