Namibia is bolstering its future as a growing trade gateway in Africa.
Namibia’s Port of Walvis Bay has been expanding over the last few years and is set to get bigger with plans by the southern African country to develop its energy sector.
The country, famous for its Skeleton Coast strewn with shipwrecks, built out its main port with a $300-million container terminal project that more than doubled capacity.
That was completed in 2020 while Namibia was still struggling with the effects of the global pandemic.
Other areas of the hub handle flows of salt, copper, coal, mining equipment and fuel.
Walvis Bay serves as an alternative to the ports of Dar es Salaam in Tanzania and Durban in South Africa for delivering the supplies and commodities from landlocked areas in the southern region.
Namibia has added about 3,687 kilometers of paved roads in the last 3 decades, while its rail system has added less than 200 miles of track.
The port will see another development following the award of a contract to build a liquid petroleum gas import, storage and distribution terminal, Namibian Ports Authority CEO, Andrew Kanime, said last month. The hub will need to be cost competitive to drive traffic, he said.
On the continent’s Atlantic Coast, Walvis Bay is the only deepwater port of its kind from Angola to Cape Town.
Recent discoveries offshore Namibia are expected to be followed by more activity.
Walvis Bay is also part of a plan for Namibia to develop and export green hydrogen, which has also been identified by fuel and chemical maker Sasol Ltd. as an area that’s optimal for renewables and producing the fuel.
Faster Trade Deals
Russia’s war with Ukraine is giving a group of European Union countries fresh incentives to speed up work on free-trade agreements.”
At least 9 EU nations (incl. Germany and Spain) are planning to send a letter to the EU seeking to speed up delayed trade talks, according to Bloomberg.
The signatories want faster negotiations with New Zealand, Australia, India and Indonesia, while speeding up the implementation of accords agreed with Chile, Mexico and the Mercosur bloc of countries (Argentina, Brazil, Uruguay and Paraguay).
The letter also says that the process to negotiate, sign and implement trade deals is too long, and points out that the massive Regional Comprehensive Economic Partnership (RCEP) was signed in late 2020 and will enter into force this year for most members.
In Brussels, a slow-moving trade bureaucracy has often been displaced and made irrelevant by quicker political developments.
For example, in 2016 a transatlantic trade deal negotiated during the Obama administration tanked after Donald Trump’s election reversed the trajectory of U.S.-EU trade liberalisation efforts.
Then in late 2020 the EU announced the conclusion of its 7-year investment negotiations with China, only to see it promptly bellyflop after Brussels clashed with Beijing over its alleged human-rights abuses in Xinjiang.
Trade agreements take time to complete and sometimes span the length of entire careers, which makes it understandably frustrating to see years of hard work go down the drain.
Russia’s invasion is hastening a fundamental rewiring of the global economy that’s reinforcing existing trade ties among geopolitical allies and incentivising new ones.
It’ll play out in the months ahead through business decisions about supply chains and government deal-making.
In a post-invasion world, it has become increasingly untenable to isolate trade from universal values such as respect for international law and human rights.
Shifts are occurring from dependence to diversification, from efficiency to security, and from globalisation to regionalisation.
In Russia, businesses and the government may already be substituting imports from Europe with imports from Asia, according to the Kiel Trade Indicator.
The Russian port of Novorossiysk in the Black Sea has recently seen a significant increase in the number of container ships arriving, whereas the port of St. Petersburg, which is involved in European trade, continues to record declines.
This could be a first indication of trade diversion and makes it all the more important to create economic incentives for countries such as India to move closer to Europe rather than Russia.
China’s COVID-19 Lockdowns
The economic fallout from China’s COVID-19 lockdowns is widening both at home and abroad.
Industrial output in world’s second-largest economy and consumer spending slid to the worst levels since the pandemic began.
China’s supply-chain snarls intensified significantly in April 2022 and may get worse before they get better. Satellite data show port activity has dropped to the low levels seen during the 2020 lockdown. China’s supply crunch is intensifying in some industries with extensive delivery networks, such as auto and electronics manufacturing
The impact goes beyond the damage to local production and multinationals’ profits. Hospitals from the US to Australia are wrestling with a shortage of chemicals used in X-rays, carmakers are struggling to get back to full strength, and building projects in the US are still being held up by delayed materials.
You can hear frustration from people, whose US firm supplies luxury bathroom fixtures and kitchen countertops to skyscraper projects. They’re still seeing months of delays for the shipment of faucets from Shanghai.
The eastern Chinese region around Shanghai is a key centre for tech production, and component shortages are hitting many companies. Microsoft and Texas Instruments said the lockdowns will crimp sales and make it harder to produce products like the Xbox.
Health-care facilities have seen shortages of an iodinated contrast medium known as Omnipaque that’s produced at a GE Healthcare factory in Shanghai.
Bang & Olufsen, the maker of luxury stereos and TV sets, recently cut its financial outlook due to the developments in China. The Danish company said the lockdowns are spilling into markets outside of China as restricted access to warehouses causes a string of logistical problems.
In Vietnam, clothing and shoe factories are struggling to meet orders as supplies of Chinese material used to make everything from sneakers to pants are drying up.
There was some room for optimism that the disruptions may stabilise. As of Monday, Shanghai was close to meeting the goal of 3 days of zero community transmission of Covid-19 that officials have said is required to start easing the harshest elements of the city’s punishing six-week lockdown.
Carmakers from Volkswagen to Toyota have started to resume production at factories in Shanghai and the industrial province of Jilin, though logistics issues continue. Tesla reportedly loaded more than 4,000 cars for shipment from Shanghai on Sunday after restarting work at its plant.
Federal Reserve in the US issues Interest Rate Hike with MORE to follow
In face of the highest inflation in 40 years, the US Federal Reserve announced another widely expected rate hike two weeks ago.
The Federal Open Market Committee (FOMC) unanimously decided to raise the target range for the federal funds rate to 1%, with further rate hikes “anticipated”.
The 50 basis point hike follows a more cautious 25 basis point increase in March and marks the largest upward step since May 2000.
“Inflation is much too high and we understand the hardship it is causing, and we’re moving expeditiously to bring it back down,” Fed Chairman Jerome Powell said in a press conference following the FOMC meeting.
Even if inflation was starting to come down, Powell later hinted, the Fed wouldn’t stop the rate hikes, but likely go back to 25 basis point increases.
As it stands, however, he expects “50 basis point increases on the table the next two meetings.”
That would be in line with projections made by FOMC members at their last meeting in March, which hinted at further rate hikes in 2022 and beyond.
Back then the median projection for the target range of the federal funds rate at the end of 2022 was 1.75% – 2.00%, with further increases towards 3% anticipated for 2023.
This article first appeared here.