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tralac’s Daily News Selection
The selection: Tuesday, 23 August 2016
SADC Secretariat records E160m operating surplus (Swazi Observer)
The Southern African Development Community Secretariat has recorded a healthy operating surplus of $11.8m (approximately E160m), for the 2015/2016 financial year. The good news was revealed by the SADC Director for Budget and Finance Clement Kanyama yesterday. Kanyama said the recorded surplus showed an increase from 2014/2015 financial year, as the SADC Secretariat recorded E139m ($10.3m). Kanyama said 2015/2016 revenue was $78.6m made up of $51.6m from Member States and $27m from grants, which were recognised as contributions based on the SADC Secretariat compliance with condition, as specified in each financing agreement. “The total expenditure was $66.8m and total assets under the control of SADC Secretariat of $101.1m,” he said.
Southern African Business Forum seeks projects to spur socio-economic growth (Swazi Observer)
SADC Lawyers’ Conference: full text of the speech by Jeff Radebe (pdf), Minister in The Presidency for Planning, Monitoring and Evaluation
Has SA’s foreign policy smoothed the way for companies in Africa?: commentary by George Rautenbach (Business Day)
AU’s Kigali summit decision on the Continental Free Trade Area (AU)
The Heads of State and Government decided to establish a High Level Panel of five eminent persons (one from each region) to champion the fast tracking of the Continental Free Trade Area (CFTA), ahead of its proposed launch in 2017. They also called on Member States to speak with one voice on all issues related to trade negotiations with third parties.
Rwanda has formally rejoined ECCAS: two updates
Rwanda back to Central Africa bloc, 10 years on (The EastAfrican): Rwanda has formally rejoined the Economic Community of Central African States (ECCAS), after Foreign Affairs Minister Louise Mushikiwabo presented the instruments of ratification to the economic bloc on August 17. The return repositions the country to benefit economically, politically and diplomatically in the Central African region. Rwanda, which had been a member of ECCAS since 1981, was readmitted into the bloc last year, almost 10 years after leaving. When it left, it cited the need to focus on its membership in the East African Community and the Common Market for Eastern and Southern Africa.
Rwanda eyes big opportunities from central African bloc (Global Times): Francois Kanimba, Rwanda minister of trade and industry said that Rwanda will reap big from various regional economic groupings. "Our country joining ECCAS is a big opportunity for Rwandan traders to sell their goods and services on a bigger platform across the continent. Local producers will benefit from increased market size which is an important factor facilitating innovation and competition," he added. Kanimba stated that Rwanda has gained a lot from being a member of multiple regional blocs since each bloc has comparative advantages to the other, ultimately strengthening the country's economic institutions.
South Africa: trade and industrial policy outcomes from Cabinet Lekgotla (GCIS)
Cabinet took strategic decisions to secure higher impact implementation of the Industrial Policy Action Plan including: (i) That the Department of Public Enterprises and National Treasury will consolidate procurement for locomotives into a single institution (Transnet) to ensure efficiency and compliance with the localisation requirements; (ii) Finalising the evaluation of financial incentives for business to strengthen conditionalities and achieve greater value for money to enhance more inclusive growth; (iii) A trade statistics architecture developed by the South African Reserve Bank, National Treasury, SARS and Stats SA will identify and hold illicit financial flows; (iv) Introducing legislative amendments to implement the 30% set asides (a new Procurement Bill developed by National Treasury) by March 2017 and unlock the potential of SMME’s, cooperatives and the township and rural enterprises. (v) Implementing the new Preferential Procurement Regulations by end August 2016 as an interim measure to this radical intervention.
Government will continue to focus on labour-intensive sectors, including the need for various mechanisms to support greater impact on jobs, such as the use of our incentive programmes, amongst others: clothing, textiles, leather and footwear value-chain; agro-processing and business process services. The successful Oceans Economy intervention will scale up projects to expand coastal and marine tourism in order to realise significant job creation.
