By&nbsp;<a href="https://blogs.imf.org/bloggers/habtamu-fuje/">Habtamu Fuje</a>,&nbsp;<a href="https://blogs.imf.org/bloggers/saad-quayyum/">Saad Quayyum</a>&nbsp;and&nbsp;<a href="https://blogs.imf.org/bloggers/franck-ouattara/">Franck Ouattara</a>



Several sub-Saharan African central banks are exploring or in the pilot phase of a digital currency, following Nigeria’s October introduction of&nbsp;<a href="https://www.imf.org/en/News/Articles/2021/11/15/na111621-five-observations-on-nigerias-central-bank-digital-currency">e-Naira</a>. Nigeria was the second country after the Bahamas to roll out a CBDC.



CBDCs are digital versions of cash that are more secure and less volatile than crypto assets because they are issued and regulated by central banks. As the <a href="https://www.imf.org/en/News/Chart-of-the-week">Chart of the Week </a>shows, South Africa and Ghana are running pilots while other countries are in the research phase.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="800" height="800" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/08/COTW-AFR-Digital-Currencies-800x800.jpg" alt="" class="wp-image-419019" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/08/COTW-AFR-Digital-Currencies-800x800.jpg 800w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/COTW-AFR-Digital-Currencies-300x300.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/COTW-AFR-Digital-Currencies-90x90.jpg 90w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/COTW-AFR-Digital-Currencies-768x768.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/COTW-AFR-Digital-Currencies.jpg 1300w" sizes="auto, (max-width: 800px) 100vw, 800px" /></figure>



The South African Reserve Bank is experimenting with a wholesale CBDC, which can only be used by financial institutions for interbank transfers, as part of the second phase of its&nbsp;<a href="https://nam10.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.resbank.co.za%2Fen%2Fhome%2Fpublications%2Fpublication-detail-pages%2Fmedia-releases%2F2022%2FProject-Khokha-2-Report-Release&amp;data=05%7C01%7CIMazlan%40imf.org%7C85ecea196ff9487a4c9308da547f5e3d%7C8085fa43302e45bdb171a6648c3b6be7%7C0%7C0%7C637915203259439947%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;sdata=9bi4N1DnVXyBQaDoaZuHMUNEHnlavN4v64Lu%2FR7VKhU%3D&amp;reserved=0">Project Khokha</a>. The country is also participating in a&nbsp;<a href="https://nam10.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.resbank.co.za%2Fen%2Fhome%2Fpublications%2Fpublication-detail-pages%2Fmedia-releases%2F2021%2FBIS-Innovation-Hub-and-the-SARB-will-test-CBDCs-for-international-settlements&amp;data=05%7C01%7CIMazlan%40imf.org%7C85ecea196ff9487a4c9308da547f5e3d%7C8085fa43302e45bdb171a6648c3b6be7%7C0%7C0%7C637915203259439947%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;sdata=G7O5ApMa0pj3lBMnmdIXOqSxA0e8DT555NNmDjZYB58%3D&amp;reserved=0">cross-border pilot&nbsp;</a>with the central banks of Australia, Malaysia and Singapore.



The Bank of Ghana, by contrast, is testing a general purpose or retail CBDC, the <a href="https://nam10.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.bog.gov.gh%2Fwp-content%2Fuploads%2F2021%2F08%2FCBDC-Joint-Press-Release-BoG-GD-3.pdf&amp;data=05%7C01%7CIMazlan%40imf.org%7C85ecea196ff9487a4c9308da547f5e3d%7C8085fa43302e45bdb171a6648c3b6be7%7C0%7C0%7C637915203259439947%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;sdata=HOSwv7osKywz0kZr8yMKmrTbFxDMW%2FqqGbSLZ%2Baffoc%3D&amp;reserved=0">e-Cedi</a>, which can be used by anyone with either a digital wallet app or a contactless smart card that can be used offline.



Countries have different motives for issuing CBDCs but for the region there are some potentially important benefits.



The first is promoting financial inclusion.&nbsp;CBDCs could bring financial services to people who previously didn’t have bank accounts, especially if designed for offline use. In remote areas without internet access, digital transactions can be made at little or no cost using simple feature phones.



CBDCs can be used to distribute targeted welfare payments, especially during sudden crises such as a pandemic or natural disaster.



<figure class="wp-block-image"><a href="https://blogs.imf.org/"><img decoding="async" src="https://blogs.imf.org/wp-content/uploads/2019/01/logo_sticky.png" alt="IMF Blog Logo"/></a></figure>



<a href="https://blogs.imf.org/2022/06/23/more-african-central-banks-are-exploring-digital-currencies/#"></a><a href="https://blogs.imf.org/2022/06/23/more-african-central-banks-are-exploring-digital-currencies/#"></a>



<ul class="wp-block-list"><li><img loading="lazy" decoding="async" width="2099" height="600" src="https://blogs.imf.org/wp-content/uploads/2022/06/BLOG-2099x600-COTW-Digital-Currencies-blackdovfx-iStock-1333222421.png" alt="" srcset="https://blogs.imf.org/wp-content/uploads/2022/06/BLOG-2099x600-COTW-Digital-Currencies-blackdovfx-iStock-1333222421-200x57.png 200w, https://blogs.imf.org/wp-content/uploads/2022/06/BLOG-2099x600-COTW-Digital-Currencies-blackdovfx-iStock-1333222421-400x114.png 400w, https://blogs.imf.org/wp-content/uploads/2022/06/BLOG-2099x600-COTW-Digital-Currencies-blackdovfx-iStock-1333222421-600x172.png 600w, https://blogs.imf.org/wp-content/uploads/2022/06/BLOG-2099x600-COTW-Digital-Currencies-blackdovfx-iStock-1333222421-800x229.png 800w, https://blogs.imf.org/wp-content/uploads/2022/06/BLOG-2099x600-COTW-Digital-Currencies-blackdovfx-iStock-1333222421-1200x343.png 1200w, https://blogs.imf.org/wp-content/uploads/2022/06/BLOG-2099x600-COTW-Digital-Currencies-blackdovfx-iStock-1333222421.png 2099w">(PHOTO: BLACKDOVFX/ISTOCK BY GETTY IMAGES)</li></ul>



<h1 class="wp-block-heading">CHART OF THE WEEKMore African Central Banks Are Exploring Digital Currencies</h1>



JUNE 23, 2022



By&nbsp;<a href="https://blogs.imf.org/bloggers/habtamu-fuje/">Habtamu Fuje</a>,&nbsp;<a href="https://blogs.imf.org/bloggers/saad-quayyum/">Saad Quayyum</a>&nbsp;and&nbsp;<a href="https://blogs.imf.org/bloggers/franck-ouattara/">Franck Ouattara</a>



Several sub-Saharan African central banks are exploring or in the pilot phase of a digital currency, following Nigeria’s October introduction of&nbsp;<a href="https://www.imf.org/en/News/Articles/2021/11/15/na111621-five-observations-on-nigerias-central-bank-digital-currency">e-Naira</a>. Nigeria was the second country after the Bahamas to roll out a CBDC.



<div class="wp-block-image"><figure class="aligncenter"><a href="https://blogs.imf.org/wp-content/uploads/2022/06/COTW-AFR-Digital-Currencies.jpg"><img decoding="async" src="https://blogs.imf.org/wp-content/uploads/2022/06/COTW-AFR-Digital-Currencies.jpg" alt="" class="wp-image-36803"/></a></figure></div>



CBDCs are digital versions of cash that are more secure and less volatile than crypto assets because they are issued and regulated by central banks. As the&nbsp;<a href="https://www.imf.org/en/News/Chart-of-the-week">Chart of the Week&nbsp;</a>shows, South Africa and Ghana are running pilots while other countries are in the research phase.The South African Reserve Bank is experimenting with a wholesale CBDC, which can only be used by financial institutions for interbank transfers, as part of the second phase of its&nbsp;<a href="https://nam10.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.resbank.co.za%2Fen%2Fhome%2Fpublications%2Fpublication-detail-pages%2Fmedia-releases%2F2022%2FProject-Khokha-2-Report-Release&amp;data=05%7C01%7CIMazlan%40imf.org%7C85ecea196ff9487a4c9308da547f5e3d%7C8085fa43302e45bdb171a6648c3b6be7%7C0%7C0%7C637915203259439947%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;sdata=9bi4N1DnVXyBQaDoaZuHMUNEHnlavN4v64Lu%2FR7VKhU%3D&amp;reserved=0">Project Khokha</a>. The country is also participating in a&nbsp;<a href="https://nam10.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.resbank.co.za%2Fen%2Fhome%2Fpublications%2Fpublication-detail-pages%2Fmedia-releases%2F2021%2FBIS-Innovation-Hub-and-the-SARB-will-test-CBDCs-for-international-settlements&amp;data=05%7C01%7CIMazlan%40imf.org%7C85ecea196ff9487a4c9308da547f5e3d%7C8085fa43302e45bdb171a6648c3b6be7%7C0%7C0%7C637915203259439947%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;sdata=G7O5ApMa0pj3lBMnmdIXOqSxA0e8DT555NNmDjZYB58%3D&amp;reserved=0">cross-border pilot&nbsp;</a>with the central banks of Australia, Malaysia and Singapore.



The Bank of Ghana, by contrast, is testing a general purpose or retail CBDC, the&nbsp;<a href="https://nam10.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.bog.gov.gh%2Fwp-content%2Fuploads%2F2021%2F08%2FCBDC-Joint-Press-Release-BoG-GD-3.pdf&amp;data=05%7C01%7CIMazlan%40imf.org%7C85ecea196ff9487a4c9308da547f5e3d%7C8085fa43302e45bdb171a6648c3b6be7%7C0%7C0%7C637915203259439947%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;sdata=HOSwv7osKywz0kZr8yMKmrTbFxDMW%2FqqGbSLZ%2Baffoc%3D&amp;reserved=0">e-Cedi</a>, which can be used by anyone with either a digital wallet app or a contactless smart card that can be used offline.



Countries have different motives for issuing CBDCs but for the region there are some potentially important benefits.



The first is promoting financial inclusion.&nbsp;CBDCs could bring financial services to people who previously didn’t have bank accounts, especially if designed for offline use. In remote areas without internet access, digital transactions can be made at little or no cost using simple feature phones.



CBDCs can be used to distribute targeted welfare payments, especially during sudden crises such as a pandemic or natural disaster.



They can also facilitate cross-border transfers and payments.&nbsp;Sub-Saharan Africa is the&nbsp;<a href="https://nam10.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.knomad.org%2Fpublication%2Fmigration-and-development-brief-36&amp;data=05%7C01%7CIMazlan%40imf.org%7C85ecea196ff9487a4c9308da547f5e3d%7C8085fa43302e45bdb171a6648c3b6be7%7C0%7C0%7C637915203259439947%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&amp;sdata=CO2sTtRrNNrv3MpDCEmxy%2Fx0nZY3bv%2B9%2FFo3TxOawYg%3D&amp;reserved=0">most expensive region&nbsp;</a>to send and receive money, with an average cost of just under 8 percent of the transfer amount. CBDCs could make sending remittances easier, faster, and cheaper by shortening payment chains and creating more competition among service providers. Faster clearance of cross-border payments would help boost trade within the region and with the rest of the world.



There are risks and challenges that need to be considered before issuing a CBDC, however. Governments will need to improve access to digital infrastructure such as a phone or internet connectivity. While the region has made significant strides, more investment is needed.



