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tralac’s Daily News Selection
The selection: Tuesday, 18 October 2016
COMESA Summit updates:
Countries seek COMESA support for top jobs at the AU: Eight countries presented requests to the COMESA Council of Ministers for support of their proposed candidates for top jobs at the African Union Commission during the forthcoming African Union Assembly scheduled for January 2017. Kenya presented its Cabinet Secretary, Ministry of Foreign Affairs Ambassador (Dr) Amina Mohamed for the position of Chairperson of the African Union Commission. Other candidates included Egypt's Mona Toema El-Garf and Zambia's Ambassador Albert Muchanga (for Commissioner for Trade and Industry), Dr Jabine Ntakirutimana of Burundi and Mrs Amira El Fadil of Sudan (for Commissioner for Social Affairs), Mr Antoine-Marie Moustache of Seychelles and Dr Austin Sichinga of Zambia (for Commissioner for Agriculture and Rural Economy).
Kenya wins new Comesa sugar cover on poll fears (Business Daily): Next year’s General Election has spared Kenya’s sugarcane farmers external competition after Comesa cited the poll as one of the reasons for restricting cheap imports from the trading bloc for another two years. Comesa’s council of ministers also noted court cases stopping the privatisation of the State-owned mills. “In discussing this matter, the meeting noted the imminent political elections in Kenya, and cases brought against the government regarding the privatisation programme,” read a memo from Comesa after the end of the meeting 19-member States. The general election is slated for August and western Kenya, where sugarcane is the dominant cash crop, will be a battle ground between the opposition and the ruling coalition.
Inquiry into the UK’s Africa Free Trade Initiative (APPG-TOP)
First, if alternative and no-less favourable trading arrangements with Africa are not put in place by the UK Government at the point of the UK’s departure from the EU, the effect would be that African exports to the UK would de facto face new tariff and trade restrictions. Non-LDC African countries which are not covered by the Everything But Arms scheme and are not (yet) members of a signed EPA with the EU (like Kenya, Nigeria, Ghana and Cote D’Ivoire) face particular risks here as new bespoke arrangements would need to be put in place for their exports to the UK. Our assessment is that the potential impacts here would be more significant for some African countries and sectors than others based upon their trading profiles. Some countries which would be most affected due to the value of their exports into the UK include South Africa, Nigeria, Angola, Kenya, Ghana and Côte d’Ivoire.
Second, major African exporters to the UK may also be affected in the face of a weaker pound. A weaker pound reduces the competitiveness of Africa’s exports, such as Kenyan’s horticulture exports, against UK domestic production. Profits will also shrink for African exporters whose expenditure is in US dollars but their income in sterling. The prospect of a deceleration in economic growth in the UK and of prolonged uncertainty regarding future trading arrangements between the UK and the EU could hold back trade and investment growth between the UK and African partners. Reduced growth in sales of African producers into the UK, and reduced levels of investment into such business, could have a significant impact on households, farmers and workers in parts of the continent. [Financial Times: UK ready to shift focus of Africa aid to trade]
Reaping richer returns: public spending priorities for African agriculture productivity growth (World Bank)
Enhance credibility by committing to an external agent: This is an important principle underlying international trade treaties. The sweeping agricultural reform program in Mexico, for example, was motivated by the determination to join the North American Free Trade Agreement and the consequent need to firmly “lock in” the policies that would make this possible. In a similar vein, regional agreements and institutions in Africa, such as the Comprehensive Africa Agriculture Development Program, can play this role if commitments are taken seriously. CAADP’s peer reviews of National Agricultural Investment Plans and the Joint Sector Review process with an emphasis on “mutual accountability” mechanisms could potentially enhance credibility. As noted earlier, the fungibility of resources makes it difficult for donors and development partners to have a significant influence over the size and composition of agricultural budgets through the mechanism of funding individual projects. But with agricultural public expenditure reviews becoming more common, they provide a tool to get a comprehensive view of the entire budget, identify shifts in overall spending patterns, increase transparency, and facilitate more effective input into budget planning and implementation. [The analysts: Aparajita Goyal, John Nash] [Note: The full report will be available in January 2017]
Increasing private sector investments in frontier markets in Africa through a regional approach (pdf, AfDB)
The services to be provided under the assignment include: (i) Assess the overall FDI landscape and the greatest opportunities for investment and trade in the following regions in Africa: Great Lakes, Horn of Africa, Sahel and Mano River Basin; (ii) Identify the region that has the greatest potential to attract investments from and increase trade with South Korean chaebol and SMEs. Identify those Korean companies that are most likely to make an investment in the region over the next 18 months.
SAPP: Regional power deficit will be over by 2021 – Kandjoze (New Era)
Meanwhile, Nampa reports that Namibia and Angola will soon sign a MoU on the interconnector power transmission project in an effort to boost integration of the regional power grid. Kandjoze said Namibia is working closely with Angola on the preliminary studies needed before the Angola-Namibia interconnector power transmission project can proceed. The project involves the construction of power transmission lines from the proposed Baynes Hydropower Plant in lower Kunene, Namibia, so as to link up with the national power grid of Angola.
