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Economic diversification even more crucial as the fight against climate change revs up
The need for developing countries to diversify the portfolio of goods and services they produce has become even more pressing as governments move to act on the promises of the Paris climate agreement, UNCTAD Deputy Secretary-General Isabelle Durant has told an international meeting in Geneva.
The international climate accord adopted in Paris in December 2015 aims to keep global warming below 2 degrees Celsius, and governments that have committed to this will have to start putting in place measures that reduce their carbon footprint.
Such response measures to global warming could have implications for trade, as governments sanction “dirty” goods and services. For countries relying on sectors in the crosshairs, such as the extractive industries, this could mean a significant blow to the exports keeping their economies afloat.
“Although often seen through the lens of environment and climate, the Conference of the Parties in Paris also has transformative implications for trade,” Ms. Durant said at a session of the Ad Hoc Expert Group Meeting on Implementing The Paris Agreement: Response Measures, Economic Diversification and Trade.
“Implementation of the Paris Agreement will alter future trade patterns, with impacts on how trade contributes to economic growth and development, job creation and poverty reduction,” she said.
A response measure such as making less internal combustion engines, for example, would significantly hamper oil producers, many of whom are developing countries.
Too many developing countries are still dependent on too few exports, normally commodities. In 2015, this was the case for two out of three developing countries.
For the two thirds of developing countries still too dependent on commodities exports, mitigating the effects of response measures requires economic diversification, a priority for UNCTAD since its founding in 1964. And in this respect, global value chains may be a piece of the puzzle, Ms. Durant said.
Goods used to be made in one country, but now the production process, from design to assembly to retail, is spread across the globe through what are referred to as value chains. So much so that 60 per cent of global trade now occurs through global value chains, with the figure jumping to 80 per cent for trade in manufactured goods.
Silicon modules, for example, vital to the production of solar panels, may be labelled “Made in the US”, but their component parts are sourced from China, Japan, and Europe. Similarly, photovoltaic cells “Made in China” are manufactured with equipment from Germany, Switzerland, and the United States.
For developing country exporters, the growth in trade of semi-finished goods means they no longer have to become experts in all facets of production to compete. To enter the global arena, they only need to be competitive at one piece of a value chain.
Once in, they can harness what they learn through their contact with firms higher up in the chain to take over other parts of production, sales and marketing – a process called upgrading. And it is through this process of upgrading that developing countries may have their best shot at diversifying exports.
“Now that the Paris Agreement is in place, and as the protectionist pressures mount in various quarters, it is high time to take a look at trade as part of the solution and explore its potential in helping countries, particularly developing ones, diversify their economies and create jobs as they make their transition to the low-carbon future,” Ms. Durant said.
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tralac’s Daily News Selection
Applications are now open for tralac’s e-course: Trade in the 21st Century – legal and policy considerations for Africa. Note the closing date: 11 October 2017
tralac’s weekly e-Newsletter is posted: The competitiveness of African economies – innovation, infrastructure, goods trade and public institutions
WIDER Development Conference on migration and mobility: papers from the 18 conference sessions have been posted. Profiled sessions: Migration within Africa: defining the governance challenge; Gender; Macro and trade session
East Africa: strengthening migration governance (IOM)
IOM, the UN Migration Agency, with cooperation from IGAD, organized a capacity building training from 18 to 29 September at IOM’s African Capacity Building Centre in Moshi, Tanzania. The training aimed to enhance migration governance and migrants’ protection in the IGAD region, which comprises Djibouti, Ethiopia, Kenya, Somalia, South Sudan, Sudan and Uganda. The two-week event covered topics such as labour migration and border management, international migration law and migration and development. Thirty-four attendees selected from institutions belonging to the National Coordination Mechanisms came from diverse backgrounds including Ministries of Interior, Foreign Affairs, Labour, MPs, and Immigration and Police Services from IGAD Member States.
SADC: Framework on managing asylum seekers and Refugees
The Refugee Sub-Sub Committee and Legal Experts meeting (27-29 September, Gaborone) to review the Draft SADC Regional Policy Framework on Management of Asylum Seekers and Refugees in line with the Comprehensive Refugee Response Framework which forms part of the United Nations New York Declaration, adopted by the General Assembly on 19 September 2016. The meeting was attended by Mozambique, South Africa, Zambia, Zimbabwe, Tanzania and Swaziland. Addressing the Refugee Commissioners and Legal Experts, Adv. Maemo Peter Machethe from the SADC Secretariat’s Directorate of the Organ on Politics, Defence and Security Affairs, emphasised the need for SADC to align the Draft SADC Regional Policy Framework on Management of Asylum Seekers and Refugees to the CRRF.
SA questioning capacity it has to absorb more migrants – minister (IOL)
The Home Affairs minister said South Africa was questioning the capacity it had to absorb more people and how it would relate to migrants’ countries of origin. “The thinking is that as people migrate from their countries, the host countries should have on-going engagements with the countries of origin so that, you hope, as their circumstances improve, there will be possibilities of secure repatriation.” As a member state of the UN, South Africa needed to guide migratory processes and look after refugees, she said. “The whole idea is that we have to protect the safety, dignity, human rights and fundamental freedoms of all immigrants, regardless of their migratory status, at all times.” Mkhize admitted that it was seen as contradictory that the country had embraced the African Union’s Agenda 2063 but was also putting in place interventions that controlled migration, such as border management.
Coordination, collaboration and connectivity for better border management (World Bank)
Over 60 stakeholders from 16 countries in Europe and Central Asia attended the two-day, peer-to-peer event, including representatives from customs agencies, sanitary, phytosanitary and veterinary agencies, ministries of economy and finance, and the private sector. Participants shared their experiences and challenges related to border management and agency coordination, and discuss best practices and potential solutions. A key outcome was the strengthening of a community of practice among countries in Europe and Central Asia.
Elisha Tshuma: Zimbabwe’s transit management system and international best practice (tralac)
Traders cannot force Zimbabwe to comply with the WTO Trade Facilitation Agreement because it is yet to ratify the agreement and WCO Revised Kyoto Convention are mere standards that are difficult to enforce. This scenario has resulted in transporters resorting to the non-tariff barrier reporting system though complaints take long to resolve. Another alternative would be to approach the COMESA Court of Justice since Zimbabwe is a member of COMESA and COMESA has aligned its Customs Regulations to both the WTO trade facilitation agreement and the WCO Revised Kyoto Convention. However, this requires exhaustion of local remedies before approaching the COMESA Court of Justice which may prove to be expensive to do on the part of traders.
Zimbabwe relaxes import rules, issues a consolidated Statutory Instrument (Bulawayo24)
Government has reduced the number of products that require import licences as part of its ongoing efforts to improve Zimbabwe’s ease of doing business while at the same time placing imports of school uniforms under import management. The changes are contained in Statutory Instrument 122 of 2017 (pdf), which also consolidates into one single instrument, goods which are currently under import control. The SI was published on September 22, 2017. Industry and Commerce permanent secretary Abigail Shonhiwa told The Herald Business that the ministry had consolidated all the controlled imports under one instrument for ease of reference by manufacturers. ”The only addition to goods under import management are school uniforms. There are a lot of companies involved in the manufacture of uniforms in the country and we felt that in order to realise the full implementation of the Cotton to Clothing strategy which promotes the textiles value chain, we should promote local companies,” said Mrs Shonhiwa. Following the amendments, the only four products that still require export licences are fertiliser, raw and refined sugar, gypsum and second-hand equipment which were deemed as strategic.
