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tralac’s Daily News selection
The selection: Monday, 15 February 2016
Today in Johannesburg: UNCTAD joins SADC review of best approaches to take its Bilateral Investment Treaty template forward. Twitter updates: @UNCTADinAfrica
Featured infographic, from @frostyhk: Here's China's worsening trade figures in a chart. Exports -11% in Jan, imports down every month since Oct 2014.
Featured commentary, by Sultan Ahmed Al Jaber: 'Asia's middle class is reshaping world trade' (CNNMoney)
The United Arab Emirates sits at the pivot point of this re-balancing of the global trade flows. In the last decade, India and China have emerged as the UAE's biggest trading partners - each does about $60bn in trade with us every year. This growth is being driven by middle income earners. Their numbers are projected to rise to five billion by 2030, two thirds of them will live in India and China. As part of our strategic vision to diversify our economy, we have created business friendly enterprise zones next to our logistical hubs, attracting thousands of Chinese and Indian businesses. For instance, the Jebel Ali Free Zone Authority is now home to some 800 Indian and 250 Chinese firms. They are drawn to an environment where the ease of doing business is matched only by the unique location that can serve both established markets and open new markets in Africa. [The author is Minister of State, United Arab Emirates]
South Africa’s exports performance: any role for structural factors? (IMF)
Despite a substantial and prolonged exchange rate depreciation, South Africa’s export performance has disappointed since the global financial crisis. In this paper we focus on the role of structural factors in reducing the responsiveness of South African exports to the real exchange rate depreciation. To this end, we construct a unique database of export performance at the firm level. Our analysis suggests that electricity bottlenecks, limited product market competition, and labor market constraints have reduced the responsiveness of firms’ exports to the rand depreciation. On the other hand, a firm’s ability to diversify its exports has helped it benefit more from currency movements.
Extract: The micro-level data reveals that small and medium sized enterprises are manufacturing-intensive, and export primarily to regional partners. More than 85% of the goods exported by SMEs are manufactured products, while almost half of large companies’ exports are mining products (Figure 3). Over 90% of SMEs’ exports are shipped to Sub-Saharan Africa, while export destinations are more evenly distributed in the case of large firms (Figure 4). [Download]
Inaugural Africa Visa Openness Index is launched (AfDB)
The report highlights regional and geographical differences. Currently, 75% of countries in the top 20 most visa-open countries on the continent are in West Africa or East Africa. Only one country in the top 20 is in North Africa and there are none in the top 20 from Central Africa. The report also shows that Africa’s Middle Income Countries have low visa-openness scores overall, while the continent’s smaller, landlocked and island states are more open. “When we started this work, only 5 African countries offered liberal access to all Africans; this number has grown to 13 over the past three years. We are making progress, but need to accelerate the pace” says Acha Leke, Director of McKinsey & Company and member of the WEF Global Agenda Council on Africa. [Download]
Southern Africa: Gender issues in cross-border trade (SATH)
The Trade Hub is currently undertaking a gender assessment of women’s roles in informal cross-border trade across Southern Africa. The Trade Hub hopes to leverage its connections with border agents and customs officials to identify innovative solutions to address gender constraints and prevent gender-based violence at border crossings. The presentation covered the methodology of the gender assessment, which includes literature and policy reviews as well as fieldwork in Botswana, Zambia, and Malawi.
Beitbridge: Government to enhance security, efficiency (The Herald)
Dr Chombo said most of the challenges at the port of entry included the inadequacy of infrastructure, manpower and accommodation for Government workers. He said they were also seized with the reports of rampant corruption at the border post. “It is worrisome that we are importing for $7bn per year and getting around $3bn on exports. It means we could be losing a lot to smuggling,” Minister Chombo said.
Mutukula One Stop Border Post: URA challenged to reduce cargo clearing time to six hours (The Monitor)
‘I have spent the past 48 hours on a truck going from Abidjan to Burkina Faso. Conclusion: you really don't want to be landlocked in Africa’ (@dlknowles)
West Africa: Germany to finance UNCTAD project on transparent trade procedures (UNCTAD)
The project will create online Trade Portals that will describe export, import and transit procedures in the recipient priority countries of Nigeria, Mali and Benin, all of which are WTO Members. Main benefits for the recipient countries will include:
East African countries could lose out on TFTA benefits from June (The East African)
So far, EAC partner states have agreed to liberalise 63% of their tariff lines to the other TFTA partners and 37% of tariff lines are to be liberalised and further negotiated. On rules of origin, members have agreed that where rules are common (including wholly originating), 35% ex-works costs (distribution and logistics) should be retained as an interim option. If enacted, such a move would mean that products on which the value-added criterion of 35 per cent ex-works cost applies could gain duty-free regional market access. “The agreement is also on product-specific rules of origin,” noted Mr Ogot.
