IMPORTANT ANNOUNCEMENT

Launch of ARII 2019 website for deeper understanding of Africa’s performance in regional integration – Following the release of the African Regional Integration Index (ARII) 2019 Report, ECA launches a dedicated website to enable a deeper understanding of the performance of the continent, Regional Economic Communities (RECs) and African countries in regional integration and assist African countries in making the most out of the African Continental Free Trade Area (AfCFTA) and boosting intra-African trade (BIAT) action plan. The Index evaluates regional integration on the basis of five dimensions – trade integration, productive integration, macroeconomic integration, infrastructural integration, and integration in terms of free movement of people – for 54 African countries and for the eight RECs recognised by the African Union. ARII 2019 ranks African countries’ level of integration within their respective RECs and also with the rest of the continent. The objective of this dedicated website is to enable in-depth understanding of integration across its various dimensions presented in ARII 2019. The website has features that allow access to customized maps, graphs, tables and the underlying raw data.

Africa’s overall score in regional integration from ARII 2019 is relatively low, suggesting considerable room for improvement. However, if we look closely into the scores across the five integration dimensions, it becomes apparent that Africa’s relative poor performance is due to the low scores in two specific areas: productive integration and infrastructural integration. If we go another layer deeper and look at the scores of indicators within dimensions, low trade in intermediate products tends to explain the relatively weak performance in productive integration, while inadequate infrastructure networks drive poor performance in infrastructural integration.

The five dimensions of integration in ARII 2019 are so closely interrelated that Africa’s overall performance in regional integration would improve significantly and allow African countries to make the most out of the AfCFTA if regional value chains are strengthened, thereby improving the continent’s productive integration, and the infrastructure network is enhanced. ECA has provided training to Member States on the collection and use of the information contained in ARII 2019 for policy analysis and policy development. The dedicated website can be accessed here.  (UNECA)

Key Words: ATII 2019, COVID-19, Regional Integration

INTERNATIONAL

The Evolution of Services Trade Policy since the Great Recession – Are changes in services markets provoking reform, restrictions, or inertia? To address this question, this paper draws on a new World Bank-World Trade Organization Services Trade Policy Database. The paper analyzes the services trade policies of 68 economies in 23 subsectors across five broad areas -- financial services, telecommunications, distribution, transportation, and professional services. Policy measures are quantified into a Services Trade Restrictions Index (STRI) following a novel, consistent and transparent framework. The paper identifies patterns of services trade policies across sectors and economies, and secular trends over the past decade. Higher income economies are still more open on average than developing economies, but the chronology of reform differs markedly across sectors. In telecommunications and finance, there is convergence toward greater openness driven by liberalization in the previously more restrictive developing economies. In the hitherto universally protected transport and professional services, there is policy divergence, as some higher income economies pioneer reform. But while explicit restrictions are being lowered in most services sectors—in contrast to recent developments in goods trade policy -- there is greater recourse to regulatory scrutiny, especially in higher income economies. These measures could reflect legitimate prudential or security concerns, but they could also reflect recourse to less transparent forms of protection.

The paper is organized as follows. Section 1 describes the Services Trade Policy Database and the data collection process, while Section 2 is devoted to the updated World Bank Services Trade Restrictions Index (STRI).   Using the resultant indices, the following section presents current patterns of services trade policy as well as the evolution of such policy over the past decade. The final section summarizes the findings of the paper and identifies areas for future work.  (World Bank)

Key Words: World Bank, Trade Policy, COVID-19

COVID-19 and Food Security: Gendered Dimensions – Informal food markets are a major source of accessible and affordable food for households in urban areas. Indeed, a survey documents that about 70 percent of households across eleven African cities buy most of their food from informal daily food markets and street vendors. Street vending and informal trade are especially important sources of livelihoods and financial independence for women, who are the primary sellers of street foods and perishable goods, such as fruits and vegetables (see Figure 1, from Roever and Skinner 2014). To minimize the spread of the coronavirus, however, some governments across the developing world implemented lockdowns of these high-density markets. While possibly effective at delaying the spread of the virus, such measures threaten the flow of food trading in urban areas, and the incomes of women traders – who depend on those daily revenues to feed their families and keep their businesses going.  

