ATPC DAILY DIGEST 1 OCTOBER 2020

DDG Wolff: Trade is the best option for ensuring supply of essential goods - In remarks delivered to the 2020 Havencongres Rotterdam on 29 September, Deputy Director-General Alan Wolff said relying on international trade is the most efficient and economical choice for governments seeking to ensure access to essential supplies in a crisis. The COVID-19 pandemic has exposed some of the fragilities inherent to value chains and economic interdependence, DDG Wolff said, but it has also shown that trade plays a central role in maintaining the availability of goods and services. His remarks are below. Extract: As you are well aware, the outlook for the global economy over the next two years remains uncertain. Much will depend upon how the pandemic evolves, what measures governments and businesses will need to take, and how quickly countries can rebound from the economic damage. The International Monetary Fund in April estimated that global economic output would shrink by 3%. By June, it downgraded this expectation to a 4.9% decline. This month, the OECD projected that the contraction would be around 4.5%. Estimates may vary, but one thing is clear: the world economy is in the steepest downturn of our lifetimes, on a scale unseen since the 1930s.(4) The ongoing contraction in global merchandise trade is substantially worse than during the global financial crisis in 2008-2009. Services trade has also declined, though less sharply.

While trade volumes have also been affected, it could have been much worse. In April, WTO economists projected that depending on the pandemic’s impact and the policy response, global merchandise trade volumes could fall by 13% to 32%. We are on track to be at the better end of that spectrum. Fiscal and monetary measures have cushioned the shock to demand. Many supply chains have overcome the initial disruptions to travel, transport, and border clearance. Container shipping has held up relatively well — in no small part thanks to the thousands of seafarers who have been unable to return home on schedule. Policy-induced trade restrictions have thus far been confined to a relatively limited number of goods and trading relationships. Our task today is to think about the economy and trade after COVID-19. Trade policy choices do have a direct role in the medical response to the pandemic, since they affect countries’ ability to import key medical supplies — as well as eventual treatments and vaccines. (WTO)

Key Words: Global Trade, COVID-19, WTO

More efforts needed from governments, regulators and business to unlock full potential of sustainable finance – The OECD Business and Finance Outlook 2020 says that ESG investing has grown steadily in recent years, with ESG ratings, indices and other financial products proliferating to meet demand. Yet market participants across the board are still missing the relevant, comparable and verifiable ESG data they need to properly conduct due diligence, manage risks, measure outcomes, and align investments with sustainable, long-term value.
“Finance has a critical role to play in ensuring a truly sustainable recovery from the COVID-19 crisis that will create better and greener jobs, boost income and lead to more sustainable and resilient growth,” said OECD Secretary-General Angel Gurría. “But finance can only deliver better environmental, social or governance outcomes if investors have the tools and information they need.” The Outlook highlights a number of challenges with current ESG-based investment and finance strategies that need to be fixed to support markets in building back better. Close engagement on the part of regulators and policymakers with the industry, including institutional investors and lenders, ratings and index providers, and international standard setters, will be critical. The different methodologies used vary in scope and tend to have low transparency, with few generally accepted, consistent, comparable and verifiable indicators on which to base assessments. In practice, this means that a company might achieve a high ESG score from one service provider, and a much lower score from another.

This fragmentation and lack of comparability means investors cannot properly assess companies’ performance on ESG-related investment goals, such as limiting exposure to carbon emissions. This means that current practices cannot be relied on to manage climate transition risks and to green the financial system, at a time when these are rising priorities for investors and policymakers alike. Fragmented ESG frameworks and inconsistent disclosure requirements also mean that both institutional investors and corporates cannot properly communicate on their ESG-related decisions, strategies and performance criteria, with beneficiaries and shareholders. This in turn makes it hard for such beneficiaries to assess how their savings are used, and for companies to attract financing at a competitive cost that fully considers ESG factors. Market supervisors have a big role to play by encouraging greater relevance and clarity in reporting frameworks for ESG disclosures. This includes transparency on how metrics are calculated, weighted and interpreted in the assessments of ESG performance. (OECD)

