News
tralac’s Daily News Selection
The selection: Tuesday, 22 March 2016
Featured tweet, from @OECDtax: James Karanja appointed as Head of OECD UNDP @Tax_Inspectors Without Borders Initiative
Five forest figures for the International Day of Forests: 'We’ve lost 1.3 million square kilometers of forests since 1990 – an area larger than South Africa' (World Bank Blogs). Inaugurated yesterday: the Forest Landscape Restoration Hub for the Eastern and Southern Africa
Three training, conference alerts:
tralac's Geek Week, 11-15 April: An emphasis will be on providing an input into a tralac book examining issues associated with African agriculture and the WTO, although depending upon the interests of participants we can tailor topics to meet these interests. For example, it is likely that the week may explore some aspects of China-Africa trade.
MEFMI's annual research and policy seminar on 'Financing of development': call for papers
OUCAN 2016: 'New spheres of development finance: the role of Chinese finance in Africa’s infrastructure landscape'
Negotiating the CFTA: presentations from the recent ECOWAS/UNCTAD stakeholder consultation
Profiled presentation, by UNECA’s F. Fajana: Preparedness of the different AU-recognized Regional Economic Communities for the CFTA
The CFTA Negotiating Forum, the key organ in the CFTA architecture that has responsibility for negotiating the technical aspects of the CFTA, has the Representatives of the RECs in its composition. However, in the Rules of Procedure for the CFTA N-F which have been agreed at the recent inaugural session of the Forum, while the rules state that “The duly accredited Members of CFTA N-F Member States shall attend and participate in the Sessions of the Negotiating Forum”, the “Representatives of the RECs/ Customs territories secretariats can attend Sessions of the Negotiating Institutions and may provide written and/or oral presentations upon the request of the negotiating institution”. Thus a clear distinction has been made between the status of Member States and RECs in the CFTAN-F. The diminished role of the RECs in CFTA N-F notwithstanding, the RECs still have an important role to play in the CFTA negotiating process - that of coordinating their Member States for common positions, based on the acquis of their FTAs and building the capacity of the Member States for effective participation in the CFTA negotiations. It is in this regard that organization of this ECOWAS Workshop is a move in the right direction. [ECOWAS towards CFTA: looking at the CFTA with statistical lenses (Edward Chisanga, UNCTAD)]
Regulatory bodies seek to harmonise standards (New Times)
Officials from national standards boards from over 20 African countries, who are meeting in Kigali, have started charting a five-year common strategy that will ensure harmony among standards across the continent. The aim is to ensure differences in standards do not hinder intra-Africa trade, according to organisers. The three-day workshop is under the auspices of the International Organisation for Standardisation for developing countries with specific regard to strengthening national standards bodies’ strategic capabilities between 2016 and 2020.
Great Lakes region: UNSC debate on launch of new Regional Strategic Framework (UN)
Investment, strong leadership, as well as sustained support for state-building and tackling poverty were critical ingredients in crafting a peaceful, prosperous future for countries of Africa’s Great Lakes, the Security Council heard today during an open debate marking the official launch of the United Nations Regional Strategic Framework for the region. [Ethiopia to host fifth Tana High-Level Forum on Security in Africa next month (Sudan Tribune)]
2016 Africa CEO Forum: remarks by AFDB's Akinwumi A. Adesina (AfDB)
Africa’s private sector will continue to lead the continent towards economic transformation, African Development Bank President Akinwumi Adesina said Monday at the launch of the fourth Africa CEO Forum in Abidjan. Extracts:
Increasingly, African nations, taking advantage of the record low interest rates, have rushed to the international capital market to raise financing by issuing bonds. Between 2006 and 2014, African nations issued $26bn worth of Eurobonds. This was prudent as long as real interest rates remained low, and sovereign credit ratings favorable. Despite increasing yields, bonds issuances by African sovereigns amounted to about $12bn in 2015.
