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5th anniversary of the Nairobi Ministerial Decision: pdf Review of implementation, identification of gaps and the way forward (125 KB) . The following submission (dated 2 March) is being circulated at the WTO at the request of the delegation of Tanzania, on behalf of the LDC Group:
What the LDCs are expecting from MC 12. As briefly summarized above, there is an imbalance between the efforts deployed by LDCs countries in the CRO since the Nairobi Decision in terms of submissions, analysis, and the level of the response so far received from preference-granting members. Implementation of the Ministerial Decision should remain a shared responsibility and not rest exclusively on evidence brought by the LDC Group. Ensuring that “preferential rules of origin applicable to imports from LDCs are transparent and simple and contribute to facilitating market access” is a clear objective of the multilateral community, embedded since 2005 in the Hong Kong WTO Ministerial Decision and reinforced in target 17.12 of the SDGs. The LDCs believe that is therefore necessary to strengthen the mandate of the Committee on Rules of Origin at the 12th Ministerial Conference by:
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Setting clearer obligations for preference granting members regarding an intensification of their efforts to monitor the impact of their RoO on LDCs’ imports and to simplify requirements in line with the provisions of the Nairobi Decision and the best practices as illustrated by the LDC Group in past submissions to the CRO; and
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Strengthening the role of the WTO Secretariat to monitor conformity with Nairobi Decision. This will have significant spill over benefits for the entire international trading system in an area that is currently unregulated.
A strong mandate of the Committee on Rules of Origin will lead to an effective participation by both Geneva and capital-based experts in the Committee meetings with a clear agenda on the work ahead. To reach this objective the LDC group will engage with preference-granting members to develop appropriate language to be submitted for consideration of ministers at the next Ministerial Conference.
Liberia heads WTO African Group of Ambassadors. The head of the Liberian Delegation to the Permanent Mission of the AU, Dr Isaac W. Nyenabo, has been appointed as chairman for the period of three months on a rotational basis of the African Group of Ambassadors, commonly called the African Group of Ambassadors in Brussels. The three-month tenure of Amb. Nyenabo commences from March 4 through June 4, 2020. Algeria, Cameroon, Kenya, Lesotho, Libya, São Tomé and Príncipe, South Africa, Togo, and Uganda will serve as vicechairpersons of the Bureau of African Ambassadors.
Post-Cotonou delays complicate EU’s new African vision (Euractiv)
The European Commission will next week publish its EU-Africa ‘strategy’, which the bloc hopes will form the basis of a new ‘partnership’ with the African continent. EU Foreign Affairs chief Josep Borrell will launch the blueprint on Monday, kick-starting seven months of negotiation between ministers and leaders from the two continents. Last week, Borrell courted controversy at an EU-African Union meeting in Ethiopian capital Addis Ababa, when he implied that the EU would provide African leaders with military support, something which would be in breach of the current EU legal framework. “We need guns, we need arms, we need military capacities and that is what we are going to help provide to our African friends because their security is our security,” the Spanish diplomat said.
But EU officials are anxious that their new Africa strategy, based around partnerships on trade, migration, environmental policy, digital and mobility does not get derailed by the delayed talks on the post-Cotonou trade and political accord which covers 48 of the 54 Africa countries. Negotiators from the EU and the ACP agreed on 17 February to extend until December the Cotonou Agreement, signed in 2000, which covers trade and political relations between the EU and the ACP.
The AfCFTA: Perspectives for Africa, policy choices for Europe (SWP)
It is, however, too early to be discussing modifying the European Union’s trade policy towards Africa, or for this to be an issue for the upcoming German Council Presidency. Nevertheless, Germany and the European Union should continue to follow and support the process of establishing the AfCFTA, which is an important political process with significant long-term economic potential for Africa. The question of whether ratification of the AfCFTA agreement means that the European Union should start negotiations with the AU about an EU-AU trade agreement to supersede the existing EPAs has already been discussed in Germany. Currently such negotiations would be neither possible nor sensible. And the African side has no incentive, because most of the states of Sub-Saharan Africa already enjoy completely free access to the EU’s markets. This applies not only to all the countries that participate in EPAs, but also to all the LDCs, which profit from unilateral EU trade preferences. South Africa and the states of North Africa already enjoy extensive tariff-free access for industrial goods.
African free trade is vital for growth (Mail and Guardian)
At the Black Business summit on Wednesday, AfCFTA secretary general Wamkele Mene, said the negotiators would have completed everything by the July deadline for the trade area to come into force. He said the negotiators are hard at work in Addis Ababa, trying to conclude the outstanding trade negotiations. He added that the rules of the origin of goods were 90% completed, with only automobiles, textile and clothing and sugar needing still to be negotiated. “I am confident that we are going to conclude these outstanding areas. We are accustomed to working under very severe time constraints.”
Trudi Hartzenberg, tralac’s executive director, said: ”This [the AfCFTA] is an incredibly ambitious project. You are trying to integrate 55 members of the African Union, and they are very diverse in terms of levels of economic development.” Hartzenberg said what makes the trade area so difficult to negotiate is the fact that the continent is home to many of the world’s least-developed countries, with many of them landlocked and lacking diverse economies. [African trade and energy developments poised to boost agriculture]
Africa may only see impact of new free-trade deal after three years. Carlos Lopes (former UNECA executive secretary): “It will take at least a year to have schedules approved by the majority of countries, unless regional blocs harmonize their offerings. Phase two on trade in services and later phase three on e-commerce are even more complex.”
Kenya - US finalising details of direct cargo flights pact (The Star)
US Embassy officials yesterday told a media briefing on economic issues touching on the two countries that the deal is a significant step. “The amendment to the US – Kenya Air Transport Agreement in Washington, DC last month will come to force following an exchange of diplomatic notes at the end of the week or early next week,” deputy economic counsellor US Department of State Chris Angelis said. She said that although direct flights between Kenya and US commenced in 2018, it did not include the seventh-freedom traffic rights for all cargo operations to the bilateral air transport agreement. The US Embassy also disputed claims that its trade pact with Kenya could undermine the EAC and the AfCFTA. “The trade pact between Kenya and US is a model to post-Agoa trade arrangement with the continent. US has also engaged the continental body,” the US Embassy team said.
Eswatini: AfDB’s Country Strategy Paper 2020-2024
In the new CSP, the Bank and the Government identified a number of operations and has developed a pipeline for the period 2020-2024 that include two transport sector interventions in roads and railways, two agriculture projects, a renewable energy sector program and one water project under Priority Area 1. Priority Area 2 envisages implementation of one policy based operation and one public finance management project. The total cost of the indicative lending program is UA 610 million.
Eswatini’s current account posted surpluses since 2012, but the surplus has been dwindling since 2016. Exports slowed down from 41.9% of GDP in 2014 to 39.0 % in 2018, while imports increased from 38.1% of GDP to 38.4% of GDP, which triggered a contraction of the trade balance as percentage of GDP from 3.8% in 2014 to 0.6% in 2018. Net services exports averaged -4% of GDP since 2014, a reflection of the country’s huge demand for foreign services partly due to skills shortage.
Senegal: World Bank’s Country Partnership Framework FY20–FY24
The World Bank Group’s Board of Directors today discussed the Country Partnership Framework for Senegal that lays out the World Bank Group program for FY20–FY24 and expressed broad support for the WBG’s engagement in Senegal’s structural reforms to achieve economic transformation and become an emerging economy by 2035. Senegal’s economic expansion has been accelerating and growing consistently above 6% per year since 2014. This high growth trajectory places Senegal among best performers in Sub-Saharan Africa and is reflective of incipient structural transformation, supported by reforms aimed at improving the investment climate, governance and investment in infrastructure, energy and agriculture. The growth outlook is favorable and projected to remain solid at about 6.8% in 2020, reflecting higher investment and exports. Growth could exceed 7% from 2021 onwards if fiscal vulnerabilities are contained and transformational reforms are implemented to crowd-in private sector investments. [The World Bank in Senegal]
Tanzania: IMF completes 2020 Article IV Mission
The pace of economic activity appears to have increased in recent months prompted by higher public investment, a rebound in exports, and an increase in credit to the private sector. As a result, real GDP growth is estimated to be close to 6 percent, with activity buoyant in the construction and mining sectors. Other economic indicators point to a benign economic environment, with annual inflation at 3.7 percent, a stable exchange rate, foreign exchange reserves equivalent to near 5 months of imports, and public debt at below 40 percent of GDP. Prudent fiscal and monetary policies have delivered economic stability. To sustain these gains, increase private investment, and create jobs, there is a pressing need to proceed with targeted economic reforms. [Tanzania and the IMF]
South Africa’s current account deficit narrows to lowest in nearly a decade (Reuters)
South Africa’s current account deficit narrowed to its lowest in nearly a decade in the last quarter of 2019 as Africa’s most industrialised economy recorded a significantly higher trade surplus, central bank data showed said on Thursday. The current account deficit narrowed to 1.3% of GDP in the fourth quarter of 2019 from a shortfall of 3.7% in the third quarter. The deficit was the lowest since a small surplus of 0.4% in the final quarter of 2010, and well shy of the 3.5% shortfall for the quarter forecast by economists surveyed by Reuters. The trade balance showed a wider surplus of R102.5bn ($6.68bn) in the fourth quarter, more than double the revised R44bn surplus in the previous three months. The central bank said the marked improvement in the trade balance was due to an increase in the value of merchandise exports against a decline in imports, allowing for a rise in both prices and volumes at a time when the rand weakened substantially against the US dollar. [SARB: Current account of the balance of payments; Standard Bank: Q4 GDP worse than bad]
Somalia clears arrears to World Bank Group
The Federal Government of Somalia has cleared its arrears to the International Development Association, completing the process of normalizing its financial relationship with the World Bank Group. With this clearance, Somalia has fully re-established its access to new resources from IDA and paved the way to receive debt relief under the Heavily Indebted Poor Country and Multilateral Debt Relief Initiative to promote growth and recovery over the coming years. [The World Bank in Somalia]
South Africa: Trade in illicit cigarettes on the way to being stubbed out (Daily Maverick)
The substantial rise in revenue from tobacco products is a silver lining to South Africa’s increasing fiscal debt. In the 2019/20 financial year, nominal excise tax revenue from domestic production of cigarettes and cigarette tobacco (of which at least 95% is from cigarettes) increased by 19.2% from R12.1-billion to R14.4-billion. In fact, in the 2019/20 financial year the reported revenues were 14% higher than the budgeted revenue. In 2018/19, the tobacco industry declared 15.6 billion cigarettes for excise tax purposes. In 2019/20 they declared 17.3 billion cigarettes, an increase of 11%. Should this increase in cigarette sales concern public health advocates? We don’t think so. Smoking prevalence doesn’t change dramatically from one year to the next. The increase in declared cigarettes indicates that illicit trade has probably reached a turning point and is now receding. [The authors, Corné van Walbeek, Kirsten van der Zee and Nicole Vellios, are attached to the Research Unit on the Economics of Excisable Products (REEP) at the University of Cape Town]
World food prices drop in February (FAO)
World food prices declined in February for the first time in four months due to a sharp fall in the export prices of vegetable oils, partly driven by fears that the coronavirus (COVID-19) outbreak will slow global demand. The FAO Food Price Index, which tracks monthly changes in the international prices of commonly-traded food commodities, averaged 180.5 points in February, down 1.0 percent from the previous month but still 8.% higher than a year earlier. [West Africa grain prices record slower growth]
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TradeMark East Africa and the UNECA released their joint report – Creating a unified regional market: Towards the implementation of the African Continental Free Trade Area in East Africa – this morning:
The report provides the first assessment of the potential impact of the AfCFTA agreement on East Africa and discusses the measures and supportive instruments that will be needed to implement the agreement successfully. Following on from the conclusions of this study, a successful approach to the AfCFTA will entail particular attention on some specific issues (pdf):
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Recommendation #1: Standardize as much and as far as possible. The standardization and harmonization of product standards, quality controls, phytosanitary regulations and technical specifications (etc) is crucial to making the continental market work as unified entity. This is arguably what holds back intra-regional trade more than anything else at the current time: non-tariff barriers of the discretionary kind leave traders vulnerable to arbitrary decisions by customs officials. The harmonization of regulatory standards would remove the discretionary nature of many cross-border transactions and provide clear benefits for consumers.
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Recommendation #2: Move towards a regional concept of ‘local content’. Many countries in East Africa have national campaigns to promote local content and production. For instance, Uganda embarked on a Buy Uganda100 campaign in 2014, and Rwanda has had a similar “Made in Rwanda” policy in place since 2015. These initiatives have borne some fruits. However, there are limits to the extent to which national authorities can singlehandedly promote their domestic production, especially in the context of a move towards a unified continental market that is supposed to create a level playing field for all. With the implementation of the AfCFTA, success hinges on the rapid emergence of regional value chains. This is unlikely to happen without a concerted effort to induce local content at the regional, rather than at the national, level.
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Recommendation #3: Open services to intra-African competition. Much of the discussion on the benefits from the AfCFTA have tended to focus on merchandise trade. Yet this report argues that many of the benefits will spring from the liberalisation of intra-African services trade. Services already constitute more than 50% of the regional economy. If services are opened up to intra-African competition, one of the major benefits from creating a unified continental market will be that it will reduce costs for both consumers and enterprises in a host of services, ranging from financial to transport. A common regulatory environment is an essential element in achieving this objective in the same way that common standards are.
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Recommendation #4: Be especially open to FDI from other African countries. A quick way to create regional value-chains, and more employment, is to encourage greater intraregional investment. In Section 2, we established that the level of intra-regional FDI is currently much lower than intra-regional trade. Yet there are remarkable business opportunities on the continent. More than 60% of retail and consumer goods companies plan to expand into additional African countries over the five-year period 2018-2023. The AfCFTA will facilitate the expansion of firms seeking a greater regional or continental presence, and member states should be especially open to FDI from other African countries.
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Recommendation #5: Leverage the potential for cross-border digital trade. Although from a very low base, digital trade is currently growing annually at 18% in Africa – which is more than double the global average. As the region that has spearheaded innovations like M-Pesa, East Africa is especially well placed to leverage the dynamism in digital trade. New continental-wide policies under the umbrella of the AfCFTA could provide a major boost to cross-border digital trade, helping to catch up with other regions of the world where it is far more prevalent. The establishment of an African Single Digital Market would be a major step forward. The AfCFTA could provide the basis for such an agreement.
Note: Drafting of the EAC Trade and Investment Report 2019 begins next week
Buhari pledges to abide by ECOWAS decision on border closure (ThisDay)
President Muhammadu Buhari yesterday pledged Nigeria’s preparedness to abide by the decision of the tripartite committee comprising Nigeria, Benin and Niger Republic on the partial closure of the country’s land borders whenever the report is submitted. He also said Nigeria was putting measures in place to secure the Gulf of Guinea, following his meeting with President Teodoro Obiang Nguema Mbasogo. The president made the pledge on border reopening when he hosted the outgoing President of the ECOWAS Bank for Investment and Development, Mr Bashir Mamman Ifo, and his successor, Dr George Nana Donkor, in Abuja. A statement by the Special Adviser to the President on Media and Publicity, Mr Femi Adesina, said Buhari told his guests that the partial closure of the borders had brought immense benefits to the country. “We have saved millions of dollars. We have realised that we don’t have to import rice. We have achieved food security. We have curtailed the importation of drugs and proliferation of small arms, which threaten our country,” he said.
SADC proposals on labour migration in the pipeline (The Citizen)
Senior officials and experts from SADC are preparing policy and guideline proposals to widen the scope for employment and labour migration. The officials yesterday started a three-day meeting ahead of the meeting of the ministers responsible for labour and employment from the 16-nation bloc slated for Thursday and Friday, this week. Employment and skills development director in the Prime Minister’s Office (Policy, Parliamentary Affairs, Labour, Employment, Youth and Disabled) Ally Msaki said the proposals would be forwarded to the responsible ministers for discussion and deliberation. “Tanzanians would love to work in, among others, Zimbabwe, Namibia and South Africa. It is a responsibility of ministers to prepare labour migration guidelines and this is why they are meeting to discuss and deliberate on our proposals,” said Mr Msaki. He said it was high time Tanzania capitalised on the region’s opportunities, which include demand for Kiswahili teachers
PIDA PAP2: West Africa consultation workshop for project selections (AU)
The African Union Commission held a regional consultation workshop (26-28 February) for West African member states and their specialised institutions for the project selection process of the second phase of the Programme for Infrastructure Development in Africa, also known as PIDA PAP2 (2021-2030). The workshop aimed to provide the necessary information and tools to prioritize gender inclusive, environmentally friendly and smart infrastructure projects. Once the project selection process is complete and the PIDA PAP2 is developed, it will then be submitted to the African Heads of State and Government for adoption during the AU Summit in January 2021. Ultimately, 58 projects are expected to be selected – 10 projects per the Northern African, West African, Central African, East African and Southern African regions, and one additional project for each of the eight Island States. The sectoral requirement is expected to be filled as at least one project in each region is to be part of the transport, energy, ICT or trans-boundary water resources sectors.
Tanzania leads Kenya in the list of dollar millionaires (The Citizen)
An estimated 499 Kenyans dropped from the rank of dollar millionaires last year, highlighting how the impact of Kenya’s soft economy has hurt persons who each had a net worth of more than Sh100 million. The 2020 Knight Frank’s Wealth Report classified 2,900 Kenyans among the world’s High Net-Worth Individuals (HNWIs) last year, representing a 14.6% drop compared to the 2017 count. Six Kenyans also dropped from an elite group of super-wealthy persons known as Ultra High Net-Worth Individuals (UHNWI) with a net worth of more than Sh3 billion, cutting their number to 42. South Africa led the pack with 1,033 ultra-rich persons followed by Egypt (764) Nigeria (724) Morocco (215) and Tanzania (114) - despite Kenya’s neighbouring country having a smaller economy.
Zimbabwe: US dollar returns to Harare as govt wavers on use of local currency (The East African)
The Zimbabwean economy is reverting back to the US dollar less than a year after the government reintroduced the local currency to assert economic independence. Over the past month, local businesses have resorted to using the dollar and civil servants want their pay disbursed in greenback, making the government’s policy useless. Morgan & Co, a stock brokerage firm said it was clear that Zimbabwe was returning to the dollar instead of cushioning the local currency as shown by the waning confidence in the local currency. “We are perplexed by the fact the monetary authorities in the country exhibit a lack of touch and appreciation of developments within the broader monetary system,” said Morgan & Co in a review of the RBZ’s latest monetary policy. “Our concern is that those that follow economic policy developments in Zimbabwe will have to separate fiction from reality so as to make sound investment decisions.” [Reserve Bank of Zimbabwe: February 2020 Monetary Policy Statement; Editorial comment, The Herald: De-dollarisation opens doors for industry]
Tanzania agrees to open up its market for Ugandan sugar. Tanzania has partly allowed to open up its borders to Ugandan sugar exports following more than a year of being locked out. This was revealed by Mr Japheth Hasunga, the Tanzanian Minister of Agriculture, who, together with a delegation from Tanzania, was in the country to understand Uganda’s sugar production and its capacity. However, he noted, the sugar will be traded under a new arrangement that will only involve government-to-government. “We are satisfied with the current rate of Uganda’s sugar production and we shall start with 30,000 metric tonnes, but that will depend on the prices, we don’t know how much the factories will charge and then we shall place another order. We shall start business as soon as possible,” Mr Hasunga said. Previously, the Tanzanian government had been issuing permits to dealers and millers.
COMESA: Regional energy experts conducting peer review on member states. Energy regulatory authorities in countries that are members of the COMESA Regional Association of Energy Regulators for Eastern and Southern Africa will be going through peer review to ensure their operations are bench-marked against regional best practices. The first peer review is being conducted this week, on the Ethiopia Energy Authority.
Two new UNCTAD analyses of the trade impact of the coronavirus epidemic:
- Coronavirus outbreak has cost global value chains $50bn in exports.
The slowdown of manufacturing in China due to the coronavirus outbreak is disrupting world trade and could result in a $50bn decrease in exports across global value chains, according to estimates published by UNCTAD yesterday. In February, the country’s manufacturing Purchasing Manager’s Index – a critical production index – fell by about 22 points to 37.5, the lowest reading since 2004. Such a drop in output implies a 2% reduction in exports on an annual basis. Because China has become the central manufacturing hub of many global business operations, a slowdown in Chinese production has repercussions for any given country depending on how reliant its industries are on Chinese suppliers. According to UNCTAD estimates, the most affected sectors include precision instruments, machinery, automotive and communication equipment. Among the most affected economies are the European Union ($15.6bn), the US ($5.8bn), Japan ($5.2bn), The Republic of Korea ($3.8bn), Taiwan Province of China ($2.6bn) and Vietnam ($2.3bn). [UNCTAD Technical Note (pdf): Global trade impact of the coronavirus epidemic]
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Short-terms effects of the coronavirus outbreak: what does the shipping data say? It is too early to gauge the full economic and trade effects of the Coronavirus outbreak. However, shipping data, based on real-time observations of vessel positions and information about the cargoes aboard those ships, already shows a change in the operational behaviour of container vessels and in the amount of oil products on the water. This article seeks to put these short-term changes in the context of the potential impact of the coronavirus epidemic on China’s manufacturing and trade of oil products. Container ship visits to Chinese ports, measured both in number of vessels scheduled to call and their cumulative capacity in Twenty-foot-Equivalent Units plunged in late January and early February (see Figure 1). At the same time, the ratio of missed port calls (i.e. scheduled vessel calls that do not occur) has risen sharply to levels usually seen in late February and March (see Figure 2). The outbreak and spread of the coronavirus, across China and now the world is influencing decisions by manufacturers, importers and exporters. Immediate actions so far show an un-coordinated and pointillist approach. [The author: Abudi Zein]
WTO DG Azevêdo: Weeks ahead are “window of opportunity” for WTO members to shape future of multilateral rule-making
At a meeting of the full WTO membership on 2 March, Director-General Roberto Azevêdo set out his views on how members could position themselves to deliver agreements on fisheries subsidies and other issues at the 12th Ministerial Conference in June. He urged them to determine what can — and cannot — realistically be agreed by then, and to do the preparatory work needed to present ministers with a manageable agenda of issues to resolve at MC12.
World could achieve ‘gender dividend’ of $172 trillion from closing lifetime earnings gaps (World Bank)
A new report from the World Bank Group released ahead of International Women’s Day shows that the world could achieve a ‘gender dividend’ of $172 trillion by closing gaps in lifetime labor earnings between women and men. The study, How Large is the Gender Dividend? Measuring Selected Impacts and Costs of Gender Inequality, finds that if women earned the same as men, global human capital wealth could increase by about one-fifth, and women’s human capital wealth could increase by more than half. The World Bank Group also released data on legal barriers that limit women’s employment and entrepreneurship opportunities over the last fifty years, providing insight into the way women’s rights have evolved worldwide. The data, expanding the time series developed by the Women, Business and the Law program, shows that in 1970, women had only half the legal rights of men on average in the areas measured; today, women are three-quarters equal. Globally, a total of 1518 reforms were conducted in fifty years, with dramatic changes in laws affecting a woman’s decision to work. [Companion report: Women, Business and the Law Data for 1971-2020]
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South Africa’s WTO ambassador Ms Xolelwa Mlumbi-Peter has been elected as the 2020 chair of the Council for TRIPS. Lesotho’s Mr Refiloe Litjobo will chair the Committee on Balance-of-Payments Restrictions. The full list of 2020 chairs is available here.
The UNECA has postponed the forthcoming Conference of Ministers of Finance, Planning and Economic Development, and all other public meetings until further notice.
Kenya: Private sector activity falls as orders for new goods drop in wake of coronavirus (CapitalFM)
The impact of coronavirus is hurting Kenya’s private sector with a Stanbic Bank report released Wednesday indicating that orders for new goods dropped further in February for the first time in more than two years. According to the Purchasing Managers’ Index, private sector firms faced a shortage of raw materials owing to reduced imports from China due to the virus outbreak over the past month. Jibran Qureishi, regional economist for East Africa at Stanbic Bank said the shortage has pushed output prices upwards, as alternative import markets are not as cheap as China. “Unfortunately, it is difficult to assert whether we are at the beginning, middle or end with the coronavirus due to scant and inadequate data points. A scenario where the virus is contained in the next couple of months is probably the best case,” he said. “However, if there is an escalation into new geographies with the disruption potentially extending into the third quarter of 2020, the likelihood of a global recession then increases,” he added.
African airlines face $40m hit in 2020 from coronavirus (Reuters)
Coronavirus disruption could cost African airlines $40m in revenue this year, a global industry body said on Wednesday, a potentially devastating hit to often struggling airlines counting on lucrative Chinese routes to fund expansion. IATA forecast in December that African airlines would make a loss of around $200m this year, similar to 2019. Tewolde GebreMariam, chief executive officer of Ethiopian Airlines, Africa’s largest carrier, said the virus had slashed passenger demand. Ethiopian Airlines has faced criticism online for not cancelling flights to China like neighbours Kenya, Tanzania and Rwanda. “The air travel demand for Ethiopian Airlines has declined by 20% due to the corona,” Tewolde told Reuters. “It is a big shock.”
