INTERNATIONAL

Members discuss trade responses to COVID-19 pandemic – More than 60 member delegations intervened at the meeting to discuss immediate responses to COVID-19 as well as longer-term strategies for addressing the adverse impact of the crisis on national economic and development prospects, as well as on the global economy as a whole. The meeting was held virtually due to continued restrictions on gatherings at WTO headquarters.  David Walker, the New Zealand ambassador chairing the General Council, said in conclusion that addressing the health crisis remains the urgent priority, and that many members taking the floor noted the importance of trade in that context — namely, to keep markets open in order to facilitate the flow of essential medical goods as well as agricultural and food products.

“Going forward, and as governments consider options for immediate responses to the COVID-19 crisis, as well as long-term ones, our biggest challenge in the trade sphere is to ensure that trade policies, and the work that we do as members of the WTO, are part of the solution to assist and support that recovery.” Multilateral cooperation “is more important than ever,” he added  “As a member-driven organization, there cannot have been a more important moment in our 25 year existence, as one of you put it today, for members to ‘step up and drive’.”

Director-General Roberto Azevêdo also stressed the importance of international cooperation on trade to help lift economies out of the crisis, a message that has been delivered by the G20 as well as various WTO members and groups of members in their declarations, statements and proposals. “Restarting the global economy and reinstating confidence for businesses and households will depend not only on when the health crisis is contained, but on coordinated, coherent and cooperative international economic policy responses,” he said. “I call upon all members to resist policies that may further disrupt supply chains and add to the strains on an already fragile global economy. To build more resilient national economies, we must build more resilient international cooperation — and a more resilient and effective multilateral trading system.” DG Azevêdo described the WTO’s efforts to track members’ COVID-19 related trade measures as part of the organization’s monitoring and transparency mandate. More information is available on the WTO’s dedicated COVID-19 webpage here.

In their interventions many members recognized the unique situation governments were currently facing. While recognizing the need to take measures necessary to ensure the supply of essential medicines and medical equipment, they stressed that any such measures must be temporary, targeted, proportional and transparent. Many developing country members that took the floor underlined the importance of flexibilities in the existing WTO agreements to respond to health emergencies, including under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).  They also said access to trade finance was a concern for many developing countries as well as the impact of the current crisis on their micro-, small and medium-sized enterprises.  (WTO)

Key Words: COVID-19, WTO, Global Business

India draws 5 markers at WTO; says no to using pandemic as portal for trade commitments – India’s trade envoy JS Deepak on Friday drew five markers for combating Covid-19 at the World Trade Organization, pushing back against egregious efforts by major industrialised countries to extract trade-liberalisation commitments from India and other developing countries by using the pandemic as a portal. In a hard-hitting intervention at the virtual General Council meeting on 15 May. Deepak said: “The economic hardship and other negative repercussions of Covid-19 make carrying on with negotiations in a business-as-usual format untenable.” Deepak drew five markers.

1. First, India acknowledges “the importance of coordinating the global response in a way that avoids unnecessary disruption in the flow of vital medical supplies, food and other goods and services across borders.”
2. Second, India remains committed to taking emergency measures for combating Covid-19 on a “targeted, proportionate, transparent, and temporary” basis.
3. Third, attempts to prohibit the use of export restrictions on medical and agricultural products are untenable because “developing countries being unable to match the deep pockets of buyers in developed countries will see these products vanish in times of shortage.”
4. Fourth, “if WTO members are serious about trade-related measures aimed at combating Covid-19, then a useful starting point would be to enable the use of TRIPs (trade-related intellectual properties) flexibilities to ensure access to essential medicines, treatments and vaccines at affordable prices.”
5. And fifth, Covid-19 has underlined “the urgent need to build the capacity of developing countries and LDCs in areas like digital skills and broadband infrastructure, rather than negotiating binding rules on e-commerce, which will freeze the non-level playing field against their interests.”