More broadly, central banks will need to develop the expertise and technical capacity to manage the risks to data privacy, including from potential cyber-attacks, and to financial integrity, which will require countries to strengthen their national identification systems so know-your-customer requirements are more easily enforced. There is also a risk that citizens pull too much money out of banks to purchase CBDCs, affecting banks’ ability to lend. This is especially a problem for countries with unstable financial systems.



Central banks will also need to consider how CBDCs affect the private industry for digital payment services, which has made important strides in promoting financial inclusion through mobile money.

In this photo illustration the International Monetary Fund (

More African Central Banks Are Exploring Digital Currencies

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/08/GettyImages-948476690-820x547.jpg" alt="" class="wp-image-418969" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/08/GettyImages-948476690-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/GettyImages-948476690-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/GettyImages-948476690-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/GettyImages-948476690-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/GettyImages-948476690-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/GettyImages-948476690-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>rAn employee handles wheat grain at the Kaap Agri Ltd. grain silo in Malmesbury, South Africa, on Tuesday, April 17, 2018. The World Bank said last week that it sees South Africa&#8217;s economy growing 1.4 percent this year, up from 1.1 percent estimated in January. Photographer: Dwayne Senior/Bloomberg via Getty Images</figcaption></figure>



This past week South Africa&#8217;s Crop Estimate Committee released its monthly update of the size of the 2021/22 summer crop harvest and its initial area plantings for 2022/23 winter crops. For summer crops – maize, soybeans, sunflower seed, sorghum and dry beans- this data comes when farmers have completed harvest in the country&#8217;s eastern regions.



The focus has shifted to the central and western areas where activity is underway. In all these regions, the message we receive from farmers is of a relatively large harvest, which is commendable if one thinks back to the start of the season when there were excessive rains that worried some about whether farmers could even manage to plant the typical area.



The winter crops planting – wheat, barley and canola &#8212; are also encouraging, showing an improvement from the area planted in the 2021/22 season. Let me explain both these crop data and their implications briefly.



<h2 class="wp-block-heading" id="h-summer-crops">Summer crops</h2>



South Africa&#8217;s 2021/22 maize harvest is estimated at 14,71 million tonnes. About 7,47 million tonnes are white maize, with 7,24 million tonnes being yellow maize. Essentially, this harvest is down by 10% from the 2020/21 season crop.



Still, this is well above the 10-year average maize harvest of 12,80 million tonnes and annual domestic consumption of 11,80 million tonnes. The annual decline is caused by relatively lower plantings and fairly poor yields in some regions due to excessive rains at the start of the season that I mentioned above. On 22 July, 8,24 million tonnes of maize had already been delivered to commercial silos. The rest will be delivered in the coming weeks as the harvest progresses.



Notably, the current harvest of 14,71 million tonnes implies that South Africa will remain a net exporter of maize, which we anticipate to be just over 3,0 million tonnes in the 2022/23 marketing season (note: this marketing year corresponds with the 2021/22 production season).



Another important and most welcome development is in the soybeans industry, where the 2021/22 harvest is estimated at a record 2,15 million tonnes. This is on the back of expansion in area plantings and large yields. This large soybean harvest will help lessen South Africa&#8217;s reliance on soybean oilcake imports. On 22 July, 2,09 million tonnes had already been delivered to commercial silos.



Sunflower seed has also improved notably from the previous seasons, and the 2021/22 harvest is estimated at 922 750 tonnes, the second largest harvest on record. The expansion in area plantings and expectations of large yields underpin this optimism. The harvest is still underway in the western Free State and North West regions. For example, on 22 July 2022, about 792 050 tonnes had already been delivered to commercial silos.



<h2 class="wp-block-heading">Winter grains</h2>



South Africa&#8217;s 2022/23 winter crop season started in May, and the plantings have progressed well. For example, wheat plantings are estimated at 553 900 hectares, up 6% y/y, barley plantings are estimated at 106 600 hectares, up 13% y/y, and canola planting are at 121 200 hectares, up 21% y/y. In the case of wheat, the one winter crop planted broadly beyond the Western Cape, a dominant province for winter crops, the expansion in plantings is also in the Free State, Northern Cape, Eastern Cape, North West and Limpopo. This broad expansion is unsurprising following the current attractive higher wheat prices.



Still, these are early days in the season for one to know where the harvest could be this year. In the previous 2021/22 season, we had the largest wheat harvest in two decades. There are hopes for yet another good harvest this season, especially as the soil moisture has generally improved in most regions of the country following the heavy summer rains. Still, we will all take guidance about the actual harvest when the Crop Estimates Committee releases its revised area planted estimate. The first production forecast for winter cereals for 2022 will be released on 30 August 2022.



<h2 class="wp-block-heading">Implications</h2>



These data paint a positive picture of South Africa&#8217;s grains production. The winter grains still have a long way until we have a reliable estimate of the size of the harvest and its implications of it on prices.



In the case of summer grains, the current production data will have minimal impact on prices. Global events mainly influence the domestic grains and oilseeds prices. The Russia-Ukraine war worries and concerns about 2022/23 global production following reports of heatwave and drought in the Northern Hemisphere continue to present upside support on prices, which are ultimately reflected in the South African grains market.



Still, the fact that domestic grains and oilseeds supplies are at somewhat higher levels provides comfort regarding the domestic needs and even exports to our traditional markets.



Ultimately, the relatively higher grains and oilseeds prices bode well for farmers in areas that didn&#8217;t experience much crop damage at the start of the season. Meanwhile, the consumers, livestock, dairy, sheep, goats and poultry producers will likely experience increased costs over the foreseeable future.



*Wandile Sihlobo is a South African agricultural economist and author of <a href="https://www.amazon.com/Finding-Common-Ground-Equity-Agriculture-ebook/dp/B084G1XS88">Finding Common Ground: Land, Equity and Agriculture</a>. Twitter: <a href="https://twitter.com/WandileSihlobo">@WandileSihlobo</a>

Grain And Corn Storage At Kaap Agri Ltd. Silos

Positive outlook for South Africa’s grains and oilseeds in 2021/22 season

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="545" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/08/Super-Block-Outside-Photos-1-820x545.jpg" alt="" class="wp-image-418949" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/08/Super-Block-Outside-Photos-1-820x545.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/Super-Block-Outside-Photos-1-300x199.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/Super-Block-Outside-Photos-1-136x90.jpg 136w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/Super-Block-Outside-Photos-1-768x510.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/Super-Block-Outside-Photos-1-1536x1020.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/Super-Block-Outside-Photos-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



<h2 class="wp-block-heading" id="h-the-gauteng-industrial-development-zone-gidz">THE GAUTENG INDUSTRIAL DEVELOPMENT ZONE (GIDZ)</h2>



The Gauteng IDZ Development SOC Ltd (GIDZ) was established to develop and operate the Special Economic Zone (SEZ) program at OR Tambo International Airport. In support of its mandate, the GIDZ must facilitate the establishment of manufacturing investment operations at the SEZ. It is required to oversee the development of strategic economic infrastructure necessary for the operations of secured investment. There are presently three SEZ designated land parcels that the GIDZ is responsible for developing. All the land parcels are located at or in proximity to OR Tambo International. They are the ORTIA Precinct 1, ORTIA Precinct 2, and the Springs Precinct.



<h2 class="wp-block-heading">INDUSTRIES OF FOCUS</h2>



Each of the presently designated SEZ land parcels have particular industries of focus identified with the support of detailed studies that defined products that are suitable for localisation at each precinct. In lieu of their competitive location next to OR Tambo International, ORTIA Precincts 1 and 2 promote the production of high-value, low-mass industries whose products typically utilise airfreight as a mode of transport. These include, inter alia, fresh food agro-products, medical and pharmaceutical products, electronics, jewellery and diamonds. The Springs Precinct, due to its competitive location next to a Platinum Group Metals (PGM) refinery, is positioned for the production of PGM products such as fuel cells. It has also been identified for capital, component, and mining equipment production.



<h2 class="wp-block-heading">THE VALUE PROPOSITION</h2>



Located on the doorstep of Africa’s largest airport, the value proposition of the OR Tambo SEZ is centred around the service offering of OR Tambo International Airport. Serving as a gateway to southern Africa, the airport has the capacity to handle more than 21 million passengers per annum. The airport also has the largest air cargo hub in Africa, an advantage in the post-Covid era where air cargo has increased. The OR Tambo SEZ remains a competitive location for investors looking to manufacture and export. Confirmed as one of South Africa’s designated SEZs, the OR Tambo SEZ locations are able to provide investors access to SEZ incentives packaged at national government level. These include duty free importation of production related material or assets, VAT exemption, and employment tax incentives. Lastly, the OR Tambo SEZ forms part of the OR Tambo International Airport Aerotropolis Development Master Plan. Managed through the City of Ekurhuleni, the Aerotropolis is a 1 975km² urban development plan with the airport at its heart. The goal of the plan is to facilitate the creation of economic hubs – catering for manufacturing industries.



<h2 class="wp-block-heading">DESIRED IMPACT</h2>



As part of its SEZ programme, the growth of Small Medium Enterprises is encouraged. Developed with consideration of the national Integrated Small Enterprise Development Strategy, it provides a framework through which SMME access to economic opportunities will be undertaken by the GIDZ, ensuring that the SEZ program plays a meaningful role in the growth of SMMEs.



<h2 class="wp-block-heading">STATUS</h2>



Part of ORTIA Precinct 1 has been operational since April 2019, when a food factory was successfully commissioned, creating over 2 000 operational jobs and 265 construction jobs. Development of the remaining part of this Precinct will be home to a jewellery and diamond manufacturing cluster that is underway and targeted for completion by January 2023. Construction of the Super Block, the administrative building housing the Department of Mineral Resources and Energy (DMRE) agencies has been completed, with a 7 200 sq.m building home to the DMRE agencies since September 2021. A gold refinery building that supports a viable mineral beneficiation cluster at the Precinct was also successfully completed in 2021. Plans are already underway to develop ORTIA Precinct 2 and the Springs Precinct. Construction on the Precincts is likely to begin in the latter part of the 2022/2023 fiscal year.

Super-Block-Outside-Photos-1

Contributing To Industrial Development In The Eastern Corridor Of Gauteng: The OR Tambo International Airport SEZ

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="600" height="800" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/lord-marland-600x800.jpeg" alt="" class="wp-image-418801" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/lord-marland-600x800.jpeg 600w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/lord-marland-225x300.jpeg 225w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/lord-marland-68x90.jpeg 68w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/lord-marland-768x1024.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/lord-marland-1152x1536.jpeg 1152w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/lord-marland-scaled.jpeg 1536w" sizes="auto, (max-width: 600px) 100vw, 600px" /><figcaption>Lord Jonathan Marland of Odstock, Chairman of the Commonwealth Enterprise and Investment Council</figcaption></figure>



Rather than winning medals every four years, countries could win every year with boosted Commonwealth trade says Lord Jonathan Marland of Odstock, Chairman of the Commonwealth Enterprise and Investment Council



Today, over 5000 competitors from nations as far afield as Malaysia to Jamaica converge on Birmingham for the Commonwealth Games. Challengers will look to make history in an event that previously saw Tanzania’s Filbert Bayi break a 1500m record in 1974 that still stands today, launched the career of a 7-time gold medallist weightlifter who would later go on to become President of Nauru, and introduced the world to a then 15-year-old human dolphin called Ian Thorpe.



The Games is perhaps the most visible aspect of the Commonwealth for many of our 2.5 billion citizens. Less visible, and appreciated, is the potential of the Commonwealth to bolster trade, business and investment between our 56 members. Given free enterprise and free trade provides the best collective means for shared prosperity, it should be better leveraged to deliver them.



