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Building capacity to help Africa trade better

tralac’s Daily News Selection

News

tralac’s Daily News Selection

tralac’s Daily News Selection

Two profiled trade reports from the USAID Economic Analysis and Data Services:

Trade in the Southern African Customs Union (pdf)

This analytical brief surveys the role trade has played in SACU since 2000, highlighting, in part, each member economy’s performance following the global recession brought about by the 2008 financial crisis. The analysis investigates trade patterns, primarily from 2000 through 2015, in an attempt to understand the evolution of SACU’s relationships with other regional partners. Additionally, the analysis examines the United States’ efforts in promoting trade capacity building in the region as well as the trade relationship between the region and the US. More specifically, the analysis provides an overview of US imports from SACU for goods eligible under the African Growth and Opportunity Act.

Trade in the East African Community (pdf)

Trade assumes a major role in the economies of the EAC member countries. In 2014, trade as a percent of GDP for EAC members ranged from 41 to 50 percent, which is below the average of developing countries in Sub-Saharan Africa at 60%. Yet when trade is examined more closely, exports as a percent of GDP are less significant ranging from 3 to 11 percent across the EAC. For example, Tanzania’s trade as a percent of GDP is 49%, while its exports as a percent of GDP are 8%. Similar to many developing countries, EAC countries import more than they export. Exports from EAC to the rest of the world have more than quadrupled since 2000% and grown by 126% since 2006. According to the IMF's Direction of Trade Statistics, the US imports about $698m from the EAC, whereas the European Union imports $2.72bn. Additionally, about $2.3bn is traded within the EAC.

African tripartite constituents endorse the 'Praia Consensus' (ILO)

Government, employers’ and workers’ representatives of 15 African countries have called for the speedy implementation of an ILO strategy entitled “Decent Work in Middle-Income Countries” of Africa. Following a two-day workshop convened by the ILO Regional Office for Africa in Praia, Cabo Verde, delegates to the meeting adopted a communiqué (pdf), asserting that they “further endorse the common implementation principles that must guide the Office’s interventions in Middle-Income Countries”. Almost half of the 54 African nations have been classified as middle-income countries by the World Bank. Yet, the term MIC masks an enormous variety and heterogeneity of country-specific contexts and situations. ILO's contribution to the ongoing debate is the design and promotion of a refined intervention strategy that takes into account the individual context of each Africa middle-income country.

A selection of Brexit commentaries:

Four lessons from Brexit and EU fallout for the East African Community (The East African)

Now that the immediate turmoil of Britain’s exit vote from the European Union has somewhat subsided, it is a good time to ask what lessons that vote holds for the East African Community. Four stand out. One, a community must be based on values shared by all. Two, a community won’t endure if it is not built on the consent of the people. Three, integration is fragile and it takes but the opportunism of a few leaders in a member state to wreck it. Four, the youth must be given voice in integration; if not, the future — complete with its uncertainties and challenges — will be shaped by those with the least stake in it, the old. The first, second and fourth are lessons for the Community as a whole and the third, though a lesson for all, is particularly important for Kenya, which has ruined the EAC once before. Let’s flesh out each one of these lessons. [The analyst, Wachira Maina, is a constitutional lawyer] [Collins Odote: Brexit and its implications for EAC integration]

Egypt: Brexiting the economy (Ahram)

“High volatility will be the name of the game in the medium term as the volatility brought to the global markets by the British vote to leave the EU brings different repercussions in the short, medium and longer term,” said Radwa Al-Sweefy, head of research at local investment bank Pharos. Both the government and the Central Bank of Egypt are conducting studies to assess the effect on Egypt’s balance of payments, forex market, tax system and customs of the British EU exit or Brexit. [South Africa: Brexit ‘will not affect SA pacts with rest of Europe’ (Business Day), The global impact of Brexit (Chicago Council on Global Affairs)]

COMESA Research Forum to underpin regional integration (COMESA)