South Africa’s trade envoy Xolelwa-Mlumbi Peter: ”We cannot agree to proposals for global rule-making that limit our policy options to respond to the crisis, enhance our preparedness for future crises and to pursue our plans for economic recovery. It is not advisable to make binding decisions in a policy environment that is manifestly uncertain, including on tariffs and export restrictions which are legal in the WTO rule book.”(The Hindu Business Line)

Key Words: COVID-19, India, Trade and Investment

UK announces new post-Brexit global tariff regime – The United Kingdom announced a new post-Brexit tariff regime on Tuesday to replace the European Union’s external tariff, maintaining a 10% tariff on cars but cutting levies on tens of billions of dollars of supply chain imports.  After decades outsourcing its trade policy to the EU, Britain is seeking free trade agreements with countries around the world and aims to have deals in place covering 80% of British trade by 2022.

The new tariff regime, in place from January 2021, marks a departure from what some UK officials call an overly complex EU system, setting out Britain’s stall as it negotiates trade deals with both the United States and the Brussels-based bloc. But it will mean that if Britain and the EU fail to reach a free trade deal by the end of the year, the price of some food, cars and some chemical inputs imported from the bloc would rise sharply. Britain said the regime, known as UK Global Tariff, would be simpler and cheaper than the EU’s Common External Tariff. It will apply to countries with which it has no agreement and removes all tariffs below 2%. “Our new Global Tariff will benefit UK consumers and households by cutting red tape and reducing the cost of thousands of everyday products,” International Trade Secretary Liz Truss said. The government said tariffs would be eliminated on a wide range of products, with 60% of trade coming into the UK tariff-free on WTO terms or through existing preferential access.

The UK will maintain tariffs on products competing with industries such as agriculture, automotive and fishing, and remove levies on 30 billion pounds ($37 billion) worth of imports entering UK supply chains.  “Keeping agricultural protection makes sense as a bargaining chip for EU & US trade negotiations. But means big cost increases for agriculture imports if no UK-EU FTA,” said Thomas Sampson, Associate Professor at the London School of Economics.  The UK will also remove tariffs on products which support energy efficiency and will introduce a temporary zero tariff on goods being used to fight COVID-19 such as personal protective equipment.  (Reuters)

Key Words: COVID-19, Global Trade, UK

PAN AFRICA

‘We need to be digitally ready for AfCFTA’– The government has been urged to ensure that all the required ICT infrastructure and resources are put in place to equip the country for the implementation of the African Continental Free Trade Area (AfCFTA) agreement after the coronavirus pandemic. Implementation of the free trade agreement was expected to commence on July 1 this year; however, due to the disruptions occasioned by the coronavirus pandemic, it is likely to be deferred to next year. Ghana was selected to host the secretariat of AfCFTA, giving the country a pivotal role in overseeing the implementation of the agreement. The country has committed US$10m for the operationalisation of the secretariat. To this end, the Deputy Director-General of the National Information Technology Agency (NITA), Kwaku Kyei Ofori, has encouraged government to leverage the benefits ICT presents and ensure that the economy is ready digitally to make the implementation of AfCFTA efficient and effective as well as boost intra-Africa trade.

Speaking to Business 24 in an exclusive interview, he said: “Digitising the economy can help us leapfrog all other businesses that are around. If we are prepared and ready [for AfCFTA], and we get our structures in place, it affords us an opportunity to improve our economy.”He added that he was optimistic about Ghana’s digitisation prospects. “We will be digitally ready, because if you look at the rectifications we are putting in place from education to health, everything is being done in a much smarter way. We have had engagements with other stakeholders [on AfCFTA] to know the requirements expected of us.” He said COVID-19 has changed lots of things, and with the advent of technology, economies can harness the benefits to turn things around by way of intra-Africa trade, collaboration and building synergies.

