Profiled submissions to the STC on Finance, Monetary Affairs, Economic Planning and Integration (12-15 April, Addis Ababa)

(i) Draft report of the experts group on the refinement of the convergence criteria of the African Monetary Cooperation Programme (pdf, Association of African Central Banks). The report of the experts group, including the comments of central banks, was examined by the Bureau of the AACB during its meeting, 8 March 2017, Dakar. In this regard, the Bureau instructed the experts group to: (i) include justifications for the selected criteria and thresholds identified; (ii) present time-lines for the creation of the African Central Bank, provided for in the Strategy of the AUC-AACB Joint Committee for the establishment of this institution; (iii) submit the report to the member central banks and to the RECs for comments; (iv) present the report to the 40th session of the Assembly of Governors scheduled for August 2017 in South Africa. To enable the Experts Group to fulfill the requested tasks, the AACB Chairman convened a meeting of the Group on 29th-30th June 2017 at the Central Bank of Nigeria in Abuja.

(ii) AU Committee of Directors Generals of the National Statistics Offices: report of the 11th Annual Session (pdf, 9-11 December 2017, Nouakchott). Extract: In some countries, the main actors participating in process of data collection, processing and dissemination trade data belong to two or more government agencies, there is need to associate all these actors when any technical support is provided to countries in order to strengthen their capabilities to record and avoid discrepancies on statistics for the same indicators at national level. The meeting considered and made the following recommendations: F - Trade Statistics:

(a) Adopt technical documents on trade statistics: (i) STG-ES Action Plan 2018-2022 on Trade Statistics in Africa, (ii) Harmonized template/framework for country data and Trade transmission channel and protocol; (iii) Metadata on trade statistics; (b) Request AUC to provide training to AU Member States and RECs on the Eurotrace software; (c) Request AU Member States to submit country trade data to AUC on regular basis. (d) Request AUC to follow up AU Member States that have not responded on the data for intra extra African Trade Publication before it uses estimates. (e) Call upon to eventually develop an alternative software to EUROTRACE, with the aim of improving knowledge of Intra-African trade statistics. The tool should include a module for estimating data from non-responding countries.

(iii) Progress report on the African Institute for Remittances (pdf)

South Africa Economic Update: jobs and inequality (World Bank)

This report reviews South Africa’s recent economic and social developments. It underlines that South Africa’s current economic rebound may not be sustained if the fundamental factors undermining its growth potential are not boldly addressed. This includes in particular income inequality, which fuels resource contestation, policy uncertainty and scare private investors of seeing their investments overly taxed and expropriated. Nevertheless, inequalities are increasingly driven by labour markets developments, as opposed to race or location of origin. Policy actions could accelerate a projected decline in inequalities resulting from greater access to education. Using a dynamic computable general equilibrium, the report simulates a number of policy scenarios until 2030.

Extract (pdf): While global growth accelerates, the South African economy has been gathering steam slowly. In 2017, primary sectors were the main drivers of growth, particularly in the agricultural and mining sectors. Momentum in other sectors has been weak. This means that South Africa is diverging from global growth. This is largely because the country’s main exports continue to be commodities – but they are raw materials that are not highly sought-after internationally. Except for parts of the services sector, South Africa is only weakly integrated into global and regional value chains, meaning that it has limited opportunities to benefit from global growth. The business cycle has been gaining momentum since late 2017 and business and consumer sentiment improved in early 2018. This may herald the return of investment that the country needs to make its firms more competitive, transfer technology, join global supply networks, and continue overcoming its historical isolation from the world economy (World Bank 2018b). This issue is further discussed in Chapter 2. [Marek Hanusch: The South African economy is growing faster – but how fast?]

Kenya Economic Update: policy options to advance the Big 4 (World Bank)

Though ambitious, the Big 4 can be achieved. However, significant policy reforms will be needed. This report proposes macroeconomic and sectoral policy options that could help advance delivery on the Big 4 over the medium term. Underpinning the proposed policy options is the recognition that success will require support from both the public and especially the private sector. Hence the need to provide appropriate incentive structures, through policy reforms, to allow resources to flow to the Big 4 areas.

Extract (pdf): The contribution of net exports will be moderate. Historically, the contribution of net exports to GDP growth has been negative, subtracting about 1.1 percentage points from GDP growth. Lower oil prices in recent years has however reduced the extent of the drag from net exports. However, since oil prices are expected to continue their steady ascent in 2018 and beyond, we expect the drag from net export over the forecast horizon to rise. This is expected to be mitigated somewhat by the lift from Kenya’s merchandise (horticulture and tea) and services (mainly tourism) exports as the projected broad-based recovery in the global economy takes root. Further, with fiscal consolidation underway and with it a projected slowdown in development spending, this should moderate the pace of import expansion and reduce the extent of the drag from the net exports contribution to growth.