Though our family of nations is diverse,&nbsp;common threads connect us in a way that lubricate&nbsp;trade and investment. This is the Commonwealth Advantage:&nbsp;the shared English language that allows for easy and effective communication; the familiar legal and administrative systems, rooted in common history, that makes one another’s business environments easily navigable; and the lively diaspora networks that pulls companies and commerce tighter together around the world.



Such conveniences bring a discount: trade between members is on average 21% cheaper,&nbsp;part of the reason&nbsp;they trade 20% more with one another than the rest of the world. With the addition just last month of its two newest members, Gabon and Togo, African countries make up the largest contingent of the Commonwealth. All will be seeking to make their mark at the Games this week in Birmingham.&nbsp;But rather than win every four years at the Games, they could win every year through the Commonwealth advantage.



The figures take on further significance when considering where our unique association of states is headed. The&nbsp;Commonwealth’s total GDP is forecast to rise nearly 50 per cent to $19.5 trillion within 5 years. Member States host over half of the global emerging cities, from the buzzing entrepreneurial Nairobi to next-generation tech innovator Bangalore.&nbsp;And whilst natural resources are spread throughout the Commonwealth, more significant are the vast reserves of talent and dynamism that come courtesy of 60% of our population being under the age of 30. These are the growth markets of the future global economy.



Now we must ask how we strengthen the Commonwealth Advantage. Of course, there is more that we can do to lower tariffs and other artificial constraints on trade between our countries, ensuring it remains fair but also freer. Respective memberships of regional trading blocs or customs unions do not – as some argue – hold us back: barriers can be lowered whilst remaining compliant within various groupings. In most cases, one has no bearing on the other. Even where it might, there is no Commonwealth imposition of conditions upon members that force a choice. Instead, we can work in an ad hoc way to enrich trade through trust.



In fact, the informality of our voluntary association is the source of its strength.&nbsp;Unencumbered by a weighty bureaucracy, we are free to explore a breadth of possibility. Given so many of our members lead the world in technological innovation, such expertise should be brought to bear to overcome technical trade barriers – whether, for instance, digitising costly and inefficient paperwork at customs, or utilising blockchain to minimise checks at borders.&nbsp;Supportive trading infrastructure – both digital and physical – should go hand in hand with the lowering of barriers.



We must also work collectively to overcome perceived investment risks within some of our developing countries. Though the Commonwealth makes up a quarter of global FDI, there is still vast pools of capital on which our members could and should draw – but the proposition must be right. Bastions of global finance, like London and Singapore, could work together further with member states to ensure risks are minimised and investments are secured. Such processes would also be streamlined because we share similar legislative frameworks.



Indeed, it is developing countries that stand to gain the most through our association, where often the benefits of other trade organisations accrue to the largest. Not forcing a straitjacket onto members unfit for their circumstances, whilst focusing on the private sector rather than specific regulations, allows members to pick the path best suited to the composition of their market economy and its stage of development.



However, many members, such as Sri Lanka, are falling into debt stressed situations, likely to worsen as rising interest rates, the strengthening dollar and spiralling bond yields raise the costs of servicing. The need to expand tax bases in developing countries, with most employment in the informal economy, is taking on a new urgency. Only the private sector, one that can be bolstered through the Commonwealth network, can provide the tax revenues, both from the companies and the employment they create, and help states prosper in the globalised economy.



Though great strides have been taken, comparative to our population, human and natural resources, the Commonwealth remains a slumbering giant. With these further steps, and even the simple knowledge within the Commonwealth on how to better leverage our ties, we all stand to gain more.



Like the games, trade and enterprise should be rooted in fair play. But it is in competition against one another that we reach higher. Let the games, and the business, begin.

lord-marland

Today, the Commonwealth Games starts – let the business begin

For many in South Africa, the term ‘labour broker’ often recalls negative thoughts. The practice of labour broking has a chequered past which has left a bad aftertaste for most. However, much of the opposition to the practice of labour broking comes from misunderstanding as to what it really entails. The practice has evolved from providing casual unskilled and semi-skilled labour on an exploitative basis into a fully-fledged service offering that provides temporary placement opportunities for skilled workers, along with many of the benefits of employment. Now a highly regulated industry, many reputable Temporary Employment Services (TES) providers have found their niche in supplying skilled workers on a temporary basis, particularly where such skills are sought-after or hard to find. An example of this is the placement of skilled workers, such as healthcare professionals in hospitals and clinics to meet their fluctuating demands.



Rooted in misunderstanding



Generally, there is the mistaken perception that the only way for workers to achieve job security is through permanent employment. There is also a misbelief that the point of the temporary employment sector is to keep people out of permanent jobs and prevent them from achieving job security. This is not the case. In the healthcare TES space particularly, most nurses seeking temporary placements are already permanently employed. Here, nursing professionals are using TES placements to take advantage of the skills shortage to pick up additional shifts to supplement their income and address their rising costs of living. In addition, they are ensuring hospitals have the necessary staff at short notice to ensure patient care is maintained.



Balancing cost and quality



Healthcare institutions also need to address the rising costs of providing medical care without compromising on quality of care, and one of the most effective ways to do that is to achieve flexibility through a TES provider. Given the environment in which they operate, there is no predictability and there is no fixed permanent formula when it comes to ensuring the correct number of nurses are on duty at any given time, to avoid being over-staffed (wasted costs) or under-staffed (compromised quality of care).



Having a labour model that is quickly adjustable is the only viable way to handle staff facilities according to the demand. Consequently, hospitals now work on a model of permanent staff, and flexible, outsourced staff. This helps hospitals to fill the gaps due to fluctuating demands, absenteeism, or annual leave. It also gives permanent staff the opportunity to take sick or family responsibility leave, knowing that their shift will be adequately covered. This helps healthcare workers to avoid burnout and gives them the flexibility to tend to their family needs.



Finding common ground



Another misconception about TES providers is that they work against labour unions. Perhaps this is because temporary placements do not fit in with their business model of a monthly union membership fee associated with permanent employment. Regardless, it is worth pointing out that when it comes to helping healthcare professionals avoid unemployment and giving them an opportunity to fairly earn a living, TES providers and unions should be on the same page.



Healthcare TES providers welcome engagement with unions. In fact, there are tangible benefits for workers in doing so. There is a unique offering in this industry called a ministerial determination. This gives amnesty to employers by allowing the workers to choose whether the TES provider adds the annual leave provision Rand amount to the worker’s salary or the TES provider makes provision for the leave to accumulate for when the worker takes leave. The ministerial determination allows the worker flexibility of choice in making provision for annual leave which is part of the basic conditions of employment, and this is done through consultation with unions who provide their sign-off before it goes to the Department of Labour. Workers take annual leave through their primary employer, and therefore have the benefit that when they take leave, they are compensated.



Choosing freedom and flexibility



Along with this industry-unique benefit, many healthcare professionals choose TES as a career path, because it gives them flexibility. Not everyone is as concerned with job security, some prefer to prioritise their home or family life, and TES placements give them the ability to work when and where they choose. They also get the freedom of gaining experience in other hospitals, in other facets of the medical field, which helps prevent boredom and complacency and adds to their skill sets. With the current skills shortage in the medical sector in South Africa, specialist TES providers can only continue to play a critical role in covering the gaps, ensuring continued quality of care for healthcare institutions and flexible earning opportunities for healthcare workers.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="708" height="629" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Donald-Mcmillan.jpeg" alt="" class="wp-image-418726" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Donald-Mcmillan.jpeg 708w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Donald-Mcmillan-300x267.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Donald-Mcmillan-101x90.jpeg 101w" sizes="auto, (max-width: 708px) 100vw, 708px" /><figcaption>Donald McMillan, MD at Allmed Healthcare Professionals</figcaption></figure>

Donald-Mcmillan

Opinion Piece: Debunking myths about labour broking in South Africa’s healthcare sector

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="769" height="800" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/professor-tshilidzi-marwala-1476x1536-1-769x800.jpg" alt="" class="wp-image-418717" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/professor-tshilidzi-marwala-1476x1536-1-769x800.jpg 769w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/professor-tshilidzi-marwala-1476x1536-1-288x300.jpg 288w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/professor-tshilidzi-marwala-1476x1536-1-86x90.jpg 86w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/professor-tshilidzi-marwala-1476x1536-1-768x799.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/professor-tshilidzi-marwala-1476x1536-1.jpg 1476w" sizes="auto, (max-width: 769px) 100vw, 769px" /><figcaption>Professor Tshilidzi Marwala, University of Johannesburg Vice Chancellor</figcaption></figure>



The United Nations Educational, Scientific and Cultural Organization has appointed University of Johannesburg Vice Chancellor Professor Tshilidzi Marwala the new rector of the United Nations University in Tokyo, Japan.



Professor Marwala will be the university’s seventh rector and will take up his new post from next March. He succeeds Canada’s Professor David M. Malone who has headed the university for the past nine years.



The United Nations University is a global think tank of 13 institutes in 12 countries. It supports efforts to resolve global human development challenges working closely with other United Nations system organizations and leading research institutions.



An academic for most of his working life, Professor Marwala was the Deputy Vice-Chancellor for Research and Internationalization at UJ till 2017 and Executive Dean of the Faculty of Engineering and the Built Environment before then.



&#8220;Professor Marwala is an accomplished scholar and thought leader with multi-disciplinary research interests that include the theory and application of artificial intelligence to engineering, computer science, finance, social science and medicine,’’ the United Nations said in a statement. &#8220;He has an extensive track record in human capacity development and is committed to leveraging technology and global connectedness towards the pursuit of the Sustainable Development Goals.’’



He has been a visiting scholar at Harvard University, University of California at Berkeley, Wolfson College of the University of Cambridge and Nanjing Tech University. He has also previously served as a member of the International Consultative Council at the Silesian University of Technology in Poland and is a trustee of the Nelson Mandela Foundation.



Professor Marwala holds a doctorate specializing in Artificial Intelligence and Engineering from the University of Cambridge, a Master of Mechanical Engineering from the University of Pretoria and a Bachelor of Science in Mechanical Engineering from Case Western Reserve University.



His work is internationally recognized and among other things he is a fellow of The World Academy of Sciences, the Academy of Science of South Africa, the African Academy of Sciences and the South African Academy of Engineering.

professor-tshilidzi-marwala-1476×1536-1

UNESCO appoints South Africa’s Marwala UN University Rector in Japan

We are in the toughest period the world economy has faced since the creation of the multilateral system more than three-quarters of a century ago. A quadruple shock of COVID, climate change, conflict and cost-of-living has undone years of hard-fought development gains. As financial conditions tighten, even countries that had seemed on track to prosperity and stability now stare into the abyss of debt distress, fragility and uncertainty about the future.



Coordinated, multilateral action is necessary to tackle the crises we face. Both aid and trade have key roles to play in reversing the impacts of this quadruple shock and putting the world back on track to achieve the Sustainable Development Goals.



We head the three international agencies that comprise the Geneva trade hub – the World Trade Organization (WTO), UN Conference on Trade and Development (UNCTAD) and the International Trade Centre (ITC). The WTO makes and monitors the rules for global trade. UNCTAD delivers research and consensus-building to guide governments. ITC helps small business go global, especially firms led by women and young entrepreneurs. We work together so that trade works better for development.



All three of us share a deep commitment to trade-led prosperity. All three of us understand that a world in crisis means no more business as usual. And all three of us want our organizations to “walk the talk” on making aid and trade deliver for real people.



To guide aid and trade towards a better world, policymakers need to pivot in three fundamental ways.