Explaining the importance of technology to regional integration, he argued that a comprehensive database system will help African countries to put together sizeable economic stimulus packages to help alleviate the economic devastation arising from the pandemic. AfCFTA provides the opportunity for Africa to create the world’s largest free trade area, with the potential to unite 1.3bn people in a US$2.5 trillion economic bloc and usher in a new era of development. The main objectives of AfCFTA are to create a continental market for goods and services, with free movement of people and capital, and pave the way for creating a customs union. It will also grow intra-African trade through better harmonisation and coordination of trade liberalisation across the continent. AfCFTA is further expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access, and better reallocation of resources. (Ghana Web)

Key Words: COVID-19, AfCFTA, Regional Integration

Plans Underway to Assess the Impact of Data Collection on Consumer Price Indices – COMESA Secretariat has embarked on the assessment of the impact of the outbreak of COVID-19 on the Consumer Price Index (CPI) data collection. This follows a disruption of  the surveys on CPI, which require interactive and wide coverage methods to collect data. The slowdown has been occasioned by the Coronavirus pandemic and subsequent measures put in place by Member States to prevent further spread of the disease. These have collectively  impacted negatively on the collection of statistical information. The Statistics Unit at COMESA Secretariat states that the partial, full lock-down, social distancing and in some cases, curfews invoked by Member States have not helped the situation.

“The CPI has been affected because data collection has become increasingly difficult as most outlets and other data collection points are either closed or access is limited or is being controlled,” Mr. Themba Munalula, Head of the Statistics Unit states told eComesa.

This data is used for the compilation of the regional Harmonized Consumer Price Index (HCPI). For the month of March, almost all countries that regularly submit data for the COMESA HCPI compilation were able to undertake the CPI surveys. A few countries, such as Tunisia reported that due to the general containment decree, only 68.9% of the prices collected in the field for the month of March 2020. Eswatini could not make estimates for non-food items following international recommendations. Seychelles reported of challenges in data collection for the month of April adding that it would use imputation techniques based on the CPI manual recommendations. The CPI is a key economic indicator that policymakers in Member States use on a monthly basis to monitor economic conditions at country level as it reflects the general levels of prices of goods, services and inflation. (COMESA)

Key Words: COMESA, Business, COVID-19

On Turkey-Africa Partnership panel, participants discuss trade and stimulus to cushion the economic fallout of COVID-19 – African Development Bank Vice President for Regional Development, Integration and Business Delivery Khaled Sherif said trade and stimulus were needed to cushion the economic impacts of the COVID-19 pandemic and build resilience among African economies to future shocks. Sherif participated in a 12 May virtual panel sponsored by the Foreign Economic Relations Board of Turkey (DEIK) titled Multilateral Response to Covid-19 Crisis: Turkey-Africa Partnership that also included Secretary General of the African Continental Free Trade Area (AfCFTA) Wamkele Mene; President and Chief Executive of Trade and Development Bank Admassu Tadesse; Nail Olpak, President of the Foreign Economic Relations Board of Turkey; and Husnu Dilemre, Director General for International Agreements and EU Affairs, Turkish Ministry of Trade. Nicholas Norbrook, Managing Editor of The Africa Report served as moderator.   

Discussions centered on the impacts of the pandemic on Africa, and how its partnership and trade with Turkey as well as regional institutions could help the continent bounce back. Dilemre pointed to Turkey’s strong diplomatic links to countries across Africa, noting that the country has embassies in 42 African countries, before going on to emphasize the importance of maintaining trade. “We are making sure that even in the present, under the severe measures that are used to control the spread of the pandemic, trade continues without restriction. We believe COVID-19 should not be an excuse to restrict trade,” he said.   In response to a question from the moderator about the scheduled commencement of trade under AfCFTA on July 1,  Mene said there would be a delay given the current circumstances: “The conditions on the ground are not permissive for a credible trading to begin on the ground as we had been directed by the heads of state.”  However, he argued that the Free Trade Area, once up and running, would act as a stimulus for the continent. “The stimulus package for us has got to be to implement this agreement. To boost inter-African trade and to position ourselves for year-on-year growth on the back of this trade agreement,” Mene said. 