Nigeria: Economy is on track to post improved growth in Q1 of 2018 (GTI Rsearch)

The biggest winner of all the positive activities that took place both in the domestic and external economic fronts within the period is the foreign reserves account. The reserves account closed at $46.04bn, representing a growth of 18.75% from $38.77bn it opened the year. The account was significantly boosted by increased receipt from crude oil sales (oil revenues makes about 95% of the reserves account). With the improved state of the reserves account, the CBN’s ability to support the Naira in an adverse situation now stands at a healthy six months’ period. This development can be traced to significant increase in oil output as a result of relative peace in the Niger-Delta region.

Mauritius: IOX submarine cable to drive the new digital economy of Mauritius (GoM)

The first phase of the IOX (Indian Ocean Exchange) Submarine Cable system project, which will position Mauritius as a technology hub and significantly enhance the country’s broadband infrastructure to support the new digital economy, was launched yesterday afternoon in Port Louis. The arrival of the marine survey vessel in Mauritius marks a key milestone in the deployment for the new 8 890 km cable system being built by Alcatel Submarine Networks for IOX across the Indian Ocean. The ultra-high speed IOX Cable System will be the first open access system connecting Mauritius and Rodrigues to East London in South Africa and Pondicherry in India. The IOX cable system will deliver an ultimate design capacity of over 54 terabits per second. The IOX cable system is scheduled to go live in 2019.

Can China realize Africa’s dream of an East-West transport link? (Jamestown Foundation)

Achieving the dream of unifying the continent is going to demand complex choices. Any East-West connection across the width of Africa would function as a de facto extension of the Belt and Road Initiative to the Atlantic Ocean. Such a connection would significantly increase Chinese presence on the continent, especially if Djibouti is its eastern anchor, because also houses China’s first overseas military base. While this might worry Western powers, Africa would arguably see it as a small price for a long-cherished dream. [The author, Cobus van Staden, is attached to SAIIA)

Indonesia-Africa Forum 2018: Indonesia targets Rp 6.75t in business deals (Jakarta Post)

 Vice President Jusuf Kalla says the government is eyeing Rp 6.75 trillion ($472.5m) in business deals with partners from Africa at the Indonesia-Africa Forum 2018 in Bali, from 8-11 April. He also stressed the importance of boosting trade between Indonesia and African countries, which was recorded at $8bn in 2017, which was a 15% percent increase over 2016. Although the value was relatively small, Kalla said there had been a significant increase in trade between Indonesia and several Asian countries – 284% with Liberia, 268% with Comoros, 215% with Gabon, 105% with Togo, 105% with Burundi and 100% with Cabo Verde. According to Kalla, about 30 Indonesian companies, including those running in textile and pharmacological manufacturing businesses as well as in energy supply, operated in African countries.

On Tuesday, the forum will feature discussions on policymakers’ perspectives to talk about strategic topics such as economic diplomacy, infrastructure and digital transformations. On Wednesday, the Indonesia–Africa Business Forum will discuss various topics such as connectivity, the digital economy and South-South and Triangular Cooperation.

ECOWAS initiates regional offensive to reach rice self-sufficiency by 2025 (Daily Trust)

Mr Ernest Aubee, Principal Programme Officer and ECOWAS Head of Agriculture Division, made the disclosure in an interview with News Agency of Nigeria in Abuja on Monday. He said rice has become a highly strategic commodity in West Africa and is the largest source of food calories on the African continent. “ECOWAS countries imported around 9 million tonnes of milled rice in 2014, representing a cost of 4 billion Euros. To avoid risks of civil unrest and the scenarios of increased global food prices, there is an urgent need to increase rice production, processing, value-addition, and marketing in West Africa to achieve self-sufficiency. Currently, the region depends on imports from Asia to fulfil about half of its consumption needs.”

Today’s Quick Links: Tomorrow in Nairobi: workshop on operationalization of currency convertibility for EAC Partner States EAC-US trade, COMESA-EAC-SADC Tripartite FTA negotiations: national sensitization workshops conclude 12 April AUC launches online knowledge management platform Single African Air Transport Market: AfDB, stakeholders chart new course for aviation Afreximbank, Russian Export Centre roadshows seek to boost Africa’s aviation infrastructure Sudan, Kenya keen to enhance economic, trade ties Agro-processing sector could save Rwanda $118m annually EAC Gazette: No. 5 of 29 March 2018