Today’s Topics:

ANNOUNCEMENT: A Guide To Gender Mainstreaming in African Continental Free Trade Area (AfCFTA) National AfCFTA Strategies – (UNECA)

WTO issues new report on how COVID-19 crisis may push up trade costs – (WTO)

COVID-19: A threat to food security in Africa – (UNCTAD)

CPIA Africa: Assessing Africa's Policies and Institutions – (World Bank)

‘Africa’s outlook is positive,’ African Development Bank tells Indian investors and officials – (AfDB)

Lighting Up Africa: Bringing Renewable, Off-Grid Energy to Communities – (World Bank)

Ethiopia: Commission Launches Digital Monitoring, Evaluation System That Modernizes Economy – (Ethiopian News Agency)

Parliament approves agreement on AfCFTA secretariat-  (Ghana Web)

Monetary Policy changes 'risky', warns Kganyago – (SA News)

IMPORTANT ANNOUNCEMENT

A Guide To Gender Mainstreaming in African Continental Free Trade Area (AfCFTA) National AfCFTA Strategies – As COVID-19 spreads rapidly across the continent, evidence highlighting the disproportionate economic and social impact of the pandemic on women is clear. The vast majority of women’s employment is in the informal sector, which has been worst hit by the economic fallout of COVID-19. Border closures have cut off livelihoods of entire communities that depend on trading carried out by small-scale and informal cross-border traders, who are predominantly women. Women are also disproportionately represented in industries that are more affected by COVID-19, including leather, textiles and apparel. Likewise, the pandemic has put in peril other sectors that women depend on for their livelihoods, including smallholder farming, horticulture, travel, tourism and hospitality. Of particular concern, is the exponential increase in gender-based violence of all types.

Notwithstanding these challenges, there is a unique opportunity in a post-pandemic Africa to put women at the centre of building back more inclusive economies that serve the AU Agenda 2063 and the broader 2030 global agenda that “leaves no one behind”. Extending equal economic participation to women in the AfCFTA requires policy makers to analyse both the opportunities for and potential barriers to inclusive gains. In an effort to enhance the knowledge of policy makers and other key stakeholders on how to advance gender equal outcomes in AfCFTA implementation, the African Trade Policy Centre (ATPC) and the Institute for Economic Development and Planning (IDEP) are organizing a four-week online course entitled “A Guide To Gender Mainstreaming in National AfCFTA Strategies”.

Applicants to the course are expected to have, as a minimum, a bachelor’s degree preferably with a background in trade, economic development and international relations and courses related to statistics, planning, project man-agement and monitoring project evaluation. In addition, two years of work experience will be required. Women candidates are strongly encouraged to apply. Until the registration deadline, participants are accepted to the course on a rolling basis and subject to availability of slots. Applications must be completed exclusively on IDEP online application platform at https://www.unidep.org/?appl (UNECA)

INTERNATIONAL

WTO issues new report on how COVID-19 crisis may push up trade costs – The WTO Secretariat has published a new information note warning of possible increases to trade costs due to COVID-19 disruptions. The note examines the pandemic’s impact on key components of trade costs, particularly those relating to travel and transport, trade policy, uncertainty, and identifies areas where higher costs may persist even after the pandemic is contained. The note estimates that travel and transport costs account for as much as a third of trade costs depending on the sector. Pandemic-related travel restrictions are therefore likely to affect trade costs for as long as they remain in place. For example, global air cargo capacity shrank by 24.6 per cent in March 2020, as passenger flights account for around half of air cargo volumes. The resulting increase in air freight prices is likely to subside only with a rebound in passenger transport, according to the report. While sea and land transport have not faced comparable shocks, maritime transport has seen a decrease in numbers of sailings, while international land transport has been affected by border closures, sanitary measures and detours. Moreover, business travel, which is important for maintaining trading relationships and managing global value chains, in addition to being a significant economic activity in its own right, is being disrupted. The quality of information and communications technology (ICT) infrastructure and digital preparedness will be important in determining how well economies can cope.