Sherif described a number of obstacles to building stronger economic resilience in Africa,  including the continent’s heavy reliance on commodities for exports, lack of social safety nets, the need to import food staples and a low tax base on which governments can draw on for revenue. These have sharpened the economic impact of the pandemic, running down of foreign exchange reserves and leading to the downgrade of sovereign credit ratings for Nigeria, Angola and a few other countries. “We are dealing with a set of exogenous shocks that Africa has never seen,” Sherif said.  He emphasized that the shocks were a result of global measures taken to contain the virus, not the disease itself. “This is not a crisis caused by the coronavirus, because the coronavirus has not spread substantially across the continent, except in five countries.”(AfDB)

Key Words: AfDB, Turkey-Africa Trade Agreement, COVID-19

Africa’s Top 250 Companies in 2020 – As international investors take fright, the total market capitalisation of the firms in this year’s survey is down 18% on last year. But there are glimmers of hope amid the gloom. Tom Minney takes stock of the fortunes of Africa’s Top 250 Companies.As African leaders slammed the brakes on economic activities and put their countries or cities into lockdown to block the spread of the coronavirus, businesses and jobs were collapsing into intensive care and could be among the biggest casualties of the health crisis.  This year’s Top 250 Companies survey highlights the overall carnage in African share valuations in the last few years and even more so in March 2020. The survey ranks African or Africa-focused companies listed on public securities exchanges according to their market valuation, also known as “market capitalisation”.

To view the full ranking of the Top 250 Companies, click here. Total value for all 250 firms on the list this year is $597.7bn, down 20% from last year’s total of $748.2bn. But last year had seen a 16% fall compared to total market capitalisation of $887.1bn in March 2018 and this year’s total value is 37% below peak value of $948.3bn in 2015.  The market value of the 250th company – in other words the cut-off market capitalisation to join the Top 250 list – was $195m in 2020, compared to $394m in 2018.

It is too early to say what the damage the pandemic will cause to companies’ future profits, a key basis on which investors value securities and set the market capitalisation. An early indicator of the scale of the cutback in Africa is the number of lost jobs. In mid-April, international consulting firm McKinsey estimated that in the formal sector, which employs around 110m people across Africa, between 9m and 18m jobs may be terminated and there could be pay cuts for another 30m-35m workers. But 100m jobs are thought to be “vulnerable” in the informal sector, which it estimates accounts for three-quarters of Africa’s 440m jobs. (African Business )

Key Words: COVID-19, Africa, Business

ICC mobilises Sub-Saharan Africa regional network to fight impact of COVID-19 – ICC convened a landmark Sub-Saharan Africa regional meeting this week bringing together participants from close to 20 African countries. The virtual meeting, which took place on 14 May, aimed to augment the voice of African business into global discussions, identify ways to build private sector resilience, and pave the way for a sustained economic recovery from the COVID-19 pandemic. Chaired by ICC Secretary General John W.H. Denton AO, the meeting featured speakers Hubert Danso, CEO and Chairman of Africa Investors, Kiprono Kittony, Vice-Chair for Africa of the ICC World Chambers Federation, and Babatunde Savage, ICC Regional Coordinator for Africa. The meeting also saw participation from new ICC Executive Board member Valentina Mintah, CEO of West Blue Consulting and Vice-Chair of ICC Ghana.

Discussions during the call were centered around the following themes:

• Regional and international instruments to support the private sector in Africa
• Specific mechanisms to build the resilience of micro and small enterprises
• Operationalizing the African Continental Free Trade Area

The outcomes of this meeting and future meetings of the group will be shared with relevant regional institutions, including the African Union and the African Development Bank. ICC’s unprecedented mobilisation of its network in Sub-Saharan Africa has resulted in engagement by more than 180 chambers in 47 African countries to tackle COVID-19. Outreach has also been facilitated through ICC representative bodies – known as national committees – in Burkina Faso, Ghana, Kenya, Nigeria and South Africa as well as through members in Angola, Benin, Côte d’Ivoire, Ethiopia, Liberia, Madagascar, Mauritius, Senegal, Tanzania, Uganda and Zambia. ICC’s network also includes three transnational chambers. They are the Pan African Chamber of Commerce and Industry (PACCI), the Federation of West African Chambers of Commerce and Industry (FEWACCI) and the Union of Chambers of Commerce and Industry of the Indian Ocean (UCCIOI). The Sub-Saharan Africa regional meeting was the latest in a series of ICC outreach initiatives aimed at addressing the impact of the COVID crisis on the private sector in Africa. (tralac)