First, make trade greener. Global trade can play an important role in a transition to a low-carbon economy. Preliminary research at the WTO suggests that removing tariffs and regulatory trade barriers for a set of energy-related environmental goods would reduce global CO2 emissions by 0.6% in 2030 just from improved energy efficiency, with additional potential gains from innovation spillovers and as lower prices accelerate the shift towards renewable energy and less carbon-intensive products.



Second, make trade more inclusive. Promoting greater trade by small businesses and greater participation by women and youth make companies and countries more competitive, drives economic transformation and reduces poverty. Yet ITC business surveys found that one only out of every five exporting companies is women-led. WTO data show that micro, small and medium-sized firms represent around 95 percent of all companies globally but only one-third of total exports.



Third, make trade more connected. In our networked world, the future of trade is through digital channels and platforms, especially for small businesses. During the pandemic, we saw how doing business online went from being useful to critical for survival. UNCTAD data shows that digitally delivered services reached almost two-thirds the level of global services exports.



These themes will be discussed at the upcoming Global Review of Aid-for-Trade, which will be held from 27-29th July in Geneva.



The event comes one month after the WTO&#8217;s successful Twelfth Ministerial Conference, which put trade multilateralism back on track and delivered a landmark agreement on fisheries subsidies, and two months before the COP27 meeting in Egypt that could determine the world’s chances to keep the 1.5C target alive.



The data shows promising signs that aid-for-trade is &nbsp;tilting towards greater sustainability, inclusivity and connectivity. OECD and WTO data reveal a record high of nearly US$50 billion in aid for trade disbursements in 2020, of which half were either climate or gender related, and one-third supported the digital economy. Despite growing budgetary pressures at home, it is critically important to continue and increase these aid for trade flows.



Apart from a stronger thematic focus on sustainability, inclusivity and connectivity, maximizing the contribution of aid for trade to achieving the Sustainable Development Goals requires a resolute focus on the “where” and “how” of delivering development results.



This means a focus on those countries whose trade and development needs are highest – particularly Least Developed Countries and fragile/conflict-affected countries – and regional initiatives like African Continental Free Trade Area, to ensure they become stepping-stones to wider and more inclusive regional value chains and trade-led growth.



It means partnership across international organizations. The WTO, UNCTAD, and ITC already collaborate on initiatives like the Global Trade Helpdesk, which simplifies market research by bringing key trade and business information into a single portal, as well as on support to cotton-exporting countries in Africa.



Last but certainly not least, it means mobilizing public and private finance. The IFC estimates a worldwide US$300 billion financing gap for women, and the global trade finance gap has nearly doubled from an already-staggering $1.5 trillion. Without access to finance, firms cannot grow, diversify or formalize.



We want to end with a call to action. Creating a more sustainable, inclusive and connected future is the moon shot of our times. Aid, trade and multilateralism – working together – are part of the solution. It is normal and understandable that governments act to shore up their own economies in troubled times. But we must act now to ensure that the world’s poorest and most vulnerable can still see a pathway to prosperity through global trade.



The following is a joint opinion piece by WTO Director-General Ngozi Okonjo-Iweala, UN Conference on Trade and Development Secretary-General Rebeca Grynspan, and International Trade Centre Executive Director Pamela Coke-Hamilton



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="788" src="https://cms.cnbcafrica.com/wp-content/uploads/2020/04/Okonjo-Iweala-820x788.jpg" alt="" class="wp-image-369148" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/04/Okonjo-Iweala-820x788.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2020/04/Okonjo-Iweala-300x288.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2020/04/Okonjo-Iweala-768x738.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2020/04/Okonjo-Iweala-1065x1024.jpg 1065w, https://cms.cnbcafrica.com/wp-content/uploads/2020/04/Okonjo-Iweala-696x669.jpg 696w, https://cms.cnbcafrica.com/wp-content/uploads/2020/04/Okonjo-Iweala-1068x1027.jpg 1068w, https://cms.cnbcafrica.com/wp-content/uploads/2020/04/Okonjo-Iweala.jpg 1295w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>Ngozi Okonjo-Iweala, WTO Director-General</figcaption></figure>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="800" height="533" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Secretaria_General_Iberoamericana_Rebeca_Grynspan_2021.jpg" alt="" class="wp-image-418697" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Secretaria_General_Iberoamericana_Rebeca_Grynspan_2021.jpg 800w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Secretaria_General_Iberoamericana_Rebeca_Grynspan_2021-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Secretaria_General_Iberoamericana_Rebeca_Grynspan_2021-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Secretaria_General_Iberoamericana_Rebeca_Grynspan_2021-768x512.jpg 768w" sizes="auto, (max-width: 800px) 100vw, 800px" /><figcaption>Rebeca Grynspan, UN Conference on Trade and Development Secretary-General</figcaption></figure>



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="800" height="533" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Pamela_Coke-Hamilton_48721844818.jpg" alt="" class="wp-image-418699" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Pamela_Coke-Hamilton_48721844818.jpg 800w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Pamela_Coke-Hamilton_48721844818-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Pamela_Coke-Hamilton_48721844818-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Pamela_Coke-Hamilton_48721844818-768x512.jpg 768w" sizes="auto, (max-width: 800px) 100vw, 800px" /><figcaption>Pamela Coke-Hamilton, International Trade Centre Executive Director</figcaption></figure>

Okonjo-Iweala

A World in Crisis Needs Both Trade and Aid

Santam Heavy Haulage is concerned that a chain reaction of events beyond the transport sector’s control has put the industry under serious financial stress, with some stalwarts having recently closed their operations. “More are likely to follow in coming months resulting from a mountain of increases and other threats,” says Anton Cornelissen, Head of Santam’s Specialist Division, Heavy Haulage.



&nbsp;The first, and likely the most impactful of increases, came in February this year when the South African Special Risk Insurance Association (Sasria), which provides cover against civil commotion, public disorder, strikes, riots and terrorism, introduced a ‘hefty’ premium increase. This was unavoidable, largely as a result of the civil unrest, torching and looting of trucks and businesses in KZN and parts of Gauteng in 2021.



&nbsp;“To give you some idea of just how sizeable the annual Sasria premium hike is, a heavy commercial vehicle (vehicles with a GWM above 3500kg) valued at R2-million, says Moonstone, is now insured by Sasria for R6901.14- compared to the previous R375.80,” confirms Cornelissen. It gets worse because in addition to Sasria’s increase, other factors impacting on bottomline for hauliers include: Covid-19, which left them struggling with slim margins; load shedding; a more than 100% increase in steel prices that in turn increases repair and maintenance costs; a shortage of new trucks entering the country; fuel price increases; the tragic rise in xenophobic attacks against foreign national employees; and the recent storm-related losses in KZN.



“This unfortunate onslaught of events has now forced reinsurers to up their premiums, which means underwriters of heavy haulage risks are unable to offer reprieve to their clients in terms of minimising their own premium increases. It doesn’t help that the Centre For Risk Analysis has predicted more lootings as consumers feel the mounting pressure of costs relentlessly being passed onto them,” states Cornelissen. “It also means that short-term insurers are now forced into the undesirable position of having to increase their premiums in order to sustain their risk pool.



”On top of this hauliers are challenged by increasing competition and worsening economic conditions, and let’s not forget the threat of labour disputes that are becoming more prevalent. There are no quick or easy solutions, however, there appears to be a growing trend by larger fleet operators that are either considering or moving their policies to international insurers. “This means valuable revenue is starting to leave South Africa,” says Cornelissen. “We just cannot afford to burden an already struggling economy.” Santam Heavy Haulage has stepped up as reasonably as possible, however, as Cornelissen emphasises, insurers in turn are now also impacted by the 30%-plus increase in respect of repair costs, increased number of claims, and a significant rise in the number of theft and truck hijack claims.



“As it is, the insurance industry overall is struggling to deal with increasing claim costs and while it has taken some two years to return to pre-Covid freight movement numbers, some industries like construction and aviation are still recovering from the effects of lockdown. That being said, as Santam we are fortunate to have diversified specialist businesses which allows us to continue to offer sustainable insurance solutions.



”While there is a margin of increase that cannot be avoided, Cornelissen and his team are engaging with clients, reinsurers, Sasria and authorities like the Road Traffic Management Corporation (RTMC) to minimise risks and ensure legislation is carefully considered.



“We are having the crucial conversations on behalf of our clients and the industry at large, to ensure the risks facing operators and their employees are mitigated. “We are doing what we can to ease the burden on transporters but it’s a struggle because there are so many challenges and much frustration within the sector. We steadfastly continue to focus on raising Santam levels of service and influence, and build our extensive partnerships and relationships,” says Cornelissen.



“Santam’s Heavy Haulage team does not simply take the approach of being purely an insurer, but a giant whose voice on behalf of its clients carries weight. We aim to affect positive change for the benefit of all in an attempt to ensure the sustainability of long-standing operators.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="597" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMG_2719-2-820x597.jpg" alt="" class="wp-image-418669" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMG_2719-2-820x597.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMG_2719-2-300x218.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMG_2719-2-124x90.jpg 124w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMG_2719-2-768x559.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMG_2719-2-1536x1117.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMG_2719-2-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>Anton Cornelissen, Head of Santam’s Specialist Division, Heavy Haulage</figcaption></figure>

IMG_2719 1

Contemplating The Sustainability Of The Heavy Haulage Sector

<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/responsive_big_webp_g4HszNIBPcEQqWKXN36WnGfcOeIXBid9O1akAXmkSmE-820x547.webp" alt="" class="wp-image-418642" width="820" height="547" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/responsive_big_webp_g4HszNIBPcEQqWKXN36WnGfcOeIXBid9O1akAXmkSmE-820x547.webp 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/responsive_big_webp_g4HszNIBPcEQqWKXN36WnGfcOeIXBid9O1akAXmkSmE-300x200.webp 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/responsive_big_webp_g4HszNIBPcEQqWKXN36WnGfcOeIXBid9O1akAXmkSmE-135x90.webp 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/responsive_big_webp_g4HszNIBPcEQqWKXN36WnGfcOeIXBid9O1akAXmkSmE-768x512.webp 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/responsive_big_webp_g4HszNIBPcEQqWKXN36WnGfcOeIXBid9O1akAXmkSmE-1536x1024.webp 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/responsive_big_webp_g4HszNIBPcEQqWKXN36WnGfcOeIXBid9O1akAXmkSmE.webp 1600w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>Africa’s abundant renewable energy sources could make it a global hub for producing low-carbon hydrogen Image: Unsplash/Anastasia Palagutina </figcaption></figure>



Africa could supply the whole world with affordable low-carbon energy in the form of hydrogen, a new report suggests.



In its Africa Energy Outlook 2022, the International Energy Agency (IEA) says<a href="https://www.iea.org/reports/africa-energy-outlook-2022/key-findings">&nbsp;Africa’s rich renewable resources&nbsp;</a>– particularly solar energy, but also onshore wind – are the key to unlocking this potential.



Africa could produce 5,000 megatonnes of hydrogen a year at less than $2 per kilogramme – equivalent to “global total energy supply today,” the IEA says.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="602" height="341" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/59jVq-Lv2nTKPngQHem4J4UbIaRhSwoxIN4lkSfNgHY.png" alt="" class="wp-image-418643" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/59jVq-Lv2nTKPngQHem4J4UbIaRhSwoxIN4lkSfNgHY.png 602w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/59jVq-Lv2nTKPngQHem4J4UbIaRhSwoxIN4lkSfNgHY-300x170.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/59jVq-Lv2nTKPngQHem4J4UbIaRhSwoxIN4lkSfNgHY-160x90.png 160w" sizes="auto, (max-width: 602px) 100vw, 602px" /><figcaption>Africa could produce 5,000 megatonnes of hydrogen a year at less than $2 per kilogramme. Image: Africa Energy Outlook 2022, IEA (p154)</figcaption></figure>



<h3 class="wp-block-heading" id="h-is-hydrogen-a-sustainable-option">Is hydrogen a sustainable option?</h3>



Hydrogen is an abundant and energy-rich gas that&nbsp;<a href="https://www.eia.gov/energyexplained/hydrogen/">occurs naturally in water and fossil fuels</a>&nbsp;like natural gas, coal, and petroleum, explains the US Energy Information Administration. Hydrogen can be used as a fuel by separating it from these sources.



