Jambo Africa Online’s Senior Editorial Correspondent, FRANCOIS FOUCHE, gives us a collage of news- titbits sourced from other platforms that impact on Africa’s economies.

The next trade war

Political support for free trade has waned markedly over the last two years, as US-China tensions have escalated, supply chains have been disrupted by COVID-19, and the backlash against the distributional effects of free trade, encapsulated by Donald Trump’s stint as US president, has been absorbed by the Western political mainstream. 

Alongside an increased impetus for action on climate change, this has created an environment where something that was largely unthinkable ten years ago is now about to enter into force: carbon tariffs being imposed on international trade.

The EU is in the vanguard of this, with its Carbon Border Adjustment Mechanism (CBAM) likely to be legislated this year.

The CBAM has sound theoretical underpinnings. Climate change is a global problem but outcomes are largely driven by national action. 

A key barrier to this, however, is if tougher trade policies simply relocate polluting activities, rather than reduce them.

A CBAM places an incentive on the producer country to take its own action: if your exports will be taxed in the destination country based on embodied carbon, you might as well tax it yourself and keep the revenue. 

In practice, however, it will be difficult to account for emissions along supply chains while also ensuring that the incentives of a CBAM actually reduce emissions (rather than, for example, just shifting the consumption location of more emissions-intensive production). 

Watching how the EU implements this, and how other jurisdictions react, could have big implications for future climate action.

Source: Economic Intelligence Unit


The World at War in 2022

8 May 2021 marked 76 years since the end of the Second World War in Europe – VE Day. 

While the conflict which claimed millions of lives on European soil is firmly committed to the annals of history, conflict in the East of the continent is still a harsh reality in the present day. 

Even before the recently increased risk of a Russian invasion, the Ukrainian crisis, ravaging the Donbass region of the country, amassed a death toll in excess of 13,000 people.

As data collection by the Armed Conflict Location and Event Data Project (ACLED) shows, a substantial portion of the globe is still engulfed in some form of conflict. 

This chart illustrates countries in which there have been reports of armed clashes involving state forces and/or rebel groups in 2022. 

Even as early as 4 February 2022, and using this simplified definition, the presence of war across the world is extensive.

Unlike the situations in Donbass and Syria, for example, not all conflicts fit the picture we may have in our minds when thinking of war. 

In Mexico in 2021 for example, ACLED recorded 6 armed clashes involving state forces. 

Each one though was a battle between different law enforcement entities – providing a snapshot of the ongoing fight against police corruption and the deep-seated influence of organized crime. So far for 2022, no such incidents have been recorded in the country.

Source: Statistta