Key Words: COVID-19, Africa, ICC

Africa’s Finance Ministers and Private Sector Group seek to rapidly resolve commercial debt service obligations together – The United Nations Economic Commission for Africa (ECA) on Monday convened a meeting between African Finance Ministers, the Africa Private Sector Working Group and the African Union (AU) Special Envoy on COVID-19 as the search continues for solutions to ensure African economies enjoy continued market access and meet their private sector debt service obligations. The meeting aimed at finding new financing solutions to provide additional resources for countries to mitigate the impact of the ongoing COVID-19 pandemic and ways to improve the profile and terms of Africa’s commercial debt obligations so that Africa can better confront the health crisis. The discussion engaged the recently formed Africa Private Sector Working Group, which represents leading private creditors to African countries.

In her remarks, Ms. Vera Songwe, ECA’s Executive Secretary stressed that; “African countries are committed to meeting all their obligations to commercial creditors in a timely manner and want to maintain access to international debt markets for the build back period.” She also added, ‘’Most African countries were on a successful reform track prior to the crisis, that is why they had access to the capital markets.”  Discussions focused on ways in which the interests of both African governments and commercial creditors could be aligned to deal with the double crisis of a health pandemic and an economic recession. During the meeting, the Finance Ministers agreed on the importance of maintaining Eurobond coupon payments so as to maintain post-pandemic access to international debt markets for development finance and on having an ongoing coordinated dialogue with creditors.

Speaking on behalf of the creditor group, Mr. Kevin Daly, Senior Investment Manager at Aberdeen Asset Management, said; “We expressed our desire to support African countries address liquidity pressures that have arisen due to the crisis, and by ensuring they remain current on their Eurobonds, we believe financing opportunities will materialize soon.” He also noted that the creditor group was proposing some innovative financing solutions, such as special purpose bonds that are targeted to Social Development Goals. (UNECA)

Key Words: UNECA, AU, COVID-19

EAST AFRICA

Monitoring COVID-19 Impacts on Firms in Ethiopia (Vol. 2) : Sampling Design – This document describes the sampling design of the High Frequency Phone Survey of Firms (HFPS-F), implemented as a response to COVID-19. The survey aims at assessing the dynamics of the impacts of COVID-19 on establishments in Ethiopia. The COVID-19 pandemic and its effects create an urgent need for timely data and evidence to help monitor and mitigate the impact of the crisis. Due to limits on faceto-face surveys the HFPM-F is undertaken via the phone.  The HFPM-F will monitor the economic activities and responses to the COVID-19 crisis, particularly its effects on firm operations, revenues and jobs, by calling a sample of establishments every three weeks between mid-April and mid-September 2020 for a total of eight survey rounds. The final dataset will consist of a panel of 800 establishments (500 in Addis Ababa and 300 in four other cities; in the other cities, there will be seven instead of eight rounds). To account for non-response and attrition, the team aims at successfully interviewing 1,050 establishments (650 in Addis Ababa and 400 in other cities) in round 1.       

The sampling procedure was undertaken in three steps. First, the team cleaned the list of registered establishments in Ethiopia, received from the Ministry of Trade and Industry (MoTI), by removing establishments with missing or invalid phone numbers. Second, all phone numbers of the cleaned list of establishments were shared with Ethio Telecom and only active phone numbers were kept constituting the sampling frame. Third, with this sampling frame, the team drew a random sample of establishments, stratified by establishment size (proxied by capital) and sector.

