Search News Results
tralac’s Daily News Selection
Nigeria’s UN Permanent Representative, Tijjani Muhammad-Bande, was elected on Tuesday to head the UNGA's 74th Session, starting in September:
UN SG António Guterres noted some of the “many important and admirable qualifications” he brings to the office. He cited the president-elect’s tenure as Nigeria’s UN Ambassador; his expertise in political science and public administration; and the “invaluable insights” he has into Africa’s challenges and world affairs in general, particularly regarding the Organization’s peace and security work, sustainable development and human rights.
A selection of perspectives, news updates on the TFTA, AfCFTA
(i) tralac’s Gerhard Erasmus: Advancing the intra-African trade agenda by implementing the Tripartite FTA. Does the trade in goods regime of the TFTA offer an additional and perhaps better opportunity for some African nations to boost their trade with each other, and to do so sooner rather than later? Could this happen while the same States are participating in the tariff reduction discussions of the AfCFTA? Could those States that have ratified the TFTA Agreement fast-track the implementation of their undertakings to liberalize trade in goods? This Trade Brief provides a discussion of these and other pertinent issues related to the TFTA and AfCFTA agreements.
(ii) COMESA’s Francis Mangeni: What next after the coming into force of African Free Trade Area? In addition, trade facilitation programs should be appropriately prioritized. Time-related costs, arising from delays, are significant, estimated at over 90% of transport costs. Customs related delays result in a loss of about 23,000 jobs annually in Africa. Trade Mark East Africa, has accordingly invested over $500m in trade facilitation projects in Eastern Africa. If the route of long bilateral tariff negotiations is taken, AfCFTA can in the meantime be projected as a Free Trade Area for Trade Facilitation and not for elimination of customs duties. While this would be quite a novelty, it would make perfect sense, in reducing the cost of doing business in Africa, which is highest in the world.
There is quite some concern about revenue losses from tariff liberalization, estimated at $4bn, or up to 3% of GDP. The Afrexim Bank has therefore mobilized $ 1.5bn, and the World Bank also the same amount, to support countries through loans. The Afrexim facility will be on a cost recovery basis, and not profit based. The Afrexim Bank has established also the MANSA program, to assist in credit rating and de-risking, with a data set of 600,000 companies already. The name derives from the legendary Mansa Musa of the old Malian empire. In conclusion, then, the African Continental Free Trade Area is here. It changes the political and economic geography of Africa forever.
(iii) UCT’s Professor Carlos Lopes: With the AfCFTA, "Africans benefit from intra-African trade". The President of Niger, Mahamadou Issoufou, is the main person to congratulate for having invested a lot in this cause as the AU Champion President in charge of the AfCFTA. He even went beyond what could be expected of him. He convened a dozen ministerial meetings which allowed the acceleration of the implementation of this plan, which culminated last year with the signing of the free trade agreement by 41 African countries. Today, 52 countries have already signed the Free Trade Area.
(iv) Frank Mattheis, Ueli Staeger: More work lies ahead to make Africa's new free trade area succeed. Finally, the free trade area will invariably pose economic challenges in AU member states. The promise of free trade agreements is to create wealth through increased competition, the equalisation of wages and the substitution of domestic labour with imported goods. International experience shows that the gains tend to be unequally distributed, especially if a free trade area involves a large amount of diverse economies. Entire economic sectors and communities can be heavily affected by the downsides: wage cuts, unemployment and environmental degradation. Questions abound. How will governments manage AfCFTA’s winners and losers when existing social protections are weak, and informal markets dominate many sectors? Will governments still respect the agreement even if it hurts some of their businesses and state companies? And how will they deal with the loss of customs revenue? Nigeria’s internal disputes and protectionism are a case in point. The road ahead to an effective free trade agreement that delivers results to Africans is still long.
(v) South Africa’s Department of Trade and Industry: Government steps up the pace of African trade integration. The Minister of Trade and Industry, Mr Ebrahim Patel noted that the establishment of the AfCFTA can be a game-changer for the local economy, providing a massive market for SA goods and services. He noted that exports to the rest of the continent already accounts for about a quarter million of South African jobs. “If we can get the institutions and infrastructure right and build a deep business and social partnership in South Africa, the AfCFTA can add many billions of rand to GDP, create large numbers of new industrial jobs, attract and expand investment and strengthen the economy. We will work in close partnership with investors and the local business community to realise this potential." Deputy Minister Majola added that the AfCFTA would South Africa an opportunity to expand to new markets in North and West Africa, beyond the SADC region. “This will provide South African exporters and investors with much needed legal certainty and predictability of markets across Africa."
(vi) Zambia will not rush into ratifying the Africa Free Trade agreement. Speaking upon arrival in Addis Ababa, Zambia's Minister of Commerce and Industry, Christopher Yaluma, said Zambia will not rush to ratify the AfCTA agreement to be done before the forthcoming July African Union Heads of States Summit. He said the wide consultation was meant to ensure that the country instituted mechanisms to ensure that Zambia does not become a dumping site for substandard products. Mr Yaluma said the consultative process with relevant stakeholders was still on-going and had not been exhausted to warrant ratification during the operationalization of the CFTA at next month’s summit. He said government wanted to obtain full endorsement from the private sector as they will be the major drivers of the programme. The Minister said the signing of the CFTA framework by His Excellency President Lungu in March was testimony that Zambia was committed to being part of the single largest market in Africa. [Zambia's AU Commissioner recognised for championing the AfCFTA]
(vii) Kenya eyes free trade pact to expand dairy market in Africa. Livestock PS Harry Kimutai says a number of countries in West Africa have already made inquiries about Kenya’s long-life dairy products. “We are eying to expand our market to other regions and we are starting with West Africa that has already expressed interest in our milk products, especially the powdered milk,” he said. The West African countries that have shown interest include Liberia and Nigeria, with officials from Monrovia recently visiting the country. Kenya Dairy Board managing director Margaret Kibogy says Nairobi is seeking to lower of the cost of production from the current Sh25 per litre to Sh15 in order to remain competitive in the wake of the free trade area. “AfCFTA is a good initiative that will open up the market for Kenya and other African countries. However, it might not augur well with our high cost of production; that is why we want to address the overheads to an acceptable level that will make us competitive in the market."
(viii) Norwegian Council for Africa's panel discussion on the AfCFTA (audio). The panelists were Grieve Chelwa (UCT), Andreas Moxness (University of Oslo) and Cathrine Jahnsen (Norwegian-African Business Association)
‘Regional security and integration’ in Central Africa under threat, Security Council warned (UN)
“Recent inter-communal tensions in eastern Chad opposing nomadic herders and sedentary farmers, as well as the attacks against villages in the Central African Republic remind us of the urgency of addressing the issue of pastoralism and transhumance”, said François Louncény Fall, referring to the traditional practice of moving livestock from one grazing area to another on a seasonal basis, which has been a persistent source of conflict in the region. On a more positive note, the UN Special Representative and Head of the Regional Office for Central Africa said he was “pleased” that the issue is “receiving increasing attention in Central Africa” and welcomed a draft regulation instrument on pastoralism and transhumance from a 27-28 May workshop in Kinshasa.
He reminded the Council that the UN Standing Advisory Committee on Security Questions in Central Africa remains “the primary platform” where the Economic Community of Central African States meet to discuss peace and security issues and recommends actions to address threats to regional stability. Given the inter-regional dimension of the tensions, Mr Fall made assurances that “UNOCA will continue to support ECCAS efforts in this area” and work with the UN Office for West Africa and the Sahel, “to promote cooperation and exchange of good practices between Central, East and West Africa on the issue”.
Kenya's horticultural sector raked in Ksh 153.7 billion, accounting for 25% of the total exports in 2018. Dr Chris Kiptoo: "I salute Kenya's horticulture sector for achieving a 33% increase in export earnings in 2018 against target of 25% in National Export Strategy. The floriculture subsector did even better through 38% growth. This is testimony of Kenya's potential as an exporting nation!"
Egypt: Combined mid-term review CSP 2015-2019, country portfolio performance review (AfDB)
Lessons for the Bank: Strengthen the private sector portfolio. The large and dynamic private sector offers business opportunities for the Bank. Yet, the private sector portfolio in Egypt is small, accounting for only about 16% of the total commitments. There is therefore a need to scale up private sector operations in light of the Government’s aspiration to strengthen the SME’s role in driving the fourth industrial revolution and improving social inclusion and youth and women empowerment through engaging in value added activities. Lessons for the Government: Strengthen project/program development. A more streamlined process for developing the lending program is needed from the Government side. Given the dynamic nature of the development of Government plans and priorities during the past few years, the Bank tried to remain as flexible as possible to be able to accommodate those changing needs. Nonetheless, some projects had to be processed under a relatively short time, which could have compromised quality at entry; while other projects were appraised but were not further processed due to change of priority of the GoE. Going forward, the Government may strengthen its planning processes such that Bank interventions are jointly agreed in due time to enable the Bank to do the necessary internal planning. This would include placing greater emphasis and resources on project preparation studies to increase the number of investment ready projects.
DRC: AfDB project appraisal report on the development of agricultural value chains in six provinces
PADCA-6P will be implemented over a five-year period (2019-2024) for a total cost of UA 22.153 million in the provinces of Kwilu, Kasaï, Haut Iomami, Iomami, Maniema, and Tshopo. It will target some 1,768,825 rural households, 60% of which are women, with 8, 394,125 direct beneficiaries, and build knowledge for the rural world at large. The project’s specific objective is to improve agricultural production by (pdf): increasing the productivity of the growth sub-sectors, namely cassava, maize, bean/cowpeas, and rice; building the capacity of stakeholders to ensure the sustainability of investments in value chains; and promoting youth and women’s entrepreneurship.
AGOA deadline: How prepared is Nigeria?
Botswana’s mining-friendly approach pays off
Zimbabwe plans corn tender, signalling biggest imports in 3 years
Smuggled rice makes mockery of Nigerian quest to boost farming
Alzbeta Klein: Financing climate-smart investment in Africa
Aubrey Hruby: New programs are helping emerging markets businesses invest in women
G7 DFIs: 2X Invest2Impact targets women-owned businesses for investments
Related News
South African government steps up the pace of African trade integration
In a step to boost the newly-approved African Continental Free Trade Agreement (AfCFTA), South Africa will be participating in a meeting of African Ministers of Trade in Ethiopia.
The Deputy Minister of Trade and Industry, Mr Fikile Slovo Majola left for Addis Ababa for the 8th meeting of African Ministers of Trade (AMOT), scheduled for 7-8 June 2019.
The 8th AMOT meeting will consider key recommendations from the meeting of Senior Trade Officials. The aim of the meeting is to consider and agree on the outstanding issues which include Rules of Origin, tariff offers and Trade in Services. The outcomes of the ministers meeting will be tabled at the Assembly of Heads of States of the African Union which will take place in Niger on 7 July 2019. The Assembly of Heads of States of the African Union will launch the operational phase of the AfCFTA.
The AfCFTA was launched on 21 March 2018 in Kigali, Rwanda by the Heads of State and Government of the African Union (AU). It is a comprehensive trade agreement with strong economic developmental objectives for Africa.
The Minister of Trade and Industry, Mr Ebrahim Patel noted that the establishment of the AfCFTA can be a game-changer for the local economy, providing a massive market for SA goods and services. He noted that exports to the rest of the continent already accounts for about a quarter million of South African jobs.
“If we can get the institutions and infrastructure right and build a deep business and social partnership in South Africa, the AfCFTA can add many billions of rand to GDP, create large numbers of new industrial jobs, attract and expand investment and strengthen the economy,” he said.
“We will work in close partnership with investors and the local business community to realise this potential,” added Minister Patel.
Deputy Minister Majola said thus far 52 members of the AU have signed the Agreement and 24 members have ratified it.
“South Africa deposited the instrument of ratification during the 32nd Ordinary Session of the AU Heads of State and Government on 10 February 2019. The AfCFTA entered into force on 30 May 2019,” said Majola.
As a flagship project of the African Union’s Agenda 2063: The Africa We Want, the AfCFTA aims to build an integrated market in Africa that will see a market of over a billion people with a combined GDP of approximately US$3.3 trillion. The United Nations Economic Commission for Africa estimates that the AfCFTA will increase intra-Africa trade from the current 10%-16% to approximately 52% by the year 2022.
Deputy Minister Majola added that the AfCFTA would South Africa an opportunity to expand to new markets in North and West Africa, beyond the SADC region.
“This will provide South African exporters and investors with much needed legal certainty and predictability of markets across Africa,” indicated Majola.
Related News
tralac’s Daily News Selection
World Bank's June 2019 Global Economic Prospects: Global growth to weaken to 2.6% in 2019
Growth among advanced economies as a group is anticipated to slow in 2019, especially in the Euro Area, due to weaker exports and investment. US growth is forecast to ease to 2.5% this year and decelerate to 1.7% in 2020. Euro Area growth is projected to hover around 1.4% in 2020-21, with softness in trade and domestic demand weighing on activity despite continued support from monetary policy. Growth among emerging market and developing economies is projected to fall to a four-year low of 4% in 2019 before recovering to 4.6% in 2020. Sub-Saharan Africa outlook: Regional growth is expected to accelerate to 3.3% in 2020, assuming that investor sentiment toward some of the large economies of the region improves, that oil production will recover in large exporters, and that robust growth in non-resource-intensive economies will be underpinned by continued strong agricultural production and sustained public investment. While per capita GDP is expected to rise in the region, it will nevertheless be insufficient to significantly reduce poverty. In 2020, growth in South Africa is anticipated to rise to 1.5%; growth in Angola is anticipated to pick up to 2.9%; and growth in Nigeria is anticipated to edge up to 2.2% in 2020. The outlook is subject to several downside risks. On the external front, a sharper-than-expected deceleration in activity in key trading partners, including China, the Euro Area, and the United States, could weigh on growth.
World Bank's Global Trade Watch 2018: Trade amid tensions. The early evidence for 2018 and the first quarter of 2019 points to some useful lessons: Trade tensions and tariff increases hurt the countries directly involved the most, although they could have long-term consequences for all countries because of the increase in uncertainty; other countries would do well to stay out of the fight, and continue with trade deals that preserve and improve open markets; and a managed trade deal between the two countries involved, especially one involving promises to increase bilateral purchases, is likely to divert trade away from other countries. It is in the long-term interest of industrial and developing countries for trade tensions to be resolved through a multilateral approach and WTO reforms. [Latin American growth: a trade perspective]
India, SA ask WTO to review moratorium on e-commerce customs duties (Business Standard)
India and South Africa have asked the WTO to revisit the issues related with moratorium on customs duties on e-commerce trade, which is expiring in December this year. In a joint communication submitted to the WTO on Tuesday, both the countries have stated that the "General Council needs to revisit" all the issues on the e-commerce moratorium with the "utmost urgency and in its entirety". The communication said the potential tariff revenue loss to developing countries is estimated at $10bn. It said the moratorium will negatively impact the efforts of many developing countries, which are laggards as far as digital industrialisation is concerned, to industrialise digitally. It could also undermine existing industries and tariffs play an important role in protecting infant domestic industries from more established overseas competitors until they have attained competitiveness and economies of scale. [India to oppose global rules on e-commerce at this weekend's G20 trade ministerial]
The WTO's 2019 Annual Report was published yesterday: downloads, by chapter
Digital Economy for Africa (DE4A): Senegal Country Diagnostic (World Bank)
The digital economy, which encompasses a wide range of new applications of information technology in business models and products, can spur economic growth, productivity and employment and, with appropriate policies to mitigate inherent risks, has a potential to support inclusive outcomes. In this global context, digital transformation of the economy has become a major objective for the government of Senegal. This report provides a snapshot of the state of DE in Senegal and uses several World Bank tools and international best practices to provide actionable recommendations to the GoS. The report is the first in the series of DE4A Country Diagnostics. On Digital Entrepreneurship (pdf):
Senegal has one of the most dynamic digital entrepreneurship ecosystems in francophone West Africa. Three drivers help this nascent startup nation to rise including a relatively widespread use of technologies in West Africa with 36% smart phone adoption rate; a high entrepreneurial activity rate with 39% of the population aged 18 to 64 is either setting up or heading a new company; and availability of diverse co-working spaces including 15 incubators and accelerators, serving the needs of a community of over 2,500 startups and entrepreneurs. To foster a promising digital entrepreneurship ecosystem in Senegal, the government can improve the current regulatory framework. Recommendations include adding different forms of tax incentives, direct financial support (i.e., operationalizing the Digital Development Fund), and access to public markets through innovative public procurement approaches. The report also proposed three high-impact projects to accelerate the growth of Senegal’s Digital Economy including: [Kenya's Digital Economy Blueprint: can we walk the talk?]
"Why Nigeria’s import, export procedures failed" (The Guardian)
Nigeria’s import, export, regulatory and transit procedures are encumbered by lengthy procedures associated with unnecessary delays, high transaction cost, and increase of cargo dwell time, which make the local ports among the most expensive in the globe. These are the major factors that have bedeviled the successful regulation and smooth trade practices in Nigerian seaports, according to the National Council of Managing Directors of Customs Agents. National President, Lucky Amiwero, in a letter to President Muhammadu Buhari, said all these factors contribute to the inefficiencies in the port system coupled with low draught level of the Nigerian ports. He described these as the main reasons the country lost the transhipment hub status to other West African countries. He identified Cotonou, Lome, Ghana, and Cameroun as countries, which have either completed their deep sea projects or near completion, noting that while Nigerian ports draught is between 8 and 13 meters, which cannot accommodate mega ships, the least draught in other ports is 15 meters. [Apapa Port: 72-hour ultimatum on trucks should be legally sustained — Customs]
Kenya lifts 2-year ban on Uganda poultry products (Daily Nation)
Kenya has lifted the ban on poultry products from Uganda following recent bilateral talks between the two heads of state that will also see the country resume beef exports to Kampala. Livestock PS Harry Kimutai says Ugandan firms are now free to bring in products after Kenya recently received official communication from Kampala highlighting measures put in place to control the viral influenza disease that led to the ban. Mr Kimutai also said beef exports to Uganda have resumed after Uganda lifted the decade-long ban. [Boost as Kenyan businessmen seek trade ties with Angola]
Kenya Industry and Entrepreneurship Project: update. Betty Maina, principal secretary for industrialization at the Ministry of Industry, Trade and Cooperatives: “The project marks an important milestone towards the ongoing digitizing and transformation initiatives for Kenya’s global competitiveness that is expected to create additional jobs for the youths.” Maina revealed that the five billion shillingsproject that is co-funded by the World Bank will also create industry platform to link startups, traditional industries and international networks in select private sector firms for the next six years.
(i) IMF Executive Board concludes Article IV Consultation. South Sudan is in a deep economic crisis. Economic conditions have deteriorated rapidly since the beginning of the civil conflict in late 2013. Real GDP is estimated to have declined by 2.4% in 2017/18 adding to a cumulated decline of about 24% in the last three years. Overall, real disposable income (adjusted for terms of trade) is estimated to have declined by about 70% since independence in 2011, contributing to an increase in poverty headcount ratio from 50% in 2012 to about 82% in 2016. The peace agreement signed in September 2018 has improved the prospects for lasting peace and economic recovery. The cessation of hostilities last year has already enabled the reopening of some damaged oil wells, which pushed up daily oil production (export) by about 20% in February 2019. Inflation has gradually declined to about 40% in December 2018 from a peak of 550% in September 2016, while the exchange rate depreciated substantially in the last 18 months.
(ii) 2019 Article IV Consultation. The current account balance has worsened in recent years largely due to the decline in oil exports. South Sudan is an oil dependent country, with oil exports accounting for about 97% of total exports of goods and services. The current account balance has deteriorated from 1.7% of GDP in 2015/16 to -4.5% of GDP in 2017/18. While imports have been partly financed by large inflows of donor grants, the deficit has also been burdened by large Transitional Financial Arrangement transfers to Sudan. While the current account deficit is expected to narrow in the coming years with higher oil exports, a structural change is envisaged with the completion of the TFA payments to Sudan, expected in 2021/22.
Related IMF-Africa reports
(i) Mozambique: IMF Executive Board Concludes 2019 Article IV Consultation. Mozambique’s economic situation had been improving until Tropical Cyclones Idai and Kenneth hit the country in March and April, respectively. Economic growth was recovering gradually and becoming broader based, and inflation reached low single digits. Economic activity is expected to decelerate sharply in 2019 due to the supply shock to productive capacity, but it should rebound to pre-cyclone levels by 2020. Directors commended ongoing efforts to increase the country’s resilience to natural disasters including through the National Resilience Strategy with support from the World Bank and encouraged the authorities to integrate climate change resilience within their broader development agenda. Directors also called for further structural reforms to support inclusive growth, job creation and poverty reduction, including by fostering competition and improving the business climate. They also welcomed the authorities’ plans to establish a Sovereign Wealth Fund to support productivity‑enhancing investments as part of their natural resource management strategy.
(ii) Namibia: IMF Staff completes 2019 Article IV Mission. Undertaking reforms to strengthen productivity and competitiveness is a must to lift business confidence and the long-term growth potential of the economy. In parallel with fiscal adjustment policies, special emphasis should be placed on reducing policy uncertainty, streamlining business regulations, removing obstacles that contribute to high electricity and transportation costs (including reforming public enterprises operating in these sectors), and establishing a well-structured wage policy for the public sector to better align wage dynamics and productivity. Over time, it is important to remove obstacles to exports, address the shortage of well-educated and skilled workers, and foster the adoption of new technologies.
Africa’s industrialization under the Continental Free Trade Area: local strategies for global competitiveness (Brookings)
Overall, the stereotypical narrative that African countries are limited to producing and trading goods for external markets is not representative of the continent’s improving supply and demand statistics. Policymakers should now identify the gaps in their national agendas and implement policies that benefit local production and offer enticing opportunities to foreign investment. Investors, on the other hand, should consider where manufacturing inputs can be sourced locally to reduce costs related to transport, import tariffs, and exchange rate fluctuations. [The author: Landry Signé] [Rwanda: Young Pan Africanists tipped on AfCFTA]
UNCTAD Fact Sheet on Investor-State Dispute Settlement Cases in 2018 (pdf)
At least Treaty-based Investor-state dispute settlement cases were initiated in 2018, all but one under old-generation treaties signed before 2012. The new ISDS cases were initiated against 41 countries. As in previous years, the majority of new cases were brought against developing countries and transition economies. Developed-country investors brought most of the known 71 cases.