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IATA’s January 2020 air cargo data: African carriers posted the fastest growth of any region for the 11th consecutive month in January 2020, with an increase in demand of 6.8% compared to the same period a year earlier. Growth on the smaller Africa-Asia trade lanes (up 12.4% in 2019) contributed to the positive performance. Capacity grew 5.9% year-on-year.
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IATA’s January 2020 passenger data: African airlines’ traffic climbed 5.3% in January, up slightly from 5.1% growth in December. Capacity rose 5.7%, however, and load factor slipped 0.3 percentage point to 70.5%.
OECD Economic Outlook: Coronavirus – the world economy at risk
Travel restrictions, and the cancellation of many planned visits, flights, business and leisure events are severely affecting many service sectors. This is likely to persist for some time. Worldwide, Chinese tourists account for around one-tenth of all cross-border visitors, and one-quarter or more of all visitors in Japan, Korea and some smaller Asian economies (Figure 4, Panel A). Exports of travel services to China, including the spending by Chinese visitors, are also significant in many countries (Figure 4, Panel B). The virtual cessation of outbound tourism from China represents a sizeable near-term adverse demand shock. This is already apparent in many destinations; visitor arrivals in Hong Kong, China in February were 95% lower than usual. If the spread of the coronavirus outbreak affects visitor numbers more widely across the major economies, there would be sizeable costs, with tourism accounting directly for 4¼% of GDP in the OECD economies and almost 7% of employment.
Growth prospects are very uncertain. The projections are based on the assumption that the epidemic peaks in China in the first quarter of 2020, with a gradual recovery through the second quarter aided by significant domestic policy easing. Together with the recent marked deterioration in global financial conditions and heightened uncertainty, this will depress global GDP growth in the early part of the year, possibly even pushing it below zero in the first quarter of 2020. Even if the COVID-19 effects fade gradually through 2020, as assumed, illustrative simulations suggest that global growth could be lowered by up to ½ percentage point this year (Box 1; Figure 5). New cases of the virus in other countries are also assumed to prove sporadic and contained, but if this is not the case, global growth will be substantially weaker. [World Bank Group announces up to $12bn immediate support for COVID-19 country response]
South Africa: Economy slips into recession (Stats SA)
The South African economy contracted by 1,4% in the fourth quarter of 2019, following a contraction of 0,8% (revised) in the third quarter. Transport and trade were the main drags on overall activity, according to the latest GDP figures. Seven of the ten industries contracted in the fourth quarter. Finance, mining and personal services managed to keep their heads above water, but this was not enough to prevent the economy from sliding into its third recession since 1994. A decline in both freight and passenger transport dampened growth in the transport and communication industry, which slumped by 7,2%. The transport and communication industry contributed the most to the 1,4% fall in GDP (-0,6 of a percentage point). Retail trade sales and restaurant trade were up in the fourth quarter, but this was insufficient to counteract the fall in motor trade, wholesale and accommodation, which dragged the trade industry lower by 3,8%. The industry was the second biggest drag on the GDP. [Bloomberg: Nigeria now tops South Africa as the continent’s biggest economy]
Kenya: Statement on completion of an IMF visit
“Discussions focused on the policies needed to support the authorities’ ambitious reform agenda, which aims to further bolster Kenya’s strong and inclusive growth. The discussions covered revenue and expenditure policies needed to reduce the deficit this fiscal year and achieve further fiscal consolidation over the next three years to reduce debt vulnerabilities while preserving high-priority, growth-enhancing public investment and social spending; public financial management reforms to increase the efficiency, effectiveness, transparency, and accountability of public spending; transformation of the banking system through the Banking Sector Charter to further strengthen financial stability and increase access to financing, including for small businesses; modernization of the monetary policy framework; steps to improve governance and strengthen the anti-corruption framework; and reforms to boost growth and improve gender inclusiveness.”
EALA adopts report of Accounts Committee: calls out for improved remittances by partner states, adherence to audit recommendations and enhanced systems
A report of the Legislative Assembly has once again lamented over the declining and slow pace of remittances at the Community. Coupled with this aspect, the Report of the Committee on Accounts (pdf) on the audited accounts of the EAC for the financial year ended 30 June 2018, calls for the speedy conclusion of the Alternative Sustainable Financing mechanism on the one side and the improvement of systems, effective and efficient operations as provided for in the financial rules and regulations of the Community. Chair of the Committee on Accounts, Hon Dr Ngwaru Maghembe, said EAC institutions, projects and programmes continue to face challenges of low absorption due to delayed or non-remittance of funds. According to the Chair of the Committee, the Community in the year under report, had a budget of $115,098,773; while the actual expenditure was $66,918,844 hence an overall performance of 58%. On remittances, the Assembly decried the delays with an amount of $20.27m not disbursed from the partner states in the financial year 2017/2018, compared to $7.85m in the financial year 2016/2017. Out of the total amount, $16.89m, or 83.34%, was due from the Republic of Burundi and the Republic of South Sudan.
Namibia: No strategy yet to capitalise on AfCFTA (The Namibian)
The government is yet to formulate a national strategy on how it can capitalise on the removal of 90% tariffs on goods in Africa because of a lack of funds and is banking on foreign donors to come to the rescue. As a regional bloc, the Southern Africa Customs Union is also behind in submitting the bloc’s schedule of concession for trade in goods, which was supposed to be submitted in January this year. This means the country has five months to draft a country strategy and to agree on which goods to progressively remove tariffs, as the AfCFTA comes into effect on 1 July 2020. According to a ministry of trade’s official Asser Nashikaku, the strategy is not done yet as the formulation of the strategy requires resources, which the ministry does not have: “Currently, the ministry has approached the UNECA for assistance and hope to develop the strategy soon with the assistance of Uneca. We have begun to cooperate towards the development of the strategy.”
Roberth Simon from NTF said Namibia needs a deliberate approach for AfCFTA, a strategy that will encourage trade with the rest of Africa. Simon also indicated that in light of the incoming trade agreement there is a need to revisit the ‘growth at home strategy’ and perhaps the industrial policy (2012). “The country has to invest in utility infrastructure for the manufacturing sector to become competitive. The legal framework should also incentivise efforts to set up industries,” advised Simon. [Bitange Ndemo: What must be done for a smooth take-off of the AfCFTA on 1 July 2020]
Uganda: URA braces for tough times as African free trade looms (PML Daily)
Uganda is set to lose huge revenue collections accruing from international trade in the next five years, the Uganda Revenue Authority says. The anticipated revenue drop, according to URA, is due to the AfCFTA treaty that all African countries ratified, except Eritrea, a year ago. “We have opened up these borders [under AfCFTA), there is no doubt that the goods that will be coming in our country will not be taxed. Currently, the domestic revenue collections contribute around 58%, compared to international trade that brings in 42%. Now the 42% is going to reduce further to 20%,” Mr Ian Rumanyika, the URA assistant commissioner Public and Corporate Affairs, said on Tuesday. URA collected more than Shs6.8 trillion in net international trade tax during the FY 2018/19. “So, the rest of revenue collection must come from the domestic market. That is why we are asking all Ugandans to be tax compliant,” he added yesterday at the Second Strategic Leaders’ Summit.
Kenya: Cement firms oppose attempts at raising clinker import duty (The East African)
Leading cement manufacturers in Kenya are against a move by National Cement Company chairman Narendra Raval to increase duty on imported clinker from 10% to 25%. Bamburi Cement, East Africa Portland Cement Company and Savannah Cement led firms opposing the increase at a meeting in Nairobi, under the stewardship of the Kenya Association of Manufacturers. However, KAM directed the manufacturers to provide data on their grinding and clinker installed capacity, clinker demand and the capacity of ongoing expansion projects. With this data, KAM will then approach the Ministry of Industry over the proposal.
New project seeks to ease trade across central Africa (UNCTAD)
UNCTAD has rolled out a new project to facilitate regional trade in central Africa. Secretary-General Mukhisa Kituyi launched the project in Kinshasa yesterday. Through the project, UNCTAD will offer technical expertise on the implementation of the WTO Trade Facilitation Agreement to five countries that are members of ECCAS. “Central Africa is facing significant trade facilitation challenges that hamper the region’s economic development,” Dr. Kituyi said. “We want to help cut red tape at borders to facilitate cross-border transactions, foster harmonious regional economic integration and prepare the ECCAS countries for gainful participation in the African Continental Free Trade Area.” Five central African countries – Chad, the Democratic Republic of the Congo, Congo, the Central African Republic and Equatorial Guinea – will benefit from UNCTAD’s empowerment programme for national trade facilitation committees.
South Africa: Border Management Authority Bill update (GCIS)
Home Affairs Minister Dr Aaron Motsoaledi welcomes the passing of the Border Management Authority Bill by the National Assembly yesterday in Parliament. “The BMA Bill is long overdue. I welcome the passing of the Bill by the National Assembly. The BMA will enable the country to manage its borders in a manner that facilitates trade and plugs holes in our porous borders. These porous borders lead to, amongst others, illegal crossing of people, illicit goods, drugs, trafficking of people, particularly of women and children, and stolen vehicles,” said Minister Motsoaledi.
AfroChampions Initiative aims to create a new generation of big African firms (The Africa Report)
The idea is to invest $1trn between 2020 and 2030 in companies “that are highly likely to become African champions,” said Paulo Gomes, President of the Executive Committee of the AfroChampions Initiative, meaning “companies that, in both their operations and capital, go beyond the scope of a country.” “We’ve already identified 20 or so African companies from different sectors (banking, food, logistics, etc.) and our capital raising, currently underway, puts us at between $700 and $800m,” Gomes said, adding that it has a particular focus on Asian, Gulf State and African funds.
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2019 African Regional Integration Report: Voices of the RECs
Towards an integrated and prosperous and peaceful Africa
This report first presents the historical context of the African integration process and the progress of African leaders towards achieving a united, integrated and prosperous continent under the Abuja Treaty and AU Agenda 2063.
The Abuja Treaty, signed in 1991, lays the groundwork for the creation of African Economic Community (AEC), whereby the economies of the member states of the AU will be fully integrated and an African Economic Community created. The goal of the AEC is to transform the fifty-five (55) African economies into a single economic and monetary union, with a common currency and free mobility of capital and labour. The Sirte Declaration, signed in 1999, and the Constitutive Act of the African Union aim at fast-tracking Africa’s integration through the creation of key institutions such as the African Central Bank, an African Monetary Fund, an African Investment Bank, the African Court of Justice and the Pan-African Parliament. Establishing the three continental financial institutions has been slow because member states have been slow to ratify the relevant instruments. Although the other institutions—the African Court of Justice and the Pan-African Parliament—are in place, they have limited powers to carry out their mandates specified in the Abuja Treaty.
According to the Abuja Treaty objectives, Africa’s integration process is expected to be completed by the creation of the African Economic Community (AEC), following a six-step sequential approach over 34 years. With the AU Commission playing a coordination role, the realisation of the AEC is predicated on the progress achieved by regional economic communities (RECs), the key pillars of Africa’s integration process.
While some RECs have made significant progress, others are far from achieving their visions and goals, as specified in their founding treaties. Overlapping memberships in many RECs continue to pose a significant challenge and remain an intractable obstacle to deeper regional and continental integration. Overlapping memberships not only exacerbate persistent funding and human capacity problems in support of regional programmes, but also lead to challenges of effective coordination of policies and programmes to foster closer regional and continental integration.
While some progress has been achieved, significant bottlenecks stand in the way of deeper integration, including narrow markets, poor infrastructure networks, cumbersome administrative procedures that impede trade integration, in diversified production bases coupled with weak backward and forward linkages between agriculture and industry, as well as weak institutional and legal mechanisms for implementing regional and continental programmes and projects. In addition, the reluctance of member states to cede sovereignty to key organs of the African Union stands in the way of accelerated African integration. Persistent conflicts in Central Africa, the Horn of Africa, Northern Africa and West Africa also present challenges to integration.
Despite these challenges, important objectives have been reached. The signing of the COMESA-EAC-SADC Tripartite Free Trade Area (TFTA) on 22 October 2008 in Kampala, Uganda, was a big step in the right direction. That FTA encompasses 26 countries of its three RECs with a combined population of 527 million, a gross domestic product (GDP) of USD 624 billion and a GDP per capita of USD 1,184. The three RECs make up nearly half the African Union’s membership of 55 countries, contribute more than 58% of the continent’s GDP and account for 57% of the total population of the African Union.
The Tripartite FTA is established on a tariff-free, quota-free and exemption basis, and adopts the principle of variable geometry by simply combining the existing FTAs – COMESA, EAC and SADC – into a single FTA. This inter-REC FTA is expected to eliminate the problem of multiple memberships, increase the critical mass of trading instruments, cushion and mitigate persistent internal and external trading shocks, enlarge markets for goods and services for member states concerned, promote inter-REC and intra-African trade, and enhance the economic and social well-being of the people of the region. It is also expected to stimulate the formation of other FTAs in other regions of Africa.
Most RECs have completed milestones in compliance with the various stages of the Abuja Treaty. The free movement of people is now a reality in most RECs. The landmark signing of the African Continental Free Trade Agreement (AfCFTA) and Free Movement of Persons in March 2017 by the AU Heads of State and Government is a good move. However, although key institutions have been established in line with the Abuja Treaty, their powers remain limited owing to the reluctance of member states to cede sovereignty. Multiple memberships are costly in both financial and human terms and prevent advancing to deeper forms of regional and continental integration. Decision-making based on consensus is problematic because decisions signed are not legally binding, and countries that do not implement decisions face no sanctions of any form.
The current method of financing regional and continental integration is both unpredictable and unsustainable. That donors fund most of these programmes requires a major shift. The division of labour between the AUC and RECs has not been clarified – and remains a work in progress. And persistent conflicts slow the pace of integration and divert limited resources earmarked for development.
This report was prepared by the Department of Economic Affairs (DEA), African Union Commission, in collaboration with the Regional Economic Communities (RECs) and the African Capacity Building Foundation (ACBF).
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@AUTradeIndustry: update on the AfCFTA negotiations
The 8th meeting of the AfCFTA Technical Working Group on Trade in Services began today in Addis. It is an opportunity for AU member states too exchange initial offers on services, whereby they indicate areas and modalities to open up service sectors prioritized for liberalization by the AU Assembly back in 2017.
2019 African Regional Integration Report: Voices of the RECs (African Union Commission)
AUC Chairperson, Moussa Faki Mahamat: ”This first edition of the African Regional Integration Report is a landmark publication representing the will of African leaders to achieve closer regional integration as a crucial driver for the realization of Africa’s development agenda. One of the recurring concerns of African integration is challenge associated with effective monitoring and evaluating the implementation of an agenda that includes the Abuja Treaty, Agenda 2063 and other flagship projects and initiatives. This is reflected in the inability to accurately measure progress to capitalise on opportunities and help the various segments of the African integration process meet the challenges. The report provides a comprehensive and structured review of the status of integration and sets out innovative policies for accelerating the ongoing regional integration process. It is an initiative by African heads of state and governments to refocus the discourse on integration and related emerging issues, and to make recommendations to achieve an “integrated, prosperous and peaceful Africa, representing a dynamic force in the concert of nations”.
Regional achievements and challenges. The status of integration is described for each of the RECs. Key challenges and specific recommendations are identified. The key message is that, while the achievements of RECs are laudable, their successes remain mixed. On the whole, all eight RECs recognised by the AU face teething challenges of funding and human capacity constraints, overlapping memberships, weak implementation of key regional integration programmes and projects, and a lack of focus and institutional alignments. Persistent conflicts, insecurity and infrastructure bottlenecks remain pervasive obstacles to deeper integration. The need to devise innovative mechanisms for funding cannot be over-emphasised.
Going forward, SADC should:
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Resolve multiple and overlapping membership to avoid confusion, competition and duplication, to lessen the financial burden on taxpayers.
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Ensure that member states commit more to the regional integration agenda and to ratify and tailor protocols, align their national strategies, policies and priorities with the regions, and harmonise their policies and legal systems.
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Immediately agree to a regional parliament, court of justice and central bank, to oversee the integration agenda.
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Engage national stakeholders and the citizenry to increase awareness and ownership of the integration agenda and process. SADC member states need to move the integration agenda to the next level, enhancing the free movement of persons and sensitising national stakeholders to what regional integration can bring to the citizenry.
Profiled recommendations: The African Union Commission should
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Continue to coordinate the implementation of the African Integration Agenda while conducting, in collaboration with RECs, annual evaluations based on the newly developed and adopted African multidimensional regional integration index.
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Devise a minimum integration programme that can be implemented over one or two years in order to increase accurate implementation with specific objectives and timeframe.
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Set up an awareness mechanism to sensitise African citizens to integration issues through an annual integration forum that would include professionals, academics, women, the private sector, the diaspora and other African stakeholders.
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Accelerate the implementation of the Kigali decision on the 0.2% for AUC funding to create financial autonomy for the RECs, AUC and other continental and regional institutions.
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Intensify advocacy efforts aimed at AU member states, for them to ratify, tailor and implement AU legal instruments such as treaties, protocols related to financial institutions, the AfCFTA, and the pan-African institutions for statistics - as well as the AU passport.
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Strengthen collaboration between the AU and members states by nominating a specific focal point (ministry, department or other structure).
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Propose a champion REC in the area of integration - the REC that has made significant progress for emulation by other RECs.
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Align policies according to priorities, financing capacities and the emerging issues.
pdf 2019 African Regional Integration Report: Voices of the RECs (3.12 MB)
South Africa: Trade statistics for January 2020 (SARS)
The South African Revenue Service has released the trade statistics for January 2020, which records a trade deficit of R1.87bn. These statistics include trade data with Botswana, Eswatini, Lesotho and Namibia. The deficit is attributable to exports of R101.41bn and imports of R103.28bn. Exports decreased from December 2019 to January 2020 by R1.45bn (1.4%) while imports increased from December 2019 to January 2020 by R14.31bn (16.1%). The Top 5 countries for exports: China (11.7%), US (8.2%), Germany (6.6%), India (5.8%), Japan (5.8%). Top 5 countries for imports: China (19.8%), Germany (10.1%), Nigeria (6.4%), US (5.8%), India (5.1%).
South Africa: SARS continues to fight against illicit trade (Moneyweb)
The South African Revenue Service seems to be losing the fight against smuggling, counterfeit goods and tax evasion in the country. In 2019 it lost approximately R2.1bn in revenue as a result of illicit trade. Beyers Theron, SARS customs and excise chief, said yesterday during a Tax Justice SA press briefing that despite coming up with innovative ways to crack down on illicit trade within the country, importers and exporters continue to find ways to avoid paying the duties and value-added tax that apply to the goods. “When you address one thing on [one] side, then it pops up on the other side in a different form,” Theron said. He added that the challenge SARS is facing now is seeing new criminals in illicit trade emerging in the furniture sector as well as the sugar industry: “We introduce the sugar tax, and now the sugar tax is also a victim of illicit trade.”
In October last year, SARS formed part of an inter-agency working group with the Department of Trade and Industry and National Treasury, focusing on, among others, the clothing, textile, leather and footwear industry. It says it started to see an increase in the number of stops and inspections that were put in place. “In December we realised that there was value [declaration] increase of 25% to 700%. We started seeing that there is a change in value behaviour; in what they declare legally. Do we believe the values are correct? No, but it is starting to adjust upwards and that means we are starting to see that the revenue becomes a little bit more.” SARS has also started to see a decrease in the declared value of goods being imported, of between 44% and 75%. [Tax Justice SA: Mboweni’s budget a picnic for tax dodgers]
How ‘misinvoicing’ gets R300bn out of SA annually (Moneyweb)
South Africa’s trade misinvoicing gap averaged $19.9bn (R309bn) per year from 2008 to 2017, according to a report by Global Financial Integrity. The report – pdf Trade-related illicit financial flows in 135 developing countries 2008-2017 (13.39 MB) – focuses on trade-related misinvoicing, one of the largest components of illicit financial flows between the 135 developing countries and 36 advanced economies. The average size of the value gap between sub-Saharan Africa and the 36 advanced economies is $27.2bn. [GFI identifies $8.8 trillion gap in global reported trade]
Illicit financial flows in Africa: Drivers, destinations, and policy options (Brookings)
Since 1980, an estimated $1.3 trillion has left sub-Saharan Africa in the form of illicit financial flows (per Global Financial Integrity methodology), posing a central challenge to development financing. In this paper, we provide an up-to-date examination of illicit financial flows from Africa from 1980 to 2018, assess the drivers and destinations of illicit outflows, and examine policy options to reduce them. Using trade misinvoicing and balance-of-payments discrepancies to estimate illicit financial flows, we find higher real GDP is associated with higher illicit financial flows (pdf) due to the increased opportunities to channel illicit resources abroad generated by higher economic activity, suggesting a need for increased diligence as countries grow. We also find that higher taxes and higher inflation lead to higher illicit financial outflows, suggesting that firms seek out relatively more stable or favorable fiscal environments for their funds. We further find that, over the past decade, there has been an increase in illicit outflows of capital toward emerging and developing economies (e.g., China) as trade between Africa and these countries has increased. We conclude with policy recommendations to address illicit financial flows in order to shift the discussion toward effective policies applicable to all countries. [The authors: Landry Signé, Mariama Sow, Payce Madden]
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pdf 2019 Article IV Consultation report (3.88 MB) . Despite a slowdown in the first half of the year, growth is expected to improve to 4.8% in 2019, and inflation to remain contained. Growth accelerated in 2018 to 4.6% - the highest rate in 10 years. After losing some momentum in early-2019 due to weakening external demand and a wait-and-see attitude during the election period, growth has rebounded and is expected to improve to 4.8% for the year following a pickup in public investment execution, positive developments in mining, textile, transportation and services, rising business confidence indicators, and increased demand for private credit. Inflation has continued to steadily decelerate since its peak in late 2017 and is expected to be contained to 6% by end-2019. Box 1. Sustaining Madagascar’s Growth Spell: Growth in Madagascar since 1960 is generally characterized by high volatility and frequent shifts between periods of expansion and contraction. This pattern seems to have changed recently, following several years of robust economic growth and the recent peaceful transition of power. Could this be the beginning of a period of sustained growth?
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pdf Selected Issues report (1.55 MB) : Tax revenue mobilization potential in Madagascar and lessons from successful episodes in SSA. Tax revenue mobilization improved in recent years in Madagascar but remains low compared to its peers and considering its large development needs. Under the Plan Emergence Madagascar, the authorities envision a sharp increase in tax revenue over the next five years — what are the possibilities? This paper takes stock of recent developments in revenue mobilization in Madagascar, estimates the country’s tax potential based on its structural characteristics and other factors, and draws some lessons from successful revenue mobilization episodes in other sub-Saharan African countries. The analysis shows that there is a significant tax potential including through a possible broadening of the tax base, notably for consumption taxation (VAT and excises); and underscores the importance of a comprehensive revenue strategy, including by combining reforms in tax policy and in tax and customs administrations.
Statement by Ambassador Shea at WTO Heads of Delegation meeting
I would like to use today’s meeting to highlight the importance of meaningful WTO reform to the United States given the publication this past weekend of the US President’s Trade Policy Agenda. This important report provides direct guidance to me and the rest of the Executive Branch in the U.S. Government on trade policy priorities. The WTO and WTO reform feature prominently in the Agenda. This is a significant development and demonstrates the attention paid to this institution at the highest levels of our Government.
The Trade Agenda highlights current shortcomings of the WTO, including its inability to keep pace with changing global realities over the past 25 years and to negotiate new rules in response. These changing realities include the rise of large emerging economies, the growth of non-market practices and policies, and technological advances fostered by the evolution of the Internet. Equally important, the Agenda also sets out some of the reforms the United States believes would bring about a WTO that can deliver on its initial promises. These reforms include reaffirming our original mandate to promote trade liberalization based on free and fair competition through the adoption of market-based policies across the WTO’s membership. [USTR Fact Sheet: The President’s 2020 Trade Agenda and Annual Report]
Another unilateral decision by Trump, another blow to the multilateral trading system (WPR)
The status of developing countries under international trade rules has long been a divisive issue. The WTO does not explicitly define what “developing” means, leaving members to determine for themselves where they fall. Even countries that have become relatively rich or are major export powers have been loath to give up the preferential access to foreign markets—or “special and differential treatment”—that developing country status entails. After decades of negotiation, the practical impact of special and differential treatment is less than it once was. But it is nevertheless a major irritant for developed country members of the WTO. And the United States under President Donald Trump seems determined to do something about it—even at the expense of the system as a whole.