Key Words: Global Trade, OECD, Business

African green reformer tipped to win UN trade leadership race - Two African women who have pledged green reforms are the front-runners to become the World Trade Organization’s next director-general in November. Either Kenya’s Amina Mohamed or Nigeria’s Ngozi Okonjo-Iweala could become the organisation’s first female and first African leader. According to analysts from the Center for Strategic and International Studies, many nations, particularly in Africa and the EU, are expected to support both candidates. Both women used their written candidate statements to call for environmental reform of the WTO’s trade rules, while their three opponents from Korea, the UK and Saudi Arabia, have said little about climate change. Mohamed, who has held cabinet roles including foreign affairs in the Kenyan government since 2013, said the economic recovery must “take account” of issues like climate change. The WTO should be reformed to “support our shared environmental objectives” and encourage diffusion of clean technologies, she said. Okonjo-Iweala, former finance minister for Nigeria, said that “the WTO appears paralysed at a time when its rule book would greatly benefit from an update to 21st century issues such as ecommerce and the digital economy, the green and circular economies”. She said she wants to reach “optimal complementarity between trade and the environment”. She previously co-chaired the Global Commission on the Economy and Climate along with Nicholas Stern, the author of ‘the Stern review’ which raised awareness of climate change in the UK. The statement of the Saudi Arabian candidate, a former fighter pilot, banker and economy minister Mohammed Al-Tuwaijri’s does not mention climate change or the environment at all. Korean trade minister Yoo Myung-Hee’s statement said that the WTO’s trade initiatives should encompass development issues like the environment. Myung-hee has been Korea’s first female trade minister since March 2019. The South Korean government promised a “green new deal” and to end finance for coal plants abroad – but was criticised in May for bailing out Doosan Heavy Industries, a major manufacturer of coal technology. Both Myung-hee and the UK’s Liam Fox criticised fisheries subsidies, which can incentivise over-fishing. Other than that, Fox’s statement did not mention the environment or climate change. (Climate Home News)

Key Words: Global Trade, Global Economy, Africa

Future-proofing safe trade now urgent for developing countries – COVID-19 is highlighting the interconnectedness of agri-food trade; and work needs to be done to mobilise action to build safe food systems. The COVID-19 pandemic is wreaking havoc with people’s lives and livelihoods, and the effects are being felt most keenly by the most vulnerable. Estimates from the World Bank point to the fact that 100 million people could now be pushed into extreme poverty, while UNCTAD reports that world trade could drop by around 20% in 2020. In developing countries, many of the sectors that had generated jobs and economic growth over the last decade have been most affected, from fruit and vegetables to cut flowers and tourism. At the same time, the pandemic highlights the interconnectedness of global supply chains, including agri-food trade. And it shows the ease with which plant pests and animal diseases can cross borders and how zoonoses – diseases transmissible from animals to humans – can spread, exposing the need for a coordinated effort to manage their impact. Yet in developing and least developed countries (LDCs), where health systems, infrastructure and resources face existing gaps, regulators and the private sector – especially small businesses – confront huge challenges to respond.

Building resilience: A focus on food safety, animal and plant health - The devastating nature of the pandemic underscores the urgent need to mobilise action and investment to improve food safety and animal and plant health systems that facilitate safe trade. It also shows the need to build the resilience of public and private sector actors in to respond to recognised threats, including the climate crisis. Building food safety and plant and animal health is a global public good. Many governments and businesses recognise the need to improve their systems and capacity to protect the health of their populations, animals and plants. They also see the value of doing so to promote access for agri-food products to regional and international markets. But realising improvements requires more financial resources, infrastructure and technical skills, as well as new and innovative approaches that connect the public and private sectors. (Trade4DevNews)

Key Words: Global Trade, Global Economy, Developing Countries

PAN AFRICA

Saving lives and money through the Africa Medical Supplies Platform – The United Nations Economic Commission for Africa (ECA) and the Common Market for Eastern and Southern Africa (COMESA) on September 17, jointly held a high-level webinar for Ministers of Finance and Ministers of Health to showcase the Africa Medical Supplies Platform (AMSP). AMSP is a digital platform intended to serve as a consolidated online marketplace to facilitate the provision of COVID-19-related medical products by addressing supply chain issues such as shortages, delays in distributing supplies, accessibility, quality standards and affordability. The platform is a timely intervention, catalyzed by the unprecedented COVID-19 pandemic, set up to specifically respond to the pandemic that so far has claimed about seven thousand lives on the continent while infecting 1.3 million others. On the platform, countries can access quality, affordable PPEs, Test Kits, medicines and other related commodities.