Effective and sustainable mitigation measures should be implemented to protect the health and livelihoods of informal food market traders and customer.  First, markets should be redesigned to minimize density while open, with measures such as alternating the days traders operate and customers visit, opening for operation every other day (and sanitizing them during the off days), or allowing traders to sell outside their homes (which can also help women cope with the increased caring responsibilities, as informal childcare arrangements may break down). Second, adherence to key COVID19 preventive behaviors should be promoted through carefully designed health information campaigns, distribution of masks and soap bars to traders, and installation of hand-washing stations in markets. Women could participate in this economy of COVID-19 response; women could be hired to distribute masks, or manage washing stations, for example. 

Third, cash transfers should be provided directly to women traders so that they can maintain their business, incomes, and consumption. Given the informal nature of these businesses, novel and practical approaches will need to be implemented to ensure that their owners are reached by any cash transfer program.1 Whenever possible, digital payments can be made directly to the mobile money accounts (see Togo example). Market leaders can help create rapid listings of traders operating in the markets. Fourth, response efforts should leverage digital infrastructure in urban areas to not only better channel financial assistance directly and privately to women traders, but also to provide critical information (including about key public health messages, as well support initiatives by governments and other stakeholders). Market leaders and female roles models trading in the market should be mobilized to facilitate the implementation of these measures. (World Bank)

Key Words: World Bank, Trade, COVID-19

PAN AFRICA

COVID-19 and Trade in SSA: Impacts and Policy Response: Policy Brief – The COVID-19 pandemic is first and foremost a public health crisis. However, measures adopted to curtail the spread of the virus have led to a sharp contraction of the global economy and an even larger decline in global trade, with significant implications on the livelihoods of people in Sub-Saharan Africa (SSA). To date, the number of confirmed cases of COVID-19 has been relatively low in Africa when compared to other regions. However, nowhere will the pandemic hit harder, or with greater adverse impacts on the economic, social, and political life of people, than in SSA, mainly due to the inherent vulnerabilities in the region. Economic growth in SSA is expected to decline to between -2.1 and -5.1 percent in 2020, the first continent-wide recession in a quarter of a century. The economic impact will be hardest felt through trade, due to the rare mix of global shocks in demand and supply. Trade is also key to the solution, both in the direct measures to control the spread of the virus and in minimizing the economic fall out. This brief focuses on trade impacts and policy responses with respect to the latter.

The trade impacts of COVID-19 are amplified since countries most affected by the pandemic also represent a significant share of global production and trade. Countries most affected by the pandemic, mainly the United States, China, Japan, Germany, the United Kingdom, France and Italy, together account for about 60 percent of global GDP, 65 percent of global manufacturing and more than 40 percent of global manufacturing exports, while forming key parts of the global value chains (GVCs). The COVID-19 related trade collapse is expected to exceed the trade slump of the 2008-2009 financial crisis. Global goods trade is projected to plummet by 13 to 32 percent. In stark contrast to the 2008-2009 global crisis, where the impact on global trade slowdown was indirect and mainly demand driven, there is now a precipitous slump in production (supply) as well as a sharp collapse in demand. The containment measures adopted in countries most affected by the pandemic result in significant demand shocks, affecting exports and economic growth in SSA.

Though Africa accounts for a very small share of global trade (3 percent), the share of trade in the national income of most economies in the region is relatively large, compared to other regions. In 2017 the share of trade in GDP was 31 percent in North America, 40 percent in South Asia, 56 percent in SSA and 57 percent in EAP. Africa’s share of exports to the rest of the world ranged between 80-90 percent during 2000-2017, higher than any other region. Given that the countries most afflicted by the pandemic account for a significant share of global trade and output and are the largest trading partners of the region, the trade impacts are expected to be severe. Hence, despite a relatively low percentage of confirmed cases of COVID-19 in SSA thus far, the largest shocks to the region are going to be external. In addition, the lion’s share of foreign direct investment (FDI) to SSA comes from these regions, creating a confluence of triple shocks: falling demand for African exports; global supply shocks further curtailing production in export-oriented sectors; and a slump in FDI flows. The impact of disruptions in GVCs driven by the global demand slump would be predominant in countries with strong forward linkages – mainly exporting raw materials used in the production for export in other countries. This accounts for the largest share of the region’s trade and GVC integration. (World Bank)