Under pressure from the Trump administration, Brazil, Singapore and South Korea have announced they will forgo developing country status in future negotiations. Because the WTO operates by consensus, however, any single country can block broad changes to the rules, such as setting explicit criteria for defining developing countries. So while the White House’s frustration on this issue is understandable, acting unilaterally and flaunting the rules—as it has already done with China as well as with tariffs on steel and aluminum—is moving the system closer to collapse than to reform. Trump may not care about that, but developing countries should. [Note: The author, Kimberly Ann Elliott, is a visiting scholar at the George Washington University Institute for International Economic Policy]
UNWTO Global Investment Forum in Africa (20-22 February, Abidjan)
The inaugural forum offered a platform to discuss the key challenges and opportunities relating to the development of African tourism through investments. These include building a more attractive business environment and potential reforms to obtaining credit, registering property and trading across national borders. UNWTO Secretary-General Zurab Pololikashvili said: “The UNWTO Agenda for Africa is an ambitious roadmap aimed at guiding African tourism towards sustainable growth between now and 2030. At the heart of this plan is unlocking growth through the promotion of investments and through the power of public-private partnerships. This Forum shows the high level of interest among our African Member States, and I am confident this will be the first of many high-level events aimed at driving investment in a sector whose potential to develop communities and transform lives is almost limitless.” The Forum issued a set of recommendations which will be submitted to the 63rd UNWTO Commission for Africa which will take place in the Republic of Seychelles from March 25-27, 2020.
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Joint Communiqué: 10th African Union Commission – European Commission Meeting
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The 10th AUC-EC Commission-to-Commission (C2C) meeting was held at the African Union (AU) Headquarters in Addis Ababa on 27 February. The meeting was co-chaired by the Chairperson of the AU Commission, Moussa Faki Mahamat, the President of the European Commission (EC), Ursula von der Leyen, with the participation of 22 EU Commissioners and nine AU elected officials. This C2C meeting was critical as a building block of an enhanced partnership, backed by the appropriate framework and instrument, to be solidified by mutual commitments at the AU-EU ministerial meeting on 5 May 2020 and the EU-AU Summit later in the year.
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The two Commissions took note of progress on the priorities set in the 2017 Abidjan Declaration and focused the discussion on the alignment of their positions on the following areas: (i) sustainable growth, trade, investment and digitalization; (ii) peace, security and governance; (iii) migration and mobility; and (iv) climate change and resilient infrastructure. In all priority areas, the two sides reiterated their commitment to support multilateralism as an effective modality in addressing global challenges.
On Sustainable Growth, Trade, Investment and Digitalization
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The European Commission welcomed the entry into force of the African Continental Free Trade Area (AfCFTA), and the ongoing implementation of its first phase, and stressed the importance of the second phase of negotiations on competition policy, intellectual property, and the investment protocol which aims to enhance the investment policy climate and address risks facing businesses and investors. The two Commissions agreed on the need to prioritise regional infrastructure as an underpinning element of the AfCFTA.
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They agreed to maximise synergies between European and African private sectors in view of the upcoming EU-Africa Business Forum, and to promote actions focused on the diversification of African economies by (i) developing the private sector and strengthening productive capacity in agriculture, manufacturing and services; and value-addition in national and regional value chains; (ii) supporting regional and trans-continental transport; and (iii) promoting digitalization.
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The two Commissions agreed to improve domestic resource mobilisation in Africa through reforms, tax revenues, tax transparency, international asset recovery, as well as fighting illicit financial flows, money laundering and corruption. Furthermore, the two Commissions called upon the international community to complement Africa’s efforts to track, stop and repatriate illicit financial flows.
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The two Commissions agreed to intensify efforts to enhance youth skills development and better match skills with the demands of the labour market, particularly in sectors with the highest job creation potential, notably in infrastructure development, digital economy and climate-friendly/green economy, renewable energy, ICT, agri-business and small-scale manufacturing, cultural and creative industries..
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The two Commissions reaffirmed the contribution of inclusive rural transformation to sustainable growth and job creation and agreed to intensify efforts for the implementation of the recommendations of ‘An Africa-Europe Agenda for Rural Transformation: Report by the Task Force Rural Africa’ endorsed by the third African Union– European Union Agricultural Ministerial Conference for rural transformation, sustainable agriculture and agro food sector in Africa.
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In order to better connect the two continents and accelerate growth for the achievement of the SDGs and AU Agenda 2063, they agreed to promote cooperation to establish a Digital Partnership based on a shared vision on an open and secure digital economy, and which puts African and European citizens at the centre of the digital transformation. They agreed that Africa and Europe should harness the many opportunities offered by digitalisation to drive innovation and transformation in all sectors. Building on the work done by the EU-AU Digital Economy Task Force, they noted the importance of taking into consideration the AU's Digital Transformation Strategy by Africa (2020-2030) for the future cooperation.
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In this regard, both continents agreed to enhance their partnership to (i) support digital infrastructure; (ii) build a secured single digital market in Africa by the 2030; (iii) help improve favourable environment, policy and regulation, (iv) develop digital skills and applications; and (v) promote digital innovation and entrepreneurship.
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Both Commissions expressed their commitment to strengthening of the multilateral trading system. The European Commission reiterated its support to an enhanced observer status for the African Union at the World Trade Organisation (WTO).
On Climate Change and Resilient Infrastructure
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The two Commissions took cognizance of the challenges posed by climate change to the development of both Africa and Europe and the achievement of the goals of Agenda 2063 and Agenda 2030. They noted the adverse impacts on food production, health, infrastructure, water resources, migration, peace and security. The two parties reaffirmed their engagement on the implementation of their respective commitments under the Paris Agreement, based on the principle of common but differentiated responsibilities, in the light of national circumstances, and stressed the importance of reviewing progress on the worldwide commitments on climate financing made in Copenhagen (2009) and the Paris Agreement, with a target of reaching USD 100 billion per year by 2020, to support developing countries in responding to climate change. The two Commissions further reaffirmed their commitment to the multilateral climate change negotiations aimed at finding global solutions to the phenomenon and to work together to achieve successful outcomes at the UNFCCC conference (COP26) in Glasgow in November 2020.
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The two Commissions also underscored the need to work together in the development and implementation of programmes aimed at facilitating the implementation of Nationally Determined Contributions (NDCs), enhancing capacity and development of clean technologies, improving access to climate finance and promoting investments in climate change related projects.
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The African Union Commission took note of the New Green Deal presented by The European Commission as the new long-term growth strategy for Europe, which recognises the global challenges of climate change and environmental degradation both requiring a global response.
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Recognizing that infrastructure is the backbone of socio-economic development and job creation, both commissions agreed to continue supporting infrastructure development through the Programme for Infrastructure in Africa (PIDA), including its phase II. They committed to use the recommendations from the AU- EU Task Forces on Digital Economy, Transport and Connectivity, and Sustainable Energy Investment as vehicles for collaboration. They agreed as well to develop an efficient African continental transport network capable of ensuring flows of goods and services as well as to connect to the European network. They agreed to jointly support the Single Air Transport Market. The partnership shall also support the promotion of gender inclusion in infrastructure value chains as well as the ongoing process to ratify the AU Road Safety Charter and UN road safety Conventions.
On peace, security and governance
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The two Commissions assessed the implementation of the provisions of the 2018 AU-EU Memorandum of Understanding on Peace, Security and Governance, which was part of the Abidjan priorities. They agreed to deepen its use in a more strategic way allowing for an effective use of the combined AU and EU political, security, development and humanitarian instruments, associating the UN as relevant. The European Commission congratulated the AU on the achievements made under the 2019 theme on ‘Refugees, Returnees and Internally Displaced Persons: Towards Durable Solution to Forced Displacement in Africa’. The European Commission also noted with appreciation the declaration of 2020 as the year of “Silencing the Guns: Creating Conducive Conditions for Africa’s Development.” In view of promoting African solutions to African problems, both sides stressed the urgent need to adapt and upscale cooperation to better respond to the changing nature of common threats, notably the spread of terrorism and violent extremism, trafficking and transnational crime including cybercrime and for action-oriented measures to curb the persistent illicit flow and use of arms and weapons into the African Continent.
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The two Commissions emphasised the need to strengthen cooperation in various areas presently implemented through the 2018 Memorandum of Understanding (MoU), including promotion of multilateralism, conflict prevention, crisis management and peace building, and health security. Furthermore, transitional justice, the rule of law, elections, human rights and gender equality were also highlighted as key areas of cooperation. They also stressed the critical role of cybersecurity and trust in the digital age and agreed to focus on and enhance capacity in privacy and data protection.
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Recognizing the need to ensure sustainable financing as a priority for peace and security in both Africa and Europe, both sides recognised the strategic significance of the revitalised AU Peace Fund, and exchanged on EU plans to establish the European Peace Facility. While noting the importance of continued European support to African-led initiatives, both sides pledged to pursue working together on the financing of African-led peace initiatives, including through UN-assessed contributions. In that context, the AU Commission welcomed the launching of the funding for the Fourth EU Support Programme to the implementation of the African Peace and Security Architecture (EU APSA IV).
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The Commissions agreed to support the implementation of the continental framework on youth in peace and security, in support of Article 17 of the AU Youth Charter UNSCR 2250 including on participation, prevention, protection, partnership.
On Migration, Mobility, Youth, Skills and Innovation
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On migration, the two sides recalled commitments made at the 5th AU-EU Summit held in Abidjan in November 2017, to deepen cooperation and dialogue on migration and mobility, and committed to developing a joint framework for a strengthened Continent-to-Continent dialogue on migration and mobility. They agreed to reinforce joint strategic management of refugees, migration and mobility at the continental level, guided by the respective migration policy frameworks of the two continents. In this respect, the two Commission agreed to work together to develop concrete proposals on all these matters for consideration by the EU-AU Summit in 2020.
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The Commissions restate their shared commitment to provide assistance to those fleeing conflict and persecution, including IDPs, and recognise that the vast majority of African refugees are hosted on the African continent. They pledge to continue their efforts to provide protection in line with international standards, to create opportunities for refugees and host communities and to find sustainable solutions. They endeavour to fast track support to refugees and displacement response in Africa.
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They noted the progress on implementation of the Abidjan priorities, through the work of the African Institute for Remittances in Kenya; as well as efforts directed towards the establishment and operationalization of the African Observatory on Migration in Morocco, the African Centre for the Study and Research on Migration in Mali, and the Continental Operational Centre in Khartoum, Sudan as a specialised office of the African Union Commission to fight smuggling of migrants and trafficking in human beings. They committed to intensify efforts in building capacity on migration management at continental, regional and national levels, as well as to explore ways to build on the experience of the AU-EU-UN trilateral Taskforce. In this context, they commended Niger and Rwanda for receiving Refugees and Asylum Seekers.
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On youth and skills, the two Commissions took note of the progress realised in the implementation of agreed priorities in education, science, technology, innovation and skills development, notably the AU-EU Skills for Youth Employability Programme. They agreed on the need to strengthen cooperation through expanding the VET Mobility, apprenticeship and other work-based learning and career guidance to address the skills mismatch. They further noted the need for harmonisation of higher education to improve relevance of curricula, academic mobility, recognition of qualifications, quality assurance and accreditation, and agreed to support implementation of the Continental Education Strategy for Africa (CESA).
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The two sides further committed to continue cooperation in science, technology and innovation to address joint challenges and to support the implementation of the outcome of the 2019 high level policy dialogue on science, technology and innovation. They appreciated the progress made in the first phase of the Global Monitoring for Environment and Security (GMES) & Africa, which contributes to the African Outer Space Program, particularly in the earth observation domain in cooperation with the EU’s Copernicus Programme. They committed to full implementation of GMES beyond the first phase.
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IGAD protocol on free movement of persons endorsed at ministerial meeting (IGAD)
Ministers in charge of Internal Affairs and those in charge of Labour of Member States of the Intergovernmental Authority on Development convened in Khartoum last week and endorsed the Protocol on Free Movement of Persons (pdf) in the IGAD Region. The Prime Minister of Sudan and Chair of IGAD, Abadalla Hamdok, said that ‘by signing this Protocol, IGAD are opening a new horizon that can lead to developing and strengthening all kinds of cooperation between its Member States’. IGAD is implementing a three-year project funded by the European Union Trust Fund to facilitate Free Movement of Persons and Transhumance in the IGAD Region.
EAC Bills, budget waiting for quorum at summit (The East African)
Failure of the EAC to hold both the Council and Summit meetings within the stipulated time has far-reaching consequences, not only on the financial viability of the bloc but also on the functions of its major institutions that include the regional parliament and court. The postponement means that more than 21 Bills by the East African Legislative Assembly will not be assented to, thereby delaying critical Community agenda items. The Summit was also expected to appoint more judges to the East African Court of Justice bench to expedite the backlog of cases. The most critical impact is a delay in passing the EAC Secretariat’s budget, whose approval to execute is only granted by the Heads of State. [Charles Onyango-Obbo: EAC is losing pace, leaders must meet to oil its wheels]
Disrupted supply of goods from China hurt eastern Africa (The East African)
The Kenya Ports Authority, in a response to queries from The East African, said four Chinese ships have not docked at the Mombasa Port in January and February, implying eight shipments have failed to arrive during the two months. Most Chinese factories are on lockdown as Beijing scrambles to contain the outbreak, disrupting supply chains across the world. “The port of Mombasa receives three big dischargers (imports) from China under Evergreen Line and one COSCO ship on a monthly basis. These four ships have not called since the coronavirus effect in China,” said the KPA managing director Daniel Manduku. KPA predicts that the downturn in imports from China will become clearer in March. “There is an anticipated effect on the throughput in the following months from February given the reduced trading volumes with China as a major trading partner,” said Mr Manduku.
China calls for removal of ‘unnecessary’ trade restrictions (The Star)
China has now appealed to WTO members to remove “unnecessary restrictions” which have affected trade between China and World. This is in the wake of the coronavirus pandemic which has cut flights to mainland china with shipping lines avoiding ports in the country, as the virus kill at least 2,700 people with more than 80,000 infections globally. Through its Ministry of Commerce (MOFCOM), China says it will strengthen communication and coordination with economic and trade partners.
Data from the Kenya Trade Network Agency (KenTrade), which oversees the country’s trading platform-Single Window System, already shows a 38.7% drop in the value of imports from China in January. The agency’s data shows the value of imports from China in January dropped to Sh54.9 billion, compared to Sh89.6 billion in January 2019. Clearing agents have reported reduced activities on imports from China, Kenya’s biggest source where a total of Sh324.9 billion worth of goods came from between January and November last year, Kenya National Bureau of Statistics data shows. “Volumes have reduced and iff the situation persist, we are likely to see a further drop on imports from China,” Kenya International Freight and Warehousing Association chairman Roy Mwanthi told the Star.
Used cars keep Africans moving, but dumping concerns remain (AP)
Africa has become “the burial ground of vehicles that run on fossil fuel as the West turns to electric and newer cleaner technologies,” said Philip Jakpor, an activist with the Nigerian branch of the group Friends of the Earth. Many second-hand vehicles shipped to Africa from Japan are believed to have failed, or were about to fail, pollution tests there, according to the UN Environment Program. But in many parts of Africa such regulations are often poorly enforced, and rampant corruption ensures that used vehicles can slip by any controls. More than 1.2 million used vehicles were imported into Africa in 2017, according to UN figures. Most were destined for Nigeria and Kenya, two of Africa’s largest economies. Both countries also have car-assembling plants.
Uganda’s government last year contracted two companies to inspect used vehicles before they are shipped. The head of the standards agency acknowledges the system is imperfect as not all vehicles are subjected to tests as they cross into the country. Inspectors based in Uganda only carry out spot checks. Ben Manyindo, head of the Uganda National Bureau of Standards, called for a plan that eventually would lead to the banning of used vehicles from abroad.
The question of whether to impose import restrictions remains contentious despite wide recognition of the dangers of an unlimited flow of used vehicles into Africa, the continent least equipped to deal with climate-changing carbon emissions. In Zimbabwe, where the government has tried and failed to impose restrictions amid resistance from importers and others, there is no age limit for imported cars. Used cars are not checked for emissions levels when they enter the southern African nation from ports in Tanzania, Namibia and South Africa, which notably allows the importation of used vehicles only for re-export to other countries.
10th African Union Commission – European Commission: selected highlights from the joint communiqué (AU)
The European Commission welcomed the entry into force of the AfCFTA, and the ongoing implementation of its first phase, and stressed the importance of the second phase of negotiations on competition policy, intellectual property, and the investment protocol which aims to enhance the investment policy climate and address risks facing businesses and investors. The two Commissions agreed on the need to prioritise regional infrastructure as an underpinning element of the AfCFTA. They agreed to maximise synergies between European and African private sectors in view of the upcoming EU-Africa Business Forum, and to promote actions focused on the diversification of African economies by:
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developing the private sector and strengthening productive capacity in agriculture, manufacturing and services;
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value-addition in national and regional value chains;
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supporting regional and trans-continental transport; and
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promoting digitalization.
In order to better connect the two continents and accelerate growth for the achievement of the SDGs and AU Agenda 2063, they agreed to promote cooperation to establish a Digital Partnership based on a shared vision on an open and secure digital economy, and which puts African and European citizens at the centre of the digital transformation. They agreed that Africa and Europe should harness the many opportunities offered by digitalisation to drive innovation and transformation in all sectors. Building on the work done by the EU-AU Digital Economy Task Force, they noted the importance of taking into consideration the pdf AU’s Digital Transformation Strategy by Africa (2020-2030) (1.80 MB) for the future cooperation. In this regard, both continents agreed to enhance their partnership to:
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support digital infrastructure;
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build a secured single digital market in Africa by the 2030;
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help improve favourable environment, policy and regulation;
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develop digital skills and applications; and
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promote digital innovation and entrepreneurship.
Both Commissions expressed their commitment to strengthening of the multilateral trading system. The European Commission reiterated its support to an enhanced observer status for the AU at the WTO. [ pdf Joint Communiqué] (158 KB)
Berlin Global Forum for Food and Agriculture: updates
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Communiqué 2020 (pdf). We underline the crucial importance of the multilateral rules-based, open, transparent, predictable, inclusive, non-discriminatory and equitable trading system and reaffirm the principles and objectives set out in the Marrakesh Agreement establishing the WTO in 1995 and the contribution that the WTO has made to strengthening the stability of the global economy. We reaffirm the value of taking decisions through a consensus-based and member-driven process at the WTO and we remain firmly committed to this trading system and to ensuring the proper functioning of its dispute settlement system.
We highlight the need to update global trade rules to reflect market and policy shifts that have occurred in recent years and to address contemporary agricultural and food challenges. We note that some progress has been made in reducing trade-distorting agricultural support in the past. However, we are concerned about increasing trade-distorting domestic support being provided by some countries and the negative effects this can have on farmers’ income in other countries. Therefore, we strongly encourage the continuing discussions in this pillar. We believe that WTO-compliant free-trade agreements can make a vital contribution towards opening markets to the extent that they are complementary to efforts being made at multilateral level to reduce trade barriers. Bilateral free-trade agreements can also contribute to sustainable development by incorporating ambitious sustainability chapters.
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WTO DDG Alan Wolff on the proposed Digital Council For Agriculture. Speaking at a side event of the WTO agriculture negotiation meetings on 24 February, Deputy Director-General Alan Wolff hailed the strong commitment of 72 agriculture ministers to strengthen the WTO for achieving sustainable agriculture trade as expressed in a communiqué at the Berlin Global Forum for Food and Agriculture. He urged members to build on this effort and take necessary decisions to reform the agriculture sector at the 12th Ministerial Conference.
Third, - and a very important point - is the support by the Ministers of the concept note on Digital Council For Agriculture. As you may know, Ministers at last year’s GFFA mandated the FAO together with other stakeholders - including the WTO - to develop a concept note for the establishment of an International Digital Council for Food and Agriculture. The Concept Note was presented to Ministers at the GFFA this year and will now have to be presented to FAO’s governing bodies for further discussions and its formal establishment. According to the planned structure of the Digital Council, the WTO — together with other IOs — would be part of an Advisory Committee. The establishment of the Digital Council for Food and Agriculture responds to the urgent need to disseminate digital technologies and smart solutions to enhance production in a sustainable manner to feed the world’s growing population and to achieve the SDGs.
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Realizing the potential of digitalization to improve the agri-food system: proposing a new International Digital Council for Food and Agriculture. Download: Concept note (pdf)
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GFFA - 2020 Concept note (pdf), and Programme (pdf)
Related digital trade, finance postings:
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The EU posted its Data Strategy and the White Paper on Artificial Intelligence last week - the first pillars of the Commission’s new digital strategy. The Commission also published a report on Business-to-Government (B2G) data sharing. The report coming from a high-level Expert Group contains a set of policy, legal and funding recommendations that will contribute to making B2G data sharing in the public interest a scalable, responsible and sustainable practice in the EU.
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Data, digital issues set to be part of India-US trade deal. The proposed mini-trade deal between India and the US is set to be resurrected in a larger and more modern form. While more restrained than US President Donald Trump’s expectations of a “fantastic, biggest ever trade deal,” a number of Indian and US officials familiar with the development say the new agenda will be more forward-looking. Talks may begin as early as April and will prioritise data and digital issues, the people said on condition of anonymity.
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The New Zealand government has announced the launch of its Digital Council, which was enacted to advise government on how to maximise the societal benefits of digital and data-driven technologies. The Digital Council will function as an independent group that acts “a bridge and connector between the government, the technology industry, and communities across New Zealand,” the New Zealand government said. The Digital Council takes over from the Digital Economy and Digital Inclusion Ministerial Advisory Group (DEDIMAG), which concluded its work program at the end of last year.
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Standard Chartered’s Regional CEO Sunil Kaushal talks to Dianna Games about Africa’s prospects for growth in 2020, the bank’s sustainability strategy and how it is capitalising on digital trends.
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The 2020 ICC Banking Commission Annual Meeting (20-23 April, Dubai) will consider the role of new technologies and digitalisation in the trade finance industry. Sessions will address the lasting hurdles associated with the digitalisation of trade finance, including legal hurdles as well as harmonising standards and interoperability between technology platforms.
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Crypto in Africa: A coming money revolution? Cryptocurrencies have the potential to revolutionise the financial system, but following a series of scams there is still a good deal of scepticism about them. Dr Desné Masie talks to some leading players to assess the value of this innovation to Africa.
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Diarise: 2020 International Women’s Day (8 March). The International Trade Centre has developed a campaign that features inspiring women entrepreneurs from across the world supported by ITC, its funders and partners.
Concluding today: ILO’s technical meeting on achieving decent work in global supply chains. Download the background report here.
South Africa could lose out on tariffs under Africa trade deal (Bloomberg)
South Africa risks forfeiting tariffs on about R70bn ($4.5bn) worth of trade when the AfCFTA kicks in, according to the country’s tax commissioner. South African imports totaled R1.27 trillion in 2019, according to preliminary data from the tax agency, including about R152bn from the rest of the continent. Of that, R70bn imports came from outside the duty-free SACU and SADC, and the tariff income on that is at risk, Edward Kieswetter, the head of South African Revenue Service, said in an interview in Cape Town. Africa’s most-industrialised economy made an estimated R56.3bn from customs duties in the current fiscal year, almost double what it collected from dividends tax. “The impact is rather small in terms of the quantum that we’re now opening it up to,” said Kieswetter. The revenue agency is more concerned about how rules of origin, which determine the nationality of goods, will be set because that could create opportunities for abuse, he said.
Kenya-Uganda milk trade war: Counting the losses (Daily Monitor)
It has been such a rough ride in the dairy sector and the damage is there for all to see. Yes, it might be too early to tell the extent of the losses but with all certainty, the Uganda-Kenya milk trade war, will have some lasting impact on Uganda’s dairy sector. Kenya has silently stopped milk exports from Uganda from entering its market on claims that Uganda cannot produce enough milk for the local and export markets. Trade Minister Amelia Kyambaddee yesterday seemed to have no update on what action government had decided to take in the face of continued hostility. “Wait, we shall communicate to you when we decide,” she said in a brief phone interview after Daily Monitor had requested for updates specifically on the protest note, which had expired without any response. Amid all the uncertainty, the cost and impact seem to be well spread and will hurt even much further if no solution is provided in the short term.
Kenya has already locked out two milk exporting companies from its market with the latest being Lakeside Dairies, which produces Dairy Top milk, in western Uganda. The company had been exporting about 80,000 liters of UHT milk to Kenya every day with yoghurt produced for the local market. Last week, according to information obtained from URA, the company was forced to return 10, 40 feet truck-loads of milk after Kenya authorities acted hostile on its products some of which had been seized while others were outrightly denied clearance. Already, according to information availed to Daily Monitor, Pearl Dairies, which produces Lato Milk has shut some of its production lines in western Uganda and cut its production capacity to under 20%. Lakeside Dairies is also counting losses and has subsequently, closed its UHT milk production line.
South Africa: Spur to continue with its successful recipe as it expands in Africa (Business Day)
Spur is looking to the rest of Africa to expand its footprint, which will include opening more of its popular RocoMamas outlets thanks to increasing profits from the continent. CEO Pierre van Tonder said the success in Africa, where many retailers like Shoprite struggle with hyperinflation and constrained consumers, was using local business people to run the franchised restaurants. Spur reported a 27.5% increase in profit in its Africa and Middle East outlets. In the past year, Spur opened six restaurants in Mauritius leading to 18 in total in the island state and three in Zambia, which will bring the total there to 16. Restaurant turnover for the Africa and Middle East operations, which accounts for 82.3% of total international turnover, increased by 9.6% in the six months to the end of December. By contrast income growth in SA, where it has 559 restaurants, was up 4.7% in the second half of last year. In the next six months the group plans to open 17 restaurants outside SA, “with our international expansion focusing primarily on Africa and the Middle East”. Six new restaurants are planned for Zambia, three in Saudi Arabia (Riyadh), two each in Nigeria, Kenya and Eswatini and one each in Zimbabwe and Ghana.
