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tralac’s Daily News Selection
The selection: Wednesday, 1 June 2016
Launching today, at the AERC conference: ‘Made in Africa: learning to compete in industry’
Concluded yesterday: Kenya trade policy and Economic Partnership Agreement workshop
Featured commentary: ‘Why the global trade slowdown may matter’
Clothing global value chains and sub-Saharan Africa: global exports, regional dynamics and industrial development outcomes (The Commonwealth)
To illuminate these analytical and policy points, this paper assesses the export-oriented clothing industry in the five main SSA clothing exporter countries (Mauritius, Madagascar, Kenya, Lesotho and Swaziland). The focus is on analysing the various characteristics driving firm and value-chain dynamics as well as upgrading and industrial development outcomes. This includes challenges related to global dynamics as well as unfavourable domestic conditions, such as limited skills and industrial capabilities and poor infrastructure. These challenges have to be addressed at national and regional levels for the sector to fulfil its potential for industrial development. [The authors: Cornelia Staritz, Mike Morris, Leonhard Plank]
Accelerating growth in the Zambia-Malawi-Mozambique Triangle (pdf, AfDB)
Fortunately, we have a number of options to accelerate growth in the ZMM Triangle. We can look into a regional value-chain approach to leverage the unique strengths of the three countries and accelerate growth in the ZMMGT. For example, natural gas from Mozambique can be shipped to neighbouring countries to generate energy for industrial and domestic use, while easing the pressure on wood fuel which has led to environmental degradation in the Triangle. For this to happen, it is important to map and quantify the available resources endowments but also identify complementarities and put in place favourable policies for their extraction and beneficiation. Such regional beneficiation has been known to work in the region. For instance, copper concentrates in Katanga Province in the DRC is transported to smelter plants in Zambia’s Copper belt area for further processing into high-value copper cathodes before exportation. This can be replicated in other sectors. We also need to leverage on the Tripartite Arrangement. [Statement by Moono Mupotola]
Zimbabwe hosts SADC corridor investment conference (The Chronicle)
The SADC Beira and North-South corridor investment meeting began yesterday with participants expected to strategise on management of regional transport institutions. The technocrats are seeking to consider the proposed governance frameworks and legal instruments and development of a MoU between the Beira Development Corridor and North-South Corridor. “Broad consensus has now been reached on the draft MoU but there has been an impasse since 2012 arising from disagreements concerning options for funding institutions and projects. The MoU needs to be finalised and adopted by prospective corridor member states,” a programme document indicates. Zimbabwe and Mozambique already have an MoU for the coordination of the Beira Corridor. The technocrats will come up with recommendations and a report when the meeting ends with the ministerial meeting on Friday. [Kazungula Bridge Project: tender for the construction of OSBP facilities in Zambia is awarded to Chinese firm]
New report queries slow cargo clearance at Busia border (Business Daily)
According to the Northern Corridor Performance Dashboard report, a tool developed by industry players to monitor efficiency on the transnational route, Busia not only had the least traffic in the first quarter but was also slowest in clearing cargo. The border post also had the lowest level of weight compliance. The Q1 report shows that an average of 424 trucks crossed the weighbridge at Kenya’s Busia border with Uganda in the three months to March. This is low compared to an average of 929 at Webuye, 2,633 at Gilgil, 2,410 at Mariakani and 5,752 at Athi River weighbridges, which registered the highest traffic due to cargo originating from Mombasa, Nairobi and its environs as well as cargo from Tanzania through Namanga.