This meeting is the third in a series, preceded by the Inter-Governmental Authority on Development (IGAD) and the Southern African Development Community (SADC) webinars held on August 14 and September 04 2020 respectively. The main objective of these webinars has been to sensitize, advocate and showcase the opportunities offered by AMSP, including in terms of creating fiscal space, growing local manufacturing, and reaping the early fruits of the AfCFTA. AMSP aims at operationalizing and fostering the primary objectives of the AfCFTA-anchored Pharmaceutical Initiative of ensuring access to safe and affordable quality medicines in Africa, through pooled procurement and capacitating local production for improved health outcomes. (UNECA)

Key Words: UNECA, AfCFTA, COMESA

COMESA Hails the new Continental One-Stop-Shop for Medicines – COMESA has welcomed the launch of the African Medical Supplies Platform (AMSP) as an invaluable One Stop Shop that will ensure access to safe and affordable quality medicines in Africa. Launched in June this year, the digital platform is intended to serve as a consolidated online marketplace to facilitate the provision of COVID-19-related medical products by addressing supply chain issues such as shortages, delays in distributing supplies, accessibility and affordability. Two weeks, ago, COMESA and the Economic Commission for Africa (UNECA) joined hands to showcase the platform to key stakeholders, among them, ministers in charge of finance and health from the African continent. The aim was to demonstrate how the Platform will help address health challenges posed by the COVID-19 and how governments can scale up interventions to stop its further spread. At the event conducted online, COMESA Secretary General Chileshe Kapwepwe cited financial constraints as one of the biggest stumbling blocks to effectively manage the pandemic considering that majority, if not all economies in Africa have financially-strained health systems. Of greatest concern in the region has been shortages or constrained supplies of essential pharmaceutical products, including medicines, Personal Protective Equipment and potential increases in substandard and counterfeit products. Consequently, the costs of these essential medicines and other health products have escalated thereby further limiting their access by health workers and the sick. Ms Kapwepwe informed participants that on its part, COMESA has in the immediate past developed a programme aimed at strengthening production capacity of pharmaceutical and medical supplies in the region – during and post Covid-19. (COMESA)

Key Words: AfCFTA, COMESA, COVID-19

How to beat the lack of data on illicit outflows draining Africa of capital and tax – Africa loses at least $40 billion each year from the underinvoicing of commodity exports from the continent, according to the latest comprehensive data available. The size of trade gaps varies by country, but is relatively consistent by commodity group, with gold exports representing 77% of the total, followed by diamonds (12%) and platinum (6%). The proceeds from trade underinvoicing and other illicit financial flows (IFFs) contribute to an average of $88.6 billion per year of capital flight from Africa, which is wealth sent and held abroad. These outflows represent a considerable opportunity cost to development in Africa, draining the capital available to invest and create jobs, and reducing the potential tax revenues governments could use to spend on infrastructure and social programmes. By some estimates, improving tax collection, along with curbing capital fight and IFFs, could raise tax revenue in Africa by an additional 3.9% of GDP, or $110 billion a year. Formulating effective policies to combat illicit behaviour requires effective analytical tools. But this is often complicated by a lack of reliable data, since illicit activities are inherently clandestine.

In its Economic Development in Africa Report for 2020, UNCTAD analyses the prevalence of IFFs in Africa, informing policymakers how to curb these flows and use the proceeds towards sustainable development. UNCTAD focused its analysis on the underinvoicing of commodity exports, comparing the recorded value of exports from African countries with the corresponding value of imports in destination markets, to identify large gaps that are persistent over time. UNCTAD’s is one of several studies estimating the magnitude of trade misinvoicing in Africa. Though the findings of these studies infer illicit activity from methodologies and data that do not offer hard evidence, they reveal the damage to the continent’s economies. For example, the partner country trade gap methodology applied by UNCTAD uses macro trade data to identify large and persistent gaps in the recorded trade between two trade partners. But the absence of comprehensive transaction-level data precludes definitive measurements of the share of illicit activities in these macro gaps. In other words, though illicit behaviour may explain part of the statistical gap, other factors also play an important part. (UNCTAD)

