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tralac’s Daily News Selection
The selection: Friday, 30 September 2016
Ahead of next week’s third CFTA Negotiating Forum: tralac’s JB Cronje on What negotiating modalities should be adopted to achieve CFTA objectives?
Ahead of next week’s World Bank-IMF Annual Meetings: a guide
South Africa’s August trade statistics will be released later today.
Carlos Lopes will leave the UNECA on 30 October: update
Africa’s Pulse: African economies need deeper diversification and better policies (World Bank)
Trade diversification among established and improved performers (Box 2.2, p47): Figure B2.2.1 depicts the extent of market diversification as measured by the Herfindahl index of trading partners. It generally shows that improved performers tend to be more diversified across markets than established ones. Among the improved performers, Cameroon, Côte d’Ivoire, Kenya, and Senegal have increased the number of destinations for their exports over the past 10 years, while Rwanda is the only country among the established ones with significant progress in market diversification. In terms of product diversification, the Herfindahl index of export goods for the four groups of performers across Sub-Saharan Africa is depicted in figure B2.2.2. The improved performers not only have a more diversified export basket over the past two decades, but also the number of products exported has increased. For the established performers, product diversification has gradually increased since 2004, while the export basket has become more concentrated for the slipping countries in the post-crisis period. Zooming in on the established countries, Tanzania displays the greatest extent of product diversification over the past two decades.
Toward a continental African agribusiness apex body (Phase II): diagnostic and development plan (pdf, AgBiz)
The study, which surveyed all African countries to identify associations representing agribusinesses, showed that agribusiness apex bodies across Africa are a relatively recent phenomenon, with most being formed between 2001 and 2014. The study by ABG leveraged on work undertaken in 2014 by the AU’s New Partnership for Africa’s Development in a study entitled "Taking stock of agribusiness chambers in Africa: lessons learned, success factors, good practices". The work by ABG and AU-NEPAD is part of a broader initiative to form a Continental Agribusiness Chamber that will represent private sector stakeholders across the continent. [Lead consultant: Michael Sudarkasa]
Transit costs in East and Southern Africa: four major corridor routes (IRU)
Purpose and scope of the project: To analyse the cost comparison between the uses of a national bond, COMESA RCTG Carnet where applicable and the TIR Carnet for two types of cargo (containerised load and tanker transporting liquid bulk) along four major corridor routes; namely North South Corridor (Durban to Lubumbashi), Walvis Bay-Ndola-Lubumbashi Corridor (Walvis Bay to Lubumbashi), Dar Corridor (Dar es Salaam to Lubumbashi) and the Northern Corridor (Mombasa to Kigali). It is clear from the summary of findings that the regional or single bond system has distinct advantages in terms of cost and time savings over the traditional national transit bond system still being deployed along certain corridors. Regional or single bonds reduce transit time, simplify clearing, reduce documentation and reduce transit costs. As the systems are not universally available for all countries and corridors, there is still a high level of variation and doubt as to the reliability of the cheaper offerings. This leaves the import-export customer with uncertainty as to the level of risk inherent in each offering and could impact on the level of facilitation offered by customs. [The analyst: Michael Fitzmaurice]
North-South Corridor Management Institution: update (GCIS)
Cabinet approved South Africa’s revised position to SADC’s proposal for the development of a MoU regarding the establishment of the North-South Corridor Management Institution. The SADC Ministers of Transport agreed to establish an NSCMI to address operational inefficiencies and bottlenecks along the corridor. Cabinet also approved for the Minister of Transport to host the North-South Corridor Ministers of Transport meeting during 2016/17.
Kenya’s careful steps through tough EPA terrain (Business Daily)
Q: The Foreign Affairs ministry on Thursday deposited the ratified Economic Partnership Agreement with the EU, and it was interesting this coincided with the EU ambassador to Kenya Stafano Dejak’s statement that they may have to engage Kenya directly if the rest of the region does not sign. Answer (from Betty Maina): I saw the comment, he even sent me the brief, but I’m not sure what he means by a direct relationship because whatever relationship you may have must negotiated. So I’m also quite curious about that. [Brexit will blow a hole in EU-Africa relations]
Kenya joins campaign against America’s trade deal with Asia (Daily Nation)
Kenya is lobbying against the planned Trans-Pacific Partnership Agreement (TPP) between US and 12 Asian states for fear of losing the current preferential access under African Growth and Opportunity Act (Agoa). The country joined other trade ministers from African countries at this year’s Agoa forum in Washington to urge the US to reconsider the move as it will make the goods coming from Africa uncompetitive in the market. Trade Principal Secretary Chris Kiptoo told the Business Daily that the preferences that Kenya enjoys will be eroded once the US enters into trade agreements with other states outside Africa.
Zimbabwe records $1,82bn trade deficit, Jan-August 2016 (The Herald)
Zimbabwe recorded a trade deficit of $1,82bn for the eight months to August 2016, as imports made up mainly of consumption goods continue to outstrip exports. According to the Zimbabwe National Statistics Agency, the country imported goods worth $3,329bn for the period under review, against exports of $1,507bn. Notably, imports grew to $443m in the month of August from July’s $394m albeit Government measures to limit importation of certain goods to prop up local production. However, exports improved 10 percent from July’s $183 million to $202 million in August.