Nigeria working with neighbours to tackle smuggling – Osinbajo (Premium Times)
The vice president said this when a delegation of the Manufacturers Association of Nigeria paid a visit to him Thursday at the Presidential Villa, Abuja. “More importantly, the whole issue is that we are able to police the borders. Last week, we had discussions with all the agencies connected; including the Customs, the Minister of Internal Affairs, NPA, and we were looking at how we can work with our neighbours, especially the Benin Republic, and our neighbours also in the North, to police our borders as much as we can,” Mr. Osinbajo said. The vice president reiterated that the major focus of the Buhari administration’s Ease of Doing Business reforms was to increase patronage for locally manufactured goods, as well as to create an enabling environment for the private sector and businesses in the country to thrive.
Nigeria Customs seizes 3,665 vehicles from 2015 to date – official (Premium Times)
The Comptroller General of Customs, retired, Hameed Ali, said that the service has seized 3,665 vehicles from 2015 till date with a Duty Paid Value of over N13 billion. Mr Ali said this during his lecture titled “Problem of smuggling and its attendant consequence on Nigeria’s economy and the way out” at the IBB Golf and Country Club, on Thursday in Abuja. He said that Nigeria imported about 70% of its needs and that 45% of all the imports were smuggled into the country. “Lack of patriotism among the traders and complicity of Customs officers has added to the problem. Over 85% of traders are not trustworthy as they falsify documents except for about five per cent of them who can be trusted and often have their goods cleared within 48 hours.”
Rwanda: Small-scale cross-border traders call on DRC to enforce better tax regime (New Times)
Small-scale traders along the Rubavu-Goma border have raised concerns over what they perceive as an ‘illegal tax’ levied on them by DR Congo officials. Their protest is hinged on an existing bilateral as well as regional trade framework exempting import duty from those dealing in products not exceeding the value of $2,000.
Angolan vendors irk Namibian business people (The Namibian)
Some Namibian small business owners and vendors in the north have expressed discontent with the increasing number of Angolan citizens selling on the streets of many northern towns. The business people are accusing their Angolan counterparts of stealing business from them as they sell merchandise at prices as low as 50% cheaper than the locals, and the situation is expected to have an ugly ending one day if not contained. The Angolans sell food items such as cooking oil, sugar, milk, rice, macaroni, sugar cane, fruits and vegetables as well as meat and chicken products. They bring in the products from their country, in most cases using illegal entry points to avoid paying customs and duty fees at the Oshikango border post.
Lions (still) on the move: growth in Africa’s consumer sector (McKinsey)
But because of the recent slowdown, some executives have begun to question whether Africa’s once-roaring economy and burgeoning consumer sector still hold promise. Is Africa truly worth investing in? Can multinational companies succeed in the region? Is the African consumer opportunity still as attractive as it once seemed? Our unequivocal answer is yes – but companies will need to adopt increasingly sophisticated approaches to compete effectively. In this article, we share our latest perspectives on Africa’s outlook to 2025 and what it will take for consumer-goods companies to thrive in the region. [The authors: Damian Hattingh, Acha Leke, Bill Russo]
COMESA countries move to scrap roaming charges
Citizens in COMESA member states may soon enjoy reduced calling charges, courtesy of a decision taken yesterday by ministers in charge of infrastructure. In their 10th meeting (3-4 October, Lusaka) the Ministers and government representatives from 15 of the 19 COMESA countries resolved to initiate action towards abolishing roaming charges levied on mobile calls. “The ICT regulators are encouraged to carry out studies to reduce the interconnection rates and reduce or eliminate the roaming charges,” said the Ministers.
India-Ethiopia Business Dialogue: full text of President Kovind’s address (New Kerala)
India is now among the top three foreign investors in Ethiopia. Indian investment has made a mark in textile and garments, engineering, plastics, water management, consultancy and ICT, education, pharmaceuticals and healthcare. Indian investments in Ethiopia have had a significant presence in manufacturing and value addition to local resources. They have created jobs in this country, and they have contributed to the prosperity of Ethiopian families. Ethiopia has been the largest recipient of Indian concessional lines of credit in Africa with over $1bn committed to projects in power transmission and sugar. I am happy to learn that the Finchaa sugar project has been completed and handed over to the Ethiopian side. Two other projects in the sugar sector have also gone into production, and are expected to be handed over shortly.
Tanzania: Food exports okay, unprocessed grain not allowed – state (Daily News)
The government has emphatically stated that it has yet to issue any ban on export of food products outside the country with only one disclaimer: nobody is allowed to export unprocessed grain. The Minister for Agriculture, Livestock and Fisheries, Dr Charles Tizeba, said yesterday that any businessperson who wants to export food products was free to do so, pointing out that his ministry would issue the export permits. “My office had never denied any businessperson an export permit for flour, rice or any processed cereal outside the country,” said Dr Tizeba. But, on unprocessed grain, the minister added, Tanzania was not ready to export cereals because the country knew its implications. Last year for example, someone issued an export permit to a businessman to export 300,000 metric tonnes of rice cereal from Kahama District to Uganda, and within a few days 115 rice processing machines shut down operations, rendering hundreds of Tanzanians jobless,’’ he said.
Zambia: Government launches the Zambia Agribusiness and Trade Project (Lusaka Times)
Commerce, Trade and Industry Minister Margret Mwanakatwe said the project reflects Government’s determination to attain the Vision 2030 and the Sustainable Development Goals. Ms Mwanakatwe notes that the Agribusiness and Trade Project will boost the country’s economy as well as support poor farmers especially the Small and Medium Enterprises, affirming that 4,000 farmers will be employed under the same project by 2022 and that include 300 Small and Medium Enterprises. [World Bank ZATP project documentation]
Is India missing out on global trade recovery? (Livemint)
Even India witnessed a mild rebound in exports in August. But a closer look at the data suggests that the 10% year-over-year growth in India’s exports in August was largely on the back of increased earnings from commodity exports – industrial metals and petroleum products – amid a global rise in prices of these products. Thus, it would be premature to hail the August trade numbers. Using a three-month moving average adjustment to smooth out monthly fluctuations, we find that India has been lagging behind most major Asian economies in merchandise exports. [India: The implication of firm competition on industrial policies]
Today’s Quick Links: Nigeria needs $16 billion to construct, modernise rail lines – Minister TNamib business plan seriously flawed Hilton Hotels launches Africa growth initative: expects to add 100 properties to its portfolio over five years Mauritius: Commonwealth Climate Finance Hub work session examines progress report Namibia: African mining sector scrutinised Egypt: Work on the framing of minerals classification system in Africa begins United States trade deficit shrinks in August as exports rise |
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IOM, IGAD assist East African states strengthen migration governance, migrants protection capacities
IOM, the UN Migration Agency, with cooperation from the Intergovernmental Authority for Development (IGAD), organized a capacity building training from 18 to 29 September at IOM’s African Capacity Building Centre (ACBC) in Moshi, Tanzania.
The training aimed to enhance migration governance and migrants’ protection in the IGAD region, which comprises Djibouti, Ethiopia, Kenya, Somalia, South Sudan, Sudan and Uganda.
The two-week event covered topics such as labour migration and border management, international migration law and migration and development. Thirty-four attendees selected from institutions belonging to the National Coordination Mechanisms (NCMs) came from diverse backgrounds including Ministries of Interior, Foreign Affairs, Labour, Members of Parliament (MPs), and Immigration and Police Services from IGAD Member States.
“The training provided us with an opportunity to learn about current developments in the IGAD region, and I believe that we gained very relevant knowledge especially now that IGAD Member States are in the process of developing national policies on migration and border management,” said Mary Mideva Kezzah from the Ministry of the East Africa Community, Labour and Social Protection of Kenya.
