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tralac’s Daily News Selection
The selection: Thursday, 15 September 2016
Featured infographic, @ITCnews: Sweet trade - 3 out of 5 top exporters of cocoa beans are located in Africa, ITCdata shows
African factories have room to grow (Business Day): Of the $430bn additional manufacturing output McKinsey believes is possible, up to $209bn could come from a category called "global innovations for local markets" that includes motor vehicles and chemicals, where research and development is a key component, and which already accounted for 27% of African output in 2015. The regional processing of goods such as food and beverages, with the largest share of manufacturing today at 38%, could add as much as $122bn. Resource-intensive manufacturing of cement and petroleum products could contribute another $72bn of additional output, and labour-intensive manufacturing of such products as apparel and footwear the remaining $27bn. Such a step change in manufacturing in Africa is, without doubt, achievable. [The authors: Tenbite Ermias, Acha Leke] [Download the McKinsey Global Institute report Lions on the move II]
Integration critical to industrialization in Africa (AfDB): For the CFTA to fulfill its promise in helping Africa to industrialize, some deliberate policy choices have to be made to create a conducive environment for the continent’s participation in global value chains, and in particular on rules of origin (RoO) and trade in services. With regard to the RoO, there must be harmonization of these rules across the entire continent if Africa is to truly have a single market. While there are large areas of overlaps across products, there are some significant differences across some of the RECs, particularly with the SADC RoO. Also, the RoO must be as flexible and pragmatic as possible. Restrictive RoO tend to constitute trade barriers more than they facilitate trade. With reference to services, the increasing “servicification of manufacturing”, referring to the role of services as inputs in manufacturing, emphasizes the importance of having a competitive services sector as a bedrock for industrialization. Services increasingly make up a larger share of the value of finished manufactured products. Consequently, the need for a competitive services sector is critical to any discussion on value addition on the continent include – both in terms of enabling products to be cost competitive and creating opportunities for value addition. [The analyst: Babajide Sodipo]
Newly posted African trade and development conference documentation:
The concept note for the African Mining Vision CSO Forum, underway in Nairobi.
The full set of documentation ahead of the third meeting of the steering committee of support to the transport sector development programme (21-22 September, Addis Ababa). Two profiled reports, below:
Report on the corridor assessment and ranking for selecting at least One Pilot Smart Corridor (pdf): The consultant collected data and information necessary for assessing and ranking the ten transport corridors according to the agreed multi-factor criteria for selecting at least one pilot smart corridor as per the project terms of reference. Both the ten corridors and the criteria were agreed on at the Validation Committee meeting of February 2016. Here are the results of the assessment and ranking of the ten corridors: North-South 80.0, Northern 73.5, Dar es Salaam 59.5, Maputo 58, Djibouti 53.5, Beira 50, Central 48, Dakar- Bamako-Niamey 47.5, Abidjan-Lagos 41, Douala-N’Djamena-Bangui 30. From a technical point of view and based on the results above, the consultant recommends that the North South Corridor be selected as the pilot smart corridor.
Transport Policy Framework: draft (pdf): The Transport Policy Framework (White Paper) is a consultative document that contains the required policy initiatives. It is intended to inform discussions at a first stage of the process that brings together the AU, REC’s, UNECA, the Fad and member states for preparing a co-ordinated response to the challenge of implementing a transport system that integrates the continent over the next 15 years, whereas taking into account the long term needs of the sector and the long term objectives of PIDA.
The draft agenda for the First African Forum for National Trade Facilitation Committees (17-21 October, Addis Ababa).
TRIPS flexibilities and anti-counterfeit legislation in Kenya and the EAC: implications for generic producers (UNCTAD-UNIDO)
Kenyan regulatory laws include sufficient remedies to enforce quality standards and to prevent the registration of medicines bearing labels that mislead patients as to the characteristics of a drug. Thus, an extension of the Anti-Counterfeit Act to drug quality issues appears inappropriate and not necessary. The Act should be limited to counterfeit trademarks and copyrights in line with Article 51 of the TRIPS Agreement. Any reference to patents should be removed to avoid misunderstanding and potential application of criminal sanctions to generic manufacturers. This would be incoherent with other policy developments in Kenya and the EAC, where remarkable efforts have been made to prepare a policy environment that is conducive to local generic production, related investment and trade within the EAC.
Namibia: Leniency policy for cartels (The Namibian)
Namibia should consider introducing a leniency policy as a way of dealing with cartels in the economy. This policy is said to have worked well all over the world, including in neighbouring South Africa. The chairperson of the Competition Tribunal of South Africa, Norman Manoim said in an interview that consideration should be given as to whether the policy can be adopted without waiting until there has been a change to the legislation. Manoim was one of the guest speakers invited by the Namibian Competition Commission for its ‘Competition & Consumer Week’ held in Windhoek with a theme ‘Cartels and their impact on the economy’.
