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tralac’s Daily News Selection
The selection: Thursday, 2 June 2016
Underway in Stockholm: WCO Europe workshop on the implementation of the WTO Trade Facilitation Agreement.
Update: the evaluation of WTO trade-related technical assistance (Saana Consulting)
Conference alert: Emerging power or fading star? South Africa’s role on the African continent and beyond (12-14 July programme, Cape Town)
The economic impact of the West Africa - EU Economic Partnership Agreement (Directorate-General for Trade)
A simulation of the impact of tariff reductions set out in the EPA shows positive gains for West Africa. The impact is positive in terms of production and exports. The remuneration of production factors is generally positively affected by the EPA, albeit to a small extent. Those gains for West African countries should be considered as underestimations of the real gains, as the economic modelling only takes into account those aspects of the EPA that are readily quantifiable (tariff reductions) and does not cover other aspects that are more difficult to quantify, but will affect positively West African economies.
ACP Summit: the Port Moresby Declaration, Waigani Communiqué
Leaders called for a conference to be organised, with the support of the European Commission along with the United Nations and other international financial institutions, on strategies for development financing, in particular financing multiannual development programmes for ACP countries, and the intensification of South-South and Triangular Cooperation to build productive capacities of ACP countries. At the same time, the Summit also called on developed countries that have not yet done so to honour their developed aid commitments. The Summit deplored illicit financial flows and the haemorrhage of financial resources from ACP member states through all forms of capital flight, in particular, tax evasion schemes of multinational enterprises. At the same time ACP leaders deplored the European Commission on its Communication on a “Fair and Efficient Tax System in the European Union”, unjustifiably listing 15 ACP states as non-cooperative tax jurisdictions, causing severe damage to the financial sectors of these states. The Summit called on the EU to immediately withdraw the list and refrain from issuing such publications in the future. [Port Moresby Declaration, Waigani Communiqué on the future perspectives of the ACP Group of States]
EAC: Secretary General institutes expenditure rationalisation reforms
The Secretary General of the EAC, Amb. Liberat Mfumukeko, has instituted stringent expenditure reforms in the East African Community Organs and Institutions with immediate effect. Amb. Mfumukeko, who took over the mantle from Dr. Richard Sezibera as the Chief Executive of the regional organization on 26th April, 2016, noted that the EAC Organs and Institutions had been experiencing liquidity challenges as a result of delays in disbursement of contributions by both the Partner States and Development Partners. Some of the measures include the following:
ECOWAS: preview of Heads of State and Government summit, 4 June
The new President of the Community’s executive body, Marcel de Souza described the austerity, cost reduction and cash control measures he has put in place with the support of the Commissioners and Heads of ECOWAS Institutions. He expressed regret at the grim state of ECOWAS’ finances which are derived largely from raw materials and oil exports. The situation is unlikely to push Member States to pay the Community Levy, Mr. de Souza said and the question should be asked if this is the reason for the Commission’s dangerous and precarious financial situation. [West African regional body should consider Gambia's expulsion over human rights abuse – Amnesty International report]
Kenya strives to hit position 50 on ease of doing business index (TFO Canada)
The Industrialization Ministry, in conjunction with government agencies such as Kenya Private Sector Alliance is working towards seeing Kenya’s rank on World Bank’s ease of doing business index hit position 50 by 2020. According to Industrialization Ministry CS Adan Mohamed, measures have been put in place in the last 12 months towards the achievement of that goal.
Angola: IMF begins assessment of financial support (MacauHub)
“The main goal of this mission is to continue talks on the key components of a package of reforms that would help accelerate the diversification of the economy, safeguarding macroeconomic and financial stability,” the statement said. The team, which will remain in Luanda until 14 June, will help set the amount of financial assistance to be provided to Angola under the Extended Fund Facility.
Africa still a success story for Nampak (Business Day)
Its operations on the continent excluding SA, now account for 47% of group trading profit, up from 38% last year. Nampak’s big beverage can production lines in Nigeria and Angola are capable of churning out about 2.7-billion cans a year between them. Ron Klipin, portfolio manager at Cratos Capital, said R1.5bn of the group’s cash was trapped in Angola and Nigeria, where Nampak continued to experience delays in timeously converting its bank balances to US dollars, due to hard currency shortages.
Zimbabwe-Botswana border post opens (The Chronicle)
The Mlambeli Border Post between Zimbabwe and Botswana in Gwanda South has started operating, a move aimed at decongesting the Plumtree Border Post. The Mlambapeli Border Post is the fourth entry point between Botswana and Zimbabwe the others being Plumtree, Maitengwe and Mphoengs border posts which are already operational.
Uganda: State of the Nation Address by President Museveni (State House)
The shilling depreciates because we import too much and we export little and, mainly, of low value. We still export quite a bit of unprocessed raw materials. We are donating $875m to China each year in imports. We are donating to India $1.154bn each year in the form of imports; to UAE, $406m; to EU, $637m; to USA, $89m, to South Africa, $257m, etc. Yet our own exports to these countries are as follows: India ─ $24.8m; to UAE, $62.6m; to EU, $433m; to USA, $27.2m; to South Africa, $4.7m; to China, $54.7m. While the economy of Uganda recovered, as pointed out above, we were not yet able to end this haemorrhage because we lacked the basics. The crucial basics lacking were electricity, low transport costs and easy transport means. The big deficit of infrastructure could not be tackled through the traditional foreign aid. That effort was miniscule and of little impact.
