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

Trade in digital services is booming. Here’s how we can unleash its full potential – Since the start of the COVID-19 pandemic, digital services such as online education, virtual meeting rooms and online marketplaces have kept our economies running and helped us stay connected. Almost all of these services are underpinned by cross-border digital trade. Even if you meet colleagues from your own town in a video conference, consult a local doctor online, or follow a virtual class by a teacher in your neighbourhood, the companies providing the networks and platforms for these interactions are probably at least partly in another country.

The global exchange of digital services is easy to overlook given its intangibility, but it’s been one of the fastest-growing areas of trade in recent years. Trade in telecom and IT services, which underpin digital trade in services, has been growing particularly strongly. In 2018, telecommunications, computer and information services was the fastest-growing services sector in terms of global exports, increasing by 15%, according to the World Trade Organization. Digital trade in services has not only become a lifeline during this outbreak, but also has the power to transform our world for the better in the long run. It could help us build a more resilient global economy, and create countless opportunities for people around the world in areas as diverse as healthcare and professional services. The telemedicine market alone is estimated to exceed $175 billion by 2026. Some telemedicine providers have been experiencing three-digit percentage increases in consultations as result of the COVID-19 outbreak. However, a number of obstacles are still preventing us from unleashing the full potential of digital trade.

The first problem is the lack of universal access to digital infrastructure. Many people who could hugely benefit from online education, jobs and healthcare lack the basic digital resources to tap these opportunities. Many businesses whose services could thrive in a global market, supported by convenient services such as online payments and online orders, also lack such access.

Even in places with a strong digital infrastructure, trade barriers limit the sector’s potential growth. In 2019, the level of services trade restrictions was 30% higher than the year before, according to the OECD. These barriers especially affected service sectors that underpin digital trade, including telecommunications, computer services and audio-visual services. They include limiting foreign providers’ access to infrastructure and connectivity, hindering electronic transactions and international payments, and other restrictive measures. (weforum)

Key Words: Global Trade, COVID-19, Business

WTO webinar explores way forward for sustainable trade after COVID-19 – Trade and the WTO have an important role to play in steering global recovery towards a sustainable course for the well-being of the world’s population and the planet in the wake of the COVID-19 crisis, speakers said at a 4 June webinar organized to mark World Environment Day. The aftermath of the pandemic provides a window of opportunity to reinvigorate work so that trade policies help generate greener and more resilient economies, they said. Protecting the planet is not a luxury. It's a necessity. The COVID-19 pandemic has rightly drawn our attention to the health crisis, along with its immense social and economic effects,” WTO Director-General Roberto Azevêdo said in a video message to the online event convened by the chair of the WTO Committee on Trade and Environment (CTE), Ambassador Chad Blackman of Barbados, with the support of the WTO Secretariat.

“Rising environmental stresses leave our societies vulnerable to natural disasters, resource scarcity and disease. And we know that it is the poorest who suffer the most. In fact, a collective response on trade that fosters sustainability, inclusiveness and resilience is what this crisis calls for,” said DG Azevêdo. His full remarks are available here. “The good news is we are not starting from scratch,” Ambassador Blackman said.  Before the pandemic, he said, the CTE already served as a global forum dedicated to promoting global cooperation on sustainable trade by discussing WTO members' policies to establish circular economies, address plastic pollution, and eliminate trade barriers on environmental goods and services. Ambassador Blackman encouraged WTO members to intensify policy dialogue, invigorate efforts to make trade policies supportive of sustainability and explore creative ways to make trade more resilient to growing environmental risks.

“We must keep the momentum going within the committee. The saying always goes that we should never waste a good crisis. I truly believe COVID-19 presents the opportunity for us to harness all that we have been trying to achieve for a number of years within the WTO and outside the WTO,” Ambassador Blackman said. Other speakers stressed how the COVID-19 crisis has served to magnify persisting challenges in trade and the environment and how global cooperation can be intensified in its aftermath. Ambassador Andrew Staines of the United Kingdom noted how WTO members have yet to conclude an agreement to liberalize trade in environmental goods and services that reduce greenhouse gas emissions and other pollution and improve energy efficiency. The need to rebuild in the wake of the COVID-19 crisis and to address the climate crisis presents a new opportunity for members to try again on that front, he said. Trade is a key driver of technology dissemination and can support the innovation needed to drive the green transition. (WTO)

Key Words: WTO, COVID-19, Global Trade

Taking stock of the Trump administration's Africa policy –The Trump administration’s Africa policy has had fits and starts, and while there are some promising developments, several experts told Devex that the framing of Africa policy as part of a U.S. competition with China and others is not winning it friends on the continent. The United States may have provided billions of dollars over the years to the continent — particularly through programs such as the President’s Emergency Plan for AIDS Relief, which has saved billions of lives — and may be the “single most important development partner,” but it seems clear that Africa just doesn’t rank that high in U.S. priorities when compared to other regions, Gyude Moore, a senior policy fellow at the Center for Global Development and former Liberian minister of public works, told Devex. President Donald Trump has met with just two African presidents in the Oval Office in his first term — fewer than any of his predecessors — has made racist statements, and has strained relations by rolling out limitations on immigration for African countries.  It is also not lost on African leaders that Trump has repeatedly proposed deep cuts to foreign aid programs, which are critical on the continent, a move that they see as a demonstration of U.S. priorities, Moore said.