Key Words: Africa, trade, COVID-19
Trade and Development Bank donates half a million dollars to COVID-19 response in Africa – The Eastern and Southern African Trade and Development Bank (TDB) has donated US$500,000 to support COVID-19 response across Africa by the Africa Centres for Disease Control and Prevention (Africa CDC). The donation is being made to the African Union through the COVID-19 Response Fund as part of TBD’s COVID-19 Emergency Response Programme (CERP). With this contribution, TDB, alongside a group of multilateral, sovereign, private sector and philanthropic partners, contributes to the implementation of the Africa Joint Continental Strategy for COVID-19 Outbreak, which aims to prevent severe illness and death from COVID-19 infections in African Union Member States, and minimize social disruption and economic consequences of COVID-19 outbreaks. Admassu Tadesse, President and Chief Executive of TDB, said: “It is our duty to respond to African Union’s call for solidarity to address today’s greatest global public health crisis. The pooling of resources and fusion of efforts of global and African institutions is certainly crucial to halting the spread of the virus and mitigating its impact on the health and socio-economic situation of our peoples. We commend the African Union for bringing African countries together to act as one, with more power and greater effectiveness.”The continental strategy for COVID-19 response was endorsed by Africa health ministers in February 2020 and approved by the African Union Bureau of Heads of State in March to facilitate cooperation, collaboration, coordination and communication in COVID-19 response across the continent. (AU)

Key Words: Africa, Trade, Regional Integration

Afreximbank provides $100 million overdraft facility for African states to facilitate online procurement of COVID-19 supplies - African Export-Import Bank (Afreximbank), the pan-African multilateral EXIM bank, announces $100 million financing to enable its Member States to procure COVID-19 related medical resources through the Africa Medical Supplies Platform (AMSP). The funding is available to African governments to acquire medical supplies through the AMSP in the form of pre-approved overdraft limits for each African government. This facility quickens access to critical COVID-19 containment and therapeutic supplies by bridging short term funding gaps that African states may be experiencing. Launched in June, the AMSP was developed by the African Union’s Africa Centres for Disease Control and Prevention (Africa CDC), Afreximbank and the United Nations Economic Commission for Africa (ECA), under the leadership of the African Union Special Envoy for COVID-19 procurements, Mr. Strive Masiyiwa. The AMSP is operated by the technology firm Janngo. It was established to facilitate pooled and transparent procurement by African countries. Its services have now been made available to countries of the Caribbean Community (CARICOM). A product of continent-wide collaboration, the AMSP aggregates medical supplies and serves as a unique interface for African governments and NGOs to easily coordinate sourcing. Afreximbank facilitates payments on the platform. The Bank also arranges letters of credit and payment guarantees, allowing participating governments and organizations to minimize the upfront cost of obtaining critical supplies. Prof. Benedict Oramah, President of Afreximbank, said: “We are mindful of the challenges many African economies are facing as they work hard every day to contain the pandemic. With this $100 million overdraft facility, we are ensuring African states are able to rapidly access diagnostic kits and medical supplies at competitive prices from African suppliers and global markets.”(Afreximbank)

Key Words: Trade, Africa, Business

African island states launch joint medicines procurement initiative – Ministers of Health from seven small African island states today signed an agreement to jointly procure drugs and vaccines in a bid to improve quality and access to medicines and other health products. The ministers from Cabo Verde, Comoros, Guinea-Bissau, Madagascar, Mauritius, Sao Tome & Principe and Seychelles that form the Small Island Developing States signed the Pooled Procurement agreement to take advantage of economies of scale and collective bargaining. High cost of drugs and medical supplies is one of the major challenges the small island states face due to their modest populations. World Health Organization (WHO) Director-General, Dr Tedros Adhanom Gebreyesus, and WHO Regional Director for Africa, Dr Matshidiso Moeti, joined the ministers in the virtual signing ceremony. Dr Tedros congratulated the ministers for this important step forward and pledged continued support from WHO to help the countries in implementing the agreement. Dr Moeti noted that the efforts made so far in establishing the joint procurement programme had already increased the attractiveness of the pharmaceutical market of the Small Island Developing States.

“By creating a larger stream of demand, we can look forward to better access to quality and competitively-priced medicines. The high cost of medicines is one of the major barriers many countries in our region face in providing affordable health care of good standard. Pooling our resources is one way of overcoming this challenge,” said Dr Moeti. The agreement inked today formalizes the objective of the Pooled Procurement Programme – to coordinate the procurement of selected medicines and health products affordably and improve product quality. It also sets the guiding principles and governance structure, including the creation of a secretariat, technical committees and a council of ministers. As the African region faces the double burden of communicable and noncommunicable diseases, it is essential that countries have systems in place for the timely procurement of supplies at a reasonable cost and in sufficient quantities to address treatment needs and efficiently complement important investments in health promotion. (WHO)