Zimbabwe: Govt gets tough on local companies (NewsDay)
Speaking at the commissioning of new machinery at Chloride Zimbabwe in Harare yesterday, Industry and Commerce minister Mike Bimha said only companies that had confidence in the country were assured of government support. “A number of companies come to government and say ‘give us support, give us protection’, but they do not in turn tell government what they are also going to give, not government, but to Zimbabwe. When we had meetings with Chloride, they said ‘give us support and we will do A, B and C’ and they did A, B and C. Let me stress the need for the private sector to heed the call to industrialise our country,” Bimha said.
Tanzania: Highlights for the Second Quarter GDP (pdf, NBS)
During the period under review, gross domestic product at constant prices for the second quarter of 2016 in absolute terms was TZS. 11.7 trillion compared to TZS. 10.9 trillion for the similar quarter of 2015. The quarterly GDP increased at a rate of 7.9% in the second quarter of 2016 compared to 5.8% observed in the corresponding period of 2015. The performance of selected economic activities observed in the second quarter of 2016 shows that transport and storage increased at the highest growth rate of 30.6% followed by mining and quarrying which recorded the growth rate of 20.5% and Information and Communication increased at a growth rate of 12.6%. However, Accommodation Services and Real Estate have recorded the lowest growth rates of 2.6% and 2.3% respectively for the quarter under-review. [Socio-Economic Atlas of Tanzania: Census 2012]
Zambia, Zimbabwe pick AfDB Advisers for $4bn Batoka plant (Zimbabwe Independent)
Zambia and Zimbabwe have appointed the African Development Bank as lead financial advisers for the construction of the 2400-megawatt Batoka Gorge hydro-power project that’s expected to cost $4 billion, an official said. Financial mobilization for the project is scheduled to start in 2018, but could begin earlier than that, he said. The dam will have a capacity of 1,2 billion cubic meters of water on completion. Kariba, the world’s biggest man-made reservoir by volume, holds 181 billion cubic meters of water.
RioZim chooses Chinese group to design US$2,1bln power plant (Zimbabwe Independent)
RioZim Ltd. chose a state-owned Chinese company to design a $2,1bn power plant it plans to build in Zimbabwe, which faces frequent blackouts, and is lobbying South Africa’s electricity utility to buy from the facility to help attract investors. State Nuclear Electric Power Planning Design and Research Institute, based in Beijing, “has already come in to design the generators” for the 2800-megawatt coal-fired Sengwa plant, RioZim Non-Executive Director Caleb Dengu said. RioZim has written to South African Energy Minister Tina Joemat-Pettersson asking that Eskom Holdings SOC Ltd. buy 2,000 megawatts, he said.
Trade facilitation and development: driving trade competitiveness, border agency effectiveness and strengthened governance (UNCTAD)
In the present study, trade facilitation is mainly reviewed in the context of development objectives. The discussion and literature review is combined with a quantitative analysis of the first 73 notifications made by developing countries concerning their trade facilitation implementation capacities in the context of the Agreement on Trade Facilitation.
Regional trade agreements and the multilateral trading system (WTO)
The book provides a greater understanding of whether RTAs are creating new standards different from the WTO’s and the possible implications these pose. Amid the growing number and complexity of RTAs today, the publication contributes to the current debate on the role of the WTO in regulating international trade. The contributors to the book look at RTA provisions liberalizing trade in goods and services as well as other provisions covering a range of issues, such as trade defence, trade facilitation, standards, intellectual property and dispute settlement. The chapters are based on all RTAs notified to the WTO up until 2014.
Roberto Azevêdo: It shows that in some areas RTAs are going further than multilateral rules and adding new layers of rules among the parties, while in others they tend not to change the existing WTO disciplines. Interestingly, in the areas where RTAs are introducing new rules, there appear to be common approaches taken by members. We can see this, for example, in services rules, dispute settlement, and intellectual property rights. This provides some reassurance to the recurring fear that RTAs represent a fragmentation of the global trading system. This may be good news for exporters, in particular SMEs, which find themselves at a disadvantage when faced with a proliferation of different rules. But, of course, RTAs could do more to assist such exporters. [Table of contents (pdf)]
Mozambique: IMF concludes visit
At the end of the mission, Mr. Lazare issued the following statement (extract): “Mozambique is facing a challenging economic environment. Growth has been on a declining path and is currently expected to be 3.7 percent in 2016 (down from 6.6 percent in 2015), which is significantly below levels observed in recent years. Inflation has risen sharply, reaching 21 percent on a year on year basis in August, fueled by a significant depreciation of the metical (about 40 percent since the start of the year). At the same time, a significant decline in imports has been more than offset by a weakening of exports, foreign direct investment, and donor financing. This has maintained pressure on international reserves, which have continued to decline. The discovery in April 2016 of previously undisclosed debt worth $1.4 billion (10.7 percent of GDP), combined with the impact of the exchange rate depreciation, has led to a substantial increase in debt ratios and the debt service burden.
World Maritime Day 2016: an UNCTAD feature
Ensuring Africa’s maritime security for development: sustainability and the blue economy (Chatham House)
Africa and World Tourism Day 2016: an AfDB feature, Memory Dube blog
Botswana: Pilane Mall opens without ‘barred’ SA retailers
Tanzania: REPOA study calls for govt role in sugar industry
Uganda to get East Africa’s first ever gold refinery by end of 2016
Tanzania: Govt finalizes local content policy for gas sector
Chris Blattman: More sweatshops for Africa?
Liam Fox: Globalisation needs to be championed more vigorously
Measure it to improve it: How benchmarking government capability for PPPs can help improve infrastructure delivery
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