While the administration was slow to develop a policy, it released its Africa strategy in late 2018, when then national security adviser John Bolton gave a speech outlining priorities. He launched the Prosper Africa initiative, aimed at doubling trade and investment between the U.S. and Africa, saying that would be a key focus for the administration. But the speech was full of references to China and Africa and great power competition.  “There is an enormous problem with how this administration framed Africa policy vis-a-vis China. They framed Africa as a pawn in a great game, as if it’s something to be lost or won, that Africans don’t have agency, and there is no intrinsic value otherwise to strong relations with African states or engaging Africa as an important region of increasing political and economic weight globally,” Grant Harris, who served as a senior policy adviser to former President Barack Obama on Africa, told Devex.

It’s increasingly clear as well that this framing isn’t well received on the African continent, with Kenyan President Uhuru Kenyatta speaking out at an event in Washington, D.C., earlier this year, saying that Western countries and their counterparts in Asia and the Middle East are acting like Africa is for the taking. “I want to tell you it is not,” he said. The administration sees Africa as important, with Secretary of State Mike Pompeo and other senior State Department officials visiting the continent earlier this year to “signal Africa matters,” said Tibor Nagy, the U.S assistant secretary of state for African affairs, at an event in Washington earlier this year. “We continue to look for every opportunity to strengthen and expand U.S. partnership with the continent,” he said. “Let’s continue to look at Africa through the windshield, not the rearview mirror.”  (Devex) 

Key Words: USA, COVID-19, Africa

Briefing Paper: International negotiations by virtual means in the time of the Covid-19 pandemic – The UN General Assembly’s pandemic “silence procedure” modality has since allowed it to act on and adopt resolutions despite the lack of in-person plenary and committee meetings. In the WTO, such procedures, as pointed out above, are currently being explored and discussed. For these international organizations and for many others, the use of virtual or online conferencing is also being explored or already implemented. However, as pointed out above, the use of virtual meetings to discuss and agree on international decisions or resolutions that could have substantive policy impacts or implications has to be looked at carefully from the perspective of ensuring transparency and full and effective participation of all the parties in order to ensure that the adopted outcome is a legitimate compromise or agreed text of the participants. A key consideration that also needs to be highlighted when it comes to assessing which negotiating modality– i.e., in-person negotiations or the “silence procedure” approach – works best for arriving at agreed outcomes for the parties is the way in which communications take place during the negotiations. This can affect the quality and level of interactivity of the communication among the parties, the extent to which rapport is developed and hence the level of cooperation among them, the extent of information shared, the level to which the parties understand the issues involved, the parties’ willingness to achieve a result, and finally the content of the outcome.

Academic studies on negotiations have highlighted that the process of negotiation involves exchanging messages and cues, both verbal and non-verbal, among the parties involved and that successful negotiation often depends on the parties’ respective abilities to read and act on these cues in a dynamic way to eventually lead to agreed outcomes. This is particularly important in light of the multicultural context in which international negotiations take place, with negotiators coming from different national and cultural backgrounds with different languages and widely varied ways of expressing themselves. This requires that the negotiators must be able to see, hear and understand each other as broadly as possible in order to avoid misunderstandings arising from mistranslated or misunderstood statements or cultural mannerisms or behavioural and speech patterns. In any communication, and particularly in the context of international negotiations, the negotiators receive and also look for contextual cues (such as the other negotiators’ gestures, posture, facial expressions and tone of voice) in order to be able to understand what the other parties are saying and that such understanding is what the other party meant.

Absent these cues, miscommunication and misunderstanding can often occur. Additionally, the lack of these contextual cues that can build rapport among the negotiators, a sense of “weare in this together”, can create distrust, increase competition, exacerbate contention, reduce accountability, and induce a fear of deception, thereby possibly leading to a breakdown of the negotiations and resulting inno outcome. This is the reason why in-person meetings are crucial to the success of international negotiations, as only in-person meetings can provide the broad contextual environment for such verbal and non-verbalcues to be perceived. It has been suggested in various quarters that international negotiations can take place through virtual means, i.e., not through in-person meetings, to allow international organizations to continue their work during the pandemic, but these can have significant downsides.   (TWN)

Key Words: Trade Negotiations, COVID-19, Global Economy

Beijing to bypass US systems with e-RMB drive– China has made a head start in the global race to research and launch a full digital currency, with some civil servants in a few pilot cities including Shenzhen, Suzhou and Chengdu getting half their pay in the form of the e-RMB. Internal testing and trials spearheaded by the People’s Bank of China (PBoC) have long been underway, with the central bank aiming for a wider roll-out for athletes, spectators and journalists at the 2022 Winter Olympics, when Beijing and the many towns near the venues will go fully paperless in all transactions.  The PBoC’s top-down push for the e-RMB is not intended to give China’s omnipresent WeChat Pay and AliPay a good run for their money or even supersede the duopoly of the two digital payment platforms, the cash cows of Chinese tech behemoths Tencent and Alibaba.

Rather, the e-RMB is part of Beijing’s imperative to safeguard currency sovereignty and promote the Chinese yuan beyond its borders.  When Facebook unveiled its Libra blockchain digital currency, otherwise known as the “Facebook coin,” in June 2019 to promote its stable, low inflation and freely-convertible cryptocurrency for worldwide transactions and transfers, the move piqued the interest of PBoC chief Yi Gang. While the project has faced criticism and objections since its conception, Yi reportedly instructed the bank’s digital currency division to expedite the process, building on the groundwork laid by China’s ubiquitous penetration of mobile payment services. With central banks across the United States, Japan and Europe scrambling to formulate strategies for currency sovereignty since the advent of digital money, China’s e-RMB had been six years in the making since former governor Zhou Xiaochuan first broached the idea of launching a digitalized legal tender.

