INTERNATIONAL

DG Azevêdo: “Decisions made at the WTO will matter” for economic recovery from COVID-19 crisis – Addressing heads of WTO member delegations for the last time as Chair of the Trade Negotiations Committee, Director-General Roberto Azevêdo emphasized that “keeping markets broadly open to trade” would help build “a post-COVID economic recovery that is strong, sustainable and inclusive”. He told the 20 July meeting that members’ policy choices, including at the WTO, would play an important role in laying the groundwork for a return to growth and job creation. In his remarks, the Director-General said that the pandemic’s growing economic and social impact would shape the context for the WTO’s work for the foreseeable future. “International cooperation on trade will be critical to help all countries build back better,” he said. DG Azevêdo emphasized that the year ahead would be a defining one for the WTO. The Twelfth Ministerial Conference (MC12), now postponed to 2021, would be a key milestone for members’ efforts. “As originally scheduled for this past June, MC12 would already have marked a critical juncture for the organization. Multilateral agreements on fisheries subsidies and agriculture, together with advances in the joint statement initiatives, would have sent a powerful signal that the WTO could continue to provide certainty and predictability for global trade for the next 25 years. Failure to agree, meanwhile, would have called all of this into question.

"Now, MC12 will have to do this and more. It will mark a key decision point for the direction of the post-COVID global economy. Will we react to the ongoing shocks with renewed cooperation, leading to shared growth and resilience? Or will we move further on the path towards costly fragmentation? Your work in the months ahead, including in this body, will help provide the answer.” To maximize their prospects for success at the next Ministerial Conference, the outgoing Director-General urged members to swiftly agree on his successor, and then “work with her or him to chart a course for MC12 and beyond”. The existing WTO rulebook continues to provide “a vital anchor of predictability and certainty in the global economy,” DG Azevêdo said. Nevertheless, like all international organizations, the WTO must adapt to changing economic and geopolitical circumstances. “Reform is a permanent task for the WTO – but it is a process that will be built by specific negotiated decisions,” he said.

“The past seven years have taught us that multilateral agreements are possible when the political will is there, and when you are pragmatic about the issues to tackle, open to creative approaches and compromise, and inclusive towards the voices of all members,” the Director-General concluded. “These lessons will be useful as you move forward.” (WTO)

Key Words: COVID-19, Global Trade, WTO

World Bank Group President David Malpass: Remarks for G20 Finance Ministers and Central Bank Governors Meeting – World Bank Group President David Malpass released the following remarks on 18^th July virtual G20 Finance Ministers and Central Bank Governors Meeting: Extract:  The pandemic has triggered the deepest global recession in decades, and what may turn out to be one of the most unequal in terms of impact.  People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.  Adding to the inequality problem, growth and investment prospects are weak and the dominant stimulus in advanced economies is through massive central bank asset purchases, which provides selective support to higher rated bonds and bondholders in their own markets. For the poorest countries, poverty is rising rapidly, median incomes are falling, and growth is deeply negative.  Debt burdens – already unsustainable for many countries – are rising to crisis levels. Meanwhile, investors are reaching for yield, as interest rates look set to be low-for-long.  This provides short-term support for some governments, but with economic fundamentals deteriorating, it risks complacency and a downward spiral into a new debt crisis that is likely to go beyond the poorest countries.  If this proceeds, it will weigh for decades on people in developing countries.

The World Bank is substantially increasing the pace of our grants and loans for developing countries as they respond to the crisis, but it won’t be enough.  We expect the development challenges to deepen and become even more severe over the next year.  Today, I’m going to focus on debt suspension, debt reduction, debt resolution, and debt transparency.  We’re recommending several actions that will be key factors in responding to the crisis and strengthening the recovery.