Ghana cancels rail MoU with China
53 African countries to participate in first China-Africa trade expo
South Africa: There’s no truth to importers’ threats about ‘expensive’ chicken
Kenya: Uhuru directive on cargo a huge relief for traders
UNCTAD, IIRC to help companies report performance on global goals
India: GFI report on potential revenue losses associated with trade misinvoicing
Related News
tralac’s Daily News Selection
Paul Brenton, Ian Gillson, Pierre Sauvé: Economic diversification - why trade matters (Trade for Development News)
Services trade policies can spur diversification through the expansion of services exports. They can also promote the diversification of goods exports through improved access to a wider range of more efficiently produced services inputs. High costs for energy, telecoms, logistics and finance erode the competitiveness of firms and deter them from diversifying production and exports. As countries develop, service sector liberalisation can help firms to meet supply requirements, diversify and integrate into regional and global value chains in goods and services alike. Efficient services are also crucial for taking advantage of modern distribution channels. Producers are increasingly using e-commerce to sell directly to consumers through web-based outlets. However, diversification toward services exports can be hampered by regulatory diversity. To address this challenge, service sector reforms need to go beyond trade openness and focus on the simplification, harmonisation and/or mutual recognition of domestic regulations.[Note: This article draws on a chapter entitled Economic Diversification: Lessons from Practice, contributed by the authors to Aid for Trade at a Glance 2019, a forthcoming joint publication of the OECD and the WTO]
International trade in services 2018: extract on Africa (pdf, UNCTAD)
From 2010 to 2016, Africa's already low share in world services trade has been on the decline. Over the last two years, the trend has been reversed and the continent's participation in international services trade has slightly increased. Travel accounts for the highest share in African services exports. Only in Western Africa do various businesses have a more prominent role. [See: Figure 6 - Share of Africa in the world services trade (exports, imports); Figure 7 - Services exports in Africa by region and service category, 2018]
Aubrey Hruby: A new kind of company is revolutionising Africa's gig economy (WEF)
By 2035, Africa will contribute more people to the workforce each year than the rest of the world combined. By 2050, the continent will be home to 1.25 billion people of working age. In order to absorb these new entrants, Africa needs to create more than 18 million new jobs each year. Given the urgent need to provide jobs and livelihoods to Africans, it is time to examine the conventional wisdom that informal markets must transition into formal markets. Development finance institutions and private investors in African markets can play a critical role in both advancing Africa’s gig economy and changing the narrative that growth in informal markets is incompatible with sustainable development.
Across African markets, companies are pioneering business models that bridge the formal and informal sectors; in these models, each company is a formal entity but can mobilise large numbers of informal actors in their supply chains or service delivery. While this has been done in dairies in Kenya and at coffee and cocoa outgrowers across the continent and in other sectors for nearly a century, the penetration of mobile phones has enabled a new breed of African companies to monetise their ability to organize and inject trust into fragmented informal markets. However, unlike Uber or Airbnb, which disrupted largely formal sectors, many of Africa’s new ‘gig economy’ firms are writing the rules for whole new industries in local markets. Perhaps the most high-profile example is Safaricom’s M-PESA.
Noah Smith: Africa could become the new China if it plays to its industrial strengths (Bloomberg, The Print)
Stiglitz and the Brookings researchers both suggest that African countries look elsewhere for growth. Their suggestions include tourism, agriculture, natural resource exports, and information technology services — basically, everything but manufacturing. Yet most of these suggestions offer little reason for enthusiasm. Agriculture tends to automate even faster than industry. Natural resource exports are linked to political dysfunction and trap a country at the low end of the value chain. Tourism is fine, but doesn’t lead to the kind of learning-driven productivity enhancements that manufacturing is known for. One shouldn’t dismiss manufacturing so quickly. The longer-term decline in African manufacturing probably has more to do with the failure of mid-20th-century industrial policies and central planning than with automation: It happened in the 1970s, 80s, and 90s — when industrial robots were still not widespread, and when China and other Asian countries were rapidly gaining manufacturing jobs. Now that countries like Ethiopia, Tanzania, Vietnam and Bangladesh are industrializing more naturally, through integration into global supply chains rather than government-driven efforts at import substitution, a repeat of 20th century deindustrialization seems unlikely.
ECOWAS single currency: Heads of State to make final decision in June (Vanguard)
This will come after the submission of the report on the currency by the Task Force on ECOWAS single currency to the heads of state during its mid-term summit later this month. The Head of ECOWAS National Unit in the Nigerian Ministry of Foreign Affairs, Musa Nuhu, who disclosed this in Abuja yesterday, said there was also a committee of Governors of Central Banks in West Africa working on the single currency for the region. He said: “Hopefully, we will be able to hear the latest, because all the committees of Central Bank are working and then the Presidential Task Force to is working, so they will present a report to the authority of Heads of State during next mid-term summit coming up by the end of June.” Nuhu explained that after the summit, it would be confirmed if the region could achieve 2020 set target for a single currency. The Presidential Task Force on ECOWAS Single Currency is headed by the President of Niger, Mahamadou Issoufou.
DG Azevêdo pledges support for Africa’s continued economic integration (WTO)
Addressing the African Group of WTO members in Geneva on 3 June, Director-General Roberto Azevêdo stressed his commitment to supporting Africa’s continued economic integration, through the AfCFTA and through the WTO, in order to further fuel the continent’s growth and development. “Clearly there is a lot of work ahead of us. I hope that the Africa Group will remain at the forefront of these debates. I am ready to assist in whatever way I can. We are in contact with the AU and Commissioner Muchanga and are exploring ways in which we may be able to work more closely together, and specific areas where we can provide greater technical support. This is in connection with our work here at the WTO, and in connection with the African Continental Free Trade Area. I want to congratulate you on the entry into force of the AfCFTA. The rapid progress that you have made here is hugely welcome. It shows how much you value trade and greater integration.” [Anabel González: The African Continental Free Trade Area is coming into force. Is it really?; AfDB-hosted seminar: Business leaders share views on AfCFTA]
ECA's Vera Songwe and EU’s Economic and Social Committee President discuss AfCFTA benefits. According to Ms. Songwe: “One of the most important impacts of AfCFTA is that it opens the door for funding Africa’s infrastructural needs, whether its railways, highways or telecommunications, or energy. In turn emergence of adequate infrastructure will create value chains that can strengthen old markets and lead to new markets and more jobs.” The two parties agreed to work together on concrete ways to amplify the role of non-state actors as implementation of the AfCFTA begins.
Songwe and Odinga discuss benefits of fast-tracking transboundary infrastructure. They discussed ways to accelerate regional integration and agreed Africa needed to fast-track transboundary energy and transport infrastructure, including key road corridors, if that is to become a reality soon. “One of the things we are busy working on here at the ECA is the nexus between trade and infrastructure and how we can use it, particularly in the Horn of Africa where we are trying to see how we can use the regional integration and trade conversation to build and capitalize on the peace momentum,” said Ms Songwe. [Related: Songwe discusses implementation of Belt and Road Initiative with Chinese delegation]
(i) IMF staff end-of-mission statement. “A focus on policy actions to remove long-standing structural constraints to growth and accelerate job creation is a must. The government has a renewed opportunity to press ahead with policies to further strengthen governance, encourage competition, increase labor market flexibility, and, more generally, reduce the cost of doing business. Public enterprise efficiency needs to be improved with measures that strengthen their finances and harden the budget constraints they face. In particular, Eskom will require bold action to redefine its business model so that it becomes self-sustained and ensures affordable and reliable electricity supply. Without fundamental reforms in Eskom’s finances and operations, continued budget transfers or assumption of its debt by the government will not resolve the company’s issues. Postponing the needed adjustment of the entity will only force greater difficulties down the road.
(ii) Response by National Treasury (pdf). The National Treasury notes the content of the IMF staff press release following the visit as well as the key risks identified and proposed policy recommendations. The South African government is cognisant of these and work is underway to address them. Government re-emphasizes its commitment to reduce the deficit and stabilize debt as highlighted in the 2019 Budget. On the revenue side, measures have been introduced to improve the capabilities of the South African Revenue Service. A new SARS Commissioner has been appointed and the SARS Large Business Centre has been reestablished to make tax compliance easier. The President’s state of the Nation Address on 20 June 2019 will provide further details of government’s plans on supporting inclusive economic growth.
(iii) Economy nosedives in Q1, hurting rand. South Africa‘s economy nosedived 3.2% in the first quarter from the previous one as its manufacturing sector suffered, according to data that significantly lagged the 1.7% decline economists had expected and sent the rand sharply lower. Year-on-year growth in Africa‘s most industrialised economy was zero compared with forecasts of growth of 0.7%. “This was the largest economic contraction in almost a decade. It was largely driven by manufacturing, then mining,” Statistician General Risenga Maluleke told a news conference.
(iv) The National Association of Automobile Manufacturers of South Africa says new vehicle sales continued to disappoint into May 2019, while export sales were also down, by 8.8%, for the first time this year.
Indian Ocean Connectivity Forum: update (GoM)
As regards tourism development in Mauritius, Mr Gayan pointed out that tourism is a key pillar of the economy accounting for 8.6% of GDP, 10% of total employment and around 5% of total investment in 2018. He highlighted that tourist arrivals increased from 74,597 in 1975 to reach 1,399,408 in 2018. Tourism earning attained an all-time record figure of Rs 64 billion last year compared to 35 million in 1975. Hotel stock increased to 113 hotels, representing 13,600 rooms, he said. The Minister also acknowledged the growing popularity of the cruise tourism which is one of the fastest growing segments in the world tourism market and is a ‘must-have’ product for tour operators and travel agencies. Cruise tourism, he said, is very popular in the Caribbean Sea, Asia Pacific and South East Asia and is gaining increasing interest in the Indian Ocean region. Last year, Mauritius welcomed 42 cruise ships compared to 30 cruise ships in 2017 which carried some 67,515 cruise passengers. Cruise tourism among islands of the region has witnessed a major boost in its activities following the Vanilla Islands initiative. [China, Namibia to boost cooperation on tourism]
Cargo pile-up in Nairobi as agencies clamp down on tax evasion, fake goods (The East African)
When the government, through the Kenya Revenue Authority and Kenya Bureau of Standards sought to clamp down on both tax evasion and counterfeit goods, little did it foresee the mess that would unravel at the Nairobi inland container depot. At the centre of this crisis is consolidated cargo brought in by small-scale traders. Authorities insist this cargo must be inspected, even when it had been subjected to the process in the country of origin by Kenya Bureau of Standards-appointed agencies. Consolidated cargo is the term for when importers pool parcels to form one consignment, which is often declared as belonging to one importer at the port of destination or de-consolidated into the original individual consignments for delivery to the respective owners. About 1,000 containers belonging to small traders are being held at the ICD on suspicion of tax evasion and bringing counterfeit goods into the country.
Macro-fiscal gains from anti-corruption reforms in the Republic of Congo
Nordic Connect 2019: Nordic countries pledge to deepen innovation in Nigeria
Tanzania, Zambia agree $1.5bn oil pipeline deal
ITC and UPS prepare Nigerian women entrepreneurs for the export market
South Africa: Attacks on trucks are an attack on the economy
Lake Chad Basin: June 2019 update
International partners pledge $1.2bn to help cyclone-hit Mozambique recover
UNCTAD Secretary-General, Mukhisa Kituyi: Digital investment starts at home
World Bank: China Economic Update
India: What's the way forward for trade and industry?
Comoros: World Bank Systematic Country Diagnostic
Related News
tralac’s Daily News Selection
Diarise:
-
The Tripartite Sectoral Ministerial Committee (6 June, Addis Ababa)
-
African Ministers of Trade (AMOT) meeting (7-8 June, Addis Ababa)
Underway in Kigali: African trade unions to discuss improved migration governance (Leadership)
Participants will converge under the auspices of the African Trade Union Migration Network, which is the migration platform of African trade unions that coordinates trade unions and facilitates migration engagement concerning Africa and Africans at the national, regional and continental levels. The event, which starts today, is backed by the IOM, ILO, and the Belgian Trade Union Cooperation Institute, and the Friedrich Ebert Stiftung, seeks to improve Africa’s integration agenda, projects and ensure better practice of migration governance. The conference also seeks to discuss how Workers’ organisations can contribute tangible outcomes in pursuit of the African Union’s theme for 2019 concerning Refugees, Internally Displaced Persons and Returnees.
The AfCFTA one year later: The road travelled and the road towards the launch of the operational phase (AU)
The Assembly of AU Heads of State and Government shall, at the Niamey Extra-ordinary Summit, also make a decision on the location of the secretariat of the AfCFTA, which will have the principal function of implementing the Agreement through a focused work programme. Seven member states - Egypt, Eswatini, Ethiopia, Kenya, Ghana, Madagascar, Senegal - submitted bids by the deadline of 20 March this year. An assessment mission visiting these countries during May, on the basis of which a report will be prepared for consideration by the AU Ministers of Trade and the Extra-Ordinary Summit. It is the results of the assessment mission which will guide the Extra-Ordinary Summit on deciding the host of the permanent AfCFTA Secretariat. The work for the interim and permanent secretariats of the AfCFTA is already being cut out for them. A post launch AfCFTA implementation plan is under preparation and will be submitted to the African Union Ministers of Trade in the first week of June this year, who, if satisfied with it, will convey it to the Extra-Ordinary Summit for its consideration and adoption in July this year. [The author: Ambassador Albert M Muchanga]
African unions want an inclusive free trade agreement
The AfCFTA was discussed at the annual global unions’ forum, supported by the Friedrich Ebert Stiftung, on 13-15 May in Johannesburg. “Unions should collectively demand commitment from the African Union to create opportunities for them to participate and influence trade policies and programmes at the national level and beyond. A transformative AfCFTA can only be achieved if negotiations are inclusive and represent relevant stakeholders, is transparent in its approach, and has the overall aim to achieve a trade agenda that is beyond the narrow interests of state parties but people-to-people centred. Such a transformative trade agenda cannot happen without the strategic and consistent involvement of civil society organizations,” said Hilma Mote from ITUC Africa. “There is an urgent need for social dialogue on the AfCFTA. With high youth unemployment the agreement can create jobs, but these must be decent and sustainable. Social protection is also important. Further ways to monitor the agreement must be put in place,” said Paule France-Ndessomin, IndustriALL regional secretary for Sub Saharan Africa. [Download: Report of the 2019 Africa International Labour Conference, 20-22 March 2019, Kigali]
The AfCFTA and TFTA: differences, progress, potential impact, and why East African businesses need to engage (Botho Emerging Markets Group)
By contrast, the more gradual ratification progress for TFTA has resulted in significantly less media attention and analysis, meaning numerous East African companies which would be directly affected by TFTA are unaware even of its existence, let alone its progress and possible impact. The result is a widespread lack of awareness across the East African private sector – and beyond – of the current state of negotiations and the potential consequences of AfCFTA and TFTA. This knowledge gap represents a critical problem, since businesses should have advance understanding of likely changes, both to engage with their governments for ongoing trade negotiations, and to prepare for the opportunities and risks these agreements might bring.
Zimbabwe and the IMF:
-
IMF Managing Director approves a staff-monitored programme, covering 15 May 2019 to 15 March 2020. The SMP is designed to support the authorities’ reform agenda. The SMP will be monitored on a quarterly basis, and is intended to assist the authorities in building a track record of implementation of a coherent set of economic and social policies that can facilitate a return to macroeconomic stability and assist in reengagement with the international community. Economic policies under the SMP emphasize the restoration of macroeconomic and financial sector stability through:
-
Staff-Monitored Programme: press release, staff report. Risks to the outlook remain tilted to the downside and include factors both within and outside the authorities’ control. Policy slippages, or interference by vested interests, could impede ongoing efforts to have market-determined exchange and interest rates. Similarly, spending pressures, particularly on wages, social support, subsidies to SOEs and agriculture, and financial sector bailouts could jeopardize fiscal goals. The envisaged deep fiscal adjustment needs to be carefully implemented to avoid a too heavy toll on vulnerable portions of the population. However back tracking on the fiscal adjustment by resorting to central bank financing of the deficit could precipitate a vicious wage-price spiral. Factors beyond the authorities’ control include a worse-than-envisaged agricultural season, exacerbating risks of poverty and social discontent, and a slow recovery in confidence that delays a resumption of economic activity, particularly in export industries like mining. The outlook also does not factor in a significant macroeconomic impact from Cyclone Idai or the drought. On the other hand, there are also potential upside risks if confidence is quickly restored.
South Africa: April trade balance (pdf, SARS)
The SARS trade statistics for April 2019 recorded a trade deficit of R3.43bn. The R3.43 billion trade deficit for April 2019 is attributable to exports of R103.75bn and imports of R107.18bn. Exports decreased from March 2019 to April 2019 by R1.34bn (1.3%) and imports increased from March 2019 to April 2019 by R6.79bn (6.8%). The year-to-date (1 January to 30 April) trade deficit of R7.55bn is an improvement from the R16.82bn deficit for the comparable period in 2018. Exports increased by 17.3% year-on-year, whilst imports for the same period showed an increase of 23.8%. Top 5 countries for exports: China (10.8%), Germany (8.0%), United States (6.9%), United Kingdom (5.7%), India (5.6%). Top 5 countries for imports: China (17.8%), Germany (9.8%), United States (6.5%), Nigeria (6.2%), India (4.8%
Uganda’s external sector: April trade figures (pdf, MoF)
Uganda’s merchandise trade deficit narrowed on a monthly basis to $108.8m in March 2019 from $203.8m in February 2019. Similarly, on an annual basis, it narrowed to $108.8m in March 2019 from $182.7m in March 2018. Export receipts grew by 102% to $606.0m in March 2019 from $300.4m in February 2019, largely driven by higher coffee and gold exports. The value of merchandise imports was $714.8m in March 2019, up from $504.2m registered in February 2019, largely driven by higher private sector imports. In March 2019, Uganda’s largest merchandise trade deficit of $185m was with Asia. However, Uganda traded at a surplus with the Rest of Europe, EAC, Middle East and the Rest of Africa. [Uganda: Debt sustainability analysis report 2017/18]
Custom experts deliberate on termination of pre-shipment inspection (AU)
The AU Technical Customs Working Group on Pre-Shipment Inspections recently concluded a meeting in Soroni, Seychelles, deliberating on the termination of contracts with inspection companies. Mr Aly Iboura Moussa, Head of Customs Cooperation Division, Department of Trade and Industry of the AUC, while acknowledging the complexities of termination of Contracts of Inspection due to contractual agreements, underscored the need for a thorough approach to ensure the capacity of the administrations is strengthen in the process of terminating the inspections. “The use of pre-shipment inspections undoubtedly has a negative impact on the countries that still use them, particularly, with regard to customs capacity building”. Recommendations from the meeting will be submitted to the 11th meeting of Directors General of Customs of the African Union scheduled to be held in Uganda, in September 2019.
Nigeria targets $1.2bn revenue from solid minerals exports (Leadership)
The Nigeria Export Import Bank has signed a tripartite MoU with the National Inland Waterways Authority and Sealink Investment Limited to develop a Sealink project aimed at enhancing non-oil revenue for the country. According to managing director of NEXIM Bank, Abba Bello, the project is expected to generate annual revenue of between $500m and $1.2bn from bulk solid minerals exports from the country. He added that the partnership is intended to bridge infrastructure gap that will promote and enhance trade connectivity as well as spur Nigeria’s regional and global trade competitiveness. Mr Bello said the project would be catalytic to the realization of one of the priority projects under the ECOWAS Community Development Programmes. He said NEXIM’s decision was largely informed by the huge logistics challenges and non-tariff measures along the ECOWAS trade corridor. This, coupled with the desire to both enhance Nigeria’s export to ECOWAS that has muted over the years at about 15% and to encourage formal trade.
Challenges for resolution of banks in Sub-Saharan Africa (World Bank)
While the recent global financial crisis has affected many developed countries, it has had less impact in Africa. Nevertheless, the lessons learned from this crisis are relevant for African countries, especially because banking groups with a head office in Africa have grown rapidly and these groups are systemically present in many of their African host countries. As macroeconomic conditions have deteriorated in many Sub-Saharan African countries in the last two years, the question arises whether the regulatory framework for the financial systems of these countries is strong enough to face a serious financial crisis in the future. This paper highlights the twelve essential characteristics of effective resolution regimes for financial institutions, as provided by the Key Attributes. [The author: Jan Barend Jansen]
Can forests and smallholders live in harmony in Africa? (CIFOR)
To tackle these complex challenges, the Center for International Forestry Research has launched a new initiative: the Governing multifunctional landscapes in Sub-Saharan Africa: Managing trade-offs between social and ecological Impacts. The project will pilot an integrated territorial approach fitting to the particular African realities in – yet to be selected – until 2021. In preparation, CIFOR scientists visited six African countries to conduct rapid assessments on the drivers of smallholder-linked deforestation, and to evaluate suitability of the landscapes for the project. The target countries were: Ghana, Liberia, Uganda, Tanzania, Zambia and Mozambique. Here are our three reflections from the assessments, which we hope will enrich understanding and inspire exchanges on how to set the path forward for integrated territorial approaches in Africa.
Today’s Quick Links: Full text: China’s White Paper on US economic and trade talks Burundi fails to meet conditions needed to become SADC member Realigning the SADC regional energy agenda Stakeholders call for better collaboration to ensure success of ECOWAS Brown Card Scheme Do interest rate controls work? Evidence from Kenya Ghana: Government names new team to head Revenue Authority |
Related News
AfCFTA one year later: The road travelled and the road towards the launch of the Operational Phase
In this commemorative article, the African Union Commissioner for Trade and Industry outlines what has been achieved since the AfCFTA Agreement was opened for signature on 21st March, 2018 in Kigali, Rwanda and what is expected as the African Union moves to launch of the operational phase of the continental market in July this year.
On 21st March this year, the Agreement Establishing the African Continental Free Trade Area marked one year of existence. It was opened for signature on 21st March, 2018 at an Extra-Ordinary Summit of the Assembly of African Union Heads of State and Government in Kigali, Rwanda. At that Summit, forty-four African Union Member States signed the historic Agreement. The number rose to 49 at the July 2018 Nouakchott, Mauritania Summit. Three more signatures were added during the February 2019 Addis Ababa Summit, bringing the figure to 52 as we commemorate the first Anniversary of this major milestone in Africa’s resolute use of the lever of continental economic integration to deliver prosperity to her people in line with Agenda 2063: The Africa We Want.
