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tralac’s Daily News Selection
The selection: Friday, 23 September 2016
South Africa: Status report on trade negotiations, by Dr Rob Davies, Minister of Trade and Industry (pdf, AgBiz)
On US-SA bilateral trade: The US have a very specific model for their FTA negotiations and require countries to make comprehensive commitments on a wide range of areas including investment and public procurement. It will therefore be very difficult for SA/ SACU to negotiate a FTA with the US since it will limit policy space in many areas. A study on the future of SA-US trade relations has been commissioned by NEDLAC. SA will need to use the time to develop a clear position on the long term relations with the US post-AGOA.
Guiding principles for investment policy-making: a South Africa scorecard (tralac newsletter)
At the 2016 Hangzhou Summit, G20 leaders endorsed a new set of “Guiding Principles for Investment Policy-Making”. The nine non-binding principles are intended to promote inclusive and sustainable growth via a coherent, open and conducive international environment for investment. As a member of the G20, South Africa has endorsed these principles, however, changes to investment laws – including the controversial Protection of Investment Act; and the cancellation of bilateral investment treaties in recent years has created some negative sentiment about investment in the country. At the same time, South Africa’s FDI inflows have decreased to the lowest level in a decade dropping from US$5.77bn in 2014 to US$1.77bn in 2015. In light of this, we assess South Africa’s foreign investment regime and environment against the new principles. [The analysts: Ashly Hope, Talkmore Chidede]
European MPs warn EAC to be cautious on EU trade deal (New Times)
The proposed Economic Partnership Agreement (EPA) between the East African Community and the European Union is not ideal for the region and could stifle the infant industries if passed as it is, some European Union Members of parliament told The New Times, yesterday. The agreement, they said, could pose a risk to regional economies as their infant industries will face unfair competition due to products from the European Union. Marie Arena, a European Parliamentarian, told The New Times that the agreement was unfair as it is and, if enforced in its current form, it could promote unfair competition in the region. [Inside the EU’s multi-billion dollar investment plan for Africa]
Global growth warning: weak trade, financial distortions (OECD Interim Economic Outlook)
The OECD projects that the global economy will grow by 2.9% this year and 3.2% in 2017, which is well below long-run averages of around 3¾%. The small downgrade in the global outlook since the previous Economic Outlook in June 2016 reflects downgrades in major advanced economies, notably the United Kingdom for 2017, offset by a gradual improvement in major emerging-market commodity producers. Growth among the major advanced economies will be subdued. In the United States, where solid consumption and job growth is countered by weak investment, growth is estimated at 1.4% this year and 2.1% in 2017. The euro area is projected to grow at a 1.5% rate in 2016 and a 1.4% pace in 2017.
High-Level Panel for Women’s Economic Empowerment: 7 primary drivers (UN Women)
The report highlights seven primary drivers to unlock the potential of women to fully participate in the economy and achieve financial independence: tackling adverse norms and promoting positive role models; ensuring legal protections and reforming discriminatory laws and regulations; recognizing, reducing and redistributing unpaid work and care; building digital, financial and property assets; changing corporate culture and practice, improving public sector practices in employment and procurement, and strengthening visibility, collective voice and representation.