 To get to a sampling frame, the team relied on a list of registered establishments received from MoTI. The sampling frame included 403,039 establishments in Addis Ababa and 142,170 establishments in Mekelle, Adama, Bahir Dar, and Hawassa. Given that the survey is administered over the phone, we had to weed out establishments without a phone number or with an invalid one. Therefore, the list of establishments was cleaned by removing establishments with a missing or invalid phone numbers. Invalid phone numbers were deemed as those with (i) less than or more than 10 digits; (ii) an invalid telephone code; and (iii) invalid characters in the number string. The cleaned list of contained 389,927 establishments in Addis Ababa and 138,679 establishments in the other cities.  (World Bank)

Key Words: World Bank, Ethiopia, Business

Kenya predicts 30pc EAC export fall on Covid rules – Kenya will not seek a suspension of debt payments under a G20 initiative aimed at helping poor countries weather the COVID-19 pandemic, its finance minister said on Friday, saying the terms of the deal were too restrictive. Minister Ukur Yatani told Reuters in an interview he was also concerned about the impact that debt relief might have on Kenya’s credit rating.  The Group of 20 major economies last month agreed to suspend payment obligations on bilateral debt owed by their least developed counterparts through the end of the year. The goal was to free up more than $20 billion that poor governments could use to buttress their health services.

But Yatani said he was concerned that terms of the deal limiting countries’ access to international capital markets during the standstill could hinder Kenya’s ability to finance its deficit later in the year.  “We fear we might unnecessarily create a crisis,” he said.  The East African nation is instead engaging creditor countries including Germany, Sweden, Japan, China and France individually with the goal of securing moratoriums on debt service payments lasting around a year.  “We have not concluded (negotiations), but it is progressing well,” he said.

The G20 initiative only covers official bilateral debt, though it calls for the voluntary participation of private lenders on comparable terms.  A third of Kenya’s 3 trillion shilling ($28 billion) external debt is owed to private creditors including holders of the country’s two Eurobonds.  “The G20 debt relief initiative does not offer optimal benefit given the structure of Kenya’s debt portfolio,” he said. “Every country adapts to the situation based on its own circumstances.”  The pandemic has caused the government’s budget deficit to swell to 8.2% of GDP in the financial year to the end of June, from an initial forecast of under 7%, mainly due to reduced tax collection and foregone revenue in the form of VAT and income tax cuts. (Business Daily)

Key Words: Kenya, Business, COVID-19

The need to improve Africa’s balance of trade – Statement by Dr Robert Mwesigwa Rukaari: Extract - For decades, now Africa has stood at a disadvantaged position in its Balance of Trade with the entire world. Several African countries import a lot more than they export to the world. To best demonstrate this, I shall use the example of Uganda, which is home for me, against China, currently the biggest market of Uganda products, as well as the biggest exporter to Uganda.  Ahead of the UAE and Kenya, in second and third place respectively, China accounts for majority of Ugandan imports, with 15% of all imported products in Uganda coming from China. In January, when the Novel Coronavirus hit China the hardest, Uganda’s imports from China took a sh6b dip, lowering a decades-long import bill. Statistics from Uganda’s central bank indicate that Uganda’s imports stood at sh400b in January, down from sh406b in December 2019. This drop, was expected to go lower as the China grappled with the pandemic.

 It is worth noting from the above statistic, that even in a difficult time, Uganda, representing Africa for the sake of this presentation, still  sits in a position that urgently needs addressing.  Talks between Uganda and China have had the government of Uganda call on their counterparts to allow in more imports from Uganda’s growing economy. Uganda has argued that China should import more agricultural produce from Africa, especially since the continent imports a lot from China, even things that could be produced locally.  Spearheaded by the ministry of trade, the Government has taken steps towards institutionalising this call for import substitution by launching the Buy Uganda, Build Uganda (BUBU) policy, where the Government encourages local entrepreneurs to produce locally and to use as many local inputs in production as possible.

 Does that then mean that Africa should cut its imports? Absolutely not. The continent’s drive at increasing its export value is heavily dependent on industrialisationand in order to realise this industrialisation, there is still need to import machinery and raw materials. Secondly, the continent cannot make a leap to cutting off imports because most of the products that countries in Africa can make right now are already being made elsewhere cheaply. Products such as foot wear, small electronics, garments and packaging material are already made efficiently elsewhere.  What then can African countries do? We need to widen our export basket. We shall have to think of producing more than just the agricultural products, the furniture, footwear and garments. This calls for growing our production capacity as Africa and because of our limited resource envelope to achieve this, we shall need Foreign Direct Investment in the industrial sector.  (News Vision)