Rwanda: Mara Phone’s dream to sell first Africa’s smartphone takes shape (New Times)
It’s been four months down the road since the factory opened shop in Kigali at the Special Economic Zone, Gasabo District. “We have been producing an average of about 10,000 (smartphones) per month based on demand,” Eddy Sebera, the company’s chief executive officer told The New Times in an interview on Wednesday. That, he added, is based on market demand that is growing gradually. As of last month, the firm says it has exported to 53 countries worldwide with Germany being their largest market outside Africa. “We are not localizing ourselves just as an African (company) but we are also producing for the global market,” Sebera notes, arguing that they have created a name in a way that they are changing the narrative. According to Mara Phone boss, changing narrative is currently the biggest task ahead of them. He doesn’t dismiss the idea that people are so comfortable owning the likes of iPhones, Samsung, Huawei and other Chinese affordable smartphones. “The biggest problem we are facing is perception,” he says.
Tanzania: Freight charges to drop 40% when SGR starts operation (The Citizen)
Freight charges in Tanzania will decrease by 40% when the Standard Gauge Railway becomes operational, a top bank official has said. The modern railway will also be able to haul up to 10,000 tonnes of freight, equivalent to 500 lorries, per trip. “Through connecting Tanzania with Burundi, Rwanda and the DRC, it would enhance regional trade,” said Sanjay Rughani, the CEO of Standard Chartered Bank Tanzania. He told the bank’s clients and business stakeholders here on Tuesday evening that the multi-million dollar project has already created more than 8,000 direct jobs to the locals.
West African ministers adopt cleaner fuels and vehicles standards (UNEP)
In a major step to reducing air pollution and climate emissions in the region, the environment and energy ministers of all the 15 countries of ECOWAS, met on 6 – 7 February in Ouagadougou, and adopted a comprehensive set of regulations for introducing cleaner fuels and vehicles in the region. All vehicles that are imported, both new and used, and petrol and diesel, will need to comply to a minimum of EURO 4/IV vehicle emissions standard from 1 January 2021. An age limit forused vehicles of 10 years was also agreed to, with a recommendation of a five-year age limit for light duty vehicles. A plan to improve the fuel efficiency of imported vehicles was also adopted, with a target to double the efficiency of the fleet from an average of 8 litres per 100 kilometres today to 4.2 litres per 100 kilometres by 2030. An intermediate target of 5 litres per 100 kilometres by 2025 was also agreed. The vehicle fuel efficiency plan or roadmap includes proposals to introduce fiscal incentives to attract low and no emissions vehicles to the region, measures to promote electric vehicles, and a new harmonized label for newly imported vehicles showing the vehicle fuel efficiency and CO2 emissions to support consumer awareness.
The AfDB posts its Namibia Country Strategy Paper 2020-2024
The African Development Bank Group’s Country Strategy Paper 2020-2024 lays out the strategy that will guide Bank support to the country for the achievement of sustainable and inclusive growth. The Bank’s Committee on Operations and Development Effectiveness discussed the strategic thrust of this CSP during its consideration of the CSP 2014-2018 Completion Report on 8 November, 2019.
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Priority Area 1: Support Economic Governance for Improved Enabling Business Environment.The main objective of Priority Area 1 is to improve Namibia’s enabling business regulatory environment and competitiveness through improved economic governance. This objective will be achieved through sustaining macroeconomic stability; improving the ease of doing business; enhancing provision of pro-growth public services; and expanding support to SMEs to spur industrialisation.
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Priority Area 2: Support Infrastructure Development and Promote Value Addition. The main objective of Priority Area 2 is to remove infrastructure bottlenecks that increase production costs, constrain Namibia’s competitiveness and thereby stifle private sector development. These include shortages of electricity and water supplies, and an aging rail network. The Bank’s other objective is to support private sector investments in value adding economic activities with emphasis on commercialising agriculture and agri-business to create decent jobs along value chains, especially for the youth and women. In the transport sector, the priority will be on improving connectivity through upgrading the rail network(including to meet SADC standards) to reduce the network capacity constraints.
In brief:
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With increased local production of fertiliser expected within the next few weeks, operators in the petrochemical space have said Nigeria would be able to save up to $500m from import substitution and earn about $400m from the export of products.
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Côte d’Ivoire has partnered with UNCTAD and Germany to assess its readiness for e-commerce. The assessment seeks to identify opportunities, challenges and actions required to improve the e-commerce ecosystem in the country. An assessment mission led by UNCTAD in collaboration with the Universal Postal Union, International Trade Centre and Consumers International is slated for 2 to 6 March in the capital, Abidjan.
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Traders at the Tunduma-Nakonde OSBP can now use Tanzanian and Zambian currencies on each side of the border without having to convert them, thanks to a new arrangement to cut inconveniencies and boost trading activities.
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A few weeks after the ban on commercial motorcyclists by the Lagos State government, freight forwarding group under the aegis of the Association of Concerned Freight Forwarders and Logistics has accused the state government of the not considering the plight of the practitioners before coming up with such policy.
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The government of Mozambique has asked the IMF to send a technical team to start a discussion on resuming its support programme for the country’s State Budget, said the minister of Economy and Finance.
China’s trade faces challenges as small firms battle coronavirus impact (Reuters)
China’s foreign trade faces challenges as small- and mid-size firms in its supply chains battle financing difficulties amid trade curbs, lack of raw materials and delayed payments during a coronavirus outbreak, the commerce ministry said on Thursday. A ministry survey showed more than 90% of roughly 7,000 companies engaged in foreign trade faced delays in shipping and payments because of the outbreak, the ministry told reporters in an online briefing. Many companies faced significant risks of cancelled orders and rejections in product delivery and payments, said Li Xingqian, director of the ministry’s foreign trade department, calling for "urgently needed" export credit insurance for them. "The ministry will introduce further assistance measures in a timely manner," Li added, without specifying a timeframe. But there has not been a major shift of supply or manufacturing chains out of China, ministry officials said, adding that some foreign companies were continuing to invest, betting on the long-term prospects of the Chinese market.
UK SME exporting trends: finance and trade (pdf, British Business Bank)
The UK Export Strategy, released in 2018, sets out an ambition to increase the share of GDP from exports by 5 percentage points to 35%. This report assesses the attitudes of, activities undertaken by, and barriers faced by SMEs at key stages in the export cycle, and to understand whether and to what extent a lack of finance or insurance is preventing viable SME exports. The evidence presented is intended to support Government in achieving its objectives in the Export Strategy by harnessing the potential of the 99% of businesses with less than 250 employees. Many of the findings in this report are based on the SME Export Finance Survey of 1,198 British SMEs, conducted between July and August 2019 specifically for this report.
Many SMEs with a history of exporting subsequently stop, but often temporarily. The SME Export Finance Survey observed a high rate of transition between exporters and non-exporters and vice versa. Around one-fifth of SMEs who have exported between 2016 and 2018 had not done so in the past 12 months, although BEIS’s Small Business Survey shows that many will restart again in future. DIT specifically recognises the need to ‘sustain’ current exporters, which can help achieve higher levels of consistent exporting by supporting SMEs with a proven ability to sell internationally.
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10th EU-AU Commission-to-Commission: updates
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Opening statement by President von der Leyen. Dear Moussa, when I first came to Addis, I told you that I came first of all to listen. And this is why we are all here today. After our first meeting, we have put together topics, a set of proposals – these will be the round tables today – the four main themes that we have chosen together.
It is first of all peace, security and good governance. Your initiative to silence the guns in Africa is something we are deeply impressed of, we want to support you as much as we can. It is a huge challenge, it is absolutely the right idea to silence the guns. So you have us at your side because this is of utmost importance for the development of this continent. And you rightly mentioned that Libya shows how natural it should be to join forces – we have met indeed in Berlin – but we know how difficult it is to implement afterwards. To keep everybody on board. But this is the essence of multilateralism. It is not only to sit down together to discuss things but it is also to implement them, to stay true to what you have accepted or what you have promised. So there is still a lot to do – we know it – and we count on you and your expertise to improve things knowing how hard this will be. So let us discuss how to best link your initiatives and our initiatives.
Second, on trade and investment. We all know the questions we have in front of us. How to make the most of your new Free Trade Area. How to bring investment to Africa. Indeed, as you mentioned, Europe is the largest investor in Africa and the largest trade partner to Africa. So there is a lot we have to share – a lot of technologies and expertise we can share. We would like to hear what you expect from our partnership, and how far you are willing to go.
Third, on the transition towards a cleaner, carbon-neutral and digital economy. I think no one understands climate change better than you. I just have to mention the growing desert. And all of us, in our continents, in Africa and in Europe, we see already and fear the consequences of climate change – the floodings, the draughts, the grief over losing species – we call it biodiversity. The knowledge that we have to profoundly change the way we produce and consume into a circular economy with respect to nature, live in harmony with nature. There is a lot we have to change, but also a lot of opportunities ahead of us we want to grasp – with new technologies and new opportunities. And the same goes, of course, for the digital age – I know that there is a thirst for digital skills in young Africans and young Europeans – let us join forces there, let us give them the technologies, let us give them the skills and, of course, frame the whole thing, because technology is neutral. So it is depending of us what we make out of it – whether it is going to be more positive or more difficult for our societies. And if I may say so, Africa does not have to repeat that same mistakes Europe did in the past. So you can take the fast track towards a more modern and more sustainable economy. Let us walk this path together, in our mutual interest.
Finally, on migration, human mobility and skills. I commend you for your initiatives on giving women full access to finance, full access to entrepreneurship, to create your own business – rightly so, I can only say. It is something where Europe also fights for, struggles with. We are still not where we want to be, we know these topics, but [and] we have improved and still, there is a lot to do. So I commend you on that. I commend you on your initiatives in investing in youth. We have achieved a lot in recent years, also on the topic of fighting smuggling and human trafficking, which disrespects the human dignity. So there, we join forces. And on the topic of voluntary returns: There is still a long way to go, yes. We must invest in what has worked over the years – so we have some experience. Over the last decades, we worked a lot together, we made mistakes, we had successes. So let us take this experience and move it forward. That what worked, we should extend, we should emphasise and intensify. And we must do more so that African youth can find a place within their own societies – through investment to education, health – these are the main topics we want to tackle.
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Remarks by President von der Leyen at joint press conference with AUC chairperson Moussa Faki. We have been discussing the Free Trade Area, and I can only commend the African Union to this success. Because the two of us, we know that tearing down barriers between Member States for free trade is the best way to prosperity. And we agree that it is also a very interesting project on the level of the European Union and the African Union to open business opportunities and investment opportunities for investors from both sides. For example, for investors from Europe, it is of course more attractive to look at one entity, which is the Free Trade Area, and not to deal with 20 or 30 different regulations, but to have to do with one system of regulation. So the Free Trade Area – I am convinced – will boost a lot prosperity and business opportunities that are necessary. Indeed, the European Union is the largest investor and the largest trade partner, we want to maintain that and we are counting on the development of this Free Trade Area.
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Related: EIB-UN Habitat Africa Day 2020 conference. A total of EUR 63 million new EIB financing that will enhance access to microfinance, support corporate investment and improve banking skills in Senegal and across Africa was formally agreed at Africa Day 2020. Werner Hoyer, European Investment Bank President: “The European Investment Bank, the EU Bank, is committed to enabling African entrepreneurs and business to harness new opportunities and expand. EUR 63 million of new cooperation with leading microfinance and development investment partners agreed today in Dakar will transform access to finance, create thousands of jobs and improve specialist banking skills here in Senegal and across the continent. The EIB looks forward to further strengthening cooperation with Baobab Senegal, Alterfin, DPI and Afreximbank that reflects our shared commitment to ensuring that African business can flourish, create jobs and contribute to sustainable development. Last year 60% of the European Investment Bank’s EUR 3 billion engagement in Africa supported new business investment.”
President’s Advisory Council on Doing Business in Africa: updates from yesterday’s meeting
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President and Chairman of the Export-Import Bank of the United States, Kimberly A. Reed, addressed a meeting of the President’s Advisory Council on Doing Business in Africa, highlighting how EXIM can help US businesses export their American-made goods and services to Africa. In her remarks, Chairman Reed underscored EXIM’s commitment to both PAC-DBIA and Prosper Africa, a whole-of-government economic effort to substantially increase two-way trade and investment between the United States and Africa. Chairman Reed offered support for the PAC-DBIA Keys to Success Report, which was adopted by the Council and highlights financing support available from EXIM. The meeting was presided over by the PAC-DBIA co-chairs, UPS President of Global Public Affairs Laura Lane and GE Africa President and CEO Farid Fezoua, while U.S. Deputy Secretary of Commerce Karen Dunn Kelley gave opening remarks.
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Inside US Trade reports that the Trump Administration envisions an eventual network of bilateral free trade agreements with subSaharan African countries, a US Trade Representative’s Office official said yesterday.USTR recently announced plans to negotiate a bilateral FTA with Kenya – which would be Washington’s first with a subSaharan African country. Once the US-Kenya deal is completed, the Administration plans to approach other countries in the region, Michael Nemelka, special advisor to US Trade Representative Robert Lighthizer, told a meeting of the President’s Advisory Committee on Doing Business in Africa. The US-Kenya FTA will be the model for additional trade deals with African countries,eventually creating a network of FTAs, he said. The Administration is committed to making the US-Kenya FTA a “comprehensive, high standard agreement” that will give US business confidence, Mr. Nemelka said. [Heritage Foundation: Strengthening America’s economic engagement with Africa]
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Related: The United States contributed $600,000 in 2019 (pdf) to help developing and least-developed countries participate effectively in global trade negotiations. This donation will finance training workshops for officials from WTO member governments to help them deepen their understanding of multilateral trade rules and strengthen their negotiating capacity.
Dangote Cement to start exports from Congo after Nigerian export woes (Reuters)
Dangote Cement said on Wednesday it planned to start exports from its Congo Republic plants to neighbouring states after its Nigerian exports fell 41% in 2019 when Nigeria’s government closed its borders. Nigeria shut its land border in August to curb the smuggling of rice to neighbouring states where it sells for more and an illegal arms trade. The closure has also hurt other Nigerian businesses, including cement exports, and stoked inflation. Joseph Makoju, Dangote’s outgoing chief executive, said the border closure led exports to drop to 0.5 million tonnes in 2019 from 0.7 million tonnes in both 2018 and 2017. He said the company had exported to West and Central Africa from Nigeria.
South Africa: Cross-border trade and financial flows to be easier, Treasury says (Business Day)
The Treasury has announced the simplification of cross-border trade and financial flows, which it says will reduce the burdensome approval processes of the past. An annexure to the Budget Review released on Wednesday said that over the next 12 months, a new capital flow management system will be put in place. “All foreign currency transactions will be allowed except for a risk-based list of capital flow measures. This change will increase transparency, reduce burdensome and unnecessary administrative approvals and promote certainty,” the Treasury said. The detailed list of remaining capital flow measures will be published on the SA Reserve Bank website, but this will include the prohibition on SA corporates from shifting their primary domicile except under exceptional circumstances and with the approval of the minister of finance. Cross-border foreign-exchange activities will continue to be conducted through dealers authorised and regulated by the Reserve Bank.
The budget noted that with the development of an African free-trade area African countries have agreed to cut tariffs to zero on 90% of goods, which alongside other trade-facilitating measures is expected by the UN Economic Commission for Africa to increase intra-continental commerce by more than 50% over four years. “The free-trade area presents an opportunity to speed up development on the continent and represents a potentially large market for SA goods and services,” the Treasury said. [Note: SA’s Budget documentation can be accessed here]
South Africa: Government on a fresh drive to open up new export markets (Business Day)
According to budget documents, the department of trade and industry will assist and facilitate the participation of more than 2,000 firms in trade missions and other export promotion initiatives over the next three years. “These initiatives are aimed at increasing the participation of historically disadvantaged enterprises and individuals,” the documents state. To carry out these activities, just more than R751m is allocated over the medium term to the export marketing and investment assistance scheme.
The impact of the coronavirus on South Africa’s retail sector: two updates from Business Insider
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Shoprite warns imports of blankets and heaters worth R100m could be hit by coronavirus. A spokesperson told Business Insider South Africa that, while the company is not foreseeing a “material impact on its operations”, turnover of R100m is at stake due to product orders from China being delayed by measures associated with attempts to control the Covid-19 virus. “Mainly shipments with winter products such as heaters and electrical blankets are affected,” a spokesperson said. Shoprite continues to monitor the situation and remains in daily contact with factories and suppliers.
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Woolworths shoppers may start seeing ‘stock gaps’ in the next two weeks. Coronavirus-related disruption to Chinese manufacturing and exports is expected to have an impact on Woolworths in the next two weeks. The retailer has warned that some imported items may not be available as it prepares to stock clothing and other products for the winter season. “Whilst we have not seen any immediate direct impact on our South African business, we anticipate that the extended Chinese New Year will create stock gaps in certain categories from mid-March onwards,” a Woolworths spokesperson told Business Insider South Africa. [The maker of Corona (beer) has already lost sales of R4.3bn to the coronavirus]
Zimbabwe: IMF concludes 2020 Article IV Consultation
The government that came to office following the 2018 elections adopted an agenda focused on macro stabilization and reforms. This was supported by a Staff Monitored Program from the IMF, adopted in May 2019, but is now off-track as policy implementation has been mixed. Notable reforms include a significant fiscal consolidation that has helped reduce the monetary financing of the deficit, the introduction of the new domestic currency in February 2019, the creation of an interbank FX market, and the restructuring of the command agriculture financing model to a public-private partnership with commercial banks. However, uneven implementation of reforms, notably delays and missteps in FX and monetary reforms, have failed to restore confidence in the new currency.
Reengagement with the international community continues to face delays. The Zimbabwean government has yet to define the modalities and financing to clear arrears to the World Bank and other multilateral institutions, and to undertake reforms that would facilitate resolution of arrears with bilateral creditors. This continues to constrain Zimbabwe’s access to external official support. As a result, the authorities face a difficult balance of pursuing tight monetary policy to reduce very high inflation and prudent fiscal policy to address the macroeconomic imbalances and build confidence in the currency, while averting a crisis. While the 2020 budget includes a significant increase in social spending, it is likely insufficient to meet the pressing social needs. Absent a scaling up of donor support, the risks of a deep humanitarian crisis are high.
Running out of time: East Africa faces new locust threat (Reuters)
“The second wave is coming,” said Cyril Ferrand, FAO’s head of resilience for Eastern Africa. “As crops are planted, locusts will eat everything.” The impact so far on agriculture, which generates about a third of East Africa’s economic output, is unknown, but FAO is using satellite images to assess the damage, he said. In Kenya, the region’s wealthiest and most stable country, the locusts are mostly in the semi-arid north, although some crops have been affected, said Stanley Kipkoech, a senior official at the Ministry of Agriculture.
In Ethiopia, the government can only afford to rent four planes for aerial spraying, but it needs at least twice that number to contain the outbreak before harvesting begins in March, Zebdewos Salato, director of plant protection at the Ministry of Agriculture, told Reuters. “We are running out of time,” he said. Ethiopia’s single pesticide factory is working flat out. The country needs 500,000 litres for the upcoming harvest and planting season but is struggling to produce its maximum 200,000 litres after foreign exchange shortages delayed the purchase of chemicals, the factory’s chief executive Simeneh Altaye said. FAO is helping the government to procure planes, vehicles and sprayers, said Fatouma Seid, the agency’s representative in Ethiopia. It is also urgently trying to buy pesticides from Europe.
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Updates on this week’s 10th EU-AU Commission-to-Commission meeting:
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The President of the European Commission, Ursula von der Leyen, travels to Addis Ababa accompanied by 20 Commissioners and the EU High Representative for Foreign Affairs and Security Policy. Discussions will focus on key issues such as growth, jobs, green transition, digital, peace, security and governance, and mobility and migration. The meeting will be an opportunity for the EU side to consult its African partners on the upcoming comprehensive Africa Strategy, which President von der Leyen promised to deliver in her first 100 days in office and is due to be presented in early March. The presentation of this important document will kick-start a wider consultation process that will lead up to the EU-AU Ministerial meeting in May 2020 in Kigali, Rwanda, and the upcoming EU-AU Summit in October in Brussels, where both sides will agree a joint approach on shared priorities. [ pdf Factsheet: European Union-African Union Commission-to-Commission take their cooperation forward (5.76 MB) ]
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EU’s Africa strategy: changing the narrative from ‘development’ to ‘partnership. At the heart of the EU’s Africa strategy, due to be formally launched in early March, will be a series of policy-themed ‘partnerships’, according to a leaked draft. The EU Commission aims to “change the narrative: look at Africa for what it is becoming: home to the world’s youngest population; largest trade area since the creation of the WTO; appetite for regional integration; women’s empowerment; all creating huge economic opportunities.” The draft of the strategy covers various important areas, namely Partners for Sustainable Growth and Jobs; for a Green Transition; for a Digital and Data Transformation; Peace, Security, Governance and Resilience; Migration and Mobility; and Multilateralism.
This strategy reflects the change in the narrative during the first three months of the Von der Leyen Commission that has shifted from the focus on ‘development’ to ‘partnerships’. The leaked draft points the direction of EU-Africa policy in one of the key documents driving the so-called ‘geopolitical’ Commission. Ministers are expected to adopt conclusions at a Foreign Affairs Council in April or May, and then at an EU summit on 18-19 June. Africa policy has also been embraced by the Finnish government during the country’s EU presidency last year, whereby both the EU and the Finnish strategies “aim to strengthen an equal strategic partnership between the EU and Africa and to boost their political and trade relations,” as its Development Minister Ville Skinnari pointed out.
The strategy is likely seek to increase EU-Africa trade, business opportunities and investment, as well as EU support for the African Continental Free Trade Agreement that will come into force later this year. However, there are concerns that it will be overshadowed by the piecemeal progress of talks on the successor to the Cotonou Agreement, which is due to expire next month.
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Towards an enhanced Africa-EU cooperation on transport and connectivity: report by the task force on transport and connectivity. On 19 February 2020, the Africa Transport and Connectivity Task Force delivered its final report on the state of the art in three key sectors of transport cooperation, that is aviation, road safety and connectivity. Part of the Africa-Europe Alliance for Sustainable Investment and Jobs proposed by the European Commission in 2018 in order to drive forward intercontinental cooperation, the Task Force was launched in early 2019 to foster a constructive exchange of views focused on cross-border integration, sustainable development and safe mobility of goods and people. Recommendations on Strategic Corridor Development and the Role of PIDA 2020-2030 (pdf):
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Accelerate the implementation of the continental and regional frameworks, texts and instruments adopted by the African Heads of State and Government, in the prospect of the Africa-EU connection.
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The development of regional corridors should go hand in hand with developing linkages between these corridors, the national networks and the urban agglomerates. The dimension of rural connectivity should be integrated into the corridor approach.
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Support the establishment of corridor management institutions with a permanent operational structure along all priority corridors, optimize the inclusive dialogue between key actors in the corridor, and facilitate coordination among development partners.
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Institutional support project for the African Union: AfCFTA implementation (AfDB)
The African Union Commission has received a grant from the African Development Fund to finance the Institutional Support Project for the African Union: AfCFTA implementation. The AfCFTA Secretariat has the responsibility to coordinate the implementation of the AfCFTA Agreement and to undertake monitoring and evaluation of implementation progress. The key objective of the institutional support project is to support the set-up of the Secretariat and to facilitate the roll out of the preliminary implementation programmes details which are itemised further below, all of which will support to the creation of a single continental free trade area and contribute to Africa’s socio-economic transformation. The project includes the following components:
Two commentaries on the proposed US-Kenya FTA:
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Potential US-Kenya trade pact meets with muted response (Global Trade Review). As neither the largest nor the fastest-growing African economy – those titles are held by Nigeria and Ethiopia, respectively – and not even ranking in the top five US export markets in the continent, it is not immediately obvious why the US would choose Kenya for its first Sub-Saharan African trade deal. “One reason for the likely US focus on Kenya lies with the heavy influence of China inside the country,” say IHS Markit analysts John Raines and William Farmer. The research firm considers Kenya to be China’s only ‘core’ Belt and Road Initiative partner in sub-Saharan Africa, where strategic Chinese infrastructure investments are likely to be made. Raines and Farmer also proffer that Kenya probably is seeking to re-engage with the US after it failed to secure from Chinese investors the required $3.8bn billion in funding for stage 2B of its Standard Gauge Railwayproject, first in September 2018 and again in June 2019.
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Aloysius Uche Ordu: As it plans a new free trade deal with the US, Kenya must watch its steps (The East African). Why is the US entering a bilateral trade agreement with Kenya despite Agoa, the multilateral trade deal with the continent? Are there lessons from the Morocco-US bilateral trade deal? What are the implications of the proposed Kenya-US deal for the African Continental Free Trade Area (AfCFTA)? These are pertinent questions.