Wake up, Zambia, smell the roses (IPPMedia)
The flower business should be best thought of as an “export processing zone”, reflects one farmer responsible for 180-million sweetheart rose exports annually to Europe and the United Kingdom, where all inputs save water and labour are imported. Yet there are no exemptions on duty; in its place exists an inadequate lengthy impractical duty drawback scheme at the mercy of government’s bureaucracy, which has replaced the duty-free status once enjoyed by exporters. Even capital equipment is subject to the same system. Moreover, the regional competition is not standing still. Why should it? Kenya and Ethiopia are surging ahead in this sector, with 3,200ha and 1,850ha under cultivation respectively. [The authors: Greg Mills, Dickie Davis]
Tanzania: 'Magufuli: Slap anti-dumping tax on foreign goods' (IPPMedia)
The president pledged unwavering support to local manufacturers and dismissed claims in some quarters that he was anti-business due to his ongoing tax crackdown and wide reaching anti-corruption crusade. He also instructed government officials to adopt a public procurement policy that gives preference to locally manufactured goods over foreign goods as part of his industrialisation plan. "I would like to see local manufacturing companies paying less tax and importers of foreign goods paying hefty taxes. We should not be a dumping area," Magufuli told Tanzanian industry leaders in his speech at this year’s President's Manufacturer of the year (PMAYA) Awards held in Dar es Salaam yesterday. "Tax evaders are killing our industries...You can't survive and you can't compete. We want to normalise the situation."
Zimbabwe cement industry: exports fall (The Chronicle)
Zimbabwe cement manufacturers have called for a reduction in the price of electricity after exports into the region dried up as high production costs make local products uncompetitive. Industry representative, Kelibone Masiyane, on Friday told a meeting organized by the Ministry of Industry and Trade to discuss import control measures that exports dropped from over 100,000 tonnes in 2014 to less than 40,000 tonnes last year and there has been none at all this year. Masiyane said at $150 per tonne, the cost of production was twice as high as that of other countries in the region mainly due to high power costs, which at 14 cents per kilowatt hour, make up 25 percent of production costs. [Related: Zimbabwe is to launch a trade information portal (Financial Gazette), Witney Schneidman: 'Zimbabwe’s economic reform challenges' (Brookings)]
Uganda’s economic growth slows down (Daily Monitor)
Uganda’s economic growth has slowed down to 4.6% for the financial year 2015/16 from growth rate of 5.0% that was recorded in the financial year 2014/15, statistics released yesterday by the Uganda Bureau of Statistics have revealed. The sectors that performed better included agriculture, which grew by 3.2%, up from 2.3%, while the services sector grew by 6.6%, from 4.5%. Dr Mukiza said the sectors that performed worse were manufacturing, which declined to 0.4% from 11.0%, and industry to 3.0% from 7.8%, in the last year financial year.
South Africa: Commitment decisions in anti-trust cases (OECD)
Of the 43 cases settled (in 2014), 39 related to cartel contraventions, three related to abuse of a dominant position and one to a restrictive vertical practice. The Tribunal, however, confirmed 42 consent orders. The Commission has accepted both structural and behaviour remedies in its attempt to craft creative remedies that restore competition. Below we discuss a few examples of settlement agreements: [Documentation: June workshop on Commitment Decisions in Antitrust Cases] [South African regulator sets conditions for $100 bln AB InBev, SABMiller deal]
South Africa: April trade statistics (Business Report/SARS)
South Africa recorded a second consecutive trade surplus in April even as exports of precious metals and stones and other mineral products fell. The surplus narrowed to R430m from a revised R2bn in March, the SA Revenue Service said yesterday. The cumulative deficit for this year is R18.7bn, 42% less than the R32bn shortfall in the first four months of last year. Selected world zone results:
Nigeria: Foreign trade report Q1 2016 – report and infographics (National Bureau of Statistics)
The total value of Nigeria’s merchandise trade at the end of Q1, 2016 stood at ₦2,723.9 billion. From the preceding quarter value of ₦3,517.4 billion, this was ₦793.5billion or 22.6% less. This development arose due to a sharp decline in both imports and exports. Exports saw a decline of ₦671.1 billion or 34.6%, while imports declined by ₦122.4 billion or 7.8%. The steep decline in exports brought the country’s trade balance down to - ₦184.1 billion, or ₦548.7bilIion less than in the preceding quarter. The crude oil component of total trade decreased by ₦716.7 billion or 46.6% against the level recorded in Q4, 2015. [Related: Lost year in Nigeria under Buhari leaves economy on knees (Bloomberg), Dara Owoyemi appointed as Special Adviser to Minister for Industry, Trade and Investment]
Makona River Free Zone Development Project: revitalisation proposals (Salone Monitor)
Ambassadors of Guinea, Liberia and Sierra Leone to China have supported calls for the revitalization of the Makona River Free Zone Development Project, which was jointly conceived by the embassies of the three countries based on the practicalities of the traditionally thriving cross-border large-scale trading and peaceful co-existence that existed between the communities of the three countries, along the Makona River. Initiated in 2013, the Makona Project is in tandem with two of MRU’s four identified growth triangles, with broad objectives of accelerating the socio-economic development of the three Nations; promote the development of infrastructural facilities, create a regional mining corridor and promote urbanization and intra-regional trade. It was conceived in line with the wider vision of China-Africa relations as outlined in the Beijing Action Plan (2013-2015).