Key Words: Ethiopia, Renewable Energy Business

WEST AFRICA

The Gambia - Systematic Country Diagnostic – The key question is how The Gambia can capitalize on this transition to overcome its legacy of autocracy and no growth. The government of The Gambia completed its National Development Plan 2018–21, which aims to “deliver good governance and accountability, social cohesion, and national reconciliation and a revitalized and transformed economy for the wellbeing of all Gambians.” The recently produced Annual Progress Report on the implementation of NDP for 2018 shows satisfactory progress, notwithstanding all the challenges faced. Significant advances have been made in key areas such as transitional justice, macroeconomic reforms and performance, stabilization of government finances, youth empowerment, and tourism. Continuation in successfully implementing these and other priorities depends on the ability to build institutions and enact policies that strengthen fiscal stability, revive economic growth, and support social and environmental sustainability. Better rules and norms for designing and implementing policies would strengthen fiscal sustainability and create budgetary space for urgently needed investments in human and physical capital. A more conducive business environment could attract more investment, both domestic and international, which is necessary to boost productivity and overcome the legacy of low and volatile economic growth. A new political order would be based on institutions that are subject to checks and balances, which opens the policy arena to all Gambians and creates a foundation for social cohesion. Strengthening the governance of the state through more effective institutions, transparency, and better accountability is paramount to raising the economy’s growth potential and to rebuilding the relationship between the state and its citizens.

 This Systematic Country Diagnostic (SCD) takes stock of The Gambia’s development trends and reflects on constraints and opportunities going forward. It explores four fundamental questions: What explains low and volatile growth rates, and which bottlenecks need to be addressed? What are the challenges to inclusion? What are the constraints to fiscal, social, and environmental sustainability? And finally, what policy areas will have the greatest potential to reduce poverty and foster sustained inclusive growth? (World Bank)

Key Words: West Africa, World Bank, Economic Growth

As COVID-19 takes jobs overnight, African Development Bank partners with ECOWAS Commission to share employment plan - The African Development Bank, in partnership with the Economic Community of West African States (ECOWAS), held a virtual stakeholder forum to outline the regional bloc’s human capital strategy. The forum, which rallied more than 100 stakeholders from across Africa on 30 April, has become imperative because of the COVID-19 pandemic. “Millions of jobs have been threatened as a result of the COVID-19 pandemic, with some job functions now extinct – almost overnight,” said Martha Phiri, Director of the Bank’s Human Capital, Youth and Skills Development Department, in opening remarks at the forum. She said one of the Bank’s High Five strategic priorities – Improve the Quality of Life for the People of Africa – recognizes the need to train Africa’s youth for the jobs of today and the future.

Other speakers made presentations on the strategy and invited feedback on its goals and action plan from the participants, who included representatives of government ministries, departments and agencies from the 15 ECOWAS countries, development partners, civil society organizations, academia and the private sector. According to a recent African Development Bank report on the fourth industrial revolution in Africa, automation will replace about 47% of current jobs by the year 2030. Disruption, digitalization and globalization are causing rapid changes to the education, skills and labour landscape. These changes highlight the growing gap between the current skill level of prospective workers in the region, and employer demand for relevant skills.

“In order to anticipate and prepare the resilience of our states to cope with all situations, it has proven important to take stock of the situation on human capital, define a strategy and an action plan for the region,” Finda Koroma, ECOWAS Commission Vice President, told attendees. The ECOWAS strategy, being developed with support from consulting firm Ernst & Young Nigeria, focuses on education, skills development, and labour challenges and opportunities in the subregion. Feedback will be incorporated into the final report, which will present strategies and solutions for investing in human capital to accelerate development and economic prosperity. (AfDB)

Key Words: AfDB, ECOWAS, COVID-19

SOUTHERN AFRICA

The Impact of COVID-19 on SADC Economy –  This report presents the impact of the COVID-19 Pandemic and implications for SADC Region as monitored by the SADC Macroeconomic Subcommittee, supported by the SADC Secretariat. It provides policy recommendations to Member States. (COVID-19 SADC Economy Report). The global economy before the COVID-19 outbreak was struggling to regain a broad-based recovery due to the lingering impact of growing trade protectionism, trade disputes among major trading partners, falling commodity prices and economic uncertainties in Europe over the impact of the UK withdrawal from the European Union.