Regional meeting of RCs/UNCT members on El Niño-induced drought in southern Africa: summary of conclusions, recommendations
Economic impacts and risk management solutions: Policy choices of countries continue to weaken their capacity to manage shocks. There has been little progress in the past 10 years in the countries’ capacity to manage shocks. There may be scope to review further why this is the case and why policies to reduce risks to natural hazards have not been adopted more widely by governments. Lessons from previous shocks are still challenging to implement: lack of fiscal buffers and maize mono-cropping makes southern Africa uniquely exposed to drought. However, some progress has been made on government safety nets, and the crisis presents window of opportunity to further promote their development. [Southern Africa: Vulnerability Assessment Committee Results 2016 (pdf)]
Agriculture and food system transformation needed on pathway to zero hunger – Ban (UN)
While the world has seen some progress on combating the root causes of hunger and malnutrition, the challenge of providing the fundamental right to adequate food to all people must remain a priority, United Nations Secretary-General Ban Ki-moon said on 22 September 2016, urging Member States to continue to work together to tackle the problem. “It is unacceptable in a world of plenty that nearly 800 million people still suffer from hunger,” the UN chief said at a high-level event on “Pathways to Zero Hunger” at UN Headquarters. The event, co-organized by the FAO, IFAD and the WFP, seeks to galvanize momentum for the Zero Hunger Challenge launched by the Secretary-General in 2012. [‘This is no longer a time for promises,’ African leaders tell UN, urging action on Global Goals]
Report reveals 11% growth of air travel to East Africa (The Citizen)
The number of international air travel to East Africa rose by 11.2% during the first eight months of this year compared with a similar period last year, a new study shows, putting the region ahead of the entire continent. ForwardKeys - which predicts future travel patterns by crunching and analysing 14 million booking transactions a day - says countries like Algeria, Egypt, Morocco and Tunisia saw little growth or even a decline. “We are seeing a tale of two Africas, with North African countries suffering from political instability and terror activities and sub-Saharan African countries powering ahead,” said the ForwardKeys chief executive officer, Mr Olivier Jager. Kenya, Mauritius, South Africa, Tanzania and Ethiopia led the pack of high growth destinations with 14.9%, 11.6%, 11.4%, 10.6 and 9.6% respectively.
Namibia: Govt plans rand-denominated loans and bonds (The Namibian)
Namibia will seek to raise about US$5bn in loans and bonds over the next decade to help diversify and industrialise its economy with any debt sales to take place in South Africa, President Hage Geingob told Bloomberg this week in an interview in New York. The President said the government plans to issue rand-denominated bonds and get funding from countries including the US, China, India and Japan. “We’re looking at the South African bond market, and some concessional loans. Rand bonds would be much better than dollar-denominated Eurobonds”, he said.
South Africa, World Bank Treasury design risk management tool for SA’s debt portfolio (World Bank)
South Africa has made significant progress to improve the financial risk management of its public debt portfolio thanks to a tailor-made model designed to analyze the costs and risk factors. This tool, developed through a partnership between the Government of South Africa and the World Bank Treasury, allows the country to be better positioned to absorb fiscal shocks going forward. Emerging market economies, of which South Africa is one, became a viable outlet for investors who flooded these markets with capital in the aftermath of the global economic crisis of 2008, when the gross domestic products of advanced economies fell by 3.4%. But in the last three years, growing volatility in emerging countries has led to vast outflows from emerging market countries to other currencies and investment options.
Tanzania: Online mining info platform touted (Daily News)
An online platform for sharing information to Tanzania Revenue Authority over exploration, development and production of mineral and petroleum resources should be established for proper implementation of the transfer pricing system in the extractive industry, a new study report suggests. The ‘Transfer price case study on Tanzania’, which was launched in Dar es Salaam yesterday by the Natural Resource Governance Institute, made the recommendation after it found out that there was inadequate information flow from the Tanzania Minerals Audit Agency and Tanzania Petroleum Development Corporation to the taxman. [Preventing tax revenue loss from extractive sector in Tanzania]
Rwanda agents happy as Dar shipping lines waive container deposit fees: Maersk and Safmarine shipping lines recently agreed to give a waiver on container cash deposit to members of the Rwanda Freight Forwarders Association to reduce the cost of doing business. The scheme will first be rolled out as a pilot phase before it can be fully adopted. The development follows bilateral talks held last month between Rwanda and Tanzania to address the current constraints affecting traders at the port, including the question of cash deposits. Fred Seka, the chairperson, Rwanda Freight Forwarders Association (ADR), said both parties agreed to use an insurance guarantee covered by UAP Insurance to facilitate ease of doing business at the port.