“We strongly believe that collaboration between IOM/ACBC and IGAD is more than needed to enable the trainees to apply what they have learnt back in their respective countries,” said Colonel Mohammed Said Ahmed, from the Ministry of Interior of Sudan.
The training sessions resulted in a set of recommendations including the development of a training roadmap to be developed by the ACBC. The first draft of the document will be launched at the next training for IGAD participants from 30 October to 3 November in Moshi.
Qasim Sufi, IOM Tanzania Chief of Mission, encouraged the participants to utilize this training to harness the fruits of migration and address its challenges in their home countries. “ACBC is the only IOM capacity building center for the whole of Africa, and it has been upgraded to host a forensic laboratory and the Migration Information and Data Analysis System (MIDAS) training facility. The ACBC is eager to provide technical support to you in English, French, Arabic, Portuguese and Kiswahili,” he added.
The training was held under the auspices of the joint regional migration project that is being co-implemented by IOM and IGAD with the overall objective of building regional and national capacities for the implementation of the regional migration policy framework (RMPF).
The specific objectives of the project include the empowerment of members of the NCMs on migration through capacity building trainings and seminars, as well as advocacy activities that help address mixed migration in the region and mainstream migration into development planning and programming by Member States.
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COMESA region set to abolish roaming charges
Citizens in the Common Market for Eastern and Southern Africa (COMESA) may soon enjoy reduced calling charges, courtesy of a decision taken on Wednesday by Ministers in charge of infrastructure.
In their 10th meeting that took place in Lusaka, Zambia, 3-4 October 2017, the Ministers and government representatives from 15 of the 19 COMESA countries resolved to initiate action towards abolishing roaming charges levied on mobile calls.
The move is intended to bring down the price of information communication and technology services that remains high in Africa compared to other regions of the world.
In their final report, the Ministers observed: “Although the pricing of voice services in many African countries was becoming competitive and comparable with the rest of the world, the cost of broadband continued to be out of reach of most people.”
They noted that Africans paid on average 25 per cent of monthly gross national income (GNI) per capita mobile cellular calls compared to 11 per cent in other developing nations.
In COMESA region, studies have shown that Malawians use more than $12 (£7.70) a month on mobile phones, the minister noted.
“This is more than half of what an ordinary Malawian earns in a month which is very expensive,” the Ministers noted. Hence there was a general concern on high mobile termination and roaming charges. They noted that although mobile phones had provided new sources of originating international traffic, it was also more expensive to terminate traffic on mobile networks.
The ministers urged the COMESA member States to emulate other grouping in Africa and beyond in coming up with reduced roaming and termination charges. They cited the East African Community which has eliminated roaming and termination charges and the European Union where mobile operators were no longer charging additional fees to their customers for using their phones anywhere else in the region.
“The ICT regulators are encouraged to carry out studies to reduce the interconnection rates and reduce or eliminate the roaming charges,” said the Ministers. “Member States are encouraged to invest into the Fibre Technology to The Home (FTTH) to increase capacity and provide excellent quality.
The ministers observed that despite substantial investments in network infrastructure in the recent years, Africa lacked a robust network connectivity and high-quality, affordable Internet access.
They noted: “COMESA countries represent over 37% of the internet users in Africa and Africa represents 7% of the internet world’s users. Hence, COMESA constitutes 2.5% of the world’s population of the internet users.
In their decision, which is binding to all the COMESA countries, the Ministers called for setting up of proper regulation to encourage investment in the Virtual Mobile Network Operator (MVNOs) to enhance competition and increase access. In Africa, MVNO permits have been issued in Morocco, Kenya and South Africa.
Small-scale cross-border traders call on DRC to enforce better tax regime
Small-scale traders along the Rubavu-Goma border have raised concerns over what they perceive as an ‘illegal tax’ levied on them by DR Congo officials.
Their protest is hinged on an existing bilateral as well as regional trade framework exempting import duty from those dealing in products not exceeding the value of $2,000.
On the Rwandan side at Petite Barrière border post in Rubavu, there is a flurry of activity, with traders crossing into Rwanda while others at exiting to DR Congo.
This was last week when The New Times visited the facility, but traders said that local officials in Goma (in DR Congo) do whatever they want, with some unsure whether the levies they are subjected to are sanctioned by authorities in Kinshasa.
“In Rwanda, we are not required to pay any import tax but back home officials ask for money every now and then,” said Buyana Bibishe, a Congolese fishmonger.
“That’s how it is there. I can say we are used to it but it is not good.”
Her type of merchandise is number 10 on the harmonised common list of products eligible under the COMESA Simplified Trade Regime (SRT) between Rwanda and DR Congo, which was launched in 2016 to allow small-scale traders to import products not exceeding the value of $2,000, duty free.
Olive Mukashyaka, a Rwandan who deals in garments, said that, in Goma, police and other local authorities demand for money as tax and that there is no standard amount.
“Some will ask for 500 francs, others 200 francs, or much more, and so on and so forth. It is the policemen or local officials and many others. We pay and move on but we feel the pinch.”
Transporters feel pinch
Albert Ndagijimana, a member of a local traders’ cooperative of people living with disabilities (PLWDs), said their hand carts no longer cross into Goma.
“We are feeling the pinch. We can’t cross the border because Congolese authorities made things tough for us. All we do is bring the merchandise to the border stores. From here, porters carry it the rest of the journey.
“Before this situation started, in one trip someone would earn $10 for moving a wagon of goods from Rubavu and into Goma but now, because we only come as far as the border, we only earn half the amount or less.”
Under the COMESA STR programme, officials drew a list 168 products – agricultural, livestock, fisheries, construction, cosmetics and manufactured products – and agreed that a joint periodic review be conducted every six months to see what products to add or remove.
The signing of the STR followed bilateral meetings organised by COMESA Secretariat in partnership with the African Development Bank and the European Union in July 2015 to agree on a common list of products.
The STR programme aims to simplify clearing procedures and reducing cost of trading by making it possible for the small scale cross-border traders’ consignments to benefit from the removal of customs Duty (COMESA Preferential Treatment) if they are on the Common Lists.
As per the agreement, the two countries reportedly agreed on a list of 168 commodities that exonerated from import duties not exceeding $2,000.
Private sector advocacy
Speaking to The New Times, Stephen Ruzibiza, the Private Sector Federation chief executive, acknowledged that there is a bilateral agreement allowing tax exemption for small-scale traders with merchandise not worth more than $2,000.
He said: “On advocacy as noted the issue is not on the Rwandan side but recently, a delegation from the Government of Rwanda and the private sector travelled to DR Congo to address the issue.”
Christine Murebwayire, chairperson of the agriculture and livestock chamber at PSF, was part of the delegation that travelled to Goma mid this year on a mission to sort out various trade concerns with their Congolese counterparts.
Murebwayire said: “We are continuing dialogue. Last week, I called the chairperson of a Congolese group called AFECODE [Association des Femmes pour la Conservation et Développment] and we scheduled a meeting for next week. We are discussing how to ease bilateral trade.”
Several attempts to get a comment from the DR Congo embassy in Kigali had not yielded by press time.
There is hope
Alphonsine Uwamahoro, a COMESA trade information desk officer based in Rubavu, said there is no difficulty on the Rwandan side because Kigali complied with everything in the bilateral agreement.
For small-scale traders to trade easily, she noted, they just need to fullfill three conditions. They must have products not exceeding the value of $2,000, their merchandise must be on the list of allowed products, and they must have a certificate of origin, an important international trade document certifying that goods are wholly obtained, produced, manufactured or processed in a particular country.
