Djibouti News Gazette

IRVING (Texas, US)— The East African Community (EAC) is setting up a Diaspora desk that will focus on facilitating East Africans living in the diaspora to invest and trade in the region.

EAC Secretary General Dr Peter Mathuki has revealed that the Secretariat is also currently developing a Diaspora Engagement Strategy, providing a framework for interacting with the diaspora community.

The Secretary General was speaking during the East Africa 17th Annual Trade and Investment Conference, organized by the East Africa Chamber of Commerce in Irving, Texas, USA.

The meeting saw hundreds of East Africans residing across the USA and East African-focused investors, converge to explore areas of investment and deliberate on solutions to overcome investment and trade challenges.

The diaspora community highlighted a lack of trust in local financial institutions as one of the challenges deterring investment in East Africa. Dr Mathuki responded by urging them to establish financial institutions such as an EAC diaspora bank, located in one EAC’s Partner States , where they can access credit and transact business.

Dr Mathuki shared that the diaspora community will also be incorporated in EAC signature events, such as Pre-Summit retreats, offering them an opportunity to engage with EAC Heads of State, Ministers and the regional business community.

The Secretary General urged the diaspora community to take advantage of EAC’s online investment guide portal (https://www.eac.int/investment-guide), which highlights investment procedures, incentives and opportunities; and increases transparency on access to relevant information required by investors.

“The EAC Trade Information Portal available on our website also provides a step-by-step guide on licenses, pre-clearance permits and clearance formalities for the most traded goods within, to, and from the East African Community,” he added.

Dr Mathuki noted that the diaspora community has a huge role to play, “The EAC recognizes the role of diaspora remittance, which continue to outpace Foreign Direct Investment (FDIs) to become the largest source of external financing.”

The inflow of funds from the diaspora has been on an upward trajectory in recent years. For instance; in 2021, the Kenyan diaspora remittance stood at $3.718 billion, while remittances from Uganda stood at $599.3M. The inflow of funds from the Tanzania diaspora stood at $569.5 while Rwanda diaspora remitted $246 million.

“The inflow of funds from the diaspora contributed largely to the EAC’s Foreign Direct Investment (FDI) which stood at $8.2 billion- a 35% growth; and helped the region’s economy withstand the devastating economic impact of Covid-19 and the trickle-down effect of the Russia-Ukraine conflict,” the Secretary General added.

Dr Mathuki noted that the time taken to register a business had reduced significantly and the establishment of One Stop Centres for business registration had further eased the process.

The Secretary General highlighted investment opportunities in the region such as agribusiness, which is the backbone of the EAC economy, employing more than 80% of its labor force.

“The investment opportunities include; large-scale commercial farming, agro-processing, value addition in agriculture, livestock, fisheries and forestry products,” he shared.

He further explored investment opportunities in the energy, mining, oil and gas industry and manufacturing sectors.

“EAC has developed a master plan for the development of infrastructure, creating linkages for Intra EAC road and railway networks as well in Airports and Port projects. It is thus opportune to tap into the Public-Private Partnerships to invest into this infrastructure in the region,” Dr Mathuki added.

The opportunities in advisory and facilitatory areas to access finances and technology, ICT, health, particularly in Physical and Mental Health were also highlighted as potential areas of investment.

In her remarks, the East Africa Chamber of Commerce (EACC) Chair, Elsa Juko McDowell noted that the diaspora community is ready to invest in the region and keen on collaborating with the EAC governments.

“We are committed to continuing collaborating in supporting the USA – East Africa trade relations, promoting trade missions and cooperation and marketing East Africa as a trade and investment destination,” she added.

Source: NAM NEWS NETWORK

WASHINGTON, October 4, 2022 — Global headwinds are slowing Africa’s economic growth as countries continue to contend with rising inflation, hindering progress on poverty reduction. The risk of stagflation comes at a time when high interest rates and debt are forcing African governments to make difficult choices as they try to protect people’s jobs, purchasing power and development gains.