Key Words: World Bank, Africa, COVID-19

Opinion: How to fill the remittance gaps left by COVID-19 – When we think of the African diaspora, we often imagine large networks across Europe or North America and the indelible contribution they play to national culture and society. But get in a taxi in Cape Town, South Africa, and there is a high chance your driver is from Malawi, Nigeria, or the Democratic Republic of the Congo. While Europe, North America, and even the Middle East are often the first places we associate with African migration, more than 70% of sub-Saharan African migrants stay on the continent. Countries such as South Africa, Côte d'Ivoire, and Uganda are among the top destinations. Africa's diaspora contributes at least $84 billion to the continent’s gross domestic product — significantly more than the $47 billion that Africa receives from foreign direct investment and the $50 billion it receives in aid. These funds play an important role in supporting everyday costs, ranging from food and school fees for siblings to health care for relatives and new homes for aging parents.

As COVID-19 grinds the global economy to a halt, many in Africa’s diaspora have seen their incomes slashed and their ability to send remittances home diminished. What’s more, those with money to send have little ability to get it there, as closed borders and curfews stop funds from moving too — by how much, nobody really knows at this stage. The World Bank reckons the decrease could be at least 23%. We will not know what permanent scars COVID-19 will leave on the way we work, travel, and move for some time. However, it is clear that the world as we know it has changed and will continue to do so. And just as the coronavirus has pushed people to embrace technology to ensure we can still work, learn, and socialize, we must also better embrace technology to improve the way people can send money home. Research from 2015 and 2016 showed that 90% of remittances from the U.K. to Africa were cash transactions via agents. While things are changing, many still rely on using cash to get money home. Until borders started to close and curfews came into effect, few people saw the need to change. Although counterintuitive — given the strength of mobile money in Africa — cash continues to be the only option for sending money to most remote places. COVID-19 has exposed one of the biggest flaws in the system: an overreliance on cash at the expense of digital transactions. With focused investments and collaboration, we can ensure we build a stronger digitized system and potentially help people through this crisis.

When the pandemic first started to emerge, several African governments and the private sector slashed transaction fees and used incentives to encourage the use of mobile money over cash. With over 100 million mobile money accounts on the continent, this was a response that could be enacted relatively fast and easily. Mobile money is generally more accessible and widespread than banks, ATMs, and money-transfer outlets. However, unlike mobile money, mobile remittances aren’t as simple. While remittances can easily flow within countries — say, from Nairobi to Kisumu in Kenya or from Dakar to Kolda in Senegal — cross-border transactions, such as from Cameroon to Nigeria, remain difficult. And that’s mostly due to regulatory issues.  (Devex)

Key Words: Africa, COVID-19, Trade and Policy

How will COVID-19 impact Africa’s trade and market opportunities? - The COVID-19 pandemic is expected to hit African economies extremely hard. According to the World Bank biannual Africa’s Pulse report, as a result of the pandemic, economic growth in sub-Saharan Africa will decline from 2.4% in 2019 to between -2.1% and -5.1% in 2020, depending on the success of measures taken to mitigate the pandemic’s effects. This means that the region will experience its first recession in 25 years. The decline will be primarily due to large contractions in South Africa, Nigeria, and Angola driven by their reliance on exports of commodities whose prices have crashed as well as other structural issues. This will inevitably affect Africa’s participation in trade and value chains as well as reduce foreign financing flows. Given the limited regional market, trade with the rest of the world is vital for Africa. Before the pandemic, Africa’s trade with the rest of the world has been showing good momentum. According to UNCTAD’s Economic Development In Africa 2019 report, in the period of 2015-2017, total trade from Africa to the rest of the world averaged $760 billion in current prices, and the share of exports from Africa to the rest of the world ranged from 80% to 90% in 2000 –2017 in Africa’s total trade. The only other region with a higher export dependence on the rest of the world is Oceania.