The hitch originating from the DR Congo, Uwamahoro said, is because Kinshasa introduced one extra requirement “obliging small traders to be in associations so as to be officially and easily identified” to curb cheating on the other side of the border. This specific was introduced into the Congolese legal framework “and gazetted” and, as such, must be abided by.
Uwamahoro said: “Their extra requirement is a measure of trying to curb fraud on their side as they have cases of big traders who masquerade as small traders so as to benefit from the STR arrangement.”
“Last week, we had meetings with COMESA officials from Rwanda, Uganda and Congo and we discussed issues including this case. But you know, since legal issues are involved here, it becomes a process. A solution might take time.”
She said “there is hope” that a way out will be found before long, especially because in DR Congo, the process of identifying genuine small-scale traders was initiated mid this year and is proceeding.
In August last year, President Paul Kagame and his Congolese counterpart Joseph Kabila met in Rubavu and agreed to strengthen cooperation in cross-border trade, among others.
The Rubavu border ranks as one of the most active borders across Africa and Rwanda has erected a new one-stop border post facility in Rubavu to facilitate trade. Construction of the DR Congo section of the facility is on course.
Rwanda’s exports to DR Congo the biggest share of the country’s informal exports, at more than 70 per cent.
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tralac’s Daily News Selection
Starting today, in Accra: The WIDER Development Conference on migration and mobility (jointly organized with the African Research Universities Alliance). Downloads: poster presentations
Later this month, in Kigali: Specialised Technical Committee on Migration, Refugees and Displaced Persons (20-21 October). Profiled conference documentation:
(i) The revised draft Migration Policy Framework for Africa and Plan of Action (2018-2027)
The MPFA is a non-binding, reference document and does not impose any obligations on Member States. It provides guidelines and principles to assist governments and RECs in the formulation and implementation of their own national and regional migration policies, in accordance with their priorities and resources. Since migration flows, patterns, volumes and dynamics vary among States and regions, the MPFA does not provide resource mobilisation mechanisms for implementation or monitoring and evaluation of the recommended actions, as these would be determined by States or regions, on the basis of their migration strategies and policies, and the migration dynamics which have shaped them. However, relevant UN Agencies and International Organisations, NGOs, CSOs and specialised agencies and institutions, with migration expertise and competencies, could support governments and RECs with the necessary resource mobilisation. In the context of the foregoing migration trends, the 2006 MPFA has been revised to respond to current migration realities and aptly guide AU Member States and RECs in the management of migration. To this end, the revised MPFA identifies eight key pillars with sub-themes and makes policy recommendations for consideration by AU Member States and RECs. It provides comprehensive policy guidelines on the following thematic issues and respective sub-themes:
(ii) Draft Implementation Roadmap for the Draft Protocol to the Treaty establishing the African Economic Community relating to free movement of persons, right of residence and right of establishment; (iii) Draft Common African Position on the Global Compact for Safe, Orderly and Regular Migration (October 2017, pdf)
At the WTO: DG Azevêdo discusses preparations for MC11 with the WTO’s Africa Group: ”The African Group is a very important constituency of the WTO. African members make up more than a quarter of the total membership. And over recent years, these members have been increasingly central in the WTO’s work. Africa’s constructive engagement was instrumental in the successes of Bali and Nairobi, for the entry into force of the TRIPS amendment – and much else besides. I hope that you will be ready to play a similar role in helping to shape the Buenos Aires outcomes,” the Director-General said.
Indian Ocean Commission sets new regional ambitions, urges collective action in Indianocéanie (GoM)
The possibility of transforming the Indian Ocean Commission into a ‘Community’ reflects new regional ambitions and translates the will of Member States to strengthen their role and reinforce the solidarity amongst the peoples of the Indianocéanie. This is one of the main strategic decisions taken during the two-day Extraordinary Council Meeting of the IOC which was held at the Hilton Mauritius Resort and Spa in Flic en Flac. A working committee has been set up and will submit a final report to the next Council meeting in March 2018 to indicate and advise on the way forward with regard to the transformation of the IOC into a ‘Community’. The session also initiated a strategic reflection on the structural transformation of the IOC so as to enable it to efficiently address challenges at several levels: economic development, climate change effects, and peace and security. A Ministerial meeting on food security will be held in March next year in Madagascar as the island is considered to be at the centre of the regional strategy for food and nutrition security.
Unlocking COMESA’s $80bn trade potential pegged on infrastructure (COMESA)
COMESA Secretary General Sindiso Ngwenya informed the Ministers that the absence of cross border production networks that would result in intra industry trade between and among firms within the region has been a major trade barrier. “The current intra-regional trade in the Common Market for Eastern and Southern Africa is US$20 billion with a potential of over US$82.3 billion,” he said. This potential can only be unlocked by addressing transport and logistic challenges which are fundamental to the COMESA agenda of inclusive and sustainable industrialization.” The sectors with the highest intraregional trade potential are textiles, wooden furniture, horticulture, household items, confectioneries, hides and skins, footwear and leather products, sugar confectioneries, tobacco and precious metals.
African carriers register 29.4% y-o-y growth in freight volume in August (IATA)
African carriers posted the largest year-on-year increase in demand of all regions in August 2017 with freight volumes growing 29.4%. This is a slight slowdown from July but still more than three times the five-year average pace of growth of 8.8%. Capacity increased by 5.9% over the same period. Demand has been boosted by very strong growth on the trade lanes to and from Asia which increased by more than 67% in the first half of the year. [IATA’s passenger growth analysis]
Zambia: ZIPAR’s analysis of the national budget
The diversification drum gets louder: It is hard to measure diversification and as such even harder to know definitively whether the economy is making progress against this agenda. However, one partial measure of diversification is non-traditional exports and here the Budget is fairly clear, they are down marginally by 3% which suggests limited progress on diversification. Agriculture is an important part of the non-traditional exports but we observe challenges, such as an export ban on maize in 2017; and the regional fall in maize and soya beans prices, certainly raises question about Zambia’s ability to boost agriculture exports in 2018. The 2018 Budget links Zambia’s diversification ambitions to a number of priority economic sectors. Here, we focus on diversification in agriculture, tourism, energy and industrialisation.
Japan commits R10m into Namport (Southern Times)
Japan has committed R10m in grant assistance for the feasibility study and future development of the Namibia Ports Authority in Walvis Bay on the western coast of Namibia, Japanese ambassador to Namibia, Hideyuki Sakamoto, has disclosed. He said that the country was also giving technical assistance to Namport and was continuously supporting the realisation of the corridor development for the Southern African region. Sakamoto noted that they could give more assistance in the future if the government of Namibia requested. He added that they were mainly supporting the preparation of the development phase of the port’s technical part, customs duty and capacity building at border posts, while also mapping out a plan for the Trans-Kalahari Highway transition. Sakamoto, who was attending the 9th Annual Logistics and Transport Workshop in Walvis Bay, hailed Namibia as one of the best gateway into the Southern African region, but said the region could be better connected depending and how the private sector is involved.
Lack of hard currency in Zimbabwe has goods suppliers concerned (Bloomberg)
Cash transactions have shrunk to about 2% of daily takings across the 33-store Spar Zimbabwe chain, from 60% a year ago, managing director Terence Yeatman said. The country’s statistics agency said last month that consumer prices rose 0.1% in August from a year earlier. “About 60% of stock on any supermarket shelf is imported,” and without sufficient dollars, inflation on imported goods is as much as 60% a year, Yeatman said at the Groombridge branch in the capital, Harare. “Suppliers are obviously concerned because the hard currency isn’t there.” At other retailers, a 200-gram jar of Nestlé SA’s Nescafé Classic instant coffee costs $14 compared with $9 a month ago.