Trade policy barriers and regulatory differences are estimated to account for at least 10 per cent of trade costs in all sectors. They include tariff and non-tariff measures, temporary trade barriers, regulatory differences and the costs of crossing borders, as well as other policies that impact trade, such as a lack of investment facilitation or of intellectual property protection. The report notes that while COVID-19 has motivated both trade-restricting and import-facilitating changes in tariffs and regulatory practices, these measures have so far affected only a small subset of products. A crisis-induced shift towards the digitalization of customs and regulatory procedures to reduce physical contact could potentially lower the associated trade costs in the long-term. (WTO)

Key Words: Global Trade, WTO, COVID-19

COVID-19: A threat to food security in Africa – The International Monetary Fund has projected a deep coronavirus-induced global recession, which threatens a nearly 4% drop in world GDP and could drag the GDP of African economies into a fall of about 1.4%, with smaller economies facing a contraction of up to 7.8%. This decline is mainly a result of export adjustments affecting primary commodity exporters and associated tax revenue losses. This in turn, reduces governments’ capacity to extend the public services needed to respond effectively to the crisis.  Overall, UNCTAD estimates a regional average of about 5% in public revenue losses in Africa. Total merchandise exports are expected to contract by about 17% in 2020. These losses will have repercussions on Africa’s progress towards the Sustainable Development Goals and Africa’s Agenda 2063. With at least 60% of the African population dependent on agriculture for their livelihoods and access to food, any trade-related distortions to the sector can threaten the food security of the continent’s poor. In addition to the impact of extreme climate shocks on agricultural productivity, there is a strong positive correlation between economic recession and food insecurity in Africa. Despite the continent’s huge resource endowments (including a wide availability of arable land, and a young, growing labour force, among other factors), the continent’s agricultural production alone, hampered by distribution, access, and affordability challenges, is insufficient to meet its food security needs. (UNCTAD)

Key Words: Global Trade, UNCTAD, COVID-19

PAN AFRICA

CPIA Africa: Assessing Africa's Policies and Institutions – The 2019 Africa Country Policy and Institutional Assessment (CPIA) report covers the period January to December 2018. Over this period, the average quality of policies and institutions in International Development Association (IDA)-eligible countries remained unchanged, amid decelerating growth across the region. The overall CPIA score for IDA countries in Sub-Saharan Africa was 3.1 in 2018, the same as 2017, reflecting the slow progress in improving the quality of policy and institutional frameworks in the region. Partly reflecting this uneven performance, per capita income growth has stagnated in recent years, and poverty headcounts remain elevated. Accelerating growth and the pace of poverty reduction in the region’s IDA countries will necessitate faster structural transformation along with the accumulation of fundamental capabilities in human capital and institutions and some degree of macroeconomic stability. Against this backdrop, the 2018 CPIA results reinforce the call for IDA countries in Sub-Saharan Africa to accelerate the pace of policy and institutional reforms to foster rapid economic growth and poverty reduction. Three areas require immediate attention. First, the quality of debt management needs to be strengthened. The buildup in public debt has continued in the context of weak debt management systems. The necessary improvements in the effectiveness of debt management need to be implemented. The number of IDA countries at high risk of debt distress or in debt distress increased further in 2018. Strong debt management capacity can enhance debt transparency, minimize contingent liabilities, render fiscal frameworks more conducive to effective countercyclical policies, and mitigate the pressures that lead to rapid debt accumulation. Over time, improved debt management would help strengthen macroeconomic stability. This year’s report focuses on debt management. Second, business regulatory reforms need to accelerate to support private sector development and job creation. Due to the slow pace of reforms, IDA countries in Sub-Saharan Africa are not converging toward the best business regulatory performance in some areas critical for private sector development including, most notably, in getting electricity. The average cost to obtain an electricity connection remains prohibitively high in many countries. Third, sustained efforts are needed to improve domestic revenue mobilization. In many countries, the yield of the domestic tax system has declined, as widespread exemptions narrowed the tax base amid weak capacity in customs and low compliance of taxpayers. Rationalizing tax exemptions and improving the efficiency of current tax systems could yield more revenue for countries to finance investments in human capital and infrastructure and ensure debt sustainability. Enforcing the rule of law, which can effectively protect property rights, strengthening accountability and transparency mechanisms, and vigorously combatting corruption remain critical. See Less (World Bank)