But Facebook’s Libra project sped up the birth of the e-RMB as the PBoC pooled its resources and fast-tracked reviews and approvals, while keeping guard on Beijing’s currency sovereignty.  Mu Changchun, chief of the PBoC’s Digital Currency Research Institute, was quoted as saying that the centralized processing platform for e-RMB being tested would help China shed its over-reliance on the US-dominated Society for Worldwide Interbank Financial Telecommunication (SWIFT) and the New York-based Clearing House Interbank Payments System (CHIPS) for the settlement of cross-boundary RMB transactions.  The speedy trial of the digital redback and its dedicated processing and clearing platform sits well with Beijing’s emphasis on self-reliance to prevent the US from cashing in on its financial and technical dominance, now that ties between the two powers are at an all-time low. (AsiaTimes)

Key Words: Digital Currency, Trade and Investment, Global Economy

Effective Market Access for Least Developed Countries’ services exports –  This paper was prepared in the context of UNCTAD’s intensified work in support of least developed countries’ (LDCs) participation in trade. It aims to contribute to the discussion on market access for services and services suppliers from LDCs. In particular, in the context of the World Trade Organization (WTO) services waiver decision adopted on 17 December 2011 (hereinafter “the waiver”). For many years UNCTAD has been emphasizing the importance of services and services trade for developing countries, and the need to strengthen and diversify services sectors. This includes a focus on services and services-supported exports. Over the past 30 years the share of services in the gross domestic product (GDP) of developed countries has grown from 61 to 75 per cent, while the share in developing countries has grown from 42 to 55 per cent. In LDCs, the share was and is still lower, but the growth trajectory is very clear: services are a key part of their economic future. Trade in services remains important as their exports have grown more than goods exports and more resiliently.

In addition to these direct effects, services provide inputs to all economic sectors. They are bundled with goods, for example when manufacturing firms also provide distribution services. They also create linkages in productive value chains, as in the case of telecommunication and information and communication technology (ICT) services which integrate, through digitization, production processes more than ever before. These indirect effects imply that there is value added of services included in output and exports of all economic sectors. While direct exports of services were 13 per cent of total exports in LDCs, services accounted for 39 per cent of total value added in their exports. This value added, the so called “Mode 5” of services trade, confirms that servicification trends also occur in international trade and place services as a key contributor to trade as it is for output.

The LDCs services waiver, which effectively operates as a new LDC-specific ‘Enabling Clause for services’, now allows developed-country WTO Members and developing WTO Members in a position to do so to provide preferential treatment to services and service suppliers originating in LDCs. Consequently, the waiver releases WTO Members from their legal obligation to provide non-discriminatory Most Favoured Nation (MFN) treatment to all trading partners when granting trade preferences to LDCs as per the General Agreement on Trade in Services (GATS) Article II. After a slow start, WTO Members eventually took up the challenge in implementing the waiver. Since 2015 developed and several developing Members, in total 24 WTO Members (counting the European Union as one), have submitted notifications granting specific preferences to LDCs under the waiver. This was an important start, but more remains to be done. (UNCTAD)

Key Words: UNCTAD, LDCs, Trade and Export

PAN AFRICA

Coronavirus: Africa needs AfCFTA to transform its economies - Of all the legacies of colonialism, one of those which has most hampered economic growth and the alleviation of poverty is fragmentation – neighbours with different currencies, regulations enabling trade with Europe but not with other Africans, and a neglect of intra-African transport and infrastructure links to facilitate this trade. In good times, with Europe accounting for around 30% of African trade, there has been little appetite to upset the status quo. In times of economic unease, African nations, like many around the world, have tended to withdraw into themselves rather than pursue broader trading options. Repeating this pattern for a generation, African nations have historically ceded economic power to external actors, remaining price-takers and struggling to develop their own solutions at times of crisis.

Change is in the air - A confluence of factors is lining up to shift Africa from the old way of doing things and drive the continent towards greater prosperity and resilience. The rise of China as an economic force and major partner (19% of Africa’s trade) has given African leaders experience in opening new trade routes and the benefits this brings. At the same time, regional trading blocs like SADC, EAC, COMESA or ECOWAS have grown in strength as countries became more adept at spotting gaps in their neighbors’ markets and adjusting areas of specialization to meet demand. Building on a decade long trajectory towards greater continental integration and more diverse trading relations, the ratification of the African Continental Free Trade Area (‘AfCFTA’) now has the capacity to eliminate the barriers to intra-African trade and establish wide-reaching economic co-operation. With COVID-19 already hitting African economies, some may question the timing of the free trade area; however, moments of crisis have often served as times for reflection and readjustment. Economic instability highlights to African governments and businesses their vulnerability to price shocks and interruption to global trade. Moreover, the effects of the oil price collapse on African nations dependent on commodity exports shows once again the importance of economic diversification. This can only be realized through rich trade between neighbors, which will help countries currently dependent on commodities broaden opportunities for value-added manufacturing.