Zimbabwe: Prices increase by more than 50% (NewsDay)
The government says prices have increased by at least 50% in recent weeks, according to preliminary results from a survey it is conducting. Industry and Commerce permanent secretary, Abigail Shoniwa told NewsDay on the side lines of a Confederation of Zimbabwe Industries (CZI) breakfast meeting yesterday in Harare that the government would not tolerate any price increments. CZI Groceries and Manufacturers’ Association chairperson, Nancy Guzha blamed the price hike on their suppliers, who have increased their prices. “What we have been told by our members is the pain they are under because none of them is getting the 100% foreign currency that they want,” she said. [RBZ: Our hands are clean]
South Africa: Fourth Industrial Revolution prioritises innovation – Davies (Engineering News)
Trade and Industry Minister Dr Rob Davies has highlighted the challenges being posed to the South African economy, and especially industry, by what is called the Fourth Industrial Revolution, or Industry 4.0. He was delivering the keynote address at the sixth Council for Scientific and Industrial Research Conference, in Pretoria, on Thursday. “We are entering an era, and probably are already in it, in which the premium for innovation has become significantly raised,” he highlighted. While innovation had always been important, it was now even more important. “We need to prepare ourselves as a country.”
SME Competitiveness Outlook 2017: Deeper and wider trade integration more beneficial for small businesses (ITC)
Comprehensive trade agreements that provide for deep regional integration are better at connecting small businesses to value chains and ultimately better for building more inclusive growth. According to the International Trade Centre’s SME Competitiveness Outlook 2017 – The Region: A Door to Global Trade, deeper regional integration turns out to be a major success factor in developing multi-country value chains, which in turn raises the competitiveness of small and medium-sized enterprises. The report finds that trade agreements – especially ‘deep integration’ deals that combine trade provisions with those on foreign investment – are associated with increased domestic value added for exports. The conclusions are drawn on novel econometric analysis of 261 bilateral and multi-country trade agreements involving more than 150 countries and territories. While trade agreements that include investment provisions are associated with a 2% increase of the domestic content in value-chain exports, stand-alone bilateral investment treaties do not have an effect on domestic value added.
Increasing value-chain activity in turn appears to boost the competitiveness of SMEs more than it does that of larger domestic companies. The report finds that for each additional policy area – such as investment, dispute settlement, competition policy, intellectual property or environmental provisions – covered by a country’s trade agreements, there is a 2.5% increase in the country’s integration into value-chain trade. More significantly, this leads to a 1.25% reduction in the competitiveness gap between small and large firms. This can have substantial impacts given that this reduction represents, for example, the difference between the competitiveness gap in countries like Botswana and Ecuador and that in Eastern European countries that belong to highly competitive regional value chains.
Note: The 50 country profiles contained in the report allow readers to develop a deeper understanding of which sectors have the potential to attract foreign investors and how national suppliers are positioned to serve or lead international value chains. In addition, the report contains five detailed stories of successful supplier integration: cocoa in Ghana, the automotive industry in Hungary, horticulture in Kenya, the electronics industry in Indonesia and the aerospace industry in Morocco. Together, they provide useful insights into the components of an effective value chain strategy. [Technical Annexes, pdf]
New survey evidence on the impact of Brexit on UK firms (Vox EU)
UK economic performance has been poor since the vote to leave the EU in June 2016, but has not been the catastrophe that many predicted. This column draws four results from the evidence gathered in the new Decision Maker Panel survey of around 2,500 businesses in the UK. While most firms expect a negative impact of Brexit on sales, investment and costs, only larger firms and those that are more exposed to international markets are likely to think that they might move part of their business abroad. [The authors: Nicholas Bloom, Paul Mizen]
Today’s Quick Links: Investing in Mauritius: Financial Times survey South Africa: SARB’s Monetary Policy Review MRA says Malawi tax rate low in SADC region Zimbabwe: Govt expects to stop soya beans imports by May 2018 Caterpillar to invest more than R1bn in Southern Africa in next decade A new generation of CEOs: six businesswomen discuss entrepreneurship and start-ups in West Africa Understanding correspondent banking trends: a monitoring framework |
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Deeper and wider trade integration more beneficial for small businesses
ITC’s SME Competitiveness Outlook 2017 finds that deep regional integration generates more value-chain activity and helps improve SMEs’ competitiveness. Trade agreements with investment provisions encourage greater domestic value added than stand-alone bilateral investment treaties.
Comprehensive trade agreements that provide for deep regional integration are better at connecting small businesses to value chains and ultimately better for building more inclusive growth. According to the International Trade Centre’s SME Competitiveness Outlook 2017 – The Region: A Door to Global Trade, deeper regional integration turns out to be a major success factor in developing multi-country value chains, which in turn raises the competitiveness of small and medium-sized enterprises (SMEs). This finding is particularly interesting given the current debate on the utility of expanding the content and depth of trade agreements.
Released today, the 2017 edition of the SME Competitiveness Outlook combines data analysis, academic insights and case studies to provide guidance for policymakers, business managers and trade and investment support institutions on how best to help SMEs navigate regional trade as a springboard to move up the value chain and increase the chances of going global. The report contains thought leader contributions from Thahirwa Dieudonné, Managing Director, Gashora Farm, Rwanda; Tony O. Elumelu, Founder, the Tony Elemelu Foundation; Mukhisa Kituyi, Secretary-General, United Nations Conference on Trade and Development; Susana Malcorra, Minister Advisor, Government of Argentina; and Ying McGuire, Global Vice-President, Technology Integration Group.
The report finds that trade agreements – especially ‘deep integration’ deals that combine trade provisions with those on foreign investment – are associated with increased domestic value added for exports. The conclusions are drawn on novel econometric analysis of 261 bilateral and multi-country trade agreements involving more than 150 countries and territories. While trade agreements that include investment provisions are associated with a 2% increase of the domestic content in value-chain exports, stand-alone bilateral investment treaties do not have an effect on domestic value added.
Increasing value-chain activity in turn appears to boost the competitiveness of SMEs more than it does that of larger domestic companies. The report finds that for each additional policy area – such as investment, dispute settlement, competition policy, intellectual property or environmental provisions – covered by a country’s trade agreements, there is a 2.5% increase in the country’s integration into value-chain trade.
More significantly, this leads to a 1.25% reduction in the competitiveness gap between small and large firms. This can have substantial impacts given that this reduction represents, for example, the difference between the competitiveness gap in countries like Botswana and Ecuador and that in Eastern European countries that belong to highly competitive regional value chains.
Increased firm-level capacity of SMEs implies being in a better position to be selected by international buyers, to operate successfully within value chains and to upgrade or expand within such chains. Overall it increases SMEs’ bargaining power within the value chain and reduces the risk of being locked into the lower ends of value chains. Being able to negotiate better contracts with their buyers also puts SMEs in a position to offer better terms to their own employees.
Gender is also a feature of the Outlook, with findings showing that there has been an increase in provisions covering gender equality and SMEs in trade agreements. In 1995-1999, 14% of trade agreements had references to gender equality; in 2010-2016, 47% of agreements referred to gender equality. SME provisions were part of only 6% of trade agreements in 1995-1999, whereas in 2010-2016, 25% of trade agreements contained SME provisions.