DEBT SUSPENSION - I urge you to extend the time frame of the Debt Service Suspension Initiative (DSSI) through end 2021 and commit to give the initiative as broad a scope as possible.  We’ve made a great deal of progress with DSSI in a short period of time, but more needs to be done. Eligibility of official bilateral claims should extend to all external long-term public and publicly guaranteed debt, including the external debts of SOEs with either explicit or implicit government guarantees. To maximize much needed support to eligible countries, all official bilateral creditors, including national policy banks, should implement the DSSI in a transparent manner. For example, full participation of the China Development Bank as an official bilateral creditor is important to make the initiative work. (World Bank)

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

Trade officials equipped to manage non-tariff measures amid COVID-19 – On the heels of the COVID-19 pandemic, governments worldwide have implemented new import and export measures as part of their health and economic responses. Nearly 80 countries, for example, have imposed some form of restriction on the export of medical supplies, reducing the availability and affordability of certain life-saving products. Some of national policy responses to the crisis have included non-tariff measures (NTMs) – policy requirements other than tariffs – that are impacting international trade in goods. To help countries better respond to the pandemic with policies that don’t hinder trade, UNCTAD has trained 207 trade experts from 67 countries on NTMs, with 156 trainees – 86 men and 70 women – successfully completing a new online course. The training, which holistically covered the objectives and implications of NTMs, took place from 15 June to 10 July, as part of UNCTAD’s ongoing efforts to help developing countries alleviate the socio-economic impacts of COVID-19.

The participants from all over the world included government officials, trade practitioners from public or private sectors, and researchers from universities, academic institutes and civil society organizations. "Learning the relevance of NTMs to the COVID-19 response was very useful,” said Rose Masita, assistant director at Kenya’s ministry of industry, trade and enterprise development. “The training brought out the various ways in which NTMs are being applied the world over and the impact they are having on trade,” Ms. Masita said. “The knowledge I gained will enable me to formulate the right policies and strategies post-COVID-19.”

Deepened knowledge - Over 85% of the participants said the training deepened their knowledge on NTMs, while 76% of them noted that it helped them better understand the policy issues faced by their countries in international trade. "The part most relevant to my work was the information on the analysis tool,” said Ahmed Abdelmaksoud, an Egyptian customs and international trade senior manager, referring to the UNCTAD Trade Analysis Information System. The system provides information on the NTMs applied by more than 190 countries. “It’s a very helpful tool that I can use to provide more reliable advice to businesses that would like to do trade across different territories,” Mr. Abdelmaksoud said. The online course also covered the connection between NTMs and the UN Sustainable Development Goals (SDGs). As NTMs are increasingly shaping trade, influencing who trades what and how much, understanding them is critical to crafting strategies and actions to meet the SDGs. Since 2014, UNCTAD has offered annual online courses on NTMs and certified almost 350 graduates. This year’s course was adjusted to respond to the COVID-19 crisis, with support from the UN Development Account.  (UNCTAD)

Key Words: COVID-19, Global Trade, Global Business

PAN AFRICA

Towards Intellectual Property Rights Harmonization in Africa – Over the last two decades, Intellectual Property Rights (IPRs) - Patents, Copyrights, Trademarks, Geographical Indications (GIs) have transited from the obscure area of legal analysis and policy isolation to the vanguard of global economic policymaking1. At the multilateral level, the successful conclusion of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) in the World Trade Organization (WTO) hoists the protection and enforcement of IPRs to the level of international commitment2. Africa is seen to have positive developments in the IP landscape but has often struggled to realize its full economic potential. For this reason; the fragmentation of the IP system in Africa has been seen as a major stalemate to IP development in Africa3. Hence, the move toward harmonization of IP has become a critical subject worth consideration for the development of the Intellectual Property system in Africa.

Mr Sand Mba Kalu: Executive Director - Africa International Trade & Commerce Research opened the webinar by stating that we live in a world where businesses are no more confined to a country’s border. And that IPRs protection is increasingly becoming international, rather than national. Mr MbaKalu mentioned that fragmented IPRs systems at regional levels limit coordinated protection of inventions and creative works, and this can directly stunt social and economic development.  He noted that currently, Africa has two main intergovernmental IPRs organizations- African Intellectual Property Organization (OAPI) and African Regional Intellectual Property Organization (ARIPO) which operate two different systems and approaches to IPRs protection and administration. And that the Intellectual Property (IP) protocol to be negotiated in Phase II of the African Continental Free Trade Area (AfCFTA) agreement opens up questions about regional and continental harmonization of IPRs in Africa. He closed his remark with a question: with the existence of different IPRs systems in Africa, OAPI, ARIPO, as well as IPRs provisions at the Regional Economic Communities; Can Africa achieve the needed technical clout to facilitate cross border IPRs protection?