Making the Agreement operational is as important as having signatories. While awaiting the remaining three Member-States to sign on, Africa is progressing very well in the direction of securing deposits of instruments of ratification on the Agreement Establishing the African Continental Free Trade Area. So far, 22 National Parliaments of the African Union Member-States have approved ratification of the Agreement, with 20 Member-States depositing their instruments of ratification. At this point in time, Africa is just short of two deposits of instruments of ratification to have the Agreement enter into force, thirty days after receiving the twenty second instrument of ratification. At the time of going to press, the remaining two Member States assured the Chairperson of the African Union Commission that they would shortly be depositing.[1]
It has been a momentous year of hard and smart work to create an African Continental Free Trade Area with commercial substance. As we commemorate the first year of this large market space, we do so with concrete achievements. The African Continental Free Trade Area is already delivering results well before it enters into force. In December 2018, we held the First Intra-African Trade Fair, in Cairo, Egypt, which attracted above target exhibitions and business transactions. At the Cairo Fair, we had 1,086 exhibitors, 86 above target. We also had business deals over US$32 billion, well above the target of US$25 billion. This sterling achievement signals the potent force of the Intra-African Trade Fair as a viable platform and brand for trade information as well as actual growth of intra-African trade.
Africa is on target to launch the operational phase of the African Continental Free Trade Area in July this year in Niamey, Niger where we shall hold another Extra-Ordinary Summit for that purpose as well as formally commemorate its First Anniversary. During the launch, the African Continental Free Trade Area shall be fully supported with well-defined rules of origin; schedules of tariff concessions in trade in goods; an online continental non-tariff barriers monitoring and elimination mechanism; a Pan-African digital payments and settlement platform as well as an African Trade Observatory portal. After July this year, traders across Africa will be able to make use of preferential trading arrangements offered by the Agreement Establishing the African Continental Free Trade Area as long as the trade relations involve the twenty-two or more countries that would have deposited instruments of ratification as well as conform to agreed provisions on rules of origin governing trade in the African Continental Free Trade Area.
The Assembly of African Union Heads of State and Government shall, at the Niamey Extra-ordinary Summit also make a decision on the location of the secretariat of the African Continental Free Trade Area which will have the principal function of implementing the Agreement through a focused work programme. Seven Member-States: Egypt, Eswatini, Ethiopia, Kenya, Ghana, Madagascar and Senegal submitted bids by the deadline of 20th March this year. An assessment mission will be visiting these countries during May on the basis of which a report will be prepared for consideration by the African Union Ministers of Trade and the Extra-Ordinary Summit. It is the results of the assessment mission which will guide the Extra-Ordinary Summit on deciding the host of the permanent AfCFTA Secretariat. We wish all the bidders, good luck.
The work for the interim and permanent secretariats of the AfCFTA is already being cut out for them. A post launch AfCFTA implementation plan is under preparation and will be submitted to the African Union Ministers of Trade in the first week of June this year, who, if satisfied with it, will convey it to the Extra-Ordinary Summit for its consideration and adoption in July this year.
The vision is to create one African market. In this respect, the historic obligation for each and every Member State of the African Union is to sign and ratify the Agreement Establishing the African Continental Free Trade Area. As we move towards celebrating the joyous occasion of the First Anniversary, we call, in the full spirit of Pan-Africanism and oneness; on all African Union Member-States to sign and ratify the Agreement before the July 2019 Extra-Ordinary Summit.
In launching the African Continental Free Trade Area and making it work, Africa is overcoming the historic fragmentation and isolation of her economies by opening up huge commercial opportunities as well as improving transport and communication linkages among our countries. This aggregation and connectivity are forces for accelerated growth and sustainable development of African countries will enable us and realize the vision of the African Union and Agenda 2063: ‘An integrated, prosperous, and peaceful Africa, driven by its citizens, representing a dynamic force in the global arena’.
We are creating more than a free trade area. In January 2018, the Assembly of African Union Heads of State and Government launched the Single African Air Transport Market as well as opened for signature, the Protocol to the Treaty Establishing the African Economic Community Relating to the Free Movement of Persons, Right of Residence and Right of Establishment. Moving forward, Africa shall, during this year, conclude work on schedules of specific commitments on trade in services as well as commence negotiations on Protocols on Investment, Competition Policy and Intellectual Property Rights. All these developments show that Africa is laying the groundwork for the establishment of an African Common Market or Internal Market, in line with the Treaty Establishing the African Economic Community, signed in Abuja, Nigeria in 1991 and ratified in 1994. To this end, the February 2019 Assembly of Heads of State and Government directed the African Union Commission to undertake a readiness assessment for this stage of deeper economic integration and policy harmonization among African countries. Work is already underway to implement this strategic Summit decision.
With a strong foundation that has been created, Africa is now better positioned to speak and act as a united entity in global trade negotiations and in the process, leverage her strength to secure trade and investment deals that offer accelerated and inclusive sustainable development for her people. There is hence political, economic, commercial and diplomatic value in establishing the African Continental Free Trade Area. Indeed Africa is, by creating the African Continental Free Trade Area also signalling to the wider world that she is committed to multilateralism and global interdependence. In this respect Africa calls on the rest of the world to re-commit in using and strengthening the multilateral trading system to promote shared prosperity among all the people of the world.
The African Continental Free Trade Area is an inclusive undertaking for Africans from all walks of life: Government, Civil Society, Academia, Women, Youth, Diaspora, Labour, Entrepreneurs and several other stakeholders at the national level. With a view to broadening stakeholder involvement, the United Nations Commission for Africa is collaborating with the African Union Commission to assist African Union Member States to formulate and implement National African Continental Free Trade Area Implementation Strategies, with appropriate national institutional arrangements. This will achieve two strategic objectives. In the first instance, Africa shall be bringing her continental integration project closer to the people. Secondly, African Union Member-States shall be able to align national development policies and programmes to the African Continental Free Trade Area legal provisions and work programme. With such alignment and policy harmonisation, Africa’s prospects for rapid socio-economic development will be enhanced.
When Africa looks back to the Kigali Extra-Ordinary Summit, she does so with pride and satisfaction that a lot has been achieved in this one year. True, a lot remains to be done in the years ahead. But Africa is committed to build on this momentum and achieve much more to deepen her economic integration. It is in this spirit that we invite all Africans on the Continent, in the Diaspora and the friends of Africa to commemorate this historic day in July this year. In so doing, Africa shall be communicating to herself and the rest of the world, her resolve to create one African market and use this continental market to deliver accelerated and inclusive sustainable development as well as contribute to strengthening the multilateral trading system.
The author is H.E. Amb. Albert M. Muchanga, African Union Commissioner for Trade and Industry.
[1] With the deposits of Sierra Leone and the Saharawi Republic’s instruments of ratification, the AfCFTA officially entered into force on 30 May 2019.
Related News
tralac’s Daily News Selection
(i) G20 Ministerial Meeting on Trade and Digital Economy (8-9 June, Tsukuba, Japan). Tsukuba, the ministerial meeting’s host city, is known as Japan’s leading city of research and academia, producing scores of cutting-edge technologies. Roughly 9,400 researchers, students and the like from about 140 countries also live in this international city.
(ii) Ethiopia’s transport sector: measuring its value chains and exploiting its potential (12-13 June, Addis Ababa). This seminar is part of the UNCTAD – Ethiopia project on services trade in Africa (pdf). The project aims at unlocking the potential of services trade of partner countries by increasing capacity to measure the contribution of services to regional value chains and to explore the value added by domestic and foreign firms. In Ethiopia, the focus is on transport services owing to its catalyzing capacity and strategic relevance for the economy.
(iii) Russia-Africa Summit (22-24 October, Sochi). The summit will be co-chaired by Russian President Vladimir Putin and Egyptian President Abdel Fattah el-Sisi. On 23 October, the leaders of Russia and Egypt will open an economic forum attended by Russian and African officials and representatives of major businesses.
(i) Landry Signé, Colette van der Ven: Keys to success for the AfCFTA negotiations (Brookings). The extent to which the AfCFTA will reduce barriers to intra-African trade is largely linked to the ongoing negotiations. This piece explores the implications of those negotiations, with a particular focus on market access for goods and services and rules of origin. It also briefly touches upon the outstanding regulatory issues. Extract from the Recommendations (pdf): With respect to RoO, it is important that they are sufficiently flexible, with a view to enabling SMEs in least developed AfCFTA State Parties to take advantage of AfCFTA preferential tariffs. Complicated and stringent RoO could risk straining the institutional capacities of African countries ill-equipped to manage complicated RoO, especially in the context of porous borders. Moreover, while the acquis and the existing RoO make full RoO harmonization impossible, negotiators should ensure, at a minimum, that the RoO are built upon existing regimes.
In the context of the Phase II negotiations, a number of key questions regarding scope and objective must be clarified. Given the vast disparity between the development of different African countries, questions regarding capacity building for Phase II are especially critical. The AU, RECs, and international organizations should come to an agreement about who is going to foot the bill for the additional resources that will be required to make the regulatory protocols workable for all African countries, especially LDCs. Finally, the negotiators must clarify the numerous ambiguities currently present in the AfCFTA Agreement. They could do so by creating a roadmap of the remaining unknowns: for example, who is negotiating what with whom, how reciprocal MFN is being approached, what will happen to customs unions if not all members have ratified/signed on to the AfCFTA, and how conflicts will be resolved. These additional clarifications will be critical for the AfCFTA’s successful implementation going forward.
(ii) Joseph Atta-Mensah (Macroeconomics and Governance Division, UNECA): “Economic pan-Africanism has come of age. We have been blessed with a crop of pan-Africanists who have negotiated this Agreement, in a record period of just two years, and have ensured it has come into force in just over one year of its signing.”
(iii) Nana Osei Bonsu (Private Enterprise Federation, Ghana): “It borders on government revenue, the elimination of tariffs is going to affect government revenue. And if the revenue is not there, the government is going to look at the domestic private sector. We need to identify the items with a 90 percent liberalization with a low impact on government’s revenue. This will reduce the burden of increasing taxes."
(iv) Related: Brahima Coulibaly and Ngozi Okonjo-Iweala: Making globalization work for Africa; Wesgro welcomes coming into force of Africa trade agreement; Turkish investors see boon in pan-African trade pact; Brookings Figures of the week: With AfCFTA officially in force, Africa is now the largest free trade area
Mozambique: Two new World Bank working papers
(i) The cassava value chain in Mozambique. Cassava is the principal starch in Mozambique, at 30% of calories. It can be stored unharvested up to 30 months, but fresh cassava lasts only three days once harvested. Most processing in Mozambique is artisanal, to eliminate cyanogenic glycosides in the 90% of production from pest resistant bitter varieties. Only 6% of production in 2011 was used commercially for non-food, two-thirds for feed and one-third for starch. Low levels of productivity for cassava compared to elsewhere and poor transportation are the main barriers to the development of a processing industry. To support industrializing the cassava value chain, the main priority should be to increase farm productivity and reduce post-harvest losses. Beyond that, the Government should (inter alia, pdf): Adopt a specific "Master Plan to Develop Cassava Value Chains" similar to Nigeria, Ghana, and some Asian countries with higher-level development of cassava; Set up a Platform and means to coordinate, monitor, and evaluate implementation of the Master Plan over time; Allocate resources and develop and adopt policies to enable new businesses in the cassava value chain—such as those related to food safety still to be introduced in Mozambique—and regulate and further legislate biofuel production to support development of the cassava value chain.
(ii) The plantation forestry sector in Mozambique: community involvement and jobs. Mozambique had 60,000 hectares of large-scale commercial planted forest in 2009, supporting about 3,000 full-time-equivalent jobs. Very little growth in large-scale commercial planted area has occurred since 2009, unlike what would be required to meet predictions at the time of 1,000,000 hectares planted by 2030. Labor costs are three to four times lower in plantation forestry in Mozambique than in Brazil, South Africa, and Uganda. Yet, unit costs per cubic meter of eucalyptus timber produced in Mozambique are higher due to lower tree volume growth rates, skills gaps, and employee absenteeism up to 50 percent. Yet, deforestation and imports of high-end wood products are rekindling interest in plantation forestry, with recognition of the need for community involvement. Integration of smaller-scale forestry into community land use patterns is taking off. Recommended actions include:
Ghana: Government to monitor operations of horticulture value-chain (Business Ghana)
Dr Owusu Afriyie Akoto, Minister of Food and Agriculture, said as part of the measures regulatory bodies would strictly monitor all the farming processes from acquisition of seedlings, field practices, harvesting, storage, packaging, and to the point of exit. Dr Akoto explained that new measures had been introduced as a result of consistent rejection of vegetables earmarked for exports at the local exits due to non-compliance to production protocol. Giving details of issues that had resulted in the indefinite suspension of export of vegetable,s namely Capsicum, Solanum, Luffa and Leafy Vegetables, the Minister said in the first five months of 2019, there were 120 rejects of vegetables earmarked for export at the local level while 20 rejects were recorded at the European market.
South Africa: New competition legislation could undermine manufacturing competitiveness (Engineering News)
The German Wirtschaftswunder in the 1950s was largely SMME driven, relying on a deconcentrated base of small family owned businesses with access to a high skills base. South Africa does not have this infrastructure, and therefore will struggle to create investment at a scale sufficient to drive large scale job creation. In the absence of such a base, the Far Eastern model of large enterprise-led growth is apposite: the chaebol in Korea and the keiretsu in Japan led to the creation of large, globally competitive enterprises that in turn created a supplier base of SMMEs. Given South Africa’s current established industrial base, the Manufacturing Circle believes that industrial policy should be focused on leveraging off manufacturing at large scale. This will arrest de-industrialisation and job losses, and act as the engine for the growth of a vibrant SMME sector. Herein lies significant opportunity: [The author: Manufacturing Circle's Philippa Rodseth]
Tanzania: Tancoal salutes JPM for barring coal imports (IPPmedia)
President John Magufuli’s decision [in 2015] to bar importation of coal from South Africa has seen Tancoal Energy Limited increase production to meet demand of local manufacturers mostly cement industries hence contributing to rapid industrialization the 5th Phase Government. In a presentation at a mining industry conference and exhibition held in Dodoma last week, the company’s CEO, James Shedd said President Magufuli’s order also helped save the country from using foreign currency unnecessarily. “The President’s decision has led to an increase in the number of industries which are now purchasing coal since 2015 because since then, the number of new customers have emerged in both, Tanzanian market and external market, especially in Uganda and Rwanda,” Shedd revealed. [Tanzania: Cashew nuts exports interruption impacts on Mtwara Port performance]
Ghana Trade Hub Mobile App: Ghana Revenue Authority registers more than 10,000 importers
African Union: Prioritizing food safety in Africa emphasized as implementation of Malabo Commitments gather momentum
South Africa bans livestock imports from Lesotho after anthrax outbreak
Ghana: Agriculture stakeholders ask govt to check sale of fake seeds
Kenya launches Irish potato regulations to improve standards
Consortium launches initiative to scale up agribusiness in Kenya, Ghana, Zambia
AFP: Ravages of time on an African cocoa plantation
Related News
tralac’s Daily News Selection
The AfCFTA Agreement is now in force: selected perspectives
@AmbMuchanga: Historic milestone! AfCFTA Agreement has today come into force. We celebrate the triumph of bold, pragmatic and continent-wide commitment to economic integration. We launch the market on 7 July; beginning the journey of transformation to secure inclusive prosperity.
@AUC_MoussaFaki: I hail Amb Muchanga and his team for their relentless work to ensure the entry into force of the AfCFTA in a record 18 months, ushering in the world's largest trading market of 1,2 billion people with a combined GDP of $2,5 trillion. Today is a historical win for the #AfricaWeWant!
President Uhuru Kenyatta: “We must find a way where all of us come out as winners. We want Africa to come together for the mutual benefit of all countries”
tralac's Trudi Hartzenberg, Gerhard Erasmus: "If the AfCFTA is properly implemented, trade governance, customs administration and rules-based trade should benefit. All trade arrangements, including those with Africa’s most important trading partners (they are outside the African borders) should benefit. Africa should become a more attractive investment destination. The biggest challenge for the AfCFTA will be about rules-based governance and transparency at home."
Christoph Kannengiesser (head of the German-African Business Association) notes that the European single market didn't come about overnight either, adding that other trade agreements such as NAFTA or TTIP are still controversial as there tend to be winners and losers in the process. "That can trigger distributional conflicts and may prompt attempts to push and preserve your own national interests too much," he said. Kannengiesser believes there's no big harm in Africa's most populous, oil-rich state, Nigeria, not wanting to join the AfCFTA. He thinks that while pursuing its own national interests and feeling stronger on its own, Niger won't be able to ignore Africa's economic dynamics in the long term.
Tshepidi Moremong (head of Africa coverage at Rand Merchant Bank): “In each of our countries, there are proper issues that one needs to deal with and where people need to see that the government is focused on their day-to-day issues. Opening up a market for the people from other parts of the continent to freely come and do commerce and trade in your country is going to take a lot.”
IATA's April data for African air cargo, passenger demand
Data from the International Air Transport Association shows that global air freight demand, measured in freight tonne kilometers (FTKs), fell 4.7% in April 2019, compared to the same period the year before. But: African carriers posted growth in April 2019 of 4.4% compared to the same period a year earlier. Global passenger demand (revenue passenger kilometers or RPKs) rose by 4.3% compared to April 2018. Regionally, Africa, Europe and Latin America posted record load factors. African airlines had a 1.1% traffic increase in April, which was down from 1.6% growth in March and was the slowest regional growth since early 2015. Like Latin America, Africa is seeing some economic and political uncertainty in the largest markets. Capacity climbed 0.1%, and load factor edged up 0.7 percentage point to 72.6%.
Kenya: Foreign investment survey 2018 (KNBS)
The Foreign Investment Survey (FIS) 2018 is the fifth in the series since the launch of the surveys in 2010 and captured data on foreign private capital flows and position for the period 2016 and 2017. Stock of FDI liabilities by region and country: As shown in Table 2.5, the stock of FDI liabilities increased by 8.5% to KSh 683,839 million in 2017. Africa was the main driver of this growth with the stock of FDI liabilities from this region increasing by 11.5% to KSh 214,740 million in 2017. Europe was the major source of stock of FDI with a share of 45.3% and 43.6% to the total stock of FDI in 2016 and 2017, respectively, attributed to the EU. The stock of FDI attributed to France increased by 20.9% to KSh 51,163 million in 2017 from KSh 42,318 million in 2016.
Africa was the second source of stock of FDI contributing one third of the total stock of FDI liabilities in the review period. The stock of FDI attributed to South Africa increased by 54.8% to KSh 121,161 million accounting for 56.4% of total stock of FDI attributed to Africa in 2017. Stock of FDI liabilities attributed to COMESA declined by 22.0% to KSh 73,487 million in 2017 accounting for 34.2% of the total stock of FDI liabilities from Africa. The decline was largely reflected in reduced stock of FDI attributed to Mauritius. Stock of FDI liabilities attributable to the EAC accounted for 15.1% and 14.0% of the total FDI stock attributed to Africa in 2016 and 2017, respectively. Stock of FDI liabilities attributable to Uganda increased by 4.7% to KSh 27,870 million in 2017 and contributed the highest proportion within the EAC.
In 2017, the stock of FDI liabilities attributed to Asia increased by 18.1% mainly as a result of FDI liabilities attributed to the Far East, which increased by 25.0% to KSh 68,107 million. India and Japan were the main sources of FDI stock collectively accounting for over 70% of the total stock of FDI from the Far East in the review period. United Arab Emirates was a significant source of stock of FDI liabilities contributing about a quarter of the total FDI stock attributed to Asia in the period under review. The stock of FDI liabilities attributed to North America, grew by 4.3% to KSh 63,843 million in 2017 and was mainly from the United States. [CBK Governor: Kenya needs to begin reorganising debt]
Egypt targets quadrupling of exports over five years (Egypt Today)
Non-oil exports have been rising by 10% annually since launching the Trade and Industry Strategy 2016-2020. However, that increase does not match the manufacturing capabilities of Egypt so the state aims at boosting exports by $55bn over the next five years. In FY2017/2018, Egypt achieved a 12.7% growth in non-oil exports to record $12.7bn from $15bn in the previous fiscal year. The prime minister held meetings with export council's representatives in the previous weeks, where each presented a vision on possible mechanisms to increase exports. In parallel, the state carries out economic reforms and takes measures that would boost the value chain by decreasing raw material exports, and increasing investments in the manufacturing sector. Chairman of the Egyptian Commercial Service, Ahmed Antar, told Egypt Today that the state targets 12 African states in the plan’s first phase. They are Ethiopia, Rwanda, Uganda, Zambia, Tanzania, and Kenya in the East; and, Nigeria, Senegal, Ivory Coast, Gabon, Ghana and Benin in the West. [Egypt’s new Aswan free zone to serve development purposes]
Ethiopia's exchange rate: Why it matters for structural transformation and growth (World Bank)
Although Ethiopia has achieved rapid economic growth since 2004, addressing the major challenges facing the economy is critical to maintaining the growth momentum. Exports witnessed relatively weak performance since the early 2010s. Exports plunged from 16.7% of GDP in 2011 to 8.9% in 2018. This, combined with the surge in imports, resulted in considerable deterioration in the trade and current account balances. The lackluster export performance is generally reflected in, among others, the acute shortage of foreign exchange, currency rationing, and flourishing parallel market. Real currency appreciation accounts for a significant part of the widening external imbalance, particularly before the devaluation in October 2017. The slow pace of structural transformation poses another challenge to the Ethiopian economy. The country’s first Growth and Transformation Plan (GTP I) (2010-2015) was mainly targeted towards jump-starting structural change by promoting light manufacturing. Manufacturing-led industrialization also features prominently in the GTP II, which covers 2015-2020. Against this backdrop, the present paper attempts to address the following main questions:
Uganda Economic Update: Economic development and human capital in Uganda (World Bank)
The World Bank’s analysis of cross-country data on human capital indicates that Uganda is under-investing in the future productivity of its citizens. A child born in Uganda today will only be 38% as productive when she grows up as she could be if she enjoyed complete education and full health. Uganda is ranked among the countries in the lowest quartile of the Human Capital Index (HCI) distribution, with an index slightly lower than the average for the SSA region, and below what would be predicted by its income level. Uganda’s low ranking in the HCI is mainly due to the country’s low education outcomes. A child born today in Uganda is expected to complete only 7 years of education by age 18, compared to a regional average of 8.1. Because of the low levels of learning achievement in Uganda, this is only equivalent to 4.5 years of learning, with 2.5 years considered as “lost” due to poor quality of education (as shown by the quality-adjusted years of schooling component of the HCI). Uganda’s score on this component is the lowest amongst the comparator countries and below the SSA average.
Songwe, UN heads of agencies discuss need for better coordination and delivery (UNECA)
ECA Executive Secretary, Vera Songwe, on Wednesday, met with key heads of UN agencies in Ethiopia to discuss how the UN in the region can coordinate better and deliver as one. Continued collaboration for the implementation of the African Continental Free Trade Area and other related instruments, including the Free Movement Protocol and the Single African Air Transport Market, was also discussed, notably in view of their significant potential to boost regional integration, strengthen inclusive economic growth, generate jobs for young Africans, alleviate poverty and lead to more stable and peaceful societies. The Conference urged greater efforts to harness Africa’s youth dividend, notably with investments in health, education, data and in science and technology.