When renewable energy – such as sun or wind – is used to power the separation of hydrogen from oxygen in water molecules, the hydrogen produced is classified as carbon-free&nbsp;<a href="https://www2.deloitte.com/uk/en/focus/climate-change/zero-in-on-hydrogen.html?gclid=Cj0KCQjwzqSWBhDPARIsAK38LY9-UxnJ6HND8Ze8zE-glW83VCIGOkr3d0C58aspSliIbZlQHqttSasaAsFIEALw_wcB">‘green hydrogen’.</a>



When<a href="https://www.carbonbrief.org/in-depth-qa-does-the-world-need-hydrogen-to-solve-climate-change/">&nbsp;hydrogen is used as a fuel</a>, the only waste element it produces is water. This makes it better for the planet than burning fossil fuels, which contribute to global warming by producing carbon dioxide, and to air pollution.



<h3 class="wp-block-heading" id="h-africa-s-big-hydrogen-potential">Africa’s big hydrogen potential</h3>



Africa has one of the world’s biggest potentials for producing hydrogen from low-cost renewable electricity, the IEA says. Africa has<a href="https://www.iea.org/news/global-energy-crisis-shows-urgency-of-accelerating-investment-in-cheaper-and-cleaner-energy-in-africa">&nbsp;60% of the world’s best solar resources</a>, but only 1% of current solar generation capacity.



Wind power is also a big resource. Arid and semi‐arid areas are ideal for wind and solar, the IEA says, especially in North Africa, the Horn of Africa and Southern Africa.



By 2030, Africa could produce 80% of the new power generation it needs from solar, wind, hydropower, geothermal and other renewable energies, the IEA says.



The falling cost of both solar units and hydrogen production is predicted to further increase Africa’s hydrogen potential. In the IEA’s model, this results in Africa’s $2-per-kilogramme hydrogen being up to half the price of hydrogen from the rest of the world.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="602" height="269" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/UxBGKWIMTM-F5GuL2jgrWSCXn_nkyxdLdNmmaT66Io0.png" alt="" class="wp-image-418644" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/UxBGKWIMTM-F5GuL2jgrWSCXn_nkyxdLdNmmaT66Io0.png 602w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/UxBGKWIMTM-F5GuL2jgrWSCXn_nkyxdLdNmmaT66Io0-300x134.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/UxBGKWIMTM-F5GuL2jgrWSCXn_nkyxdLdNmmaT66Io0-160x71.png 160w" sizes="auto, (max-width: 602px) 100vw, 602px" /><figcaption>Hydrogen could help the 600 million Africans who don&#8217;t have access to electricity. Image: Africa Energy Outlook 2022, IEA (p35)</figcaption></figure>



<h3 class="wp-block-heading">Africa’s energy challenges</h3>



About 600 million people – 43% of Africa’s population – currently don’t have access to electricity. Most of these people live in sub-Saharan Africa. Countries including Ghana, Kenya and Rwanda will be on track for full access by 2030, the IEA predicts in its Sustainable Africa Scenario.



This is mostly achieved by extending national grids, it says. In rural areas &#8211; where most people without access to electricity live – solar mini-grids and standalone systems are the most viable solutions.



To reach universal access to affordable electricity by 2030, Africa will need to connect 90 million people a year, the IEA says. This is three times the rate of recent years.



Hydrogen is seen as one of the answers.



<h3 class="wp-block-heading">How is hydrogen used in Africa today?</h3>



Hydrogen is currently used in industry to make fertilizer based on ammonia – a common<a href="https://www.weforum.org/agenda/2021/01/green-ammonia-stop-fossil-fuels/">&nbsp;crop nutrient</a>&nbsp;– and to refine oil in North Africa and Nigeria. This hydrogen is mostly extracted from natural gas and coal and is not low-carbon, the IEA says.



But in the IEA’s model of future energy use in Africa, strong policy support and infrastructure investment triggers “rapid growth in the production and domestic uptake of low‐carbon hydrogen”.



By 2030, this leads to “significant potential” to export to demand centres in Europe.



The IEA notes that a number of low-carbon hydrogen projects are already under way or under discussion in Egypt, Mauritania, Morocco, Namibia and South Africa.

responsive_big_webp_g4HszNIBPcEQqWKXN36WnGfcOeIXBid9O1akAXmkSmE

How Africa could become a global hydrogen powerhouse

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/JJ-Photo-2-820x547.jpg" alt="" class="wp-image-418625" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/JJ-Photo-2-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/JJ-Photo-2-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/JJ-Photo-2-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/JJ-Photo-2-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/JJ-Photo-2-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/JJ-Photo-2-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



19 July 2022;&nbsp;Imperial, owned by DP World, announced today that all the requirements relating to its 100% acquisition of J&amp;J Group, the largest integrated logistics operator on Mozambique’s Beira corridor, have now been fulfilled.



The transaction relating to the acquisition of the first tranche of shares (51%) of the J&amp;J Group, which was announced on 29 July 2021, was closed on 18 July 2022. This will be followed by the acquisitions of the second and third tranches of 46.5% and 2.5%, respectively.



J&amp;J Group offers end-to-end logistics solutions along the Beira and North-South corridors, specialising in the transport of break-bulk, containerised, project, fuel and out-of-gauge cargo between Mozambique, Zimbabwe, Zambia, South Africa, Malawi and the Democratic Republic of the Congo.



Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World, said: “This acquisition strengthens DP World’s position as an end-to-end logistics provider, by adding J&amp;J’s significant presence along these key corridors in Africa – a market where trade is expected to grow at more than twice GDP driven by population growth, accelerated urbanisation and rising middle classes.”



Mohammed Akoojee,&nbsp;Chief Operating Officer of DP World Logistics and Group CEO at Imperial&nbsp;added: “This acquisition complements our ‘Gateway to Africa’ focus as it optimises and expands our reach in Africa by providing scale in end-to-end cross-border transportation services in key countries and new industries. This is possible through well-established routes, port capabilities, a well-developed asset base, including a fleet and warehousing space, as well as an entrenched customer portfolio.”



Through the acquisition of the J&amp;J Group, Imperial will be positioned for quicker go-to-market outside of South Africa and end-to-end access to certain key countries and corridors (port to customer) in Africa.



“We are excited for J&amp;J to partner with Imperial and believe that the operations of these two businesses are very complementary. This combination offers existing and potential J&amp;J clients a true gateway to Africa,” explained Carlyle and Ethos Private Equity, currently the controlling shareholders of the J&amp;J Group.



DP World has been growing its business in Africa, being a key growth region that offers many opportunities for further development in the ports and logistics sector, trade corridors, eCommerce, and others. Africa is centrally positioned to fit into the global trade and supply chains, and the development of trade corridors and port infrastructure is critical to connect the continent to drive economic growth and development. DP World operates nine ports and terminals across 8 countries in Africa – Algeria, Angola, Egypt, Mozambique, Rwanda, Senegal, Somaliland and South Africa.



About Imperial:



Imperial is an Africa-focused provider of integrated market access and logistics solutions. With a focus on the following key industries &#8211; healthcare, consumer, automotive, chemicals, industrial and commodities &#8211; we take our clients’ and principals’ products to some of the fastest growing and most challenging markets in the world. As a leading global logistics provider, we seek out and leverage new technology to deliver innovative, end-to-end solutions. Through our significant African footprint and international expertise, and with the support of our 25,000 people, Imperial’s purpose is to connect Africa and the world &#8211; and to improve people’s lives with access to quality products and services. Imperial became a wholly owned business of DP World in March 2022. For more information:&nbsp;<a href="http://www.imperiallogistics.com/" target="_blank" rel="noreferrer noopener">www.imperiallogistics.com</a>



About DP World:



We are the leading provider of worldwide smart end-to-end supply chain logistics, enabling the flow of trade across the globe. Our comprehensive range of products and services covers every link of the integrated supply chain – from maritime and inland terminals to marine services and industrial parks as well as technology-driven customer solutions.



We deliver these services through an interconnected global network of 295 business units in 78 countries across six continents, with a significant presence both in high-growth and mature markets. Wherever we operate, we integrate sustainability and responsible corporate citizenship into our activities, striving for a positive contribution to the economies and communities where we live and work.



Our dedicated, diverse and professional team of more than 97,600 from 158 nationalities are committed to delivering unrivalled value to our customers and partners. We do this by focusing on mutually beneficial relationships – with governments, shippers, traders, and other stakeholders along the global supply chain – relationships built on a foundation of mutual trust and enduring partnership.



We think ahead, anticipate change and deploy industry-leading digital technology to further broaden our vision to disrupt world trade and create the smartest, most efficient and innovative solutions, while ensuring a positive and sustainable impact on economies, societies and our planet.



About J&amp;J Group



The J&amp;J Group is the largest integrated logistics operator on Mozambique’s Beira corridor. The company has an extensive cross border fleet which is supported by a network of trucking depots in Mozambique, South Africa, Zambia and Zimbabwe. In addition to its trucking offering, the J&amp;J Group provides its clients with access to its 95,000m2 container terminal and a further 45,000m2 of warehousing space in Beira. The company transports a range of commodities such as fertilizer, chemicals, tobacco, cotton, sugar, fuel and minerals. Should clients require it, the J&amp;J Group is also able to transport “out-of-gauge” and project cargo such as heavy mining equipment.

JJ-Photo-2

Imperial obtains approval for acquisition of 100% stake in J&J Group

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="541" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-2-820x541.jpg" alt="" class="wp-image-418527" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-2-820x541.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-2-300x198.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-2-136x90.jpg 136w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-2-768x507.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-2-1536x1014.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-2-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>Amref Health Africa GCEO, Dr. Githinji Gitahi (right) CBS PS MOH, Ms. Susan Muchache (center) and AstraZeneca Area Vice President (Middle East and Africa) Pelin Incesu (left) pose for a photo after signing of the MOU before the official launch of the mobile vaccination clinics at Kibra DC grounds.</figcaption></figure>



At the end of June, a fleet of solar-powered mobile vaccination clinics began work in one of Africa’s largest informal settlements, the Kibera community in Nairobi, as part of efforts to protect more Kenyans against the coronavirus and curtail the pandemic.



In coordination with the Kenyan Ministry of Health, the mobile clinics are being deployed by Amref across Kenya, targeting ‘last mile’ communities where they live and work.



Each clinic aims to vaccinate up to 100 people per day &#8212; with a total target of 1000 daily vaccinations once all clinics are operational &#8212; while also providing health information, COVID-19 screening and post-immunisation care. In order to tackle misinformation around vaccination, health workers will seek to build trust among communities and demonstrate the safety and efficacy of COVID-19 vaccines.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-3-820x547.jpg" alt="" class="wp-image-418528" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-3-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-3-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-3-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-3-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-3-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-3-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>CBS PS MOH, Ms. Susan Muchache (right) AstraZeneca Area Vice President (Middle East and Africa) Pelin Incesu (center) and Amref Health Africa GCEO, Dr. Githinji Gitahi (left) cutting the ribbon during the official launch of Mobile clinics at Kibra DC grounds.</figcaption></figure>



AstraZeneca is supporting this initiative because we understand that the cost of medicines, though important, is not the only barrier to healthcare.