The Annual COMESA Research Forum took place in Nairobi, Kenya from 27 June to 1 July. The forum discussed the modalities for the establishment of the COMESA Virtual University. A committee of 22 leading Universities across the 19 COMESA Member States that was formed to discuss modalities of implementing the COMESA Masters Program in regional integration came up with several recommendations that were endorsed by the Forum. Eight research papers were presented at the forum covering: the role of trade facilitating infrastructure in promoting manufacturing exports in the COMESA region; the effect of trade facilitation reforms on export performance of COMESA member states and the nexus between international financial integration and trade in financial services in the COMESA region.

Decisions of the sectoral council of ministers responsible for EAC Affairs and Planning (EAC)

Some of the decisions/directives and recommendations of the 24th Meeting of the Sectoral Council of Ministers Responsible for EAC Affairs and Planning: The Secretariat to i) develop a comprehensive strategic framework with clear timelines on the implementation of the Common Market Protocol Scorecard findings and the Single Customs Territory and report to the 25th Meeting of the Sectoral Council; ii) convene a meeting of Heads of Immigration on harmonization of classification/common procedures and fees for issuance of work permit for citizens of EAC Partner States by September 2016; iii) to urgently convene an Extra-Ordinary Meeting of the Sectoral Council on Trade, Industry, Finance and Investment through video conference, preferably by 11 July, to deliberate on the finalization and preparation for signing the EAC-EU-EPA being proposed to take place on 18th July 2016, on the margins of the United Nations Conference on Trade and Development (UNCTAD) XIV Conference in Nairobi.

East Africa: regional geothermal development (New Times)

The upcoming East African Power Industry Convention in Nairobi will focus on how the region can harness the opportunities presented by geothermal power to enhance access to energy, especially among rural communities. “There is no one-size-fits-all approach to developing geothermal. It’s an amazing source of base load, renewable energy, but we have to take a realistic approach to how it’s developed,” said Amanda Lonsdale, the institutional and commercial development advisor for the East Africa Geothermal Energy Facility. Established by the British Department for International Development, EAGER facilitates the development of geothermal energy for power generation and other uses in Ethiopia, Kenya, Rwanda, Uganda and Tanzania.

South Africa: Risk-averse companies missing out in Francophone Africa (Business Day)

Rwanda and Mauritius are also popular with South Africans, although both are also English-speaking nations. But that leaves just under 20 other relatively unexplored markets. Many of the more recent investors are from non-French jurisdictions — China, Thailand, India, South Korea, Germany, United Arab Emirates and others. English-speaking African countries, including Nigeria, Ghana and Uganda are also active in French-speaking markets. The issues were discussed at a forum in Johannesburg last week. Hosted by the French embassy, it aimed to address some of the myths about doing business in the region, improve the understanding in SA of the Francophone region and encourage more people to learn French as a business tool. [The author: Dianna Games] [SA losing out in Francophone Africa (City Press)]

Kenya: Rotich’s taxes on locally made cars put 10,000 jobs at risk (Business Daily)

Nearly 10,000 vehicle and motorcycle assembly jobs are at risk of disappearing in the wake of the recently introduced excise taxes on locally assembled vehicles, industry officials said. The assemblers said they had already retrenched 415 workers in the first five months of the year in response to a slowdown in business associated with the levies. The Kenya Association of Manufacturers (KAM) said last year’s introduction of a flat excise tax of Sh150,000 and its recent enhancement to 20 per cent of a vehicle’s value have effectively wiped out the tariff and tax incentives that led to the establishment of assembly plants in the 1970s.

Uganda, Tanzania discuss oil pipeline (Daily Monitor)

Ministry of Energy officials from Uganda and Tanzania will pitch camp in Hoima District for two days starting tomorrow to review progress of implementation plan for development of the proposed crude oil export pipeline. The Ugandan team is led by Energy minister Irene Muloni while the Tanzanian team is led by Muloni’s counterpart Prof Sospeter Muhongo. The talks will also have representatives from the three oil companies—Tullow, Total and Cnooc.

