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tralac’s Daily News Selection
The selection: Thursday, 18 August 2016
Marek Hanusch: ‘What would have happened if South Africa had lost its investment grade credit rating?’ (World Bank)
To this end, a team of economists from the World Bank and South African Reserve Bank looked at the history of past downgrades in 20 countries and estimated the impact on short-term borrowing costs. It is a rather broad-brush attempt at understanding the effect of a downgrade on borrowing costs. It employs annual data, only looks at short-term Treasury Bills (where risk premia are more pronounced among longer-term debt instruments), and there are still relatively few cases to study (most of them derive from the post-financial crisis period). Given these important caveats, the findings suggest that a downgrade to sub-investment (or sub-IG) grade by one major rating agency increased Treasury bill yields by 138 basis points on average. When a second rater follow suit with such a downgrade, Treasury bill rates increased by another 56 basis points (although this effect is not statistically significant). [Download: The ghost of a rating downgrade: what happens to borrowing costs when a government loses its investment grade credit rating?]
Making the most of demographic change in Southern Africa (World Bank)
This paper examines how demographic dividends may play out in the economically linked but otherwise diverse SACU economies, when presented with similar economic policy outcomes. SACU economies - Botswana, Lesotho, Namibia, South Africa, and Swaziland – have relatively diverse demographic and economic starting points. This diversity is present in terms of their demographic profile, as evidenced by South Africa being further along in the demographic transition process than the other countries. The diversity is also present in terms of their development indicators, as illustrated by the relatively lower educational attainment rates in Lesotho and Swaziland, or the extremely high unemployment rates in South Africa. Three broad questions are addressed: What is the potential contribution of demographic change to growth in the different SACU economies? What is the potential effect of demographic change on poverty reduction for SACU economies? What policy intervention might have the largest impact on the size of a SACU economy’s demographic dividend?
Nigeria, South Africa, Egypt urged to leverage intra-Africa trade, diversification (BusinessDay)
Key members of the Organised Private Sector on Tuesday emphasised urgent need for Nigeria, South Africa and Egypt to synergize by leveraging on intra-African trade in the bid to harness vast socio-economic opportunities in the region. This, according to the stakeholders drawn from National Association of Nigerian Traders (NANTS), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Nigeria Labour Congress (NLC), National Automobile Technicians Association (NATA), who converged at the stakeholders’ workshop on Economic Partnership Arrangement held in Abuja, can be achieved through the establishment of bi-national Commission among the three leading African economies.
Ghana: Trade ministry looks at promoting cashew value chain in Africa (News Ghana)
Mr Fredrick Yaw Alipui, Policy Advisor at the Ministry, said this during the opening ceremony of the second session of the third edition of the Master Training Programmeon cashew value chain promotion on Monday in Sunyani. The five-day international event, funded by Germany’s Federal Ministry of Economic Cooperation and Development, was organised by the Competitive Cashew initiative (ComCashew) together with African Cashew Alliance, the Ministry of Food and Agriculture, and the Cocoa Research Institute Ghana. It provided a platform for about 70 cashew experts from Ghana, Benin, Burkina Faso, Cote d’Ivoire, Mozambique, Gambia, Chad, Sierra Leone, Senegal, Mali, Togo and Nigeria to share knowledge, discuss best practices and lessons learnt, as well as to build national and regional networks for future collaboration.
Chad's first steps in the regional public securities market (IMF)
Selected Issues Report: Except for two issuances through bank syndication in 2011 and 2013, Chad never resorted to the regional public securities market before the last quarter of 2014, when the country issued its first ever Treasury bills. Since then, Chad expanded its issuances and was the largest issuer among CEMAC members in 2015. The first steps taken by Chad in the regional securities market have been encouraging, obtaining financing regularly at relatively low interest rates and without exchange rate risk. On the basis of a more comprehensive analysis of the CEMAC securities market, this chapter stresses some challenges and makes some recommendations to strengthen Chad’s participation in the regional public securities market. [Chad: 2016 Article IV Consultation documentation]
East Africa: Integrate regional exchanges to deepen cross-border trade – expert (New Times)
East African exchanges should fast-track integration initiatives like the capital markets infrastructure project, and create a pool of skilled personnel. This is essential to position the regional stock market as a platform of choice for raising long-term funding for governments and business community, Celestin Rwabukumba, the East African Securities Exchange Association chairman, has said. Speaking at the 27th consultative meeting in Dar es Salaam recently, Rwabukumba said the CMI project that is nearing completion presents new possibilities for investors seeking cross-border trade opportunities. With capital markets across the world becoming increasingly automated and integrated, regional stock exchanges require a modern system that meets different market needs. This will also make it possible for EAC capital markets to attract global capital flows and participate in international capital markets.