Digital trade issues: OECD's key issues paper prepared for the Council at Ministerial Level (22-23 May)
Digitalisation has cut the costs of international trade and more firms, including SMEs, are exporting to new markets as online tools are facilitating cross-border sales. Although difficult to measure and without internationally-comparable statistics, the available evidence suggests that digital trade is growing. Today, digitally deliverable services, for example, represent over 20% of services trade in OECD countries. Efforts are accelerating to provide internationally comparable statistics and evidence on digital trade and data flows. The OECD’s work on digital trade aims to help unpack some important policy and measurement issues raised by the digital transition. To start, the OECD and other international organisations including the WTO are developing a Handbook on Measuring Digital Trade. At the same time, the OECD is working on providing new frameworks for better trade policy making, identifying what matters for market openness in digital trade – including for services through the Digital Services Trade Restrictiveness Index – helping inform the debate on trade and cross-data flows, including in support of the work at the WTO. [Table of contents. Unlocking the potential of digital transition: the role of governments and importance of international cooperation; Empowering different actors in society in the digital age: the role of jobs, skills, and education; Realising the digital promise for sustainability and well-being; Reaping and diversifying the benefits of trade in the digital era]
Mozambique: AfDB supports new tracking system to create growth-friendly labor market
The Ministry of Labour, Employment and Social Security of Mozambique has launched the Labour Market Information System (SIMT) Management Platform. The platform aims to establish a new dynamic in the analysis of the behavior of sector-based reliable statistics. More importantly, SIMT will enable the government to formulate skills development policies and programs, which will lead to the creation of decent employment opportunities, as well as growth and economic integration.
Migration and jobs: Issues for the 21st Century (World Bank)
With an estimated 724 million extreme poor people living in developing countries, and the world's demographics bifurcating into an older North and a younger South, there are substantial economic incentives and benefits for people to migrate. There are also important market and regulatory failures that constrain mobility and reduce the net benefits of migration. This paper reviews the recent literature and proposes a conceptual framework for better integration and coordination of policies that can address the different market and regulatory failures. The paper advances five types of interventions in need of particular attention in design, implementation, and evaluation: [The authors: Luc Christiaensen, Alvaro Gonzalez, David Robalino]
Tackling the global profitarchy: Gender and the choice of business sector (World Bank)
This paper investigates the horizonal dimension of sectoral segregation by studying global data on female and male enterprises operating in sectors that are typically dominated by the same and opposite sex. The analysis uses the novel Future of Business dataset, which spans 97 countries and was administered to enterprise owners, managers, and employees who use Facebook. [Note: The geographic coverage of the Future of Business survey now includes 11 Sub-Saharan African countries. They are: Nigeria, Kenya, Uganda, South Africa, Côte d’Ivoire, Botswana, Benin, Mozambique, Tanzania, Ghana, Cameroon]
Japan grows stake in Africa with new deal
Japan and Austria support NDCs of African countries
Zimbabwe: Trade deficit narrows 22%
Mozambique exports power to Botswana
Nigeria: Trade ministry’s 13 reforms in Buhari’s 1st term
Related News
tralac’s Daily News Selection
The AU, CoDA multi-stakeholder dialogue on implementing the AfCFTA concludes today in Addis Ababa. For insights on debates: @AUTradeIndustry, #coda4afcfta, #auccoda
(i) Perspectives quoted in a New Times article from the conference: Abdoulie Janneh (Executive Director of the Mo Ibrahim Foundation): “A big country like Nigeria which is such a big proportion of Africa, if they are not part of this it certainly reduces the impact of what we are supposed to do. Let’s push and encourage Nigeria.” General Olusegun Obasanjo (Chairperson of the CoDA Board of Directors): “The economic welfare of our people in Africa and the clear benefits of the AfCFTA, when it is fully implemented, to this effect cannot be overemphasised. That is why this issue should be a matter of great concern to all who desire a strong, safer, secure and progressive Africa.”
(ii) Perspective quoted in Daily Post article. General Olusegun Obasanjo: “It is nobody’s fault if your country cannot resolve its domestic problem. If you (Nigeria) is not signing the agreement, it is unfortunate. AfCFTA will go on without Nigeria. You will recall that this is the first time, since 1976, that Nigeria is not at the table of a major continental process. Nigeria should settle its problem at home and not bring it to the AU."
A week-long meeting of the EAC Sectoral Council on Trade, Industry, Finance and Investment began yesterday in Arusha: a brief overview of agenda items
The road to the Niamey Summit: dates to diarise
17-18 June: Permanent Representatives' Committee meets in Addis Ababa
4-5 July: 35th Ordinary Session of the Executive Council, in Niamey
7 July: Extraordinary session of the Assembly of the Union on the AfCFTA
8 July: First mid-year coordination meeting of the AU and the RECs
(i ) Today marks the 44th anniversary of ECOWAS: message by President of the ECOWAS Commission, Mr Jean-Claude Kassi Brou. The Economic Community of West African States was established on 28 May 1975 in Lagos upon the signing of the Founding Treaty by the Heads of State and Government. This was the outcome of several years of consultations by the pioneers, which culminated in the launch of our regional community. While the original objectives were essentially economic, the revision of the Treaty on 24 July 1993 enhanced ECOWAS’ role, particularly with regard to political, peace and security cooperation in our region.
On the economic front, growth continues to improve with growth rates above 6% in several countries in 2018. Agricultural and industrial production continues to be boosted. Similarly, our various social programmes in education and health, particularly with the West African Health Organization, are being implemented in the different countries, alongside paying due attention to gender issues. Furthermore, while we recognise that the construction of our common market will require the roll-out of major cross-border infrastructure, we have remained committed to the ongoing Abidjan-Lagos and the Praia-Dakar-Abidjan corridor projects, and enhancing energy- generation capacity. In the same vein, we are striving to create an enabling regional framework for economic development and investment, through the Macroeconomic Stability and Convergence Pact, implementation of the recently adopted Regional Investment Code, and very soon through the Regional Mining Code and the establishment of the Regional Competition Authority.
However, despite these achievements, we are currently facing serious challenges that pose a major threat to the attainment of our integration agenda. In that respect, the most pressing challenge is certainly security. Another major challenge we have is to build our common market. We have certainly made clear progress in the free movement of persons and goods, particularly with visa-free travel to Member States for Community citizens. Unfortunately, obstacles and barriers remain, hampering trade and slowing down wealth and job creation. We must fight against all illegal obstacles and make our Community a true common market. The imminent entry into force of the AfCFTA will also offer new opportunities to economic operators in the region.
(ii) ECOWAS to launch Regional Competition Authority (31 May, Banjul). The ECOWAS Regional Competition Authority (ERCA) is established to implement the Regional Competition Rules adopted by the ECOWAS Authority in 2008. In recognition of its strategic importance to the regional integration efforts, beginning from 28 May 2019, a technical committee meeting of national experts from the Trade and Competition Agencies will precede the launch, offering all stakeholders the opportunity to chart a course for the operations of ERCA and also discuss the unique market structure of the ECOWAS regional market. ERCA Executive Director, Mrs Henrietta Uzoamaka Didigu, said ahead of the launch: [A profile of Mrs Henrietta Uzoamaka Didigu]
(iii) ECOWAS moves to increase participation of women in peace and political processes. ECOWAS’ maiden Annual Policy Dialogue on Women Participation in Peace and Political Processes ended on 24 May in Abuja. The meeting, comprised of representatives of civil society organizations and regional institutions responsible for women rights and welfare, developed a methodology for the collection and reporting of gender disaggregated data, gender mainstreaming parameters and a checklist on women participation in ECOWAS political processes and interventions. In addition a draft template for an integrated database of women stakeholders in the region was developed to promote partnerships and synergies which will produce concerted efforts and results that are required to transform conflict prevention and peace-making in ECOWAS.
(iv) COMESA, UNCTAD to establish regional trade information portals. Under the Agreement, COMESA delegates to UNCTAD the design and development of national and regional Trade Information Portals (TIPs) and the Customs Automation Regional Centre (CARC). The two will be funded by the 11th European Development Fund Trade Facilitation Programme. The TIPs will facilitate easy access to essential trade information in one platform while the CARC will support technical and functional training on the Automated System for Customs Data (ASYCUDA) World Platform thereby improving skills to develop and use applications. UNCTAD's Dr Kituyi said the engine of regional integration and the deepening integration through trade is largely dependent on the success of COMESA as the regional organization with the largest member states and a very substantial component of the African economy.
(v) Joint meeting of SADC Ministers of Energy, Water (24 May, Windhoek). Extract from the statement (pdf): Ministers noted progress made in the amendment of the Protocol on Energy of 1996 and approved the Roadmap to finalize the review and amendment of the Protocol, and urged Member States who have not yet acceded to the Protocol to do so. Ministers urged Member States to commit to the Regional Priority Power Projects aimed at enhancing security of energy supply and directed the Secretariat to present a comprehensive report on energy projects that are under preparation and development by regional project preparation facilities. Ministers directed the Secretariat, assisted by Regional Energy Regulatory Association of Southern Africa, to establish appropriate structures to develop and implement regional regulatory initiatives pertaining to other energy sub-sectors namely; petroleum, gas and renewable energy under its expanded mandate. In summary, Ministers amongst other decisions...:
The political economy of Africa’s regional ‘spaghetti bowl’: synthesis report (ECDPM)
This report synthesises the findings of a two-year research project on the political economy dynamics of regional organisations (PEDRO). The findings presented discuss why regional organisations often struggle to promote the functional integration that is sought in Africa. Often the ambitions and scope of regional commitments and support go beyond the political ‘room for manoeuvre’ of national and regional actors. That implies a need to recognise that barriers to progress on regional integration and cooperation often arise from the continual flux of political bargaining processes between and within countries, and not simply a lack of finance and capacity. The nature of the regional ‘problem’ being addressed is also important, raising questions about the appropriate level and form of regional cooperation to aim for and the role of regional organisations within specific policy areas. It also raises the need to identify and focus on locally-defined problems where there is a clear value-added from working regionally. [The authors: Bruce Byiers, Sean Woolfrey, Alfonso Medinilla, Jan Vanheukelom]
Zambia: Truck drivers threaten to paralyze transport sector (The Mast)
In an open letter to President Edgar Lungu, the truck drivers, who do cross-border and local trips, lamented that they had been taken for granted and if their demands were not met, they would paralyze the country’s entire transport sector. They are demanding among other incentives better conditions of service and salary hike of not less than K15,000 after deductions. The truck drivers also want to know how Somalians acquire legal documents like the Zambian National Registration Card, passport and driver’s licence and eventually get employed as professional drivers in Zambia while many Zambian drivers were languishing without employment. They are also demanding that the Road Transport and Safety Agency extends the years of renewing PDP to five years.
Zimbabwe: Exporters keeping $900 mln in offshore banks - treasury official (Reuters)
George Guvamatanga, permanent secretary for ministry of finance told a parliamentary committee that $500m out of last year’s $4.3bn export earnings was still being kept offshore. Another $400m was outstanding from the January to May 2019 exports, which earned $1.4bn, he said. Exporters were also keeping $800m in local foreign currency accounts, he added. “There is $1.7bn that should be available in this economy to pay for the pharmaceuticals, to pay for the fuel and all the requirements we need as an economy. The issue is how do we enhance the interbank market so that those export proceeds can be liquidated on the interbank market,” said Guvamatanga, who appeared with Finance Minister Mthuli Ncube. [Zimbabwe’s 90-day export repatriation puzzle: how do other countries do it?]
South Africa: Agricultural trade surplus expands by 11% y/y in the first quarter of 2019 (pdf, Agbiz)
This was primarily due to an 18% year-on-year decline in the value of imports to $1.45bn, not an uptick in exports. South Africa’s agricultural exports were down by 10% from the first quarter of 2018, recorded at $2.11bn. From a destination point of view, the African continent and Europe continued to be the largest markets for South Africa’s agricultural exports, respectively accounting for 44% and 30% in value terms. Asia was the third largest market, taking up 18% of South Africa’s agricultural exports in the first quarter of 2019. The balance of 8% value was spread across other regions of the world. Looking ahead, South Africa’s agricultural trade prospects for 2019 are not as positive as for 2018, as unfavourable weather conditions in parts of the country could lead to lower production, particularly in grains and wine grapes. [East, Central Africa: Trade and Markets Report, May 2019 update]
(i) East and Southern Africa Region Governing Council meeting in Gaborone (23-24 May). The Vice-Chair for the Region, Mr Kateshumbwa, referred to the outcomes of the December Policy Commission and the progress to date with the implementation of the regional strategy. He highlighted the need for concerted efforts to successfully implement the AfCFTA, recognizing the important support of the private sector and development partners. Secretary General Mikuriya updated delegates on recent developments and highlighted the critical role played by technology in streamlining Customs procedures and enhancing regional integration. Delegates went on to discuss the following: the Regional Strategy; Customs reforms and modernization; Efficient cross-border management during the response to disasters; and the AfCFTA and the WTO Trade Facilitation Agreement.
(ii) East African Customs participate in benchmarking study on IPR border control in Thailand, Japan. Intellectual property rights control is a part of an overall project by the 5 Customs Administrations in East Africa, under the guise and support of the WCO and JICA Trade Facilitation and Border Control Project in East Africa, to further enhance their border control functions. In particular on IPR-infringed goods, as these countries are experiencing increasing flows of counterfeit goods coming into their countries. Accompanied by WCO and JICA experts, 13 officials from the five administrations and EAC Secretariat visited Thailand (7-10 May) and Japan (13-16 May). Participants exchanged procedures and practices with Thai and Japan Customs relating to IPR border controls, such as legal/institutional framework, cooperation with relevant authorities, partnership with Intellectual Property (IP) Right Holders, use of the recordation system as well as ex-officio control, public awareness activities and human resource development/management.
(iii) Enhancing the skills of customs administrations in East, Southern Africa on gender equality. The workshop (6-10 May, Mauritius) provided an opportunity for 15 participants from 9 countries in the region (Eswatini, Kenya, Malawi, Mauritius, Rwanda, Uganda, Seychelles, South Africa and Zimbabwe) to enhance their skills on how to implement gender mainstreaming by using a project management approach including principles of strategic planning and change management with a particular focus on monitoring and evaluation.
Dr Edwini Kessie (WTO's Director of Agriculture and Commodities): WTO can’t be blamed for Africa’s struggles
Mauritius: Women in Industry and Trade workshop
Mauritius: Western Indian Ocean regional Science to Policy workshop
Rwanda: Economic activity and opportunity for refugee inclusion
Related News
tralac’s Daily News Selection
T20 communique for G20 Leaders: extracts from recommendations from Task Force 5 on Cooperation with Africa (pdf)
Agree on a unified approach towards macroeconomic stability by attaining fiscal and debt sustainability and strengthening domestic resource mobilization:
(i) Enhance discussions between G20 countries on debt data reporting and publication standards for low-income countries, especially those in Africa, as well as an orderly debt resolution mechanism with a more diffuse creditor base.
(ii) Assist in negotiations over innovative funding sources that limit the need for foreign currency and volatile borrowing and ensure that borrowed funds, especially non-concessional, are used productively to enhance repayment capacity. In this context, ensure that Multilateral Development Banks are adequately capitalized.
(iii) Ensure that taxation of the digitalized economy works for Africa, especially regarding the profit allocation rules for multinational enterprises.
Enhance policy coordination between the G20 and Africa to promote economic integration, including removal of policies that impede African development:
(i) Realign G20 countries’ agriculture trade practices, especially subsidies and non-tariff barriers that are inconsistent with WTO regulations to provide opportunities for African producers to participate in global value chains. At minimum, a “do no harm” approach should be guaranteed.
(ii) Develop regional regulatory institutions to ensure the safety and quality of African products, especially food products, while not placing a prohibitive burden on African small and medium enterprises and smallholder farmers in complying with associated regulations.
(iii) Strengthen efforts to combat illicit capital outflows such as tracking and repatriating illicit funds back to African countries as well as support global and inclusive discussion of new approaches to taxation of the digital economy.
A listing of T20 Policy Briefs (all available for download):
1: Deliberate next steps toward a new globalism for Universal Health Coverage
2: Transforming education towards equitable quality education to achieve the SDGs
3: Early childhood development education and care: the future is what we build today
4: Developing national agendas in order to achieve gender equality in education (SDG 4)
6: Teacher professional skills: key strategies to advance in better learning opportunities
7: Sustainable financing for development
8: Scaling up business impact on the SDGs
9: Leveraging science, technology and innovation for implementing the 2030 Agenda
- Keynote speech at the T20 Summit by Haruhiko Kuroda (Governor of the Bank of Japan): Global economy: challenges and policy responses
TICAD Seminar Series 2019: schedule of forthcoming video conferences
(i) Electricity access in Sub-Saharan Africa: uptake, reliability, and complementary factors for economic impact (29 May, Tokyo)
(ii) Realizing the full potential of social safety nets in Africa (4 June)
(iii) World Bank Africa Human Capital Plan (18 June, Tokyo)
Harnessing the opportunities of the digital economy in SADC: a presentation by Research ICT Africa to the SADC Parliamentary Forum
On 22 May, Alison Gillwald, Enrico Calandro and Anri van der Spuy presented policy options for the digital economy to the SADC Parliamentary Forum meeting in Johannesburg. The two-hour session covered a range of issues pertaining to the governance of digital economies. Extract (pdf, Slide 67): A phased approach is proposed. 1. Regional Technical Roadmap (‘Green Paper’); 2. White Paper; 3. Model Law on the Digital Economy; 4. Post-adoption: implementation training and guides. [Related: The state of ICT in Uganda, pdf]
Michael Hewson: Prepare for tax in digital economy (Mail and Guardian)
The OECD will develop a plan for further work on the digital economy. This will be presented to the G20 finance ministers in June. The final consensus set of outcomes is expected to be finalised by the end of 2020. South Africa, as a member of the G20 and an observer of the OECD, is likely to consider the final proposals made. The outcomes of the OECD plan will potentially affect all multinationals operating in the digital economy. It is, therefore, imperative that relevant stakeholders contribute to the discussion. This includes taxpayers and tax authorities. For example, the value of digital services provided into African countries is generally greater than the value of digital services provided out of African countries. Accordingly, there may be a tendency for countries in Africa to seek to use this G20/OECD project to implement protectionist measures. But countries in Africa that are seeking to increase their services economies and encourage local companies to provide services to recipients in other countries should consider how potential proposals may affect these companies. Revenue and other authorities need to take a proactive approach in discussions on this issue, and to ask the key questions: How do we identify digital transactions; how do we determine value; how do we tax these transactions and how do we encourage the growth of the digital economy in South Africa?
Niger eyes cooperation with China's Alibaba (Global Times)
Niger wholeheartedly looks forward to cooperating with Alibaba Group Holdings, not only to boost agricultural product exports with the help of e-commerce but also to take part in training programs provided by the company, said Nigerien President Mahamadou Issoufou. He commented after a brief visit to Alibaba's headquarters in Hangzhou, capital of East China's Zhejiang Province on Sunday, accompanied by Alibaba CEO Daniel Zhang. Mahamadou Issoufou said he hopes Alibaba's e-commerce platforms can help Niger export more of its specialized agricultural products, like onions, to China. China mostly imports agricultural products and uranium from Niger, while exporting items like fabrics, mechanical and electrical products, Song Wei, an associate research fellow at the Chinese Academy of International Trade and Economic Cooperation who focuses on the study of Africa, told the Global Times on Monday. In the first four months this year, China's US dollar-denominated trade with Niger surged by 41.6% on a yearly basis, with exports increasing by 59.9% on a yearly basis and imports from Niger rising by 34.5%, customs data showed.
Zimbabwe: Fish farmers want 10% surtax on imports (NewsDay)
In a report following the 2019 fish farming indaba held recently, the Livestock and Meat Advisory Council said the proposal would capitalise an aquaculture development fund they want introduced. “For Zimbabwe to realise the full potential of aquaculture, the private sector and government must work together with financial institutions to establish an Aquaculture Development Fund,” the report read. “It was proposed (in the meeting) that a surtax of 10 cents/kg on all fish imports entering Zimbabwe be implemented, which will then directly capitalise the fund. This innovative idea was discussed and recommended by participants.” Zimbabwe Fish Producers Association believes that fish production in Zimbabwe would grow significantly, with aquaculture proudly taking its place alongside the chicken, pork and beef industries as a key supplier of tasty, nutritious, home-grown protein for a growing population.
Morocco steps up efforts to attract foreign investors (North Africa Post)
Morocco is set to create 12 special economic zones in its 12 regions offering tax incentives and other advantages to attract foreign industrial investors. The special zones are also meant to boost exports and curb imports in order to ease the country’s trade deficit. The decision was made in 2016 in a business charter that commits to establishing new economic areas to attract foreign firms to Morocco’s 12 regions and help spread industry throughout the country.The recent decision to turn the Tangier Tech City into an economic free zone is in line with the country’s industrialization strategy. The new zone is expected to attract major Chinese companies in the automotive, aeronautical and textile sectors. The city worth $1bn will help create 100,000 jobs as Chinese companies are expected to bring 10 billion dollars in investments.
New global rules curb unrestricted plastic waste exports (Guardian)
Amid Nigeria’s house of representatives bill to ban the use and sale of plastic bags, governments at the 14th Conference of the Parties (COP14) of the Basel Convention have restricted rampant plastic waste exports by requiring countries to obtain prior informed consent before exporting contaminated or mixed plastic waste. A deluge of plastic waste exports from developed countries has polluted developing countries in Southeast Asia after China closed the door to waste imports in 2018. International POPs Elimination Network (IPEN), the global network of environmental health, science and public interest organizations that has exposed environmental impacts of plastic waste exports to developing countries, applauded the move as a critical step to stem the toxic tide of plastic waste.
SADC EOI: Baseline study on support to peace and security in the SADC region (SADC)
The purpose of the assignment is to establish the collect data on all key indicators of the 11th EDF Peace and Security PAGoDA, by determining quantitatively and qualitatively the state of peace and security infrastructure and capacity in the SADC region in the respective areas that the programme covers.