Of course, a rising Africa cannot be an indebted Africa. While the diversification of financing sources can be good, African governments need to be wary of the risks. Foreign currency denominated debt can quickly become unmanageable when currencies depreciate and foreign reserves are depleted. To avoid it, there is an urgent need to focus on macroeconomic stabilization and fiscal consolidation, broaden the tax base, and deepen domestic capital markets. We must ensure we do not fall again into the debt trap.
We must also tap into and securitize remittances for development. Remittances to Africa have risen from $11bn in 2000 to over $62bn in 2014, exceeding by far Official Development Assistance inflows. Also, sovereign wealth funds’ assets managed in Africa rose from $114bn in 2009 to $162bn in 2014. Pension funds currently stand at $334bn. With all these resources, Africa can finance its own development, and doing so enables it to decide its own direction and pace of growth. [Full text]
Africa CEO Forum second plenary debate: 'Africa – the next clean energy powerhouse?' (AfDB)
Economic Insight: Africa (ICAEW, Oxford Economics, NKC African Economics)
This issue of 'Economic Insight: Africa' aims to provide insight on the dynamics influencing growth in sub Saharan Africa over the past few years and explores the continent’s prospects over the rest of the decade. Growth after commodities: In summary, we find that the Chinese slowdown, and consequent effects on commodity prices, are resulting in changes in the structures of African economies; net energy importers, especially in East Africa, begin with an advantage on this score; the services sector in particular is an important driver of growth; and foreign direct investment and innovation in these sectors are leading to some exciting business developments.
Assessing the contribution of African sub-regional development banks to infrastructure development (ICA)
This study by the Infrastructure Consortium for Africa is an assessment of the current and past contributions of African Sub-regional Development Banks (SRDBs) to infrastructure development in Africa. The study reviews four out of the six African SRDBs that have been established by African Regional Economic Communities. The four sub-regional development banks covered by the study are: [The author: Dr Lufeyo Banda]
Industrial policy for long-term resilience (UNCTAD)
Extract: Active policy responses are now under consideration in many developing countries as industrial policies are once more on their agendas. While simple imitation is ruled out by country-specific constraints and challenges, a number of broad policy lessons may be drawn from successful industrializers. Finally, it is important to note that effectively implementing such a diversification strategy depends on the creation of an appropriate structure of public and private institutions and, not least, the development of a strong and competent bureaucracy.
COMESA, Islamic Development Bank explore partnership (COMESA)
The Islamic Development Bank is exploring possible areas of cooperation with COMESA on regional integration programs. These include cross-border cooperation, improving regional exports/intra-regional trade, trade facilitation, enhancing competitiveness of the private sector in regional market taking into consideration of the great economic and development potential of the Tripartite FTA. Six COMESA Member States namely Comoros, Djibouti, Egypt, Libya, Sudan and Uganda belong to the Organization of Islamic Co-operation.
ECOWAS, APPA to collaborate on developing energy sector in West Africa (ECOWAS)
The partnership will also develop common strategies for securing supplies of energy including hydrocarbons; promote efficient supply infrastructure development policies, transport and distribution of hydrocarbons through regional integration projects. It will also work towards harmonization of contractual frameworks, policies, regulation and tax based on the implementation of joint activities, mutual technical assistance, information exchange, training and participation in specific meetings.
SADC launches ICT thematic group (SADC)
IGAD member states validate sectoral strategies for next five years (IGAD)
The state of EAC bourses and the need for improvement (The Citizen)
Let us take an inventory of where we are: the four markets (Kenya, Tanzania, Uganda and Rwanda) have a total equity market capitalisation of $40bn. There are 105 total listed companies in the whole region (90 - if we exclude the cross/dual listings effect); bonds listed in the four markets are worth about $6.5bn. Liquidity (turnover) in the equity listings is at the level of $2bn per annum (5% of market capitalisation), liquidity on bonds trading is about $0.7bn. Our population is estimated at 140 million, but only about 3 million people have investment accounts with the stock exchanges and central banks (for government bonds investments). The above data are meant to tell us much about our region and its state of long term finance sources. The data tells us about how little we have made use of the capital markets to finance our enterprises and development projects. How are we currently financing these long-term economic activities then? [The author, Moremi Marwa, is Chief Executive of the DSE]
Boost to manufacturers as EAC relaxes rules on goods produced in the region (The EastAfrican)
Local industries have received a major boost after the East African Community relaxed the rules on goods made in partner states. According to the revised rules of origin, goods made in partner states will now be sold duty-free. The more accommodating rules of origin have been under discussion for a year, and are expected to promote locally manufactured goods to increase intra-regional trade. According to Adrian Njau, trade economist at the East African Business Council, the revised rules of origin are trade friendly, simpler and support value chain in the EAC region compared with the old ones.
