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tralac’s Daily News Selection
Featured infographic, @ianbremmer: 'Best map I've seen showing just how big Africa is'
TWN Africa, UNECA, ATPC colloquium on the Continental Free Trade Area: presentations and papers
Profiled presentation, David Luke (ATPC, UNECA): The CFTA is also timely as it has now become clear that efforts to achieve development-friendly trade rules in the WTO have failed. Following the recent WTO Ministerial Conference in Nairobi, ambivalence shrouds the future status of the Doha Development Agenda. At the same time, the action has shifted from the WTO with the world’s major and emerging economies negotiating mega-regional trade deals principally through the Trans-Pacific Partnership (TPP), the Regional Comprehensive Economic Partnership (RCEP) and the Trans-Atlantic Trade and Investment partnership (TTIP). ECA research has shown that Africa’s exports to these markets will decline as preferential margins are eroded. But with Africa’s own mega-regional through the CFTA in place, trade will grow significantly among African countries as I have already noted. An added benefit of the CFTA is that for the first time, it will provide Africa with a coherent trade policy against the background of multiple trading regimes and overlapping REC memberships. The experience of negotiating the Economic Partnership Agreements revealed that without a continent-wide trade regime, African countries participating in different RECs could find themselves in the absurd situation of giving better trade terms to external partners than to one another.
Notwithstanding ECA’s advocacy for the CFTA, some caveats must be noted. Policymakers must be conscious of how the economic effects of FTA agreements cascade down to marginalized groups, the implications for gender and the environment as well as for the least developed country (LDC) economies several of which can be found in Africa, and of appropriate policy responses to these challenges. In particular, with agriculture as the largest sector in most African economies in terms of livelihoods, employment and incomes, ECA is calling for a separate agreement on agriculture within the CFTA. This is to lock in agreed continental policy frameworks such as the Malabo Declaration and the Comprehensive Africa Agriculture Development Programme (CAADP) that make provisions for enhancing food security, rural development, productivity and enhanced participation in agro-value chains. This will also create options and pathways for Africa’s LDC economies to benefit from the CFTA. It is clear to us at ECA that liberalization alone through the CFTA is not sufficient to ensure the modernization of African agriculture. [Access the 19 downloads from the Accra colloquium, 29 February - 3 March]
tralac’s 2016 Annual Conference: conference report and presentations
Trudi Hartzenberg, tralac Executive Director set the scene for the discussions, entreating delegates to assist in moving the conversation from overarching, broad statements on the importance of rules-based governance, to a practical agenda to take the continent forward. There is a need to find regulatory pathways that take into account the true costs of regulation, and to establish a variable geometry that is grounded in clearly articulated, predictable rules. It is also critical that we learn from others, such as mega-regionals including the TPP as continental negotiations progress. These negotiations as well as Africa’s own regional economic communities and ongoing negotiations such as the Tripartite Free Trade Area, offer important lessons for the Continental Free Trade Area (CFTA). Sequencing of the negotiations to reflect priorities such as trade facilitation, standards and technical regulations, rather than starting with tariff and rules of origin negotiations, could well provide opportunities to move ahead on less contentious issues, and issues that can contribute to boosting intra-African trade and competitiveness. The design and architecture of the CFTA have the potential to make or break the agreement. [Access the 20 downloads from the Swakopmund conference, 7-8 April]
South African trade envoy advises small regional economies to industrialise (The Post)
Smaller African economies like Zambia need to improve their infrastructure if they are to benefit from WTO’s trade facilitation agreement, says South Africa’s Ambassador to the World Trade Organisation Xavier Carim. “The fundamental problem that we have in Africa is the ability to produce. South Africa is a big economy, so it [TFAF] will benefit South Africa, certainly, but if you want to have balanced trade, then many of the other [WTO] members have to spend more time talking about how we industrialise, how we build up productive capacity to take advantage of trade facilitation, of more open regional and global markets,” Ambassador Carim told journalists attending an FES-WTO information seminar on trade policy on Wednesday.
Macro poverty outlook briefings: Botswana, Lesotho, Namibia, South Africa, Swaziland, Zambia, Zimbabwe (World Bank)
Africa, TPP, and TTIP: integration or isolation? (Brookings)
The negotiation over the Transatlantic Trade and Investment Partnership is a more complex and immediate challenge to the US-Africa trade relationship. Over the past decade the EU has put in place reciprocal Economic Partnership Agreements (EPAs) with most African nations. Last year, the US last year renewed the non-reciprocal AGOA through 2025. If the US does not address this asymmetry in the context of the TTIP negotiations, it will be ceding a long-term commercial advantage to European firms investing in Africa and exporting to that market. For example, under the terms of its free trade agreement with the EU, South Africa allows imports from Europe at a 4.5% general tariff rate. In contrast, US exports to South Africa face an average general tariff of 19.5%. According to the US Trade Representative, the competitiveness of US exports to South Africa “will further erode” once the EU-SADC EPA comes into force. The disadvantage to US products and companies will increase across Africa in coming years as the EPAs enter into effect unless the U.S. takes steps now to address the imbalance. [The author: Witney Schneidman]
Embracing impact: how Africa can overcome the emerging market downturn (Atlantic Council Africa Center)
Slowing Chinese growth, in particular, will have a negative effect on African economies. China is the continent's largest trading partner, making up 13% of Africa's total exports. Chinese concessionary and commodity-backed lending supports tens of billions of dollars of badly-needed infrastructure projects across the continent. As China's growth slackens, its interest in and ability to finance African projects - and especially valuable infrastructure - will necessarily slow, causing African governments to have to rethink their infrastructure development plans. Brazil and Russia are both experiencing negative growth, and thus are unlikely to make up for the slackening Chinese role in African markets in the short-term. India remains a positive outlier, as it is expected to grow by 7.5% in 2016. Given India's long-standing commercial patterns in East and Southern Africa, the India-Africa relationship could prove a bright spot in a gloomy economic forecast. [The authors: J. Peter Pham, Aubrey Hruby]