Egypt plans new maritime line to East Africa for increasing exports
Wandile Sihlobo: Well-functioning shipping ports are key to SA’s agriculture success
Nigeria: FG restates sommitment to Special Economic Zones
Digital trade in spotlight during 11th World Chambers Congress in Rio next month
Cisco to train 1 million potential digital workers in Africa by 2025
Related News
tralac’s Daily News Selection
Diarise: Investment to support competitiveness and inclusive growth in South Africa (27 May, Johannesburg). One of the speakers at this Tutwa CG seminar will be David Bridgman (outgoing WBG manager of Trade and Competitiveness – Sub-Saharan Africa)
Selected AfCFTA updates: Zambia, Kenya, Zimbabwe, Cameroon
(i) Zambia's National AfCFTA Consultative Forum concludes today. The Forum included presentations by the AUC and the SADC and COMESA Secretariats; a ministerial session and presentations by business associations. Extracts from the keynote address by UNECA's Said Adejumobi:
It is important to note that the AfCFTA Agreement is not self-executing; it requires Zambia to deploy deliberate strategies towards ensuring that the private sector, as key stakeholder in production and trade, is primed to exploit a larger market and product opportunities offered by the AfCFTA, with reduced tariff and non-tariff barriers. It is imperative to, among others, address supply-side constraints limiting the productive capacity of industry to stimulate competitiveness. Coherence between the National Industry Policy and trade promotion initiatives is critical. Furthermore, the effective exploitation of the AfCFTA will require consensus among all stakeholders – the private sector, government, academics, civil society, women and youth organisations; hence the imperative to establish a well-resourced national AfCFTA Committee as part of the framework to entrench and facilitate the required consultative processes in the implementation of the agreement.
Without pre-emptying discussions during this forum, I believe other key reforms required to ensure that industrialisation, investment and trade generate optimum benefits for Zambia under a larger market include the areas of trade facilitation, infrastructure development, doing business reforms to create a conducive environment for the private sector, product quality and standards and the general policy environment, its consistency, clarity and stability to facilitate evolution of a competitive industrial sector able to capture opportunities arising from a borderless trade continent. Zambia is assured of the technical support of the UNECA working with the African Union Commission in assisting Zambia to develop the national AfCFTA Strategy and Action Plan that will complement existing industrialisation, investment and trade policies in promoting overall national development aspirations. [The author is the director of the UNECA's Southern Africa Office, in Lusaka]
(ii) Kenya offers five office buildings in bid to host AfCFTA Secretariat. Foreign Affairs Principal Secretary Amb Macharia Kamau said Kenya’s bid was anchored on key selling points including geographical centrality in the continent, improved infrastructure, and freedom of the press. “We’re availing many buildings in Upper Hill, Westlands, Gigiri, and Central Business District and we’ve already spoken to managers of some of the buildings who’re available to offer some of the buildings,” the PS stated adding the government would facilitate the furnishing of the buildings should Kenya win the bid to host the AfCFTA Secretariat. Kamua said the hosting of the AfCFTA Secretariat in Nairobi will open up opportunities for the capital and foster the country’s position as a multilateral hub. Kenya is up against Senegal, Egypt, Ethiopia, eSwatini, Ghana, and Madagascar.
(iii) Zimbabwe deposits its instrument of ratification: @AmbMuchanga. “More good news! African Continental Free Trade Area State Parties increasing! Zimbabwe today deposited Instrument of Ratification, becoming 23rd. More expected before 7th July, 2019.”
(iv) Cameroon will develop its national AfCFTA implementation strategy: starting in June, ending in October
(v) Professor Faizel Ismail's Nigerian Institute of Advanced Legal Studies lecture: Inclusivity and the transformational potentials of the AFCFTA for African countries
Selected updates, commentaries on the WTO:
(i) Escalating trade war to impact South Africa – Minister Rob Davies. South Africa was getting the short end of the stick in the escalating global trade war, which might have a major impact on the country's future industrial, tariff and trade policies, Trade and Industry Minister Rob Davies said yesterday. Davies attended a meeting of the WTO in France on Thursday, where he discussed the growing plight of developing countries such as South Africa. “The WTO is facing an existential crisis arising from the US’s refusal to agree to appoint the appellate body of the dispute mechanism of the WTO. If this continues until the end of the year the future of the enforcement of tariffs and duties on trade rules is uncertain,” said Davies. He said the US was also increasingly acting in a way where its trade policies appeared to be taken on arguments of national security, but there was no jurisprudence in the WTO for national security interests.
(ii) South Africa part of collateral damage from US-China trade war. South Africa may be almost 12 000 kilometres from Beijing and even further away from Washington DC, but the mass producer of fruit and wine is still affected by the US-China trade war. The country is “a small, open economy which grows by selling into the global demand,” central bank Governor Lesetja Kganyago told reporters in Pretoria on Thursday. That’s no different to other emerging economies, which will also be held back, he said. Ultimately, “there are no winners,” Kganyago said as the SARB held the key interest rate at 6.75% while cutting the full-year economic growth forecast. “Trade wars are silly, you want to control your market, but you still want access to other markets so it’s illogical.”
(iii) IMF Blog: The impact of US-China trade tensions. Consumers in the US and China are unequivocally the losers from trade tensions. Research by Cavallo, Gopinath, Neiman and Tang, using price data from the Bureau of Labor Statistics on imports from China, finds that tariff revenue collected has been borne almost entirely by US importers. There was almost no change in the (ex-tariff) border prices of imports from China, and a sharp jump in the post-tariff import prices matching the magnitude of the tariff. Some of these tariffs have been passed on to US consumers, like those on washing machines, while others have been absorbed by importing firms through lower profit margins. A further increase in tariffs will likely be similarly passed through to consumers. While the direct effect on inflation may be small, it could lead to broader effects through an increase in the prices of domestic competitors. [The authors: Eugenio Cerutti, Gita Gopinath, Adil Mohommad]
(iv) WTO DG Roberto Azevêdo's speech yesterday to the OECD Ministerial Council: E-commerce must be a force for inclusion. As of this month, 77 WTO members accounting for 90% of global trade have commenced negotiations on trade-related aspects of e‑commerce. A first substantive round of meetings was held last week. I understand that delegations discussed proposals on a wide range of issues, such as: facilitating electronic transactions, consumer protection, transparency, and non-discrimination and liability. Further discussions will be held next month. E-commerce issues range widely in their level of complexity and ambition. Time will tell what members can achieve. Ensuring that these discussions remain open to all members is important – but proponents should also be seeking to ensure that poorer countries that want to participate are helped to do so. Ultimately, the test of our success in responding to this revolution will be the extent to which we use it as a force for greater inclusion.
(v) The Ottawa Group and WTO reform: summary of Ottawa Group Meeting yesterday in Paris. Recognizing its importance to the future functioning of the organization, we discussed how best to pursue the development dimension in the context of WTO rule-making. Ministers appreciate Norway’s leadership, including its discussion paper, which lays out the context on development concerns and serves as a useful basis for continued dialogue at the WTO. We agreed that further outreach to the broader membership is required. In addition, ministers were grateful for Brazil’s impressions of the recent ministerial meeting for developing countries hosted by India. The Ottawa Group discussed ongoing work including on the Joint Statement Initiatives, in particular e-commerce, transparency and notification obligations, and industrial subsidies. We welcomed Chile’s update on the recent successful APEC trade ministers’ meeting. We further discussed Japan’s plans for considerations on WTO reform under its G20 presidency. [Canada: Disagreements over how to overhaul WTO could paralyse institution]
China's Ambassador to Namibia, Zhang Yiming: “As the ‘Grey Rhino’ of China-US trade war rampages, many people are worried that the ‘Black Swan’ of global economic crisis might come in the aftermath."
59 WTO Members yesterday adopted a Joint Statement on Services Domestic Regulation: this paves the way for a successful outcome on this issue at the next WTO Ministerial Conference in June 2020
EU, China, Thailand seek to join WTO consultation over India’s ICT products tariff
The implications of Korea’s experience for developing agriculture value chains in Africa (AfDB)
This report was prepared for the African Development Bank by a multidisciplinary team of consultants under the Korea Institute for International Economic Policy. Extract from Chapter VI: Conclusions (pdf). The aforementioned changes that have taken place in Africa suggest that the role of the AfDB, as a vanguard of Africa’s economic development and social progress, has to be enhanced. And this study is intended to provide assistance to such determined efforts of the Bank by cataloguing Korea’s experiences. One of the conclusions that can be drawn from cataloguing Korea’s experiences is that Africa needs to produce more rice to develop robust value chain activities. In doing so, challenges and success can be applied to other grains and agricultural products delineated in the AfDB’s Feed Africa Strategy report. To this end, Korea’s success with increased rice production can offer useful policy references to the Bank. As the gravity of control of the agro-value chains shifted to the market in the post rice self-sufficiency period, the concomitant policy changes can also be more relevant sources of reference that may well be in sync with the realities of Africa’s agriculture today. [Download the summary version here; Global value chains and development paths: a conversation with Caroline Freund]
Malawi records Q1 drop in mobile money activity (ITWebAfrica)
Despite an increase in subscribers to mobile money services, Malawi recorded low activity in this space in the first quarter of 2019, according to the latest report by the Reserve Bank of Malawi. The National Payment System 2019 First Quarter report stated that only 39.7% of the 6.5 million mobile money subscribers used the service, compared to the 41.1% recorded during the last quarter of 2018. It added that the number of registered mobile money agents rose by 10.1% to a total of 43, 406 in March 2019, but said there was a drop in the number of active agents with only 59.3% recorded as being active during the quarter under review. [Related: First e-commerce day celebrations held in Nairobi; Western African Digital Pool: update; SA Post Office expects big things from ecommerce platform]
Tracking SDG 7: The Energy Progress Report 2019
Sub-Saharan Africa remains the region with the largest access deficit: here, 573 million people - more than one in two - lack access to electricity. The region is also home to the 20 countries with the lowest electrification rates (see figure ES3). Burundi, Chad, Malawi, the DRC, and Niger were the four countries with the lowest electrification rates in 2017. If the rate of progress in expanding access to electricity remained at the same level as that between 2015 and 2017, universal access could be reached by 2030. However, connecting the last of the unserved populations may be more challenging than past electrification efforts, since many such populations live in remote locales or over-burdened cities. A projected 650 million people are likely to remain without access to electricity in 2030, and 9 out of 10 such people will be in Sub-Saharan Africa. Key strategies for closing this gap will include data-based decision-making and advanced policy-planning frameworks, private sector financing, versatile solutions that include decentralized renewables, and efforts to both extend rural electrification and cope with urban densification. [Sanea: South African Energy Risk Report 2019, pdf]
Zambia's Ethiopia embassy partners with Addis Ababa Chamber of Commerce
Southern African Science Service Centre for Climate Change and Adaptive Land Management: Research call (pdf)
Central Bank of Nigeria: communiqué from MPC meeting, 20-21 May
Africa CEO Network debuts in Nigeria
Afreximbank releases first quarter financial statements: shows 59% growth in revenue, to $240.71m
AfDB's Independent Review Mechanism: Annual Report 2018
Eritrea: IMF staff completes 2019 Article IV Mission
Inaugural UK-West Africa Agritech Summit
UNSC's debate on Somalia: lengthy summary of the statements
Related News
tralac’s Daily News Selection
Small African economies in a more uncertain global trade environment: the potential impact of post-AGOA scenarios for Lesotho (World Bank)
This paper provides a forward-looking view of trade and its relevance for Lesotho’s medium- and long-term development. It does this through CGE analysis of potential impacts based on specific trade-related scenarios. The scenarios include the potential loss of AGOA preferences and preference erosion against competitors through, for example, a US–Vietnam FTA. An immediate loss of AGOA preferences would have a significant economic impact that far exceeds that of a potential future US–Vietnam FTA. If these preferences were suspended in 2018, Lesotho would face a loss of 1% in income by 2020, relative to the baseline, and exports of textiles and apparel would drop by 16%. The CGE simulations stress the need to strengthen efforts to support structural transformation leading to diversification of export products and markets, improving backward and forward linkages, and lowering trade costs. The simulations also indicate that trade facilitation measures leading to an average decrease in trade costs of 2%per year would eliminate the negative consequences of the loss of AGOA preferences in terms of the loss of income. The changing external environment is likely to offer new opportunities to Lesotho's export industries in the medium term, including through regional integration under the African Continental Free Trade Area. Extracts (pdf): These findings emphasize the need for a new approach to trade and trade policy that can provide export-driven growth that is more sustainable and inclusive. Policy recommendations moving forward include:
Improve access to imported material inputs and technology by pursuing tariff reductions within SACU and ensuring that the duty drawback system functions more efficiently and effectively; A sustained focus on increasing productivity in AGOA beneficiary sectors, most notably textiles and apparel, and aiming to increase spillovers and linkages from these sectors; Enhance export promotion activities, including improving market information on export opportunities to South Africa, European and other markets, as well as for products other than apparel to the United States; Since a reduction in trade costs could substantially offset any risks from losing AGOA preferences, there would be substantial gains to a coordinated approach to trade regulatory requirements and coordinated border management and exploring cross-border coordination mechanisms with the South African authorities, among others; Undertake a comprehensive analysis of service-sector performance in Lesotho and its implications for export-driven growth, identifying the most urgent regulatory issues that need to be addressed; Develop a comprehensive trade and investment strategy linked to the NSDP II, focusing on how to retain and increase investment once AGOA margins have been eroded, determine progress in the implementation of actions recommended in the 2012 DTIS Update and supporting industrialization through participation in regional and global value chains. [The authors: Maryla Maliszewska, Jakob Engel, Guillermo Arenas, Barbara Kotschwar]
The escalating China-US trade dispute: Economic and geopolitical implications for Sub-Saharan Africa (Policy Center for the New South)
In summary, this brief review of the structure of SSA’s trade suggests that the main effect of international trade disputes on the region will operate through the macroeconomic channel, i.e. the effect on global economic growth and commodity prices, rather than directly though trade restrictions. The effect of the trade tensions on growth in Europe is especially important for Africa. [The author: Uri Dadush]
World Economic Situation and Prospects as of mid-2019 (UNDESA)
The economic outlook for Africa remains challenging (pdf). While growth is estimated to pick up, the region faces difficulties in embarking on a robust and sustained growth trajectory, amid a global slowdown, tepid commodity prices and protracted fragilities in many commodity exporters. Aggregate GDP growth is projected at 3.2% in 2019 (see figure XII) and 3.7% in 2020, after an estimated expansion of only 2.7% in 2018. The risks to the outlook are tilted to the downside. They include weather-related shocks, political uncertainty and security concerns on the domestic front; and lower-than-expected commodity prices and an escalation of trade tensions on the external one. The recent upsurge in external sovereign bond issuances has also raised debt sustainability concerns in several economies.
East African manufacturers losing out to counterfeits (IPPMedia)
Manufacturers in East African Community members have lost at least 40% of the market to counterfeit goods which are mostly imported from the rest of the globe. Speaking in Dar es Salaam during their joint meeting, Kenya Anti -Counterfeit Agency and the country’s Fair Competition Commission Chairpersons, Flora Mutahi and Professor Humphrey Moshi, said they have launched a crackdown against the copycats which deny governments revenue, endanger consumers and threaten growth of industries in the region. The ACA delegation’s head called upon strengthening cross-border collaboration between the two countries and other EAC members because counterfeits don’t respect borders. ACA’s Mutahi said collaboration among nations is the only weapon that can realize a successful fight against counterfeits in the EAC region. Prof Moshi said that fair competition should prevail in the EA region by ensuring that counterfeits are denied entry or being manufactured locally.
EAC to restrict cross border spread of livestock disease (IPPMedia)
Kenya and Tanzania have secured 100 million shillings from the WHO and the German Cooperation, GIZ, to support long term contingent strategy for disease outbreaks which EAC senior livestock officer, Dr David Balikowa, says will help determine the two countries’ disease preparedness capacity, challenges and how to address them. The grant will support frequent simulation exercises in which the experts will be carrying out fictitious disease outbreak management exercise across the region.
George Asante: Financial market reform is vital for Africa to become an economic powerhouse (Business Day)
To accelerate financial market reforms, African countries should prioritise policy initiatives that make it easy for investors to participate in the markets. For example, African countries need to pay more attention to the trading and settlement infrastructure to spur liquidity, while ensuring timeliness and transparency of market data. This will improve the competitiveness of Africa’s capital markets and better position Africa to attract its fair share of available global capital. The fruits of opening up financial markets are undoubted. It is the main reason GDP per head south of the Sahara is two-fifths higher than it was in 2000. And while much of the world retreats into protectionism, it is heartening to see Africa attempt to open up its markets. This approach must continue, starting with ambitious financial market structural reforms. [The author is Absa head of markets ex SA]
Leónce Ndikumana: Why an overhaul of the international tax system is so important (Business Day)
After years of silence, the OECD has recently admitted the need to question the system that allows companies to declare their profits wherever they wish, in order to benefit from very low or even zero tax rates in tax havens — and this in a totally legal way. This is a requirement that we, the Independent Commission for the Reform of International Corporate Taxation, have been pursuing for years. Rich countries are now under pressure from the International Monetary Fund and the UN, which in recent months have called for a major overhaul of international taxation. This is a first step in the right direction, but there is an urgent need for developing countries to participate actively in the drafting of new tax standards.
(i) ECOWAS Commission meets with permanent Representatives on Peace, Security, Trade and other integration matters. ECOWAS met with the Permanent Representatives Committee, made up of Ambassadors accredited to ECOWAS, on 21 May in Abuja, to discuss recent peace and security developments as well as other issues relating to the regional integration process. The president of the ECOWAS Commission Jean-Claude Kassi Brou refocused attention on the all-important matter of regional security and inter-community issues. The ECOWAS Commission President also made a passionate plea for concerted efforts on the implementation the ECOWAS Trade Liberalisation Scheme noting that the cooperation of the ambassadors is needed also in regards to the conduct of officials of their national agencies, seeing that much else, including the implementation of a single currency for the region, depends on free movement of persons, goods and services. There were also briefings on the latest regional integration agenda, free movement as well as cooperation with the African Union, the retreat of the PRC, construction of the new ECOWAS headquarters building, statutory meetings as well as an update on the institutional Reforms. [ECOWAS marks a decade of the operationalisation of the Conflict Prevention Framework]
(ii) Model Drug Law for West Africa presented to ministers of health. The West Africa Commission on Drugs, UNAIDS and the Global Commission on Drug Policy today presented the Model Drug Law for West Africa (pdf) to ECOWAS ministers of health. Drug laws in western Africa are not having the intended effect. Neither drug use nor drug trafficking have been effectively reduced. Drug trafficking in western Africa has reached such an extent that the drug trade threatens stability in the region. The model drug law provides concrete templates that countries can adapt to reform their drug laws—legal provisions and how they relate to international legal obligations—as well as useful commentary that explains different options and reasons for choosing the proposed legal solution. The model drug law offers a measured way for decriminalizing drug use and possession for personal use by introducing thresholds, thereby allowing people who use drugs to access health services and seek support.
(iii) ECOWAS set to implement harmonised roaming tariff for mobile networks. ECOWAS is working towards the implementation of a regulation to define a harmonised legal and tariff framework for roaming on public mobile communication networks among member states by June 2019. Mr Zouli Bonkoungou, ECOWAS Commissioner, Telecommunications and Information Technologies said this during an interactive session with members of the ECOWAS Parliament at its ongoing ordinary session in Abuja on Wednesday. Bonkoungou said that the harmonised tariff regime for roaming was expected to take off in June 2018, but the action plan was not implemented by member states. Burkina Faso, Cape Verde, The Gambia, Nigeria and Senegal have since been elected as members of a new facilitation group to assist member states with the technical implementation of the regulation.
(i) Nigeria recorded $3bn trade surplus with US in 2018. Goods imported from the US in the year under review totalled $2.7bn, while goods exported to the US was $5.6bn.
(ii) Congo Republic's IMF bailout at risk over debt deals. Advisers to Congo Republic’s government have warned it that there is a “major risk” the IMF will reject its bid for a long-sought bailout, according to a letter obtained by Reuters. An IMF spokesperson: “This information does not represent the views of the IMF. The IMF team continues to be in discussions with the authorities regarding the next steps needed to be able to present this agreement to the IMF Executive Board for discussion.”
(iii) Tanzania's China-backed $10bn port plan stalls over terms. “The conditions that they have given us are commercially unviable. We said no, let’s meet halfway,” Deusdedit Kakoko, director general of the state-run Tanzania Ports Authority (TPA) told Reuters. China Merchants, in an e-mailed statement; “This project is a purely commercial, investment project and China Merchants Port has in its overseas investments always followed the principles of commercial feasibility and win-win cooperation.”
(iv) Inclusive and sustainable industrial development and why gender matters (pdf). This UNIDO brief, based on a working paper (pdf), outlines the advancement of the twin policy agenda of ISID and gender equality by providing a conceptual framework and empirical base from which to understand the inter-linkages between gender equality and industrial development.
(v) AfDB EOI: Review and analysis of national and regional agricultural policies and their impact in Africa. The service will involve the review, assessment, analysis, synthesis of various sectoral and macroeconomic policies, laws and regulation impacting the agricultural sector in Uganda, Mauritania, Mozambique, Guinee Conakry, Tanzania, Zambia, Ghana, DRC.
(vi) Related, from the AfDB: Review of Tanzania's land tenure systems (to support the creation of an enabling environment for agricultural transformation)
Related News
tralac’s Daily News Selection
AfCFTA negotiations update, from @AUTradeIndustry: The 15th meeting of the AfCFTA Negotiating Forum kicked off Monday at the African Union, Addis Ababa. The meeting will consider, among others, the AfCFTA post- launch implementation plan and the organogram of the AfCFTA Secretariat.
Details of the AU-CoDA AfCFTA implementation policy dialogue (27-28 May)
OECD Economic Outlook May 2019
The outlook remains weak and there are many downside risks that cast a dark shadow over the global economy and people’s well-being: First, the mediocre growth outlook is conditional on no escalation of trade tensions, which cut across the Americas, Asia and Europe. Simulations in this Outlook’s first chapter show that renewed tensions between the United States and China could shave more than 0.6% from global GDP over two to three years. Second, manufacturing and services do not work in isolation. While services have remained buoyant, providing a buffer, it is unlikely that they decouple for long from manufacturing. More than a third of manufacturing gross exports comes from services, and services contribute, directly or indirectly, to more than half of global exports. In addition, manufacturing crucially depends on investment, which is not only an engine of growth and employment today but also shapes tomorrow’s growth and living standards.