We have been providing COVID-19 vaccines at cost to low and middle-income countries through COVAX since they first became available. But more than a year since the first supplies landed in Ghana, only <a href="https://africacdc.org/covid-19-vaccination/">19 per cent of Africans</a> have received their first course of a COVID-19 vaccine, according to the Africa CDC.



If we are ever to see an end to this pandemic &#8212; an end to the emergence of new variants that threaten countries rich and poor &#8212; we need those numbers to increase, and fast.



We are fortunate that we have the tools needed to protect people against COVID-19 but the challenge we now face is making them accessible to communities on the ground.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">&#8220;This crisis is not over yet, and it is up to all of us to maintain that sense of urgency and innovation to reach ‘last mile’ communities. Only then can we hope to end the pandemic for all.&#8221; &#8211; Pelin Incesu, AstraZeneca&#8217;s area vice president for the Middle East and Africa</blockquote>







Achieving this requires working together across the private, public and third sectors to pursue a patient-centred approach to accelerating vaccination.



That is why we are taking our vaccines to the heart of communities that would otherwise find it difficult to access health services, including COVID-19 vaccination, either due to limited health facilities in their areas or an inability to travel the distances required to access the care they need.



The health workers I met in Kibera were armed with training and educational tools to address questions from community members and to deliver health services with empathy, driven by an understanding of the contexts in which they operate.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-7-820x547.jpg" alt="" class="wp-image-418530" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-7-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-7-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-7-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-7-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-7-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMAGE-7-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>Kelensenjia Okonyo gets vaccinated inside the mobile clinic after it was officially launched by CBS PS MOH, Ms. Susan Muchache.</figcaption></figure>



Working with governments and civil society across Africa, AstraZeneca hopes to continue to contribute to the development of sustainable solutions to the region’s health challenges, both during and after the pandemic.



In a post-pandemic world, the mobile clinics can be used to support other health priorities, such as tackling the rising burden of non-communicable diseases, including cancer and diabetes.



The unprecedented speed and scale at which vaccines and other tools to fight COVID-19 were developed when the virus first started to spread has undoubtedly saved millions of lives worldwide. However, this crisis is not over yet, and it is up to all of us to maintain that sense of urgency and innovation to reach ‘last mile’ communities. Only then can we hope to end the pandemic for all.

IMAGE-2

‘Last mile’ vaccination essential to ending the pandemic

18 July 2022:&nbsp;The consecutive large increases in the fuel price over the past number of months have left consumers reeling, largely due to the impact such increases have on the cost of most other consumables.&nbsp;&nbsp;However, it’s not just consumers that are feeling the effects of sharply higher fuel prices.



Trade and industry in South Africa, and globally, is just as vulnerable to energy shocks. However, the effect of increasing fuel costs on trade flows is a lot more difficult to quantify than it is at a consumer level. That’s because fuel is just one of many input costs that importers and exporters have to take into account in order to ensure the profitability and sustainability of their businesses. So, while there are those who argue that oil price spikes like we’ve seen recently have the ability to put the brakes on global trade, the reality is that it’s just not that simple.



While high fuel prices will certainly have some direct influence on trade volumes – particularly trade activities undertaken over vast distances – that direct influence is relatively minor compared to the indirect, knock-on effects of high oil prices and the resulting inflationary pressures on both the supply and demand side of the trade equation.



For one, it’s very important, when considering the impact of ongoing fuel increases on trade, to look beyond just the activities of importing or exporting goods. Both of these trade activities are ultimately dependent on extensive supply chains, most of which begin way before the trade activity itself, with extraction, harvesting or manufacturing activities. The negative effect of high fuel costs is typically felt at every point along these supply chains, and it has a tendency to compound as the number of ‘links’ in the chain increases.



In addition to the supply side, there is also the consumption side of the trade equation to consider, and here too, economic impacts can have a knock-on effect that is far greater than just the cost of fuelling a ship or truck. One of the most significant indirect impacts of significant fuel price increases is demand destruction.



This is effectively the level of inflation at which consumer behaviour changes and becomes notably more conservative. Fuel cost is arguably the most significant direct driver of inflation, whether up or down. And when that influence is upwards, the impacts filter through much of the economy. Not only do higher prices at the pump mean consumers have less money to spend, but they also increase the costs of manufacturing and transporting goods; and these costs are invariably passed on to the people who buy them.



While the world may not yet have reached the tipping point at which significant demand destruction takes place, if inflation continues to rise it will likely happen very soon. At that point the indirect impact of rising fuel prices on trade volumes will almost certainly be seen as supply is forced to drop to match declining demand.



The consequences of such demand destruction could be dire. For South Africa, as a developing economy, most production, distribution and trade businesses are already unable to pass through further increases in costs. And most retailers will soon reach the point where they are not prepared to accept more pass-through costs.



So, the only alternative is for businesses to absorb them. And the only effective way of doing that is by reducing operating costs in order to maintain margins. In most cases, the first place owners and boards look to cut costs is by reducing staff headcount. Unfortunately, lay-offs and retrenchments are only a short-term fix, and they have the further indirect impact of reducing consumption, further stifling economic growth, and ultimately reducing production and trade volumes even further.



There’s also a very fine line to be walked here by companies, as reducing employee numbers invariably leads to demands for higher pay from those who remain. And when you add that to the already rising costs of labour due to inflation-linked increases, the benefit of reducing operating costs through retrenchments can quickly be eroded.&nbsp;



With all this in mind, it’s something of a stretch to say that trade volumes are at the mercy of increasing oil prices. The reality is that we are facing the potential for declining global trade; but there’s far more behind it than just the higher cost of filling up a cargo ship. And the difficult truth is that, unless a way is found to stabilise fuel prices soon, the negative impact they will have on entire economies and the world’s consumers will massively overshadow those they will exert on global trade volumes.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="543" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Bobby-Madhav_FNB1-820x543.jpg" alt="" class="wp-image-418521" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Bobby-Madhav_FNB1-820x543.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Bobby-Madhav_FNB1-300x199.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Bobby-Madhav_FNB1-136x90.jpg 136w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Bobby-Madhav_FNB1-768x509.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Bobby-Madhav_FNB1.jpg 1267w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>Bobby Madhav, FNB Head of Trade &amp; Structured Trade and Commodity Finance</figcaption></figure>

Bobby-Madhav_FNB1

Will rising fuel prices put the brakes on global trade?

Following recent talk of “deglobalisation” and speculations that the World Trade Organisation might have had its time, the agreements brokered at its recent Ministerial Conference show that free and open global trade live on to see another day. In the meantime, however, what can’t be denied is that the pandemic, its shutdown of trade routes and the ongoing disruption of supply chains, has shaken the notion of global trade being the panacea, and ushered in a trend of regional blocs, deepening regional ties, and a move towards what could seem like regional and even national self-reliance.



<h2 class="wp-block-heading" id="h-while-afcfta-gives-promise-we-have-a-long-way-to-go-ppps-are-part-of-the-solution">While AfCFTA gives promise we have a long way to go – PPPs are part of the solution</h2>



While the African Continental Free Trade Area (AfCFTA) and its accompanying trillion-dollar investment framework will create the largest free trade area in the world, we’re not there yet. Indeed, the war in Ukraine and the ensuing food crisis across the continent are a pertinent reminder of our dependencies. Rates of progression vary, but many countries still need to create an environment where economic activity can thrive, and a large part of that means developing the appropriate infrastructure needed. In this context, public-private partnerships (PPPs) can offer a lifeline and lay the foundations for developing water, telecommunications, transport, and power, among other things.



<h2 class="wp-block-heading">Any PPP is not necessarily a good PPP</h2>



But any PPP isn’t a good PPP. For decent contracts and projects to happen, discerning governments with strong governance are required so that untenable projects that only go on to indebt countries and disadvantage their populations yet further are avoided. Indeed, despite the numerous successful PPP projects across the world, a lack of regulatory oversight and inadequate evaluation process from the get-go has resulted in at least as many failures.



The Grand Inga Dam project in the DRC might not be classed as such – 2 of the 6 dams originally envisaged have at least been built – but the project has and continues to be shrouded in controversy.



The initial international economic community’s vision to develop a power grid that can supply a third of the continent’s power supply and spur economic development is far from achieved. Instead, as the current government attempts to push the third dam forwards, the previous two are seen to be responsible for a huge part of the country&#8217;s debt burden, were fast producing a fraction of the electricity they were sold to do (40% of capacity by 2002) and haven’t come close to meeting even the nation’s needs – an estimated 11% of Congolese have access to electricity. The projects at inception failed feasibility studies, showing them to be uneconomical. &nbsp;A lack of transparency and accountability, a missing environmental impact assessment or mitigation plans, and displacement of local communities are just some of the other charges against it.



<h2 class="wp-block-heading">Governance matters</h2>



While big infrastructure projects may seem tempting to governments in the race towards economic development, when it comes to PPP investments, governments need to be more discerning of the projects they choose to embark upon. Many of the failures of PPP projects could have been avoided or mitigated with strong governance in place – of not just the projects, but of the governments themselves. ‘Investability’ is crucial to attract the necessary private investment, but beyond that, countries should also be politically stable, free from corruption, and adhere to rule of law. All these conditions count when it comes to the successful and sustainable PPP projects.&nbsp;



<h2 class="wp-block-heading">Rwanda shows that good investments with governance can spell growth&nbsp; </h2>



Take Rwanda for example, whose government is investing in PPPs with the potential to offer national and potentially pan-African benefits. Making that link with governance again, Rwanda was recently classed as the best performing low-income country in the world and ranked 2nd amongst countries in sub-Saharan Africa in the <a href="https://chandlergovernmentindex.com/">2022 Chandler Good Government Index</a>. Its rapid economic growth over the last two decades is in part due to its strong focus on improving not just its financial and economic governance, but also its leadership and long-term vision.



One of its PPP agreements, Africa Improved Foods (AIF), is creating jobs for locals, investing in farming, and sourcing their ingredients from the country to boost local economies and fulfil their vision for “Africa to feed Africa”. Meanwhile, AIF is also working to resolve the malnutrition and stunted growth of the country’s children by providing them with nutritious food during the first 1,000 days of their life, with the goal of reaching 1 million malnourished children and pregnant or breastfeeding women annually by 2031. Looking to solve malnutrition in the region, their next step is to expand operations to Ethiopia and other East African countries.



As the world pivots towards a seeming pulling in and localisation of trade and agreements, good PPPs and the AfCFTA provide countries with funds, resources, and mechanisms to build their physical and human infrastructure, and in so doing move us closer to a position of greater intercontinental trade and regional autonomy. In the meantime, foreign institutions and investors coupled with smart and discerning governments still have a large and valuable role to play in developing the capacity of countries and businesses in Africa.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="566" height="521" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Paulo-Gomes-picture.jpg" alt="" class="wp-image-418430" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Paulo-Gomes-picture.jpg 566w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Paulo-Gomes-picture-300x276.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/Paulo-Gomes-picture-98x90.jpg 98w" sizes="auto, (max-width: 566px) 100vw, 566px" /><figcaption>Paulo Gomes &#8211; Chairman and Founder of Orango Investment Corporation</figcaption></figure>

Paulo-Gomes-picture

Sound governance and good investments are what will move Africa to a place of greatness

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="762" height="650" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMG-20220711-WA0002-1.jpg" alt="" class="wp-image-418384" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMG-20220711-WA0002-1.jpg 762w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMG-20220711-WA0002-1-300x256.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/07/IMG-20220711-WA0002-1-106x90.jpg 106w" sizes="auto, (max-width: 762px) 100vw, 762px" /></figure>



Paris – Monday, 11 Jul 2022



Abdul Samad Rabiu, Founder and Chairman of BUA Group, one of Africa’s largest foods, mining, manufacturing and infrastructure companies, has been re-appointed as President of the France Nigeria Business Council by President Emmanuel Macron of France. This was announced at the July 2022 Meeting of the France Nigeria Business Council held in Paris.