Why geographical indications for Least Developed Countries? (UNCTAD)
It is legitimate for developing countries, including LDCs, to consider GIs as an alternative to valorize and market their products embedded in rich environmental settings; or by protecting well-known geographically based products already recognized by consumers in the market (Yeung and Kerr, 2011). The cases of Bhutanese red rice, Harenna wild coffee, Wenchi volcanic honey, Pink rice from Madagascar and mullet bottarga from Mauritania show environmentally friendly production processes. Thus, producers in LDCs should be supported by long-term policies and programs aimed to promote collective action, traceability, monitoring and business development. It is necessary to examine the environmental impact after GI implementation due to a possible growth in demand. For example, following questions should be constantly posed and monitored: [The report is based on case studies, which include Ethiopia, Madagascar, Mozambique, Mauritania, Senegal] :
MEPs back trade deal with six African countries (EU)
The European Parliament approved an agreement granting duty-free access to the EU for products from Namibia, Mozambique, Botswana, Swaziland and Lesotho, and improved market access for South Africa on Wednesday. “This agreement will help our African partner states to reduce poverty and can also facilitate their smooth and gradual integration into the world economy. There are also many safeguards in the deal to ensure that local people truly benefit from this cooperation. The language on human rights and sustainable development is one of the strongest that you will find in any EU agreement”, said rapporteur Alexander Graf Lambsdorff (ALDE, DE), before the vote. MEPs approved the deal by 417 votes to 216, with 66 abstentions.
Bitange Ndemo: ‘Are we capable of negotiating global treaties?’ (Business Daily)
A new book, “Bounded rationality and economic diplomacy: the politics of investment treaties in developing countries”, has some insights that reveal the continent’s weakest link with respect to international treaties – the capacity to negotiate effectively while protecting its interest. We can choose to turn the idle capacity within academic institutions into a formidable negotiation teams that could not just help Kenya but the region. This can only be done through a deliberate effort to develop capacity. Of greater importance is the political will to do the right thing to avoid politicization of the economic process. [The writer is an associate professor at University of Nairobi’s School of Business]
Lesotho: water security and climate change assessment (World Bank)
Despite its abundant water resources, Lesotho remains vulnerable to the impacts associated with regular and recurrent floods and droughts, the report revealed. The floods in 2011 were the largest in the country since the 1930s, while the drought in 2015-16 period was the most severe on record. All the climate models indicate that average mean surface temperatures will rise, but precipitation projections vary greatly. The report also recommends improved data needed to continue to develop more sophisticated analyses of the complex issues around the country’s most important natural resource. Data constrains around agriculture, the economic uses and value of water, climate and hydrology have the potential to undermine future opportunities.
South Africa: Gauteng’s Township Stock Exchange project (GCIS)
As part of mainstreaming the township economy and transforming our townships into centres of innovation and manufacturing, we will also next month launch the Township Stock Exchange. The Gauteng township economy is estimated by the World Bank to be worth over R10bn. It is the critical site of the informal sector and more than 1.5 million people. Properly supported, it can contribute to inclusive growth and sustainable economic empowerment of the majority of our population. We believe this is a critical intervention that will help us build a vibrant manufacturing industry in our townships. Already large numbers of township entrepreneurs are makers of things - they are involved in manufacturing, albeit on a minimum scale. As this government, working together with the private sector, we are determined to support these home-grown, genuine entrepreneurs and catapult them to the next level. [The author: Premier David Makhura]
South Africa: The Real Economy Bulletin - Second Quarter 2016 (TIPS)
Behind the trends: Exports were the main driver of the surge in growth in the GDP in the second quarter of 2016, largely thanks to the auto industry. Critical for export growth was the persistence of relatively competitive exchange rates as well as some recovery in the U.S. and Europe in the past year. While welcome, these developments emerged in the context of fairly gloomy prospects for growth in the medium term. Growth in the BRICS: Divergent developments in the BRICS in the past five years illustrate the extraordinary impact of the slowdown in Chinese growth on middle-income economies. They also show how this kind of sharply slower growth can play out in greater political contestation and uncertainty. Growth in the SADC: The rest of Africa now represents around 30% of South Africa’s export market, up slightly from 2010. The bulk of South African exports to the rest of the continent go to Namibia, Botswana, Mozambique, Zambia and Zimbabwe. Because the region is growing rapidly compared to most other regions, despite the end of the commodity boom, it represents a significant opportunity.