However, intra-African trade, defined as the average of intra-African exports and imports, was around 2% during the period 2015–2017, and the intra-African exports were 16.6% of total exports in 2017, much lower compared with 68.1% in Europe, 59.4% in Asia, 55.0% in America, and 7.0% in Oceania. Figure 1 shows the small size of intra-regional trade in Africa compared with other regions, and (b) the lower trade linkages of Africa with the rest of the world —when compared with other regions.

In the recent decade, Africa’s trade linkage has been steadily increasing. Based on an upcoming study on Africa-Asia global value chain (GVC) linkages, exports to Asia are positively correlated with exports to the rest of the world, and increased exports from a Sub-Saharan African country to Asia tend to raise exports to the rest of the world as well as to other African countries, thus, helping Sub-Saharan African nations move up the value chains. Although exports from Sub-Saharan Africa to Asia remain highly concentrated in resource-intensive products, such as petroleum, minerals, metals, and primary goods, there are a few exceptions. For instance, Ethiopia and Tanzania have done relatively well in diversifying their export portfolios during the boom of exports to Asia. (World Bank Blogs)

Key Words: Africa, COVID-19, Trade and Market

EAST AFRICA

Risk and Resilience: How East Africa could bounce back from the COVID-19 Pandemic - By Andrew Mold, Head of Regional Integration and the AfCFTA, Economic Commission for Africa, Office for Eastern Africa, Kigali, Rwanda. A hitherto rapidly growing but vulnerable region- The best-laid plans of mice and men often go awry. Prior to the announcement of a global pandemic on 11^th March by WHO, our office was about to a release a report which spoke of the fairly rosy prospects for East Africa in 2020, after a decade of solid growth. That report recognised the persistence of serious developmental challenges but highlighted major improvements not just in economic growth (the region has been the fastest growing sub-region in Africa since 2014), but also in human development. One simple statistical illustration of this – life expectancy over the last decade has risen by an unprecedented 6.7 years on average. Just a few months later we are now presented with a quite different panorama, both for the global economy and East Africa. For the region, 2020 – and quite possibly 2021 – is no longer going to be characterised by a continued economic dynamism, but rather a sluggish economic malaise, as countries wrestle with ballooning fiscal deficits, deteriorating trade balances, and a serious disruption to normal economic activity.   

East Africa is different - Yet there are still grounds for guarded optimism over the capacity of East Africa to bounce back from the current crisis. First, thus far the region seems to have been spared the worst consequences of the health crisis, with relatively few confirmed cases of COVID-19 in East Africa (13,017 as of the 27^th May). This is the lowest in the continent and in per capita terms one of the lowest rates of infection in the world. Secondly, without underestimating the severity of the current crisis, there are several key reasons why East Africa may not be so heavily impacted long-term by this pandemic. Ironically, this is because of structural characteristics usually considered as reflecting developmental weaknesses. Four structural reasons stand out:

1. Still predominantly rural economies Unlike the heavily urbanised economies of Northern Africa, the diversified economy of South Africa and the oil-dependent nations of Central and West Africa, East Africa is still heavily dependent on its agricultural sector and rural economy. In terms of GDP, agriculture contributes around a third of GDP, and still accounts for about 70 percent of employment. In a crisis such as this, this could turn into a blessing – most farming is small-scale or subsistence, and hence relatively isolated from the main impacts of the economic lockdowns.[1]
2. A region of net commodity importers The impact of the sharp decline in commodity prices is hitting key regional exports like cash crops and minerals. But overall the effect will be more ambiguous. It will hit certain export earnings hard, but the majority of economies – including the two largest in the East Africa region (Ethiopia and Kenya) – are in fact net commodity importers, importing large quantities of oil and food. Hence the impact of the commodity price decline may be more ambiguous for them.
3. A low share of the population living in urban areas Although there is a recognition that rural areas may well be susceptible, thus far the disease has impacted hardest on urban areas. East Africa is one of the least urbanised regions in the world – less than a third of the population, against a global average of 55 percent, lives in an urban environment.
4. Demographics Though still mired in uncertainty, the long-term health consequences for East Africa may also be starkly different. Arguments that demographics of the African continent may play in the continent’s favour take a special relevance in East Africa. With under-20s making up around 50 percent of the regional population, the impact is likely to be very different from that of a country like Italy, where around half the population is over 50 (the most vulnerable group).

