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tralac’s Daily News selection
The selection: Thursday, 4 February 2016
Now available: African Integration and Development Review (Vol. 8 No. 2, July 2015)
Africa-Arab Partnership: update from Addis (AU)
East Africa Research Fund: call for proposals. Themes 'Understanding intra-regional labour migration' and 'Understanding small scale mining'
Mukhisa Kituyi: 'How to ensure the continued participation of LDCs in the multilateral trading system?' (UNCTAD)
There is significant potential in LDCs for the creation of regional value chains in agriculture and agro-processing. Integration into regional markets for agro-based products is strong in Asian LDCs (which direct 85% of their agricultural goods to regional markets); but it is much weaker in African LDCs and Haiti (where the corresponding share is just 26%) and island LDCs (approximately 10%), where the development of regional agricultural value chains is held back by infrastructure deficits, poor competitiveness in production and trade, and weak implementation of regional integration initiatives.
Developing regional markets is also important for trade in services, which has become a dynamic driver of growth in many African LDCs. To leverage services trade and the related development, employment and growth benefits, it is particularly important to improve the coherence in the currently existing multiple layers of regulation that appear disjointed and unrelated across existing national, regional and global frameworks. To address the disconnect at the global level, the LDCs' national and regional priorities must be better taken into account and adequately reflected in the global services agenda in order to move from the multilayered status quo to an articulated and coherent strategy.
Trade, finance and development: overview of challenges and opportunities (ICTSD)
Where do trade and finance fit into this picture? In order to organize our thoughts, let us divide the impact of trade and finance on economic growth (leaving development per se out of the picture for the time being) into two components. [The author, Jean-Louis Arcand, directs the Centre for Finance and Development at the Graduate Institute Geneva]
US companies want fair treatment in South Africa (NewsGhana)
American companies in South Africa are concerned that some EU companies who are their competitors were getting 5 to 25% reduction in duty, a treatment which is denied to US companies, Assistant US Trade Representative for Africa, Florizelle Liser, said at a press conference in Johannesburg. This happened when South Africa was enjoying duty free access to the U.S market to sell their products, she said. There are over 600 US companies operating in South Africa, and this pushed American government to force South Africa to comply with certain compliances in relation to the African Growth and Opportunity Act, Liser said. Liser, however, denied that her country was arm twisting South Africa to agree to the U.S. demands.
ANC sets up review of SA’s trade agreements (Business Day)
Economic subcommittee co-chair Enoch Godongwana on Monday said in light of Agoa, it was agreed that NEC members should have a deeper understanding of trade agreements. "We have got to deepen our own understanding of these trade agreements and their implications and therefore the economic transformation subcommittee will work out a detailed presentation for the NEC," he said. This presentation will be made to the party’s highest decision making body between conferences when Mr Mantashe slots it onto the programme. Mr Godongwana echoed Mr Davies’ assertion that the intention was not to change or reverse any of the agreements, but rather to deepen members’ understanding of them and their implications.
US-Africa Business 2016 summit: Kenya ministers pitch projects to investors in Addis (Daily Nation), The problem with investing in Africa – Hayes (PM News)
Klaus Schade: 'To de-link or not to de-link? A contribution to the current debate in Namibia' (Southern Times)
Last but not least, de-linking the Namibia dollar from the South African rand would imply that we abandon our regional integration ambitions of a monetary union that is still on the agenda even though no new time lines for achieving it have been agreed upon.
Lesotho: 2015 Article IV Consultation (IMF)
Spillovers from slower growth in neighbouring South Africa have begun to weigh on the Lesotho economy. Diminished employment opportunities for migrant workers, particularly in the mining sector, have reduced remittances and consumers’ purchasing power at home. Also, with a lag, SACU revenues depend on South Africa’s collection of import duties, which fell considerably short of expectations in 2014/15. South Africa is also an important source of private sector investment in Lesotho, which also appears to have fallen. However, beyond water transfers, Lesotho’s principal export markets (diamonds, textiles) lie outside the sub-region and are not strongly affected by economic developments in South Africa. Finally, Lesotho’s financial system has close linkages with South Africa and under the CMA, South Africa’s monetary and exchange rate policies have a direct impact on Lesotho. Most years, several of Lesotho’s financial institutions have accumulated assets in South Africa leading to a net outflow of financial resources.