Words: World Bank, Trade, Africa

‘Africa’s outlook is positive,’ African Development Bank tells Indian investors and officials - The groundwork has been laid for Indian investors who are looking to invest in Africa. During a recent virtual conference hosted by the Confederation of Indian Industry (CII) and its partners, officials called for Indo-African partnerships to go beyond government-to-government cooperation and promote private sector participation in order to accelerate Africa’s development. The Conference on Innovative Financing Mechanisms for Doing Business with Africa took place on 30 July 2020 and attracted more than 600 participants from over 45 countries. Besides Africa and India, there were also participants from the Middle East, Europe, and Asia, representing businesses, governments, financial institutions, and business promotion agencies. Akhilesh Mishra, India’s Additional Secretary in the Ministry of External Affairs, urged the private sector to consider investing in youth and startups because those sectors have enormous potential for employment generation.  He noted that, aside from the long-term funding traditionally provided as official development assistance, African countries will require more targeted short-term financing. Bajabulile Swazi Tshabalala, Acting Senior Vice President and CFO of the African Development Bank Group, highlighted business potential in Africa, noting that the continent had great prospects for investors, with a growing consumer market that Indian firms cannot afford to miss.

“The positive outlook for Africa is reinforced by the establishment of the African Continental Free Trade Area (AfCFTA), which seeks to deepen regional integration across the continent and allow the free movement of people and trade across borders,” Tshabalala said. Tshabalala said there was a tremendous opportunity for Indian industry to work together with the Bank in sectors such as power generation and transmission, energy, agricultural transformation, healthcare and pharmaceuticals, technology, transportation, and industrialization. The Bank is seeking to expand the number of bankable projects in Africa and has set aside $100 million for project preparation activities in low-income countries. It is also keen to mobilize greater private sector participation in these projects from all countries, she added.  (AfDB)

Words: AfCFTA, Trade, Regional Integration

Lighting Up Africa: Bringing Renewable, Off-Grid Energy to Communities – Between 2014 and 2018, the Bank provided more than $11.5 billion in financing for renewable energy and energy efficiency. A comprehensive approach to scaling up access to electricity is critical. Mini-grid systems, where several homes are connected (often with pay as you go systems) are emerging as a key player for cost-effective and reliable electrification of rural areas. The Bank is currently one of the largest financiers in this sector, supporting about 25% of mini grid investments in the developing world.  As the Ghana pilot program demonstrates, access to technology, systems, and products is key. From the outset, GEDAP considered different technologies that were sustainable and affordable, including hydroelectric and wind technologies, but identified solar as the best option. Solar energy panels are relatively simple, making the transformation both affordable and resilient.  The pilot program in the Volta Lake and Volta River also introduced prepaid meters and pay-as-you-go systems for low-income customers. The project was commissioned in November 2017 by the Ministry of Energy, and since then, the communities have use off-grid solar electricity with public illumination for parks and recreation, small businesses, and lighting for schools. 

The Bank’s initiatives began with solar mapping atlas projects to assess general energy needs and has continued with projects that increased electricity access to households, businesses, schools and clinics through stand-alone, off-grid solar systems. 

Scaling Up Clean Electricity for a Low Carbon Future - Africa is engaged in an exciting energy transformation, country by country, across the continent.  Since the Ghana project began, Bank-supported solar projects and programs have been launched in West Africa and the Sahel Region, including Benin, Burkina Faso, Cabo Verde, Cameroon, Central African Republic, Chad, Cote d’Ivoire, The Gambia, Guinea, Guinea-Bissau, Liberia Mali, Mauritania, Niger, Nigeria, Senegal Sierra Leone and Togo, among other countries.  The Lighting Africa program, which includes GEDAP, contributes to the World Bank Group’s Sustainable Energy for All, which has a mandate to bring energy to the planet by 2030.  Through the Lighting Africa program, 32 million Africans gained access to energy, often through off-grid products that charge with batteries at home.  (World Bank)

Key Words: Africa, Business, World Bank, Renewable Energy

EAST AFRICA

Ethiopia: Commission Launches Digital Monitoring, Evaluation System That Modernizes Economy - Planning and Development Commission of Ethiopia launched a digital monitoring and evaluation system today. During the launching ceremony, Deputy Prime Minister Demeke Mekonnen said the system  will have significant importance in modernizing and creating a healthy and competitive economy. The digital monitoring and evaluation system is part of the national reform, he added. “This will not only put in place checks and balances but also ensures transparency and accountability,” the deputy premier noted. Planning and Development Commissioner, Fitsum Assefa said on her part digitizing the monitoring and evaluation system is a complete shift as it is result-based rather than process. The digital system will enable for seamless information exchange across various sectors, she stated, adding that it “will allow ministries to prepare one master report instead of six.” According to the commissioner, the introduced system is a step forward in making the nation’s documentation and accessibility sophisticated. The digital monitoring and evaluation system launched was jointly developed by Planning and Development Commission and Ministry of Innovation and Technology. (ENA)