Third, China remains a source of concern, as the deployment of monetary, fiscal and quasi-fiscal tools not only has uncertain effects on activity, but might continue to fuel non-financial corporate debt, already at a record high level. We estimate that a 2-percentage point reduction in domestic demand growth in China, sustained for two years and combined with heightened uncertainty, could reduce global GDP by 1¾ per cent by the second year. Finally, private sector debt is growing fast in major economies. The global stock of non-financial corporate bonds has almost doubled in real terms compared with 2008, at close to USD 13 trillion, and the quality of debt has been deteriorating, including a heightened stock of leveraged loans. A new bout of financial stress could erupt. Looking ahead, trade tensions are not only hurting the short-term outlook but also medium-term prospects, calling for urgent government action to reinvigorate growth. The global economy was expanding in sync less than two years ago, but challenges to existing trade relationships and the multilateral rules-based trade system have now derailed global growth by raising uncertainty that is depressing investment and trade. The post-World War II process of globalisation driven by multilateral agreements that allowed ever-increasing trade openness is being challenged. [OECD slashes SA's growth forecast to 1.2%]
Rwanda becomes the 55th member of the OECD Development Centre (New Times)
The Minister for Trade and Industry, Soraya Hakuziyaremye, is representing Rwanda at the ongoing OECD meeting in Paris. In a recent interview with The New Times, the Minister for Foreign Affairs and Cooperation, Dr Richard Sezibera, said that Rwanda seeks to learn from the OECD Development Centre especially with regards to business standards and trade ethics to help improve its business environment.
SADC Industrial Energy Efficiency Programme: update from Windhoek conference
The First Industrial Energy Efficiency Conference organized in SADC welcomed over 150 southern African and international experts to take stock of the status of industrial energy efficiency, share results and best practices, identify policy recommendations and outline investment prospects. The two-day event was organized by the SADC Centre for Renewable Energy and Energy Efficiency, in partnership with the SADC Secretariat, UNIDO and the Austrian Development Cooperation. On 22 May (today), the SIEEP programme will be presented to the SADC Energy Ministers for adoption in Windhoek. It will further on be submitted to the Ministerial Task Force in June 2019 who will thereafter table it at the SADC Summit in August 2019. [Download: Overview of the conference agenda, pdf]
Lesotho: Performance and learning review of the Country Partnership Framework, FY16-FY20 (pdf, World Bank)
A private sector diagnostic that examined the impediments to investment and growth, focusing on manufacturing, horticulture, and the digital economy - three of the key priorities of the NSDP-II - was delivered. This work influenced the design of the smallholder agriculture development project phase II, the Agriculture Productivity Program for Southern Africa project and is helping refine activities under the private sector competitiveness project. A digital economy (DE4A) diagnostic is underway. A further knowledge output related to a trade integration strategy and advisory work on trade facilitation, particularly electronic transactions, is now being used to modernize border systems as a part of the private competitiveness project. The IFC has advisory products in helping implement the WTO trade facilitation agreement and raise Doing Business scores, which contribute to scaling up impact under the private competitiveness project. A climate smart agriculture profile was developed to guide policies in this area and will be followed by an investment plan. These are vital inputs into the second phase of the smallholder agriculture development project.
Focus Area 2: Promoting private sector job creation. In the first strategic objective, improve the business environment and diversify the economy, the emphasis will shift towards the digital economy.11 In line with NSDP-II priorities on technology and WBG corporate priorities on maximizing finance, the WBG will step-up assistance on digital technologies and e-governance, an essential pillar of competitiveness and the fight against corruption, and critical to raising both business productivity and the quality of public services. Clearly, such a development agenda will need to span two or more CPF periods; only a beginning can be made in the remaining two years of the current CPF period that focuses on diagnosis and the initial steps of delivering a digital service economy. The country has to contend with low ICT literacy and skills and the need to develop laws and regulations to facilitate electronic governance and establish a seamless, open access cross-border fiber optic backbone managed under high governance standards. The WBG will help unlock dividends from digitalization whilst mitigating risks, through advisory work on digital platforms, identity and literacy and legal and regulatory adaptations. It will review the adequacy of the telecom infrastructure. IFC will explore opportunities to develop or improve the quality of digital infrastructure through PPPs and promote digital technology in financial services.
Sierra Leone, Zimbabwe, Guinea: AfDB commissions value chain study into jewelry manufacturing, jobs for women, youth (AfDB)
The initial $1.4m project will entail a value chain analysis study examining the sector’s contributions to value addition and job creation. It will be financed under the Bank’s Transition Support Facility and implemented over 24 months, in coordination with the relevant ministries and agencies in all three countries. The initial study will directly help to address the lack of skills and create a better understanding of adding value in the industry, with the ultimate goal of reducing fragility in all three countries and building resilience.
Nigeria: NEPC re-introduces AGOA visa stamp to exporters (The Guardian)
The Nigeria Export Promotion Council has re-introduced the African Growth and Opportunity Act visa stamp to non-oil exporters. This, according to the NEPC, was to ensure that exporters in the country participate and benefit more from the AGOA Act before it expires in 2025. Speaking at the NEPC workshop on AGOA Visa Stamp utilisation in Lagos, the NEPC Executive Director, Olusegun Awolowo, who was represented by the Deputy Director, National Office on Trade, Saave Nanakaan said AGOA is also meant to forge stronger commercial ties between Nigeria as well as other qualified African countries and the United States; while it helps to integrate these African countries into the global economy.
Kenya: New strategy can deliver agricultural industries (Business Daily)
The recently published 2019-29 Agricultural Strategy (pdf) comprehensively details key drivers for agriculture, a sector which has been intensely studied, talked about, but never prioritised with enough budgetary resources or political focus. It is a strategy that is 20 years too late. My key take on the strategy is agro-processing, an area that has always interested me. The report says that agro-processing contribution to GDP in Kenya is only 3.2%; with 2.4% contribution to national employment; and 8.5% of exports. Egypt, a “desert” country, has far higher agro-processing metrics. For those of us who were around in 1960/70s, we can confirm that former President Jomo Kenyatta had delivered a high level of agro-industries, which unfortunately collapsed in the subsequent leadership of his successor Daniel Moi. The just launched strategy for agro-processing is achievable. All we need is to revisit the successes of yester years. The strategy promises 10 agro-processing feasibility studies to be undertaken in the next five years, with five of them actually accelerated for design, construction and operation. If we shed off the bureaucracy and lethargy that is characteristic of our government systems and allocate sufficient budgetary resources, it is possible to deliver ten feasibilities and five industries in five years. [The author: George Wachira]
Frontiers of economic policy communications (IMF)
The role of communications is increasingly recognized in all policy areas, but the journey communications has made in central banking over the past 30 years is especially impressive: from secrecy to vagueness to transparency and accountability. The growing popularity of inflation targeting, in which communications play a central role, and increased use of forward guidance in the aftermath of the global financial crisis are important factors behind the greater attention to communications. Long gone are the days when central banks sought to “keep the press out of the bank and the bank out of the press,” and there is no going back. However, there is room for one policy area to draw from experiences in the others. The paper discusses current and prospective developments in communications on monetary, financial stability, fiscal, and structural policies. It also considers the role that communications can play in helping to strengthen public trust in institutions. The country examples have been chosen to highlight issues that arise and recur in a wide range of political systems and economic policy frameworks. [The author: Olga Ilinichna Stankova]
Zimbabwe: Vision 2030 should be anchored on value added exports
USGC seeks export opportunity in South Africa
Kenya seeks assistance from development partners to transform agriculture sectors
MTN Nigeria shares show appreciation of R24bn in value in four days
Istanbul Africa Trade Company: Africa Economic Report
Free trade deal to benefit Chinese companies in Africa, Egypt
Related News
tralac’s Daily News Selection
Nigeria’s funding of the AU: FEC approves implementation of new import levy (Daily Post)
The Federal Executive Council, yesterday, approved the rate of 0.2% as the new import levy of Cost, Insurance and Freight (CIF) on goods coming into Nigeria. The Minister of Finance, Mrs Zainab Ahmed, disclosed this while addressing the State House correspondents after the FEC meeting presided over by Vice President Yemi Osinbajo. “Council approved a rate of 0.2% as the new import levy of CIF that will be charged on imports coming to Nigeria but with some exceptions. The exceptions include goods originating from outside the territory of member countries that are coming into the country for consumption. It also includes goods that are coming for aid and also it includes goods that are originating from non-member countries but are imported through specific financing agreement that ask for such kind of exemptions. It also exempts goods that have been ordered and are under importation process before the scheme is announced into effect."
Ahmed said that Nigeria knew that what would accrue from the new levy would be more than what was required as subscription to the AU, that the balance would be put in a special account. The special account would be used to finance subscriptions in multilateral organisations such as the World Bank, African Development Bank and the Islamic Development Bank. She said the second approval by the PEC was for the setting up of the Steering Committee, to be chaired by the vice president for the design and implementation of a National Single Window.
Egypt looking forward to hosting AfCFTA's executive office: Prime Minister (Ahram)
During a meeting with a delegation from the AUC on Monday, Egypt's Prime Minister Mostafa Madbouly said that President Abdel-Fattah El-Sisi is giving priority to the AfCFTA agreement under Egypt's current chairmanship of the AU, affirming that Egypt is looking forward to hosting the headquarters of AfCFTA's executive secretariat. Madbouly stressed the importance of the African AfCFTA agreement due to its positive role in promoting cooperation and integration in the African continent, pointing out that Egypt's capabilities, including logistic and infrastructure ones, enable it to be the seat of the head office of the agreement.
Egypt: 3.7% growth in trade exchange with South Africa (Ahram)
The trade exchange between Egypt and South Africa has achieved a growth of 3.7% in 2018, registering $287.8m, compared to $277.5m in 2017, the Egyptian Commercial Service said on Monday. Egypt's exports to South Africa increased to $105.4m during 2018 compared with $98.7m in 2017, with an increase of 10%, according to a report submitted by the ECS office in South Africa's capital of Pretoria. Despite some logistic problems, Egypt's exports to South Africa country met the targeted increase planned for Egyptian exports by the Ministry of Trade, the report said. Asphalt, or bitumen, topped Egypt's exports to South Africa with a notable increase of 512% followed by non-woven fabric that stood at 128 percent, according to the report. [Egypt launches trade shipping line from Ain Sokhna to East Africa]
PwC Global Economy Watch: improvements to public governance could boost Africa’s continental economy by $23bn
The latest edition of PwC’s bimonthly Global Economy Watch has found that African economies could receive a windfall of £23bn if each economy applied similar governance reforms equivalent to those made by Cote d’Ivoire since 2013. The continent-wide economic analysis modelled the performance of each country across six of the World Bank’s Worldwide Governance Indicators (2013-17), which covers aspects such as regulatory quality, rule of law and government effectiveness. The analysis has found that if each African economy made an improvement to governance equivalent to that made by Côte d’Ivoire over the past four years, these gains would be worth around $23bn if realised across the continent. The countries with the largest potential gains are those with a comparatively high GDP per head but a poor track record on governance. Accordingly, oil-rich Libya and Equatorial Guinea would see the greatest increase, with each person gaining an additional $400 and $200, respectively. Those with lower GDP per capita, such as Niger and Malawi, would see a smaller improvement, despite their governance rank being below the average for the region. By contrast, economies like Rwanda, which have made similar improvements to Côte d’Ivoire, would also only realise a small benefit, with greater gains made through further diversification of their economies. The forecast also notes strong regional differences in economic growth across the continent.
Trade integration and growth: evidence from Sub-Saharan Africa (World Bank)
This paper examines the growth effects of different dimensions of international trade integration - notably, volume, diversification, and natural resource dependence - in Sub-Saharan Africa. First, the paper documents the recent trends in these foreign trade dimensions for the region and the traditional sources of growth. Second, it empirically estimates the impact of trade integration on growth per worker and the sources of growth; that is, growth of capital per worker and total factor productivity growth. To accomplish this task, the analysis uses a sample of non-overlapping five-year period observations for 173 countries from 1975 to 2014. [The authors: César Calderón, Catalina Cantú]
Measuring progress: Financial inclusion in SADC - 2018 (pdf, FinMark Trust)
By design, this first-year monitoring and evaluation report in the selected implementation countries (Botswana, Eswatini, Lesotho, Malawi) in the SADC region does not include all of the elements of the National Financial Inclusion Roadmaps and Strategies, in order to allow them to be developed with additional collaboration and engagement of the participating donors and agencies along with private sector consultation. Despite relatively high levels of financial inclusion, mostly achieved over the last 10 years, FinScope demonstrates large numbers of people that remain excluded from financial services and a trend of more people (45%) making use of informal financial services. Formal inclusion has remained at 54% between 2015 and 2017, while those that have been banked has actually reduced. While the headline numbers show that more than half the population in SADC countries are included, the underlying data shows we still have a long way to go in formal inclusion, with figures remaining constant as people have not migrated to the formal sector. [Related: Understanding remittances from Botswana to Zimbabwe (pdf), Amadou Sy: Going up the value chain of fintech in Africa]
EAC states waver on a freely convertible currency regime (The East African)
Efforts by central banks in East Africa to ensure full convertibility of regional currencies and reduce reliance on the US dollar are facing hurdles even as it emerges that banking regulators had planned to implement the project in September. Member countries are still reluctant to pay as well as receive payments in regional currencies — a move likely to hinder regulators’ efforts to set up a system of tradeable currencies ahead of a single currency regime in 2024. Latest data from Kenya’s Central Bank shows that the country has dominated transactions in the East African Payment System which allows citizens of member countries to make and receive payments in the Kenyan shilling, Ugandan shilling, Tanzanian shilling, Rwandan franc and Burundian franc. [Central Bank of Kenya: Annual Report 2018 (pdf): During the period under review, 16,161 messages were sent (via EAPS) worth about $2.413bn. Kenya was leading in the EAPS utilisation with 8,053 messages worth $2.377bn which represents 98.4% value utilisation and 49.8% volume utilisation.]
ECOWAS moves to ensure biosafety in the region
The preliminary draft regulations on biosafety in West Africa have been validated by ECOWAS Ministers in order to address the challenges related to the use of modern biotechnologies and their potential impacts on the environment, human and animal health and socio-economic and food security in the region. The representatives of the Ministers who met on 17 May in Abuja, called on member states to effectively implement the regulations when adopted by the ECOWAS Parliament and the statutory Council of Ministers. Furthermore they urged the ECOWAS Commission to collaborate with member states and other regional organizations to develop information mechanisms on the regulations and contribute towards the mobilisation of funds necessary for its implementation.
From bilateral trade to centralised markets: a search model for commodity exchanges in Africa (IGC)
Several African countries have recently centralized their agricultural markets by launching a commodity exchange. What would be the impact of such a move? Who will be the winners and the losers? This paper develops a simple search model for understanding the impact of a commodity exchange in a market where traders and farmers search and bargain to trade. We study the efficiency gains from moving from the status quo trading regime to trading under a commodity exchange system. [The authors: Yaw Nyarko, Heitor S. Pellegrina; Kenya to embrace technology to boost rice production]
Selected perspectives on global trade dynamics
(i) Trade weakness to extend into second quarter, WTO indicator suggests. World trade growth is likely to remain weak into the second quarter of 2019 according to the WTO’s latest World Trade Outlook Indicator (pdf). The new WTOI reading is 96.3, exactly as it was in the previous release in February this year, maintaining the weakest level since 2010. The latest result of the WTOI was driven by declines in all but two component indices. Indices for international air freight (92.3), automobile production and sales (92.2), and agricultural raw materials (92.4) fell further below trend. The index for container port throughput (101.0) also declined but remained above 100, suggesting growth in line with recent trends. Indices for export orders (96.6) and electronic components (96.7) appear to have bottomed out, even as both remained firmly below-trend.
(ii) WTO's Dispute Settlement Body: items proposed for 28 May meeting (pdf)
(iii) US seeks to join Japan-India consultations on IT product tariffs
(iv) Philip Lowe (Governor, Reserve Bank of Australia): The economic outlook and monetary policy
(v) DIT's Liam Fox: City Week address
(vi) Richard Baldwin: Globalisation, automation and the history of work - looking back to understand the future
TFTA update: Countries fail again to agree on trade access
EAC consultative meeting on air transport concludes
Expedite climate change Bill, EALA legislators tell EAC Ministers
Zambia: Car inspections increase prior to importation
India's apparel exports to UAE decline 33% on higher import duty
The New Economy: The challenges facing blockchain adoption in global trade
AfDB EOI: Technical assistance for capacity building of Zambia Revenue Services Customs Division Services
UNIDO: Certification of measuring instruments (pdf)
Exploring carbon pricing in developing countries: a macroeconomic analysis in Ethiopia
OECD: Analysis of long-term challenges for agricultural markets (pdf)
Related News
tralac’s Daily News Selection
tralac's April newsletter was published earlier today: it contains a wide variety of AfCFTA-relevant commentaries and resources
A select listing of African trade events:
(i) Underway in Addis: Strengthening food safety capacity for reporting in the Biennial Review. The workshop (20-22 May) will bring together food safety experts from the AU member states for a comprehensive training on data collection and computing for the Africa Food Safety Index.
(ii) Starting tomorrow, in Nairobi: GTR East Africa 2019. An insightful view of the East African trade landscape, featuring in-depth analysis of geopolitical and macroeconomic trends, regulatory and finance sector developments, and the trade financing and risk mitigation techniques being utilised throughout key regional value chains, from agribusiness to oil and gas and value-add manufacturing sectors.
(iii) Zambia National Consultative Forum on the AfCFTA (23-24 May, Lusaka). The Forum is part of a wider programme to develop a national AfCFTA Implementation Strategy, which includes a nation-wide consultation from 27-31 May.
(iv) AUC, Coalition for Dialogue on Africa joint stakeholder dialogue on continental trade and strengthening implementation of the AfCFTA (27-28 May, Addis Ababa)
(v) TIPS Forum 2019: Innovation and Industrialisation (30-31 May, Johannesburg). What then is South Africa’s ability to adapt and respond to technological change and especially discontinuous technological change?
(vi) Extending pension coverage to informal sector workers in Africa (29-31 May, Cotonou). The workshop will bring together government officials from pension institutions, ministries and supervisory agencies from 12 countries and two regional institutions (Benin, Côte d'Ivoire, Ghana, Ethiopia, Kenya, Liberia, Namibia, Nigeria, Rwanda, Senegal, Sierra Leone, Uganda) as well as representatives of regional the supervisory organizations in West Africa.
(vii) Tanzania Investors’ Forum (5-6 July, Mtwara). Download the advance document: Regional profiles of cashew nut production and processing investment opportunities
Debt vulnerabilities in Africa: AfDB, World Bank high-level consultative meeting
Representatives from four African countries today called for a balanced approach to growing debt vulnerabilities to help low-income African countries meet their commitments to lenders. Adama Koné, Minister of Finance, Cote d’Ivoire, praised the World Bank and the IMF for their assistance but appealed for more “innovative and strategic sources of funding.” “We want to have CFA-denominated bonds on markets. Since we are not known, we have to pay a premium. If we have a guarantee mechanism, this will allow us to issue those bonds at a lower price,” he said during a panel discussion. Representatives from Zambia and Senegal said they were taking steps to address their debt situation, while Richard Evina Obam, Minister Finance, Cameroon, supported the call for broader sources of financing, including the Islamic world. Charles Boamah, Senior Vice-President of the AfDB, said the dialogue around debt sustainability “couldn’t come at a better time.” “It is at the center of many conversations taking place currently. We here at the African Development Bank are engaged in a couple of very important discussions - a 7th General Capital Increase and the 15th replenishment of the African Development Fund,” Boamah said in his opening remarks. [Akihiko Nishio: Facing substantial investment needs, developing countries must sustainably manage debt]
Pamela Coke-Hamilton: We must help developing countries escape commodity dependence (UNCTAD)
Commodity dependence is not rare. Around 54% of all countries, or 102 out of 189, are commodity-dependent. However, only 13% of developed countries - including Australia, New Zealand and Norway - are in this situation. In contrast, this share increases to 64% for developing countries, and is higher still - at 85% - for the world’s least-developed countries. In other words, export concentration of primary commodities is linked to underdevelopment; the higher the dependence, the lower the country’s development, measured by its GDP per capita. In some cases, the dependence is extreme. There are 35 countries in the world for which more than 90% of their exports are commodities. For Angola, Iraq, Chad, Guinea-Bissau and Nigeria, this share surpasses 98%, and in some instances a single product constitutes more than three-quarters of all export revenue. The problem is not dependence per se, but the vulnerability it entails. The recent commodity price downturn is a case in point.
ECA pledges practical support to Angola’s economic reform (UNECA)
The ECA has established three work streams aimed at supporting Angola on its sustainable development trajectory and macroeconomic reform agenda, following the accession to power of President João Lourenço in September 2017. A series of high-level talks with Angolan authorities culminated with discussions at the Presidential palace in which four main areas of cooperation were agreed. These include: supporting Angola restore macroeconomic stability and diversify its economy within the context of the country’s National Development Plan 2018-2022, improving public debt management, increasing the share of renewable energy in the country’s energy mix and capitalizing on the opportunities of the African Continental Free Trade Area.
ITC facilitates China-Ethiopia investment plans worth over $2bn (ITC)
On the margins of the second Belt and Road Forum in Beijing from 26-27 April, the Chinese investors and the Ethiopian Investment Commission signed MoUs to engage in agro-processing and manufacturing investment projects. ITC’s Partnership for Investment and Growth in Africa initiative had worked with both the Ethiopian and Chinese stakeholders to help bring the deals to fruition. The planned investments include a large-scale bamboo development and pulp-paper manufacturing plant to be set-up in Assosa, the capital of Ethiopia’s western Benishangul-Gumuz region; a pharmaceutical plant in Kilinto Industrial Park, south of the capital; and a fully integrated livestock and meat processing park in Addis Ababa.
Nigeria and the AfCFTA: extract from an interview with Nigeria's Minister of Industry, Trade and Investment, Dr Okechukwu Enelamah (Leadership)
Now, having finished that work, the president now asked for impact assessment, the pros and cons. So he set up a committee chaired by myself and the chief of staff to the president, basically to oversee a technical group. I am hopeful that the president will sign the agreement which includes remedies and plan of action and how we will engage and make the most of it. The point is let’s do it well and I think Nigeria has such strategic importance. By doing it well, we can provide leadership. [Confirmed: Egypt bids to host AfCFTA's executive office, says legal adviser of AU]
Kenya: Alarm over bill barring raw coffee export (Business Daily)
A Bill seeking to bar export of raw coffee has caused jitters, with some international buyers avoiding to sign further contracts with local suppliers for fear they might not get the produce. An official at the Nairobi Coffee Exchange says some of the overseas buyers were shying away from new agreements for clean coffee because of uncertainties over the fate of the Crops Amendment Bill by Gatundu South MP Moses Kuria. The Bill proposes that all coffee grown in Kenya undergo processing, production and packaging locally. “Buyers are refusing to sign orders for clean (American green) coffee as they do not know what will happen in the future, with fears that they are likely to lose out on their orders,” said an official at NCE who sought anonymity so as to speak freely. The proposed amendment to the Crops Act says the product may only be distributed, marketed or exported in its fully processed form. [Jobs at stake as KEBS bans import of used car parts]
Revamping Ghana's poultry sector: Will the policies ever work? (Graphic)
Over the past decade, the government has initiated at least five separate strategic policies and programmes targeted at building the capacities of local poultry farms to meet the country’s increasing demand for poultry products. The Livestock Development Policy and Strategy document, which spans a period of 10 years (from 2016 to 2025), also shares in the agenda of reducing livestock imports drastically by empowering local producers to become competitive. Three years into the programme, it appears the poultry sector has not benefitted from the initiative, with the Ghana National Association of Poultry Farmers bemoaning that local producers accounted for only five per cent of the about 300,000 tonnes of chicken consumed annually. Demand for broiler meat in Ghana is ever increasing. Meanwhile, domestic supply remains mostly stagnant, allowing imports to fill the gap.