Addressing the council, Abdul Samad Rabiu thanked members for coming and remarked that it was a personal honour for him to be a part of the France Nigeria Business Council, and also a privilege to serve as the pioneer President of the Council which was inaugurated just over a year ago and now, be reappointed as President. He also thanked President Macron for his support and, for reappointing him as well as Jean Haas of Relais (France) as President of the Council, and Head of the Secretariat respectively.



The France Nigeria Business Council brings together the top businesses in Nigeria and France with a goal of improving business relations between Nigeria and France whilst ensuring routine cooperation that will bring about immense economic benefits for both countries.&nbsp; French members of the council include the Global Chief Executives of Total Energies, Dassault, Axens, Accor, CMA, amongst others and on the Nigerian side, Dr Mike Adenuga of Globacom &amp; Conoil, Jim Ovia of Zenith Bank, Gilbert Chagoury of Chagoury Group, Aliko Dangote of Dangote Group, Tony Elumelu of UBA, Heirs Holdings and Tony Elumelu Foundation, Dr. Herbert Wigwe of Access Bank Group, Dr. Philip Mshelbila of NLNG, Sen. Daisy Danjuma of Sapetro and May &amp; Baker, and Abdul Samad Rabiu of BUA Group &amp; the Abdul Samad Rabiu Africa Initiative (ASR Africa) who is the current president.&nbsp;



Speaking further, Abdul Samad Rabiu praised the progress that has been made by the France Nigeria Business Council since its inauguration and the commitment of members &#8211; despite slow global recovery, in pushing forward with various partnerships. These include plans by some of Nigeria’s biggest banks to set up subsidiaries in France, and BUA’s partnership with Axens of France to build a 200,000bpd refinery in Akwa Ibom, Nigeria amongst other key projects by members. Abdul Samad also encouraged members of this council to keep seeking for partnership opportunities, whilst planning, working together and adding value to each other so that successes already being created can be escalated for the mutual economic benefit of Nigeria, Africa’s biggest economy and, France &#8211; a global economic leader. It is also expected that Rabiu’s current tenure will see the creation of working sub-committees and sectoral groups to enhance the council’s effectiveness.

IMG-20220711-WA0002-1

BUA’s ADBUL SAMAD RABIU REAPPOINTED AS PRESIDENT, FRANCE NIGERIA BUSINESS COUNCIL BY FRENCH PRESIDENT, EMMANUEL MACRON

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="492" src="https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Farmers_farmingJimma_Ethiopia-820x492.jpg" alt="" class="wp-image-376497" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Farmers_farmingJimma_Ethiopia-820x492.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Farmers_farmingJimma_Ethiopia-300x180.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Farmers_farmingJimma_Ethiopia-768x461.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Farmers_farmingJimma_Ethiopia-1110x666.jpg 1110w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Farmers_farmingJimma_Ethiopia-696x418.jpg 696w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Farmers_farmingJimma_Ethiopia-1068x641.jpg 1068w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Farmers_farmingJimma_Ethiopia-600x360.jpg 600w, https://cms.cnbcafrica.com/wp-content/uploads/2020/07/Farmers_farmingJimma_Ethiopia.jpg 1280w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



In 2021, global hunger surpassed all previous records, with close to&nbsp;<a href="http://www.fightfoodcrises.net/fileadmin/user_upload/fightfoodcrises/doc/resources/GRFC_2022_IN_BRIEF.pdf" target="_blank" rel="noreferrer noopener">193 million people</a>&nbsp;acutely food insecure. This crisis is worsening, and African countries are at its epicenter. Eight of 12 countries forecast to have more than 3 million people in food crisis in 2022 are in Africa.&nbsp;



While immediate aid is needed, the long-term solution in Africa is to boost domestic production.&nbsp;Indeed, the continent could be food sufficient through times of war and peace, boom and bust but today its huge agricultural potential is being overlooked. This is not for lack of urgency but for lack of patience – patience on the part of investors who may still shy from making long-term investments in African agriculture.&nbsp;&nbsp;



Let’s take mechanization as an example: African farming today remains the least mechanized in the world. Globally there are roughly 200 tractors per 100 square kilometers of agriculture lands, but in sub-Saharan Africa, there are only about 27. Changing that would go a long way in closing the deep productivity gap between African farms and farms in rich countries. Closing that gap could increase the global supply of cereals, grains, and vegetable crops by a stunning&nbsp;<a href="https://www.mckinsey.com/industries/agriculture/our-insights/winning-in-africas-agricultural-market" target="_blank" rel="noreferrer noopener">20 percent</a>.&nbsp;



But doing so is a multi-billion-dollar quest that cannot be solved with Silicon-valley type infusions of fast cash at high costs. A new tractor can cost anywhere from US$10,000 to $200,000—an unheard of amount of money for most farmers in Africa. What is needed is patient capital—invested for the long-term with low interest rates, using innovative new financial models.



Patient capital could fund the mechanization of African agriculture, just as it is already transforming other sectors. For example, it’s already infusing clean energy enterprises through green bonds, with&nbsp;Kenya, Nigeria and South Africa&nbsp;<a href="https://www.mfw4a.org/blog/long-term-finance-critical-attracting-patient-capital-developing-sustainable-african-economies" target="_blank" rel="noreferrer noopener">taking the lead</a>. The&nbsp;$2 billion&nbsp;<a href="https://www.breakthroughenergy.org/investing-in-innovation/investing-in-innovation" target="_blank" rel="noreferrer noopener">Breakthrough Energy Ventures</a>&nbsp;fund, launched by a coalition of investors led by Bill Gates, invests in 20-year cycles.&nbsp;<a href="https://www.engine.xyz/" target="_blank" rel="noreferrer noopener">The Engine</a>&nbsp;incubates &#8220;tough tech&#8221; to solve global problems—without eyeing a return on investment for at least 12 years.&nbsp;



Patient capital will also transform health in Africa, not least through building its vaccine and medicines manufacturing capacity—a mission supported by the African Development Bank with a&nbsp;<a href="https://www.nature.com/articles/d41586-022-00335-9" target="_blank" rel="noreferrer noopener">US$3 billion investment over 10 years</a>.&nbsp;



Why isn’t this happening for agriculture? Although agriculture contributes 40% of GDP and accounts for 60% of the continent’s labor force, it receives on&nbsp;<a href="https://altf.afdb.org/en/charts" target="_blank" rel="noreferrer noopener">average 4%</a>&nbsp;of long-term financial investments.&nbsp; That should be 40-50%.&nbsp;



There are signs of change. Hello Tractor, recently benefited from a round of patient capital—in the form of long-term, zero-interest loans—provided by Heifer International. Hello Tractor connects tractor owners to smallholder farmers using a smart app and booking agents with strong farmer networks.&nbsp;The US$1 million&nbsp;capital enabled Hello Tractor to finance the purchase of 17 tractors in Nigeria, Kenya and Uganda.&nbsp;



Building on the success of its partnership with Hello Tractor, Heifer International has now committed an additional US$3.5 million&nbsp;in tractor financing for Africa&nbsp;under its&nbsp;Tractors 4 Africa project. Heifer International’s&nbsp;total investment of US$4.5&nbsp;million is&nbsp;set to provide affordable access to tractor services to 872,250 smallholder farmers at an affordable rate, boosting farm productivity, employment, food security and farmer livelihoods over the next ten years.



This funding will be catalytic.&nbsp;



So far, Hello Tractor has facilitated tractor services for more than 500,000 farmers in 17 countries. We are now growing our capital base to finance more tractors. Patient capital for African agriculture cannot only be the purview of philanthropists. We need to excite capital markets, showing investors that they will get back their principal plus interest, albeit with a longer time horizon.&nbsp;



There are other positive developments for mechanization and long-term financing. In&nbsp;<a href="https://www.researchgate.net/publication/342329834_Agricultural_mechanization_in_Africa_Myths_realities_and_an_emerging_research_agenda" target="_blank" rel="noreferrer noopener">some districts of Ghana</a>&nbsp;up to 80 percent of farmers use machinery. These pockets of mechanization owe a lot to support of the government, which has imported and distributed tractors at subsidized rates to farmers and private entrepreneurs, who operate nearly 90 Agricultural Mechanization Service Centers.



Finally, there’s another less obvious benefit to patient capital. A recent study&nbsp;<a href="https://www.die-gdi.de/uploads/media/DP_18.2021.pdf" target="_blank" rel="noreferrer noopener">in Kenya shows that it can grow jobs</a>, and jobs that are high quality.&nbsp; This is in part because firms that benefit from patient capital can pursue longer-term growth strategies, which include hiring more workers and investing in skills that generate profits over the longer term. In addition, investors tend to care more about a firm’s social performance as they look beyond short-term profitability.&nbsp; They care more.



Africa needs this. Every year, 10-12 million new workers enter African labor markets, while only three million jobs are created. Economic growth and social stability in Africa demand the creation of millions of high-quality jobs, especially in food systems that provide a bedrock of African economies. Heifer International’s investment alone will create nearly 7,000 new jobs as booking agents, tractor operators, technicians and tractor owners over the 10 years.



Because patient capital demands a return on investment, it demands accountability and rigor. So does agriculture, and so does a tractor. When investors bet on patient capital, they are looking for a return that’s reasonable and meaningful—for the investor, the company, and ultimately the people who are employed and who benefit from new products and services. The mechanization of African agriculture may not be the goose that lays the golden egg, but with patience, it will give back far more than it receives.&nbsp;



Adesuwa Ifedi is Africa Senior Vice President for Heifer International. Jehiel Oliver is Chief Executive Officer for Hello Tractor

Farmers_farming,Jimma_,Ethiopia

Patient capital for African agriculture gives back far more than it receives

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="615" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/06/51856412619_7f34223fc0_o-820x615.jpg" alt="" class="wp-image-418092" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/06/51856412619_7f34223fc0_o-820x615.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/51856412619_7f34223fc0_o-300x225.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/51856412619_7f34223fc0_o-120x90.jpg 120w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/51856412619_7f34223fc0_o-768x576.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/51856412619_7f34223fc0_o.jpg 1024w" sizes="auto, (max-width: 820px) 100vw, 820px" /></figure>



“Africa can no longer outsource its healthcare security to the benevolence of others” – Akinwumi Adesina



Abidjan, 27 June 2022—The African Development Bank’s Board of Directors has approved the establishment of the African Pharmaceutical Technology Foundation, a new groundbreaking institution that will significantly enhance Africa’s access to the technologies that underpin the manufacture of medicines, vaccines, and other pharmaceutical products.



African Development Bank Group President, Dr. Akinwumi Adesina said: “This is a great development for Africa. Africa must have a health defense system, which must include three major areas: revamping Africa’s pharmaceutical industry, building Africa’s vaccine manufacturing capacity, and building Africa’s quality healthcare infrastructure.”



During the African Union Summit in Addis Ababa in February 2022, the continent’s leaders called on the African Development Bank to facilitate the establishment of the African Pharmaceutical Technology Foundation. Adesina, who presented the case for the institution to the African Union said: “Africa can no longer outsource the healthcare security of its 1.3 billion citizens to the benevolence of others.” With this bold initiative, the African Development Bank has made good on that commitment.



