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Dear Colleagues, Friends,

Scientists around the world are still making sense of the outbreak of the novel Coronavirus, COVID-19. While there are still a large number of unknowns, and the race for a cure is on, multiple experts have said it is likely that the outbreak could gain a solid foothold in Africa to quickly replace Europe or the US as the new center of the pandemic.

Clearly the Coronavirus will have both immediate and long-term economic impacts globally. Africa, like all the other continents, is in uncharted territory when it comes to the economy. We have seen that the uniqueness of the current situation makes economic forecasting more difficult than ever. Among the effects of the outbreak are weakened commodity prices that will add to tough times in oil-producing countries, deep cuts in leisure and business as people spend less money on everything, the slump in global demand means further unemployment and economic difficulties lie ahead.

Businesses in Africa are now taking actions to support the government and people in their response to the Coronavirus crisis. The Pan African Chamber of Commerce and Industry is also working to extend its support, as the continent’s institutional representative of businesses, to protect lives, livelihoods and the continent’s economy. Our primary task today is to enable businesses to do what it can to support those seeking to mitigate the effects of the virus.

As the economic impact of the virus grows, PACCI encourages government leaders in Africa to quickly take several common-sense steps to provide assistance and relief to businesses and workers alike. Our recommendations include:  Keep employees on payroll – Government to consider a minimum cash rebate to eligible businesses that pay salary and wages.

 Offer indirect support – Government to consider indirect support such as delaying payment of taxes, debt forgiveness pausing the payment of bank interest or principal, and other measures to assist SMEs facing cash flow difficulties.  Businesses to refrain from engaging in price gouging, which can reduce public ‘goodwill’ towards their business and drive customers to other competitors. The Pan African Chamber of Commerce and Industry (PACCI) calls on African governments, banks, and other corporates to support businesses by bringing together all of the available relief options to effectively navigate new and developing challenges. As the situation evolves, we will continue to bring you further updates on how to face these difficult times during the COVID-19 crisis. We hope that you and your loved ones are staying healthy as we look forward to better times for our continued work together. Kind regards,

Youssouf Moussa DAWALEH

President, PACCI

President, Djibouti Chamber of Commerce and Industry

 

 

Dear Colleagues, Friends,

Scientists around the world are still making sense of the outbreak of the novel Coronavirus, COVID-19. While there are still a large number of unknowns, and the race for a cure is on, multiple experts have said it is likely that the outbreak could gain a solid foothold in Africa to quickly replace Europe or the US as the new center of the pandemic.

Clearly the Coronavirus will have both immediate and long-term economic impacts globally. Africa, like all the other continents, is in uncharted territory when it comes to the economy. We have seen that the uniqueness of the current situation makes economic forecasting more difficult than ever. Among the effects of the outbreak are weakened commodity prices that will add to tough times in oil-producing countries, deep cuts in leisure and business as people spend less money on everything, the slump in global demand means further unemployment and economic difficulties lie ahead.

Businesses in Africa are now taking actions to support the government and people in their response to the Coronavirus crisis. The Pan African Chamber of Commerce and Industry is also working to extend its support, as the continent’s institutional representative of businesses, to protect lives, livelihoods and the continent’s economy. Our primary task today is to enable businesses to do what it can to support those seeking to mitigate the effects of the virus.

As the economic impact of the virus grows, PACCI encourages government leaders in Africa to quickly take several common-sense steps to provide assistance and relief to businesses and workers alike. Our recommendations include:  Keep employees on payroll – Government to consider a minimum cash rebate to eligible businesses that pay salary and wages.

 Offer indirect support – Government to consider indirect support such as delaying payment of taxes, debt forgiveness pausing the payment of bank interest or principal, and other measures to assist SMEs facing cash flow difficulties.  Businesses to refrain from engaging in price gouging, which can reduce public ‘goodwill’ towards their business and drive customers to other competitors. The Pan African Chamber of Commerce and Industry (PACCI) calls on African governments, banks, and other corporates to support businesses by bringing together all of the available relief options to effectively navigate new and developing challenges. As the situation evolves, we will continue to bring you further updates on how to face these difficult times during the COVID-19 crisis. We hope that you and your loved ones are staying healthy as we look forward to better times for our continued work together. Kind regards,

Youssouf Moussa DAWALEH

President, PACCI

President, Djibouti Chamber of Commerce and Industry

 

 

