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tralac’s Daily News Selection
The selection: Wednesday, 23 March 2016
Featured tweet, by @Erastus_Mwencha: Africa’s development trajectory has been boosted by mostly, [unrecorded] intra-African trade.
AfDB appoints Dr Frannie Leautier as Senior Vice-President
What’s the latest economic research on Africa? CSAE Round-up – Day 1
This week Oxford University’s Center for the Study of African Economies holds its BIG annual conference. Two plenary panels, one keynote speech, one presentation of the World Bank’s new report on Poverty in Africa, and almost 300 papers being presented. Wow! Today’s post provides micro-summaries of the papers presented on the first day of the conference.
Carlos Lopes: 'Regional integration and monetary unions in Africa' (UNECA)
Administering 54 sovereign states with an array of national policies and inefficient government apparatus constitutes a massive resource-draining overhead cost on Africa’s fragile, undiversified primary production based economies. An assessment of progress towards macroeconomic convergence in Economic Communities in Africa show that, while some progress is being made, it is generally below the targets set in their monetary integration programmes. If Africa were a business the management costs of this type of structure would be uncompetitive. The cost of governing such a fragmented production structure is simply too high for Africa to afford or sustain.
Thus, the contribution of regional integration to the promotion of intra-group trade, growth, development and social and political cohesion is unquestionable. The stark conclusion that can be drawn from these facts is that Africa must integrate (or, in business parlance, rationalize and merge) in order to reduce its overhead costs. The debate about integration, however, has been mostly centred on the political dimensions and the paramount pan-African ideal. [This commentary is based on the author's recent Africa Training Institute lecture]
Experts challenge regional governments to use pension funds for industrialisation (The Post)
Southern Africa economic experts have challenged governments in the region to explore the viability of pension funds, financial services levies and sovereign wealth funds in financing industrial infrastructure and key commodity value chains. “RECs must also build internal capacity to be able to provide the necessary leadership to drive the industrialisation process; they should organise comprehensive regional capacity building programmes for value chain identification, analysis and development among the public and private sectors and identify and develop concrete projects of a regional nature to kick-start the industrialisation process among others.”
West African Economic and Monetary Union: IMF Executive Board concludes regional consultation (IMF)
The overall budget deficit (including grants) increased to 4.8% of GDP in 2014, up from 3.3% in 2013, largely driven by ongoing large public investment programs to address countries’ infrastructure gaps. This deterioration increases public debt for the region to 44.7% of GDP in 2015 from 38.9% in 2014. The drop in oil prices has lightened the energy bills for all WAEMU countries while cocoa and groundnut prices have remained buoyant, thereby improving the trade balance, notably of Cote d’Ivoire, the largest economy in the region. However, the surge of imports associated with public investment and private consumption has partly offset the impact of lower energy bills. As a result, in 2015 the region’s overall current account deficit reached 5.6% of regional GDP, compared with 6.1% in previous year, and gross international reserves rose to 5 months of imports from 4.7 months in 2014.
Abidjan-Lagos Highway Corridor Management Authority: EOI for a needs assessment on its establishment (AfDB)
On trade and transport facilitation: The consultants will identify key bottleneck and propose concrete and targeted steps/actions required with cost estimates towards enhancing movement of goods and services and persons along the corridor; through policy harmonization and reforms. On trade analysis: This analytical component will look at trade amongst the five countries on the Corridor, including the major goods and services traded at the borders, the private sector operators using the borders. The consultant is expected to engage with private sector operators involved in the transformation or processing of agricultural products as well as trade in similar goods along the Corridor. Enquiries will also be made on what constrains operators are facing and what arrangements could be made to facilitate trade and transportation of such products within the sub-region.
Related: West Africa Regional Integration Strategy paper - EOIs from the AfDB: EOI for the development of new RISP, EOI for analytical briefs for the new RISP
Tweet, by @Marcel_Vernooij: Meeting in The Hague with Denmark Foreign Affairs @UM_dk @SaanaConsulting @ECDPM @TradeMarkEastA on Accelerating Trade in West-Africa
Africapolis: Measuring urbanisation dynamics in West Africa (Sahel and West Africa Club Secretariat)
UK-backed African infrastructure projects are ‘pipeline for investment’, says minister (Out-Law)
The UK's Africa minister James Duddridge told an infrastructure conference hosted by the international and current affairs think-tank Chatham House in London on 15 March: “Infrastructure is a pipeline for money. Airports, railways and roads are all pipelines for economic activity. This requires local knowledge and skills but also global expertise and help to get people and money moving.” Duddridge said there was “no quick fix” for infrastructure challenges in Africa, but part of a new UK-led ‘Prosperity Fund’ for the region, worth £1.3 billion ($1.8bn) over five years, “will be used to help Africa grow out of poverty”.
UK aid: allocation of resources - interim report (International Development Committee)
We have some concerns, however, about how the aid strategy was developed and how it will be taken forward. Poverty reduction has been, and should always be, the first priority of UK aid. The strategy’s status as a Treasury-led document with little explicit focus on poverty reduction risks creating an impression that the objectives regarding the UK’s national interest, and therefore security and prosperity, were drawn up first, with DFID left to connect the dots with poverty reduction. That “tackling extreme poverty and helping the world’s most vulnerable” is listed as the fourth of four strategic objectives compounds this impression and risks damaging the reputation of UK aid abroad.