Key Words: Trade, Africa, WHO

ECA Executive Secretary calls for accelerated actions & interventions towards addressing LLDCs’ special challenges – The Economic Commission for Africa (ECA) on Wednesday participated in the Annual Ministerial Meeting of Foreign Ministers of Landlocked Developing Countries and highlighted the need for sustained and consistent support to LLDCs on the African continent. In her remarks, ECA Executive Secretary Vera Songwe said Africa is home to the majority of the world’s LLDCs which continue to face peculiar trade and development challenges arising from their lack of territorial access to the sea and geographical remoteness from international markets affecting their quest for economic development. “LLDCs suffer from lack of competitiveness of both their exports and imports, as well as reduction in the purchasing power of their populations, leaving them worse off in comparison to non-LLDCs,” said Ms. Songwe. She said if ever there was a time when multilateralism was needed, it was now, especially as the dreaded coronavirus continues to rear its ugly head the world over affecting global supply chains. “We need multilateralism to provide consistent and sustained support for the LLDCs. They have more special needs than non-LLDCs,” said Ms. Songwe, adding the COVID-19 had underscored the need for a strengthened multilateralism going forward. “Africa’s infrastructure deficit, including resultant high costs of logistics, remains a primary constraint to growth. Regarding energy infrastructure for example, only 30 per cent of people living in the African LLDCs had access to electricity in 2017, lagging behind all LLDCs and the world.” (UNECA)

Key Words: Trade, Africa, Investment

NORTH AFRICA

Retail & Consumer Egypt Focus: Anti-counterfeiting recordals process, early planning is key – Since March 2016, brand owners seeking to export select goods to Egypt have been subject to a rigorous recordal system implemented by the General Organisation for Export and Import Control (‘GOEIC’). Ministerial Decree number 23/2016 was implemented as a means of reducing the number of counterfeits entering the Egyptian market, creating a recordal database that the authorities could use to help verify the authenticity of shipments entering the country.

As of the date of writing, recordals with GOEIC apply to 29 categories of goods (increased from the original 25 categories). Some of these goods includes cosmetics, clothing, footwear, mobile phones, household appliances, hair removal appliances, some food products etc. If a brand owner is planning to export any of the applicable goods to Egypt, it is imperative that they comply with the recordal process to avoid their goods being detained by customs. In light of the onerous requirements, not to mention the length of time that it can take to prepare and complete the recordals, forward planning is key so that lost sales can be mitigated and any strain on relations with local distributors can be avoided.

To complete the recordal process, brand owners are required to record the following information with GOEIC; evidence of its trade mark registration(s), a full list of goods sold under the trade mark(s), full details of its manufacturing factories alongside copies of the factories quality control certificates, and full details of its distributors. At present, it can take 3-4 months for these recordals to be prepared, filed and completed, without any means to expedite. As such, brand owners need to anticipate any export involving Egypt so that it can be adequately prepared and enjoy an uninterrupted flow of goods. In particular, brand owners need to consider the trade mark protections that it has (or may not have) in place, as this will have a direct impact on its ability to complete the recordal process. (Lexology)

Key Words: Trade, North Africa, Trade Mark

EAST AFRICA

Uganda to help build roads inside Congo, citing trade goals - Uganda’s government said Tuesday it would help finance projects to surface over 200 kilometres (124 miles) of road inside neighbouring Congo as part of plans to boost trade between the countries. Uganda will contribute about 20% of the project value while the rest will be met by Congo’s government in an envisaged public-private partnership, Ugandan Works and Transport Minister Gen. Katumba Wamala told The Associated Press. Such an arrangement is unheard of in a region where governments struggle to expand road networks within their borders. Despite its vast size and wealth of natural resources, Congo remains one of the poorest countries in the world. Eastern Congo is particularly plagued by rebel violence. “There is always a first time for everything,” Wamala said. “This is a joint project between the two countries and there is a very good reason for that.” The office of the Ugandan government spokesman in a statement said a meeting of Cabinet had authorized the surfacing or upgrading of the road from the border to Congo’s town of Beni as well as the road from the border post of Bunagana to the city of Goma. The projects will boost investment and improve security in eastern Congo, the statement said.