According to the World Bank’s latest Africa’s Pulse, a biannual analysis of the near-term regional macroeconomic outlook, economic growth in Sub-Saharan Africa (SSA) is set to decelerate from 4.1% in 2021 to 3.3% in 2022, a downward revision of 0.3 percentage points since April’s Pulse forecast, mainly as a result of a slowdown in global growth, including flagging demand from China for commodities produced in Africa. The war in Ukraine is exacerbating already high inflation and weighing on economic activity by depressing both business investments and household consumption. As of July 2022, 29 of 33 countries in SSA with available information had inflation rates over 5% while 17 countries had double-digit inflation.

“These trends compromise poverty reduction efforts that were already set back by the impact of the COVID-19 pandemic,” said Andrew Dabalen, World Bank Chief Economist for Africa. “What is most worrisome is the impact of high food prices on people struggling to feed their families, threatening long-term human development. This calls for urgent action from policymakers to restore macro-economic stability and support the poorest households while reorienting their food and agriculture spending to achieve future resilience.”

Elevated food prices are causing hardships with severe consequences in one of the world’s most food-insecure regions. Hunger has sharply increased in SSA in recent years driven by economic shocks, violence and conflict, and extreme weather. More than one in five people in Africa suffer from hunger and an estimated 140 million people faced acute food insecurity in 2022, up from 120 million people in 2021, according to the Global Report on Food Crises 2022 Mid-Year Update.

The interconnected crises come at a time when the fiscal space required to mount effective government responses is all but gone. In many countries, public savings have been depleted by earlier programs to counter the economic fallout of the COVID-19 pandemic, though resource-rich countries in some cases have benefited from high commodity prices and managed to improve their balance sheet.

Debt is projected to stay elevated at 58.6% of GDP in 2022 in SSA. African governments spent 16.5% of their revenues servicing external debt in 2021, up from less than 5% in 2010. Eight out of 38 IDA-eligible countries in the region are in debt distress, and 14 are at high risk of joining them. At the same time, high commercial borrowing costs make it difficult for countries to borrow on national and international markets, while tightening global financial conditions are weakening currencies and increasing African countries’ external borrowing costs.

This challenging environment makes it essential to improve the efficiency of existing resources and to optimize taxes. In the agriculture and food sector, for example, governments have the opportunity to protect human capital and climate-proof food production by re-orienting their public spending away from poorly targeted subsidies toward nutrition-sensitive social protection programs, irrigation works, and research and development known to have high returns.

For example, one dollar invested in agricultural research yields, on average, benefits equivalent to $10, while gains from investments in irrigation are also potentially high in SSA. Such reprioritization maintains the level of spending in a critical sector, while raising productivity, building resilience to climate change, and achieving food security for all. Creating a better environment for agribusiness and facilitating intra-regional food trade could also increase long-term food security in a region that is highly dependent on food imports.

Source: World Bank

ADDIS ABABA— At the very height of Climate Change induced hazards, 32 African countries converged Monday in Addis Ababa, Ethiopia, to set a roadmap for better understanding and inclusion of Agroecology as a means of forging the next best solution for Africa’s food problems.

The three-day conference is one of many endeavours by the Alliance for Food Sovereignty in Africa (AFSA) to offset the climate catastrophe through a major agroecology policy solution and curb the negative effects it has on Africans’ social, economic, and ecological well-being.

The conference (AFSA) was organized in conjunction with Consortium on Climate Change Ethiopia and Environment Protection Authority to foster the prioritization of agroecology as a means of transforming the agri-food system, building resilience, and enabling small-scale farmers, pastoralists and fishers to adapt to climate change.

Participants including farmers, Women Groups, Faith Based Organisations, Fisher folks and the media were drawn from 32 African countries including Nigeria, Uganda, Ethiopia, South Africa, Ghana, Kenya and Mozambique among others.

AFSA General Coordinator, Million Belay said the purpose of the high-level engagement was to bring consensus among African Actors on climate, such as governments, civil society organizations, Academia, religious leaders and media among others.

He said it was important to bring this issue to COP 27 because that is a place where agriculture and adaptation are going to be discussed as it is high on the agenda.