Source: thedti.gov.za

One of the immediate tasks of the African Continental Free Trade Area (AfCFTA) is to ensure that the tariff schedule listing all products covered by the agreement for tariff liberalisation and the indispensable rules of origin are finalised to ensure that the implementation date of 1 July 2020 is met. Therefore, the current administration has a responsibility to work with other African Union member states to finalise the detailed modalities in order to establish a platform on which the benefits of the AfCFTA can be derived for both South Africa and its African counterparts. This was said by the Deputy Minister of Trade and Industry, Mr Fikile Majola during an Economic Policy Dialogue to unpack the AfCFTA which took place in Cape Town. He emphasised that there was a need to be ready to take full advantage of the opportunities that will become available in the ongoing implementation of AfCFTA agreement and that should create a more open integrated continental market and enhanced intra-Africa trade “While this policy dialogue aims to discuss the AfCFTA with the intention of determining its bearing on South Africa, it is prudent to give a glimpse into the possible trade and economic spin-offs for our country. Though some opinion-makers indicate that the AfCFTA is very ambitious because of the many disparities between the countries development stages, especially relating to trade capabilities, infrastructure and administrative frameworks such as competition and intellectual property policies, however, notwithstanding such deficiencies we are confident that the potential benefits of the AfCFTA will be significant in increasing intra-Africa trade and foreign direct investment,” said Majola.  He further stressed that the imperative for Africa’s economic integration agenda was more urgent than ever as the continent it contended with the world economic downturn and impending uncertainty. “Africa’s vulnerabilities and limited participation in global trade is a function of its traditional over-dependence on the export of low-value raw materials and commodities and the import of high-value manufactured goods and services. The continent’s full potential will remain unfulfilled unless we address the challenges of poor infrastructure, small and fragmented markets, underdeveloped production structures and inadequate economic diversification,” he said.  The Western Cape Minister of Finance and Economic Opportunities, Mr David Maynier described the dialogue as an ideal opportunity to build on the ambition for his province to be a key trading region for Africa. “That is why we seek your and the business sector’s inputs so that we can better understand how to make it easier for you do business across Africa. That is why this dialogue between provincial and national governments and the business sector on the subject of the AfCFTA is going to be so important,” he said.

Source: uneca.org

For the detailed documentation (PDF)

The Economic Commission for Africa (ECA) on Friday warned the unfolding coronavirus crisis could seriously dent Africa’s already stagnant growth with oil exporting nations losing up to US$ $65 billion in revenues as crude oil prices continue to tumble.

Speaking at a Press Conference in Addis Ababa, ECA Executive Secretary, Vera Songwe, said having already strongly hit Africa’s major trading partner, China, COVID-19 was inevitably impacting Africa’s trade.

She said although a few COVID-19 cases have been reported in some 15 countries far, the crisis was set to deal African economies a severe blow.

“Africa may lose half of its GDP with growth falling from 3.2% to about 2 % due to a number of reasons which include the disruption of global supply chains,” said Ms, Songwe, adding the Continent’s interconnectedness to affected economies of the European Union, China and the United States was causing ripple effects.

She said the continent would need up to US$ 10.6 billion in unanticipated increases in health spending to curtail the virus from spreading, while on the other hand revenue losses could lead to unsustainable debt.

COVID-19, Ms. Songwe said, could reduce Nigeria’s total exports of crude oil in 2020 by between US$ 14 billion and US$ 19 billion.

The ECA estimates COVID-19 could lead to Africa’s export revenues from fuels falling at around US$ 101 billion in 2020.

Remittances and tourism are also being affected as the virus continues to spread worldwide, resulting in a decline in FDI flows; capital flight; domestic financial market tightening; and a slow-down in investments - hence job losses.

Pharmaceuticals, imported largely from Europe and other COVID-19 affected partners from outside the continent, could see their prices increasing and availability reduced for Africans.

With nearly two-thirds of African countries being net importers of basic food, shortages are feared to severely impact food availability and food security.

Furthermore, negative consequences are expected to worsen, if COVID-19 develops into an outbreak in Africa.

In addition, a decline in commodity prices could lead to fiscal pressures for Africa’s economic power houses such as South Africa, Nigeria, Algeria, Egypt and Angola.

Speaking at the same Press Conference, Stephen Karingi, Director of the ECA’s Regional Integration and Trade Division, said there, however, was an opportunity the Continent could take advantage of as trading within the African Continental Free Trade Area (AfCFTA) is set to commence this July.

“The intra-African market could help mitigate some of the negative effects of COVID-19 through limiting dependence on external partners, especially in pharmaceuticals and basic food,” said Mr. Karingi, adding diversifying economies away from fuel-driven was vital beyond COVID-19.