Jeremy Stevens: Covid-19 clouds the African horizon (Standard Bank)
Evidence of China’s adjustment is also evident in Chinese imports of Africa, which contracted by 4% and remain below 2013 peaks. Recall that a one percentage point decrease in China’s domestic investment growth is associated with an average 0.6 percentage point decrease in Africa’s exports. Indeed, China’s rebalancing translates into investment doing less heavy lifting and expanding much more sluggishly. Back in 2010, domestic investment was growing at 30% y/y but has slowed steadily in each of the past 10 years, slipping to just 4% in 2019. And 2020 is likely to be closer to zero. Meanwhile, African countries have fallen in relative importance to China: South Africa, for instance, slipped from China’s 12th-largest source of goods in 2013 to outside the top 20 last year.
This year, a demand shock and price decline would be very difficult for Africa. Even though tallying the impact of this coronavirus is not yet possible, already expectations for oil consumption have been reduced by 1.5mn barrels per day in Q1:20 and demand for copper is forecast to fall by 300,000 metric tons in 2020. Already, prices of key commodities, like copper, oil and thermal coal have already fallen by 20% since mid-January, and a few reports are emerging that Chinese buyers have postponed overseas orders, some declaring force majeure.
Unfortunately, resource sales (and prices) play an oversized role in fiscal revenue collection to help fund public expenditure. Consider that resource exports account for 40% of total exports in nearly half of SSA, and for eight the ratio is about 70% of exports. Furthermore, the path of commodity prices has one other significance. Making matters worse, around a quarter of China’s loans have been backed by resource concessions. On this score, the more indebted – often to China, backed by resources – are Angola and Zambia.
It is also plausible that the China-related deal pipeline will be smaller than it otherwise would have been. Disruptions in China will crimp revenues for companies in sectors affected by this coronavirus and divert attention of policy banks and commercial banks – the scaffolding for China-Africa deals. That said, much of the rationale for China’s endeavors in Africa (or Belt and Road, for that matter) are to leverage China’s competitive advantage in infrastructure, offshore some overcapacity sectors, and heavier industry, and tap into fast-growing consumer markets. All of this remains.
In contrast to China’s growing penetration, Africa’s traditionally large trading partners have seen their market share decline. Last year, China’s exports to Africa expanded by 7.2% y/y, to $113bn in 2019. And now, COVID-19 has disrupted the path ahead. Consider Yiwu in Zhejiang: as much as 7% of all of China’s exports to Africa originate from Yiwu. But today, Yiwu is far from business as usual. In terms of sourcing from China for domestic demand, South Africa and Nigeria purchase the most from China, but the risk of disruptions affecting cities in Africa is more a function of the relative share of China’s production in overall supply. In addition, overlaying loan data, it seems that Kenya, Tanzania, Mozambique and Ghana are likely sourcing considerable quantities of equipment and machinery from China. [Containing the coronavirus: what’s the risk to the global economy?]
Brexit beyond tariffs: The role of non-tariff measures and the impact on developing countries (UNCTAD)
Non-tariff measures could cause major fractures in post-exit trade relations between the UK and the EU, knocking up to $32bn, or 14%, off of UK exports to the EU, according to a new UNCTAD study. Potential losses under a “no-deal” Brexit from tariffs that may be imposed by the respective parties are estimated at between $11.4bn and $16bn, or 5-7% of current exports. The new study, Brexit beyond tariffs: The role of non-tariff measures and the impact on developing countries (pdf), says NTMs would double those losses. The study also projects that even if a “standard” free trade agreement were to be signed by the parties, the UK’s exports could still drop by 9%.
On the flipside, exports from developing countries into the UK, and to a smaller extent into the EU, could increase if the former doesn’t increase tariffs for third countries. A no-deal Brexit could offer some opportunities for developing countries as trade barriers between the UK and the EU would benefit suppliers from third countries. By contrast, a deal between them would preclude the incentive to turn to third countries, the study finds. However, the positive third-country effect could be diminished by increasing regulatory divergence. If the UK’s regulations divert over time from the EU’s, trade costs would rise for third countries due to production process adjustment costs and potential duplication of proofs of compliance. This would disproportionately affect smaller and poorer countries as well as small and medium-sized enterprises. The study quantitatively explores the post-Brexit role of NTMs and the consequences for developing countries by simulating possible impacts using a panel data gravity model. Under a tariffs-only scenario, exports of developing countries to the UK would increase 1.3% to 1.5% while a tariffs-and-NTMs scenario would see them rise 3.5% to 4%, according to the study. The positive impact would be strongest in agriculture, food and beverages, wood and paper sectors and weakest in electrical and machinery, metal products, chemicals, and textiles and apparel industries.
State of the Digital Economy in the Commonwealth (pdf)
Chapter 1 maps trade trends in the digital economy in the Commonwealth. It finds that while the contribution of ICT services to the Commonwealth’s total services trade and GDP has been gradually increasing since 2012, the Commonwealth seems to be losing out on high-technology manufacturing. The share of the Commonwealth in world high-technology exports declined from 19% to 11% in the period 2000–2017. In the last five years (2013–2017), manufacturing exports have been dominated by resource-based exports (equivalent to 5.3% of the Commonwealth’s GDP), followed by medium-technology exports (4%), and primary product exports (3.5%) in the Commonwealth. Moreover, just six Commonwealth countries make up 98.8% of the Commonwealth’s total high-tech exports as of 2017.
Beyond ICT services, the share of digitally deliverable export services – such as, insurance and financial services, intellectual property charges, telecommunications, computer and information, other business and audio-visual and related services – has increased in high-income as well as upper- and lower-middle-income Commonwealth countries, but decreased in small states and low-income countries. Among Commonwealth countries, the share of DDES in total trade in services varies from more than 70% in the UK, India and Ghana to less than 10% in some small states. Chapter 7 identifies seven possible policy initiatives for the Commonwealth to foster the digital economy, with a focus on intra-Commonwealth efforts.
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Implementation of the Tripartite FTA Agreement now in sight
The implementation of the Tripartite Free Trade Agreement is now in sight following a spike in the number of countries ratifying and set to ratify the Agreement. Eight countries have so far ratified the agreement with six remaining to attain the required threshold of 14 for the Agreement to enter into force.
Namibia is the latest to ratify the TFTA agreement, and today, the country’s High Commissioner to Zambia Mr. Siyave Haindongo deposited the Instrument of Ratification to the Chair of the Tripartite Task Force Chileshe Kapwepwe, who is the Secretary of COMESA.
“Namibia now joins Egypt, Uganda, Kenya, South Africa, Rwanda, Burundi and Botswana in the roll of honour of countries that have ratified the Tripartite Free Trade Area Agreement,” the SG said.
Seven countries are in advanced stages of the ratification process: these are Comoros, Eswatini, Malawi, Sudan, Tanzania, Zambia and Zimbabwe. These are expected to complete the ratification process before the end of this year paving the way for its implementation.
“With the impending ratification by the seven countries, it is my firm belief, that the threshold of 14 ratifications for the TFTA Agreement to enter into force, is now clearly in sight,” Ms Kapwepwe said.
Several rounds of negotiations spanning five years have been taking place with the Tripartite Council of Ministers having earlier set April 2019 as the deadline for Member/Partners States to ratify Agreement.
The tripartite FTA brings together 28 countries that are members of COMESA, the East African Community (EAC) and the Southern African Development Community (SADC).
Launched in Sharm-El-Sheikh, Egypt, in June 2015, the TFTA champions integration that is grounded on the developmental approach to regional integration, based on the three pillars: market integration, industrial development and infrastructure development.
This is approach is borne out of the realization of the complementarity existing between trade liberalization, competitive industrial production and infrastructure development.
“As Africa moves to consolidate gains to intra-continental trade and make itself competitive, of great significance for our region, is the long-standing commitment of our Heads of State and Government to advance regional integration as an overriding vision for generating increased trade volumes in the Tripartite Region,” COMESA SG said.
Ambassador Haindongo said Namibia was now ready to implement the Tripartite FTA having completed the required processes.
Implementation of the TFTA is critical in addressing key constraints to trade in the region, namely; the structure of production and the composition of exports in the member/partner States.
For example, many Member/Partner States in the TFTA have narrow production bases, exporting only a few primary commodities. The Tripartite Model is intended to ensure that the right commodities are produced and competitively availed to the market. In addition, a significant proportion of the States have economies that are resource based with primary commodities accounting for between 40% – 90% of their total exports.
According to the COMESA SG, this has resulted into an expansive extractive sector in the region, with limited linkages to other sectors of the economies. This scenario has rendered many of the Member/Partner States vulnerable to external shocks.
The Tripartite model espouses a value chain approach to exploitation and processing of commodities within the region to address this constraint. The Tripartite model addresses not only the types of goods to be produced in the region, but also the technological content of those goods.
Ms. Kapwepwe called upon the rest of the Tripartite Member/Partner States, to demonstrate commitment by ratifying the Agreement, so that, together, we can consolidate and enjoy the gains that the TFTA has to offer.
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Starting tomorrow: Gabon’s AfCFTA national awareness and sensitization forum
Postponed: The 21st ordinary meeting of the Summit of the EAC Heads of State
The 21st Ordinary Meeting of the Summit of East African Community Heads of State that had been scheduled for Saturday (29 February, in Arusha) has been postponed to a later date. The postponement of the summit comes in the wake of a request by South Sudan, which said it was currently in the process of forming a transitional government bringing together the government and opposition groups. Also postponed is the 41st Extra-Ordinary Meeting of the EAC Council of Ministers, scheduled to take place from 25-27 February at the EAC Headquarters in Arusha. In requesting the postponement, Mr Mou Mou Athian Kuol, South Sudan’s Under Secretary for EAC Affairs in the Ministry of Trade, Industry and EAC Affairs, said that the formation of the new Transitional Government of National Unity would mean a lot of changes in the government and probably affect its organizational structure.
Report of the EALA’s committee on communication, trade and investment on the delayed ratification and establishment of a trade remedies committee (pdf, EALA)
While the Summit approved the amendment of Article 24(2)(a) of the Customs Union in October 2009, it took the Secretary General five years (10t November 2014) to transmit to the partner states the approved amendment for ratification. This unjustified delay raises serious questions about the level of commitment to the EAC integration the Office bearers had at that time. The month of October 2019 marks 10 years since the Summit of Heads of State approved the amendment of Article 24(2)(a) of the Customs Union Protocol to pave way for the operationalisation of the Trade Remedies Committee. A decade later, as the House debates this report, none of the partner states has ratified the aforementioned provision of the Protocol thus making it impossible to constitute this important Committee.
Despite the delayed ratification, all the Partner States pledged their commitment to expedite the ratification process. They undertook to conclude the ratification of the amended provision of the Protocol and have the instruments deposited with the Secretary General at the earliest possible opportunity. It is apparent that the signing of the AfCFTA will lead to increased volumes of trade in the region and there will be NTBs of continental and global nature. The EAC should create safeguards to enable the region engage firmly in continental and global trade. Therefore, it is important that the partner states expeditiously ratify Article 24(2)(a) of the Customs Union Protocol and operationalise the EAC Committee on Trade Remedies to address issues of dumping, subsidies and surge of imports.
Kenya’s EAC exports hit six-year high after trade rows ease (Business Daily)
Kenya’s exports to top markets within the six-nation EAC bloc jumped to a six-year high in 2019 on the back of easing trade tensions, provisional data shows. Earnings from goods sold to Uganda, Tanzania and Rwanda increased by nearly Sh11.01 billion, or 10.06%, in the January-December 2019 period to hit Sh120.43 billion. This is the highest income from goods sold in the three regional markets since Sh120.68 billion was earned in 2013, according to latest statistics collated by the Central Bank of Kenya. The value of exports to Rwanda accelerated at the fastest pace of 29.95% (or Sh5.34 billion) to touch a fresh record of nearly Sh23.18 billion. Orders from Tanzania climbed Sh3.87 billion, or 13.03%, to close the year on Sh33.61 billion – the highest value since protectionist President John Magufuli’s first full-year in office (In 2016, they stood at Sh34.80 billion).
The unspoken pain of Kenyan companies in Tanzania (Daily Nation)
Although many Kenyan companies doing business with Tanzania may not publicly admit it, they are caught up in a cold war that threatens to freeze them out. They accuse the neighbour of being averse to competition, and any sense of losing out results in arbitrary introduction of charges that ensure Kenyan products attract higher prices. Tanzanian has banned some services offered by Kenyan firms and introduced trade barriers that favour local competitors while frustrating the latter. These frustrations are contained in annual reports and financial statements of many companies pointing to a trade war far from over, but which no one wants to admit overtly. Carbacid Investments Limited, which exports Carbon Dioxide (CO2) to Tanzania, is one of the companies whose operations were hit by introduction of new policies.
As Namibia ratifies: Implementation of the Tripartite FTA Agreement is now in sight (Comesa)
The implementation of the Tripartite Free Trade Agreement is now in sight following a spike in the number of countries ratifying and set to ratify the Agreement. Eight countries have so far ratified the agreement with six remaining to attain the required threshold of 14 for the Agreement to enter into force. Namibia is the latest to ratify the TFTA agreement, and today, the country’s High Commissioner to Zambia, Mr Siyave Haindongo, deposited the Instrument of Ratification to the Chair of the Tripartite Task Force Chileshe Kapwepwe, who is the Secretary of COMESA. “Namibia now joins Egypt, Uganda, Kenya, South Africa, Rwanda, Burundi and Botswana in the roll of honour of countries that have ratified the Tripartite Free Trade Area Agreement,” the SG said. Seven countries are in advanced stages of the ratification process: these are Comoros, Eswatini, Malawi, Sudan, Tanzania, Zambia and Zimbabwe. These are expected to complete the ratification process before the end of this year paving the way for its implementation.
Célestin Monga: Africa isn’t ready for currency unions (Project Syndicate)
But Africa’s track record on institution building, especially for overseeing sensitive governance issues involving sovereign states, is poor. Even when rules are adopted and exist on paper, the lack of credible monitoring and enforcement means they stay there. Countries in the SADC and EAC also fail to meet the criteria for optimal currency areas with well-functioning transnational public-finance and banking systems. African political leaders view monetary unions as a stepping-stone toward continental political unity. But a common monetary policy is not adequate to achieve such a goal. No regional integration strategy can survive, much less overcome, pervasive poverty and social tensions. Economic development is a precondition for stable societies. A more appropriate monetary strategy for African countries would be to redesign Africa’s monetary integration project and implement it through concentric circles, with smaller groups of countries that have similar production structures and factor mobility, along with credible transnational fiscal and banking policies. A shared currency pegged to a basket of currencies or with a flexible exchange-rate regime would ensure external competitiveness and yield more economic benefits.
Institutional support to the African Civil Aviation Commission for the implementation of the Single African Air Transport Market: AfDB project appraisal report
The 1988 Yamoussoukro Declaration superseded by the 1999 Yamoussoukro Decision (YD) was was adopted out of the realization that Bilateral Air Services Agreements were too restrictive and hampered the expansion and improvement of air transport in Africa. Indeed, Air transport connectivity in the African continent is significantly lower than in other regions, and only captures around 3% of the global air transport. The YD provides for the full liberalization of Intra-African air transport services in terms of market access, the free exercise of the five freedom traffic rights for passengers and freight by eligible airlines and the full liberalization of frequencies, tariffs and capacity. It is in this context that the Single African Air Transport Market (SAATM) was launched and established on 28 January 2018 as the first AU 2063 Agenda flagship project. The SAATM aims to expedite the full implementation of the YD. The AU gave the mandate of implementing SAATM to the African Civil Aviation Commission (AFCAC. The proposed Project provides for support to the AFCAC as the Executing Agency of the SAATM for the implementation of this initiative.
Although the AFCAC was entrusted with this responsibility, no resources were allocated to enable it to undertake these new functions effectively. A major weakness often associated with the AUC is the lack of durable, goal efficient and reliable project teams and institutions with adequate capacities to undertake implementation. And the YD experience substantiates the latter. The project has been designed considering the SAATM prioritized action plan as well as the results of the Bank’s study on market access and liberalization in 2019. This study highlights inter alia that one of the main reasons for the failure of the YD was the lack of a body with the power to enforce the regulations approved; and conclude that there is need for the support envisaged.
Uganda: Jobs strategy for inclusive growth (World Bank)
Trend growth in Uganda’s economy has not been fast enough to create enough jobs with higher earnings for one of the world’s fastest growing workforces. With almost three quarters of young people still joining the workforce on farms, Uganda’s economic transformation into off farm waged jobs in urban areas must be hastened for faster economic growth. This report identifies 10 key facts from a Jobs Diagnostic analysis which describe the main jobs challenges Uganda faces. It then sets out policy recommendations for a strategy for jobs and economic transformation which focuses on creating more waged jobs in Uganda, encouraging mobility into better jobs in urban areas, accelerating transformation of Uganda’s agriculture, and fostering inclusion into better jobs. Extracts (pdf):
We suggest a policy realignment around jobs priorities, not a new economic policy paradigm. Most of our recommendations can be found in many Ugandan strategy documents. The recipe of macroeconomic stability and liberal, outward-looking, private sector-friendly policies that has allowed Ugandan markets to work and Ugandan entrepreneurs to pursue profi ts since the early 1990s, must be maintained. But given Uganda’s stage of demographic transition, and the limited economic transformation Uganda has experienced even since reforms started in the early 1990s, we think laissez-faire policies will take too long to shift workers from traditional farming to the modern sector and towns. The strategy set out here is therefore not agnostic about which products, locations, workers, and what types of jobs Uganda should target in the realigned strategy (or action plan). A full set of policy recommendations is set out in section 3.
Increased net agribusiness exports, the development of agro-processing industries and markets, and fast growth in higher-value food markets from orderly urbanization are important first steps in Uganda’s economic transformation. Uganda is also a large importer of processed foods and a growing importer of unprocessed agricultural products, including cereals. Processed foods accounted for 9% of all Ugandan recorded imports over the 2012–2016 period; fresh (i.e. unprocessed) food accounted for 3% and has been on the rise in 2012–2016. Food import dependency reached almost 13% by 2016.48 This suggests scope for competitive replacement by local domestically grown and produced goods.
Support SMEs transition to exporting. SMEs typically lack knowledge about regional and international markets, potential market requirements, and relationships abroad to find customers. Access to exports boost demand for SME products and allow SMEs to grow. Potential actions include:
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Establish a specialized agency to support SMEs to export. The Uganda Export Promotion Board could also be strengthened rather than create of a new agency. This agency would support only domestic micro, small, and medium enterprises. This agency would facilitate SME operations; among its services, the agency could assist with tax-related services and exemptions, access to certifications, financial support to attend trade fairs and international events, and training to bid for contracts.
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Provide specialized consulting services to SMEs willing to export. This technical assistance could be provided by local consultants as well as international advisers for a specific need requiring highly specialized competency; for instance, developing a website, developing a quality management system, prospecting for clients, and developing a marketing strategy. The example of the European Bank for Reconstruction and Development (EBRD) in Tunisia demonstrates the opportunities for SMEs (see Box 3.2).
Germany-SA trade (Standard Bank)
In her two-day visit here two weeks ago, German Chancellor Angela Merkel said that German businesses would be keen to invest in SA but first would want to see less bureaucracy and more legal certainty. Indeed, such ideal conditions are what investors would want too before committing in long-term investment here. Indeed, President Ramaphosa’s government is set to improving the ease of doing business in SA, combatting crime and corruption, and implementing pro-growth reforms.
Current Germany-SA investment and trade relations are reasonable; any further German investment clearly would assist our growth and employment. In 2018, direct investment stock from Germany was R90.4bn, while SA’s direct investment stock to Germany was R56.5bn. Germany is SA’s third-biggest source of direct investment stock from Europe, after the Netherlands (R387.7bn) and Belgium (R191.8bn).
SA currently runs a trade deficit with Germany; nevertheless, the share of SA’s exports to Germany was 8.3% in 2019 (above the historical average of 6.3% 2001-2019) and also above SA’s share of exports to the United States (7.0%); United Kingdom (5.2%); Japan (4.8%); and India (4.6%). Germany is therefore an important SA trading partner. The trade deficit can be attributed to SA’s import values of vehicles (27.8%); machinery (21.4%), electrical machinery (10.6%), and optical, photographic at 5.7% (see footnotes below). [The author: Thanda Sithole]
Ireland gets closer to becoming AFDB member (EA Business Week)
Ireland moved a step closer to becoming a member of the African Development Bank Group after a government delegation on Monday deposited ratification instruments during an official visit to the Bank’s Abidjan headquarters. The delegation, led by Paul Ryan, Director, International Finance Division of Ireland’s Department of Finance, included Patrick Mulhall and Renee Martin of the Department of Finance, and Laura Gibbons from the Department of Foreign Affairs and Trade. Ireland’s application to join the African Development Bank Group as its 81st member, was approved during the Annual meetings of the Board of Governors of the Bank Group in Malabo, Equatorial Guinea in June 2019.
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How emerging markets will shape Africa in 2020 (WEF)
In recent years, Sub-Saharan Africa has increasingly traded old friends, like the US and the European Union, for new ones in emerging markets. Since 2006, the region’s exports to the US have declined by 66%, while exports to countries such as Russia and Turkey have doubled and tripled respectively. This shift in partnerships comes as Africa embarks on a new era buoyed by the promise of the AfCFTA, the landmark free trade agreement that will become operational in 2020, as well as increased visa openness and harmonization of monetary policy through West Africa’s new Eco currency.
In 2020, it is imperative that African nations build on the foundations for strong partnerships established in recent years with their emerging market counterparts in Russia, India and the UAE. Given the IMF’s lowered African growth projections because of US-China trade tensions, Brexit and slowing Chinese growth, courting a wider network of partners will be critical for achieving the ambitious plans for 2020, 2025 and 2030 set out by countries from Ghana to Tanzania and the Ivory Coast – major economies in the region that all head to the polls later this year. [The authors, Isaac Kwaku Fokuo and Akinyi Ochieng, are attached to the Botho Emerging Markets Group]
EAC settles on 32% tax to lock out cheap imports (Business Daily)
Negotiators have agreed to raise the EAC upper tariff band to 32%, breaking a deadlock that has delayed review of the customs taxes for close to 10 years. At the moment, the region’s three-band common external tariff (CET) structure has an upper rate of 25%, which is blamed by the private sector for letting in cheaper goods from outside the bloc. The region currently charges zero percent on raw materials and capital goods, 10% on inputs and 25% on finished goods imports. In addition, there are a number of products such as maize, rice and textile which the EAC has put under the sensitive list to attract CET at rates between 35 and 100 percent because they can be produced within. The agreement implies that tariffs will be reviewed to charge import duty of 32% on all finished goods from non-EAC states. Through the years of negotiation, Kenya and Uganda have been pushing for a higher upper CET band of 35% “to protect the local industries from influx of cheap goods” while Rwanda has been keen on an upper limit of 30%. The new band will have to be ratified by the council of ministers before being presented to the Heads of States Summit later this month.
South Africa: Chicken could get pricier as soon as next week when Ramaphosa slaps tariffs on poultry imports (Business Insider)
South African chicken prices can increase from next week when the South African government introduces additional import tariffs, experts believe. President Cyril Ramaphosa during his State of the Nation Address last week said that the state will introduce a new poultry import tariff to support the local industry by the end of next week. FNB Agriculture information head’s Dawie Maree said they expect local poultry tariffs will increase to a maximum of 45%. “Price increases, if at all, on the local market will not be substantial [from the tariffs],” Maree told Business Insider South Africa. “Other factors influencing the consumer price will most probably have a bigger effect such as electricity and transport costs, feed costs, labour etc.”
Kenya: KAM protests easing of import rules (Business Daily)
Manufacturers say lifting stringent conditions that outlawed importation of uninspected goods will reverse gains made in blocking substandard and fake products into Kenya. Kenya Association of Manufacturers chief executive Phyllis Wakiaga said the high taxes that manufacturers pay this year as a result of higher sales could be lost if the new rules are operationalised. Last week, outgoing trade cabinet secretary Peter Munya sanctioned re-introduction of destination inspection as per the legal notice 183 of December 5, 2019. Mr Munya also reduced the value of non-conformity penalty on importation of uninspected goods from 20% to 5% of the value of goods. “Importation of prohibited goods by unscrupulous traders breeds corruption, increases complexity of clearance notwithstanding inadequate local inspection capacity,” she said.
Nigeria: Shippers Council, Customs partner to ensure compliance to e-Platform (The Guardian)
To boost Federal Government’s revenue drive, the Nigerian Shippers’ Council , and the Nigeria Customs Service, have partnered to ensure shippers complied with procedures at the seaports to curb unnecessary delays in cargo clearing. Executive Secretary of NSC, Hassan Bello, during a courtesy visit to on the Comptroller-General of Customs, Col. Hameed Ali (Rtd.), yesterday, in Abuja, pointed out that low compliance rate among shippers often caused a delay in cargo clearing, but the partnership among regulatory agencies would further ensure proper compliance.