Dr Titilayo Adunola Adebola- Lecturer and Theme Coordinator, Intellectual Property Law- University of Aberdeen, UK, served as the moderator of the webinar. Opened her statement by mentioning that innovation and creativity are widespread in Africa and that from the cultural viewpoint, taking provenance associated goods that are protected under geographical indication systems as an example -we have Oku white honey and Penja pepper from Cameroon, Ziama-Macena coffee from Guinea, Rooibos from South Africa and Argan Oil from Morocco. She further expressed that from the creativity viewpoint, we have a thriving Nollywood industry in Nigeria, which is the second-largest film producer in the world and Gollywood from Ghana, which are creative works produced in the film industries and are protected under copyright systems.  She  further referenced Professor Caroline Ncube (2018) who neatly delineates the emergence and development of intellectual property rights in Africa through four periods: (i) pre-colonial; (ii) colonial (fifteenth-century century onwards); (iii) post-colonial (twentieth-century century onwards); and (iv) post-TRIPS (1995 onwards). She believes Africa is about to enter another period with the AfCFTA. (Africa International Trade & Commerce Research)

Key Words: Africa, Trade and Investment, AfCFTA

Coaxing AfCFTA a country at a time - With only 10 per cent of all trade in Africa being intra-African, so much more needs to be done to increase this opportunity which could transform the continent’s economy. The African economy has the potential to grow to billions and to achieve this, countries have to build greater economic partnerships. To tap into this potential, the African Export-Import Bank (Afreximbank), has disbursed a total of US$ 3.55 billion to the Egyptian Banking sector under its Pandemic Trade Impact Mitigation Facility (PATIMFA) since the outbreak of the pandemic in March this year. In its bid to strengthen long-term economic prosperity in the region the Bank has also provided US$ 300 million to the National Bank of Egypt to support activities aimed at expanding intra-African trade. The funding has been provided to the Central Bank of Egypt and other Egyptian banks.

PATIMFA is designed to assist Afreximbank member countries to manage the adverse impact of financial, economic and health shocks caused by epidemics or pandemics, in the nature of covid-19. “By doing so, it helps preserve and promote economic stability through the period of global uncertainty. The funds ensure trade debt payments that fall due are honoured and supports the stabilization of foreign exchange resources in order to preserve the flow of critical imports. They will bolster the liquidity of the Central Bank and Local Egyptian lenders during the crisis while ensuring vital trade in items such as food and medical supplies continues,” notes a statement from Afreximbank.

Afreximbank President, Prof. Benedict Oramah, said: “Faced with a sharp change in the economic outlook, banks in most countries, including Egypt, need to brace themselves for widespread economic disruption and a recession. The support we are providing to the banking system in Egypt will ensure trade continues and defaults are averted, bolstering the economic foundations needed to preserve public health and promote a strong recovery.” He added, “As we rightly focus on stability in the present, we must also look to build a more prosperous and resilient future. Egypt has been a regional banking powerhouse for more than a century and will play a vital role in expanding intra-Africa trade as the continent recovers from the pandemic and reaps the benefits of the African Continental Free Trade Area. The National Bank of Egypt’s balance sheet is among the top three strongest in Africa and we are confident its expansion will prove an effective multiplier for trade across the continent.”

Last year, Africa became the largest trade zone in the world with the ratification of the Africa Continental Free Trade Agreement (AfCFTA). The AfCFTA is expected to increase intra-African trade by 52 per cent by the year 2022 and remove tariffs on 90 per cent of goods. However, the covid-19 pandemic has put a damper on this ambitious plan which targets Africa’s 1.2 billion people. The trade agreement aspires to create a tariff-free continent to grow local businesses, boost intra-African trade, spur industrialization and create more jobs. (THE EXCHANGE)

Key Words: AfCFTA, COVID-19, Regional Integration

International Chamber of Commerce official in Dubai lauds ‘untapped potential’ of UAE-Africa trade – The chamber of commerce executive hailed the UAE’s services culture and manufacturing capacity as two of the characteristics that made it an effective trading partner. Some industries in Africa, she said, “haven’t hit the maturity level that is expected”, but the UAE has the know-how and the skill sets to help and ensure both parties can get the most out of their international trade relationships. “[The UAE] has the machinery to be able to achieve, and then the services on top of that, to make sure we can realise value.” Ms Mintah highlighted technology, infrastructure and manufacturing as areas that were likely to drive a growth in trade between the UAE and Africa. Improving supply chains would enable greater trade to the benefit of both sides, she said, and added there remained obstacles to ensuring technological development could proceed unhindered. “One thing about technology is that in order to realise maximum benefit you have to make sure that all the preconditions are met,” she said. “We need to make sure that the road networks, the rail networks, the transportation networks are solidly in place and robust enough.”  The UAE’s relationship with its trading partners in Africa has already grown much closer. A new, younger generation has taken up the challenge of boosting trade on both sides of the negotiating table, and is working “as peers” to change the nature of the relationship fundamentally.