(OECD)

 Key Words: OECD, COVID-19, East Africa

Tanzania: JPM, Uhuru Amicable Talk Heralds Smooth Cross-Border Trade -  POST Covid-19 life has begun with smooth trade across Tanzania-Kenya borders after the East African Community (EAC) partner State leaders- Dr John Magufuli and Uhuru Kenyatta initiated a diplomatic gesture. In sight, the regional apex body of private sector associations and corporate - East African Business Council (EABC) has confirmed that the initiatives by the two leaders were paying with witnessed resumption of smooth trade between the two countries. Commenting on the flourishing business, EABC Chief Executive Officer (CEO), Dr Peter Mathuki, said yesterday that agreements struck at a bilateral meeting of ministers from both sides at Namanga, following the presidential talks are commendable for they have reduced the clearance of cargo at the frontiers. "The sustainable way to combat the Covid-19 as a region was to deploy an EAC coordinated approach and also economic recovery strategy. If partner states of the EAC work in isolation on Covid-19, it will be costly and take us longer to flatten the curve," pointed out Dr Mathuki, who is also a former East Africa Legislative Assembly (EALA) member.

At the meeting, the leaders resolved that truck crews first be tested using World Health Organisation (WHO) standards in their countries of origin and issued with a 14-day Covid-19 free certificate that one would show during one's journey into another state. Dr Mathuki also lauded the EAC partners for the increased intra-trade in the bloc, where member states have taken to sourcing final products and raw materials in wake of the disease that was disrupting global business supply chain. "The EABC appreciates President John Magufuli of Tanzania and President Uhuru Kenyatta of Kenya for reiterating their commitment to the EAC regional integration agenda," said the CEO. It was President Uhuru, who phoned his Tanzanian counterpart for amicable talk as trade tiff between the two neighbors escalated over Covid-19 testing at the borders.

In the course, the leaders agreed and directed their officials to meet at Namanga on May 22, where they resolved to facilitate a seamless cross-border movement of goods and people to end the stand-off that had led to sanctions imposed on both sides' merchandises. However, the ministers agreed that each country should create conducive places where the truck drivers could stop for a rest and that such places be equipped with necessary amenities. (Daily News)

Key Words: Cross-Border Trade, COVID-19, Regional Integration

East Africa: Sh2.1 Billion for Safe Trade in East Africa – Donor- funded trade organisation, TradeMark East Africa (TMEA), has unveiled a Sh2.1 billion emergency fund to support safe trade in the region even as Covid-19 trade wars threaten the East African Community. The organisation said the Safe Trade Initiative would urgently support East and the Horn of Africa to make ports, borders, and critical supply chains safe to trade. "The Safe Trade Emergency Facility will be quickly rolled out in all the countries TradeMark East Africa has a foot print in the region," TMEA chief executive Frank Matsaert said in an emailed interview with Smart Company. The organisation operates in Burundi, Eastern Democratic Republic of Congo, Kenya, Rwanda, Somaliland, South Sudan, Tanzania, Uganda, Djibouti, Malawi and Zambia.

TRADE DISPUTE- Kenya is coming from a major trade dispute with Tanzania over tests and movement of truck drivers at the border. This is now shifting to Uganda where hundreds of truck drivers are currently stuck, waiting for the governments to agree on how to deal with the border clearance. The different strategies in combating the deadly virus are making trade a casualty. TradeMark estimates that these delays and interruptions in East Africa have reduced trade volumes by 30 per cent along key regional trade corridors. This will get worse unless governments stop escalation of the Covid-19 trade wars currently being fought at the borders in the region. The emergency fund will also ensure the smooth functioning of food and critically required medical supply chains and support measures to prevent job losses and make the region more resilient to future crisis. Further, it would introduce rapid inspection and clearance of goods as well as carry out regular research and survey to inform regional governments response. (Nation)

Key Words: Trade, COVID-19, Regional Integration

Oxfam raises alarm over Somali remittance lifeline - Oxfam, together with over 100 NGOs, activists, and academics, raised the alarm today regarding the plummeting Somali remittances amid the COVID-19 crisis.  In a joint brief, the agencies expressed their deep concern at how nearly half of all Somali households rely on remittances to cover basic needs like food, water, health care and education costs, but as their family members and organizations abroad struggle to earn and send money in the COVID-19 economic downturn, this vital lifeline is now being cut. This is part of a reported 20% global decrease in remittances, as recently estimated by the World Bank.