‘Including provisions on gender equality and SMEs has to be part of modern trade agreements,’ said ITC Executive Director Arancha González. ‘Even when they are not legally binding, they send an important signal that efforts need to be made to create a level playing-field for all. It is all about the need for greater coherence between economic and inclusiveness policies.’
‘The potential of SMEs to connect to foreign markets depends on the extent of value-chain activity nearby,’ González said. ‘As this report shows, most value-chain activity takes place within regional value chains, with suppliers serving lead firms in the regional hub. This means that creating an environment that facilitates regional value chain activity is important for the inclusiveness of trade.’
The report also examines recent regional infrastructure initiatives – such as China’s Belt and Road Initiative – that explicitly recognize the interaction between infrastructure, trade and regional integration.
Regional competitiveness
In line with other research, the report shows that regional value-chain activity is highest in Europe, Asia and North America. ITC’s competitiveness analysis, based on firm-level capacity, strength of the ecosystem and the national environment, makes it possible to assess why this is the case. While trade and investment policies play an important role, they are not the sole determinant.
Among the report’s findings are that traditional ‘headquarter’ economies in Europe (for example, France and Germany) and Asia (for example, Japan and the Republic of Korea) are surrounded by countries with a strong supplier base that facilitates regional value-chain activity. Both regions are also characterized by the emergence of new headquarter economies, notably China in the Asian region.
In contrast, the top competitiveness performers in Latin America and the Caribbean are weaker than their European and Asian counterparts, and are not fully exploiting the potential to become headquarter economies. Africa, meanwhile, remains split in two, with countries north of the Sahara serving value chains headquartered in Europe, while regional value-chain activity remains weak elsewhere on the continent.
The 50 country profiles contained in the report allow readers to develop a deeper understanding of which sectors have the potential to attract foreign investors and how national suppliers are positioned to serve or lead international value chains. In addition, the report contains five detailed stories of successful supplier integration: cocoa in Ghana, the automotive industry in Hungary, horticulture in Kenya, the electronics industry in Indonesia and the aerospace industry in Morocco. Together, they provide useful insights into the components of an effective value chain strategy.
Key findings of the Outlook include:
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Deep regional trade integration can help deliver more inclusive economic growth.
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Deep integration trade deals spur activity in cross-border value chains for goods and services.
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Increasing value-chain activity helps boost the competitiveness of small and medium-sized enterprises.
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Narrowing the competitiveness gap between small and large firms helps reduce income inequality.
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Bilateral investment treaties do not measurably stimulate domestic value-added in exports through value chains. Integrating investment provisions in trade agreements does.
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Investment into regional infrastructure has to be part and parcel of regional trade and investment strategies and cannot only come as an afterthought.
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Lack of regional hubs means sub-Saharan Africa and Latin America (excluding Mexico) are less integrated in international value chains than Asia, Europe and North America (including Mexico).
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China has the capacity to act as a headquarter economy in Asia and a number of Eastern European countries can move into this position in Europe.
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Regional top performers like South Africa in Africa and Chile and Colombia in South America are the most likely candidates to take up positions as ‘headquarter’ economies.
Background
The following countries are profiled in the competitiveness index: Argentina; Bangladesh; Barbados; Bhutan, Brazil; Burkina Faso; Cambodia; Chile; China; Colombia; Costa Rica; Côte d’Ivoire; Ecuador; Egypt; Ghana; Guinea; India; Indonesia; Jamaica; Jordan; Kazakhstan; Kenya; Lebanon; Madagascar; Malawi; Malaysia; Mauritius; Mexico; Morocco; Namibia; Nepal; Nigeria; Paraguay; Peru; Poland; Russian Federation; Rwanda; Senegal; Slovakia; South Africa; Sri Lanka; Thailand; Trinidad and Tobago; Tunisia; Turkey; Ukraine; United Republic of Tanzania; Uruguay; and Viet Nam.
For further background on the SME Competitiveness Outlook, please click here.
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COMESA’s trade potential pegged at over US$80bn
The current intra-regional trade in the Common Market for Eastern and Southern Africa is US$20 billion with a potential of over US$82.3 billion. This figure has risen from US$3.2 billion in 2000 when the Free Trade Area was launched.
“The paradox is that the products are produced and exported to the rest of the world and at the same time imported from the rest of the world into the region,” COMESA Secretary General Sindiso Ngwenya said on 3 October 2017.
He was addressing Ministers of infrastructure responsible for transport, communications, energy and information technology during the opening of their 10th meeting in Lusaka, Zambia.
Ngwenya said the huge trade potential was in textiles, wooden furniture, horticulture, household items, confectioneries, hides and skins, footwear and leather products, sugar confectioneries, tobacco and precious metals.
He noted: “Member States have the highest potential in producing and exporting the products whose total value is approximately ten times that of existing trade.”
COMESA has identified the absence of cross border production networks which would result in intra industry trade between and among firms within the region as major trade barrier. Hence, addressing transport and logistic challenges is fundamental to the COMESA agenda of ‘inclusive and sustainable industrialization’ in unlocking the trade potential and making the region more competitive.
Mr Ngwenya added: “While we have made considerable progress in establishing favourable trading arrangements among ourselves, we need to ensure our productive side is properly structured.”
Zambia’s Acting Minister of Transport and Communications Mathews Nkhuwa opened the meeting. He called on member states to put in place policies, systems, institutions and resources to ensure adequate infrastructure capacity in terms of quantity and quality.
A report presented to the Ministers at the meeting highlighted notable infrastructural projects that have been completed. These include the first phase of the standard gauge railway between Mombasa and Nairobi which will eventually connect Kenya to Ethiopia, Uganda and South Sudan. Ethiopia has also completed constructing a 750-kilometer standard gauge railway which will connect to Djibouti.
In the energy sector, the region currently has a total installed power generation capacity estimated at 65, 791 megawatts as at the end of 2016. This is a 36% increase from 2012 figures of 48,352 megawatts.
On ICT, COMESA countries represent 37% of the internet users in Africa. There is therefore needed to do more to enable majority of Africans have access to ICT services.
The Ministers’ meeting comes to an end Wednesday, October 4th with the adoption of various recommendations that have been prepared by the committee of the technical experts on infrastructure.
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Zimbabwe dollar dearth causes shortages, return of inflation
Zimbabwe’s money shortage has seen card and mobile-money payments eclipse cash sales at the nation’s retailers, throttling suppliers’ stock of hard currency needed to put goods on shelves and forcing up food prices.
Cash transactions have shrunk to about 2 percent of daily takings across the 33-store Spar Zimbabwe chain, from 60 percent a year ago, Managing Director Terence Yeatman said. Consumer prices as measured by the statistics agency rose 0.1 percent in August from a year earlier, it said on Sept. 15.
“About 60 percent of stock on any supermarket shelf is imported,” and without sufficient dollars, inflation on imported goods is as much as 60 percent a year, Yeatman said at the Groombridge branch in the capital, Harare. “Suppliers are obviously concerned because the hard currency isn’t there.” At other retailers, a 200-gram (7-ounce) jar of Nestle SA’s Nescafe Classic instant coffee costs $14 compared with $9 a month ago.
The southern African nation abandoned its currency in 2009 after the International Monetary fund estimated inflation had topped 500 billion percent, and has mainly used the dollar since. Greenbacks are in short supply following a collapse in exports that’s forced the government to pay its hundreds of thousands of workers late.
Not Accepted
The central bank has printed so-called bond notes, which it says carry a value equal to the dollar’s, since the end of 2016, but they aren’t accepted by foreign suppliers, including those that sell critical goods such as oil and agricultural feed. Small shops and gas stations in Harare charge 30 to 40 percent more if people use them rather than authentic greenbacks.