Uganda’s decision to co-operate with Congo comes amid a standoff with neighbouring Rwanda, once a major export destination for grains and other produce. Rwanda’s government closed a busy border crossing with Uganda in February 2019 in what Uganda describes as a trade embargo. Rwanda’s government ordered its citizens not to travel to Uganda, asserting that Rwandan citizens were not safe across the border. Rwandan authorities also accused Uganda’s government of backing rebels opposed to President Paul Kagame. Ugandan officials in turn accused Rwandan state agents of operating unlawfully in Uganda, including in alleged abductions of citizens wanted back home. (The Star)

Key Words: East Africa, Business, Trade

Good news as Covid-19 tax reliefs to stay – Kenyans will continue enjoying the current tax relief extended by the government to cushion households and businesses against the Covid-19 pandemic for another three months. But, some other tax reductions will be in place for much longer as they will lapse in July next year to coincide with the end of the government’s financial year. This is after President Kenyatta directed the Treasury to consider retaining the Value Added Tax (VAT) rate at 14 per cent until July 1, 2021. VAT is charged on supply of taxable goods and services made or provided in Kenya. It’s also levied on imported taxable goods or services into Kenya, accounting for one of the major determinants of the cost of goods in the country. The President also asked the Treasury to retain the income tax rate, also known as Pay As You Earn, and the resident income paid by companies at 25 per cent until January 1, 2021. 100 per cent tax relief - He further asked Treasury to retain the 100 per cent tax relief for people earning a gross monthly pay of up to Sh24,000 beyond the end of the year, which was the deadline for the tax holiday.

Reduced turnover tax - Small businesses will also continue paying a reduced turnover tax. “To continue cushioning our micro, small and medium enterprises, the Treasury considers maintaining the reduction of the current turnover tax from three per cent to one per cent,” the President said at the end of yesterday’s Covid-19 conference. To enhance access to credit for small businesses, Mr Kenyatta directed Treasury to speed up the roll-out of the credit guarantee scheme in partnership with participating banks and development partners. (Nation)

Key Words: East Africa, Business, Trade

Local production reduces imports of face masks: Ministry – Health Ministry said that the huge establishment and expansion of local medical equipment manufacturing firms have been playing a pivotal role in reducing the country’s dependence on the importation of face masks and other Novel Coronavirus (COVID-19) prevention items speaking to The Ethiopian Herald, Health State Minister Sahrela Abdullahi stated that due to the high demand created by COVID-19, many textile companies are switching to the production of surgical face masks thereby contributing share in the import- substitution strategy. Noting that Ethiopia has obtained most of face masks through imports and donation from international institutions including the Jack Ma Foundation, Sahrela indicated that many governments are currently banning the export of face masks due to the upsurge of the pandemic. The ministry has been floating international tenders to avail surgical face masks to the growing number of health professionals that are deploying in COVID-19 treatment and isolation centers. “We have witnessed huge consumption of surgical face masks at the centers,” she said, adding that that local firms’ investment in this sector will have paramount importance to supply quality products and ease the shortage.

The government has disbursed substantial amount of hard currency to the purchase of COVID-19 preventive items including personal protective equipment (PPE), oxygen tanks, beds and ventilators and it encourages private sector’s involvement in the production of medical equipment. Guyya Medical Equipment Manufacturing Company is one of the leading domestic firms that have been engaged in the production of facemasks. Owner and CEO of the company, Mubarak Kemal said that Prime Minister Abiy Ahmed’s call to all Ethiopians to partake in the fight against COVID-19 encouraged his firm, previously known as Guyya Textile Manufacturing, to shift business from the garment to medical industry. (Ethiopian Press Agency)

Key Words: East Africa, Business, Trade

Tanzania, Burundi plan for railway and refinery – After last week’s maiden tour of Tanzania, where Burundi’s President Evariste Ndayishimiye met Tanzanian President John Magufuli in Kigoma, the two countries agreed to build a railway to transport minerals from Gitega. Addressing the crowd in Kigoma, President Magufuli said that they agreed to build a narrow gauge railway that will help transport nickel from Burundi. “I have assured him that the experts here revived a railway from Dar to Kilimanjaro and Arusha; they can’t fail to build this one,” said President Magufuli. The railway is expected to run from Uvinza in western Tanzania to Gitega in central Burundi through Musongati, where the largest deposits of nickel are found. The two governments have set up a permanent commission to implement the project.