Opportunities already obvious - The opportunities from more integrated and diverse trade across the continent are evident from the benefits already accruing for a select group of trailblazers. In Francophone West Africa, harmonization of currency and regulation has demonstrated what regional co-operation can achieve. Trade hubs like Côte d’Ivoire and Senegal have already emerged (measured as a share of total regional imports). It is however on the Anglophone side that resides the largest trading hub. South Africa alone is the source of about 35 percent of all intraregional imports in Africa (and about 40 percent of intraregional manufacturing imports). Size does not always matter. Algeria, Egypt, and Nigeria, which collectively represent about half of Africa’s total GDP, account together for only 11% of continental trade. In contrast, the 3 leading intra-African exporters in 2015–2017 were Eswatini, Namibia, and Zimbabwe—all three, nations of limited size, but leading Africa in export contributions. Importantly, all three are members of the SADC. The successful experience of these countries shows that closer integration can be a vital tool for building value-added economies. (The Africa Report)

Key Words: AfCFTA, AU Regional Integration

AfCFTA remains Africa’s ambitious plan to prosperity even in midst of COVID-19– The African Continental Free Trade Area (AfCFTA) is still the agreement with great potential to foster regional economic integration and economic growth, and take Africa to the next level, even in the midst of a crippling coronavirus crisis, panellists on a COVID-19 Recovery Mechanism and AfCFTA webinar agreed Thursday. The panelists agreed the AfCFTA was a crucial move towards removing the continent’s heavy reliance on commodity and agricultural exports leading to exponential growth in the manufacturing sector, export diversification and creation of quality jobs if its full potential to be transformational for all Africans is tapped.

Regional Integration Division Director at the Economic Commission for Africa, Mr. Stephen Karingi, in his remarks said a lot of empirical work had been done by ECA showing what the AfCFTA means for Africa. “One of the things we have been able to demonstrate empirically is that the AfCFTA has the potential to deepen not only the regional integration of the continent but also to allow us to do more value addition in our production processes,” he said. This, added Mr. Karingi, presents an opportunity not only to create economic resilience but also create quality and more valuable jobs compared to jobs that are not based on industry. “We know what the AfCFTA means for this continent. COVID-19 has exposed that had we implemented the AfCFTA earlier, we would be in a better position than we are now,” he said, adding the ECA’s analytical work had been able to demonstrate the big role that services are going to play in terms of economic development. The ECA Director said Africa should also discuss the use of digital services to deliver health services and education as it talks about recovery and building resilience post COVID-19, adding ecommerce should be brought forward to Phase 11 negotiations of the AfCFTA.

For her part, Mama Keita, Director of the ECA’s Sub-Regional Office for East Africa, said in COVID-19 recovery, Africa should prioritise labour intensive sectors to preserve jobs and livelihoods. This includes the agricultural sector to ensure food security for the continent. “Health and digital are indispensable sectors contributing to fix the health crisis so we should strengthen the health sector,” Ms. Keita said, adding environmental sustainability was also important as well as climate friendly activities ‘as we build back better’. She said understanding current and past macroeconomic frameworks and constraints of States was important for assessing the means available for a robust COVID-19 response and recovery plan. “The potential of the AfCFTA is undeniable. What is needed is commitment from everyone, including governments and the private sector,” said Ms. Keita. She said post COVID-19 there was a need to secure demand for local products; enhance productive capacities to supply goods and services needed; and promote strategic sectors, including promoting innovation and local manufacturing.

Panelists agreed chambers of commerce on the continent have a great role to play in facilitating trade and ensure African nations traded with each other. Richard Ngatia, President of the Kenya National Chamber of Commerce and Industry (KNCCI), said the AfCFTA was a monumental milestone on Africa’s developmental roadmap that must be exploited to the full for intra-Africa trade. “It will unleash unlimited opportunities, new economies of scale, income and employment generation through greater market and economic integration,” said Mr. Ngatia, who moderated the discussion. He said with COVID-19 having an immediate and significant impact on businesses in Africa, there was need for nations to identify opportunities for entrepreneurs with regard to the AfCFTA and put in place an economic recovery mechanism. The webinar was organized by the KNCCI in partnership with the ECA and the Great Lakes Region Private Sector Forum.(UNECA)

 Key Words: ECA, Regional Integration, AfCFTA

Food Security Monitor – Africa Food Trade and Resilience Initiative – Despite stable supplies in the global cereal markets, COVID-19 induced behavioural changes such as government protectionist/restrictive trade measures (e.g. in strategic surplus regions/countries)2,10,11 and panic buying have disrupted supply chains affecting the functioning of food markets. Increasing government bulk food procure-ment for food security and nutrition support programmes are likely to increase upward pressure on food prices leading to localized food price spikes (WFP, 2020)12. The upsurge in food demand and logistical disruptions in re-gional food movement from surplus to deficit regions due to the COVID-19 pandemic are threatening food situ-ation, particularly in food import dependent countries. The UNCTAD (2020) estimates that due to the COVID-19 pandemic shock, global trade values declined by 3% in the first quarter of 2020 and a 27% quarter-on-quarter decline is expected in the second quarter13. Overall, the COVID-19 pandemic shock threatens food crises in food deficit areas heavily dependent on markets which could result in food shortages and price spikes. The combined effects of food crises and the pandemic shock will seriously impact on food and nutrition security, especially among the already vulnerable populations in many parts of Africa.  