India looks to fight alone at WTO on global e-commerce rules (Times of India)
Much to its embarrassment, the government had to drop a mention of the issue in a declaration issued after the mini-ministerial meeting hosted by it here last week with only South Africa on its side.
Chinese envoy: No Kenyan assets have been mortgaged for SGR loan
Kenya: National shipping line revival plan signals lower freight costs
Nigeria: What is wrong with importing toothpicks?
Wandile Sihlobo: US-China trade row - SA should hold course on agriculture exports
Uganda: AGOA 101 guide (pdf)
East Africa Trade Hub: Women cross border traders develop trade commitments at Hub-supported B2B meeting
UNCTAD: A framework for science, technology and innovation policy reviews
Related News
tralac’s Daily News Selection
African trade policy events to note:
An EAC experts meeting on the AfCFTA takes place today (by video conference)
Botswana Competition Policy Peer Review Report dissemination events (20-23 May, Gaborone)
EAC trade in services meeting; export promotion strategy meeting (both on 24 May, by video conference)
Mauritius hosts first ACP private sector development information, knowledge sharing event (ACP)
The ACP Secretariat has launched a series of regional meetings aimed at boosting ACP private sector information, developing knowledge sharing and networking. As an integral activity of the Joint ACP-EU Private Sector Development Framework, these events are organised with technical support from Business ACP - the ACP Private Sector Development Platform and the European Commission. This is particularly useful at this point in time, as several new intra-ACP projects and substantial private sector financing facilities are being launched or expanded, namely under the 11th European Development Fund and the European External Investment Plan. Mauritius hosted the first information and knowledge sharing workshop (14-16 May).
EALA approves key report on agriculture, demands additional funds for sector (EALA)
The regional Assembly has again reiterated the need for partner states to implement the Malabo Declaration as a means to ensuring food security and transformation of the sector. With that, the Assembly at its sitting late yesterday approved the report of the Committee on Agriculture, Tourism and Natural Resources on budgetary enhancement in the agricultural sector. The report presented to the House by the Chairperson of the Committee, Mr Mathias Kasamba, states that despite its potential, the agriculture sector has been growing slowly over the years and continues to attract limited funding from governments, far below the continental benchmark of 10%. Moreover, partner states are yet to put in place action plan(s) for attaining the 10% budgetary allocation to the sector. The report reveals a number of challenges within the Partner States, while saying that many Partner States can address some of the challenges given the fact they are at an advanced stage of preparation of their 2019/2020 national budgets. [Rwanda: Could Bank of Kigali’s intervention turn agriculture sector around?]
Ethiopia Economic Update: Poverty and household welfare in Ethiopia 2011-2016 (World Bank)
Ethiopia’s real GDP growth, while still strong, decelerated to 7.7% in FY2018. A slowdown in industrial growth, mainly driven by lower growth in construction due to foreign exchange shortages and higher prices of imported construction materials, coupled with weaker performance of the manufacturing and the agriculture sectors, explains to a large extent the growth deceleration. Services sector exhibited strong growth in FY2018 while manufacturing underperformed. In addition to the prevailing structural- and trade logistics–related challenges, severe foreign exchange shortages and political unrest affected the manufacturing sector over the past three years, with the magnitude of the effect peaking in FY2018. As a result, manufacturing growth has dropped drastically, from 24.7% in FY2017 to 5.5% in FY2018. Large and small-scale industries underperformed dramatically. By contrast, growth of services increased from 7.5% in FY2017 to 8.8% in FY2018, with real GDP growth driven mainly by services (3.4%). Agricultural growth decelerated from 6.7% in FY2017 to 3.5% in FY2018, mainly due to slower growth of crop production. On the demand side, government and private consumption declined by about 1 percentage point each.
Integrating Kenya’s micro and small firms into leather, textiles and garments value chains: Creating jobs under Kenya’s Big Four agenda (ODI)
This study (pdf) aims to support Kenya’s Executive Office of the President by suggesting ways to better integrate leather, textiles and garments MSMEs into value chains, economic zones and industrial parks. It concludes that Government should focus on three priorities, including restructuring MSME institutional support structures, introducing dedicated MSME incubator programmes and involving county governments in MSME support. We suggest three priority actions for the Executive Office of the President: Restructure MSME support structures such as MSEA by feeding into current reviews by the Government of Kenya; Introduce more and better-dedicated incubator and accelerator programmes; Involve county governments:
Creative industries in Rwanda: digital paths to global markets (ITC)
Developing countries may not be the first thing that comes to mind when the topic of digital trade arises. Exports of products such as music and film are seen to be dominated by wealthy economies. But Rwanda’s creative industries are actively exporting to the international market, showing that digital pathways offer new avenues in the global economy. That is a key finding of a new International Trade Centre report that examines how music and film companies in Rwanda are exploring ways to expand sales at home and abroad. The report Creative industries in Rwanda: digital paths to global markets (pdf) offers case studies that illustrate how micro, small and medium-sized enterprises in the Rwandan music and film sectors are overcoming challenges and selling digitally to a global market. In Rwanda, cultural and creative industries represented 5.3% of the gross domestic product in 2016. This share is above the regional average of 1.1%, and exceeds the roughly 3% share in both the United States and the European Union. [Rwandan government agencies, ITC to strengthen capacity of small businesses to use e-commerce]
Nigeria: CBN inaugurates committee to revive textile industry (ThisDay)
The Central Bank of Nigeria has set up a committee for the revival of the country’s cotton, textile and garment industry, with the mandate to revive a minimum of 50 textile firms by 2023. However, in the short-term, the apex bank plans to revive 20 textile firms within the 2019 fiscal period. Citing the whopping $4bn spent annually on importation of textile materials into the country, the apex bank had in March, added all forms of textile materials to the list of items that are not eligible for foreign exchange from the official windows, thereby restricting the sale of forex to textile importers. The CBN Governor, Mr Godwin Emefiele, while inaugurating the committee in Abuja, yesterday, further expressed concern that the country loses $2bn annually to textile smuggling and export, stressing that it was time the country revived the sector in order to take advantage of the massive opportunities therein.
Kenya: Beauty firms blame port delays for stock-outs (Business Daily)
Importers and manufacturers of high-end cosmetics have reported biting stock shortages in recent months attributed to delayed clearance of goods and raw materials at the port. Global cosmetic firms Yves Rocher and Madora - the importer of Chanel and Dior products - are among those hard hit by the delays, which have seen them suffer huge financial losses as well as attrition of customers who have opted for alternative products. Shipments for retailers that would ordinarily take two to three weeks to clear are now taking as much as two-and-a-half months to three months as the government enforces a crackdown intended to net counterfeit products as well as catch tax evaders. “In the last year, Kenya has become one of the most difficult jurisdictions in the world for clearing international goods. We apologise for the temporary stock-out of some of our products, while we navigate this unprecedented regulatory uncertainty,” said a notice to customers by Yves Rocher.
South Africa: Truckers blockade Durban container terminal (IOL)
Hundreds of truck owners blocked roads leading to the Durban Container Terminal yesterday morning causing huge traffic backlogs in the south of Durban. Truckers embarked on a blockade limiting access to both Bayhead and Langerberg roads in frustration over several issues, including the long hours they have to spend waiting to enter the terminal. Truck owner Adhil Chunder said they wanted a 90-minute turnaround time for trucks. He said the turnaround time frame was stipulated in an agreement that had been in place for the past 10 years, but had not been adhered to. Chunder added that truck drivers had to contend with deplorable conditions while waiting to load.
Mozambique and the IMF: Request for bisbursement under the Rapid Credit Facility, Staff report, Debt Sustainability Analysis
The damage to infrastructure has severely impacted productive capacity in key economic sectors in the central region of Mozambique. Preliminary projections suggest that real GDP growth in 2019 would decelerate to a range of 1.8% to 2.8% - down from a pre-cyclone projection of 3.8% - owing mainly to significant losses to agricultural production and disruptions to transport, communications and services. Given the adverse supply shock to food availability in Beira and neighboring districts, end-of-period inflation is now projected to pick up to 8.5% in 2019 - up from a precyclone projection of 5.5% - as the metropolitan region of Beira accounts for about one-fifth of the national CPI.
Emergency assistance and reconstruction efforts will add pressures to an already tight budget. The authorities are committed to reallocate resources to emergency, critical spending in cleanup, quick-wins in the reconstruction effort, and increased social assistance to the most vulnerable, including shelter, clean water and food. The fiscal primary deficit after grants is projected to rise to 2½ percent of GDP in 2019 - one percentage point of GDP higher than earlier projected. The adverse effects of the cyclone will affect the fiscal accounts both through lower tax collections and higher spending related to emergency relief and reconstruction. The bulk of the needed additional spending, however, will have to be covered by external grants. A large gap in the BOP is expected. The non-megaproject current account deficit is estimated to narrow less than projected before the cyclone, to around 13¼ percent of GDP in 2019, from 15¼ percent of GDP in 2018. Replacement for locally-grown foodstuffs, such as rice and maize, and reconstruction materials along with expected decreases in export receipts, including from Beira port services, will create a very significant BOP gap. While external grants are expected to cover most of the external financing shortfall, the authorities aim to close the remaining BOP gap projected for 2019 with the requested RCF disbursement.
AfDB hosts pan-African dialogue on achieving climate change goals for adaptation and mitigation
The AfDB hosted (15-16 May, Abidjan) the first-ever conference for exchange and cooperation between national and local authorities in Africa to address climate issues and support decentralization territorial approach of Nationally Determined Contributions. Ministers, mayors and heads of African municipalities explored opportunities for cooperation and mutual assistance in a “Structured Dialogue” conference convened by the Climate Task Force of the United Cities and Local Governments of Africa, in partnership with the European Commission and the AfDB.
Today’s Quick Links: WBG releases Little Data Book on Gender World Bank: Combining growth and gender diagnostics for the benefit of both Implications of E-commerce for Competition Policy: OECD posts two documents summarising debate at its June 2018 roundtable |
Related News
tralac’s Daily News Selection
Djibouti-Addis Ababa-Juba-Kampala Corridor: IGAD wraps up development studies
The Executive Secretary of IGAD, Amb Mahboub Maalim, along with the Director for Transport, Infrastructure Development of the Ministry of Transport of Ethiopia, Mr Fekadu Shumet, yesterday inaugurated a steering committee meeting on the Transport Facilitation and Road Upgrading Studies for the Djibouti-Addis Ababa-Juba-Kampala Corridor. The two-day meeting in Nairobi is meant to wrap-up the development studies for the corridor and provides an opportunity for concerned IGAD Member States (Djibouti, Ethiopia, South Sudan, Uganda) and the IGAD Secretariat to chart the way forward to implement the recommendations of the studies on the feasibility of the corridor, undertaken by the Nairobi-based Africon Consulting firm. The study strongly recommends the implementation of the Corridor after carefully analysing the two components of the project and found that both components are technically and economically feasible as they scored high economic indicators. The soft part, the feasibility study, of the project has been successfully concluded. The participants are looking into the hard part of it, which is the implementation part.
Evolving peace trends and regional integration: opportunities for revitalizing IGAD
Strategically positioned at the major geopolitical and geo-economic nexus of the Red Sea and the Suez Canal, the IGAD region belongs to the African and Middle Eastern economic, religious, historical, migratory, trade and security zones. It possesses a long coastline with deep natural ports and a busy maritime domain that links Africa, the Middle East, the Far East, and Europe. The presence of four peacekeeping missions with more than 50,000 that comprise of the UN and AU peacekeeping troops (Darfur-Sudan, Abyei, Somalia, South Sudan) and of hundreds of thousands of foreign military forces, accentuates the peace and security challenges of the IGAD region. This policy brief examines whether or not these ongoing changes in the region present opportunities for another round of revitalization of IGAD institutions, and if so, what areas of IGAD should be transformed. The policy brief outlines key points concerning the requisite processes and concludes with a series of recommendations for a further phase of institutional revitalization. [The author: Mehari Taddele Maru; Download related TANA Forum 2019 documentation]
Tapping the potential of Kenya’s transport services for regional value chains (UNCTAD)
UNCTAD and Kenya’s Ministry of Industry, Trade and Co-operatives conducted a national seminar in Nairobi (14-15 May) to build the capacity to harness Kenya’s transport services to boost regional value chains. More than 25 participants from 15 Kenyan public and private sector entities participated in the seminar. “Small and medium-sized enterprises are crucial for the trade of services in Kenya,” said Joyce Ogundo, the country’s secretary of trade. “We must enhance their integration into global value chains to boost economic development.” Several participants emphasized the importance of mapping transport services, especially in relation to horticulture and tea value chains, Kenya’s key merchandise export sectors. “Our project seeks to enable Kenya to get a better picture of how transport services feed into regional value chains and how much of the value is added by domestic and foreign operators,” said Paul Akiwumi, director of UNCTAD’s division for Africa and least developed countries. Besides Kenya, UNCTAD and the UNECA are supporting five other countries – Ethiopia, The Gambia, Mali, Nigeria and Togo – to better measure the contribution of specific services to regional value chains to inform policymaking.
Mauritius National Leather Value Chain Strategy for 2019-2023: update (GoM)
The Mauritius National Leather Value Chain Strategy for 2019-2023, an integral part of the reform for the leather sector, was presented to key stakeholders in presence of the Minister of Business, Enterprise and Cooperatives, Mr Soomilduth Bholah, the CEO of the SME Mauritius Ltd, Mr Rabin Rampersad, and the consultants from the Africa Leather and Leather Products Institute during a validation workshop at the Voila Hotel Bagatelle. In his address, Minister Bholah highlighted that the national strategy will serve as a guide for designing policy instruments and activities to support different players in the leather supply chain. This initiative, he said, was undertaken due to signs of contractions in the number of enterprises and employment rates in the leather sector in Mauritius
South Africa: Court action suspended, parties agree on more transparency in chicken industry (IOL)
The Association of Meat Importers and Exporters (AMIE) and the South African Poultry Association have agreed to lift the veil of secrecy on “confidential” documents on which the protectionist application on chicken imports is based. In a statement in Wednesday AMIE, which had launched the court action, said the move to lift the veil of secrecy effectively averted a protracted court battle. AMIE had previously argued that the public right to information on a tariff application that could impact on the affordability of a major food source had to be considered. Paul Matthew, CEO of AIME: “Backing our call for transparency in this matter is the fact that local chicken broiler producers have, since a downturn in 2016, experienced increasing profitability. During 2018, the local sector recorded record profits.” [Francois Baird: Chicken industry can stem the tide of unemployment]
Market integration will ensure Africa’s prosperity – Museveni (New Vision)
Transform Africa Summit: selected updates
-
Africa’s Digital Economy opens new markets. With Africa’s digital economy taking off exponentially, the continent is ready to meet the consensus of the AfCFTA, panel members told a packed auditorium in Kigali at the opening of Transform Africa Summit 2019 on Tuesday. Key to this effort will be connectivity, data and digitization and innovation among others, the conference heard. AfDB Vice President, Private Sector, Infrastructure and Industrialization Pierre Guislain said One Stop Border Posts will accelerate intra-African trade, but openness and competition need to be promoted and defended. Indeed, some vested interests may fear this openness and may keep it from happening. “We need to measure the speed of movement along Africa’s major trade corridors and ensure any remaining bottleneck gets removed,” he added. Africa also needs more private sector African champions - companies that have done well nationally and are ready to expand regionally and beyond.
-
Kagame, Uhuru and Keïta call for common African ICT agenda. African countries have a better chance to benefit from the digital revolution through collaborating as opposed to working as separate entities, Heads of State attending the Transform Africa Summit have said. The summit, which opened in Kigali yesterday, was attended by Presidents Paul Kagame, Uhuru Kenyatta of Kenya and Ibrahim Boubacar Keïta of Mali. President Kagame said that collaboration was a sure way to navigate through the complex global dynamics in regards to the digital agenda. He said that it would be wise to steer away from the tendencies that have often divided the continent. President Kagame added that with the AfCFTA now in force, the continent ought to keep industrialisation and technology agendas in close alignment to make the best of both trends.
-
President Kenyatta unveils digital economy blueprint. President Uhuru Kenyatta of Kenya on Wednesday unveiled a blueprint for his country’s digital economy, which he said could be a guiding tool for the adoption of digital technologies for Africa’s transformation. “It is intended as a framework to guide us as we accelerate the adoption of digital technologies. I hope all countries will find value in contextualising this framework to their specific ecosystems so as to realise the full potential of our digital transformation,” the President noted as he launched the blueprint at the Transform Africa Summit in Kigali.
Commodity dependence: A 20-year perspective (UNCTAD)
Commodity dependence affects developing countries almost exclusively, according to the report. It affects 85% of least developed countries, 81% of landlocked developing countries and 57% of small island developing states. With 89% of countries in Sub-Saharan Africa being commodity-dependent, it is the hardest-hit region. It is followed by the Middle East and North Africa, where 65% of countries depend on commodities. Half of the countries in Latin America and the Caribbean, and half of the countries in East Asia and the Pacific are also commodity dependent. Commodity dependency is also persistent, according to the report. The dominant groups of exported products changed in only 25% of countries between 2013 and 2017, partly due to changes in commodity prices. The number of countries dependent on the export of agricultural products declined from 50 to 37 between the 1998-2002 and 2013-2017 periods. The number of mineral-dependent countries steadily rose, from 14 to 33, while the number of energy-dependent countries increased from 28 to 32.
Profiled chapters (pdf): Commodity dependence around the world; An empirical exploration of the link between income level, export concentration and commodity dependence; The evolution of world commodity dependence, 1998–2017, and the commodity price cycle; Did CDDCs diversify their exports and productive sectors between 1998 and 2017?; Commodity price bust, GDP growth and external debt in CDDCs; Conclusions and brief policy discussion; Annex 1: The 50 most commodity-dependent countries
Tanzania: Cursed before production? (CMI)
Big discoveries of high value natural resources can have negative economic, political, and social effects long before full production of a resource begins. While Tanzania has already experienced some tensions around the country’s gas discovery, there is consensus among scholars and practitioners that the country has thus far generally avoided experiencing economic and political problems because of the discovery. Political risks remain, however, and continued immunity to the pre-source curse, and ultimately to the resource curse, will require ongoing, sound political decision making about how to react to the promise of potentially large future resource revenues. [Related CMI briefs: Civil society’s role in petroleum sector governance: the case of Tanzania; Petroleum’s potential impact on future state-society relations in Tanzania]
ITFC hosts 1,320 bilateral meetings through ‘bridges’ programme (Trade Arabia)
The International Islamic Trade Finance Corporation , a member of the Islamic Development Bank Group, reported a total of 1,320 bilateral meetings and 200 deals under discussion through its flagship programme: the Arab Africa Trade Bridges Program. The deals were at an Agri-food Trade Forum held recently in Dubai, in collaboration with Dubai Exports. The two-day forum promoted trade and investment between African countries and the UAE and eight other Arab Countries. Attended by 40 companies from 15 African countries, in addition to 70 companies from the UAE and Arab countries, the event focused on how to increase the import and export of Agri-Food products. Agri-food companies from Mauritania, Senegal, Cote d’Ivoire, Mali, Niger, Burkina Faso, Nigeria, Benin, Gabon, Sudan, Uganda, Ethiopia, Somalia, Kenya and Mozambique were among the participants in the forum. [Arab Africa Trade Bridges Program: documentation]
Today’s Quick Links: RwandAir to commence flights to China’s Guangzhou in June Zimbabwe: Government drafts quality policy ECOWAS, GIZ meet in Abuja to strengthen cooperation UNCTAD: A framework for science, technology and innovation policy reviews McKinsey discussion paper: Tech for Good – smoothing disruption, improving well-being |
Related News
tralac’s Daily News Selection
African trade events to diarise:
-
Intra-African Trade Fair (IATF) 2020 (1-7 September 2020, Kigali)
-
World Export Development Forum 2019 (18-22 November 2019, Addis Ababa). The WEDF will take place during Africa Industrialization Week, with sessions designed to help business make the most of the newly-ratified AfCFTA. It will be co-hosted by the International Trade Centre and Ethiopia’s Ministry of Trade and Industry.
The Transform Africa Summit began today in Kigali: Sophia, the famous humanoid robot featured in the opening session
The robot made remarks during the opening ceremony alongside President Paul Kagame and International Telecommunication Union Secretary-General Houlin Zhao, among others. Designed by Hong Kong firm Hanson Robotics, Sophia was programmed to speak English, French, Swahili and Kinyarwanda. In her brief remarks, Sophia, who is a Saudi citizen, said that technological advancements had brought realities such as artificial intelligence and machine learning closer to realization. She said that through technology, Africa has an opportunity to get past challenges in sectors such as healthcare, agriculture and education provision. “Right here in Rwanda, you have cashless payments for public transport, ride hailing apps for safety and online services to access government services,” she said.
Middle East becomes largest market for Uganda’s exports (Daily Monitor)
The Middle East has toppled COMESA as Uganda’s number one destination for the country’s exports for the month ended March, according to a Bank of Uganda report. The report released last week, indicates that in March, Uganda’s export revenue from Middle East grew to Shs990b up from Shs290b in February. This represented a 70% increase from what the country earned in the region in February. Most export receipts from Middle East came from United Arab Emirates taking a share of $259m (Shs976b). According to experts, Uganda’s increase in gold and food exports to the Middle East could explain the increase in receipts. Mr Elly Twineyo, the Uganda Export Promotion Board executive director, said the trend will persist because of gold exports to the region and the blockade placed on some products from entering the European Union due to failing standards.
Tanzania’s coffee production likely to drop by 23% (IPPMedia)
Africa’s fourth-biggest coffee producer, Tanzania said the overall production in coffee would drop by 23% in the next period due to delayed rainfall in northern regions, according to the Tanzania Coffee Board. The crop for the season that starts in July may decline to 50,000 tons, the Tanzania Coffee Board said Monday in an emailed response to questions. After missing earlier targets to boost production, the country has said it’s considering distributing seedlings to farmers in an effort to double supply in five years. Arabica coffee accounts for more than half of Tanzania’s output, and it mainly ships coffee to Japan, Italy, the US and Belgium.