Lesotho’s SACU revenues are expected to fall by about 12 percentage points of GDP between 2014/15 and 2016/17, with much of this drop expected to be long lasting. After falling by 3½ percentage points of GDP in 2015/16 (to just over 25 percent of GDP), they are projected to plunge another 8½ percentage points to about 16½ percent of GDP the following year. Although a modest rebound is expected in 2017/18, SACU revenues are projected to remain relatively low (below 20 percent of GDP) over the foreseeable future, largely due to the slowdown in import growth in South Africa, which is the main determinant of the size of the SACU revenue pool.
Zimbabwe: Economic Update (World Bank)
Low export prices and high production costs are contributing to a persistent deficit in the external accounts. Despite narrowing somewhat in recent years, Zimbabwe’s current account deficit remains much larger than those of comparable countries in the region, and exports currently amount to just over half of imports. A decline in global prices for gold, platinum and other mineral commodities, coupled with unresolved supply-side constraints, has reduced the value of mining exports. Zimbabwe has also benefited from lower oil prices, but rising import volumes largely offset the impact on import values. Remittances gradually increased during 2010-2015 and are estimated to have reached almost 7% of Gross National Income in 2015. The deficit is primarily financed by capital inflows, especially foreign borrowing, but unfavorable terms contribute to making this model unsustainable over time.
Today, in Harare: RBZ Monetary Policy Statement
Rwanda: Govt targets $100 million from floriculture, horticulture exports (New Times)
The Government targets $104m annually from floriculture and horticulture sector by 2018, up from current $10m, an official said yesterday. Tony Nsanganira, the state minister for agriculture, said this would be possible owing to the increasing number of investors in floriculture growing in Rwanda. He was speaking at a meeting with investors from Japan and session on Japan floriculture experimental study that seeks ways to boost flower growing in the country.
Designing an agricultural mechanization strategy in sub-Saharan Africa (Brookings)
Kenya: Thugge defends tax treaty shielding Mauritian firms (Business Daily Africa)
Treasury permanent secretary Kamau Thugge has held in court that a treaty shielding Mauritian firms from normal taxation rates was signed to attract investors to Kenya. Mr Thugge says, in response to a suit filed by a lobby, that the tax treaty signed in 2012 will lower levies for Mauritian firms doing business in Kenya but only for five years. The Tax Justice Network-Africa has sued the Kenya Revenue Authority, the Treasury and Attorney General Githu Muigai in a bid to quash the Double Taxation Avoidance Agreement which it says will deny Kenya billions of shillings in revenue. The lobby says unscrupulous parties can manipulated the terms of the treaty to evade taxation by the KRA.
Tanzania: Employers unhappy with law covering foreign workers (IPPMedia)
Opening a seminar for Association of Tanzania Employers members yesterday, Dr Mlimuka said although the association was committed to creating more jobs in the country, the existing local business environment made it difficult to do so. He cited legislation like the Non-Citizens (Employment) Regulations Act of 2015 which, according to him, was extremely unpopular among employers. “At the risk of being labeled anti-local, we as an association would love to see more relaxed labour and migration laws for foreigners working in the country, vis-à-vis the lack of qualified Tanzanians in specialised fields of work,” he said.
Tanzania: Spice growers to benefit from value chain trade association (IPPmedia)
Africa’s production of spices has grown by 40% over the decade such that SADC countries produce 1.2 million metric tonnes with 1.7% market share in 2005. Highlighting on Tanzania’s share of global spice exports, Mchomvu said in Tanzania trade in the crop was still traditional and localised with limited supply to niche export markets. In 2009, Tanzania was ranked 3rd in organic spice farms in Africa and fifth in the World with 151.6 hectares that were organically certified out of 85,366 farms.
IMB says Somalia route highly volatile despite lull in piracy attacks (Business Daily)
The International Maritime Bureau has warned that ships plying routes off the coast of Somalia remain at risk despite a lull in piracy attacks that enters its fourth year. The intergovernmental anti-piracy group said no Somali-based attacks were reported in 2015 but the route through the Gulf of Aden remained a risk area.
Nigeria: To devalue, or not to devalue? (ThisDay)
India’s trade with Senegal rockets to over $700m (Odisha News Insight)
Commodity price shocks and financial sector fragility (IMF)
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