A political crisis has seen the economy halve in size since 2000 and caused a cash crunch that worsens in the second half of the year, when foreign currency earnings traditionally slump after the sale of tobacco ends.
The central bank has limited daily withdrawals from banks to $50, but lenders have tightened this to $20.
People sleep rough outside banks in an effort to be close to the front of the line, which can snake around the block by dawn.
Stocks Depleted
At a bank in Harare’s middle-class Avondale suburb, the stock of dollars is exhausted within an hour of the branch’s opening, said Enock Mangena, a guard who was employed to ensure orderly queues and now spends his days breaking up squabbles and fights as people who are desperate for cash jostle for money.
It takes at least 10 days and 240 miles of cycling every month for Jeremiah Ndove, a messenger in Harare’s semi-industrial Southerton district, to withdraw his salary of $200. The bank branch is 12 miles away from where he lives and he often returns empty-handed because dollar supplies are depleted. Lenders no longer stock automated teller machines.
The lack of foreign direct investment is exacerbating the dollar shortage, said John Robertson, an independent economist in Harare.
“The difficulties we’re facing will only get worse, because the government believes its own expenditures are more important than those of the productive sectors,” he said. “If that doesn’t change, the cash crisis will be with us for a long time and shortages can’t be ruled out.”
Some businesses have resorted to paying workers partly with food, but this is running into difficulties too.
“At first it was excellent business for us,” said Vinod Patel, who owns a wholesale shop in northern Zimbabwe. “Then, prices start rising alarmingly fast. Now, sourcing goods is difficult because our suppliers haven’t got foreign currency to make their purchases.”
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tralac’s Daily News Selection
Profiled trade and regional integration editorial commentaries: (i) New Times: EAC could achieve more if all member states moved at the same pace; (ii) Business Day: Catch-22 of trade surplus
Diarise: Regional Roundtables on Infrastructure Governance: Cape Town (2-3 November)
Remittance flows set to recover this year, after two years of decline (World Bank)
Remittances to low- and middle-income countries are on course to recover in 2017 after two consecutive years of decline, says the latest edition of the World Bank’s Migration and Development Brief. The Bank estimates that officially recorded remittances to developing countries are expected to grow by 4.8% to $450bn for 2017. Global remittances, which include flows to high-income countries, are projected to grow by 3.9% to $596bn. Among major remittance recipients, India retains its top spot, with remittances expected to total $65bn this year, followed by China ($61bn), the Philippines ($33bn), Mexico (a record $31bn), and Nigeria ($22bn). In keeping with an improving global economy, remittances to low- and middle-income countries are expected to grow modestly by 3.5% in 2018, to $466bn. Global remittances will grow by 3.4% to $616bn in 2018.
Maximising gains from Ghana’s trade partnerships (IMANI)
This section analyses the growth trends of Ghana’s trade flows along EPA, AGOA, and ETLS trade routes. Comparisons are made with trends in Cote D’Ivoire and in some cases with West African averages. Cote D’Ivoire is selected for comparison because not only does she trade along EPA, AGOA and ETLS trade routes, she also has similar characteristics as Ghana – both Ghana and Cote D’Ivoire export mainly agricultural products and are both lower middle income countries with per capita income (2016) of $1,380.00 and $1,520.00 respectively. This section also explores the market share of some selected NTEs – cocoa paste, tropical fruits, bananas and processed fish. The selected products fall within the priority products of the National Export Strategy and also represent the top most traded NTEs by Ghana along EPA and AGOA trade routes. A product destination analysis – an analysis of Ghana’s market share in the major export destinations, and the competition faced in those markets will also be conducted in this section.
Oil discovery and macroeconomic management: the recent Ghanaian experience (World Bank)
This paper analyses the evolution of fiscal and monetary variables in Ghana, from the discovery of oil in 2007 through to 2014. It documents the deterioration of fiscal and monetary discipline over this period, which resulted in a rebound of debt, a deterioration of the external balance, and a decrease in public investment. The paper goes on to analyse the potential causes of this deterioration, including the political economy context, and the fiscal and monetary institutional framework. The suggested causes include the politics of Ghana’s dominant two-party system. Finally, the paper discusses what Ghana could have done differently to avoid the various damaging effects associated with the oil discovery. It does not aim to provide specific fiscal policy recommendations for Ghana, but rather to give an empirical account of Ghana’s experience that may be useful for other countries that discover oil.
Visa-free Africa by 2018: Where does Rwanda lie? (New Times)
All holders of African passports travelling to or transiting through the country are issued an entry visa upon arrival at any Rwandan entry point. And, some countries do not require visas at all. For Rwandans, however, of the 53 African countries, only 29 allow holders of the Rwandan passport to enter without a visa or issue it on arrival. The Chief Executive of Rwanda Convention Bureau (RCB), Frank Murangwa, said opening borders to Africans has contributed to the growth of the economy, especially in terms of increasing in-bound delegate numbers.
SA-Zimbabwe Bi-National Commission: Beitbridge OSBP, trade update
Having noted the developments on the One Stop Border Post at Beitbridge, they welcomed the establishment of a Joint Technical Committee whose mandate, among other things, will be to develop the necessary legal framework for the Project. The two Heads of State reaffirmed the strategic importance of the OSBP and directed the relevant Ministers to fast-track its operationalisation. The two Heads of State noted the existence of more than 40 bilateral Agreements and MoUs between the two countries and directed that these Agreements be fully implemented. They further emphasised the need to finalise all outstanding Agreements and MoUs. The two Heads of State reiterated their commitment to improving and strengthening the economic relations between the two countries by facilitating trade and removing impediments constraining bilateral trade and investments. President Zuma: I wish to underscore the strategic significance of a One Stop Border Post at the Beit Bridge Border. This border post is the busiest border post on the Continent. Much of our goods and services go through it. We cannot afford to continue to have unnecessary delays at that border. It is therefore important and urgent that we start in earnest the process of establishing a One Stop Border Post. Our two countries took a decision to do so as far back as 2009. In this regard, we direct the relevant ministers and officials to move with speed and report progress at the next BNC.
Kenya retains import tax to fund regional rail network (Business Daily)
Kenya has retained the railway development tax in its budget plan for the next four years, indicating its continued gamble on the Mombasa-Malaba route as a major trade highway for years to come. The National Treasury projects that the railway development levy (RDL), which generated Sh18.2 billion in the financial year to June 30, will grow gradually over the period, netting Sh31.8 billion in 2020/21. The RDL is collected at the rate of 1.5% on imports from non-East African Community states. When Kenya first introduced the RDL in its 2013/2014 budget, the target was to raise Sh10 billion annually for the Mombasa-Nairobi -standard gauge railway. ”We will continue to implement the previously announced tax measures,” Treasury secretary Henry Rotich says in the Budget Review and Outlook Paper published last week.
Moody’s places Kenya’s B1 rating on review for downgrade (Kenyan Wall Street)
Moody’s Investors Service has placed the B1 long-term issuer rating of the Government of Kenya on review for downgrade. The decision to place the rating on review for downgrade was prompted by the following key drivers: (i) Persistent, large, primary deficits and high borrowing costs continue to drive government indebtedness higher; (ii) Government liquidity pressures risk rising in the face of increasingly large financing needs;(iii) Uncertainties weigh over the future direction of economic and fiscal policy, in part due to evolving political dynamics.