Why Dar port is losing out (IPPMedia)
According to the parliamentary Infrastructure Development Committee, what is pushing customers away from the Dar es Salaam port is not its notorious bureaucratic delays in clearing cargo, but rather an unfavourable tax regime attached to the transport hub. The committee's chairman, Prof Norman Sigalla, said yesterday that the problem of multiple taxes and levies imposed on transit cargo was proving a highly discouraging factor for many importers and exporters from neighbouring countries. The committee has advised the government to scrap off value added tax (VAT) on transit goods passing through the port, pointing out that competing ports like Durban, Beira and Mombasa do not charge the tax, which basically makes Dar a much more expensive gateway. [TICTS makes case for more space at Dar port as cargo volumes increase]
Ethiopia 2016-2020 Country Strategy Paper: promoting green economic transformation (AfDB)
Regional Integration and Trade: Ethiopia is generally committed to regional integration, as it has ratified the COMESA Protocol, is a member of IGAD, works to accede to WTO, and has continued with EPA negotiations. It has also signed a Memorandum of Understanding and Transport Corridor Service Agreement with Kenya and South Sudan. Further, Ethiopia has bilateral investments, double taxation treaties, and protection agreements with 40 countries. However, the country’s progress in enhancing regional trade has been generally slow. GoE has yet to ratify the COMESA Free Trade Protocol, scheduled for 2021. Ethiopia’s cross-border trade, diversification, and trade freedom indices are the lowest in SSA. In Doing Business 2016, it ranked 166th of 189 nations in trading across borders. Administrative entry barriers are the major nontariff barriers affecting Ethiopia’s trade with COMESA members. This, and the anticipated energy trading, calls for the scaling up of the Bank’s advisory services to GoE to address these challenges. [Comoros: 2016-2020 Country Strategy Paper (AfDB)]
IGAD's Regional Pastoral Livelihoods Resilience Project: consultancy project to review cross-border trade policies
The overall objective of the assignment is to review cross-border trade policies and bilateral trade agreements among IGAD member states (focusing on Uganda, Ethiopia and Kenya) in order to support implementation of IGAD minimum integration plan. The assignment identifies issues furthering harmonization of national policies and regulatory regimes, as well as issues that support trade facilitation and integration among the IGAD member states, focusing on livestock and livestock products. [Related IGAD consultancy]
Egypt's e-commerce strategy: update (UNCTAD)
With approximately 8 million credit and debit card holders nationwide and the numbers increasing, Egypt is making headway in growing card and mobile payments. But bottlenecks remain not only in encouraging greater consumer use of credit and debit cards and other electronic payment forms for e-commerce, but also in incentivizing Egyptian small businesses to accept cards and mobile payments. These were some of the findings of a recent UNCTAD/World Bank fact-finding mission to assess the status of payments for e-commerce in Egypt. The UNCTAD and World Bank collaboration responds to the request of the Government of Egypt to UNCTAD for advisory services to assist in the development of a national e-commerce strategy.
Is living in African cities expensive? (World Bank)
Readjusting the calculated price levels from national to urban levels, the analysis indicates that African cities are relatively more expensive, despite having lower income levels. The price levels of goods and services consumed by households are up to 31% higher in Sub-Saharan Africa than in other low- and middle-income countries, relative to their income levels. Food and non-alcoholic beverages are especially expensive, with price levels around 35% higher than in other countries.[Why urban agriculture isn't a panacea for Africa's food crisis (The Conversation)]
Africa and the Identification for Development (ID4D) project: update (World Bank)
African leaders and development partners agreed on a common approach for accelerating the provision of unique identification to millions of people in Africa as a means to foster more inclusive economies and greater regional integration. At a high-level meeting on Wednesday during the World Bank-IMF Spring Meetings, representatives from the African Union, the Economic Community of West African States, the East African Community, African Ministers of Finance, development partners and the World Bank Group committed to join efforts in providing identification to millions of people across Africa through a more integrated and regional approach.
Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development: communiqué
Effective international tax cooperation is an essential complement to our efforts to mobilize domestic resources. We strongly support the participation of developing countries on an equal footing in the widespread and consistent implementation of outcomes of the G20/OECD Base Erosion and Profit Shifting (BEPS) Project. We welcome the joint initiative of the IMF and the WBG on capacity building on tax administration and call for delineating concrete steps on how they can support enhancing the participation and voice of developing countries on international tax issues. Furthermore, we urge the IMF and the WBG to strengthen their support to combat illicit financing flows. We reiterate our longstanding call for a third Chair for Sub-Saharan Africa in the IMF Executive Board, provided it does not come at the expense of other EMDCs’ Chairs.
Arvind Subramanian: 'The risks of China’s failure – and success' (Project Syndicate)
Sustainable economic development in a challenging global environment: 14 April conference summary (IMF)
Taxing to develop: when ‘third-best’ is best (International Growth Centre)
Tanzania: Govt officials ‘dodge’ mining sector discussion (IPPMedia)
Zimbabwe: Declining exports reflect deep crisis (editorial comment, Zimbabwe Independent)
Don’t run from Zambia, Zambian Turkish Business Association urges investors (The Post)
SA, Seychelles Chambers of Commerce and Industry sign cooperation agreement
Africa probes the Panama connection (Africa Confidential)
Panama Papers reveal shell companies linked to Africa’s richest man Dangote (M&G Africa)
Liberia's private sector withdraws from African Peer Review (FPA)
Argentina wins WTO appeal in case targeting Panama tax practices (Reuters)
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