EAC-German Business and Investment Dialogue urges EAC to streamline regional trade
The EAC has been urged to prioritize collaborative approaches that will see supply chains strengthened across borders and governments laying the groundwork for the ease of movement of goods and people in the region. Addressing the forum on behalf of the EAC Secretary General, Amb. Liberat Mfumukeko, the Deputy Secretary General in charge of Productive and Social Sectors, Christophe Bazivamo, said the draft EAC Investment Policy which is currently under consideration by the Council of Ministers, envisages a transformed upper middle-income EAC that is a competitive common investment area with a more liberal, predictable and transparent investment environment. Bazivamo told the participants that the investment policy lays ground for partner states to cooperate in investment promotion, facilitation, liberalization and protection of cross border investment. “Partner States are to streamline and simplify administrative procedures related to investments, promote and maintain dialogue with the private sector and exchange business information,” he added.
ECOWAS Commission urges harmonised strategies and collective expertise to tackle regional security
The Commission’s Commissioner for Political Affairs, Peace and Security, General Francis Béhanzin, made the call during the opening of a Annual General Assembly of the West African Police Chiefs Committee. Commissioner Béhanzin, representing the President of the ECOWAS Commission Jean-Claude Kassi Brou, remarked that conventional approaches may be inadequate in meeting the challenges confronting the region which were highlighted to include drug trafficking, proliferation of illegal small arms and light weapons, cybercrime, money laundering and growing trend in terrorism, among others. He called on the Police Chiefs to bring on board their “collective expertise and experiences together to further reflect on how best to overcome these challenges and ensure effective enforcement of existing policy frameworks for eliminating them”. [Nigeria farmers form vigilante groups to confront bandits]
South Africa: 4IR Presidential Commission update (GCIS)
The department has indeed commenced some of the groundwork towards preparing South Africa for the Fourth Industrial Revolution. We began engagements with stakeholders to identify various enablers that could help us derive the benefits that come with technological innovations and developments relating to 4IR. That is how we were alerted to the Value-at-Stake Framework, which was developed in partnership with the World Economic Forum. Without going deeply into the Framework, its key finding is that digital technologies can generate more than R5 trillion in value for industry, consumers and society in South Africa. The work that is currently underway uses the term of Regulatory Remodelling for a 4IR economy. We are making concerted efforts to assist government to gravitate towards certain obligatory steps, standards and principles that should provide guidelines for every government department to function within the realm of the Fourth Industrial Revolution. Central to all that will be a department that ensures that there are critical enablers, amongst which would be the following: [Address by Minister Stella Ndabeni-Abrahams to the Commission]
Business leaders task Nigeria on industrial revolution (The Guardian)
Business leaders are worried about the slow pace movement of Nigeria towards the fourth industrial revolution, otherwise known as Industry 4.0. The leaders from the Lagos Chamber of Commerce and Industry noted that the fourth industrial revolution is here, “but can we say we are prepared,” they queried. The President of LCCI, Babatunde Ruwase, noted that fourth industrial revolution is a topical issue Nigerians and Africans as a whole are not taking seriously, which may have far-reaching implications in the country and Africa in general. Therefore, to awaken the Nigerian spirit, Ruwase said LCCI’s yearly ICTEL EXPO and conference would focus on the issue. The expo holds between 16-17 July in Lago on the theme as ‘Fourth Industrial Revolution: Implications for the Nigerian Economy.’
Digital disruption in financial markets (OECD)
This paper surveys the technological disruption in banking examining its impact on competition and the potential to increase efficiency and customer satisfaction. It analyses the possible strategies of the players involved, incumbents, FinTech and BigTech firms, as well as the role of regulation. The industry will see a radical transformation and restructuring, and will move towards a customer-centric platform-based model. Competition will increase as new players enter the industry but the long run impact is more open. Regulation will influence decisively to what extent BigTech will enter the industry and who will be the dominant players. The challenge for regulators will be to keep a level playing field striking the right balance between fostering innovation and preserving financial stability. Consumer protection concerns raise to the forefront. [The author: Professor Xavier Vives]
Two consultancy opportunities: AfDB, World Bank
-
Sustainable market access for African road transport: AfDB EOI. The ADB seeks the services of a consulting firm with qualified professionals for the elaboration of the SMART Study Report “Sustainable market access for African road transport”. The study will examine the market access systems for international road freight transport in Africa and will propose innovative models for introducing a multilateral access license quota system for international road freight transport in Africa. Moreover, the report will propose a methodology to assess corridor management and performance in Africa. The estimated duration of the services is four months. [AfDB’s Infrastructure and Urban Development Department: Annual Report 2018]
-
Strengthening DRR coordination, planning and policy advisory capacity of SADC: procurement plan posted by World Bank
Jack Hughes: Canada should invest time in South Africa (iPolitics)
The African National Congress’ victory in last week’s South African elections all but ensures that President Cyril Ramaphosa will attend next month’s G20 summit in Japan. Prime Minister Justin Trudeau should seek a bilateral meeting with him in Osaka and use it to invite Ramaphosa to undertake an official state visit to Canada next year. More specifically, Trudeau should ask Ramaphosa to address a joint sitting of Parliament on 18 June 2020 - the 30th anniversary of Nelson Mandela’s first speech to Canada’s Parliament shortly after his release from prison. Who better to commemorate that historic event than the man who was Mandela’s first choice to succeed him as president? Scheduling an official state visit that far in advance would serve another purpose, it would establish a timeline — and set a deadline – for Canadian and South African officials to explore the best ways to strengthen our bilateral economic ties. As a starting point, officials should dust off the original Canada-South Africa Trade and Investment Cooperation Arrangement which was signed during Mandela’s second visit to Canada in 1998.
Today’s Quick Links: Steering committee of the EU-WCO Programme for Harmonized System in Africa holds its first meeting SADC/JICA sustainable forestry project: 5th Joint Coordination Committee Meeting starts Mauritius and Comoros to consolidate regional ties Folashadé Soulé, Camilla Toulmin: Setting the record straight about African migration Japan initiates WTO dispute complaint against Indian tech tariffs China’s retail sales growth slumps to 16-year low as trade war risks rise FAO: ‘Disaster resilient’ farming reduces agriculture risks, yields economic gains |
Related News
tralac’s Daily News Selection
An explanatory video on the AfCFTA, produced by the ECA_Official Video Channel: How will it benefit us in practice?
“Honour Ghana with AfCFTA Secretariat for sacrifices made towards AU”: President Akufo-Addo
The President said Ghana has the facilities to provide an efficient centre for the work of the Secretariat. He noted further that it was time that the AU recognised the sacrifices Ghana had made towards the African Agenda and hoped that when members meet in July this year, it would become a reality. President Akufo-Addo made these remarks when the AU inspection team, tasked by the Continental Body, to inspect and identify a suitable country to host AfCFTA Secretariat, paid a courtesy call on him at the Jubilee House. Members of the team include Ambassador Rosette Nyirinkindi Katungye, Mr Prudence Sebahizi, Mr Chiza Charles Newton Chiumya and Dr Guy-Fleury Ntwari. The rest are: Mr Alem Gebreamlak Kidane, Ms Lesedi Rantao, Mr David Luke, Mr Inye Briggs, and Mr Michel Jeremias Freire Cabral.
A $130bn opportunity in digital skills across Sub-Saharan Africa (IFC)
The IFC report estimates that 230 million jobs in Sub-Saharan Africa will require digital skills by 2030, presenting investors and education operators with an estimated $130bn opportunity to train the future workforce in digital skills. IFC launched the report, ‘Digital skills in Sub-Saharan Africa: spotlight on Ghana’, at the group’s office in Accra. Nearly $4bn of the opportunity in digital skills will be in Ghana. Although digital skills are perceived among the top seven skills for the future of the global workforce, the study finds that these skills are undersupplied globally and most particularly in Africa. Around 80% of industry participants interviewed believe that an undersupply in digital skills would hamper expected economic growth, and nearly 20% of Ghanaian companies surveyed recruit only internationally for digital skills, largely because they cannot find skilled local talent. The study concludes with a call to action: the private sector must play a pivotal role in addressing the challenges in digital skills. Extract (pdf):
India’s WTO mini-ministerial meeting of developing countries: selected updates
-
Extracts from the declaration. Multilateral avenues, based on consensus, remain the most effective means to achieve inclusive development-oriented outcomes. Members may need to explore different options to address the challenges of contemporary trade realities in a balanced manner. We note that in the post-MC 11 phase, many Members have evinced interest in pursuing outcomes in some areas through joint initiatives approach. The outcomes of these initiatives should be conducive to strengthening the multilateral trading system and be consistent with WTO rules.
We recall that international trade is not an end in itself but a means of contributing to certain objectives, including raising standards of living. Special and Differential Treatment is one of the main defining features of the multilateral trading system and is essential to integrating developing Members into global trade. Special and Differential Treatment provisions are rights of developing Members that must be preserved and strengthened in both current and future WTO agreements, with priority attention to outstanding LDC issues.
The process of WTO reform must keep development at its core, promote inclusive growth, and fully take into account the interests and concerns of developing Members, including the specific challenges of graduating LDCs. The way forward must be decided through a process that is open, transparent and inclusive. We agree to work collectively with the aim to develop proposals to ensure that our common interests are reflected in the WTO reform process.
WTO rules seek to foster an open and non-discriminatory trade regime. In order to instill confidence among the Members, it is imperative that the Ministerial Conferences of the WTO are organized in a more open, transparent and inclusive manner. WTO notification obligations must consider the capacity constraints and implementation related challenges faced by many developing Members, particularly LDCs. In the WTO, a more cooperative and gradual approach is the best way in dealing with the issue of transparency, where many developing Members struggle to comply with their notification obligations.
-
India bats for a strong WTO appellate body. India has made the appointment of new members to the WTO appellate body a pre-condition for discussing reforms to the multilateral trading system. The seven-member appellate panel is the highest adjudicating body of disputes among member countries. It has only three members, the minimum required for giving a judgement. However, two are set to retire in December, making the body defunct. Despite this, the US has been blocking new appointments.
-
WTO DG Azevêdo: “Make your voices heard” on reform issues. In his overview, DG Azevêdo addressed the impact of rising trade tensions on trade expansion and global economic growth. He emphasized the fact that all will feel the effects and that developing countries and least-developed countries would be the most negatively affected. He outlined the key areas in which reform is being discussed and underscored the importance of engagement on all areas. He also observed that apparently not all issues are on the table yet, and the debate is in its early stages. He said that members seemed to prefer not to attempt to create a package of reforms as it would be better to work to change and adjust progressively, “harvesting what we can when we can”.
-
India’s Commerce and Industry minister Suresh Prabhu: Questions raised on S&DT are quite divisive. “The crisis in the Appellate Body threatens to bring back power play to the multilateral trading system,” commerce and industry minister Suresh Prabhu said in his address at the WTO ministerial meeting. “Questions being raised on S&DT are controversial and extremely divisive,” he said, adding there is reluctance on the part of some members to consider S&DT in the negotiations on fisheries subsidies. Prabhu called upon the participating member countries to come to a common understanding on the declaration. “These are difficult times at the WTO, particularly for developing members.” [Indian Trade Service’s Ajay Srivastava: Need to breathe life back into WTO]
-
Now circulating at the WTO: China’s detailed proposals for WTO reform
G-20 Agricultural Summit: DDG Wolff highlights role of WTO in facilitating agri-food chains (WTO)
The WTO’s rules-based framework benefits farmers and other participants in nascent and developing agri-food value chains by facilitating their daily operations and encouraging regulatory cooperation among governments, WTO Deputy Director-General Alan Wolff told the G-20 Agricultural Summit in Niigata, Japan on 11 May. “All stakeholders in agri-food value chains, and all countries at every stage of economic development, stand to benefit from fully participating in a strengthened and dynamic multilateral trading system,” he said.
Women Entrepreneurs Finance Initiative allocates second round funding (World Bank)
Women Entrepreneurs Finance Initiative (We-Fi) has announced its second funding allocations – expected to benefit 70,000 women-led businesses and mobilize nearly a billion dollars of additional public and private sector resources. The second round allocates $129m for programs to boost women’s entrepreneurship that will be implemented by four multilateral development banks, expecting to mobilize $990m of additional funds from other public and private sources. The AfDB was granted $61.8m for its programme Affirmative Finance Action for Women in Africa. Of 21 economies targeted, AFAWA will mainly service IDA and fragile or conflict-affect countries where women are underserved in accessing financing, markets, knowledge, and mentoring programs. These countries include Burundi, Chad, Comoros, Côte d’Ivoire, DRC, Ethiopia, Mali, Mauritania, Mozambique, Niger, Senegal, Sierra Leone, Tanzania, Uganda, Zambia and Zimbabwe.
The Gambia’s pathway to prosperity (IMF)
Trade integration will also help frame the reforms of this country’s state-owned enterprises. In many cases, the long-term viability of those companies will depend on increasing their regional orientation. Take the example of the energy sector. The stabilization of electricity output has contributed to your country’s stronger growth. So, the ongoing investment in the electricity transmission not only will link the Eastern and Northern parts of the country, it will also open doors to West Africa’s power networks by enabling cross-border energy trading, including under the flagship OMVG project uniting The Gambia, Guinea Conakry, Senegal, and Guinea Bissau with the aim of harnessing the water resources of The Gambia River Basin to produce low-cost renewable energy for the member countries. In the same vein, investment to upgrade the port of Banjul could create a new trans-shipment hub for the region. Seen in this context, the Senegambia Bridge could be just one step in the development of the Trans-Gambia corridor within ECOWAS. Regional integration and cooperation are particularly important for improving the structure of the economy and enhancing competitiveness. Let me offer two examples: [The author: IMF Deputy Managing Director, Tao Zhang]
South Africa: Astral Foods ‘hit by imports, dumping’ (IOL)
South Africa’s leading integrated poultry producer, Astral Foods, yesterday highlighted the impact of chicken imports on the local industry after it reported a 68.9% decline in the operating profit of its poultry division for the six months to end March. Astral said the profit fell to R258m from R828m last year, driven largely by materially higher feed input costs and lower sales realisations that buckled as a result of imports. The division said its revenue rose a modest 1% to R5.5bn. Chief executive Chris Schutte said: “Long-term investments in local chicken production will be hampered should poultry imports and dumping continue unabated.”
Kenya: Trading in mitumba items soars amid rise in apparel exports (The Standard)
Second-hand items trade surged significantly, with traders importing 177,160 tonnes of clothes in 2018 valued at about Sh17bn, up from 135,868 tonnes in 2017 and 106,974 in 2014, according to data from Kenya National Bureau of Statistics. “The secondhand items business in Kenya is soaring because of three things, first is stifled incomes, second it is offering thousands of jobs and third the items are of good quality fuelling demand,” said Ernest Manuyo, a tutor at Pioneer Institute. However, even as second-hand items business grows, Kenya is working to boost the manufacturing of clothes using genetically modified cotton. The cotton is expected to start to be grown this year. But as Kenya works on the cotton, apparel exports, mainly sewn at the export processing zones, surged to a new high in 2018. According to KNBS, the export of apparels increased from Sh32.4bn in 2017 to Sh34.2bn in 2018, accounting for about 6.3% of total domestic exports. [Details of new programme leaves River Road counterfeit traders in tears, pain and anger]
Kipkirui Langat: Nuts, bolts of making Kenya industrial hub (Business Daily)
Limiting age of imported used vehicles will raise average price. In the short term, this will affect small enterprises, low-income earners and reduce government revenues. However, in the long term, this is likely to reduce traffic congestion, leading to a substantial increase in productivity, reduction in fuel consumption, improve air quality and road safety. Used motor vehicle business makes the region more of a trading economy than an industrial and technological hub. The use of second-hand goods always affects or slows down industrial and technological development. A systematic phase-out of implementation of age limit while increasing capacity of local manufacturers will spur local demand, thus encouraging and accelerating technology and industrial development in the region. To mitigate on the impact of age limit, there should be a policy change covering transport planning and land use to promote public transport. There is also a need to develop laws on domestic, regional and international trade including taxes, subsidies, incentives and import/export regulations. Finally, road transport standards are necessary for management of road transport vehicles from design, manufacture, operations, scrappage and disposal. [Kenya: Government’s policy on maize imports a ploy to cheat farmers]
Stablecoins, central bank digital currencies, and cross-border payments: a new look at the international monetary system (IMF)
Related News
DG Azevêdo at India’s ministerial meeting of developing and least developed countries: ‘Make your voices heard’ on reform issues
Participating in an Informal WTO Ministerial Meeting organised by the Indian government in New Delhi on 13 May, Director-General Roberto Azevêdo outlined the current discussions regarding WTO reform and told those attending that “this is your organization... make your voices heard in this debate.”
The meeting was hosted by Mr Suresh Prabhu, Commerce and Industry Minister of India, and was attended by a number of developing country ministers.
After giving an overview of members’ discussions in all three pillars of the WTO’s work – monitoring, dispute settlement and negotiations – DG Azevêdo said:
“This is an important moment. The decisions members take on the issues I’ve raised today will determine the future of the global trading system. Equally, a failure to confront these issues would also determine the path forward in what could be a very negative way. I personally don’t believe that the status quo is an option. But what happens next is up to you, the members. This is your organisation. I think we have an opportunity now to make it stronger and to set it on a positive path for the future. So I urge you to make your voices heard in this debate.”
In his overview, DG Azevêdo addressed the impact of rising trade tensions on trade expansion and global economic growth. He emphasized the fact that all will feel the effects and that developing countries and least-developed countries would be the most negatively affected.
He outlined the key areas in which reform is being discussed and underscored the importance of engagement on all areas. He also observed that apparently not all issues are on the table yet, and the debate is in its early stages. He said that members seemed to prefer not to attempt to create a package of reforms as it would be better to work to change and adjust progressively, “harvesting what we can when we can”.
The DG observed that the informal meeting comprised a representative group that can contribute significantly to the process of understanding where we are, and considering where to go. He stressed that the WTO has to be better, work faster, and be more responsive to today’s challenges. He noted that no one is talking about trashing the system that we have and “starting from scratch”, adding that the main focus is on preserving the system and building on what we have.
Outcome of the WTO Ministerial Meeting of developing countries working collectively to strengthening the WTO to promote development and inclusivity
-
We, the Ministers and high-level officials from Arab Republic of Egypt, Barbados, Central African Republic, Federal Republic of Nigeria, Jamaica, Kingdom of Saudi Arabia, Malaysia, People’s Republic of Bangladesh, People’s Republic of China, Republic of Benin, Republic of Chad, Republic of India, Republic of Indonesia, Republic of Malawi, Republic of South Africa, Republic of Uganda and Sultanate of Oman met in New Delhi, on 13 and 14 May 2019, to discuss recent developments at the WTO and explore ways for working with all Members to strengthen the multilateral trading system.
-
We reaffirm the pre-eminence of the WTO as the global forum for trade rules setting and governance. We note with concern the multiple challenges confronting the rules-based multilateral trading system and agree to work together with all WTO Members to strengthen the WTO, make it more effective and continue to remain relevant to the diverse needs of its Members, in line with objectives of the WTO.
-
We re-affirm that the dispute settlement system of the WTO is a central element in providing security and predictability to the multilateral trading system. This has proved to be more effective and reliable as compared to its predecessor, GATT. We note with concern that Members have failed to arrive at a consensus in the selection process to fill vacancies in the Appellate Body. This ongoing impasse has weakened the dispute settlement system and threatens to completely paralyze it by December 2019. We, therefore, urge all WTO Members to engage constructively to address this challenge without any delay in filling the vacancies in the Appellate Body, while continuing discussions on other issues relating to the functioning of the dispute settlement mechanism.
-
An inclusive multilateral trading system based on equality and mutual respect should ensure that all WTO Members abide by WTO rules and abjure any form of protectionism. The core value and basic principles of the multilateral trading system must be preserved and strengthened, particularly with a view to building trust among Members. To this end, we urge WTO Members to adopt measures that are compatible with WTO rules to avoid putting the multilateral trading system at risk.
-
Multilateral avenues, based on consensus, remain the most effective means to achieve inclusive development-oriented outcomes. Members may need to explore different options to address the challenges of contemporary trade realities in a balanced manner. We note that in the post-MC 11 phase, many Members have evinced interest in pursuing outcomes in some areas through joint initiatives approach. The outcomes of these initiatives should be conducive to strengthening the multilateral trading system and be consistent with WTO rules.
-
We recall that international trade is not an end in itself but a means of contributing to certain objectives, including raising standards of living. Special and Differential Treatment is one of the main defining features of the multilateral trading system and is essential to integrating developing Members into global trade. Special and Differential Treatment provisions are rights of developing Members that must be preserved and strengthened in both current and future WTO agreements, with priority attention to outstanding LDC issues.
-
We stress the importance of technical assistance and capacity building provided to developing Members, in particular LDCs, including through the Enhanced Integrated Framework, Aid for Trade and other tools. We urge Members to continue doing so.
-
The process of WTO reform must keep development at its core, promote inclusive growth, and fully take into account the interests and concerns of developing Members, including the specific challenges of graduating LDCs. The way forward must be decided through a process that is open, transparent and inclusive. We agree to work collectively with the aim to develop proposals to ensure that our common interests are reflected in the WTO reform process.
-
WTO rules seek to foster an open and non-discriminatory trade regime. In order to instill confidence among the Members, it is imperative that the Ministerial Conferences of the WTO are organized in a more open, transparent and inclusive manner. WTO notification obligations must consider the capacity constraints and implementation related challenges faced by many developing Members, particularly LDCs. In the WTO, a more cooperative and gradual approach is the best way in dealing with the issue of transparency, where many developing Members struggle to comply with their notification obligations.
-
Some WTO agreements, for example the Agreement on Agriculture, contain imbalances and inequities that prejudice the trade and development interests of developing Members. There is a need to provide adequate policy space to the developing Members to support their farmers through correcting the asymmetries and imbalances in this Agreement on priority. This should be undertaken on the basis of work done and progress already made in the past, and provide further flexibilities to the LDCs and Net Food Importing Developing Countries. It is really time that cotton receives concrete and appropriate responses it deserves.
-
We agree to consult on various issues of common interest to developing Members, including comprehensive and effective disciplines on fisheries subsidies with appropriate and effective Special & Differential Treatment provisions for developing Members.
-
We urge WTO Members to expedite the process of accession of new Members.
-
We reiterate our commitment to work towards strengthening WTO by promoting development and inclusivity for the benefit of all Members.