Burundi has 231 mega tonnes of proven nickel reserves. The two governments are also working on setting up a refinery for the mineral. It is also rich in vanadium, gold, rare earth, phosphates, kaolin, quartzite and limestone. Burundi imports most of its cargo through Dar es Salaam. Tanzania Deputy Minister for Minerals Stanslaus Nyongo told The EastAfrican that Tanzania will strengthen business ties with other landlocked countries. Tax payments for minerals have been harmonised to curb illegal business transactions across the border. Reforms in mining have accelerated the sector’s growth in Tanzania. The country expects a turnover in revenue from mining of Tsh600 billion ($270 million) in the 2020/21 financial year. Mining’s contribution to the government’s coffers rose from Tsh161 billion ($75 million) in 2014 to Tsh528 billion ($250 million) in 2020, and accounts for 52 per cent of all foreign currency. (The EastAfrican)

Key Words: East Africa, Business, Trade

Crisis? What crisis? COVID-19 and the unexpected recovery of regional trade in East Africa – At the beginning of the COVID-19 pandemic, such was the scale of the economic disruption caused by lockdown measures that there was much talk of the collapse of global trade. In the midst of the lockdowns, in April, the World Trade Organization estimated that the decline would amount from anywhere between 13 and 32 percent. In a similar vein, UNCTAD was forecasting a 20 percent decline in global trade for 2020. However, recently released trade statistics across the world reveal that those forecasts may have been overly pessimistic and underestimated the relative resilience of the global trading system. In fact, in June, after several months of sharp declines, trade volumes recorded their biggest monthly rise on record, with a 7.6 percent increase. East Africa may be shadowing these global trends. Kenya, the largest regional trader, is a good barometer of broader East African trends. The country was initially hit quite hard in terms of the decline in trade volumes, with a 19 percent drop in total trade volumes in April. As warned in our earlier Brookings policy brief, re-exports to the rest of the region were hit extremely hard, with a 83 percent decline in April. Since June, though, total trade volumes have begun to recover rapidly, with a 9 percent increase in June and a 12 percent increase in July (Table 1). Moreover, the story is a similar if the analysis is undertaken using year-on-year percent changes.

Kenyan exports have proved to be particularly resilient during this crisis. If we take the data for “domestic exports” alone (i.e., subtracting the re-export of goods to other countries), it is clear that the export performance has been extremely volatile, with a record monthly peak in export revenues in March, followed by a sharp drop in April/May. However, by July, domestic exports were 12.7 percent higher than in July of the previous year (Figure 1, Panel A). More specifically, although Kenya’s large cut-flower industry has not yet fully recovered, seasonal exports of tea, fruit, and vegetables have held up extremely well, in part due to government measures to protect these sectors from the negative impacts of lockdowns. Among the measures undertaken were the ring-fencing of the tea sector from mobility restrictions to minimize the disruption to exports; the re-equipping of some passenger planes to be able to carry cargo; and the creation of mobile laboratories for cross-border testing to facilitate smooth trade flows with Tanzania. (Brookings)

Key Words: East Africa, Business, Trade

WEST AFRICA

Addressing Youth Unemployment in Ghana Needs Urgent Action, calls New World Bank Report – A new World Bank report titled “Youth Employment Programs in Ghana: Options for Effective Policy Making and Implementation” identifies agribusiness, entrepreneurship, apprenticeship, construction, tourism and sports as key sectors that can offer increased employment opportunities for Ghanaian youth. It also calls for more investments in career guidance and counseling, work-based learning, coaching, and mentoring to equip young people with the skills needed for work. The report suggests that although these are not new areas, the government could maximize their impact by scaling-up these priority areas in existing youth employment interventions and improve outreach to the youth. “This report is another milestone towards addressing the unemployment challenge,” said Ignatius Baffour Awuah, Ghana’s Minister of Employment and Labour Relations. “It presents specific options to guide the government in the short to medium-term to enhance effective coordination of youth employment programs.” Ghana is faced with 12% youth unemployment and more than 50% underemployment, both higher than overall unemployment rates in Sub-Saharan African countries. Despite major investments by both government and private sector, this challenge will intensify if job opportunities remain limited. To tackle youth unemployment, the report highlights the importance of having disaggregated data on youth jobseekers by location, gender, skills and capabilities to inform policy and funding decisions and respond with appropriate and tailored employment programs. “Ghana's youth employment challenge is vast and requires an all-round, deliberate, and consistent response,” said Pierre Frank Laporte, World Bank Country Director for Ghana, Liberia and Sierra Leone. “Considering the options outlined in this report, future youth employment policy planning should not only address youth unemployment but should also build the human capital needed to sustain Ghana’s economy.” (World Bank)

Key Words: West Africa, Regional Integration, World Bank

Nigeria: Rising inflation/energy prices force small businesses to close – Nigeria's mounting inflation in parallel with growing costs of energy are driving small and medium businesses away; at a time when the whole economy is suffering from the impact of the pandemic. Omowumi Ikuerowo was in the middle of expanding her existing food service business when energy prices were hiked. This, in addition to inflation largely driven by “legacy structural factors such as the inadequate state of critical infrastructure and broad-based security challenges across the country,” is forcing business owners to close shops on increased overhead costs, including Ikuerowo. Nigeria’s food industry is estimated to worth more than N1tn, according to 2016 data from the Association of Fast Food and Confectioners of Nigerian (AFFCON), which said the sector is mostly driven by small and medium enterprises, as well as multinational food companies.