Ethiopia, Sudan prepare to launch single border-crossing (Sudan Tribune)
A four-day workshop to develop the legal framework for the border crossing has commenced in Khartoum on Monday with the participation of legal experts from COMESA. Sudan’s Minister of Presidential Affairs and head of the higher committee for border crossings Fadl Abdalla Fadl, who addressed the workshop, said the workshop seeks to develop a draft agreement between Sudan and Ethiopia on the border crossing.
Kazungula Bridge OSBP update: Zambia, Botswana sign K263m contract with Chinese firm (Lusaka Times)
Zambia and Botswana have signed a contract with Anhui Foreign Economic Construction Group Company Limited of China (AFECC) for the construction of OSBP facilities at Kazungula Border on the Zambian side at a cost of more than K263 million. The contract valued at K263, 670, 419.98, which is funded through a loan from the AfDB, forms package three of the Main Kazungula Bridge Construction Project which is expected to be completed in December 2018. Package three of Kazungula Bridge consists of 10 main buildings, 800 metres of circulation roads, parking areas and 2.4 kilometres of the main bridge road. [Note: 2nd edition of the OSBP Sourcebook to be published in October (ICA)]
N$1bn Namibia, DRC trade park on course (New Era)
Construction recently began on the Namibia Trade and Industrial Park in Lubumbashi in the mineral-rich DRC, Namibian Ambassador to the DRC, Wilbard Hellao, told New Era in an interview last week. The project will be done in four phases and the other phases will commence soon, in sequence. He said that upon completion the trade and industrial park is estimated to will cost the Namibia government close to N$1bn. "This will offer new opportunities to both governments, while also acting as a springboard for Namibians for trade into the Central African and Great Lakes regions,” he said.
East Africa: Regional armed forces move to share industrial facilities (New Times)
The EAC has made significant progress toward shared use of military industrial facilities, an official said during a meeting in Kigali yesterday. Col. Francis Mbindi, Tanzania’s defence liaison officer at the EAC Secretariat, told reporters that officials from EAC partner states will tour Rwanda’s facilities and determine which ones can be put to shared use. The meeting, in line with the EAC defence sector calendar, is a follow up on a similar session held in June in Dar-es-Salaam, Tanzania. Among others, Kenya also informed its peers that all requisite machinery for food processing is projected to be imported by year end. Kenya, Uganda and Tanzania are also working on a joint research and development project to benefit the entire Community. Joint research and development in the production of raw materials from locally available resources between the Tanzanian corporation and Uganda’s Luwero Industries Ltd – an ammunition facility – is reported to be in advanced stages.
SADC Senior Officials for ICTs, Transport and Meteorology are meeting at Esibayeni Lodge in Matsapa, Swaziland, ahead of Ministers Meeting (@SADC_News)
West Africa Gateway: NewsBrief, 4-17 October
AU adopts new charter on maritime safety (Graphic)
Ghana's Deputy Minister of Foreign Affairs, Mr Emmanuel Bombande, said in signing the charter, Heads of State agreed that special technical committees must meet to develop additional annexes that would be automatically be integrated into the charter. Asked if that meant that the charter, in its current form, was not complete, Mr Bombande said "it is complete in the sense that our African leaders have adopted and signed it.” As a result, he said there would be extraordinary sessions of specialised training committees to develop the less visible components that could then be integrated into the main document. Consequently, the minister said the charter was ‘work in progress’ that would be fully complemented by July next year, after the annexes had been adopted and automatically integrated into it.
The role of newly industrialized economies in global value chains (IMF)
This study contributes to the economic literature by performing a similar analysis for the position of newly industrialized economies in global value chains, including Brazil, China, India, Indonesia, Mexico and Turkey. The analysis shows that while all are outsourcing locations and at a similar stage of development, newly industrialized economies play very different roles in global production and in global value chains. [The analyst: Dominik Boddin]
What drives the Rand / US Dollar exchange rate volatility? (IMF)
This paper investigates possible drivers of volatility in the South African rand since the onset of the global financial crisis. We assess the role played by local and international economic surprises, commodity price volatility, global market risk perceptions, and local political uncertainty. The results suggest that rand volatility is mainly driven by commodity price volatility, and global market volatility, as well as domestic political uncertainty. In addition, economic surprises originating in the United States matter, but not those originating from South Africa, Europe, or China. [The analysts: Nasha Maveé, Roberto Perrelli, Axel Schimmelpfennig]
Today's Quick Links:
Afreximbank AGOA seminar in Cairo: two perspectives
Kenya pushes for review of CET rates on sensitive goods
Gas boom in southern Tanzania casts bleak future for cashew farming
Aflatoxins affect African food exports, experts say
Zambia Development Agency says investment pledges have hit $2.6bn
Pradeep S. Mehta, Abhishek Kumar: How does India score well on competitiveness but poorly on ease of doing business?
Jomo Kwame Sundaram: Why farmers respond differently to higher food prices?
Samir Saran: BRICS remains on course for bigger, more effective projects in the years to come
BRICS New Development Bank not feeling peer pressure from AIIB - says VP Paulo Nogueira Batista
BRICS NDB president KV Kamath: interviewed on its medium term outlook
Brazil knocks on India's door to revive trade ties
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