South Africa: SOEs must buy local (IOL)
The Department of Trade and Industry wants state-owned entities to procure 70% of their products locally to boost growth and create jobs. Director-general Lionel October told MPs last week that if this could be done, localisation would be a game-changer in South Africa, adding that localisation was at the heart of reigniting growth in the economy. October also said the same principle was applied in the US through legislation. October said there was nothing that could stop South Africa from adopting a similar legislation to boost growth.
Djibouti: The road to international trade (CPI Financial)
Though it has long been a strategic port in the region, Djibouti is going a step further, steadily transforming itself into the critical hub for linking East Africa to the eastern hemisphere. Its aspirations got a boost with the recent cooperative agreement signed between Djibouti Ports and Free Zones Authority and Silk Road E-Merchants Information Technology Co. Ltd to create the Djibouti Silk Road Station. Ahmed Osman, Governor of the Central Bank of Djibouti, spoke to Banker Africa about the road ahead for Djibouti.
East Africa drives towards road tolling (World Highways)
The drive towards road tolling in East Africa is gaining momentum. Uganda appears to have broken ranks with its neighbours to make huge strides in achieving progress with this innovative road financing plan. Road tolling has hitherto has been held back in East Africa for lack of political goodwill and State bureaucracies. Kenyan government officials have made announcements on planned road tolling projects. But little has been achieved on the side of policy formulation, project structuring and reviewing the existing road act to pave the way for privatisation of certain routes.
Kenya: New railway to add 1.5% to national wealth (Daily Nation)
Uganda-Kenya to meet in two weeks over pipeline deal (Daily Nation)
How is the Chinese “Going Out” policy having an impact on agriculture-related trade with Africa? (Future Agricultures)
This study illustrated that Chinese investments in agriculture-related commodities in Africa are not necessarily aimed at satisfying China’s domestic food security, but rather are assisting Africa with its food security problem via increasing local productivity using improving technologies, machinery and infrastructure in the region. [Afreximbank urges twinning between Chinese industrial parks, African cities (StarAfrica)]
Does trade reduce infant mortality? Evidence from Sub-Saharan Africa (CGI)
This paper investigates the impact of a trade policy, the African Growth and Opportunity Act (AGOA), on infant mortality and fleshes out the likely mechanisms. This paper derives a causal estimate by developing a micro panel dataset across countries and exploiting within-mother variation in survival of infants. I find that the policy reduces infant mortality by about 9% of the sample mean.
EAC: RFP for the development of the EAC Food and Nutrition Security Policy Implementation Strategy
The high stakes of India’s dispute with the US over visa fees (Livemint)
As India drags the US before the WTO over a spike in American visa fees for foreign workers, the stakes go well beyond the few thousand dollars required for paperwork. It’s the first time that two countries have clashed over visas at the international trade arbiter and reflects the changing nature of global commerce. India generates more than $100 billion from a services industry that depends on sending citizens to the US and other countries to develop software, set up computing systems and repair broken technologies. It argues the US move to double the cost of visas for these skilled workers constitutes protectionism and violates the WTO’s principles for fair trade. The US contends the policy is more about immigration than trade.
Analysing Namibia’s 2015 trade statistics (New Era)
Maersk: South Africa trade reports
Mwami one-stop border post will boost Zambia, Malawi trade - Mwananshiku (The Post)
Kenya: National Ethics and Corruption Survey Report 2015 (EACC)
Daron Acemoğlu: 'Inclusive institutions key for economic growth' (Huffinton Post)
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