Somali money transfer operators (MTOs) report that remittances have already dropped substantially since the onset of COVID-19, due to economic pressures on members of the Somali diaspora. As unemployment and underemployment figures soar in the US and elsewhere, including in the Somali diaspora, that economic crunch is then being felt in Somali households that depend on regular payments from their families abroad, just as they need it most. As women are increasingly having to stay home to care for sick family members and children out of school remittances are often the only funds that female caregivers are able to access and control, making them a vital tool for women’s economic empowerment. In countries where no salary compensation schemes are in place – like the Gulf countries – these economic losses are being felt even more acutely. The social safety net in the US has proven to be weak or nonexistent to many communities, particularly those made up of immigrants, and those in more informal jobs.

“The majority of Somalis are out of work, so people are having difficulties sending money,” says Ubah Haji Mahammed, a Somali woman who has been living in the UK since the 1980s. “A lot of people, like bus drivers, are shutting their shops - even those who are working in permanent positions, are only getting paid 80%.” She is worried about people in Somalia getting food and says that “people are panicking.” A family member in Somalia was telling Ubah that his money will not last as long as the food prices are rising.

Not only do many Somali diasporas have less money to send, but many are still unable to send home even the reduced amounts they can afford due to preexisting and prohibitive banking restrictions. The aggressive approach of governments, particularly the United States, has left banks unwilling or unable to shoulder the risk to support MTOs who are sending money to what are deemed “high risk” places. Regulations which do have important intentions, have had unintended consequences, and have Somali families as collateral damage. Oxfam has called on governments to address these barriers in the past, and now their failure to act has exacerbated this crisis. (Oxfam)

Key Words: Somalia, COVID-19, Trade Policy

CENTRAL AFRICA

IOM, EU Bolster Response to Economic Impact of COVID-19 on Returning Migrants Across West and Central Africa – The suspension of “non-essential activities” to limit the spread of COVID-19 in West and Central Africa has had a heavy socio-economic impact on some 34,000 returning migrants. Many already have set up microbusinesses as part of their reintegration assistance under the EU-IOM Joint Initiative for Migrant Protection and Reintegration. To measure the effects of the COVID-19 pandemic on returning migrants assisted by the International Organization for Migration (IOM), the IOM Regional Office for West and Central Africa launched a needs assessment survey in Burkina Faso, Cameroon, Guinea Bissau, Nigeria, and Senegal – with a sample of 100 returnees in each country.

The data gathered reveal that 89 per cent of beneficiaries reported their financial situation has worsened since the COVID-19 outbreak. Rising food costs and movement restrictions are adding to returnees’ struggles. “Sometimes I sit here all day and not a single person enters my shop. Then I wonder if the business I chose will work or not,” said Christopher, a Ghanaian returnee. Another side-effect of the crisis: most of the 14 per cent of respondents who reported relying on remittance payments from relatives abroad reported they were no longer receiving remittances or were receiving a lower amount. Many explained relatives living in Europe and North Africa are losing jobs or are unable to travel to work. Based on the data, Guinea Bissau and Burkina Faso – where 30 per cent and 24 per cent, respectively, used to rely on remittances – are the countries most affected by this downward remittance trend.

Moreover, one-third of the beneficiaries interviewed reported additional financial costs due to COVID-19 shutdowns. These additional expenses include having to prepare more meals at home to replace school feeding programmes or being unable to go to work due to lack of childcare. One returnee in Cameroon complained, “The children are eating twice as much, while their expenses have doubled.” IOM is responding to the COVID-19 pandemic in West and Central Africa and helping migrants most affected by the socio-economic blows. Thanks to the support of the EU, a one million plus Euro COVID-19 emergency fund was made available under the EU-IOM Joint Initiative to assist with the voluntary return of migrants when humanitarian corridors are granted by countries of origin.