Jump in prices mixed with the pandemic - At a time when the nation is reeling from the effects of the coronavirus pandemic which negatively impacted government and business revenues, as well as individuals’ personal incomes, the Nigerian government gave the nod for a 100% increase in electricity tariff that sees Nigerians paying N62.33 from 30.23 per kilowatt unit of energy per hour (kwh). This was followed by petroleum price hikes after the government suspended fuel subsidy payments, after more than 13 years of campaigns against the subsidy payments. “I can’t keep selling at the old price as prices of raw materials increased on a weekly basis if not daily,” Ikuerowo tells The Africa Report. “Local open market increased prices but we were not getting value for it. For example, a paint bucket [a form of measurement] of melon is supposed to give an average of 27 milk tin measurements, but we now only get about 22 milk tins at a price above the one of 27. For us to sell at the value that the brand is known for, we had to increase our prices slightly, with addition to complimentary services to encourage our customers. Even with that, we have lost about 50% of our customers. Only the ones that believe in our brand are left with us,” she says. (The Africa Report)

Key Words: West Africa, Regional Integration, Business

Bank identifies public, private cooperation as core to agricultural transformation – Chairman, Board of Directors, Sterling Bank Plc, Asue Ighodalo, has identified five core areas that should be articulated in the quest to transform the agricultural sector in Nigeria and African. The Chairman stated this in his welcome address at the virtual Agriculture Summit Africa (ASA), organised by Sterling Bank, themed: Fast Forward Agriculture: Exploiting the Next Revolution,” with synchronized broadcast studios from Lagos and Abuja. Ighodalo stressed the need for the involvement of key stakeholders across public and private sectors in developing the right policies to aid the growth of the agribusiness value chain. According to him, this is the only way to effectively transform the agricultural sector, feed the continent’s growing population, boost her economies, create massive employment for millions of its young and not so young people as well as absorb the shocks of the on-going pandemic.

Ighodalo urged governments in sub-Saharan African economies to optimise the agricultural sector to attract sizeable investments that will help to drive expansion, and achieve global competitiveness as well as increase financing to key points of the value chain, particularly small holder farmers, to modernize their practices and increase outputs. He stressed the need to focus on the role and impact of technology and data science in stimulating innovation in the value chain, and the need to understand the changing regional climate cycles, its impact on productivity, as well as identifying necessary adjustments to deliver growth despite these changes. Also speaking, the Managing Director/Chief Executive Officer, Sterling Bank, Abubakar Suleiman, noted that the government can only help to kick-start the revolution, while private sector players can come together to make a success of it. (The Guardian)

Key Words: West Africa, Regional Integration, Business

SOUTHERN AFRICA

‘Sanctions hamper access to capital’ – Zimbabwe’s efforts to implement sustainable development and its capacity to revive the economy from the impact of Covid-19 pandemic are hampered by the illegal sanctions denying access to capital, President Mnangagwa has told the United Nations, while appealing for more debt relief for developing countries. During a high-level virtual meeting of Heads of State and Government as part of the ongoing opening session of United Nations General Assembly he said the pandemic and illegal sanctions had derailed Zimbabwe’s efforts to achieve the 2030 Agenda for sustainable development. “Efforts towards practical and real time solutions to the sustainable debt burden that constitutes risk to long lasting recovery for most developing countries must be vigorously pursued. The efforts must enable debtor countries to channel more resources towards developmental programmes for Zimbabwe,” President Mnangagwa said. “The illegal economic sanctions are undermining the implementation of the sustainable development goals agenda and constraining our ability to shield the economy from the negative impact of the novel coronavirus.“Sanctions severely undermine our efforts to access capital from the international markets hence Zimbabwe appeals to the UN General Assembly to unequivocally call for the removal of these sanctions. Zimbabwe stands ready to work with the international community to strengthen multilateralism for the realisation of our shared goal of creating a better world for all.” (The Herald)

Key Words: Zimbabwe, Regional Integration, Trade

Centre africain pour la politique commerciale

ATPC DAILY DIGEST 1 OCTOBER 2020

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