The primary and secondary impacts of the COVID-19 pandemic have resulted in significant livelihood and fi-nancial losses for actors along affected supply chains, leading to significant losses of purchasing power and high levels of business insolvency. For low income coun-tries where a significant share of the household income goes to food, aggregate food demand may decrease due to income losses. The demand for cereals is less income-elastic and may not be significantly affected by the income shocks induced by COVID-19. However, the demand for expensive and nutritious food such as meats, fruit, dairy products, and vegetables will reduce as households opt for cheaper food options (especially staples) affecting food nutrition security (AGRA, 2020). Overall, both physical and economic access to nutrition-ally balanced foods will become increasingly difficult for the poor; disproportionately impacting on women and children in sub-Saharan Africa. In addition to ensuring that measures for containing the spread of COVID-19 are better coordinated and are informed by market dynamics they should adequately integrate resilience and sustainability of food systems and supply chains during and beyond the pandemic. This includes ensuring food systems and supply chain disruptions are minimized and that adequate support measures are provided to facilitate sustainable opera-tions across the different stages of food supply chains at the local, national and regional levels. The impacts of COVID-19 on different sectors of the economy, includ-ing agriculture, requires governments to take deliber-ate steps to support investments in agriculture to build resilient and productive local food systems, especially targeting the active participation of smallholder farm-ers. Platforms of state and non-state actors are needed to advocate for increased investments to improve and sustain productivity and resilience in agricultural food value chains. (AGRA)

Key Words: Africa, Food Trade, COVID-19

As lockdown fuels food shortages, Africa goes online for groceries –In many African countries, measures put in place to slow the spread of COVID-19 have made it harder for people to access affordable, nutritious foods, sparking warnings from aid groups that the pandemic will worsen malnutrition rates.  An estimated 73 million people in Africa are already acutely food insecure, noted Matshidiso Moeti, the World Health Organization’s Regional Director for Africa in a press release last month.  “COVID-19 is exacerbating food shortages, as food imports, transportation and agricultural production have all been hampered by a combination of lockdowns, travel restrictions and physical distancing measures,” she said.  A possible global GDP loss of 5% this year could push another 147 million people into extreme poverty - more than half of them in sub-Saharan Africa, according to the D.C.-based International Food Policy Research Institute (IFPRI).

CLICK TO EAT - Mobile tech startups are helping people get hold of fresh food during the pandemic by tapping into the rapid rise in smartphone use across Africa.  About one-third of people in sub-Saharan Africa had access to a smartphone in 2018, more than double the number four years earlier, according to the Pew Research Center, a Washington-based think tank.  Launched in October 2018 and selling surplus fruits and vegetables from local farms, Fresh in a Box found itself scrambling to add more farmers to its roster to supply the sudden rush of new customers, said co-founder Kudakwashe Musasiwa. He added that it now distributes about 2.6 tonnes of vegetables daily from nearly 2,000 small-scale farmers to customers’ doorsteps.  “With COVID-19, something incredible happened. We had to find a way of scaling up really quickly because all of a sudden our demand shot up,” Musasiwa said.

Like Zimbabwe’s Fresh in a Box and the Market Garden app in Uganda, which is connecting women produce vendors to a new wave of online customers, Namibia has also seen a rise in the popularity of online markets under lockdown.  A website called Tambula - meaning “take” in the local Oshiwambo language - is described as “an online mall” by its founder Jerobeam Mwedihanga, who launched the site about a week into Namibia’s lockdown, which started in March.  “Rental fees in malls are high in Namibia,” said Mwedihanga, 36, an IT engineer, whose site delivers electronics, beverages, furniture and more. “And there are many home-run businesses with no place to showcase their products.”  Last month, Tambula partnered with the U.N. Development Programme on a pilot project to sell informal market goods online, including local foods like dried spinach, mopane worms and ground nuts.

“For many consumers, this is their first time buying traditional foods online,” said Mwedihanga, adding that products from informal vendors have grown to make up 35% of online sales.  One positive to come out of the new coronavirus pandemic, he said, is that people are becoming more aware of e-commerce and realising that food from informal traders is often more affordable than that from retail shops.  In Nigeria, entrepreneur Luther Lawoyin realised that bulk purchases could save consumers from overspending on food.  He launched PricePally - described as a digital food cooperative - in November 2019, as a way of letting people buy food online in bulk from farmers and wholesalers and split the cost with other site users.  “When the coronavirus (outbreak) was really picking up in Nigeria, we noticed a spike in our traffic and sales, so we figured that people need help to get their food items and, especially, to avoid the market,” said Lawoyin.  (Reuters)

Key Words: Business, COVID-19, Africa

Safeguarding Africa’s food systems through and beyond the crisis – There is widespread concern about the potential impact of the COVID-19 pandemic on Africa’s agricultural and food systems. This should certainly be a priority for leaders across the public, private, and development sectors: some 650–670 million people in Africa, roughly half of the population, already face food insecurity. Of those, more than 250 million people are considered to be severely food insecure.

Agriculture is also one of Africa’s most important economic sectors, making up 23 percent of the continent’s GDP. In sub-Saharan Africa, it provides work for nearly 60 percent of the economically active population. 3 Africa’s exports of food and agricultural products are worth between $35 billion and $40 billion a year, and some $8 billion a year flows through intra-regional trade in these products (Exhibit 1). In addition, Africa’s food and agricultural imports amount to between $45 billion and $50 billion a year—along with $6 billion a year in imports of agricultural inputs. In this article, we present new McKinsey analysis on the impact of the COVID-19 crisis on the continent’s agricultural and food systems, along with insights from on-the-ground discussions with agriculture value-chain players, governments, and civil-society institutions. We show how the crisis has disrupted regional and global trade and slowed demand for Africa’s agricultural export products, putting jobs and livelihoods at risk. But we also show that, to date, the impact on the food and agricultural system as a whole has largely been localized and muted. In addition, tailwinds—including good harvests in some African regions at the end of 2019—are helping to minimize the effects of the crisis.