To enhance the availability of basic medical supplies across the region, IOM is mainstreaming COVID-19 related activities into existing initiatives. As part of their reintegration assistance, returning migrants are producing thousands of protective equipment items for frontline immigration and border officials. IOM also is developing alternative assistance schemes. In some countries, for example, IOM is planning to use reintegration assistance to provide cash grants to returnees for three months. Read here on how IOM’s COVID-19 response through the Joint Initiative was implemented. (Relief Web)

Key Words: Economic Policy, COVID-19, Trade Policy

WEST AFRICA

Nigeria - Country Strategy Paper 2020-2024 – This report presents the Bank Group’s Country Strategy Paper (CSP) for Nigeria for the period 2020-2024. The report has been developed in the context of Nigeria’s new middle-income country (MIC) status amidst lingering challenges of security and fragility, slow growth, infrastructure deficit and low level of human capital development notably widespread poverty, high inequality and rising youth unemployment. The preparation of the report also coincides with the adoption of ‘ECO’ as the name of the regional currency by Heads of State and Government of the Economic Community of West African States (ECOWAS), and the entry into force of the African Continental Free Trade Area (AfCFTA) both in 2019, designed to boost regional and continental trade. However, the COVID-19 global pandemic has resulted in drastic reduction in the international price of crude oil (Nigeria’s main foreign exchange earner) and global lockdown thus stoking the fear of global recession. The CSP is underpinned by Nigeria’s Vision 20:2020 and the Economic Recovery and Growth Plan (ERGP) 2017-2020 adopted by the Federal Government of Nigeria (FGN) in 2017 in response to the economic recession. The FGN has indicated that a successor plan based on the underlying strategic thrust of the ERGP with robust implementation framework will be prepared before the expiration of the ERGP and launched in early 2021. Meanwhile, following the mid-term review of the ERGP, the government has encapsulated eleven priorities. (AfDB)

Key Words: West Africa, AfDB, AfCFTA

SOUTHERN AFRICA

Zimbabweans struggle as remittance lifeline shrinks – The coronavirus pandemic has been yet another severe blow to millions of Zimbabweans experiencing extreme hardship in their motherland, many of whom have been relying on remittances from the diaspora to survive. In December 2019, the United Nations warned that 7.7 million Zimbabweans were facing food insecurity. The severe drought in southern Africa has caused a maize meal shortage, and the agricultural sector is still struggling to deal with the devastation wrought by Cyclone Idai in March last year. “You can’t imagine the suffering. Now you have a situation where people can’t remit enough. Even those households that could sustain themselves through remittances have slid back into food insecurity,” said Vusi Thebe, an anthropologist at the University of Pretoria.

The lockdown in South Africa has left many Zimbabweans inside the country in dire straits too. “The majority of Zimbabweans are in the hospitality sector and are not working,” said Ngqabutho Mabhena, chairperson of the Zimbabwe Community in South Africa. “UIF is not being paid to migrant workers, so it is making it difficult to send money and goods home. Those who do send will be sending little compared with what they normally send.” Zimbabweans are not suffering alone in this regard. Low and middle-income countries have seen sharp falls in remittances since the start of the Covid-19 pandemic and the concern is that this will have dire socioeconomic impacts. It is estimated that remittances could fall by as much as 20% or $110 billion (about R1.9 trillion) in 2020.

“While we are anticipating a strong economic downturn globally, our concern is that there will be an even stronger knock-on effect for remittance-dependent economies, communities and families in terms of worsening access to education, health and nutrition, and broader poverty outcomes,” said António Vitorino, director general of the International Organization for Migration (IOM). “We call upon policymakers, the private sector and civil society to focus on specific measures we can take in this regard to support migrants and their families.” The IOM said governments and central banks should declare remittance transfer services an essential service. It also called on remittance service providers to reduce transaction costs.  (New Frame)

Key Words: Zimbabwe, COVID -19, Trade