News
tralac’s Daily News Selection
The selection: Friday, 21 October 2016
Out next Tuesday: The Doing Business 2017 report
Featured tweets:
@WorldBankPSD: Paul Brenton: "Reducing trade barriers in agriculture in Africa requires understanding the institutions and politics involved. They matter."
@alykhansatchu: Creating and strengthening trade ties between Africa Latin America and Caribbean #LACAfricaSummit (24-25 November, Nairobi, @LACAfricaSummit)
Featured commentaries:
Carlos Lopes: ’Africa’s no-regret route to industrialisation’ (African Arguments): What is clear is that governments have the central role in taking the long view. Policy stability, effective pubic institutions and consistent implementation make all the difference in creating credible incentives to unlock private investment. But while governments lead the way, they should realise that they cannot hope to design, fund and achieve a green and inclusive economy on their own. It will require a more sophisticated approach. The time for Africa has come. It is within the continent’s reach to opt for a new, cleaner and more efficient growth formula that will result in shared prosperity. The window of opportunity is open – it just needs to be seized.
Dipti Jain: ’Will Modi’s target of doubling BRICS trade by 2020 materialize?’ (LiveMint): A look at historical intra-BRICS trade data suggests that the target is unlikely to materialise. Here’s why. For intra-BRICS trade to increase to $500bn by 2020, it would have to grow at a minimum of 12.7%. But between 2006 and 2015, annual average growth in trade between BRICS countries was at 10.1%. The historical data should be read with the caveat that South Africa became a member of the block in December 2010. What makes Modi’s hopes look even more far-fetched is the fact that intra-BRICS trade has been declining over the last two years.
Chad P. Brown: ’Duty-free beats headphones? Yes, plurilateral trade agreements have something for everyone.’ (Washington Post): Smaller deals and selected countries — that’s the WTO approach to trade deals nowadays. These “critical mass” or “plurilateral” negotiations get far less attention than NAFTA or the Trans-Pacific Partnership - but quietly bring in real trade benefits and cooperation. How does this work? Here’s a closer look at the first of these new agreements, a move to lower trade barriers on information technology and medical equipment.
Banks failing coast to coast show spreading Africa distress (Bloomberg)
African banks are sinking deeper into trouble. Drowning in bad debt and swamped by slowing economies, more and more of the continent’s lenders are starting to fail. The collapse of a Ugandan bank, said to be an acquisition target of Bob Diamond’s Atlas Mara Ltd., is adding to woes stalking the industry from Mozambique to Nigeria. High interest rates, soaring levels of unpaid loans and low commodity prices are just some of the factors felling banks as growth across the world’s poorest continent stutters. “We’ve been forecasting an African banking crisis since the beginning of this year,” said Robert Besseling, a Johannesburg-based executive director at business-risk consultancy Exx Africa. “We’re likely to see more banks fail in Nigeria. The Kenyan banking sector will have to consolidate and Ethiopia’s will have to liberalize. Angola is also struggling. Some Ghanaian banks have reported heavy losses. The other one to watch is the DRC, which has also seen some turbulence.”
Kenyan, Australian markets regulators ink deal to support fintech (Business Daily)
The Capital Markets Authority of Kenya and the Australian Securities and Investments Commission have signed a co-operation agreement aimed at promoting innovation in financial services in their respective markets. “We are committed to facilitating innovation in financial services, leveraging Kenya’s positioning in the region as an innovation centre. This however calls for us to assess lessons learned and to compare strategies to balance innovation and regulation with our peer regulators,” said CMA chief executive Paul Muthaura. Mr Muthaura noted that the CMA has recently moved towards the establishment of a Regulatory Sandbox structure that is designed to encourage innovation in the capital markets.
Promoting pharmaceutical sector investments in the EAC region (UNCTAD)
The overall objective of the workshop (2-4 Nov) is to develop a common and shared vision for promoting investment in the regional pharmaceutical manufacturing sector, including; (i) sensitize pharmaceutical manufacturers on the EAC Regional Harmonized Medicines Registration Procedures/guidelines and address their concerns, if any, (ii) discuss and propose the most viable incentive schemes for promoting local pharmaceutical manufacturing, (iii) make recommendations for consideration by the Partner States’ governments on promotion of local pharmaceutical manufacturing industry, (iv) promote and foster dialogue between the policy makers, regulators and pharmaceutical manufacturers.
Mauritius tycoons eye a share of the growing EAC pie (The Star)
Growth-hungry Mauritius has set eyes on investment opportunities in the five-nation East Africa Community bloc, with Nairobi poised to be its hub. The Indian Ocean island nation is targeting to use a two-day Buyers Sellers Meeting forum in Nairobi from Monday. Another forum will be held in Mombasa on Thursday next week to help in sealing major deals, Enterprise Mauritius through its liaison office in Nairobi said in a statement yesterday.
Namibia: New tariffs as EPA kicks in (The Namibian)
Finance minister Calle Schlettwein yesterday said a new tariff book will be gazetted next month as part of Namibia’s Economic Partnership Agreement with the European Union. This comes after the EPA, an agreement where there would be less or zero tariffs on trade between the EU and the SADC, has been provisionally effected. Schlettwein said although Namibia has ratified the EPA, it has yet to be gazetted. Therefore, all parties will have to use the old tariffs and get refunds once the new tariff book has been gazetted.