South Africa: Minister Ebrahim Patel welcomes action against collusion and price-fixing in steel industry (GCIS)
The Minister of Economic Development, Ebrahim Patel, has welcomed the announcement of a R1,5bn fine payable by ArcelorMittal, the country's largest steel-maker, for price-fixing and collusion in the steel industry. This is the largest single fine imposed against a single company thus far by the competition authorities. The company also undertook, as part of the settlement with the authorities, to invest R4, 6 billion in new capital spending to upgrade its plants and improve its competitiveness. The settlement further provides for a pricing mechanism that will cap the company's margin on flat steel products for a period of five years. [Increase in wheat tariff slammed]
South Africa – Zimbabwe trade war: time for WTO intervention? (Tutwa Consulting)
Should Zimbabwe’s action be regarded as safeguard action, that is, provisional safeguard measures, a violation of both the WTO Agreement on Safeguards and of Articles 20 and 20 BIS of the SADC Trade Protocol is apparent. For instance, the measure imposed should only be a tariff increase pending an investigation and not a ban requiring a license which can only be issued to prevent shortages in the local market where domestic production cannot satisfy demand. Interestingly, SI 164 as well as the subsequent press statement by the Minister of Industry and Commerce do not make any reference to any enabling provisions of the SADC Trade Protocol or WTO provisions, as if Zimbabwe is not bound by its trade liberalization commitments regionally and internationally – only domestic legislation is mentioned. While the SADC Trade Protocol provides a mechanism, Annex VI, to be followed in the event of a dispute, to date no trade dispute has been considered under this system. [The analyst: Nkululeko Khumalo]
Zimbabwe: Govt seals multilateral road deal (The Herald)
Zimbabwe yesterday signed a “framework agreement,” with an Austrian construction firm Geiger International and a Chinese Company, China Harbour Engineering, setting the stage for the rehabilitation, dualisation and upgrading of the Beitbridge–Harare and Harare-Chirundu highways. “The signing of this framework is an important milestone in the negotiations that will result in the implementation of the construction of this very important road in Zimbabwe through a combination of Build Operate Transfer and loan financing models,” he said, dismissing claims that it would cost $2.1bn. “The section from Beitbridge to Harare shall be implemented as a BOT, with a concession period of 20 years, while the section from Harare to Chirundu — including the Harare ring road — will be implemented as a combination of a loan and private sector investment contributed by CHEC.”
Beitbridge redevelopment: many intentions, no action (The Herald)
95% of cargo transported in the region is by road with a delay of three days at the border increasing transport costs by about $500 per truck per day which is passed on to the importer. In other terms some unscrupulous officials have turned the port of entry and the entire town into a danger zone for travellers and transit population. Beitbridge Border Post used to be the port of choice for many travellers in the last five years, with importers or travellers in transit opting to put up in local hotels in the town, soon after getting their goods or vehicles cleared at the border. However, that has changed as a result of the mercenary attitude among border officials.
SMEs and GVCs in the G20: implications for Africa and developing countries (GEGAfrica)
The paper first reviews, in broad outline, key contours of the global debate on GVCs and what they imply for trade and investment policies. Broad implications for SMEs wishing to integrate into, and upgrade within, GVCs are also developed. The paper then relates the broad positions of key international institutions on the matter. These institutions represent large and small businesses, and international governmental agencies charged with developing policy perspectives on the issue. Broad implications for SMEs are drawn from this survey, and related to the debate previously charted. Finally, South African, and to some extent African, realities are compared with the policy perspectives emerging from the international institutions surveyed, in light of the GVC policy debate. The paper concludes with recommendations for the South African government. [The analysts: Peter Draper, Chiziwiso Pswarayi], [Emerging economies hope to get economic boost from G20 summit]
Why business operators should embrace arbitration (New Times)
Dr Fidelle Masengo, secretary general of the Kigali International Arbitration Centre, said arbitration is new in Rwanda, adding that they are going to conduct awareness drives to educate business operators on the concept. He argued that arbitration benefits all parties involved in commercial disputes, saying it is not costly in terms of money and time compared to resort to courts of law. “We are already training lawyers and business people about the benefits of this form of settling commercial conflicts so they avoid lengthy and costly court processes,” he said. He said KIAC is working with the Private Sector Federation and some specific sectors, like mining, services and banking, sensitising them on how they can use arbitration to settle disputes. He said the centre has already trained a sizeable number of professional arbitrators to handle such cases.