The decision is a major boost to the health prospects of a continent that has been battered for decades by the burden of several diseases and pandemics such as Covid19, but with very limited capacity to produce its own medicines and vaccines. Africa imports more than 70% of all the medicines it needs, gulping $14 billion per year.



Global efforts to rapidly expand the manufacturing of essential pharmaceutical products including vaccines in developing countries, particularly in Africa, to assure greater access, have been hampered by intellectual property rights protection and patents on technologies, know-how, manufacturing processes and trade secrets.



African pharmaceutical companies do not have the scouting and negotiation capacity, and bandwidth to engage with global pharmaceutical companies. They have been marginalized and left behind in complex global pharmaceutical innovations. Recently, 35 companies signed a license with America’s Merck to produce Nirmatrevir, a Covid-19 drug. None of them was African.



No institution exists on the ground in Africa to support the practical implementation of Trade Related Intellectual Property Rights (TRIPs) on non-exclusive or exclusive licensing of proprietary technologies, know-how and processes.



The African Pharmaceutical Technology Foundation will fill this important and glaring gap. When fully established, it will be staffed with world-class experts on pharmaceutical innovation and development, intellectual property rights, and health policy; acting as a transparent intermediator advancing and brokering the interests of the African pharmaceutical sector with global and other Southern pharmaceutical companies to share IP-protected technologies, know-how and patented processes.



Adesina said “Even with the decision of the TRIPS Waiver at the World Trade Organization (WTO), millions are dying -and will most likely continue to die &#8211; from lack of vaccines and effective protection. The African Pharmaceutical Technology Foundation provides a practical solution and will help to tilt the access to proprietary technologies, knowledge, know-how and processes in favor of Africa”.



The World Trade Organization and the World Health Organization, respectively, welcomed and lauded the African Development Bank’s decision to establish the African Pharmaceutical Technology Foundation.



The Director-General of the World Trade Organization, Dr. Ngozi Okonjo-Iweala, said “The African Pharmaceutical Technology Foundation is innovative thinking and action by the African Development Bank. It provides part of the infrastructure needed to assure an emergent pharmaceutical industry in Africa”.



The Director-General of the World Health Organization, Dr. Tedros Ghebreyesus, said “Establishing the African Pharmaceutical Technology Foundation, by the African Development Bank, is a game changer on accelerating the access of African pharmaceutical companies to IP-protected technologies and know-how in Africa”.



The African Pharmaceutical Technology Foundation will prioritize technologies, products and processes focused primarily on diseases that are widely prevalent in Africa, including current and future pandemics. It will also build human and professional skills, the research and development ecosystem, and support upgrading of manufacturing plant capacities and regulatory quality to meet World Health Organization standards.



While the African Pharmaceutical Technology Foundation is being established under the auspices of the African Development Bank, it will operate independently and raise funds from various stakeholders including governments, development finance institutions, philanthropic organizations among others.



The Foundation will boost the African Development Bank’s commitment to spend at least $3 billion over the next 10 years to support the pharmaceutical and vaccine manufacturing sector under its Vision 2030 Pharmaceutical Action Plan. The Foundation’s areas of work will also be an asset to all other current investments into pharmaceutical production in Africa.



Rwanda will host the African Pharmaceutical Technology Foundation. A common benefits entity, the Foundation will have its own governance and operational structures. It will promote and broker alliances between foreign and African pharmaceutical companies.



The African Pharmaceutical Technology Foundation will strengthen local pharmaceutical companies to engage in local production initiatives with systematic technology learning and technology upgrading at the plant level.



The Foundation will work with African governments, research and development centers of excellence to strengthen the regional pharmaceutical and vaccine innovation ecosystem for Africa and build skills of the kind needed for the pharmaceutical sector to flourish.



It will also promote closer coordination of the various ongoing medicines and vaccines’ manufacturing initiatives at the regional level to increase collaborative linkages, leverage synergies and partnerships in a pan-African context.



The African Pharmaceutical Technology Foundation will work closely with the African Union Commission, European Union Commission, the World Health Organization, the Medicines Patent Pool, the World Trade Organization, philanthropic organizations, bilateral and multilateral agencies and institutions, and will foster collaboration between the public and private sectors in developed countries and developing countries. 



Contact: Communication and External Relations Department, media@afdb.org

51856412619_7f34223fc0_o

African Development Bank’s Board approves landmark institution: Establishment of African Pharmaceutical Technology Foundation to transform Africa’s pharmaceutical industry

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/06/Desai_Sonal_hi_res_RGB-820x547.jpg" alt="" class="wp-image-417924" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/06/Desai_Sonal_hi_res_RGB-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/Desai_Sonal_hi_res_RGB-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/Desai_Sonal_hi_res_RGB-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/Desai_Sonal_hi_res_RGB-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/Desai_Sonal_hi_res_RGB-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/06/Desai_Sonal_hi_res_RGB-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>Sonal Desai, CIO at Franklin Templeton Fixed Income</figcaption></figure>



The Fed raised interest rates by 75 basis points in its June policy meeting, acknowledging continued upside surprises on inflation, inflation expectations and wage growth. It also de facto abandoned forward guidance. It was a reminder that economic data eventually rule the day, says Franklin Templeton Fixed Income CIO Sonal Desai. She argues this is a welcome but only partial move to a more realistic stance and discusses why further hawkish surprises likely lie ahead.



The US Federal Reserve (Fed) has capitulated to the data and in my view, has opened the door to a slightly more realistic assessment of the inflation and policy outlook.



Fed Chair Jerome Powell this week took the podium in a very weak position. The Fed had badly mismanaged communication ahead of this week’s Federal Open Market Committee (FOMC) meeting: it had telegraphed a 50 basis point (bp) hike but at the last minute signaled the larger 75 bp hike it then delivered—and which had therefore been largely priced in by markets. Upside surprises on headline Consumer Price Index (CPI) and inflation expectations had badly shaken the credibility of FOMC forecasts and of the moderate policy tightening that had been foreshadowed in last month’s meeting.



The FOMC outcome was a timely reminder that economic data eventually rule the day. In my view, the post-meeting press conference delivered a clear warning that investors should be prepared for further hawkish surprises. Powell acknowledged that the recent rise in inflation expectations had played a key role in swinging the decision to a larger hike. He acknowledged that the very tight labor market adds to inflation pressures via robust wage growth. He noted that the Fed is ultimately responsible for headline CPI inflation, and that headline inflation drives inflation expectations. The clear message is that the Fed is now—belatedly—aware that both inflation expectations and wages are adding to inflation pressures and sees inflation risks as skewed to the upside.



The FOMC’s median expectations of the policy rate have shifted up sharply, to 3.4% by the end of this year and 3.8% by the end of 2023. The end-2022 expected rate is now 150 basis points higher than at the March meeting.



Powell repeatedly emphasized the high level of economic uncertainty, in particular the important role that supply shocks outside of the Fed’s control can continue to exert on prices, and stressed that the Fed’s policy response will be data-dependent.



In a reversal of Mark Antony’s famous line “I come to bury Caesar, not to praise him,” Powell praised forward guidance while de facto burying it. The Fed wants to be transparent to investors in order not to add further volatility to markets, but in this case being transparent means that future policy moves will depend on data on which the Fed has very little visibility. This is a quite a momentous change. For over 10 years, major central banks have held markets by the hand with stone-clad forward guidance while claiming policy would be data-dependent. The inherent inconsistency and unsustainability of this combination has now come to the fore. Markets will need to adjust to this new reality.



While it will respond to data, the Fed recognizes it is still quite far from a neutral policy stance, and will need several months of declining inflation to be reassured that price pressures are coming back under control.



It’s a much more sober and realistic Fed than we have seen in previous meetings. Some of the criticisms and misgivings I expressed in previous writings still apply: inflation could easily end the year at 6%-7%, so that a 3.4% fed funds rate would still be deeply negative in real terms. At face value, the Fed’s forecasts still assume that inflation will come down on its own even as monetary policy remains expansionary. But this press conference has now signaled that the Fed could tighten more if inflation remains stubbornly high. I still find the Fed’s neutral rate estimate of the “mid-2s” to be way too low, but Powell to me this week sounded somewhat less confident of how reliable that estimate is.



Powell felt the need to reassure markets that he does not expect a 75 bp hike to become the norm. That sounded out of step with much of the rest of his comments. Consensus seems to be moving toward expectations of another 75 bps in July followed by hikes of 50 bps, 25 bps and 25 bps in the remaining policy meetings of this year. But I would caution that if inflation, wage growth and inflation expectations remain robust, the Fed’s “dot plot” could shift higher yet again and the actual policy tightening be more severe. I, in fact, see a significant chance that this could indeed be the case.



Overall, I think the Fed has taken an important step in the right direction. Acknowledging that policy will be driven by a very uncertain data flow gives a clear warning that policy tightening might get significantly more pronounced.  I expect that data over the coming months will indeed point to the need for a greater degree of tightening, and market prices will need to adjust. But the Fed’s new stance should buy it greater credibility and help limit market volatility along a very challenging disinflation path.

Contributor

More African Central Banks Are Exploring Digital Currencies

Positive outlook for South Africa’s grains and oilseeds in 2021/22 season

Contributing To Industrial Development In The Eastern Corridor Of Gauteng: The OR Tambo International Airport SEZ

Today, the Commonwealth Games starts – let the business begin

Opinion Piece: Debunking myths about labour broking in South Africa’s healthcare sector

UNESCO appoints South Africa’s Marwala UN University Rector in Japan

A World in Crisis Needs Both Trade and Aid

Contemplating The Sustainability Of The Heavy Haulage Sector

How Africa could become a global hydrogen powerhouse

Imperial obtains approval for acquisition of 100% stake in J&J Group

‘Last mile’ vaccination essential to ending the pandemic

Will rising fuel prices put the brakes on global trade?

Sound governance and good investments are what will move Africa to a place of greatness

BUA’s ADBUL SAMAD RABIU REAPPOINTED AS PRESIDENT, FRANCE NIGERIA BUSINESS COUNCIL BY FRENCH PRESIDENT, EMMANUEL MACRON

Patient capital for African agriculture gives back far more than it receives

African Development Bank’s Board approves landmark institution: Establishment of African Pharmaceutical Technology Foundation to transform Africa’s pharmaceutical industry

On my mind: The Fed capitulates

News Tips

Advertise With Us

Contributor

More African Central Banks Are Exploring Digital Currencies

Positive outlook for South Africa’s grains and oilseeds in 2021/22 season

Contributing To Industrial Development In The Eastern Corridor Of Gauteng: The OR Tambo International Airport SEZ

Today, the Commonwealth Games starts – let the business begin

Opinion Piece: Debunking myths about labour broking in South Africa’s healthcare sector

UNESCO appoints South Africa’s Marwala UN University Rector in Japan

A World in Crisis Needs Both Trade and Aid

Contemplating The Sustainability Of The Heavy Haulage Sector

How Africa could become a global hydrogen powerhouse

Imperial obtains approval for acquisition of 100% stake in J&J Group

‘Last mile’ vaccination essential to ending the pandemic

Will rising fuel prices put the brakes on global trade?

Sound governance and good investments are what will move Africa to a place of greatness

BUA’s ADBUL SAMAD RABIU REAPPOINTED AS PRESIDENT, FRANCE NIGERIA BUSINESS COUNCIL BY FRENCH PRESIDENT, EMMANUEL MACRON

Patient capital for African agriculture gives back far more than it receives

African Development Bank’s Board approves landmark institution: Establishment of African Pharmaceutical Technology Foundation to transform Africa’s pharmaceutical industry

On my mind: The Fed capitulates

News Tips

Advertise With Us

Newsletters