Mozambique: Tomaz Salomão praises Bank of Mozambique for supporting limits on dollar use (Club of Mozambique)
Speaking at the Agrarian and Fishing Sectors Business Forum in Manica on Monday Salomão praised Rogério Zandamela’s appointment as governor of the Bank of Mozambique, and said that the first decision taken by his team was right. “A major concern that has been raised in this meeting is the issue of the slippage of the metical. On Friday, the central bank made an announcement which I believe was right. I mean restricting the movement of dollars in our country as a way of strengthening of the metical,” he said. Tomaz Salomão raised other concerns at the forum, such as the under-invoicing of exported products, and challenged ministries to address the situation to boost foreign exchange earnings.
Zimbabwe adopts Rand-based tourism pricing (The Chronicle)
Players in the local tourism industry have resolved to adopt a “rand-based” pricing system to cushion their businesses from the prevailing cash crisis. In the context of weakening regional currencies, the use of the strong US dollar has negatively affected tourist arrivals as the country is viewed as an expensive destination. Recent reports indicate that some tourists wanting to visit Victoria Falls, for instance, now prefer flying into Livingstone in Zambia from where they undertake tourism activities and only cross to Zimbabwe as Zambian clients — prejudicing the country of the precious earnings. Last week Finance and Economic Development Minister Patrick Chinamasa revealed that the approach (rand-based pricing system) has been agreed upon by the Government, players in the hospitality sector and the Reserve Bank of Zimbabwe. [Zimbabwe to scrap horticulture export permits]
Clearing the jam at Djibouti (African Business Magazine)
But such is Ethiopia’s growth – both in terms of economy and population; its current population of around 100m is set to reach 130m by 2025, according to the United Nations – that some say it’s going to need all the ports it can get. “Ethiopia’s rate of development means Djibouti can’t satisfy demand – even if Berbera is used, Ethiopia will also need [ports in] Mogadishu and Kismayo in the long run, and Port Sudan,” Ali says. “The bottleneck is not because of the port but the inland transportation – there aren’t enough trucks for the aid, the fertiliser and the usual commercial cargo,” Aboubaker says, explaining that even with other ports such as Berbera offering more docking options in the future, the problem of not enough trucks matching demand would lead to the same dilemma as now. It’s estimated that 1,500 trucks a day leave Djibouti for Ethiopia and that there will be 8,000 a day by 2020 as Ethiopia tries to address the shortage. [The author: James Jeffrey)
Tanzania: Freight forwarders oppose Kigali plan (The Citizen)
The Tanzania Freight Forwarders Association is up in arms against Rwanda’s request to clear own consignment at the Dar es Salaam Port. TAFFA chairman Steven Ngatunga advised the government to reject the proposal, saying it will deny Tanzanians employment at their own port.
Rural Development Report 2016 (IFAD)
Chapter 3: Structural and rural transformation in Africa. The agricultural sector has grown absolutely and declined relatively, as resources have shifted to other sectors, primarily services. The demand for services comes in part from the agricultural sector. Much demand is generated by resource rents (and in some countries official development assistance) channelled back into the economy through public spending (Gollin et al. 2013). The rapid growth in the service sector shows a high degree of responsiveness to new opportunities, but sustained growth in that sector will require technical change in agriculture to shift the foundations of the middle class from the public sector to competitive manufacturing and services.
Private investment in food systems is expanding quickly (World Bank 2013). What Reardon (2015) calls the “quiet revolution” in food supply chains spans retail, wholesale, first- and second-stage processing, packaging, branding and logistics. Also targeted for investment is the full range of product transformation functions: trucking, processing, storage and wholesaling. These transformations in food systems are very uneven among and within countries, with sharp differences in opportunity based on proximity to cities and access to key assets.
Trade delegation from Africa seeks food security at Big Iron (Grand Forks Herald)
This year’s group was heavily represented by sub-Saharan countries, a difference from the usual guest list that often is heavily represented by visitors from Soviet Union countries, where agriculture is more similar to Upper Great Plains farming. This year’s delegation is the largest to date from Africa. Visitors came from Angola, Benin, Ethiopia, Liberia and Nigeria. Dalva Ringote Allen, chairman of the board of directors of the Republic of Angola’s Ministry of Economy’s Institute of Business Foment, was among those leading a 56-member delegation from her country, focusing on developing agriculture in the wake of declines in oil prices, which the country exports.
Ethiopia is now the largest coffee market in Africa
ECOWAS states urged to adopt uniformity in Single Window Systems (GhanaWeb)
Namibia’s 20th National Rangeland Forum has started
Namibian Biomass Industry Group: case studies on demand for invader bush biomass
Nissan SA poised to expand into Africa
Jeff Nemeth: Getting wheels rolling on the continent
VW expanding its Africa commitment
CTI study roots for expertise sharing to industrialise Tanzania
Rwanda’s MINAGRI rolls out new strategy to boost agriculture
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