There is no room for complacency, however. Existing vulnerabilities in Africa’s agricultural and food systems, combined with demand and supply shocks likely to flow from COVID-19, could be heightened unless mitigating actions are taken now. In the pages that follow, we evaluate the potential shocks to African demand for food products, trade in African export crops, and African agricultural and food production. We also outline practical steps that governments and companies along the value chain can consider to mitigate the impact of COVID-19 on agriculture, bolster Africa’s food security, improve the sector’s future resilience, and transform its effectiveness in the long term. (Mckinsey)

Key Words: Africa, Regional Integration, COVID-19

NORTH AFRICA

Tunisia Public Expenditure Review : A New Pact for the Transition - Modernizing the State for Better and Fairer Public Spending – Tunisia faces the challenge of improving the quality of its public spending and maintaining fiscal sustainability following a decade of weak economic performance. It is critical for Tunisia to strengthen the quality of infrastructure and services, and to support inclusive growth and private sector job creation. The aim of this public expenditure review (PER) is to identify structural policy options to help Tunisia tackle its economic and social challenges through more effective and equitable public spending. This PER employs a rich set of detailed spending data at the level of the central government and state-owned enterprises (SOEs) to analyze how public expenditures in Tunisia can be allocated and spent in a more effective and equitable manner. The report also assembles detailed expenditure, operational, and financial data from SOEs with a focus on the energy, water, roads, and public transport sectors. These data allows to analyze and benchmark Tunisia’s spending trends, effectiveness, and equity, and to identify areas in which spending growth can be contained, where spending gaps exist, where resetting of spending priorities is needed and reallocation of expenditures necessary, and where spending should be more balanced to reduce inequities. The PER is organized in three blocks. The first block - composed of chapters one to four - analyzes the macro-fiscal profile and the two largest spending items, namely wages, energy, and food subsidies, as well as the single largest liability, namely pensions, and the social protection system which is critical for protecting vulnerable households from shocks and from the potential negative effects of certain reforms. The second block - composed of chapters five and six - covers the education and health sectors, the two most important social services for human capital development, which account for the largest share of social spending. The third block - composed of chapters seven to nine -analyzes the issues of public investment efficiency and SOE performance in the electricity, water, roads, and transport sectors. (World Bank)

Key Words: North Africa, Trade, World Bank

EAST AFRICA

Kenya overtakes Angola as third-largest economy in Sub-Sahara Africa – Kenya has overtaken Angola as the third-largest economy in Sub-Sahara Africa, International Monetary Funds’ (IMF) fresh estimates released Friday has shown.  The East Africa’s largest economy, that has been the fourth largest economy in the Sub-Sahara Africa, has surpassed Angola to become third-largest economy in dollar terms. Kenya now is behind Nigeria (1) and South Africa.  Bloomberg reports that Angola has contracted every year since 2016 as oil output declined, and the kwanza was devalued in 2019 while Kenya’s shilling held steady. The coronavirus pandemic and restrictions to limit its spread will probably see Angola’s gross domestic product contract 1.4 percent in 2020, while Kenya’s is projected to grow by one percent, according to the IMF report.  

According to IMF, Angola, an oil dependent country, recently had its national assembly approve a package of revenue and expenditure measures to fight the COVID-19 outbreak in the country and minimize its negative economic impact.  Additional health care spending, estimated at $40 million (Sh4billion) was announced. Tax exemptions on humanitarian aid and donations and some delays on filing taxes for selected imports were granted. While Kenya has earmarked Sh40 billion (0.4 percent of GDP) in funds for additional health expenditure and funds for expediting payments of existing obligations to maintain cash flow for businesses during the crisis, among other tax relief incentives.  (Business Daily)

Key Words: EAC, Business, Trade

U.S. Eyes Big Chunk of Key Sectors in Trade Deal With Kenya - The United States government is seeking unfettered access to the Kenyan market in the proposed free trade agreement between Nairobi and Washington, which could have far-reaching implications on Kenya's critical agricultural sector and its industrialisation plans. The Office of the United States Trade Representative (USTR) has made public a summary of key negotiation points in the proposed bilateral deal, which will see Kenya lift tariffs on all US agricultural products and open its maritime, textile, telecommunications financial services and other industries, including those classified as sensitive sectors to US investors. Kenya's Trade and Industrialisation Cabinet Secretary Betty Maina, last week launched a secretariat to draft Nairobi's proposals in readiness for the negotiations expected to start in a few months, even as she sought to assure East African Community member countries that the free trade agreement will not breach regional trade protocols. "We would like to assure our partners in the EAC and the African Continental Free Trade Area (AfCFTA) that we do not intend to jeopardise our regional interests. The team will work putting in mind the promise we indicated in the letter to the EAC Heads of States in which we informed them regarding our intention to offer preferential market access to the US," said Ms Maina. Once the deal is signed, Nairobi expects to export a range of goods tax-free to the US.