“Historically, wrongly or rightly, you’d have raw materials going straight out, where it’s just a transaction and a product and an exchange, which sometimes is not a win-win situation for everyone” she said. “Now, with a new generation coming in and with a new mind set, this time we’re sitting around the table trying to find out ‘what’s in it for me?’ from both sides of the table and ensure that the relationship is of benefit to both sides. “Being able to sit at the table and see what is best for both regions is what I am driving at,” she said. The chamber executive said she was excited to get working to realise the “huge potential” in the relationship, and added that innovative thinking and coming up with new ways of solving problems was one of the defining characteristics of the Emirates.  (The National)

Key Words: UAE, Africa, Trade Agreement

NORTH AFRICA

Morocco Announces New Program to Revive Tourism Sector - The Moroccan Minister of Tourism Nadia Fettah Alaoui announced Thursday the launch of a new program to revive the tourism sector in Morocco.  Head of Government Saad Eddine El Othmani attended the tourism minister’s presentation before the government council on July 16.  During the presentation of the project, Alaoui said the program will maintain the continuity of jobs, accelerate the integration of employees in vulnerable situations, and develop products that serve to promote domestic tourism. Government spokesperson Saaid Amzazi emphasized that the project is set to accelerate the revival of tourism in Morocco and develop programs to promote domestic tourism in partnership with regional and local entities. He added that the project aims to support the Moroccan economy and preserve jobs in the tourism industry. Alaoui stressed the participatory character of the program, which concerns Moroccan tourism professionals and the relevant government departments. As Morocco continues to record a significant number of new COVID-19 cases every day, Alaoui underlined the importance of preventive measures in the tourism sector. Tourism institutions have adopted practices such as mandatory COVID-19 screening tests for all employees, in coordination with local health authorities. Morocco’s Ministry of Tourism is set to implement the national tourism revival program through a roadmap covering the period 2020-2022.  (Morocco World News)

Key Words: North Africa Economy, COVID-19, Morocco

EAST AFRICA

East Africa: ‘Trade must become more fluid’ in post-pandemic era – The post-pandemic period promises to be a moment of opportunity for Africa, that of securing supply by bringing production back to the continent. Yet the risks of supply disruption are not as much linked to a lack of factories in Africa as they are to the concentration of trade. Africa imports 75% of its drugs from Europe, India, and China. First and foremost, securing supply requires greater diversification of suppliers, backed up by trade agreements. Can this be done in a way that benefits African countries?

Intra-community trade within EAC - Intra-continental trade circuits are more fragile than international circuits. Despite the pandemic, cargo aircraft continue to land in Nairobi, container ships dock in Djibouti and oil tankers leave Port Sudan. Traffic in the Kenyan port of Mombasa is only expected to decrease 2.1% in the first quarter of 2020 as compared to 2019. The problem lies elsewhere.

Quality of infrastructure - Intra-Community trade within the East African Community (EAC) represents only 20% of its total trade (as opposed to 70% in Europe). Several factors are to blame for this, including the poor quality of infrastructure, complex administrative procedures, low competition in the carrier industry, and a lack of interconnectivity between the various modes of transport. For example, clearing a container takes eight days in Mombasa, less than two days in Mauritius and barely ten minutes in Europe. These differences are even more pronounced when it comes to transport corridors. According to TradeMark East Africa, it takes twelve days for a shipment from Djibouti to travel the 850 km to Addis-Abeba. That is four times longer than Asian averages for the same distance. The current crisis has shed a harsh light on these difficulties, as lines at the Uganda-South Sudan Border have stretched 70 km. Failure to mutually recognise COVID-19 tests has led to conflicts between Tanzania and Kenya and placed carriers in danger.