South Africa: Long-awaited ‘Border Bill’ finds resistance in Parliament (Daily Maverick)
On the face of it the Border Management Authority Bill aims to address long-standing concerns over South Africa’s porous more than 8,000kms of land and sea borders, 72 ports of entry and countless unpatrolled airstrips and cross-country crossings. The aim is to establish a single integrated authority with armed border guards “to contribute to the facilitation of legitimate trade and secure travel” against, among other things, cross-border crime syndicates, people trafficking and the health risks of “harmful and infectious diseases, pests and substances”. Exactly how this should be done is unclear as the Bill creates a framework without too much detail. An explanatory memorandum states that customs, immigration and law enforcement functions related to agriculture and environmental affairs would be transferred to this authority by ministerial proclamation. Co-operation with other organs of state and border communities remains.
Mauritius: achieves 1st in Africa ranking in UN e-Government Survey 2016 (GoM)
The United Nations e-Government Survey 2016 ranks Mauritius first in Africa (followed by Tunisia) and 58th worldwide, with an e-Government Development Index of 0.6231. In 2014 Mauritius was ranked 76th and Tunisia 75th. Issued at the moment when countries are launching the implementation of the 2030 Agenda for Sustainable Development, the survey offers a snapshot of trends in the development of e-government in countries across the globe.
Kenya: Capacity assessment of the domestic construction industry (pdf, AfDB)
The consultant is specifically expected to: (i) carry out a situational analysis on existing capacity of the industry in Kenya and particularly, relate the impact on economic growth of the current state of practice; analyze status of development of construction labour, materials and equipment to identify constraints; study the legal environment, industry structure for infrastructure development, national professional organizations; assess level of skills development critical to implementation of large scale infrastructure projects; and (ii) present findings, draw conclusions, and subsequently make policy recommendations to remedy the state of practice, and (iii) develop a national strategy for sustainable improvement of the capacity of domestic construction industry in Kenya. The assignment will be carried out over a period of 12 months.
IGAD: report on Al-Shabaab as a transnational security threat
Al Shabaab has aspired to become a truly regional organization, with the membership and horizons that transcend national borders. It became active in no less than six countries (Djibouti, Ethiopia, Kenya, Somalia, Uganda and Tanzania) of the region, striking terrorist attacks on five of them. It is well known that Al-Shabaab’s operation reach has expanded beyond Somalia to the wider region. The report has provided a series of recommendations to be taken by IGAD Member States and other stakeholders in order to mitigate the threat posed by Al-Shabaab. Subsequent to the submission of the report, on May 2016, IGAD commissioned a study on “Mapping Jihadist Organizations and Influences in the IGAD Region”, which is going to be reported to the UNSC Committee on Eritrea and Somalia. [Download]
ECOWAS Inter-Governmental Action Group against money laundering and terrorism financing in West Africa: workshop update
ICGLR: Third Party Audits for mineral exporting companies in Rwanda, DRC
The ICGLR Secretariat has successfully completed its pilot phase of the Third Party Audits of Mining companies and published 8 reports in a move to provide fact based credibility for certified conflict free exports of tin, tantalum or tungsten (3T) to the international market from the ICGLR Member States and compliance with all standards and requirements of the international mineral industry. The publication of Reports of the Eight Third Party Audits conducted in the DRC and Rwanda is a great achievement as it allows the audited mineral exporters to be issued with certificates that allow them to credibly export conflict free minerals. These companies are:
ECOWAS, civil society agencies work towards consolidating conflict prevention efforts
The workshop (16-17 August) had the objective of providing CSOs with a monitoring tool which can be used to track the progress of national conflict prevention programmes, design strategies that will enhance effective implementation of conflict prevention interventions at local and national levels, and discuss regional and national peace and security issues which are meant to be prioritized. More than 40 CSOs intervening in the field of conflict prevention and peacebuilding from the 15 ECOWAS Member States attended the Workshop.
Rwanda-Shanghai Investment Forum: update (New Times)
Chinese firms have been encouraged to take advantage of the security and immense opportunities in Rwanda to expand their businesses in the region and on the continent. Rwanda’s ambassador to China, Lt.Gen. Charles Kayonga was speaking during Rwanda-Shanghai Investment Forum that brought together Rwandan business community in China and Chinese investors from the city of Shanghai over the weekend. The event was organised by the Rwanda embassy in China and was facilitated by Touchroad Media Holdings and the Shanghai Science and Technology Development and Exchange Centre. RwandAir, the national carrier, is set to start flights to Guangzhou later this year and would definitely give Rwanda a lion’s share of the 100 million Chinese tourists going abroad annually. Speaking at the event, Liu Beimin, the deputy director for foreign economic co-operation at Shanghai Municipal Commission of Commerce, lauded efforts by Rwanda to further improve the business environment, as well as support international investors.
Southern African Development Community forum opens in Hanoi (VietNamNet Bridge)
African Parliamentarians’ Network on Development Evaluation (APNODE) grows in size and ambition (AfDB)
Kevin Amirehsani: 'The East African Community needs to focus on concrete objectives' (Global Risk Insights)
South Africa: EU economic trade agreements excite committee (Parliament)
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