Key Words: East Africa, Business, Digital Trade

WEST AFRICA

Parliament approves agreement on AfCFTA secretariat – The report of the Foreign Affairs Committee on the agreement presented at the plenary of Parliament, in Accra, said key provisions of the agreement required that Ghana, as the host country, provided at its own expense a secure, equipped and furnished permanent premises for the secretariat. Amongst other requirements are that the secretariat shall have a legal personality with the capacity to enter into a contract, and acquire and dispose of movable and immovable property needed for its operations in accordance with the laws of Ghana. It also requested for Ghana to provide a secured, equipped and furnished official residence for the Head of the Secretariat; and guarantee the inviolability of the premises of the Secretariat and the Secretariat shall be accorded diplomatic status. “Officials of the secretariat and state parties to the AfCFTA agreement shall enjoy within the host country privileges and immunities as established by the General Convention on the Privileges and Immunities of the AU. “Member states participating in the work of the secretariat and representatives of non-African States accredited to the secretariat shall be entitled to the same privileges and immunities as accorded to diplomatic envoys of comparable rank under international law,” the report added.

According to the report, all persons enjoying privileges and immunities in line with agreement are to comply with the laws and regulations of the Republic of Ghana. “The secretariat shall freely purchase any currencies through authorised channels and hold and dispose of them, transfer its funds to or from the host country, and operate accounts in any currency. “The secretariat is exempt from any direct or indirect taxes except for charges and taxes on public utility services including compulsory contributions to any social security scheme of the host country. “General convention on the privileges and immunities of the OAU and the Vienna Convention on Diplomatic Relations shall be applicable to the Secretariat, its headquarters, properties, funds, assets, premises and facilities, officials of the secretariat, state parties to the AfCFTA agreement and persons performing missions for the secretariat,” it said. Any dispute arising out of or in connection with the agreement, including any question regarding its validity or termination, the report said, shall be resolved amicably through diplomatic channels. (Ghana Web)

Key Words: AfCFTA, Regional Integration, West Africa

SOUTHERN AFRICA

Monetary Policy changes 'risky', warns Kganyago – Despite South Africa’s well-documented low economic growth and high unemployment rates, South African Reserve Bank (SARB) Governor Lesetja Kganyago has warned the country against considering risky monetary policy changes. The Governor sounded the alarm during a virtual keynote address, titled the shadow of COVID: lessons from 20 years of inflation targeting at the University of Pretoria on Wednesday. “We have a well-established inflation-targeting framework, which is delivering low interest rates and low inflation,” he said. The address came after the pandemic saw the SARB reduce the repo rate by 250 basis points in an effort to soften the economic impact of the virus on consumers. Kganyago emphasised that getting monetary policy right isn’t going to be enough. “South Africa’s debt situation is critical. And our rebound from lockdown is looking weak compared with other countries,” he said. As a country, said the Governor, South Africa needs to find a path back to fiscal sustainability and growth. He said: “We can borrow from new creditors; we can shift our debt towards short-term borrowing; we can move things around different balance sheets – but this is not a recovery strategy; it is just a way to buy time.

“If public sector borrowing were the way to achieve sustained growth, the last 10 years of debt accumulation should have been enough.” Kganyago said the real task now is restoring the country’s fiscal credibility and implementing structural reforms so the economy has a way to become more efficient and grow. “In many ways, as a country, we seem to be depressed, unable to get out of bed. Yes, it is winter, and it’s cold. But we can’t live like this. Spring is coming, and inflation and interest rates are low. We need to focus on the opportunities, get up, and get to work,” he added. Right now, South Africa does not have the high inflation and high interest rates of the past. “But we also don’t have the zero rates and close-to-zero inflation of the rich countries. The inflation-targeting paradigm is working pretty well,” he said. “Given all the challenges facing South Africa, we should recognise that monetary policy is the last place where we should consider risky changes. We have a well-established inflation-targeting framework, which is delivering low interest rates and low inflation.”  (SA News)

Key Words: SA, trade, Regional Integration