DRC traders assured of better port services: TPA Director General, Engineer Deusdedit Kakoko gave the assurance after meeting traders from Bukavu and Goma towns in Kivu province. He told them that the government of Tanzania is constructing standard gauge railways that will simplify goods transportation along the central corridor. Also in the plan, he said, is putting up modern infrastructure at Isaka dry port. “With such measures, DRC business members will not necessarily travel all the way to Dar es Salaam to follow up their cargo,” he noted, adding that Isaka dry port will have rail connection, revenue office centre and other services to carter for neighbouring business community.
No Dutch aid for Kenya after 2020, minister tells parliament (Business Daily)
Kenya will not receive financial assistance from the Netherlands beginning 2020, the European nation has said, citing “significant” economic growth in the past decade that has turned the East African state into a middle-income country. The Netherlands assistance to Kenya has been concentrated in supporting food security programmes, governance and human rights, improvement of the business climate, environmental conservation, sanitation as well as culture and sports. Dutch Minister for Foreign Trade and Development Co-operation, Lilianne Ploumen, told her country’s Parliament that the relationship between the Netherlands and Kenya - after 2020 – will become purely that of “trade partners” hence the decision to stop aid.
Botswana: Choppies profits halve on expansion costs (Mmegi)
Budget retailer, Choppies Enterprises saw its profit after tax for the year ended June 30, 2016 almost halve from the prior year as a difficult economic climate in Zimbabwe and South African mining towns slowed revenue growth while start up costs in Kenya and Zambia pushed up expenses.
Dangote’s low cement prices upset East African firms (The EastAfrican)
The entry of low cost Dangote Cement products into the Kenya and Tanzania market is starting to unsettle large cement players in the region by increasing competition and reducing profit margins for regional firms. The cement firm, owned by Africa’s richest man, Aliko Dangote, is using his factories in Ethiopia and Tanzania to gain a foothold in the regional cement market. Dangote’s cement is 20 to 40% cent cheaper than locally produced cement; this is expected to finally drive down retail prices, which have been static for close to a decade. [Related: Cheap imports, high power costs pushing manufacturers out of Kenya, Ethiopia wins big as cement, flower, shoe firms set up shop]
Kenya’s sugar sector reels in uncertainty as COMESA deal nears end (Business Daily)
As the clock ticks towards next year’s removal of the protection for Kenya’s sugar sector from cheaper imports, Agriculture Cabinet Secretary Willy Bett is a worried man. While Mumias Sugar Company’s privatisation was supposed to offer a roadmap on how to revive the industry, it has become the laughing stock of the sector. “We are ashamed of Mumias because they negated our principle that privatisation is the key to keeping the sector alive. We are really very sorry about Mumias,” he says. Even with that classic failure, Mr Bett still thinks that privatisation is the panacea for the woes of the struggling factories, weighed down by ineptitude, lack of cane and corruption. Others think the sector should encourage block farming first and reorganise itself before privatisation.
Mali, Africa’s second-biggest cotton producer, expects record crop (Bloomberg)
“A total output of 725,000 tons is expected this year - it’s a record high,” Modibo Kone, CEO of the Compagnie Malienne pour le Developpement du Textile, said in an interview Wednesday. Besides favorable weather, subsidies for fertilizers had also helped boost the harvest due to end in March. “Our goal is to reach 800,000 tons in 2018,” Kone said.
Zambia: REOI for value chain development specialist (pdf, AfDB)
The main components of the Project related to support to light manufacturing through the development of industrial clusters with the promotion of access to markets, finance, technology and business skills for MSMEs operating in selected subsectors. In the second area of focus, the Project will address the key prerequisites for unlocking the full value addition potential of cassava as a commercial crop, while supporting women and youth as stakeholders along the value chain.
Zimbabwe: Mnangagwa hails SI64
Kenya’s North Rift region woos Chinese investors after WB ranking
International air travel to Kenya rises 14.9%
US fund opens Nairobi office in hunt for mega deals
Transport CS James Macharia: Delayed SGR project to be back on track in 2 weeks
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