As of December 2019, prospects in terms of fiscal deficit and public debt were mixed. While some Member States had made commendable improvements in their fiscal positions, a majority were already grappling to manage their increasing public debt, which was on the brink of breaching the regional threshold of 60 per cent of GDP. The Fiscal Monitor released by the International Monetary Fund (IMF) in April 2020 highlighted that COVID-19 outbreak and its financial and economic consequences will cause a major increase in fiscal deficits and public debt load in 2020. Fiscal policy measures that are implemented include government-funded paid sick and family leave, transfers, unemployment benefits, wage subsidies and deferral of tax payments. The increasing public debt levels will put additional burden to the Member States resources as debt service costs increase.

The impact of COVID-19 is changing the economic landscape around the world including SADC region. As the pressure mounts, industries are moving swiftly to build resilience, while governments are mobilizing to safeguard citizens and manage the social and economic fallout. Combining these factors with the on-going lockdowns around the globe, the platform to trade fairly is slowly being skewed with some players losing while others winning. As such, SADC Member States should consider the following policy interventions and recommendations to keep economies afloat in the face of the worst global economic downturn:

(i)      While the focus should be health and humanitarian sector due to the damage caused by the virus, there is need also to strengthen early warning systems, response and mitigation of pandemics and disasters that have proved to be major threats to education, tourism, informal sector and other sectors.

 (ii)     Member States should consider developing Roadmaps and Action Plans that prioritize investments and channel scarce resources to identified economic sectors to resuscitate their economies, strengthen resilience and improve competitiveness. Relaunching strategies should be premised on the existing SADC macroeconomic convergence programme. Full report can be accessed here: Impact of COVID-19 on SADC Economy. (SADC)

Key Words: SADC, COVID-19, Economic Growth

Namibian Imports Fall Further – The value of Namibian imports fell by almost 40% in March amid global lockdowns and severe pressure on disposable income. This fall is not new, and has given the trade balance some breathing space, switching from a normal deficit to a surplus. Although imports have been dipping since March last year, this is the first time a trade surplus has been recorded this year, with the last surplus recorded over a year ago. According to monthly figures released by the Namibia Statistics Agency, the value of imports fell from N$11,1 billion recorded for the same month last year, to N$8,7 billion - a fall of 37,2%.

Matched to an export bill which increased by 3,3%, this pushed the trade balance into a positive of N$1,5 billion. Exports for March 2020 stood at N$8,5 billion. Falling imports are mainly due to local household and business income adapting to pressure, and lockdown measures imposed in other countries in March slowing the movement of goods. Total trade for March stood at N$15,5 billion, which is 20% lower than the N$19,4 billion recorded in the same month in 2019. The NSA did not provide a reason for the fall, but theoretical explanations can be that Namibia either reduced imports or that disposable income allowing the country to import shrunk. According to the financial stability report released recently by regulators, annual growth in household disposable income eased to 2% in 2019 from 7% in 2018. The key factor that caused the moderation in household disposable income was the category compensation of employees which slowed as wage growth was weak in line with recessionary conditions.

Growth in the compensation of employees moderated to 1,9% in 2019 from 5,9% in 2018, which indicates that households experienced financial constraints under recessionary economic conditions. The fall in imports also shows the country's reliance on imports can be minimised with enhanced local production. The fall in merchandise trade value resulted in Namibia recording a trade surplus of N$1,5 billion compared to a deficit of N$2,9 billion recorded in March 2019. Namibia's trade continues to be concentrated on a few trading partners and key commodities (minerals) dominated by China and South Africa. "In March 2020, China was Namibia's largest export market, while South Africa continued to lead as the main source of imports," the monthly bulletin shows. The composition of the country's exports did not change, comprising mainly minerals such as metalliferous ores and metal scrap, non-metallic mineral manufactures, gold, and fish, the only non-mineral product on the top five list of exports. (The Namibian)

Key Words: Namibia, COVID-19, Trade