President Donald Trump's administration has been pursuing an "America First" policy in its trade negotiations with other countries as part of his attempt to counter a surging Chinese economic and political influence around the world. In the proposed FTA, the US is seeking to secure comprehensive market access for its agricultural goods in Kenya by reducing or eliminating tariffs and providing "reasonable" adjustment periods for import-sensitive agricultural products. It intends to push for establishment of new and enforceable rules to eliminate "unjustified trade restrictions," which means its agricultural products will be allowed into Kenya at zero or reduced tariffs. The US expects Kenya to streamline and expedite Customs treatment of its products for express delivery shipments, as per proposals in the document tabled in the Congress on May 22, by ensuring there is simplified Customs procedures for low-value goods. The US proposes the development of rules of origin to ensure that the benefits of the agreement go to products genuinely made in the US and Kenya and to ensure that the rules of origin incentivise production in the territory of the parties.

The US wants to promote supply of its telecommunications services by facilitating market entry, secure commitments to provide reasonable network access for telecommunications suppliers and establish provisions protecting telecommunications services suppliers' choice of technology.  (The East African)

Key Words: EAC, AfCFTA, Free Trade

WEST AFRICA

COVID-19 Ministerial Coordinating Committee Meeting of the ECOWAS - Final Communique: Extract from the communique – Following presentations by experts and exhaustive discussions, the Ministers agreed to:

 I. Institute measures to mitigate the socioeconomic impact of the pandemic on the population

 ii. Mobilize more resources to support national and regional Covid-19 response capacity

 iii. Strengthen capacity for contact tracing, isolation & treatment

 iv. Expand the health workforce through the use of community health workers, allied health professionals and healthcare students to assist in the public health response such as contact tracing and mitigate current shortages

 v. Decentralise testing, surveillance & case management to the districts with professionals and volunteers deployed to support local efforts 

 vi. Develop a cross-border surveillance & management strategy for use during epidemics. The idea of designated border crossings with enhanced surveillance facilities, trained personnel, and robust data sharing platforms including smartcards should be explored.

vii. Prioritize inclusive, contextualized and targeted risk communication that promotes adherence to public health measures while taking account of the socioeconomic situation of the population.

 viii. Strengthen disease surveillance and management for non Covid-19 diseases. Measures such as community engagement through traditional and religious leaders to create demand, ensure provision and promote accountability should be considered.

 ix. Ensure data driven decisions, particularly when easing lockdown. Ministers agreed that the easing of lockdown which has already started in some Member States should be data-driven, adapted to local context, and implemented gradually; that its effect on the pandemic should be evaluated after a period of about two weeks; and that lockdowns should be reapplied in the event of a resurgence in cases

 x. Revise their current treatment strategy in view of the emerging literature on the effects of chloroquine and hydroxychloroquine in patients with Covid-19 which had necessitated suspension of the WHO clinical trial. However, Ministers charged countries that continue to use chloroquine on a compassionate basis to carefully document patient response and any adverse effects

 xi. Encourage the evaluation of potential benefits of traditional medicines in clinical trials, including the COVID Organic product, as is being done in some countries

12. The Ministers also reflected on gradually engaging the public to come to terms with living with the virus in countries where the pandemic has reduced or stabilized, considering that the social restrictions cannot be applied indefinitely 

 13. The Ministers tasked WAHO, to work with the Department for Trade, Customs & Free Movement at ECOWAS Commission, and the Ministerial Coordination Committee on Transport, to come out with health-related guidelines and protocols on regional cross-border movement by air, land or sea for consideration by the Ministers.  This should cover the following areas: 

 a. Essential products including medicines, agricultural, food products and petroleum; commercial goods for trade and business; and passenger movements  b. Motor parks and loading areas for passengers and goods c. Border Posts or Entry posts for international travel including air, land and sea ports d. Risk communication for travellers and handlers of goods . (ECOWAS)

Key Words: ECOWAS, Regional Integration, COVID-19

Buhari nominates Okonjo-Iweala as DG World Trade Organization – President Muhammadu Buhari nominated the former Minister of Finance and Coordinating Minister of the economy, Ngozi Okonjo Iweala, as the Director-General of the World Trade Organization (WTO). President Muhammadu Buhari has nominated the former Minister of Finance and Coordinating Minister of the Economy, Ngozi Okonjo Iweala, as the Director-General of the World Trade Organization (WTO). This was seen in a tweet posted by the Presidential aide on Digital and New Media, Tolu Ogunlesi, in the early hours of Friday, June 5, 2020. In the statement, Ogunlesi said that the current Director-General of the intergovernmental organization, Roberto Azevedo, is stepping down from his position on August 2020, a year ahead of the end of his tenure.

Azevedo, who has been the head of the WTO since 2013, is stepping down at this critical period of global economic crisis and the trade war between the United States of America and China. The WTO head said this is the best way to avoid my chaos at the alliance, which has witnessed attacks from US President, Donald Trump. This means that the election that was earlier scheduled for 2021 when his tenure was supposed to expire might be coming up much earlier for a new four-year term. Tolu Ogunlesi in his statement said, ”President Muhammadu Buhari has nominated Okonji-Iweala as Nigeria’s candidate for the position of the Director-General of World Trade Organization. DG Azevedo is stepping down in August 2020, a year earlier, so the election of the new DG, originally scheduled for 2021, may take place much earlier”. According to a monitored report, President Buhari withdrew the candidacy of Nigeria’s permanent representative to WTO, Yonov Frederik Agah, for the same position. (Niarametrics)

Key Words: West Africa, Trade, Investment

SOUTHERN AFRICA

Bulletin 6: SADC Regional Response to COVID-19 - The Bulletin 6 of the SADC Regional Response to COVID-19 provides highlights on recent tools and guidelines released by the World Health Organization (WHO). These include a case report form for a suspected case of Multi system inflammatory syndrome (MIS-C) as well as guidance in recommendations for mass gatherings, which is a resource to be used by Member States. The report further highlights the resolution adopted by the World Health Assembly (WHA). The resolution seeks to establish the origins of the novel coronavirus as well as initiate an “impartial, independent and comprehensive evaluation” on the response of the WHO to the coronavirus crisis.

