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tralac’s Daily News selection
The selection: Monday, 8 February 2016
Profiled trade and investment policy discussions:
Tomorrow, in Pretoria: What next for EU‐SA trade relations?
Thursday, in Nairobi: Stakeholder consultations on a National Export Strategy
This week: ECOWAS, Germany collaboration in focus
Later this month, in Arusha: the inaugural East African Business Leaders Summit
Profiled 2015 annual reports: NEPAD Agency, Southern Africa Shippers Transport and Logistics Council
Egypt: Beyond summit diplomacy (Al-Ahram Weekly)
Preparations are well underway for Egypt to host a conference on investment in Africa later this month. Scheduled to open in Sharm El-Sheikh on 20 February, the conference is expected to attract high-level delegations to discuss intra-African investment and foreign investment in the continent. Official press statements say Egypt is eyeing mega-projects in several African states, and government and business-sector sources say they are discussing potential “common interest” projects that, if pursued, will enhance Egypt’s position in Africa. East Africa in general, and Nile Basin countries in particular, are expected to receive the greatest attention from Egyptian investors, working either independently or in partnership with other foreign investors. Though the conference will be opened by President Abdel-Fattah Al-Sisi, it will be the private, rather than state, sector that takes the lead, said Minister of Investment Ashraf Salman.
Brazilian and African governments discuss investments (POST)
A series of topics were discussed between the executive secretary of the Ministry of Development, Industry and Foreign Trade, Fernando Furlan, and ambassadors from 15 African countries in Brasília. The ambassador of Tunisia said to ANBA that the meeting was “highly productive”. “We talked about the signing of the Cooperation and Investment Facilitation Agreement, which sets the rules for doing business and investments, and is a modern instrument to replace the Bilateral Investment Promotion and Protection Agreements. This new model allows the investor more institutional support, unlike the BIPA. It’s an innovative model.” Angola and Malawi are some of the African countries that already signed the agreement with Brazil. In Tunisia, Algeria and Morocco, CIFA negotiations are still in the early stages.
Matrade to expand Malaysian products in West Africa (Malaysian Insider)
The Malaysia External Trade Development Corporation aims to use Nigeria and Ghana as a platform to promote Malaysian products in the West African region. MATRADE Trade Commissioner to West Africa Saifuddin Khalid said the West African region had started opening up their economies, resulting in increasing demand for foreign products. Saifuddin noted that Malaysia enjoyed good relationship with West Africa before the region was hit by political uncertainties in the 1990s, which led to Malaysian companies divesting their investments there.
AGOA has rich export opportunities, if Kenya is interested (Daily Nation)
For this article, rather than attempt to analyse the entire product list, I will focus on two areas, textile and fisheries. These two also happen to be areas that Kenya’s government has committed to developing.
US opens up for more of SA’s goods (Business Day)
After intense discord over SA’s participation in the African Growth and Opportunity Act, the trade relationship between SA and the US is on the mend, with talks now under way to provide greater access for SA’s agricultural products into the lucrative US market. The discussions between the US and South African governments over expanding the range of SA’s agricultural exports that can enter the US market duty free under Agoa have already yielded results, as the US Department of Agriculture has issued a regulation to allow SA to export litchis to the US. Other "low hanging fruit" under discussion are avocados, mangoes and beef, assistant US trade representative for agricultural affairs and commodity policy Sharon Bomer said last week.
Mozambique, China: update on bilateral trade and investment relations (MFA China)
China has started the implementation work and set up a fund for production capacity cooperation, and will soon launch the first batch of projects, and then more and more enterprises will focus their attention on Africa. China is willing to discuss with Mozambique the cooperation under this framework at the earliest time to help its development and bring more benefits to its people. China will view Mozambique as a natural extension of the 21st Century Maritime Silk Road and boost cooperation with Mozambique in marine economy and port-neighbouring industrial parks. Both sides could focus their cooperation on the following aspects:
Mobile phones top imports by Kenyan traders from China (Business Daily)
SA coal finds new markets (IOL)
South Africa’s coal exporters, who reported record shipments last year, are finding markets closer to home to replace waning Chinese demand. “The market axis for coal is seemingly shifting towards new and emerging markets, marking a structural change from a well- established way of doing business," Mosa Mabuza, deputy director general for mineral policy and investment promotion at South Africa’s Department of Mineral Resources, said Thursday at an IHS conference in Cape Town.
South Africa: Beware of impact of new laws on investment - Chamber (Fin24)
The negative impact of legislation like the investment promotion protection bill and the expropriation bill on foreign investment figures in South Africa will only become visible in future, cautioned Matthias Boddenberg, chief executive of the Southern African-German Chamber of Commerce and Industry on Thursday. The chamber has expressed its concern about the legislation in the past, but was not successful in convincing the Department of Trade and Industry and other policy makers of its view, Boddenberg said at the first meeting of Cape members of the chamber in 2016.
The Rand, Nam dollar and benefits of being in the CMA (Southern Times)
The South African Rand might have depreciated against major foreign currencies, particularly the US dollar, Euro and the British pound. This is however not a reason to have discussions of de-linking the Namibian dollar from the South African Rand, to which it is linked one-on-one. Southern Africa Customs Union spokesperson says although the union secretariat does not yet have the latest figures to comment on the impact of the weakening of the rand on trade in the customs area, it is important to note the weakening of rand does not have much impact on intra-trade of Common Monetary Area Member States apart from the general impact that now importing goods into the Union is now expensive.