Rwanda: Grain council calls for sensitisation on rules of origin (New Times)
The Eastern Africa Grain Council Rwanda has called for more sensitisation about rules of origin policies between regional blocs to ensure local traders understand them to benefit from the proposed Tripartite Free Trade Area. Epiphanie Karekezi, the EAGC Rwanda market information system officer, said creating a ‘common understanding’ of the rules of origin between stakeholders in the sector will help spur trade in grains and cereals in the free trade area, as well as help improve quality along the value chain, ensuring better earnings for farmers. Nathan Gashayija, the director in charge of co-ordination at the Ministry of Trade, Industry and EAC Affairs, said the free trade zone presents Rwandan traders and grain and cereal exporters, in particular, immense business opportunities.
Zimbabwe: statement by the IMF
“On October 20, 2016, Zimbabwe settled its overdue financial obligations to the Poverty Reduction and Growth Trust (PRGT) of the IMF. Zimbabwe had been in continuous arrears since 2001. To settle these obligations, which amounted to SDR 78.3 million (about US$107.9 million), Zimbabwe transferred part of its SDR holdings kept at the IMF to the PRGT account. Zimbabwe is now current on all its financial obligations to the IMF.”
ZimTrade: Reducing export time can grow GDP 2-4% (NewsDay)
Trade promotion body, ZimTrade, says reducing the amount of time it takes to export by at least 10 days would result in gains to the gross domestic growth rates of 2 to 4%. Speaking at the Maximising Competitive Advantage to Drive Export-Led Growth conference in Harare yesterday, ZimTrade chief executive officer, Sithembile Pilime said there was need to reduce documentation to allow for only relevant and efficient regulations to be in place. Among the impediments, ZimTrade identified the temporary export permits (TEP) required for goods exported for exhibition and a deposit of 10% of the value of goods being exported from the company as the most challenging. The need for the review comes as the government was accepted as a member of the African Trade Insurance Agency. [Govt moots strategies to boost exports]
India-US Trade Policy Forum: joint statement (USTR)
While welcoming the success of the TPF to date, and that two-way bilateral goods and services trade reached $109 billion in 2015, the Ministers recognized that for economies of their size, a great deal of potential remains. Both sides agreed to continue their efforts for exploring possibilities for opening markets as well as expanding the share of existing trade to each other’s territory. Sharing a desire to increase bilateral trade in goods and services, the two governments reviewed substantive progress achieved in deepening bilateral trade and investment in 2016, and discussed planned engagement for 2017 which can further promote economic growth and job creation in both India and the United States. Minister Sitharaman and Ambassador Froman discussed and exchanged views on a range of trade and investment issues, in particular, (i) Agriculture, (ii) Trade in Services and Trade in Goods, (iii) Promoting Investment in Manufacturing, and (iv) Intellectual Property.
China scores WTO victories against some US anti-dumping methods (Reuters)
China won the bulk of a WTO complaint against certain US methods of determining anti-dumping duties on Chinese products in a WTO dispute panel ruling released on Wednesday. The panel ruled against the US Commerce Department’s practise of "zeroing" in cases involving targeted dumping. In zeroing, the department typically assigns a value of zero any time a producer’s export price is above that producer’s normal home market price, partly to account for freight and customs charges. In practice, the zeroing methodology tends to increase the level of U.S. anti-dumping duties on foreign producers.
This article summarizes relevant policies for the structural transformation of African agriculture and rural space based on Korean experiences in agricultural development and transformation through KSP-AfDB joint consulting in 2015. It highlights policy alternatives to support the structural transformation of agriculture and rural space by analyzing the agricultural development status of Tanzania and Uganda among the Sub-Saharan African countries, and by conducting a comparative analysis with Korean agriculture and experiences in rural development.
UNGA Second Committee debates macroeconomic policy questions
Bangladesh’s representative, speaking for the Group of Least Developed Countries, said they had increased their share in world goods and commercial services exports from 0.7% in 2005 to 1.03% in 2014, but that it had dropped by 20% in 2015. Small islands were losing comparative trade advantage due to reduced tariff lines under the World Trade Organization. Erosion of preference and loss of tariff revenue, as well as employment and various kinds of adjustments, should be fully compensated for least developed countries, he continued. They urgently needed duty- and quota-free market access for all products, simplified and transparent rules of origin and financial and trade capacity-building. [Note: Session documents available for download]
Africa Q3 2016 report (Oxford Economics, ICAEW)
Uganda: Shilling strengthens against the dollar as PTA loan comes (Daily Monitor)
Yuan to Nam dollar exchange facilitation doubles (Namibia Economist)
Nigeria’s customs service promotes Mandarin learning among officers (FOCAC)
Geingob US trip opens new pathways (Southern Times Africa)
Egypt forms committee to set profit margins for sale of basic goods (Egypt Independent)
Southern African Power Pool to become competitive (Southern Times)
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