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tralac’s Daily News Selection
The selection: Monday, 24 October 2016
Events this week: In Geneva – the DRC’s Trade Policy Review (25, 27 October); In Maputo – Open forum on macroeconomic scenarios and challenges in the present situation (25 October), Conference on poverty and well-being in Mozambique (26 October)
Featured tweet, @megareg_iilj: ‘David Luke: Africa will lose from megaregional trade agreements. CFTA might mitigate losses and contributes to regional integration.’
Nancy Alexander: ‘Possible priorities of the 2017 German G20 Presidency’ (HBS)
The idea is to execute investment compacts with African governments that would represent frameworks for infrastructure and pave the way for private industry. (Compacts may be designed with the United Nations “Global Compact”.) Perhaps Germany will also revive aspects of its “investment for development” initiative which was advanced during its G8 presidency of the 2007 Heiligendamm Summit. The Finance Ministries are concerned about African debt. In that regard, the big question is: how could-large scale borrowing for infrastructure be justified given the fact that many African countries are highly indebted? Is it realistic to hope that investment will generate productivity and growth to facilitate repayment? Optimism will be tempered with some realism given not only the debt, but also low growth, a potential banking crisis, a slowdown in China (Africa’s major trading partner), depreciating currencies, and expanding deficits (especially given the decline in export revenues due to low commodity prices).
Intra-BRICS trade: an Indian perspective (EximBank India)
Over the past decade, there has been a shift in BRICS export interdependence. In 2006, with a share of 46.9% in BRICS intra-exports, China was the dominant exporter to rest of BRICS countries, followed by Russia (accounting for 20.9% of intra-BRICS exports in 2006), Brazil, India and South Africa. By 2015, while China remained the largest supplier to the rest of the BRICS countries, with an increased share of 56.3% in the intra-BRICS exports, Brazil became the second largest intra-BRICS exporter (17.8%), followed by Russia (14.5%), India (7.5%) and South Africa (4%) (see Table 3.2). China has also registered the fastest growth in intra-BRICS exports, with a CAGR of 13.5% during 2006-2015. It is pertinent to note that though South Africa has the smallest share in intra-BRICS exports, its importance as a supplier to BRICS has been growing. During 2006-2015, South Africa’s exports to BRICS grew at a CAGR of 12.3%. As in the case of exports, there has also been a shift in BRICS import interdependence. The share in intra-BRICS import of China, Russia, and South Africa which accounted for 43.2%, 16.4%, and 9.8%, respectively, in 2006, reduced to 40.8%, 13.8%, and 6.8%, respectively, in 2015. While share of Brazil and India increased from 10.4% and 20.2%, respectively, in 2006 to 12.8% and 28.8% in 2015.
"Dar, India trade notches $1.74bn by August" (IPPMedia)
The trade deficit on the part of Tanzania was $392m at the end of August after exporting only goods worth $676m against an import bill of nearly $1.07bn. “The top Indian imports from Tanzania are gold, wood, coconuts, Brazil nuts and cashew nuts as well as dried leguminous vegetables, oil-cake and other solid residues of vegetable fats,” the Indian High Commission notes in the latest India–Tanzania Trade Statistics report. Tanzania and India recorded the least balance of trade last year, which was only $110m compared to $1,174.14m and $1,556.54m in 2014 and 2013 respectively. [Trade high on Dar-Rabat vision]
Israeli exports to Africa rise as exports to China fall (YNetNews)
Israel has been exporting more to Africa as the continent experiences significant economic growth and as the Chinese economy begins to weaken. The Israel Foreign Trade Risks Insurance Corporation has approved 28 deals to be covered by the insurance corporation. The deals amount to approximately $1.05bn dollars. Fiscal year 2015 only saw 17 deals approved, amounting to $623m. The number of Israeli trade deals with African nations which were followed through on in 2015 was four, and amounted to $312m. However, a recent Ashra survey showed that approximately a quarter of all Israeli exporters believe that the African market is the most attractive market to expand operations in. The head of Ashra, Tzahi Malach, said that “we are expecting to see a significant increase in Israeli exports to Africa. The main countries we expect to see exporters shipping to are Zambia, Kenya, and Ethiopia.”
Mauritius at Guangdong 21st Century Maritime Silk Road expo (GoM)
Enterprise Mauritius is leading a delegation of 38 local participants at the 2016 Guangdong 21st Century Maritime Silk Road International Expo. According to the CEO of Enterprise Mauritius, Mr Radhakrishna, the expo (27-30 October) is the ideal platform for Mauritius to benefit from maximum visibility as a strategic partner for trade, investment and tourism. ‘The aim behind our participation is also to establish fruitful business contacts with over 60 participating countries. In addition, the strategic position of Mauritius presents the island as the springboard to propel China in Africa’, he stated. As at date, 30% of trade between Mauritius and China goes through Guangdong.
China’s growing presence in Africa wins largely positive popular reviews (pdf, Afrobarometer)
How do Africans see China’s foreign investment and influence in their countries? Findings from Afrobarometer’s 2014/2015 surveys in 36 African countries, which included a special series of questions on China, suggest that the public holds generally favourable views of economic and assistance activities by China. Africans rank the United States and China No. 1 and 2, respectively, as development models for their own countries. Remarkably, in three of five African regions, China either matches or surpasses the United States in popularity as a development model. In terms of their current influence, the two countries are outpaced only by Africa’s former colonial powers.