TICAD VI countdown: AfDB, Japan agree to work together (AfDB)
A 40-member delegation of Japanese investors paid a courtesy call on the African Development Bank Group in Abidjan on Monday, March 21, 2016, and met with AfDB President Akinwumi Adesina. The meeting focused on further strengthening AfDB-Japan cooperation in the public sector as well as promotion of Japanese business and private investments in Africa. The AfDB and Japan agreed to give an impetus to cooperation and building a transformative partnership that would stimulate large-scale private sector investments in Africa and provide opportunities for constructing quality infrastructure in the region, with energy as a key priority for the continent’s development. Japan’s State Minister for Foreign Affairs, Seiji Kihara, led the delegation. [TICAD VI senior officials meeting held in Djibouti]
Donald Kaberuka: 'Promoting Africa-India investment in the new global landscape' (Exim Bank)
Dr Kaberuka spoke extensively on Africa and India’s development story while drawing references to the gradual evolution of both the regions in the new economic environment, and the potential it has in the days to come. As a corollary, he mentioned about the growing trade and investment flows between Africa and India, even in the aftermath of the global financial crisis, which stands today at about US$ 76 billion dollars, from US$ 38 billion dollars in 2008. At the same time the African economy today has grown by 5 times its size as compared to 2000, (adjusted for real 2000 dollar the size is three times).
IDB signs MoU with Chinese fund to boost investment in Africa (StarAfrica)
On the side lines of the landmark China-OIC Forum 2016 taking place in Beijing, a memorandum of understanding was signed between the Islamic Corporation for the Development of the Private Sector, the private sector arm of Islamic Development Bank Group and China-Africa Development Fund (CADFund), a Beijing-based private equity firm focusing on Africa. Research collaboration and capacity-building programs that are tailored and demand-driven will also be conducted to better serve target markets. In addition, efforts will be focused on boosting support for African small-and-medium enterprises, widely recognized as an important economic driver and key contributor to sustainable GDP growth.
Summit to explore investment in Africa data centres (CAJ News)
Investors in the information and technology sector will meet in Monaco (9 June) to explore the next phase of data centre and cloud development across Africa. International consulting company, BroadGroup, who research and produce Datacloud, will provide a Market Assessment and Outlook for the Africa data centre landscape.
Mauritius: 2015 Article IV Consultation (IMF)
Mauritius is facing the challenge of avoiding the “middle-income trap” and moving to a higher income status. Competitiveness, productivity and investment rates have been declining in recent years, and the labour force is projected to shrink over time. Infrastructure bottlenecks are a constraint to further development, and the authorities envisage large public investment programs with complementary private investment to boost port capacity, transportation, connectivity and other advanced technologies. The country is also seeking a strategic re-orientation of its large offshore sector to channel foreign investment into mainland Africa. Currently, the global business company sector is a source of economic dynamism on the back of a Double-Taxation Avoidance Agreement Treaty with India, legal and accounting expertise, bilingualism and the record of political stability. Going forward, the authorities seek to position the country as a prime route for foreign investment into Africa and to depart from the tax-centred model to attract capital inflows. This strategy entails even stronger inter-linkages between the GBC sector, the domestic economy and the financial sector, providing further development momentum but also stronger potential spillovers from volatile external conditions. [Mauritius-Seychelles: Joint Commission of the Extended Continental Shelf (Government of Mauritius)]
Politics and development in Tanzania: shifting the status quo (Chatham House)
Tanzania’s trade relations with SADC overshadow those with the EAC, because South Africa dominates as a key country of origin for goods entering Tanzania, and is one of the largest export destinations for Tanzanian goods, second only to India. South African companies swiftly built a dominant presence in Tanzania in the 1990s, as the end of apartheid coincided with the latter’s economic liberalization, allowing South African companies to acquire a number of parastatal institutions during Tanzania’s privatization process. Over 200 South African firms operate in Tanzania; they are most prominent in high-profit industries such as infrastructure and telecommunications. South Africa’s Vodacom is the largest telecommunications firm in Tanzania. [The author: Adjoa Anyimadu]
Related: Tanzania increases issue of EAC trade certificates (East African Business Week), Ikulu: Uganda-Tanzania oil pipeline a done deal (IPPMedia)
South Africa: Does anyone remember the developmental state thing? (Business Day)
To ensure that growth is inclusive, the state has an important role to play in the economy. Policy sequencing in SA is key. Urgently, we need bold structural reforms to get the macroeconomic environment back into shape. Further, there is a need to take determined measures to improve institutional and technical capacities within the state, restructure the operating environment of state-owned enterprises, parlay investments into infrastructure to lift confidence, and explore creative and productive avenues to co-invest with the private sector. [The author, Mzukisi Qobo, is attached to the University of Johannesburg]
Kenya: Second reviews under the stand-by arrangement (IMF)
Performance under the current programme: Although Kenya’s macroeconomic performance remains robust, external shocks complicated achievement of some program’s macroeconomic objectives. All end-September and continuous performance criteria (PCs) were met. Performance under the structural benchmarks was mixed. [Rwanda could go for IMF precautionary loan (The East African)]
It takes a village to power Africa: Q&A with Andrew M. Herscowitz (GE Reports)
So it’s a whole micro-economy that is going to boom. The role of Power Africa — along with our partners like the UK’s Energy Africa and the African Development Bank’s New Deal on Energy for Africa — is determine how to harness what those companies are doing and get them into markets all over the continent. So that you’re cutting out the utility — and you’re cutting out us and the governments — and people are dealing directly with companies and are not waiting a month, a year or 10 years to be connected to the grid. [Andrew M. Herscowitz is the coordinator for President Barack Obama’s Power Africa and Trade Africa initiative]
Zuma coming to Zim in July (NewsDay)
Leaders of Angola-China Chamber of Commerce take office on 31 March (Macauhub)
Rwanda: Cement makers urged to embrace innovative ways to stay competitive (New Times)
Malawi drops ban on imported cement (Global Cement)
Botched rules trip Narendra Modi’s dream of shipping hub rivaling Singapore (Livemint)
Forum for the Future of Agriculture: FAO perspective, conference www
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