New ICT project to support EAC farmers launched (Business Week)
Small-scale farmers from Uganda and Kenya, with support from development partners, have launched an integrated information communication technology project that will help farmers address the challenge of information flow related to agricultural products and the economic potential of the integration among the EAC Countries, majorly Uganda and Kenya. Under the project, code-named Kilimo Mart Application, an ICT application will be developed to aid farmers to share and access information related to markets for their products.
The MSME Voice: Growing South Africa’s small business sector (IFC)
This report follows The Unseen Sector, which was launched in 2019 and provided an in-depth assessment of the micro, small and medium enterprise landscape in South Africa, including the size of the sector, key barriers to access finance and markets. With The MSME Voice, IFC brings the voice of the small business owner and entrepreneur into the discussion. The report compiles insights from in-depth interviews with small businesses across South Africa, highlighting trends from access to finance and business infrastructure to use of cash and banking services, with the goal to inform the design of regulation, creation of tools and provision of financial services that will meet the needs of South Africa’s small businesses. Extract (pdf):
Uptake of formal finance and services is limited and impedes small businesses’ ability to develop and grow. The interviews found that 79% of informal businesses have never borrowed money, and of those that have, only 21% utilized a bank loan. Only 2% of informal businesses have borrowed money for their business in the last 12 months. 58% of formal businesses indicated that they have never borrowed money and 54% of those who have borrowed money for their business obtained a bank loan. Only 19% of formal businesses used a bank loan to start their business. Only 15% of informal businesses have access to a smartphone or tablet, only 9% have a laptop, 9% have an email address and 9% have a social media page. This suggests a low level of digital connectivity. As a result, access to electronic platforms are limited, making physical small business hubs preferable to digital assistance at this point.
Gender mainstreaming in AfCFTA national strategies: Why it matters for the SDGs (IISD)
In 2019, UNECA provided support to 15 African countries to develop national strategies for implementing the AfCFTA. Gender mainstreaming is central to the design of these national strategies. In particular, gender mainstreaming is guiding the development of gender-responsive policies and context-specific interventions to drive female empowerment in the AfCFTA. This in turn directly supports the realization of SDG 5 (gender equality) as a prerequisite for catalyzing progress across all the SDG and targets. Because women are known to invest most of their incomes (90% on average) back in their families (notably in education and health) and communities, identifying interventions to increase the economic power of women through employment can raise living standards for all. Higher living standards in turn contribute to SDG 1 (no poverty), as well as to improved nutrition (SDG 2), good health and well-being (SDG 3) and quality education (SDG 4) outcomes for women and those who depend on them.
Advancing women’s participation in agriculture under the AfCFTA directly supports increased agricultural productivity and food security targets in SDG 2. Likewise, drawing attention to gender-specific effects of export-oriented industrialization could support opportunities for women to hold higher-value addition employment in manufacturing. Raising gender-related concerns regarding the potential impact on women of trade in services liberalization supports the participation of women in higher-skilled services jobs. This in turn gives impetus to the decent work (SDG 8) and industrialization (SDG 9) agenda, as well as to SDG 10 (reduced inequalities). Highlighting the need for empowering women with the required ICT, technical education, skills development and training to access higher-skilled manufacturing and services jobs further contributes to providing education opportunities (SDG 4). [The authors: Nadira Bayat, David Luke]
MAN Lagos zonal AfCFTA sensitisation workshop: MAN insists on negotiation mandates, others for AfCFTA implementation (The Guardian)
Preparatory to the implementation of the AfCFTA, in July, the Manufacturers Association of Nigeria (MAN), has insisted that key technical concerns should be addressed with a strong commitment on the government’s part to enhance competitiveness. Such concerns include the crafting of robust national negotiation mandates, the Rules of Origin, phased liberalisation, the developing and less developed countries dichotomy, and the schedule of specific tariff items in the basket for Trade in Goods. According to MAN, while the implementation of the agreement is expected to drive the growth of the real sector, certain protectionist measures need to be deployed.
Kenya: State, ILO simplify EAC cross-border trade guide (Business Daily)
The government has moved to woo traders in border counties to use formal channels of trade with other EAC states. EAC and Regional Development Principal Secretary Kevit Desai said there was lack of awareness despite EAC member states benefiting from liberalised trade laws for micro and small-scale merchants. “Kenya in partnership with ILO has initiated the process of developing a simplified guide to EAC trade rules, regulations and procedures for cross- border traders and other service providers to assist them get all the relevant trade information,” he said. Mr Desai was speaking in Kisumu during a capacity building workshop which is aimed at sensitising cross- border women traders on the simplified guides to EAC trade rules and regulations to advance the gains of the EAC integration process.
Politics, lack of technical support slow down Igad and regional bodies: Mahboub Maalim, the former executive secretary of Igad, spoke to Victor Kiprop about the organisation’s reforms (Business Daily)
Q: What challenges did you face? A: The biggest was politics. It’s like the oil in the engine of a car. A lot of times when we have problems in regional institutions, it’s just bad politics. The second major challenge was commitment by member states. How much of what they approve do they actually support with ratifications, approvals, legislative and Cabinet approvals? How much of the in-country civil service would be available for technical support? Third, multilateral relationships between the international community and different countries that affect Igad.
Q: Some Igad member states are members of the East African Community, and others are pushing for the formation of a Horn of Africa Alliance. Where does that leave Igad? A: If we really want to get things right, then the bigger we are the better. As secretary general of Igad I am on record making a case for the collapsing Igad and the EAC into one entity. There’s no point of having two separate blocs when there’s overlapping membership. We should have started by collapsing the two and having a greater EAC or greater Horn of Africa, so that when we talk about business, politics and other commonalities that people can benefit from, we have a bigger market. We have prepared papers and presentations on this, but we haven’t reached consensus.
Guide for road safety opportunities and challenges: low- and middle-income country profiles (UN)
The World Bank’s Global Road Safety Facility presented the Guide for Road Safety Opportunities and Challenges: Low- and Middle-income Country Profiles (pdf) during the 3rd Global High-Level Conference on Road Safety in Stockholm. The guide gives a precise assessment on the magnitude and complexity of road safety challenges faced by low-and middle-income countries and helps policy makers understand the road safety framework in context of their own country systems and performance. LMICs are facing a major challenge in road safety. Each year, 1.35 million people are killed on the worlds’ roads, and a further 50 million are injured, with the vast majority of these (over 90%) occurring in LMICs.
One major barrier to improving this situation is a lack of understanding of the problem due to deficient information. Many vital metrics of road safety performance are not measured effectively in most LMICs, including the actual number of road crash fatalities and serious injuries. Measures of progress such as safety rating of roads, age and safety of vehicles, and safety behaviors such as helmet or seatbelt use are also commonly not known. This limits every aspect of road safety management and delivery, including resource allocation, advocacy, intervention selection, and prioritization of resources.
Related:
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6th Meeting of the EU-SADC EPA Trade and Development Committee: Joint Communiqué
Senior officials from six countries (Botswana, Eswatini, Lesotho, Mozambique, Namibia and South Africa) of the Southern African Development Community (SADC) and the European Union held the 6th meeting of the Trade and Development Committee (TDC) under the Economic Partnership Agreement (EPA) on 19-20 February in Brussels.
As the EU-SADC Economic Partnership Agreement (“EU-SADC EPA”) has entered its fourth year of application, both Parties took stock of its implementation and endorsed the draft decisions to be adopted by the Joint Council (the Ministerial-level decision making body of the EU-SADC EPA) and agreed on the way forward on several trade-related matters arising from the Agreement.
Parties endorsed draft decisions for adoption by the Joint Council on: (i) updating the reference quantities for the application by the Southern African Customs Union (SACU: Botswana, Eswatini, Lesotho, Namibia, South Africa) of the Agricultural safeguard under Article 35 of the EPA, (ii) allocation and reallocation of the tariff rate quotas (TRQs (pending the establishment of the SACU-wide TRQ management system) for imports from the EU and on (iii) corrigendum to the EU-SADC EPA.
Following the formal consultations within the context of the dispute avoidance and settlement provisions of the EPA on the safeguard tariff imposed by SACU on imports of frozen poultry from the EU, the Parties exchanged views on the next steps.
The Parties reaffirmed the importance of the inclusive monitoring and evaluation of the implementation of the EPA. To this end, the Parties agreed on a set of monitoring indicators and on the process of the preparation of monitoring reports as of 2020.
As the EU-SADC EPA approaches 4 years of its implementation, the Parties exchanged views on its review which should start in 2021 in accordance with the Agreement’s provision.
An ad-hoc special technical group was set up to continue work on the few outstanding issues related to the EPA monitoring and evaluation system, the involvement of non-state actors, and the preparation of the review of the Agreement.
The co-facilitation of engagement of non-state-actors representatives from both sides in the monitoring of EPA implementation was also discussed with a view of reaching agreement on key principles allowing the organisation of a first joint meeting of non-state actors from both sides in October 2020.
In the context of implementation of the Trade and Sustainable Development Chapter, the EU made a presentation on the European Green Deal, the new EU’s climate-friendly growth strategy, followed by an exchange of views between the Parties.
The Trade and Development Committee took note of the reports of the meetings of: the Special Committees on Customs and Trade Facilitation, the Special Committee on Geographical Indications and Trade in Wines and Spirits as well as of the EU-SADC EPA Agricultural Partnership. The Parties exchanged views on the SADC-EPA States’ intention to start applying cumulation of rules of origin under Protocol 1 of the EPA facilitating integration of the SADC EPA Group into regional and global value chains.
The SADC EPA States provided updates on their National EPA Implementation Plans, aiming at identifying the necessary steps and measures to support the implementation of the EPA and enhance the contribution of the Agreement to the Sustainable Development Goals.
The official request of Angola of February 2020 to join the EU-SADC EPA was noted with appreciation by the Parties. They exchanged views on the next steps to be taken in response to the request for accession.
Last but not least, the Parties exchanged information on the state of play in their trade relations with third countries. The Parties also expressed joint support to the Phase II negotiations and effective implementation of the African Continental Free Trade Agreement. Reaffirming support for the multilateral trading system, the Parties underscored the need to make progress on the crucial elements of the WTO reform, including the developmental elements and the unblocking of the WTO Appellate Body impasse, in view of the upcoming 12th Ministerial Conference in June 2020.
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Ministers of Health of AU member states will meet this weekend to discuss a continental strategy for preparedness and response to the coronavirus disease outbreak. The ministers will:
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discuss and agree on a continental strategy to better prepare and respond to any new cases of the virus on the continent
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discuss and agree on a common approach to receiving African students and citizens wishing to return from China
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share knowledge and information about experimental drugs, vaccines and clinical trials currently being undertaken for the control of the coronavirus disease.
South Africa: PwC unpacks the extent to which coronavirus may dampen the local economy (Engineering News)
“Slower growth in China will hit the South African economy through several transmission mechanisms: firstly, there is the demand for our minerals and mining products; secondly, there is the impact on the balance of trade; and thirdly, there is the potential exchange rate impacts. We were expecting slower Chinese growth to hit South Africa at some point towards the end of 2020, but recent developments have accelerated this slowdown and now we are dealing with suppressed demand a year earlier than we initially thought it would happen,” notes PwC chief economist Lullu Krugel.
PwC further avers that many of South Africa’s industries will see an adverse impact from the virus, including mobile operators, automotive manufacturers, as well as hospitality and retail establishments. The firm adds that three out of four Chinese tourists to South Africa undertake personal shopping activities – China has a burgeoning middle class opting to spend money internationally. The size of the potential decline in Chinese arrivals in South Africa is hard for PwC to gauge at present. Using some simplifying assumptions, the firm estimates a potential loss of at least R200m in Chinese tourist spending.
Commentaries on the proposed Kenya-US FTA:
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Mukhisa Kituyi, Erastus Mwencha: A note to Kenya on its trade talks with the US. At the technical level, an American FTA is much more than a renewed market access arrangement. First is a demand for easier export of American products into your country. Not dissimilar to the recent exhortation by UK Prime Minister Boris Johnson for more chicken from Dover to populate African kitchens. Secondly, US will pile pressure on domestic reform in the partner country. From radical reform of labour laws to strong intellectual property policing, this initiative flies in the face of food security and increased manufacturing output as espoused in the Big Four Agenda. Kenya will quickly learn why the Southern African Customs Union put FTA negotiations with the US on ice.
Regarding the end of Agoa, Kenya should follow the tested route of collective negotiation. Over the past two decades, whenever a phase of Agoa has approached a dateline, the 39 beneficiary countries have engaged the US congress collectively; and this legislation which enjoys rare bipartisan support has been given a new lease of life. Kenya should not provide cracks in the armour of those who have pushed for further collective engagement sure in the knowledge that there is strength in numbers. That is what you negotiate on the wholesale market and at a better price than solo efforts on the retail market.
Regarding the MCA, it is important to note two facts. One, for 16 years, Kenya has been locked out of the grant programme because successive US administrations have been dissatisfied with the level of commitment and action against grand corruption. Secondly, none of the current beneficiary countries of the MCA grants in Africa has negotiated a bilateral FTA with Washington. Beyond the technical challenges and feasibility of a balanced agreement lie the most serious challenges to Kenya’s action. Its impact on the momentum for the AfCFTA and its compatibility with Kenya’s membership of the EAC.
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US-Kenya deal could spur regional value chains says former US negotiator, Florie Liser. A trade deal with the US could help both Kenya and its neighbors in the EAC by fostering the development of regional value chains, according to a former US trade official. “I think it’d be really fascinating as we go forward with this US-Kenya FTA to see what’s going to be possible not just for Kenya but for other African countries in various sectors,” Florie Liser, a former assistant US Trade Representative for Africa who now heads the Corporate Council on Africa. While at USTR, Liser was the chief negotiator for a trade agreement between the US and SACU, talks for which ultimately stalled. “They could actually develop an ecosystem where essentially you get all of these different input manufacturers to final products,” she said. She pointed to SACU as another example, noting that South Africa has become an exporter of autos and that other countries in the bloc have become parts suppliers.
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KEPSA to explore investment opportunities emerging from Kenya-US FTA. KEPSA chief executive officer Carole Kariuki said the mutual beneficial agreement between the two states will ensure a balance and be of value to both Kenya and the United States. “Kenya should draw lessons from Morocco on the challenges and opportunities that are emerging with the free trade agreement between Morocco and the US in order to learn and eventually do better,” she urged. In this regard, KEPSA, Corporate Council on Africa and General Confederation of Enterprises in Morocco will work together to learn lessons from the Morocco experience,” said Kariuki. KEPSA and Corporate Council on Africa also agreed to promote mutual interests through cooperation in the promotion of trade and investment opportunities in Kenya.
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Oluwatosin Adeshokan: Does the Kenya-US free trade deal signal Nigeria’s fall from grace? Nigeria seemed like the prime candidate for a free trade agreement with the United States based on the agreements of the African Growth and Opportunity Act. However, the current policies of the country seem not to indicate it’s not good enough as a trade partner for many of its partners. Adedayo Bakare, an economist and investment researcher at Afrinvest stated the bulk of the trade policies the federal government and Central bank are taking are textbook protectionist and will long term discourage investors from coming to the country. “Nigeria’s import substitution policy and shutting the land borders are sending negative signals to investors and countries saying Nigeria is not open to trade,” said Bakare.
Related:
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The Corporate Council on Africa, in partnership with the government of Morocco, will host the 13th US-Africa Business Summit, 9-12 June in in Marrakech.
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Namibia’s first consignment of beef to the US has left, after 18 years of extensive negotiations between the two countries
Kenya: CBK data reveals exports have hit a three-year low (Business Daily)
Total exports fell to Sh595.28 billion in the year to December from a record Sh612.88 billion a year earlier, Central Bank of Kenya data has revealed. The dip pushed Kenya’s trade deficit – the gap between imports and exports – to a record Sh1.16 trillion from Sh1.145 trillion in 2018 despite a flat growth in imports. Total imports dropped by 0.09%, or Sh1.54 billion, to Sh1.756 trillion. CBK data indicates income from tea shipped abroad last year stood at Sh113.67 billion, a significant Sh25.16 billion dip compared with nearly Sh138.84 billion a year earlier. The earnings from Kenyan tea – used to blend other varieties globally due its superior quality but fetches relatively low value because it is exported raw – were the lowest since 2014 when they stood at nearly Sh94.0 billion. CBK data shows that coffee exports fell Sh2.58 billion to Sh20.91 billion in 2019 compared with the year before, while horticulture’s rose Sh5.04 billion to Sh110.70 billion.
Ensuring economic viability and sustainability of coffee production (pdf, CCSI)
For this report, we developed a new economic model of supply and demand in the coffee sector, which forms the core of our quantitative analysis. The model simulates a global price equilibrium between 136 consuming countries and the farming decisions in 3024 coffee-growing regions. Our report is also grounded in extensive desk research and at least 72 interviews with 86 people, representing producers, small and large companies, civil society organizations and multi-stakeholder platforms, research institutions and academics, and others.
Will the coffee sector continue following a business-as-usual trajectory of limited and piecemeal sustainability endeavors, which would ultimately result in further concentration of coffee producers and heightened supply risks? Or will the coffee sector undertake strong concerted efforts to support a more sustainable and resilient future for producers and the sector overall? We suggest that each coffee-producing country develop a National Coffee Sustainability Plan (NCSP), that accounts for differentiated needs, challenges, and opportunities within the country’s coffee sector. There is not a one-size-fits-all approach for NCSPs. However, each NCSP should include a focus on the following collective goods: [Kigali will host the third World Coffee Producers Forum in July 2021]
2020 Off-Grid Solar Market Trends report (World Bank)
The off-grid solar industry has grown into a $1.75bn annual market, providing lighting and other energy services to 420 million users and remains on a solid growth curve, a new World Bank Group and GOGLA report shows. The 2020 Off-Grid Solar Market Trends report finds that the industry has made tremendous strides in the past decade. Since 2017, revenues from the off-grid solar industry continue to rapidly grow, increasing by 30% annually. To date, more than 180 million off-grid solar units have been sold worldwide and the sector saw $1.5bn in investments since 2012. Extract (pdf):
Companies are moving into new geographies and underserved markets in pursuit of scale. Several providers in East Africa have expanded into new markets, especially in West Africa, as established markets become more saturated. In Nigeria, companies are introducing new products; for example, Zola launched its Infinity backup product to serve the large unreliable grid market in that country, and Beebeejump offers an SHS product with an AC inverter, a category in which several other companies are currently testing products.
Around 70% of the population without access in Sub-Saharan Africa and Asia–Pacific could afford to pay the monthly installments for a Tier 1 multi-light product, so the current addressable market for this product is 476 million people. The remaining 240 million people who cannot afford a Tier 1 OGS product are mostly concentrated in Sub-Saharan Africa, which reflects the region’s lower ability to pay compared to Asia–Pacific. The addressable market for a basic SHS (21–50 Wp) is smaller at 43% (310 million people) of the global target population. While this affordability gap persists for quality-verified, Tier 1–enabling products and above, almost all people in these markets can now afford an entry-level, single-light pico product.
The largest concentrations of people with unreliable grid connections are in South Asia and West Africa. In South Asia, while grid access rates have expanded rapidly, some 832 million people have an unreliable grid connection (Figure 9). This translates to about 46% of all grid-connected people. In West Africa, the majority of all grid-connected households in Guinea and Nigeria report not having electricity “half of the time.”
AfDB joins other DFIs to deepen private investment in fragile states (AfDB)
Representatives of 27 development finance institutions met at the University of Oxford (11-13 February) for a follow-up forum to strengthen private investment inflows into fragile or conflict-affected economies. The Commission for State Fragility, Growth and Development, a partnership of the World Bank Group’s International Finance Corporation, CDC, the UK’s DFI and International Growth Centre of the London School of Economics organized the meeting. Participating institutions agreed to cooperate in rolling out pilot interventions in a number of fragile states. Africa’s premier DFI, the AfDB co-organized the forum, and agreed to lead a pilot intervention in Madagascar going forward. The Bank will also participate in joint implementation of pilot programs in Ethiopia, Democratic Republic of Congo and Sierra Leone. Participants at the 2020 meeting discussed developments in pilot programs, launched last year at the inaugural forum, in a number of countries. Other topics included managing the higher risk associated with operating in fragile environments, including the use of de-risking tools; and mechanisms to maximize the impact of donor-supported investment facilitation. Participating institutions agreed the following:
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Kimberly Ann Elliott: Would a US-Kenya trade deal throw African integration off course? (WPR)
But a bilateral deal with the US will make it harder to bring the AfCFTA to fruition. If Kenya lowers barriers for US exporters while its regional partners do not, those partners will likely erect barriers - rules determining the origin of imports - to prevent transshipment of American goods through Kenya. Washington will similarly insist on rules of origin that prevent exports from Tanzania or Uganda - members of the EAC - from passing through Kenya on their way to the US. That will mean border checks have to remain in place to enforce the rules of origin, and that will raise the costs of trade within the EAC, the exact opposite of what regional integration is supposed to achieve. So why go down this path?
A more development-friendly approach that also supports the goal of African economic integration would involve maintaining the African Growth and Opportunity Act indefinitely and pursuing reciprocal trade negotiations when the members of the AfCFTA are collectively ready for it. It is true that American leverage would be somewhat weaker in that case. But balancing the bargaining power at least somewhat - making the deal less one-sided, essentially, between a very powerful U.S. and a much smaller African country - would also help to ensure that the resulting agreement is less “America First” and more beneficial for both sides.
Michael R. Pompeo: Liberating Africa’s Entrepreneurs (State Department)
If there’s one thing you should know about our President, my boss, you should know that he loves deals. He wants more to happen. He wants more to happen between the United States and nations all across Africa. That’s why the United States launched our new Development Finance Corporation. I’m sure I’ll get a chance to talk more about this with Vera. It’s now just one month old, but it’s well-resourced, well-funded, and well-structured. The goal is very simple. The goal is to catalyze private sector investment in developing countries, focusing heavily on priority areas like agriculture, like energy, and infrastructure. $60bn of finance capacity, it will help here in Africa. And there’s more. The US under President Trump launched Prosper Africa – the Prosper Africa initiative, which is opening opportunities for businesses on both sides of the ocean. We are pushing forward, too, the W-GDP program, with the goal of economically empowering at least 50 million women by 2025. We expect more than half of those women to be right here in Africa. USAID, one of our traditional assistance mechanisms, is integrating the private sector into its core development work in ways that it’s never done before. We support the African Continental Free Trade Area, and we remain committed to our partnership with the African Union. [This speech was delivered this morning at the UNECA]
UK seeks trade pact with Rwanda, EAC (New Times)
In an exclusive interview with The New Times UK High Commissioner to Rwanda, Jo Lomas, said that they are looking to negotiate a trade deal somewhat similar to EAC’s Economic Partnership Agreement with the European Union. “We are looking to have a trade deal with the EAC, along the lines of what was agreed upon by the EU. Ultimately, we would like to be negotiating something more ambitious but we are keen not to disrupt trade,” she said. She said that, so far, they have commenced consultations with the EAC secretariat as well as EAC member states, including Rwanda. “We have started to consult with the EAC secretariat and the EAC states on how to take that forward. The Rwandan Minister for Trade was in London and we had an initial discussion,” she said. She noted that the lack of an EAC-EU binding economic agreement necessitated the negotiation of a new one. “If there was trade agreement with the EU already in operation, we would transition to one. At the moment, there is none. Our options are either EAC decides to implement it and we transition from that or we come up with a new agreement,” she noted. [UK government update: UK trade agreements with non-EU countries]
Selected AfCFTA updates
Nigeria
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CNBC Africa interview with trade minister Niyi Adebayo: “Nigeria won’t ratify AfCFTA unless local industries are safe”
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CNBC Africa interview with Tilewa Adebajo (CEO of CFG Advisory) and Mansur Ahmed (Manufacturers Association of Nigeria): Nigeria to review its trade policy ahead of AfCFTA
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NOTN engages stakeholders on commitment in ‘services trade’. The Nigeria Office of Trade Negotiations has engaged key stakeholders and private sector operators to reach a common stand on the nation’s specific commitments for trade in services under the AfCFTA agreement. Speaking at the stakeholders meeting in Abuja on Monday, acting Director-General of NOTN, Victor Liman, said the move became necessary to get relevant input from industry players on the liberalisation of services sectors in accordance with the tenet of the continental trade pact. Liman, who listed the priority service sectors for liberalisation as financial, communications, transport, tourism and professional business service sectors, said decisions reached in the meeting be processed as Nigeria’s position and forwarded for harmonisation into a single schedule by ECOWAS.
Ghana
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Ghana’s Minister for Trade and Industry, Alan Kyeremanten: ”The closure of the Nigerian border can be considered as a trade barrier and we have negotiated under the CFTA a protocol on dispute settlement, so unlike what exists in the current protocol, any country that feels aggrieved by an act or issue by another country that is part of the CFTA can file an action against that particular country or trading group. We are also required by the law to resolve to that matter so it’s not going to be business as usual as it currently exists.”