Rwanda: What new online portal means for agric export-import enterprises (New Times)
The new online portal will reduce the transaction and administrative time and costs associated with issuance of permits and certificates by up to 45%; the current direct transaction costs to apply for a permit or certificate is $5.67, this is expected to drop to less than $3 per transaction. Already, 150 companies and 50 individuals registered with the system following during its three-month piloting. During this period, a total number of 120 import permits and 207 phytosanitary certificates were issued. [Prices soar in Rwanda as Burundi’s ban on food exports bites]
Tanzania: State urges speed on LNG plant (Daily News)
President John Magufuli has directed the Ministry of Energy and Minerals to fast-track the construction of a liquefied natural gas plant in Lindi Region to cost $30bn (65 trillion/-). “I want to see this project taking off, there have been a lot of unnecessary delays...just accomplish whatever is creating any bureaucracy so that our investors can begin the work with immediate effect,’’ he said. The president was speaking at the State House in Dar es Salaam yesterday after receiving a progress report on the multi-trillion grand project for construction of Liquefied Natural Gas (LNG) plant at Likong’o area in Lindi Region. The report was presented by an official of the Norwegian Company, Statoil Country Representative, Mr Oystein Michelsen, who insisted that after completion of the construction of the envisaged gas plant, production would continue for a period of not less than 40 years. [Nissan earmarks Tanzania for growth in Africa]
Namibia: Team Namibia calls for public sector to procure local (The Namibian)
“Attempts to persuade the public sector to procure local have proved to be futile as imported goods are purchased, despite the availability of their locally manufactured counterparts. The public sector should be the driving vehicle and exemplary agent for ensuring that our Namibian manufacturers and service providers are their first choice of preference,” Roberta da Costa, CEO of Team Namibia, add.
The political and economic dynamics of foreign aid: a case study of US and Chinese aid to Sub-Sahara Africa (pdf, ERSA)
This study sought to answer four specific questions. First, what are the determinants of Chinese and American aid allocation decisions to SSA countries? Second, how has US aid allocation determinants changed with the arrival of China into the aid field in SSA? Third, is there any credence to assertions that China is primarily motivated by access to resource in SSA? Fourth, how significant is recipient governance in the decision of both countries aid allocation decision to SSA.[The analysts: Kafayat Amusa, Nara Monkam and Nicola Viegi]
Agreement on trade in services between India and the Association of Southeast Asian nations: report by the Secretariat (WTO)
This report, prepared for the consideration of the Agreement on Trade in Services between India and the Association of Southeast Asian Nations (ASEAN), has been drawn up by the WTO Secretariat on its own responsibility and in full consultation with the Parties. The Agreement on Trade in Services under the framework agreement on comprehensive economic cooperation between India and the Association of Southeast Asian Nations is ASEAN's 6th regional trade agreement. It is however ASEAN's 3rd Agreement covering trade in services. The Agreement is India's 14th RTA but India's 5th RTA in trade in services. In commercial services, India ranked 5th globally in terms of both global exports and imports, amounting to $156bn and $147bn, respectively. This represents 3.15% and 3.07% of world exports and imports, respectively. Among the ASEAN members, Singapore accounted for the largest share of world trade followed by Thailand and Malaysia. Among the newer ASEAN members (Cambodia, Lao PDR, Myanmar and Viet Nam) Viet Nam had the largest share of exports and imports of commercial services, while Lao PDR has the smallest share. [ASEAN in a climate of change: spotlight on sustainable energy in Malaysia, Thailand, Vietnam (Economist Corporate Network)]
World Bank facilitates water sector talks between Egypt, Sudan, Ethiopia (Daily News)
Angola: EIU forecasts economy will grow 1.3% in 2016 (Macauhub)
UN health agency’s African member States adopt new malaria framework (UN)
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