He emphasized the need for the continent to urgently implement the AfCFTA as he urged African countries who export drugs to prioritize selling on the African market.

The ECA, in a presentation on the economic effects of the COVID-19 on Africa, suggests African governments could review and revise their budgets to reprioritize spending towards mitigating expected negative impacts from COVID-19 on their economies.

As a safety net, the think tank is urging governments to provide incentives for food importers to quickly forward purchases to ensure sufficient food reserves in key basic foods items. 

Mr. Karingi said fiscal stimulus packages are also crucial if the continent is to weather the COVID-19 storm which has now claimed over 5,000 lives globally and infected 139,637 people. 

Source: www.bloombergquint.com

The real impact of commerce under a Pan-African deal to establish the world’s largest free-trade area will probably only be seen in three years, according an architect of the pact. While the first trade under the African Continental Free-Trade Area, which could cover a market of 1.2 billion people with a combined gross domestic product of $2.5 trillion is set to start July 1, it will be “very mod Read more at: https://www.bloombergquint.com/onweb/africa-may-only-see-impact-of-new-free-trade-deal-after-3-years

Trading under the historic African Continental Free Trade Area (AfCFTA) is scheduled to begin on 1 July 2020. Hailed as a game-changing agreement, with the potential to propel Africa’s socio-economic transformation, the AfCFTA will play a significant role in anchoring the 17 SDGs.

The UN Economic Commission for Africa (UNECA) has recognized the unparalleled opportunities inherent in the AfCFTA, but is also cognizant that these opportunities will not accrue automatically. This article describes how UNECA is working to ensure that African countries can seize the benefits offered by the AfCFTA, especially the benefit of greater gender equality.

The AfCFTA framework agreement includes an objective of gender equality (Article 3(e)). Gender mainstreaming promotes this objective by advancing the full, equal and meaningful participation of women in an integrated continental market. Gender mainstreaming also supports delivery on range of sustainable development imperatives linked to the 2030 Agenda. Indeed, gender mainstreaming embodies the most important promise of the 2030 Agenda: to leave no one behind. The 2030 Agenda also makes clear that there can be no sustainable development without gender equality.

Confronted with deeply-rooted gender based discrimination and pervasive inequalities, women across the region are disproportionately among the left behind. At the same time, African women are a powerful force for development, whose strength and leadership remain critical to the ultimate success of the AfCFTA.

What does “gender mainstreaming” mean as part of implementing the free trade area? First, mainstreaming entails analyzing the gender dynamics for women in the formal and informal economy. This process offers a systematic approach to identifying gender-specific barriers confronting female traders, producers, entrepreneurs, and wage-workers in agriculture, manufacturing and services- as sectors which are expected to gain new trade opportunities through the AfCFTA. It is crucial to consider  the main factors leading to gender segregation in access to economic opportunities in priority economic sectors, together with gender differences in access to productive inputs (particularly finance).

In 2019, UNECA provided support to 15 African countries to develop national strategies for implementing the AfCFTA. Gender mainstreaming is central to the design of these national strategies (see full UNECA working paper). In particular, gender mainstreaming is guiding the development of gender-responsive policies and context-specific interventions to drive female empowerment in the AfCFTA. This in turn directly supports the realization of SDG 5 (gender equality) as a prerequisite for catalyzing progress across all the SDG and targets. Because women are known to invest most of their incomes (90% on average) back in their families (notably in education and health) and communities, identifying interventions to increase the economic power of women through employment can raise living standards for all. Higher living standards in turn contribute to SDG 1 (no poverty), as well as to improved nutrition (SDG 2), good health and well-being (SDG 3) and quality education (SDG 4) outcomes for women and those who depend on them.

Advancing women’s participation in agriculture under the AfCFTA directly supports increased agricultural productivity and food security targets in SDG 2. Likewise, drawing attention to gender-specific effects of export-oriented industrialization could support opportunities for women to hold higher-value addition employment in manufacturing. Raising gender-related concerns regarding the potential impact on women of trade in services liberalization supports the participation of women in higher-skilled services jobs. This in turn gives impetus to the decent work (SDG 8) and industrialization (SDG 9) agenda, as well as to SDG 10 (reduced inequalities). Highlighting the need for empowering women with the required ICT, technical education, skills development and training to access higher-skilled manufacturing and services jobs further contributes to providing education opportunities (SDG 4).