Dar port doldrums beckon as logistics firms go elsewhere (IPPMedia)

The port of Dar es Salaam risks handling the lowest number of vessels in its history this year after various cargo management and logistics firms opted to bypass it following Value Added Tax imposition on transit goods. A copy of a document from a multinational cargo and logistic firm said charging the VAT rate of $150 plus per 20 ft would reduce their profit levels. “Let the powers that be know that at the ports of Beira, Walvis Bay, Durban, even in Mombasa right here in East Africa officials do not charge any VAT and if we start talking about VAT of $150 plus per 20 ft, other ports become attractive options by far,” the write up said in part. A meeting planned yesterday in Dar es Salaam to discuss the imposed Value Added tax on transit goods between the Tanzania Revenue Authority and the Tanzania Freight Forwarders Association was called off after Commissioner General Alphayo Kidata sent his juniors to deliberate the meeting.

Why Indian leaders, including Modi, are lining up to visit African countries (The Scroll)

At the same time, India’s development diplomacy for the continent has been through a strategic shift. Exim Bank, for example, is now likely to focus more on service exports, rather than compete with China for infrastructure projects in Africa. The bank is looking to disburse close to Rs 10,000 crore in Africa over the next three years as both commercial and concessional credit. Service exports aim to build on India’s traditional strengths in Africa and will include healthcare, education, and information technology services. Exim inaugurated an office in Cote d’Ivoire during Mukherjee’s visit. The office is expected to widen the bank’s footprint in West Africa. Exim Bank is also looking to sharpen its focus on another area of India’s traditional exports to Africa: project exports.

Netanyahu heads for Africa to find deals (Bloomberg)

Netanyahu left Monday on a five-day tour that also includes Kenya, Ethiopia and Rwanda in the first trip by an Israeli prime minister to sub-Saharan Africa in 29 years. With a delegation of 70 business executives, the African excursion is part of the Israeli leader’s effort to cultivate growth markets while economies languish in the country’s biggest trade partners, the U.S. and European Union. “This has very important implications for diversifying our international alliances and international relations and expanding our powers to Asia, Russia, Latin America, and of course now, the African continent,” Netanyahu told cabinet members on Sunday. Before departing Monday, he called the trip “historic” and added, “Israel is coming back to Africa, big time.”

Venezuela mess prods China to reassess Africa lending spree (Bloomberg)

Facing such pressures, China has begun to demand greater financial transparency and responsibility from recipient nations, said Lin Boqiang, the director of Xiamen University’s energy economics research centre and an adviser to the National Energy Administration of China. The message is that China’s shouldn’t squander the world’s largest stockpile of foreign reserves. "China’s more experienced now," Lin said. "It now considers a risk index when making funding decisions. It’s more careful about the terms of loans, asset evaluation of investment projects, and also political security of the recipient countries, because much uncertainty stems from unstable politics."

Bangladesh: Services Policy Review (UNCTAD)

This publication presents the result of a Services Policy Review undertaken by the Government of Bangladesh and UNCTAD. Volume I contains the UNCTAD desk study – an overview of the economy and its services sectors, particularly those considered to be priority. Volume II contains strategies for advancing development of key priority services sectors in Bangladesh.

Lake Victoria Fisheries Organization project in crisis (The Citizen)

East Africa Trade and Investment Hub: June newsletter

Russian business delegation to visit Zimbabwe (The Herald)

Tanzania, Germany trade to reach new heights (Daily News)

Zimbabwe: The (un)necessary case of the import ban, protectionism (The Herald), Beitbridge: Shaken govt claims border riots are political (The Standard)

AUC and FAO determined to promote agricultural mechanization (AU)

Local content policies and programmes: an enabler for development and growth in Africa (Bechtel)

A new framework for cross-border data flows (CFR)

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