By importing so much from outside, we are creating jobs for the children of the Chinese, the Indians, the Japanese, the Europeans, the Americans and the Middle Easterners and forgetting about our own children. This must stop. If all the textiles that are used in Uganda are made here, we shall save $888m annually and create about 45,000 direct manufacturing jobs. By insisting on only allowing vehicles that are assembled in-country (lorries, buses, mini-buses, pick-ups and piki-pikis) to be sold in the Ethiopian market, they have created 160,000 jobs. You can check that easily. I have talked to our importers. These policy changes or evolutions should not take one year. We can phase them; but they must be triggered. Otherwise, we shall be slaves. We shall continue to run a supermarket for foreign products but which we call country.
Ethiopia’s grand ambitions to become Africa's biggest car manufacturer (CNBC Africa)
For now, Ethiopia is a minnow in African terms. South Africa and Morocco are involved in the full manufacture of vehicles annually making more than 600,000 and 200,000, respectively. Egypt, Sudan and Kenya also assemble vehicles. "The aim is to become a leading manufacturing hub in Africa," State Minister for Industry Tadesse Haile told Reuters. "We want to become the top producer of cars on the continent in 15 or 20 years." The industry is still based on fixing together "semi-knockdown" kits that come in a 1,000 or so pieces each. But the aim is to shift to "complete knockdown" kits, requiring greater local input, in five years or less, the minister said.
Kenya: April 2016 remittances edge up (Central Bank of Kenya)
Remittance inflows to Kenya in April 2016 increased to $143.5m, which were 1.7% and 15.3% higher when compared with March 2016 and April 2015, respectively. The April 2016 increase is reflected in inflows from North America and the rest of the world (see Table 2). Cumulative inflows in the 12 months to April 2016 increased by 10.7%, to $1,619 million, from $1,463 million in the year to April 2015.
Migrants’ remittances and the role of post offices in rural development (IFAD)
On these promising basis IFAD and the EU have jointly agree to engage in the provision of concrete support to post offices through the African Postal Financial Services Initiative. The level of remittance dependency for many African states is extremely high; in certain cases accounting for almost 20 per cent of their GDP. In a recent baseline survey, IFAD measured the demand-side perspective about receiving and sending money via postal networks in peri-urban and rural areas of 11 African countries. The findings were enlightening:
SADC ministerial conference: 'Postal services need new ideas’ (The Herald)
African member states should join forces and push for the reform of the Universal Postal Union, a UN specialised agency for the postal sector, Vice President Emmerson Mnangagwa said yesterday. He made the remarks in Harare while opening an extra-ordinary meeting of SADC ministers responsible for postal and courier services. The Ministers gathered for the past two days to come up with strategies and a common position ahead of the UPU Congress in Turkey in September, and the Pan-African Postal Union Plenipotentiary Conference slated for Cameroon next month. He said as always, SADC should find consensus and act as a block at the Turkey Congress to achieve the reforms. VP Mnangagwa said the postal services sector was under threat from cheaper and efficient means of communication and needed new ideas to survive.
Zambia: Civil society opposes invitation of South African farmers to Zambia (The Post)
The Zambia Alliance for Agro-ecology and Biodiversity Conservation has opposed the invitation of South African commercial farmers to Zambia, arguing that such a move amounts to auctioning the agriculture sector to the highest foreign bidder. A week ago, 27 leading commercial farmers from South Africa arrived in the country through Zambia’s High Commissioner to that country, Emmanuel Mwamba, to prospect investment opportunities in the sector. ZAABC, a network of 20 civil society organisations, champions small-scale farmer driven agro-ecological farming systems.
Forthcoming: UNDP study of African LDCs and graduation to middle-income country status (UNDP)
During panel discussions, UNDP RBA Chief Economist Ayodele Odusola expounded on LDC graduation processes and criteria for achieving middle-income status. Odusola urged African countries to diversify their economies by switching from primary commodities production and exports and pursuing value addition, industrialization and improving agricultural productivity. Africa is home to the world's largest contigent of LDC, with 34 countries. UNDP’s final report on the LDC’s graduation to middle-income status is scheduled to be released in July 2016.
India-US trade relations: Bit of a bumpy ride (The Hindu)
A balanced BIT that protects foreign investment without unduly compromising the host state’s right to regulate will benefit both India and the US. It will send a positive signal to US investors who are concerned about legal certainty in India. It will also protect Indian investment in the US. According to a 2015 report prepared by the Confederation of Indian Industry and Grant Thornton, 100 Indian companies such as Tata, Wipro, Cipla, Tech Mahindra and Infosys have invested more than $15.3bn in the US. However, there is a yawning gap between the two sides on core foreign investment protection standards, as reflected in their respective model BITs, which makes BIT negotiations really difficult. Let us look at some of these differences. [India, EU aim to break Free Trade Agreement impasse (The Hindu)]
Nigeria: CBN begins stakeholder consultations on flexible exchange rate (ThisDay)
Tanzania: FDI pours in as economic diplomacy pays off (Daily News)
Malawi ahead of Nigeria in Africa prosperity index (Nyasa Times)
South Africa: Government to provide R550m to support black industrialists (Business Day)
Cheap milk from South Africa, Europe hurts Kenyan exports (Business Daily)
Botswana-US inward investment symposium, New York: opening remarks by Gareth Mostyn (de Beers)
Botswana: Mineral policy due for parliament (Daily News)
East Africa: Mapping the way to successful natural resource management (Brookings)
Nigeria: Solid minerals roadmap revisited (ThisDay)
Just out at OECD: dataviz, by country, looking at restrictions on exports of raw materials
Germany donates 1 million EUR to WTO’s Doha Development Agenda Global Trust Fund
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