Inflation differential- Another sign of the lower resilience of continental circuits is the inflation differential per product (imported or not). In Kenya, conflict and subsequent delays at the Tanzanian border have tripled the price per kilo of onions. It is certainly difficult to determine which issues are caused by supply problems, and which are caused by locust invasion, flash floods and recurring inflation during Ramadan. However, those African businesses that have been surveyed confirm that local supply has suffered greater disruptions than the others.

Inter-continental trade with EAC - Adapting inter-African trade to shocks is even more complicated due to inequalities in access to financial and digital services.

Electronic cargo  tracking system - The EAC’s adoption of an electronic cargo tracking system, including an inventory of drivers’ COVID-19 tests, is especially encouraging. It proves that coordinated action at the continental level is possible. This is welcome news, since this type of coordination is required not only in order to regulate the flow of trade, but to safeguard intellectual property rights, competition and quality. (theafricareport)

Words: Regional Integration, East Africa, Regional Trade

Ethiopia: Institute Targets African Markets for Leather Products - Ethiopia with its huge livestock potential has not yet tapped its resources. Especially, leather and leather factories need to be competitive in the global market and should expand their export destinations.  Having understood this, the Ethiopian Leather Industry Development Institute has been endeavoring to create market opportunities in most African countries, Communication Director at the institute Birhanu Serjebo told The Ethiopian Herald. He stated that enhancing the quality of leather products and adding value to the imported items would be crucial to compete in the global market. Export trade has played a vital role in the economic growth the nation has achieved over the last two decades. However, there are challenges relating to the diversification and value addition which are vital for boosting competitiveness and effectiveness.  ‘‘Producing quality and value-added items would significantly transform export trade. Besides, expanding export destinations should be prioritized. As part of the scheme, it has been planned to export leather and leather products to various African countries,’’ he said.

United States, Italy, United Kingdom, Canada, China and Japan are the major importers of Ethiopian live animals, hides and skins, as to him. Moreover, there is also a huge market in East Asia and Middle East countries. Nowadays, there is an encouraging start in producing various leather products such as export-oriented shoes, gloves, belt, bag, jacket and other items. The products should be modernized so as to compete globally and to generate the deserved foreign currency earning. “The leather industry sector is flourishing from time to time. But the sector has been facing challenges. For instance, the country is producing only 10 percent chemical which would be used for leather industries. This trend needs to be changed. To transform the sector, a committee has been launched under the Prime Minister’s office,’’ Birhanu explains. For the meantime, Ethiopian Embassies and Consulate offices have been playing their part in creating market opportunities in the countries they are being assigned, the director underscores.

As a challenge lack of sufficient chemical was mentioned. Lack of quality on raw leather, lack of loans, and lack of infrastructure as well as global market fluctuation and electric city outage are also among the serious hindrances which are affecting the leather industry. For his part, Mewael Desta, Economics Lecturer at Mekelle University says that leather and leather producing factories should be proliferated so as to create ample market opportunity for farmers and skin sellers.  “Leather factories have been playing a massive role in buying hides and skins from farmers. Thus, the life of ordinary farmers and skin traders have been improving, though local brokers are creating tricks. The government should tighten its controlling mechanism on hides and skins to get the deserved income out of it. Hides and skins providers and other stakeholders should deliver quality and healthy produce which could have high market value,’’ he emphasized. (Ethiopian Press Agency)

Words: African Markets, East Africa, Regional Trade

WEST AFRICA

A new dawn for women entrepreneurship in Africa’s future – The female economy is the world’s largest emerging economy. According to Global Entrepreneurship Monitor, sub-Saharan Africa has the highest rate of female entrepreneurship with 26% of female adults engaged in entrepreneurial activity. In Ghana, approximately 46% of businesses are owned by women which is more than any other country in the region (MIWE (In full), 2018). The paradox is that the rise of women entrepreneurs is not necessarily in tangent with the grinding pace of the country’s economic development and so worth paying attention to the reasons. In addition to the already complex environment, the natural order of work is now severely disrupted with what is normal due process becoming constant improvisation. Sectors run prevalently by women include wholesale and retail trade especially in fast-moving consumer goods, food and beverage, hospitality, education, event management, fashion and arts, and wellbeing. Thus, it helps to better identify and understand the factors and conditions that are most conducive to women business owners in the country and address the challenges that limit women from opening or expanding their businesses.