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Ghana constitutes technical working groups to domesticate AfCFTA objectives. The seven TWGs, comprised over 100 technical experts from the various sectors of the economy, mandated to develop a comprehensive national action plan to boost intra-African trade and ensure the nation takes full advantage of the opportunities presented by AfCFTA to enhance economic growth. They are: trade policy, trade facilitation, enhancing productive capacity, trade-related infrastructure, trade finance, trade information and factor market integration. The TWGs are based on the seven clusters of the Boosting Intra-African Trade proposed by African leaders during the AfCFTA’s adoption. Mr Alan Kwadwo Kyerematen, minister of trade and industry, announced that a National Steering Committee comprising heads of the seven cluster TWGs would be established to coordinate the activities of the technical groups for effective implementation of the National Action Plan.
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AfCFTA readiness assessment consultation begins in Accra. The consultation is focusing on six sectors of Association of Ghana Industries members who are in agri-business, food and beverages, pharmaceuticals and herbal, garment, textile and leather, plastics and hardware as well as hospitality and tourism industry sectors. “The stakeholder consultation with the private sector is very important as it would help in assessing their knowledge and understanding of AfCFTA, rules of origin, capacity to produce and export to other African countries as well as identifying the challenges that would impede their ability to take full advantage of the AfCFTA,” said Appiah Kusi Adomako, the country director for CUTS. But he added that a firm in Ghana which borrows on the average of 28% per annum cannot compete with firms in South Africa, Rwanda, Mauritius that borrow on an average of 7% per annum.
Trade between Egypt and Africa up by 2.03% (Ecofin)
Between January and November 2019, trade between Egypt and the rest of Africa slightly increased by 2.03%, reaching $131.35m against $128.74m against the same period in 2018. Data were provided by the Central Agency for Public Mobilization and Statistics. On the continent, Kenya was Egypt’s leading trade partner with a trade volume of about $17.69m at the end of November 2019 against $20.49m the same period in 2018 (-13.67% YoY). South Africa came second with a trade volume of $6.52m at the end of November 2019, against $4.64m at the end of November 2018 (+40.52 pct YoY).
Harnessing Malawi’s agricultural trade for sustainable development: Groundnuts, sunflower and soybeans (UNCTAD)
A decline in tobacco exports due to health concerns has made it imperative to identify other promising agricultural sectors as a means of increasing foreign exchange earnings to support development. This study analyses the three sectors in terms of opportunities derived from exports of primary and processed products, within a context of regional integration and LDC preferential access to developed country markets. It provides detailed information on the current and evolving trading regime between Malawi and its close regional partners, with a focus on both formal and informal trade, given that the latter accounts for a significant proportion of the country’s overall trade and notably involves female traders. The study notes that all three crops offer significant export opportunities:
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Soybean is in great demand both for the production of protein-rich meals as well as for livestock feed. GMO-free soybean from Malawi already earns a premium in export markets.
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Potential export earnings from groundnuts, grown by poor communities throughout Malawi, are estimated at around $48.4m, of which over half is as yet unrealised.
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Demand for sunflower oil is growing in Malawi and foreign exchange constraints can encourage processors to source from domestic producers.
Profiled policy recommendations (pdf):
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Speeding up processing of testing and certification for exporters by the MBS and promoting mutual recognition of regional test certificates: will significantly facilitate trade for the region’s exporters, and help firms integrate into regional value-chains. In particular, accelerated implementation of existing initiatives such as Malawi’s National Single Window for exporters, which allows a single entry point to fulfill all import, export and transit related regulatory requirements.
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Exploring Special Economic Zones as an alternative to Export Processing Zones for export-oriented, value-added industries: could provide processing firms additional opportunities for integration into regional value chains, by tapping into domestic production and markets and sourcing raw materials from SADC and COMESA for processing and further re-export to earn foreign exchange. Implementation of SEZ initiatives already underway in Malawi could be further accelerated.
Avocados in Kenya: What’s holding back smallholder farmers (The Conversation)
Kenya is the world’s third largest producer of avocados. It’s also Kenya’s leading fruit export, accounting for nearly one-fifth of its total horticultural exports. But Kenya only exports 10% of its total avocado production. By comparison, Chile exports 55% and South Africa exports 60%. In a new study we surveyed 790 avocado-farming households in Kenya and analysed what factors get in the way of smallholder farmers participating in export markets. We then looked at the implications this has on their farming businesses. This included labour inputs – such as hired and family labour – farm yields, sales prices, and finally, incomes. Smallholder avocado farmers in Kenya face several big barriers to participating in export markets.
SWIFT’s annual African Regional Conference: API hackathon to foster innovation in cross-border payments in Africa
SWIFT will hold an open API hackathon at its annual African Regional Conference (21-23 April, Cape Town). The hackathon aims to identify new solutions to reduce costs in cross-border payments into and within Africa. Over two days, teams of developers will be given access to a combination of SWIFT and industry APIs in an open sandbox environment provided by SWIFT. They will be asked to develop solutions to concrete, real-world challenges currently facing the payments industry in Africa. The teams will then pitch their work in front of an expert industry panel at ARC.
The 14th WTO trade policy review of the European Union is underway in Geneva: the documentation can be accessed here.
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Diarise:
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Special Session of the Regional Coordination Mechanism for Africa ( 24 February, Victoria Falls). The session will focus on leveraging the Decade of Action for the realization of the Sustainable Development Goals and Agenda 2063 in Africa. To that end, it will discuss among other things (pdf), the role of the UN Development System, AU organs and agencies and other stakeholders. The session will be held back-to-back with the sixth session of the Africa Regional Forum on Sustainable Development (25-27 February, Victoria Falls). The rationale for linking the two events is to facilitate the translation of the outcomes of ARFSD sessions into programmatic responses by the UNDS.
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The 4th STC on Finance, Monetary Affairs, Economic Planning and Integration (9-14 March, Accra): Leveraging the 4th Industrial Revolution to address youth unemployment in Africa. The STC’s discussions will, inter alia, identify the drivers of change and their likely consequences over the next half century, and propose policy choices that will enable Africa to fulfil its potential in the years ahead. The STC will also add to the scant knowledge base on this topic for Africa and reflect the latest evidence from leading reports such as the Africa’s Development Dynamics, whose 2020 edition would focus on policy responses needed for a better “Future of Work” in Africa given the process of technological change, demographic, urban and green transition.
Selected STC side events, background documents (all pdf):
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pdf A status update on Financing the Union (809 KB) : challenges of the 0.2% import levy
Only 17 countries out of the 55 member states are collecting from the levy. Though funds are being collected they are not remitted in full by some Member States. There is no enforcement mechanism to ensure that the money collected is actually transmitted.
Some countries, such as Seychelles and Mauritius have undertaken a zero tariff commitment at the WTO on almost 95% of their imports. Imposing the levy on the remaining goods would only yield less than is required to pay to AU. Similarly, doing so would be in breach of GATT Article II on schedules of commitments. Similarly, a number of Small Island States have raised concerns that their economies are small and not diversified, depending mainly on tourism. These countries have indicated that an increase in the tariffs on the small quantity of imports could potentially weaken their economies.
Other Member States are constrained by legal implications under their obligations to the WTO, especially with the Most Favored Nation principle. The MFN principle requires that WTO members apply the same tariffs on a like product imported from other WTO members.
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African Union policy dialogue on the taxation of the digital economy (12 March, Accra). The Policy Dialogue is being held on the backdrop of the new proposals by the OECD Inclusive Framework to develop a global consensus-based solution to the tax challenges arising out of the digitalisation of the economy. Recently, many African countries have reported concerns about the tax challenges they face, as their economies become increasingly digitalised. Digitalisation enables multinational enterprises to carry out business in African countries, with no or very limited physical presence. This makes it difficult for African countries to establish taxing rights over the profits the MNE is making from the business activities it carried out. This is due to the current international tax rules only allocating taxing rights to a country where a non-resident enterprise creates sufficient physical presence in that country, i.e. creating a “nexus” in that country. Business models that enable an MNE to carry out business in an African country with no or very limited physical presence in that country, therefore, represent a significant risk to the tax base of African countries
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High-level conference on the promotion of good governance and fight against corruption (12 March, Accra). The Conference is a joint initiative by the IMF’s Africa Training Institute and the African Union Commission. The specific objectives of the conference include: launching the AUC strategy and the IMF framework on governance and corruption; helping build consensus on macro-critical impact of poor governance and corruption and their transmission channels; and disseminating key IMF and AUC messages on governance and corruption issues.
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Progress report on the establishment of the African Union Financial Institutions. The main challenges towards the establishment of the AUFIs include the slow ratification of the legal instruments. Since adoption in 2009 and 2014 for the AIB and AMF, respectively, none of the financial institutions has reached the requisite number of ratifications to enter into force. In addition, there is a shortage of financing for the establishment of the AUFIs, and this is particularly detrimental to the operationalization of the AMI, which is the first step toward the establishment of the ACB. Efforts of the AUC to speed up progress include:
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pdf African regional integration: contribution to the acceleration of the digitalization in Africa (581 KB) . The African integration process presents a real coordination challenge. The RECs and the African Union are faced with duplication of activities and misperception of roles in the implementation of integration programs. In this regard, the RECs have programs that have so far failed to take into account the Continental Integration Agenda. This gives rise to different regional and continental objectives which reduce the efforts of actors at the continental and regional levels. One of the great challenges emanating from this lack of coordination is the coexistence of the AfCFTA and regional Free Trade Areas. A coordination mechanism is necessary so that the FTAs existing in the RECs can contribute to the operational success of the AfCFTA.
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pdf Final report of the 10th meeting of AfCFTA AU ministers of trade (384 KB) (held in 14 December, Accra)
- Realizing Africa’s digital transformation through improved and integrated digital financial and payment systems
pdf Eswatini: National budget speech 2020-2021 (647 KB) (GoE)
Revenue forecasts for 2020/21 financial year are projected to be E21.2 billion, indicating an 18.4% increase from the E17.6 billion in 2019/20 financial year’s collection. A number of factors underpin the expected increase in collection. In particular, SACU receipts are expected to be E8.34 billion which is a 32.5% increase from the E6.3 billion 2019/20 financial year amount. The positive trade balance amounting to E3.9 billion in 2019, is explained by a 16.2% rise in export receipts, largely dominated by the country’s export of soft drink concentrates, followed by sugar exports. On average, 67% of the country’s exports are destined to the South African market. Kenya, Nigeria and Mozambique have remained above the 1% market share, showing an increasing trend of our exports going to African countries. Also, partly contributing to the significant rise in export receipts is the weak Lilangeni against major global currencies which benefitted exporting companies. [Presented by the Minister of Finance, Nal Rijkenberg]
Nigeria: IMF staff concludes Article IV Consultation (IMF)
High fiscal deficits are complicating monetary policy. Weak non-oil revenue mobilization led to further deterioration of the fiscal deficit, which was mostly financed by Central Bank of Nigeria (CBN) overdrafts. The interest payments to revenue ratio remains high at about 60%. Under current policies, the outlook is challenging. The mission’s growth forecast for 2020 was revised down to 2 percent to reflect the impact of lower international oil prices. Inflation is expected to pick up, while deteriorating terms of trade and capital outflows will weaken the country’s external position. Nigeria’s border closure will continue to have significant economic consequences on the country’s neighbors. It is important that all involved parties quickly resolve the issues keeping the borders closed - including to stop the smuggling of banned products.
OECD/SWAC: Violence in North and West Africa increasingly targeting civilian and border areas
Violence in North and West Africa is increasingly targeting civilian and border regions as today’s conflicts involve non-state actors with diverging agendas, according to a new report (pdf) by the OECD’s Sahel and West Africa Club. The report uses granular data to assess the intensity and geographical distribution of violence in the region since 1997. It finds that the last five years have been the most violent recorded in North and West Africa, with more than 60,000 people killed between January 2015 and the end of 2019. More than 40% of violent events and fatalities occur within 100 km of a land border, and 10% of deaths from political violence occur less than 10 km from a border. Civilians are increasingly specific targets of violence, rather than just being caught in cross fire.
Amidst protection challenges, Eastern Route outpaces Mediterranean for people leaving Africa (IOM)
A monthly average of 11,500 people traveling from the Horn of Africa to Yemen last year made the so-called Eastern Route the busiest maritime migration path on earth, the UN migration agency said on Friday. Data collected by IOM’s Displacement Tracking Matrix revealed that over 138,000 people crossed the Gulf of Aden to Yemen last year, as compared to the more than 110,000 migrants and refugees who crossed the Mediterranean Sea to Europe during that same period. And this is the second year in a row that the Eastern Route reported more crossings than the Mediterranean. In 2018, roughly 150,000 people made the journey.
A global profile of emigrants to OECD countries: younger and more skilled migrants from more diverse countries (pdf, OECD)
The purpose of this paper is to answer some of these questions and to present the basic findings drawn from the updated DIOC 2015/16. The first section of this paper presents the Database on Immigrants in OECD Countries in detail, its key variables and country coverage. Section 2 describes migrant populations both by country of destination and country of origin in 2015/16, as well as the dynamics of international migration to OECD countries since 2000/01. Section 3 presents the evidence on overall emigration rates and emigration rates of the highly skilled at the regional and country levels. Finally, section 4 looks at age patterns in immigrant populations. Main findings:
The adult (15+) immigrant population of OECD countries has reached 120 million in 2015/16, up from 78 million in 2000/01. These immigrants account for 54% of the world immigrant population and represent 12% of the total population of OECD countries. Europe is the main region of origin of immigrants in OECD countries, with 41.5 million immigrants (about 35% of the total), followed by Asia (31 million, 26% of the total), Latin America (30 million, 25% of the total) and Africa (12 million, 10% of the total). North America and Oceania account together for only about 3% of immigrants living in OECD countries.
Two new UNCTAD reports, manuals:
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UNCTAD’s updated 2019 guidelines to collect data on official non-tariff measures. During the last few decades, multilateral and regional trade negotiations and unilateral liberalization have substantially reduced tariff rates. Non-tariff measures (NTMs), however, represent a growing challenge for exporters and policy makers. The purpose of this manual (pdf) is to provide guidelines to data collectors to harmonize the NTM data collection process and to minimize uncertainty during the process of categorization and classification. In doing so, the manual presents the logic behind the classification of NTMs, and it explains how to choose the most appropriate code. This manual provides a large set of examples, and it is regularly updated to respond to queries and questions emerging during the data collection exercise.
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Negotiating liberalization of trade in services for development. The services sector has been increasingly dominant in most economies. According to the International Labour Organization estimates for 2017, services are the main source of global employment with 48.5% share. The purpose of this publication is to assist trade policy makers, regulators and trade negotiators in considering their decisions regarding trade in services and services negotiations in the overall national development context. It could also be useful for other stakeholders involved or interested in services negotiations and policymaking, including the private sector, researchers and non-governmental organizations. The publication seeks to do so by providing a balanced, objective and sound analysis of the technical and policy issues about the rules and negotiations on trade in services and explore possible ways to address the above-mentioned challenge, especially under the General Agreement on Trade in Services (GATS) of the WTO. A brief analysis is also conducted regarding services negotiations in the regional integration context.
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Trade events to diarise:
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EA Competition Authority experts meeting to develop a prioritization framework and conduct of market studies (19-22 February, Dar es Salaam)
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EAC: Verification of glass products manufactured in the Republic of Kenya (19-22 February, Nairobi)
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15th CII – Exim Bank Conclave on India-Africa Project Partnership (15-17 March, New Delhi)
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7th biennial UNCTAD World Investment Forum and inaugural Asian E-Commerce Week (6-10 December, Abu Dhabi)
WTO goods barometer signals further weakening of trade in first quarter of 2020
World merchandise trade growth is likely to remain weak in early 2020, according to the WTO Goods Trade Barometer (pdf) released today. The real-time measure of trade trends now reads 95.5 — less than the 96.6 recorded last November and well below the index’s baseline value of 100. The drop in the barometer since November has been driven by additional declines in indices for container shipping (94.8) and agricultural raw materials (90.9), as well as the plateauing of the automotive products index (100.0). Although indices for export orders (98.5), air freight (94.6) and electronic components (92.8) are all below baseline, they appear to have stabilized and would normally be expected to rise in the coming months. However, every component of the Goods Trade Barometer will be influenced by the economic impact of COVID-19 and the effectiveness of efforts to treat and contain the disease.
WTO members advance new aid for trade programme (Barbados Advocate)
Barbadian Ambassador to Geneva, Chad Blackman wants WTO members to push for a new deal on the aid for trade (AfT) programme. This comes as the body moved closer to finalizing the new AfT work programme for 2020-2021 at a meeting of the Committee on Trade and Development dedicated to AfT on 11 February 2020. Delegations also discussed at a workshop how Aid for Trade can help support rural economic transformation. Blackman invited delegations to help finalize the biennial work plan, with the objective of agreeing to it ahead of the General Council’s next meeting on 3 March. Several WTO members reported on their AfT activities. [Ambassador Amina Mohamed: Why trade in services matters for development and inclusiveness in Africa]
Fifth ATPC steering committee meeting: preview (UNECA)
The Fifth Steering Committee Meeting of the African Trade Policy Centre under its third 2016-2020 programme cycle will be hosted by the EAC Secretariat in Arusha later this week (19-20 February). The first day of the meeting will review ATPC programme results and financial reports for 2019, and take stock of the evaluation of Phase I of the EU Project on “Deepening Africa’s Trade Integration through Effective Implementation of the AfCFTA”, which successfully concluded in December 2019, and is to be followed by a new and even more ambitious second phase. The main highlights of the second day of the meeting include presentations on ATPC’s 2020 work programme and budget, along with two special sessions which will (1) introduce ATPC’s new industrialization cluster which is focused on upgrading and transforming Africa’s trade and regional value chains, and (2) future collaborative work with the EAC. The meeting will wrap up with a presentation of the envisaged collaboration with Global Affairs Canada under the upcoming 4th cycle of programme support for the period 2021-2025.
Africa makes a “standard comparison” to study the implementation of the UAE Halal system (Zawya)
A high-level delegation from the African Organization for Standardization, which has 37 members, reviewed the UAE Halal system, which was launched by the Emirates Authority for Standardization and Metrology “ESMA”, and achieved a global spread in the past five years. The African continent will hold a set of normative comparisons during the coming period, after the good reputation of the UAE Halal system led them to attend the activities of the global Halal industry platform as a guest of honor, to listen closely to all the technical and operational details. The ARSO delegation, at the end of the activities of the 5th session of the global halal industry platform, expressed their happiness to get to know, and listen to important national experiences such as the Saudi Halal system, and other experiences that have proven successful In dealing with the UAE halal system. [Gulf economies to take coronavirus exports hit says S&P]
Wandile Sihlobo: Understanding South Africa’s agriculture trade patterns (Daily Maverick)
After reaching a record level of $10.6bn in 2018, South Africa’s agricultural exports fell by 8% year-on-year (y/y) in 2019 to $9.8bn. This, however, was unsurprising as agricultural production data for 2019 showed a notable decline in a number of exportable commodities because of the drought. The temporary ban on exports of livestock products and wool in 2019, following the outbreak of foot-and-mouth disease at the start of the year, also contributed to the decline in exports. Be that as it may, the top exportable agricultural products for 2019 included citrus, wine, grapes, apples and pears, sugar, macadamia nuts, wool and maize.
Over the same period, South Africa’s agricultural products imports declined by 4% y/y to $6.4bn. This was underpinned by the decline in the import value of rice, meat, wheat and palm oil. But these products remained among the top imported agricultural products in value terms. Overall, this subsequently led to a 12% y/y decline in South Africa’s agricultural trade surplus to $3.4bn, as shown in Exhibit 1 below. South Africa’s agricultural exports could recover somewhat in 2020. The improved weather conditions have led to an increase in summer crops’ area plantings and prospects of a bigger maize harvest, which is an exportable commodity. The South African wine grapes production is also set to increase in 2020, thus contributing to a larger wine volume output.
Kenya’s avocado sector updates:
Selected postings on the proposed Kenya-US FTA:
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Kenya will be in breach of EAC, AfCFTA rules in proposed trade deal with America. Kenya’s proposed free trade deal with the US has put it in the crosshairs as critics say the planned bilateral agreement would be a breach of regional and continental trade protocols. EAC Trade officials in Arusha say the deal is potentially in breach of Section 37 of the EAC Customs Union Protocol that requires a member state to inform its partners of its intentions before such a deal is signed. The Kenyan government has however denied that it is in breach of both the EAC Customs Union Protocol and the AfCFTA agreement. Kenya’s former Trade Cabinet Secretary Peter Munya, who attended the trade talks in the US, said Kenya is seeking an alternative route to access the US market, which accounts for up to 10% of its exports basket. “The rules and guidelines of the EAC Customs Union Protocol require that we formally notify the EAC states of our intentions. There hasn’t been any signing of a trade deal. We will notify the EAC once the deal is in place,” Mr Munya said.
Erastus Mwencha, former deputy chairperson of the AUC and a former Secretary-General of the Comesa, has cautioned Kenya against signing the deal. “Under the AU, the African heads of state have discouraged member States from entering into bilateral free trade negotiations with third parties because they jeopardise the AfCFTA.”
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US-Kenya trade talks seen as risk for Africa regional pact. “Kenya should not provide cracks in the armor of those who have pushed for further collective engagement,” according to Mukhisa Kituyi, secretary-general of the United Nations Conference on Trade and Development, and Erastus Mwencha, former head of the Common Market for Eastern and Southern Africa. “There is strength in numbers,” they said in a joint statement. A free-trade accord would enable products from the world’s biggest economy to enter Kenya more easily and could hamper the East African nation’s efforts to boost its own manufacturing and farming, Kituyi and Mwencha said. The US would also pressure Kenya to show more zeal in reforming its labor laws and enforcing rules on intellectual property, they said.
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Editorial commentary in The East African: Kenya must be cautious on trade deal with the US
ECOWAS ministerial meeting on the closure of Nigeria’s land borders to goods: update
A high level ministerial meeting was held on Saturday in Ouagadougou, Burkina Faso, attended by ministers responsible for ECOWAS Affairs, Finance and Trade from Benin, Burkina Faso, Côte d’Ivoire, Ghana, Niger, Nigeria and Togo. They met to assess the situation of the closure of land borders of Nigeria to goods, pursue the overall objective to reach an acceptable solution by all parties and propose actions for the rapid reopening of the land borders of Nigeria for the free movement of goods. General Salou Djibo, Chairman of the Task Force on the Free Movement of Persons and Goods stressed that the meeting which is to assess the situation of the closure of Nigeria’s land borders to goods and arrive at a solution. After deliberations, the Ministers arrived at some recommendations, which they presented to the Champion of Free Movement of ECOWAS, H.E. Roch Marc Christian Kabore at the Presidency in Ouagadougou.
East Africa mulls ways to end illicit gold trade (The East African)
Countries in the region are discussing the adoption of stringent traceability mechanisms for the gold industry to stamp out rampant smuggling across East and Central Africa to overseas buyers particularly in Asia. Mining officials from the International Conference of the Great Lakes Region countries are in negotiations and are meeting next month to discuss the body’s Artisanal and Small-Scale Gold Strategy, which calls for harmonisation of gold export procedures including taxation and traceability and certification. The ICGLR wants its member countries to adopt the strategy by mid-this year. “It is disheartening to see so much gold being smuggled from the DR Congo through its neighbouring countries. While much attention over the past 10 years has focused on implementing traceability for tin, tungsten and tantalum (Three Ts), little has been done in terms of monitoring the flow of gold in the region,” Ambeyi Ligabo, director of Democracy and Good Governance at ICGLR told The EastAfrican. “We have agreed that it is crucial to implement the ICGLR guidelines on gold trade because the region’s image has been smeared by smuggling. We hope they speed up the process so these guidelines are affected by March this year,” said Mr Ligabo.
Decade of African Women’s Financial and Economic Inclusion: update from the AU Summit
The Status of Gender and Development in Africa Report, presented to the Assembly of Heads of States and Government by Nana Akufo-Addo, the President of the Republic of Ghana and the African Union Leader on Gender and Development Issues in Africa, shows that the continent has made considerable progress in implementing commitments towards gender equality and women’s empowerment. African Union member states such as Rwanda, Namibia, South Africa and Senegal, are among the top ten countries in the world with the highest level of women representation in their Parliaments. Others, such as Ethiopia have, for the first time, achieved a parity government, with women in its cabinet. Sixteen member states have surpassed the 30% threshold of women’s representation in national parliaments, with significant progress having been made in advancing women’s participation in holding elective offices and in positions of leadership. Further, Ghana, Madagascar, Mozambique, Burkina’s Faso, Ethiopia, Liberia and Mali, have reduced appreciably the gender gap in terms of access and attainment of education. Despite these laudable achievements, the President of Ghana however noted that the continent still needs to do more and urges the leaders to place more emphasis and efforts towards achieving gender equality in all spheres of life.