“In our engagement with African group of negotiators, we could see that they do not have a believe or trust on Agroecology, so we just want to create a consensus amongst the civil society organisations to be transmitted to our various governments” explained Belay.

He mentioned that there is a need to meaningfully engage small-scale food producers and indigenous communities, including women and youth, in the COP27 negotiations and beyond as they are the ones who manage landscapes across Africa.

He urged them to reject false solutions that threaten land, seeds and breeds and increase reliance on global agrochemical corporations.

He cited refocusing climate financing on sustainable food systems.

“Direct climate finance to agroecology is a far-reaching and very practical solution. The time is now for an appropriate and deliberate increase in financing for small-scale farmers, fishers, pastoralists, and indigenous communities to deliver sustainable food systems through agroecology,” he added.

Dr. Balley said the consensus was not only aimed at COP 27 but on the way and beyond that.

“What shall we do before COP 27, what shall we do at COP 27 and what shall we do post COP 27, so it is to refine our agenda at COP 27. To collaborate and unite our agenda for Africa. So, by bringing all these actors together, we are creating a broad base for advocacy to issues related to the subject matter to discuss, deliberate and advocate”.

He maintained that there was so much confusion about what kind of agriculture Africa should have, towards adapting to the climate crisis that is coming.

“Some of us advocate for agroecology, some say it is climate-smart agriculture while others say it is nature-based solution, so there is a lot of confusion, lots of agendas which emanate from outsiders”.

He noted that as a continent the agenda was not clear, “Africa traditionally has diverse food but increasingly we are losing our diversity mainly because of the kinds of policies that we are promoting”.

“So, we are trying to propose a policy both at the country and continent level which will be coherent amongst us all as often we have lots of policies negating against each other while also bringing food access from all over the world.”

In November 2022, Egypt will host the 27th Conference of the Parties of the UNFCCC (COP27) in Sharm El-Sheikh, with a view to building on previous successes and paving the way for future ambition.

According to www.cop27.eg/, the event is “a golden opportunity for all stakeholders to rise to the occasion and tackle effectively the global challenge of climate change facilitated by Egypt on the African continent”.

Source: NAM NEWS NETWORK

U.N. economists warn the monetary and fiscal policies of advanced economies risk plunging the world into a recession worse than the financial crisis of 2008. UNCTAD, the United Nations Conference on Trade and Development has issued its annual Trade and Development Report 2022.

The authors of the report warn the world is teetering on the edge of a recession due to bad policy decisions by advanced economies, combined with cascading crises resulting from climate change, the COVID-19 pandemic, and the war in Ukraine.

They project this year’s global growth rate of 2.5 percent will slow to 2.2 percent in 2023. This, they say, will leave a cumulative shortfall of more than $17 trillion, close to 20 percent of the world’s income.

The report finds the slowdown is hitting countries in all regions, especially developing countries. It says growth rates in the poorer countries are expected to drop below three percent, damaging development and employment prospects.

UNCTAD Secretary-General Rebeca Grynspan says middle-income countries in Latin America, as well as low-income countries in Africa, will register some of the sharpest slowdowns this year.

“In Africa, an additional 58 million people will fall into extreme poverty in 2022 adding to the 55 million already pushed into extreme poverty by the COVID-19 pandemic,” Grynspan said.

Grynspan says developing countries are facing alarming levels of debt distress and under investment. She says 46 developing countries are severely exposed to multiple economic shocks. She adds another 48 countries are seriously exposed, heightening the threat of a global debt crisis.

“So, countries that were showing signs of debt distress before COVID are taking some of the biggest hits, with climate shocks further threatening economic stability,” Grynspan said. “This is increasing the threat of a global debt crisis. So, countries urgently need real debt relief.”

Grynspan says there is still time to step back from the edge of recession if countries use available tools to calm inflation and support vulnerable groups.

Among its recommendations, UNCTAD urges a more pragmatic strategy that deploys strategic price controls, windfall taxes, anti-trust measures and tighter regulations on commodities speculation.

Source: Voice of America