Unlocking Namibia’s industrialisation potential (New Era)
Recognising that presently Namibia has a very narrow manufacturing base dominated primarily by agro-processed products, the Growth at Home strategy, therefore, calls for a diversified economy through value addition activities or processes. However, due to the lack of economies of scale facing many Namibian manufacturers, an innovative approach such as focusing on niche markets should be considered in order to make the growth at home strategy impactful. [The author, Maria Lisa Immanuel, is attached to the Namibia Trade Forum]
Fair trade hinges on rules of origin (East Africa Business Week)
The Rules of Origin, which determine whether a product is produced within a particular trading partner, are pivotal to any preferential trade arrangement. “These rules of origin that we set for ourselves have the power to render the preferences useless or to actually promote industrial growth of the continent,” Emmanuel Hategeka, the Permanent Secretary in the Rwanda Ministry of Trade and Industry said last week. Hategeka was speaking at the at the recently concluded First Tripartite Private Sector Regional Dialogue on the theme ‘Towards a Private Sector position on TFTA Rules of Origin for increased Market Access’, in Kigali last week.
Kenya and Uganda to jointly monitor transit cargo in bid to stem diversion (Daily Nation)
The pact was signed by Uganda Revenue Authority Commissioner General Akol Doris and Kenya Revenue Authority Commissioner General John Njiraini following deliberations in Nairobi. Speaking at the just concluded East African Revenue Authorities Commissioner-General’s (EARACG) meeting, in Nairobi, the two expressed optimism that revenue collection would be streamlined.
Importers from Uganda and Rwanda now threaten to ditch Mombasa port (The Standard)
The traders accuse the Kenya Revenue of subjecting their goods to verification of cargo at the Container Freight Stations. They said this verification should be done at the port instead of transferring the burden to the CFS, such as Portside Container Terminal where KRA has ordered a 100 per cent physical inspection of all cargo.
Tanzania: High costs stymie standard gauge plan (Daily News)
The government yesterday noted that the envisaged multi-trillion shilling central railway line project that was to be rebuilt to standard gauge level is for now too expensive for Tanzania to finance through own funds. Finance and Planning Minister Dr Philipo Mpango said this yesterday when wrapping up the debate for the 2016/2017 development plan and budget framework. Dr Mpango told the parliament that for the 15tril/- project to be commercially viable, it has to run through Burundi, Rwanda and the Democratic Republic of Congo. He expounded that through the support of the World Economic Forum and the African Development Bank, the central corridor has been found most commercially viable, thus the government was doing all it could to implement it. “WEF and ADB are working closely with Tanzania to raise the required funds. The project will only be viable through Public Private Partnership.” He noted that there are Chinese and American companies which have already shown interests to invest in the project.
Related: EAC states told to pick up pace (East Africa Business Week), Common market yet to open up (East Africa Business Week)
'It's tough to do business in Africa' (IOL)
Politicians were to blame for high airfares that prevented Africans from travelling around their own continent, Mossadek Bally, founder, chairman and CEO of the Azalai Hotel group said. Bally, who was part of a panel in the closing session of the three-day US-Africa Business Summit in Addis Ababa on Thursday, said it was easier for Africans to take a plane to fly to Dubai or Paris on holiday than within Africa.
Related: It’s easier for North Americans to travel within Africa than Africans themselves (Quartz), South Africa: Implementation of Cabinet concessions on immigration regulations (GCIS), Tourism ‘will take years to recover’ from visa issues (Business Day)
Kenya: Steelmakers take dispute on imports to regional bloc (Daily Nation)
Local steel manufacturers have escalated their dispute with the government over cheaper imports from China to the East African Community. The traders are lobbying the five-member trading bloc to increase import duty to protect their businesses. Through the Kenya Association of Manufacturers, they have accused the government of refusing to shield them from cheaper Chinese steel.
Possible protection for SA steel - dti (Fin24)
The South African government is working closely with all stakeholders in the steel sector to secure agreement on a comprehensive package of measures to support South Africa’s primary steel production capabilities, the Department of Trade and Industry said on Friday. Minister of Trade and Industry Rob Davies has assented to tariff increases for three steel products. Investigations into another eight product lines have been finalised and await government approval. This follows due process involving the International Trade Administration Council, according to the dti.
Migration and multilateralism will be hallmarks of 2016 (UN)
The world is facing a political, economic, moral and social crisis as governments and communities struggle to provide effective solutions for the unprecedented numbers of people fleeing war, instability or persecution, the top United Nations migration official said today, calling for deceive multilateral action to tackle “the global issues lurking behind today’s vast movement of people.”
India: Is low import penetration hurting productivity growth? (Livemint)
One important feature of the economic reforms process that started in 1991 was India opening its doors to international trade. It cut tariffs and other barriers such as import quotas and reduced trade protection overall. While trade has risen, a recent Reserve Bank of India paper notes that import penetration has shown a relatively muted increase. This, the paper notes, may be one reason for lower productivity growth. Import penetration is simply the ratio of imports to domestic demand, i.e. how much of domestic demand is being met by imports. For manufacturing goods, this ratio increased from 10% in 1990-91 to only 15% in 2009-10, despite a huge decline in trade protection from 129% to 21% over the same period. Trade protection here refers to approximately how much of domestic industry’s profits (or more correctly value-added) are protected due to tariffs.
The chequered history of Make in India and what Modi must do to make it work (The Wire)
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