Tanzania: Transporters call for urgent improvement of Dar port services (IPPMedia)
The Minister of Industries, Trade and Investment, Charles Mwijage said operations at the port should conform to modern technology to make sure that clearance of the freight at the port does not exceed 24 hours. “It is absolutely unacceptable to dwell on the sickening 14-day bracket of shipment clearance which in neighbouring ports like Beira in Mozambique and Mombassa, Kenya takes 24 hours only. Necessary improvements must be in place the soonest. Dar es Salaam must be a port of choice and convenience,” Mwijage insisted. The minister made the remarks at the opening ceremony of the annual Tanzania Transporters Association stakeholders’ meeting in Dar es Salaam on Saturday.
Seven northern Kenya counties set to form economic bloc (Daily Nation)
Seven counties in Northern Kenya are Tuesday set to launch a bloc aimed at transforming the formerly marginalised region into an economic giant. Marsabit Governor Ukur Yattani said governors from Mandera, Wajir, Isiolo, Tana River, Lamu and Garissa are to join him for the launch in Marsabit Town. [Africa tilts as winners emerge from the commodities slump]
Rwanda, DR Congo sign deal to ease cross-border trade (New Times)
Officials in charge of trade from both countries signed the memorandum of understanding (MoU), last week, in Rubavu District, during the official launch of the Common Market for Eastern and Southern Africa Simplified Trade Regime. The move seeks to ease small-scale trade by waiving import duty on products whose worth is below $2000 (about Rwf1.6 million), according to officials. It is especially expected to help thousands of small-scale cross-border traders, largely women, to carry out their daily business smoothly. There is a list of 168 products categorised into agricultural, livestock, fisheries, construction, cosmetics and manufactured products. A joint periodic review will be conducted every six months to see if there are more products to add or remove, officials said.
DR Congo NGO ends boycott of UAE’s Kimberley Process chairmanship (The National)
The National Support Centre for Development and Popular Participation, known under its French acronym Cenadep, from the DRC, became the first member of the Civil Society Coalition to break ranks with the boycott organised last year. The Congolese organisation is one of 11 that make up the CSC. Others are believed to be considering the offer from Mr bin Sulayem, although Partnership Africa Canada, the most vociferous critic of the UAE under its director of research Alan Martin, has said that the boycott remains in place. Ola Bello, the executive director of one organisation that is attending the plenary, Good Governance Africa, said: "We are very pleased to see that in reflection of Africa’s tradition, the KP chair and some members of the CSC have decided to reconcile their differences and bring forward a positive agenda for change of the KP."
‘Zim should address high wage levels’ (The Herald)
Zimbabwe should address high wage levels, which are in some cases 10 times more than those prevailing in the region, as this is contributing to the erosion of competitiveness for local products, the Minister of Policy Coordination and Promotion of Socio-Economic Ventures in the President’s Office Simon Khaya Moyo has said. "A regional comparison puts Zimbabwe at a disadvantaged position as its wages are significantly higher. One erudite economist made a comparative analysis of the regional wages. He indicated that Zimbabwe offers minimum wages of $275 to $300, Malawi offers $30, Mozambique $120, Botswana $93 and Zambia $100. It is obvious that using this criterion of minimum wages, investors will not invest in Zimbabwe,” he said.
Ethiopia wants more business from SA (City Press)
Ethiopia’s drive to attract more South African investment is being hampered by a government that still distrusts business and a population wary of foreign domination. Africa’s second most populous country wants more foreign direct investment in agriculture, energy, transport and manufacturing, among other sectors, as it seeks to sustain an average economic growth rate of 11% over the past decade, according to Wegayehu Berga, the minister counsellor of business promotion at the Ethiopian embassy in Pretoria. However, at an investment briefing organised by the Gordon Institute of Business Science this week, PPC and Group Five, which are establishing themselves in the country, detailed tales of a slow-to-reform bureaucracy still married to paperwork, slow in decision-making and still protective of its dominance of the economy. “They are incredibly wary about business,” said Tony de la Motte, managing director of Group Five Projects, a unit of JSE-listed Group Five. “I couldn’t even get a one-year visa from this man,” De la Motte said, patting Berga’s shoulder at the panel discussion.
Egypt: FDI galore? (Ahram)
The FT said in an article last week that Egypt had moved to fifth place globally in 2016, up from 15th the previous year, in greenfield FDI inflows to a total of $20 billion. A greenfield investment is a form of FDI in which a parent company builds its operations in a foreign country from the ground up or expands its business including by building new distribution hubs and offices. The news raised eyebrows in Egypt because of the harsh economic situation of the country, especially amid the acute foreign currency shortage caused by the drying up of foreign currency sources, including FDI. But did Egypt really receive this amount of FDI? Official figures from the Egyptian government do not confirm this.
Women’s roles in the West African food system: implications and prospects for food security and resilience (SWAC, OECD)
This paper examines how women’s empowerment is essential for food and nutrition security and resilience in West Africa and suggests policy “pointers” arising from the West African experience that can help inform policies and strategies, particularly in view of the 2030 Agenda for Sustainable Development. West African women play a significant role at each stage in the food system, from production to distribution to nutrition, and they contribute to building resilience and adaptability to uncertainty and shocks including the effects of climate change. While it is clear that women significantly contribute to the eradication of hunger and malnutrition, it is also evident that there is a need for greater political representation and participation in policy dialogues.
South Africa to cooperate on competition law with Russia and Kenya (NLR)
Egypt’s ceramic exports to Africa could increase by 5% (Daily News)
Iran opens business unit in Cape Town (Tehran Times)
Africa Islamic Finance Forum explored development opportunities (Saudi Gazette)
Uganda: Tourism earns economy Shs7.3b (Daily Monitor)
Smuggling eats into Uganda tax revenue (The East African)
17th World Trade Union Congress, Durban: closing remarks by General Secretary of the WFTU, George Mavrikos
India pushes WTO members to accelerate work on outstanding Doha Round issues (LiveMint)
Why India sneezes when China catches a cold (LiveMint)
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