Women account for the vast majority of informal cross-border traders. If governments can identify the priority needs of female informal cross-border traders, they can also devise gender-responsive trade facilitation measures that respond to those needs, and then assist them to enter the formal sector (SDG 8). Similarly, in supporting women-owned informal businesses to participate more effectively in intra-African trade, trade facilitation measures directly contribute to meeting SDG target 8.3 on the formalization and growth of micro, small and medium-sized enterprises.

The AfCFTA can play a powerful role in empowering women and advancing global goals on gender equality. Gender mainstreaming in AfCFTA National Strategies is the building block to operationalizing these goals, turning the transformative promise of the AfCFTA into tangible progress for African women.

Source: www.tralac.org

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In recent years, Sub-Saharan Africa has increasingly traded old friends, like the US and the European Union, for new ones in emerging markets. Since 2006, the region’s exports to the US have declined by 66%, while exports to countries such as Russia and Turkey have doubled and tripled respectively. This shift in partnerships comes as Africa embarks on a new era buoyed by the promise of the AfCFTA, the landmark free trade agreement that will become operational in 2020, as well as increased visa openness and harmonization of monetary policy through West Africa’s new Eco currency.

In 2020, it is imperative that African nations build on the foundations for strong partnerships established in recent years with their emerging market counterparts in Russia, India and the UAE. Given the IMF’s lowered African growth projections because of US-China trade tensions, Brexit and slowing Chinese growth, courting a wider network of partners will be critical for achieving the ambitious plans for 2020, 2025 and 2030 set out by countries from Ghana to Tanzania and the Ivory Coast – major economies in the region that all head to the polls later this year. [The authors, Isaac Kwaku Fokuo and Akinyi Ochieng, are attached to the Botho Emerging Markets Group]

Source: Herald.co.zw

A senior official of the African Union (AU) has noted that leveraging the African continental free trade area (AfCFTA) contributes to silencing the guns in Africa, through the process of delivering broad-based prosperity on the continent.

The 33rd AU summit is being held under the theme, Silencing the Guns: Creating Conducive Conditions for Africa’s Development, at the AU headquarters in Ethiopia’s capital Addis Ababa.

Speaking to the press last Thursday in the framework of the summit, the AU Commissioner for Trade and Industry, Albert Muchanga, said the AfCFTA, as a development programme, broadens policy space for development and compliments the programme of silencing the guns.

“The advocates of free trade have long argued that its benefits are not merely economic. The advocates advise us that free trade also encourages people and nations to live in peace with one another. They also point out that free trade reduces the possibilities of war by making nations more economically interdependent because free trade makes it more profitable for people of one nation to produce goods and services for people of another nation,” he said.

Stating that silencing the guns in Africa is aimed at creating conducive environment for development, the Commissioner underlined the need to implement the AfCFTA agreement effectively in order to successfully silence the guns.

“With the AfCFTA working and producing tangible benefits, Africa will be able to create conditions for ending poverty and unemployment. Poverty and unemployment are some of the key factors that generate social and political tensions, which if left to linger, can transform into tension and conflicts,” noted the Commissioner.

Fifty-four of the 55 AU member states have signed the agreement establishing the AfCFTA, and 28 countries have ratified and deposited the instruments of ratifications with the AU.

Speaking of the progress on the ratifications of AfCFTA agreement, the AU Commissioner said that more are expected to deposit instruments of ratifications during the summit, indicating that things are going in the right direction.

“When we look at the historical trend, it takes five years for the AU legal instruments to enter into force. The AfCFTA has been an exception. We opened for signature on the 21st March 2018 and in the period of one year, one month, one week, and one day, we got the minimum 22 ratifications required for it to enter into force. This shows the strong political commitment of member states and governments have towards this agreement. So, we are confident that we are moving in the right direction and we are taking step,” he said.

The main objectives of the AfCFTA are to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Customs Union.

It will also expand intra-African trade through better harmonisation and coordination of trade liberalisation and facilitation and instruments across the RECs (regional economic communities) and across Africa in general.

The AfCFTA is also expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better reallocation of resources.

The AfCFTA will bring together all 55 AU member states, covering a market of more than 1.2 billion people, including a growing middle class, and a combined gross domestic product (GDP) of more than US$3.4 trillion.

In terms of numbers of participating countries, the AfCFTA will be the world’s largest free trade area since the formation of the World Trade Organisation.

Estimates from the Economic Commission for Africa (UNECA) suggest that the AfCFTA has the potential both to boost intra-African trade by 52.3 percent by eliminating import duties, and to double this trade if non-tariff barriers are also reduced. – Xinhua
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The Pan African Chamber of Commerce and Industry was established in 2009 by 35 founding national business chambers to influence government policy and create a better operating environment for business.

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