China and UK partner with ITC to promote investment-led exports and growth in Africa (ITC News)
Held in Beijing on 31 May, the Forum was organized in the framework of the Partnership for Investment and Growth in Africa, a joint UK-China effort to increase exports and sustainable economic growth in African countries. Through the PIGA project, DFID, CCPIT, CADFund and ITC work together to increase sustainable investment for greater integration of SMEs into global value chains in the manufacturing and agro-processing sectors. PIGA aims to maximise local development benefits, including the creation of more, better and inclusive jobs in Ethiopia, Kenya, Mozambique and Zambia. [4th China Beijing International Fair for Trade in Services]
Malaysia-Africa bilateral trade to grow 4% to 5% in 2016 (The Star)
Malaysia External Trade Development Corp chief executive officer Datuk Dzulkifli Mahmud said he was confident that the growth could be achieved given that the two-way trade between both countries has been growing at a gradual pace over the previous years. In the first 11 months of 2015, Malaysia’s trade with Africa rose by 3.2% year-on-year to RM27.5bil from RM26.6bil previously. Total bilateral trade between the two countries amounted to RM29.4bil in 2014 against RM26.6bil in 2013. In terms of exports, he said as of November last year, Malaysia’s exports to Africa grew by 6.7% to RM18.9bil compared to the corresponding period in 2014.
Kenya, South Korea sign MOU to boost standardization (CitizenTV)
The three-year agreement will see both countries benefit from exchanging technical personnel and also participation in conferences, symposia, workshops, exhibitions and other relevant meetings organized by either party. Additionally, both countries have also agreed to provide guidance to harmonization of specific standards with international standards for promotion of technical and scientific co-operation to eliminate Technical Barriers to trade. Finally Kenya and Korea will jointly attend training programs on product standards and management system standards such as ISO 90001, 14001, 22001, 27000 etc. to enhance competence in standardization and testing.
Related standards updates: Uganda: Ministry of Trade warns businesses on standards (Daily Monitor), Standards Organisation of Nigeria, ECOWAS to end agric products’ rejection (The Nation), ECOWAS to enshrine food standards’ safety (TODAY)
ECOWAS: West Africa edges towards harmonised roaming services (ITWebAfrica), 'Get to know ECOWAS': training for journalists
The Productivity-Inclusiveness Nexus (OECD)
The report highlights how the growth of the digital economy raises new challenges for jobs and skills. It adds that the growing weight of finance in the global economy may have diverted investment away from productive activities, while resulting in a higher concentration of wealth at the top of the income distribution. [E-trade: national and international policy implications (World Bank Blogs), African data centre market gains momentum (ITWeb)
Cairns Group submission for annual export competition review (WTO)
The report reaffirms that many of the reported policies appear consistent or moving in the direction of being consistent with the MC10 Decision. In particular, export subsidy expenditure has fallen significantly. This generally positive trend, however, is not without exceptions. One point of concern is that since MC9 a number of Members have increased their export subsidy outlays, introduced new export subsidy programmes, or are considering such moves. These developments appear inconsistent with the Bali Declaration, reaffirmed in the MC10 Decision, to exercise utmost restraint, with regard to all forms of export subsidies. A full assessment of current policies against the MC10 Decision is not possible at this point because the report is based on pre-2016 data. [Downloads available]
Ministerial meeting of AU-Horn of Africa initiative on trafficking in persons begins tomorrow
World Bank announces long-term support for displaced populations in Africa
AfDB, Malawi ink US $1-million humanitarian assistance grant agreement
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