ITME Africa 2020: overview (ITC)
Africa’s first International Textile Machinery Exhibition (ITME Africa 2020) held in Addis Ababa (14-16 February), was organized by the India International Textile Machinery Exhibitions Society (India ITME Society) in partnership with the Ethiopian Chamber of Commerce & Sectoral Associations. More than 180 exhibitors from 14 countries participated in the event, with country pavilions from India, Italy, Switzerland and Turkey showcasing state-of-the-art technologies in the textiles sector. “The inauguration of ITME Africa 2020 marks a remarkable stage in the relationship between two major poles of growth – the African continent and India,” Ms. Tembo said. “Over the past two decades, trade between India and the African continent has increased more than eight-fold.” Mr. S. Hari Shankar, Chairman, India ITME Society, said Africa’s growing importance as a sourcing destination for textiles could not be disputed: “The continent affords abundant opportunities to the international textiles market, and we hope that this event will catalyze business partnerships that will further develop the textiles value chain across Africa.” [Downloads: ITME press releases]
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pdf Why the need for a pharmaceutical initiative anchored on the AfCFTA? (894 KB) Extracts from the technical paper prepared for the Third Africa Business Forum (UNECA)
This innovative AfCFTA-anchored pharmaceutical project has key objectives to support attainment of the SDGs and improve the African governments’ fiscal space. The initiative also demonstrates a more strategic role for the private sector to play in both the supply and demand sides of provision of health care. The creation of single economic space under the AfCFTA allows more secure logistics and a controlled environment for procurement and distribution. The pilot project proposes a regional pooled procurement arrangement, which can also help tackle the infrastructure, data and logistics needs of the continent. Once this arrangement has been set up, it will provide for the safety, security and quality of products procured and distributed.
The second objective of setting up more local pharmaceutical production is to incentivize and engage local pharmaceutical manufacturers across the continent on the supply side of the project. This builds on the Pharmaceutical Manufacturing Plan for Africa. The preliminary data currently available reports that local manufacturing in the 10 countries (see below) is extremely low, with the exceptions of Ethiopia and Kenya. The number of recognized pharmaceutical manufacturers in the region is estimated at 50 but approximately 30 of these are based in Kenya. Ethiopia supplies 20% of domestic consumption but with limited product portfolios (see Box 2). [Companion paper: Disruptive pharmaceutical and finance initiative - AfCFTA and AMA game changers. Note: The pilot countries are Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Madagascar, Mauritius, Rwanda, Seychelles, Sudan, and IGAD]
Statement by South Africa’s DTI: Designations of developing and least- developed countries under the Countervailing Duty Law by the USTR (DTI)
Now, the new USTR designation adds to the GNI measure the following criteria to determine which WTO Members will be considered developed or developing for the purposes of CVDs under US law. WTO Members accounting for 0,5% or more of world trade; Organisation for Economic Co-operation and Development Members and those in accession; all EU Member States; Members of the G20; and WTO Members who did not declare themselves to be developing countries during their WTO accession process will be treated as developed. In other words, the 1% ad valorem and 3% negligibility thresholds will now apply to an additional 34 developing countries, including South Africa. The implications of this change in the US application for South Africa will need further assessment. However, as the South African Government does not provide subsidies to industry or agriculture that are illegal under the terms of the WTO SCM, the new USTR designation should have no direct impact.
The change in designation, however, may not be unrelated to US efforts at the WTO over the past two years to restrict the application of the principle of special and differential treatment that provides all developing countries to flexibilities in WTO negotiations. The US has requested many developing countries, including South Africa, to forgo such flexibility in future negotiations. It should be recalled that under the Uruguay Round negotiations, South Africa was treated as a developed country and was required to undertake deep and wide tariff reductions that have contributed to deindustrialisation and high unemployment in South Africa. South Africa and many other developing countries have not been prepared to forego SDT in future negotiations based on the experience of the Uruguay Round outcomes.
Is the time ripe for US-Egyptian free trade agreement? (Al-Monitor)
Comments by the top US diplomat in Cairo have renewed hopes among Egyptians for the potential of a long sought bilateral free trade agreement. US Ambassador to Cairo Jonathan Cohen said Jan. 28 that negotiations at the official government level between Egypt and the United States are scheduled to begin next year on a bilateral free trade agreement. Cohen’s announcement came on the sidelines of the conference of the American Chamber of Commerce in Egypt. He said that the discussions between the two countries on the free trade agreement are in the best interest of both sides, recalling the countries’ strong strategic relations dating back more than 41 years. Washington and Cairo have been engaged in talks on a free trade agreement — to varying degrees of intensity — for the better part of two decades. So far, however, a deal has remained elusive.
With lending to Africa up, Malpass splits World Bank Africa department in two (Devex)
The World Bank will split its regional department for Africa in two, effective later this year, World Bank President David Malpass said Wednesday. Since 2000, the 54 countries of Africa have been internally divided at the World Bank into a regional department dubbed “Middle East and North Africa” and another simply called “Africa” that included all of sub-Saharan Africa. According to an internal announcement obtained by Devex, as of 1 July 2020, the Africa department will be divided into “Western & Central Africa” and “Eastern & Southern Africa.” Each new department will be led by its own vice president. In an interview with Devex, Malpass described the move as a “recognition of the big challenges Africa is facing” and an alignment of the World Bank’s personnel and management with its growing loan portfolio for Africa. Hafez Ghanem, the bank’s current vice president for Africa, will become vice president for Eastern & Southern Africa. Ousmane Diagana, currently the bank’s vice president for human resources and a former World Bank country director for Mali, Niger, Chad, and Guinea, has been named to lead the Western & Central Africa unit. [Re-upping the recent World Bank report Borrow with Sorrow? The changing risk profile of Sub-Saharan Africa’s debt]
AfDB rebuts World Bank President’s comments on Africa’s debt profile (AfDB)
In several news reports, World Bank President David Malpass was recently quoted as saying some Multilateral Development Banks, including the African Development Bank, have a tendency to lend too quickly and in the process, add to the continent’s debt problems. This statement is inaccurate and not fact based. It impugns the integrity of the African Development Bank, undermines our governance systems, and incorrectly insinuates that we operate under different standards from the World Bank. The very notion goes against the spirit of multilateralism and our collaborative work. These are the facts (extracts):
Given substantial financing needs on the African continent, the development assistance of the African Development Bank, the World Bank and other development partners remain vitally important, with increasing calls for such institutions to do even more.
The lending, policy, and advisory services of these development institutions in their respective regions are often coordinated and provide substantially better value-for-money to developing nations, compared to other sources of financing. As a result of the African Development Bank’s AAA-rated status, we source funding on highly competitive terms and pass on favorable terms to our regional member countries. Combined with other measures to ensure funds are used for intended purposes, it helps regional member countries finance debt and development in the most responsible and sustainable way.
With regard to the need for better lending coordination and the maintenance of high standards of transparency, the African Development Bank coordinates lending activities, especially its public sector policy-based loans, closely with sister International Financial Institutions (notably the World Bank and the IMF). This includes reliance on the IMF and World Bank’s Debt Sustainability Analyses to determine the composition of our financial assistance to low-income countries; and joint institutional approaches for addressing debt vulnerabilities in the African Development Fund and International Development Association countries.
In addition, country economists of the African Development Bank fully participate in regional and country level IMF Article 4 missions. Contrary to suggestions, these are just a few concrete examples of historic and ongoing coordination between sister Multilateral Development Banks, IFIs, and development partners. The African Development Bank is committed to the development of the African continent. It has a vested interest in closely monitoring debt drivers and trends in African countries as it supports them in their efforts to improve the lives of the people of Africa.
World Bank chief: some development banks worsening poor country debt burdens (Reuters)
World Bank President David Malpass on Monday chided other development banks for lending too quickly to heavily indebted countries, saying some were helping worsen already-challenging debt situations. Malpass said at a World Bank-International Monetary Fund debt forum in Washington that the Asian Development Bank, the African Development Bank, and the European Bank for Reconstruction and Development were contributing to debt problems. “We have a situation where other international financial institutions and to some extent development finance institutions as a whole, certainly the official export credit agencies, have a tendency to lend too quickly and to add to the debt problem of the countries,” Malpass said. He said the Asian Development Bank was “pushing billions of dollars” into a fiscally challenging situation in Pakistan while the African Development Bank was doing the same in Nigeria and South Africa.
Malpass said there needed to be more coordination among international financial institutions to coordinate lending and maintain high standards of transparency. “And so we have a very real problem of the IFIs themselves adding to the debt burden and, and there’s pressure then I think on the IMF to sort through it and look at the best interest for the country,” he said. Malpass also said that the new Beijing-led Asian Infrastructure Investment Bank was seeking to develop lending standards that were equal to those of the World Bank and was causing fewer problems than some of the more traditional development lenders.
The evolution of public debt vulnerabilities in lower income economies (IMF)
On 22 January 2020, the Executive Board of the IMF discussed a joint IMF-World Bank staff paper assessing the evolution of debt developments and emerging debt issues in lower-income economies (LIEs) since 2017. Executive Directors welcomed the opportunity to discuss the evolution of public debt vulnerabilities in LIEs. They noted that accommodative global financial conditions and expanded funding from non-Paris Club creditors have allowed LIEs to mobilize larger volumes of external financing. This has provided the opportunity to help finance important development spending. At the same time, Directors highlighted the challenge for countries to strike a balance between boosting development spending and containing debt vulnerabilities. Extract:
Commercial creditors are playing an increasingly important role as a source of bond debt. Bond issuance has continued to grow since 2016, with the share of bond debt in LIEs economies rising by an average of two percentage points of GDP per annum on new entrants and larger issuances. Since 2010, foreign currency denominated bonds have been the fastest growing source of financing for frontier LIEs, mainly in sub-Saharan Africa. Eurobond issuances have almost tripled from an average of $6bn per annum during 2012–16 to about $16bn per annum in 2017–18 and several countries have become new issuers. Participation is still concentrated, however, with only 22 issuers among LIEs, of whom the top ten account for almost 90% of borrowing since 2004. For some of these economies, relative to their size, issuance levels are similar to those of emerging market economies. Annex 2 discusses some key aspects of frontier bond markets. [Note: The 2 January 2019 version of the above report can be accessed here]
Emerging and developing economies: Ten years after the global recession (World Bank)
Although emerging market and developing economies (EMDEs) weathered the global recession a decade ago relatively well, they now appear less well placed to cope with the substantial downside risks facing the global economy. In many EMDEs, the room for monetary and fiscal policies to respond to shocks has eroded; underlying growth potential has slowed; and the momentum for improving policy frameworks, institutions, and business climates seems to have slackened. The experience of the 2009 global recession highlights once again the critical role of policy room in shielding economic activity during adverse shocks. The subsequent decade of anemic growth underlines the need for sound policy frameworks, institutions, and business environments to promote sustained growth. With the global growth outlook weakening and vulnerabilities rising, the policy priority for EMDEs is now to improve resilience to shocks and to lift long-term growth prospects.
Somalia and the Enhanced Heavily-Indebted Poor Countries Initiative: IMF’s preliminary document
Somalia has an historic opportunity to turn the page on decades of conflict, fragility and state fragmentation, and embark on a trajectory towards poverty reduction and inclusive growth. For over two decades, Somalia has experienced protracted conflict and fragility, the collapse of rule of law, institutions, basic public services and the social contract, resulting in the impoverishment of millions. The 2012 Provisional Constitution established a federal political structure, including a parliament, the Federal Government of Somalia and the Federal Member States. The sustained political, economic and institutional reforms undertaken since 2016 have succeeded in rebuilding core state capabilities. [IMF, World Bank consider Somalia eligible for assistance under the Enhanced HIPC Initiative]
Tanzania signs $1.46bn loan for standard gauge railway construction (Reuters)
Tanzania has signed a $1.46bn loan agreement with Standard Chartered Bank Tanzania to fund the construction of 550km (341.75 miles) of standard gauge railway running between between Dar es Salaam and Matukupora in central Tanzania. “Standard Chartered Tanzania acted as global co-ordinator, bookrunner and mandated lead arranger on the facility agreement that is the largest foreign currency financing raised by the ministry of finance to date,” the Finance and Planning Ministry and Standard Chartered Bank Tanzania said in a statement. It added that the biggest part of the financing would come from Sweden’s and Denmark’s export credit agencies.
“Nigeria does not have the capacity to borrow $23bn” (Daily Trust)
Financial analyst and managing director, Cowry Asset Management Limited, Mr Johnson Chukwu has said the country does not have the capacity to borrow $23 billion as currently canvassed by the federal government . Chukwu disclosed this in an exclusive chat with Daily Trust yesterday in Lagos while responding to question on the borrowing plan of the federal government. The federal government, penultimate Tuesday, sought the approval of Senate for concessionary external borrowing of $22.8 billion for development of infrastructure across the country. [Nigeria’s central bank introduces longer-term contracts on the naira to lure investors, shore up FX reserves]
Pompeo makes first trip to Africa amid conflicting US signals (Reuters)
US secretary of state Mike Pompeo on Saturday begins a trip to Senegal, Angola and Ethiopia, chosen for their leaders’ attachment to democratic values in a continent that has seen backsliding in recent years. “These three countries are major contributors to regional stability. Also, the countries are benefiting from dynamic leadership,” a senior state department official said on customary condition of anonymity. The official said that a “major theme” will be the growing role of China, which has poured money into the continent as part of its global blitz of infrastructure spending. China has invested especially heavily in Angola, which racked up an estimated $25bn in debt to Beijing to be repaid with oil shipments.
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Posted by the African Union: African Innovation Outlook III
Extract from Chapter 3: Status of innovation performance (pdf). This chapter presents the status of innovation performance in the business sector, mainly focusing on manufacturing and services firms from 10 African countries during the period 2013-2015. The 10 countries, with a total of 321 million inhabitants, represent nearly a third of Africa’s population and a total GDP of $630bn in 2016 prices. While 10 countries do not accurately represent a continent of 55 countries, it is a reasonable number from which key lessons can be drawn. While the previous chapter focused on the national R&D system, this chapter provides complimentary information on innovation activities such as capital expenditure on machinery and equipment, R&D and software, as well as expenditure on the acquisition and use of knowledge, product design, personnel training, pilot scale production, and market analysis from a firmlevel perspective. The survey specifically looks at firms that introduced new products and processes, organisational and marketing innovations and other aspects such as challenges faced by firms and sources of useful information for innovations.
Product and process innovations (pdf): A closer look at product (goods and services) and process innovations suggests that process innovations were higher at 33.4% followed by product innovations separately presented as goods (21.6%) and as services (17.0%). However, wider differences were observed among countries (Tables 3.8 and 3.9). For instance, in Seychelles firms reported 66.7% of process innovations and 66.7% of service innovations and goods innovations were at 26.7%. On the other hand, Egypt and Ethiopia reported much lower innovation rates for services as compared to goods and processes. Similarly, firms in Lesotho pursued more innovations in goods (44.4%) and processes (44.4%) than in services (30.6%).
Third Regional Dialogue on WTO Accessions for Africa: WTO membership and AfCFTA implementation in deepening economic integration (UNECA)
Mr Stephen Karingi (Director: Regional Integration and Trade Division of ECA) reflected on what he called “the contrasting narratives on the governance of international trade” coming out of Africa, on the one hand, and the West, on the other, and observed that despite the waning confidence in rules-based multilateral diplomacy, Africa is “affirming and reaffirming its confidence in a rules-based system of economic liberalization as a tool for inclusive and people-centered development.”
Instead of turning against the multilateral trading system, the Dialogue served as an opportunity for African countries to explore the synergies between the AfCFTA and the WTO regimes so as to ensure those countries pursuing accession to the WTO and participation in the AfCFTA approach these twin processes in a coordinated and mutually-reinforcing manner. The dialogue comprised of government representatives from seven of the nine acceding African countries – Algeria, Comoros, Equatorial Guinea, Ethiopia, Somalia, South Sudan, and Sudan. It also brought together representatives from the private sector, civil society, independent experts, academia, international organizations and development partners.
US-Kenya trade negotiations: A chance to get it right (PIIE)
Moving countries from unilateral preferential schemes to reciprocal agreements is a long-standing US trade policy objective, undertaken when Central American countries moved from the Caribbean Basin Initiative to the Central American Free Trade Agreement in the early 2000s. Since then the United States has wanted to enter into free trade agreements in Africa as well. A major concern about potential US-Kenya negotiations is that the parties could settle for a limited deal. Kenya would benefit from a deep preferential trade agreement, but it needs time to forge such an agreement and align its domestic political economy to support it. Kenya needs to revise some of its current trade policies and practices and tackle controversial issues head on.
Plenty of challenging issues will need to be sorted out: high import tariffs on dairy, corn, and other products; sanitary and phytosanitary barriers, like import bans on genetically modified products or complex requirements on meat, dairy, and poultry; restrictions on government procurement; trade barriers in insurance and telecommunication services; and restrictions on FDI in combination with local requirements, among others. Practices such as closing borders or banning imports, like the recent episode of blocking Uganda’s milk supply, will come under pressure. Open consultations with the private sector, good mechanisms to improve coordination among government agencies, and broad communication initiatives would help Kenya get its domestic political economy right. In parallel, Kenya should address some of the main problems impeding private sector growth.
But for US-Kenya negotiations to deliver, Washington needs to move away from the one-sided bilateral deals recently favored by the Trump administration and find the right template. The agreement should also be designed to effectively support regional integration. But to effectively move into a reciprocal relationship with benefits for both parties, it is critical to consider the following [three] points: [The author: Annabel González; Bitange Ndemo: How will the new Kenya-US trade deal fare?]
Free trade agreement between Mercosur and Egypt (pdf, WTO)
The representative of Egypt noted that the Free Trade Agreement between Mercosur and Egypt was signed by the parties on 2 August 2010, and had entered into force on 1 September 2017. The trade liberalization offered by Egypt to the Mercosur states would take place over ten years from the date of entry into force of the agreement. Egypt had already liberalized 1,090 tariff lines for Argentina, Brazil, and Uruguay, and 1,094 lines for Paraguay. An additional 739 lines would be liberalized in 2020 for all Mercosur states. Egypt would also liberalize around 1,700 tariff lines in 2024 and 1,100 tariff lines in 2026. He noted in conclusion that Egypt was looking forward to expanding its trade relations with the Mercosur states through the full implementation of trade liberalization under the agreement. His delegation believed that the agreement would serve as a important tool for the private sector on both sides to help develop trade and investment partnerships.
Isaah Mhlanga: How the new US trade policy will affect SA (Moneyweb)
Essentially you have about 36% of South Africa’s total export that goes to the United States without any tariffs or duties. And that’s quite a significant amount. But if we consider for some subsectors such as agriculture, for instance, that percentage goes to about 75%, which means these are now going to be subject to tariffs, which means it’s going to be much more expensive for us. And because of that access to the US market without tariffs, South Africa has maintained a trade surplus in terms of goods trade with the US since the inception of Agoa in 2000, and exports have increased by 104%, which is a significant growth. If you look at 2018 alone, South Africa exported to the US about R8.5bn, while it imported about R4.2bn, which means we had a trade surplus of R3.76bn, which benefits South Africa quite significantly. And those trade dynamics are likely to change going forward. [The author is executive chief economist at Alexander Forbes]
AU Financial Institutions Initiative: Ghanaian president named as Champion (Xinhua)
Ghanaian President Nana Addo Dankwa Akufo-Addo has vowed to help the African continent towards effectively harnessing African financial institutions as he was named Champion of the African Union Financial Institutions. “Ghana believes that the establishment of the African Financial Institutions are critical for enhanced resources mobilization on the continent,” an AU statement issued late Tuesday quoted Akufo-Addo as saying, as he emphasized that such continental financial institutions “will drive the continent’s financial sector to facilitate its productive transformation and development.”
According to the Ghanaian president, effective establishment of the AU financial institutions requires bold commitments from African policymakers, as leaders of the continent. “We need to take urgent actions for the signing and ratification of the legal instruments of the African Investment Bank and African Monetary Fund, in order to get the required number of ratifications to mobilise Member States towards their operationalization,” he added. As the champion for the AUFI, Akufo-Addo will work together with the African Central Bank, the African Monetary Fund, the African Investment Bank and the Pan-African Stock Exchange.
Bohani Hlungwane: The AfCFTA will be a game-changer for African free trade (Business Day)
The anticipated overall growth in intra-African trade will generate an increasing need for trade finance. The International Chamber of Commerce estimates there is already a trade finance deficit of at least $100bn, even before there is an increase in intra-African trade that should result from a successful implementation of the AfCFTA. This will pose a significant challenge to African banks, as they will require flexibility in risk assessments and financing requirements, given the already very high trade finance deficit. Regional banks, such as Absa Group, Standard Bank and Ecobank, will need more flexibility in their risk assessments for trade deals in order to support corporates as they take advantage of new growth and trade opportunities across the region. This is important, as strong regional banks have proved to be critical in regional economic and trade development in other regions, such as Europe, North America and Asia. [The author is regional head of trade and working capital for Africa regional operations for Absa Group Limited]
CIPE and NACCIMA position Nigeria’s organised private sector on AfCFTA implementation: The aim is to support MSMEs in Nigeria to articulate policy positions needed to maximize the opportunities presented by an Africa free trade area and to implement vital economic reforms to harness benefits to MSMEs.
Islamic Corporation for the Development of the Private Sector signs MoU with the A-eTrade Group: The scope of cooperation envisaged in the MoU provides for a landmark contribution to Africa’s economic structural transformation, when fully executed, including enabling SMEs in Africa, especially women and youth, to be active participants and beneficiaries of the AfCFTA. “Our goal is to create 600,000 SMEs in 4 years with 22 million jobs, and 5 million SMEs in 15 years with 80 million jobs”, said the CEO and Chairman of the AeTrade, Mr Mulualem SYOUM.
Why exporters need to mind the trade finance gap (WEF)
According to the Asian Development Bank, the current trade finance gap, or the amount of requested trade finance that is rejected, is estimated at $1.5 trillion globally. Half of this is in developing countries in Asia and Africa, with small and medium-sized enterprises suffering the most. The WEF estimates this gap could reach $2.5 trillion by 2025 as supply chains move away from China to poorer developing countries. This not only puts up a major wall between global markets and the SMEs that are otherwise ready to supply them, it also prevents trade from fulfilling its potential to promote growth and development and create jobs. The situation in the least developed countries is dire. The rejection rate for requests of trade finance in Africa exceeds 50%, while the trade finance gap is estimated to be more than $100 billion annually – one-third of the total market value. With few alternatives to bank financing, traders generally abandon the transaction once rejected. Many international banks no longer support cross-continent trade transactions with Africa, for fear of regulatory fines. As a result, finding US dollars to clear trade transactions has become a challenge for local banks.
Prompt submission of notifications urged for full implementation of Trade Facilitation Agreement (WTO)
Members considered 43 notifications received since the last Committee meeting in October 2019. Canada, China, the European Union, Japan, the Russian Federation and the United States took the floor at the meeting to remind members to submit information to the WTO about implementation timelines, trade procedures, contact points and other details required under the Agreement. The US also drew attention to the upcoming deadline of 22 February for LDCs to notify definitive dates when they would implement certain TFA provisions for which they required transition periods. As of 11 February, the current rate of implemented commitments under the TFA stood at 64.7%. Broken down by level of development, this equates to a 100% rate of implementation by developed members, 63.9% among developing members and 29.6% among LDCs.
Uganda Economic Update: Strengthening social protection (World Bank)
The current account deficit almost doubled to 9.8% of GDP in FY18/19 from 5.4% last year, but remains manageable as it is financed by large net FDI inflows. Aided by real exchange rate appreciation, total imports grew by 20% in FY18/19. Merchandise exports performed well (pdf), despite a reduction in the value of coffee exports. Merchandise exports grew 12% in FY18/19, surpassing last year’s pickup in exports totaling 8%. The rise in exports of goods occurred despite export volumes of coffee falling by over 6% in FY18/19 and coffee prices declining by 10%. As a result of such developments, refined gold has replaced coffee as the leading export product in Uganda, growing in value from $343m in FY17/18 to $1.1bn in FY18/19. The latter accounts now for one-third of total merchandise exports. That said, the longer-term sustainability of this development remains questionable. Refined gold exports helped elevate total merchandise exports to over 13.4% of GDP during in FY18/19 from 12.9% of GDP the year before. Traditional export products, such as tobacco and cotton, also performed well with growth rates of 58% and 32%, respectively.
Services sector growth slowed to 4.9% in FY18/19 (Table 1). This was largely due to slower growth in the trade, transportation and storage, and accommodation and food sub-sectors (Figure 5). In FY17/18 these sectors grew on average at almost 9%, but eventually slowed to 3.4% in FY18/19. The slowdown could be on account of slower intra-regional economic activity, following the lingering effects of the South Sudan conflict and closure of the Uganda-Rwanda border.
Climate change and marine fisheries in Africa: Assessing vulnerability and strengthening adaptation capacity (World Bank)
This report aims to assess, to the extent possible, the potential impact of climate change on fisheries and the related well-being of coastal African countries. It focuses on how the observed and anticipated ecological impacts of climate change are likely to affect fish stocks and the fisheries that depend on them and highlights the coastal countries and regions in Africa that are most vulnerable to climate change. Based on these projections, the report further assesses subsequent socioeconomic impacts on coastal countries and communities.