The global, continental and regional situation of COVID-19 is also presented. The Bulletin also presents the impact of COVID-19 on value chains, with emphasis on the fisheries and aquaculture value chain which was deliberated during the virtual meeting of Ministers responsible for Agriculture and Food Security, and Fisheries and Aquaculture held on 22 May 2020. Further, the Bulletin provides updates on the implementation of the SADC Guidelines on the Harmonization and Facilitation of Cross Border Transport Operations across the region, and on the Secretariat’s resource mobilization efforts towards COVID -19. Key recommendations from the report include;

a)    The gradual resumption of economic activities to be conducted simultaneously with the scaling up of the testing capacity in areas where public health measures are being lifted.

b)    The testing policy should be informed by the epidemiological scenarios in the country and must follow WHO recommendations in terms of prioritization of populations and individuals and priority should be given to testing of health care workers, communities with clusters and exposed individuals in quarantine.

c)     Ensuring supply chain access with consideration of gender, and, for those operations exporting within the region, continent and overseas, ensuring continued access to and cooperation from officials at ports, rail and border crossings so they can maintain their sales.

d)    Continuous Implementation of the SADC guidelines on facilitation of cross-border transportation with emphasis on adopting harmonized test protocols including mutual recognition of test results and agreement on validity period of test result. (SADC)

Key Words: SADC, Regional Integration, COVID-19

Angola cuts oil shipments to China as it seeks debt relief – Angola has cut the number of oil cargoes that it will ship to Chinese state firms to pay down debt to Beijing as it seeks to renegotiate repayment terms to deal with the crippling impact of the coronavirus, three sources familiar with the matter said.  Angola said this week it had asked for G20 debt relief and was in advanced talks with some countries importing its oil on adjusting financing facilities, but expects no further debt overhaul to be needed beyond this.

The sharp global economic slowdown due to the novel coronavirus pandemic pushed Brent oil prices to their lowest levels since the late 1990s and U.S. oil futures to negative territory for the first time in history. The price drop has put heavily-indebted Angola into a fragile state as it derives a third of state revenues from oil.  By far, its biggest creditor is China. Analysts say Angola has over $20 billion in bilateral debt with the lion’s share owed to China. Much of the cash was borrowed to build roads, hospitals, houses and railways across the southern African country.  On top of its Chinese debt, Luanda secured a $3.7 billion loan from the International Monetary Fund last year and state oil firm Sonangol has borrowed $2.5 billion from banks between end-2018 and mid-2019, the IMF said.  A global oil output cut deal led by the Organization of the Petroleum Exporting Countries (OPEC) has added to Luanda’s woes.  As an OPEC member, Angola was pressured to cut oil exports starting from May. The result has left the country with fewer and lower-value cargoes to split between paying off its Chinese debt and filling its depleted coffers.

The sources said that China’s state-owned Sinochem would receive five cargoes in July, down from the usual seven or eight, while the trading arm of Chinese giant Sinopec called Unipec would receive none.  Unipec typically receives two to three cargoes earmarked as debt repayment.  Sonangol, Angola’s finance ministry, Sinopec and Sinochem did not immediately respond to requests for comment.  China’s foreign ministry said on Wednesday that the relevant departments were in contact with Angola over its request for debt relief.  “These oil-backed loans create stronger interdependence (between lender and borrower) than traditional financing. This tactic of diverting cargoes is not new as seen elsewhere,” David Mihalyi, a senior economic analyst with the Natural Resource Governance Institute, said.   (Reuters)

Key Words: Angola, Export Sector, China

Status of Integration in the Southern African Development Community – The Status of Integration in the SADC Region Report highlights the key achievements and successes made by the Southern African Development Community (SADC) in the area of regional integration, as well as the challenges that have been faced along the way. This review of the status of integration in SADC in terms of achievements realized and challenges encountered, reveals that implementation has progressed well despite the several challenges faced, and SADC has been successful at many levels and across a wide range of areas relating to regional cooperation and integration. There are variations across the sectors, but the most important achievement is that appropriate policy frameworks, protocols and decisions have been put in place, ratified and domesticated in key areas.

In the process of implementing the various initiatives on regional integration, useful lessons can be drawn which include, the challenges of domestication of agreed policies and legal frameworks, roadmaps for implementation, enforcement and follow-up mechanisms, administrative issues, capacity issues, statistics and information sharing, and budgetary constraints.

This Report highlights the Status of Regional Integration in SADC and seeks to inform SADC Member States and the wider range of relevant stakeholders on the progress made in achieving the regional integration agenda. It covers four key pillars –

1. Industrial Development and Market Integration;
2. Infrastructure Development in Support of Regional Integration,
3. Special Programmes of Regional Dimension; and
4. Peace and Security Cooperation.

 (tralac)

Key Words: SADC, Regional Integration, Trade Agreement