Challenges and bridging the gap- Access to knowledge: There is the need for education and training, upskilling and re-skilling – especially in the technology space which is currently male-dominated. The rapid technological and digital transformations affecting jobs means women have to keep up with the pace through training to be tech-savvy and among others take advantage of online presence. Relevant education programmes and funded training opportunities should be created to eliminate the confinements of women to traditional sectors to achieve market access to new sectors in science, technology and the circular economy. The big question to ask is why are women still under presented in STEM education? Thus, relevant education programmes and funded training opportunities should be created to eliminate the confinements to traditional sectors to enable market access to new sectors in science, technology and the circular economy.

Access to funding: There is a requirement for financial inclusion – lack of appropriate financial and business strategy advice and access to credit to women entrepreneurs due to little or no collateral security puts them at a disadvantage. Why are women not given more control over family assets such as joint property rights, thus eliminating the need for collateral? So, despite the immense opportunity for economic growth and social impact by investing in women, the limited access to and lack of funding means that their businesses continue to suffer especially at this time when keeping employees is an expensive venture. Toyin Dania, Women’s Entrepreneurship Day Ghana Ambassador said, “My female clients have been concerned about their businesses but especially their staff and what the new normal will look during these uncertain times. Their businesses are more than just economics – it’s about their staff who have the intellectual value of their training and understanding of their business, and their families. One of the solutions is to reduce working hours which is effective but only in the short-term.”  (Ghana Web)

Key Words: Africa, Business, AfCFTA

CENTRAL AFRICA

Central Africa Economic Outlook 2020 - Coping with the COVID-19 Pandemic - As in 2018, the real GDP In 2019, the international economic environment experienced a slight dip in global economic growth to 2.9% from 3.6% in 2018. This slowdown was mainly due to trade and geopolitical tensions between the USA and China and uncertainties surrounding the Brexit. The projections made before the outbreak of the coronavirus pandemic (COVID-19) forecast global real GDP growth rates of 3.3% and 3.4% in 2020 and 2021, respectively. These projections have been revised downwards in light of the risks to global economic growth from the pandemic whose impact has caused a decline in international trade, a slump in oil prices, a drop in investment, financial resources and tourism revenues, and pressure on health and social systems. The IMF has now revised its global growth forecast down by 6.3 percentage points to-3% in 2020 because of the COVID-19. According to African Development Bank estimates, Africa’s real continental GDP growth rate is forecast to contract to -3.2% in 2020, representing a loss of 7.3 percentage points compared with the pre-pandemic forecast of 3.9%. In general, the severity of the COVID-19’s negative impact on global growth will mainly depend on: (i) the scale and speed of the virus’s spread throughout the countries; (ii) the effectiveness of health and economic measures adopted by governments to contain it; and (iii) the amount of resources committed to supporting the economies. In 2019, Central Africa’s growth rate was the same as in 2018, which remained lower than the Africa average(3.2%).

growth rate was 2.8% in 2019 - one of the lowest in the five   ofthe continent. Growth was stronger in East Africa (5.2%), North Africa (3.7%) and West Africa (3.6%). Only Southern Africa (0.3%) posted lower growth in 2019. In 2019, the region’s key macroeconomic indicators improved: (i) average inflation at2.6% was the lowest of all the regions; (ii) the fiscal balance showed a surplus equivalent to 0.5% of GDP making Central Africa the only region without a deficit; and (iv) the current account deficit narrowed to 1.9% of GDP, the best   all the regions. The prospects for medium-term economic growth in Central Africa were favorable before the coronavirus pandemic. The pre-COVID-19 real GDP growth rate for the region was projected at 3.5% in 2020 and 2.9% in 2021, supported by the continuing implementation of the reforms embarked upon, dividends from key investments, development of economic diversification and debt management efforts made. However, the prospects are now gloomier since the onset of the pandemic. In the latest macroeconomic projections that factor in the disease’s potential impact, AfDB has projected a growth rate of -2.5% for the region in 2020 in a best-case scenario where the situation is controlled in the short term, i.e. a drop of 6.1 percentage points compared with its original pre-COVID-19 projection of 3.5%. In a worst-case scenario, where the pandemic is more slowly contained, the estimated growth rate for 2020 is -4.3%, i.e. a drop of 7.8 percentage points compared with pre-COVID projections. (AfDB)

