The European Business Council for Africa

 The United Nations Conference on Trade and Development (UNCTAD) has published its 2021 Review of Maritime Transport.

Maritime transport is the backbone of international trade and the global economy. Over 80% of the volume of international trade in goods is carried by sea, and the percentage is even higher for most developing countries.

Historically, structural change has been the force behind sustained economic growth, driving large-scale job creation and productivity growth. Industrialization — defined as rapid transformation of the significance of manufacturing vis-à-vis other sectors — has been the mainstay of structural transformation and the resulting economic growth and development. Industrialization has long been a reliable path to fast-track countries into middle- and high-income economies. Therefore, industrialization-driven structural transformation must be at the forefront of policy strategies for Sub-Saharan African countries.

Recently, emerging trends such as functional and geographic fragmentation of production, adoption of advanced production technologies in manufacturing, and shifting globalization patterns, climate change, and global pandemics have characterized the global economy. These developments have generated a lot of debate and speculation about the prospects of manufacturing as a potential driver of job creation, income growth and structural change in Sub-Saharan Africa.

 

EY Africa publishes Africa Attractiveness 2021; the continent’s FDI appeal intact and multi-speed recovery post COVID-19 restrictions.

According to EY Africa CEO, Ajen Sita “Rising investment into sectors outside the traditional extractive industries is creating more sustainable long-term growth.”

He cites rapidly rising FDI into service sectors including business services, telecoms, media, technology, financial services, and consumer services as those sectors that will enable sustainable job creation over time.

“Realising Africa’s potential for enormous growth and innovation given it’s young population and vast natural resources, will require significant investment into economic reform, education, healthcare and digital skills development,” says EY Africa Government and Infrastructure Leader, Sandile Hlophe.

Africa is home to the youngest population in the world, with a median age of less than 20 years, and 70% of the population is under the age of 30. “Africa is still an attractive investment destination, but requires enhanced economic reforms, good governance and a stable political landscape to continue attracting FDI,” he adds.

The world remains in the grip of the COVID-19 pandemic and a seemingly accelerating pace of climate change, both of which underscore the need for increased global cooperation and dialogue. Solutions to these global problems must involve all countries and all regions, especially sub-Saharan Africa, with the world’s least vaccinated population, most promising renewable energy potential, and critical ecosystems. Sub-Saharan Africa’s economy is set to expand by 3.7 percent in 2021 and 3.8 percent in 2022. This follows the sharp contraction in 2020 and is much welcome, but still represents the slowest recovery relative to other regions.

Each year, the Annual Development Effectiveness Review (ADER) provides an update of development trends in Africa and assesses the contribution that the African Development Bank has made to that progress. The ADER is an important tool that helps the Bank to reflect on its achievements and identify areas where it needs to do better. Set against the background of a pandemic and a global economic crisis, this year’s ADER reveals how the unprecedented upheaval affected Africa’s development and the operations of the Bank.

The COVID‐19 pandemic has been contained relatively successfully in Central Africa, which comprises the six member countries of the Central African Economic and Monetary Community (CEMAC)—Cameroon, the Central African Republic, Chad, the Republic of Congo, Equatorial Guinea, and Gabon—and the Democratic Republic of Congo. Partly due to government lockdowns, mask requirements, and mobility restrictions and partly to the region’s younger populations and distance from highly infected areas, COVID-related deaths in the seven countries totaled about2,953 at the end of June 2021. Thus, the region’s COVID deaths accounted for just 2.1 percent of all COVID deaths in Africa—the lowest level of all African regions. The highest tolls have been in Cameroon and the Democratic Republic of Congo, with 1,320 and 916 deaths respectively as of June 27, 2021.

Economic resilience and trade
The COVID-19 pandemic and the prospect of increasingly frequent and more intense natural and man-made disasters raise important questions about the resilience of the global economy to such shocks. The 2021 edition of the WTO's World Trade Report examines why the interconnected global trading system is both vulnerable and resilient to crises, how it can help countries to be more economically resilient to shocks, and what can be done to make the system better prepared and more resilient in the future.

The Sustainable Manufacturing and Environmental Pollution (SMEP) programme has been established by the Foreign, Commonwealth and Development Office of the United Kingdom of Great Britain and Northern Irelandand is implemented in partnership with UNCTAD.

In this context, this study prepared by the Instituto 17, called “The role of exports in manufacturing pollution in sub–Saharan Africa and South Asia: towards a better trade-environment governance”, herein referred to as “study”, or “report”, considers the role of exports in driving pollution in selected manufacturing sectors in four specific countries located in Sub-Saharan Africa (SSA) and South Asia.

The report aims to understand how the group of the SMEP target countries located in Sub-Saharan African (SSA) and South Asia have participated in the global trade, specifically investigating the role of trade in manufactured goods. They correspond to thirteen countries, of which ten are in SSA, namely the Democratic Republic of the Congo, Ethiopia, Ghana, Kenya, Nigeria, Rwanda, Senegal, Uganda, the United Republic of Tanzania, and Zambia, and three are in South Asia, namely Bangladesh, Nepal, and Pakistan.

China is Africa’s largest trading partner, and deeper China–Africa engagement has the potential to transform the continent’s trade.

Summary:
- China is Africa’s largest trading partner, and enhanced China–Africa cooperation has the potential to transform the continent’s trade and boost its development prospects.
- There is much scope for the newly formed African Continental Free Trade Area (AfCFTA) and the Chinese-led Belt and Road Initiative (BRI), in which Africa is already well entrenched, to act as the pillars and coordination points for enhanced China–Africa trade and investment.
- This paper explores four different options for future Africa–China engagement under the AfCFTA and BRI, examining both the benefits and pitfalls of each option.
- Between the ill-advised ‘business-as-usual’ approach (option 1) and the ambitious, comprehensive free trade agreement between China and the entire African continent (option 4) lie targeted and managed approaches (options 2 and 3) which show strong potential.
- As African countries gear up for stronger engagement with China, leveraging the synergies between the AfCFTA and BRI, they need to be aware of and guard against some of the pitfalls of trading with China, particularly the risk of African markets being swamped by cheap Chinese imports, which will threaten Africa’s manufacturing and industrialisation drive.

Extreme weather phenomena such as rising temperatures and the increasing frequency of droughts and floods are affecting lives and livelihoods in Africa. According to the Global Climate Risk Index 2021, five African countries ranked among the 10 countries most affected by extreme weather in 2019: Mozambique (first), Zimbabwe (second), Malawi (fifth), South Sudan (eighth), and Niger (ninth).

The negative societal effects of climate change, such as loss of life and livelihoods, are already and will continue to be tragic and severe, and are a key concern to governments and individuals. More frequent and severe weather events, as well as a delayed transition to a low-carbon economy and the increasingly material financial losses these directly and indirectly cause are also impacting the financial system, with potential systemic consequences for financial stability. The threat posed to the global financial system by climate-related risks is recognised by the Financial Stability Oversight Council’s 2021 report on climate-related financial risk and the Network for Greening the Financial System’s (NGFS) October 2021 progress report on global supervisory and central bank climate scenario exercises. Extreme weather events could lead to damage of physical assets, including real estate, productive capital, and infrastructure, consequent property and casualty insurance losses, damage to balance sheets of households and firms, increases in defaults, and potential financial sector distress. A late or sudden transition to a low-carbon economy could result in an abrupt repricing of climate-related risks and stranded assets, which could negatively impact the balance sheets of financial institutions (FIs).