Towards Africa’s own mega-regional: the CFTA (Bridges Africa)
Botswana: Economic Stimulus Programme launch (Government of Botswana)
It is in response to the above that ESP is targeting the construction, the manufacturing, tourism and the Agricultural sectors. The Economic Diversification Drive and the Special Economic Zones in particular will boost the local Manufacturing Sector. These efforts will be further complemented by the implementation of the Doing Business Roadmap and Action Plan, recently launched by the Ministry of Trade and Industry. The Government Implementation Coordination Officeis being strengthened to oversee the implementation of all government projects, monitor and to keep records of their progress while the National Strategy Office will focus on the successful delivery, strategic oversight and support to ensure that the goals of the ESP are achieved. [The author: President Khama]
East Africa: ‘We can’t build integration on political quicksand’ (Citizen Digital)
Although an attempt by Burundi to recall four members of the East African Legislative Assembly has been successfully defeated, the danger signals to regional integration initiatives arising from that attempt are clear. It is not lost on observers that Burundi is going through political turmoil, and the efforts to recall the four legislators could very well be associated with local political manoeuvres. Fortunately, EALA stood its ground, making it clear that the attempted recall was in contravention of the Treaty for the Establishment of the East African Community. [The author: Isaac Mwangi]
Even with open EAC borders, there is so much more to do (New Times)
ECOWAS Parliament as Ekweremadu exits amid accolades (ThisDay)
Ethiopia: That illusive US investment (Addis Fortune)
Business relations have still not taken off satisfactorily. Of the 250 US companies that have made it through the US Embassy's International Trade Administration office in the year and a half since it opened, less that 4% have got to the point of starting operations. Data from the Ethiopian Investment Commission show that in the past 22 years, 522 US companies have been licensed. Of these, 35% made it to operation. The companies made a capital outlay of 7.5 million Br, and created 15,000 permanent jobs. "It takes from two to four years to start operations," the US Embassy's Foreign Commercial Service Officer, Tanya L. Cole, told Fortune, adding that time is one of the biggest deterrents to FDI in Ethiopia.
Egypt: Chinese companies boost operations (ecns)
He explained that the company chose to set up a base in Egypt because of the country's location and the preferential trade policies it enjoys in other markets. "If you export fibreglass to Europe from China, you have to pay anti-dumping and anti-subsidy duties of 24.8 percent, not to mention the tariff. There is no tariff if you export to Europe or the Middle East from Egypt, nor any anti-dumping and anti-subsidy duties." Also, it takes at least a month to ship goods from China to Europe, but from Egypt it takes only a week, and a container could arrive in Turkey in just two days, he said.
South Africa: Zuma releases report that calls for partial privatisation (Business Day)
Signalling that the government is finally ready to move on the reform of state-owned companies, President Jacob Zuma has released the report of the presidential review commission, which advocates partial privatisation through listing and the sale of equity stakes in some companies. The report was commissioned by Mr Zuma in 2010 and he received it in December 2012. In 2013 a brief summary was made public by then minister in the presidency Collins Chabane. The full report was finally released by the Presidency on Friday. [Download: Presidential Review Committee on State-Owned Enterprises]
Ashok Leyland begins work to set up assembly unit in Africa (Economic Times)
"From the traditional market in Middle East, Sri Lanka, Bangladesh (which Ashok Leyland serves currently), we would now like to shift to Africa and select countries there. We also have an East Africa strategy and West Africa strategy," Ashok Leyland Chief Financial Officer Gopal Mahadevan told reporters here. The move comes in the backdrop of orders it received for supply of buses and trucks from Senegal, Ivory Coast, Tanzania and Zimbabwe.
India prods steelmakers to use local coal to cut $4 bln import bill (Reuters)
India is asking the country's big steelmakers to consider converting local medium-quality coal into premium coking coal to slash an annual import bill of more than $4 billion for buying that grade from countries such as Australia and South Africa. Resurgent local output of power-generating thermal coal has been one of Prime Minister Narendra Modi's successes, and the latest project could help India to partly make up for a shortage of coking reserves that forces companies like JSW Steel and Jindal Steel to import heavily.
Social Development Commission: draft Africa resolution (UN)
The Commission for Social Development concluded its fifty-fourth session, approving three draft resolutions for adoption by the Economic and Social Council with one on Africa’s development, traditionally endorsed by consensus, requiring a rare vote to address the United States’ concerns over language around trade issues, and more generally, “the right to development”. As the day began, the Commission approved a draft on “Social dimensions of the New Partnership for Africa’s Development” by an unexpected vote of 29 in favour, to 12 against, with no abstentions. By its terms, the Council would emphasize that “increasingly unacceptable” poverty, inequality and social exclusion in most African countries required social and economic policies to be devised through a comprehensive approach.
Africa-Arab Partnership formulates Action Plan 2017-2019 (Gulf News)
SADC Commission of Inquiry report: main findings (Lesotho Times)
Sustainable Energy for All (SE4All) Africa: workshop (AfDB)
Nigeria: Business, govt regulators plan roundtable to review relationship (ThisDay)
Kenya’s new Insolvency Act will boost ease of doing business (The East African)
East Africa: TradeMark channels $2.5m to private sector (The East African)
United States goes a’courting ASEAN (East Asia Forum)
President Barack Obama is hosting leaders of 10 Southeast Asian countries in Sunnylands in California this week in a bold move to deepen and broaden US engagement with ASEAN. This is a positive development but it also imposes risks that, in the end, will be up to ASEAN to manage. The ASEAN group is the fourth largest trading partner of the United States and American companies are the largest single source of foreign direct investment in the region.
Vivek Dehejia: 'The return of trade protectionism' (LiveMint)
Isabelle Ramdoo: 'Thinking beyond the resource boom: African countries must avoid procrastination' (ECDPM)
Christine Mungai: 'Which are the top think tanks on the continent? Plus insights about the thinking business in Africa' (M&G Africa)
Silk Roads, Night Trains and the Third Industrial Revolution in China (Truthout)
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