Key Words: Central Africa, Economic Growth, COVID-19

SOUTHERN AFRICA

SADC Ministers of Finance and Investment and Peer Review Panel discuss financial mechanisms critical for the prosperity of the region – The Ministers of Finance and Investment and Peer Review Panel of the Southern African Development Community (SADC) met virtually on 15June 2020, where they discussed progress made in the implementation of financial mechanisms critical for the prosperity of the region. In his opening remarks, Honourable Mussa Azzan Zungu, Minister of State Union and Environment of the United Republic of Tanzania, representing the Chairperson of the SADC Committee of Ministers of Finance and Investment, highlighted that attracting investment in the SADC region remains the region’s common aspiration. He underscored the need for the region to create a conducive business and investment climate through, amongst others, harmonization of regional investment frameworks and policies including Bilateral Investment Treaties (BIT) model will generate unprecedented benefits to Member States.

On her part, the SADC Executive Secretary Her Excellency Dr Stergomena Lawrence Tax commended SADC Member States for the progress made in the implementation of the SADC Protocol on Finance and Investment which aims to foster harmonization of the financial and investment policies in the region. H.E. Dr Tax cited the harmonisation of payments and clearing systems through the SADC Real Time Gross Settlement System (RTGS) as one of the key milestones made in transforming payments and clearing systems in the region. On this note, the Executive Secretary called for speedy on-boarding of all regional currencies to the SADC-RTGS multi-currency platform which has already facilitated the settlement of 1.7 million transactions, translating into R6.87 trillion since July 2013 when it was launched.

During the meeting, the Ministers noted the progress on the implementation of the SADC Regional Development Fund, a facility through which Member States will mobilize development resources as a group. To ensure the full implementation of the Fund, the meeting urged Member States that have not yet signed and ratified the Agreement on the Operationalisation of the SADC Regional Development Fund to do so expeditiously. The meeting considered progress on the development of the Regional Transmission Infrastructure Financing Facility (RTIFF) which is aimed at enabling SADC Member States maximize the benefits from the regional electricity trade. In order to expedite the finalization of the enabling measures for RTIFF viability, the Ministers directed the Secretariat to continue engagement with the International Cooperating Partners and the regional organisations in the energy sector in mobilizing concessional funding. (SADC)

Key Words: SADC, Regional Integration, Investment Policy

South Africa Full Quarterly Bulletin– No 296 – June 2020  - The further contraction in South Africa’s real gross domestic product (GDP) at an annualised rate of 2.0% in the first quarter of 2020 extended the economic recession into its third quarter. The nationwide lockdown, from 27 March, to curb the spread of the coronavirus disease 2019 (COVID-19) is expected to severely affect economic activity in the second quarter. The real output of the primary sector declined further and was driven by a sharp contraction in mining output, which was impacted by electricity load shedding and supply-chain disruptions as well as lower global demand as the COVID-19 pandemic impacted export markets. By contrast, the real gross value added (GVA) by the agricultural sector expanded markedly in the first quarter of 2020, following four consecutive quarterly contractions. Favourable weather conditions supported the production of field crops as well as horticultural and animal products.

The real output of the secondary sector contracted for a third successive quarter. Economic activity declined in most manufacturing subsectors in the first quarter of 2020, as both global and domestic demand conditions deteriorated. The sustained decline in the output of the electricity-intensive mining and manufacturing sectors also weighed on electricity production and consumption. Real construction activity contracted for a seventh successive quarter, suppressed by persistent low business confidence, policy uncertainty and the recessionary conditions.

The real GVA by the tertiary sector reverted from a contraction in the final quarter of 2019 to an increase in the first quarter of 2020. Growth in the real output of the finance, insurance, real estate and business services sector accelerated in the first quarter, in part reflecting increased trading activity in the financial markets following the worldwide panic-trading in reaction to the COVID-19 pandemic. By contrast, the real GVA by the commerce sector decreased further as weak trading conditions and pre-lockdown supply-chain disruptions constrained the real output of the wholesale trade subsector, while lower sales of new and used vehicles reflected weak consumer confidence and spending. However, real retail trade activity improved marginally, reflecting increased sales of food and beverages as well as pharmaceuticals as consumers stockpiled before the start of the national lockdown. (South African Reserve Bank)

Key Words: SA, Trade, COVID-19