Tanzania: Tightening of screws on Tanzanite yields positive results (Daily News)
The government’s recent move to tighten the noose on Tanzanite mining and trade in the country has started paying off, with the production of the gemstone increasing more than 30 times in the country. President John Magufuli noted yesterday that the success was a result of measures taken to control the Tanzanite mining in the past few days, including tasking the armed forces to strengthen security. The measures also include erection of a fence, to cost 6bn/-, surrounding the Tanzanite mine in Mirerani, Dr Magufuli said when officially opening the 33rd Annual General Meeting of the Association of Local Authorities of Tanzania. President Magufuli told the participants that just after strengthening control of the mining activities and trade, there was a day when the production reached over 18 kilogrammes. “This has never happened since the start of Tanzanite mining in the country,” he stated.
Mauritius Container Terminal is now a leading container port in the region, says PM (GoM)
The Mauritius Container Terminal is now a leading container port in the region with the completion of the extension of the quay to a length of 800 metres. This project, to the tune of Rs 6.5 billion, is in line with Government’s vision to make the Port Louis Harbour the preferred maritime gateway in the Indian Ocean. This project will transform the harbour, the principal gateway of the country handling about 99.5% of the total volume of external trade representing 7.3 million tons of cargo annually. Furthermore, the Prime Minister announced another important development project in the port area, namely the construction of an Island Container Terminal opposite the MCT. This facility, he said, will undoubtedly be the most important container port in the region with a capacity of over 1.5 million TEUs.
Nigeria pledges support for monetary institute to enhance trade, growth in West Africa
The Federal Government on Tuesday pledged to support the West Africa Monetary Institute to enhance trade, create wealth and ease the flow of capital and growth in the region. Foreign Affairs Minister Geoffrey Onyeama said this when the new Director General of WAMI, Dr Ngozi Egbuna, paid courtesy call on him in Abuja. The director general had earlier requested the ministry to provide political support for the Institute to enhance its operations in the region.
The links between global value chains and global innovation networks: an exploration (pdf, OECD)
Following the international fragmentation of production, goods and services are nowadays produced and heavily traded in international production networks or Global Value Chains (GVCs). More recently, innovation activities have also become increasingly internationalised thereby giving rise to global innovation networks (GINs). The networks typically consist of own R&D facilities abroad as well as collaborative arrangements with external partners and suppliers. The nexus between these two types of networks in the global economy has not really been explored, although strong interdependencies between GVCs and GINs are likely. This paper takes a first attempt to analyse the linkages between both types of networks and identify a number possible government implications. The motivation for this analysis is that concerns are raised in policy discussions that countries are not able to capture the value of their innovative activities.
The innovation paradox: Developing-country capabilities and the unrealized promise of technological catch-up (World Bank)
Economists have long argued that developing countries have the potential for high productivity growth if they adopt existing technologies and apply them to the local context. This report brings to bear a battery of new data sources to explore the innovation “paradox”: despite the potential for very high returns, developing countries invest far less in adopting and inventing new processes and products than advanced countries. The report posits three broad factors underlying this paradox. [Ashraf Patel: Will the App Economy be throttled in South Africa too?]
World trade data shows globalisation is alive and kicking (The Conversation)
That said, while intra-regional trade is important, and there remains much truth in the idea that global value chains are primarily regional, it appears this may be in decline. We have pulled this out into the graph below which gives the change in the intra-regional trade share for each of the regions. The only grouping which sees a rise in trade with itself is the RoW, and it’s fair to note that this is not a regional grouping geographically. More generally, the heat map table above shows a rise in the importance of the RoW countries as destinations for the exports of other groupings. Their share in the exports of East Asia has gone up from 8% to 18% between 2002 and 2016. For Europe it rose from 19% to 22%; for North America from 8% to 13%. [The authors, Peter Holmes and Michael Gasiorek, are attached to the University of Sussex]
Richard Manning: Multilateral development aid - assessing the major replenishments of 2016 (UNU-WIDER)
This survey of the 2016 replenishments of three multilateral development bank soft funds and of the Global Fund for AIDS, TB and Malaria shows that a significant re-set of the multilateral development finance system is taking place, with grant funding from traditional donors generally in decline (the Global Fund is an exception), but with the accessing of the ‘hidden equity’ in soft loan-based funds offering a large increase in such funding (most notably in the World Bank’s soft fund, the International Development Association). ‘Graduation’ of countries away from eligibility for highly concessional multilateral finance is also changing the context. This paper underlines the need for more consideration of these wider structural issues.
Today’s Quick Links: Africa’s main textile, apparel trade show kicks off in Ethiopia Wesgro secures R17.5bn for Cape economy SA’s wheat import tariff has been revised up to R752 per ton, a 98% increase from the previous rate of R379 per ton Soya beans imports cost Zimbabwe $200m Guinea-Bissau: IMF completes 2017 Article IV and ECF review mission Tobacco tax reform: At the crossroads of health and development World Bank East Asia and Pacific Economic Update Donald Kaberuka to chair IMF’s high level evaluation panel of its Independent Evaluation Office |
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Remittances to recover modestly after two years of decline
Remittances to low- and middle-income countries are on course to recover in 2017 after two consecutive years of decline, says the latest edition of the World Bank’s Migration and Development Brief, released on 3 October 2017.
The Bank estimates that officially recorded remittances to developing countries are expected to grow by 4.8 percent to $450 billion for 2017. Global remittances, which include flows to high-income countries, are projected to grow by 3.9 percent to $596 billion.
The recovery in remittance flows is driven by relatively stronger growth in the European Union, Russian Federation, and the United States. As a result, those regions likely to see the strongest growth in remittance inflows this year are Sub-Saharan Africa, Europe and Central Asia, and Latin America and the Caribbean. In the Gulf Cooperation Council (GCC) countries, fiscal tightening, due to low oil prices, and policies discouraging recruitment of foreign workers, will dampen remittance flows to East and South Asia.
Among major remittance recipients, India retains its top spot, with remittances expected to total $65 billion this year, followed by China ($63 billion), the Philippines ($33 billion), Mexico (a record $31 billion), and Nigeria (($22 billion).
In keeping with an improving global economy, remittances to low- and middle-income countries are expected to grow modestly by 3.5 percent in 2018, to $466 billion. Global remittances will grow by 3.4 percent to $616 billion in 2018.
The global average cost of sending $200 remained stagnant at 7.2 percent in the third quarter of 2017.This was significantly higher than the Sustainable Development Goal (SDG) target of 3 percent. Sub-Saharan Africa, with an average cost of 9.1 percent, remains the highest-cost region. Two major factors contributing to high costs are exclusive partnerships between national post office systems and any single money transfer operator (MTO), which stifles market competition and allows the MTO to raise remittance fees, as well as de-risking by commercial banks, as they close bank accounts of MTOs, in order to cope with the high regulatory burden aimed at reducing money laundering and financial crime
“Remittances are a lifeline for developing countries; this is particularly true following natural disasters, such as the recent earthquakes in Mexico and the storms devastating the Caribbean. It is imperative for the global community to reduce the cost of remitting money, by eliminating exclusivity contracts, especially in the high-income OECD countries. There is also an urgent need to address de-risking behavior of global banks,” said Dilip Ratha, lead author of the Brief and head of KNOMAD.
In a special feature on forced and voluntary return migration, the Brief notes that the surge in refugees, asylum seekers and undocumented migrants arriving in Europe is slowing. Even as European countries grapple with refugee and migrant flows, low- and middle-income countries continue to host more than 90 percent of refugees. It highlights the challenges of return and reintegration of migrants. Policies that promote voluntary return and successful reintegration back home include: recognition of skills and qualifications acquired abroad; the possibility of securing a permanent residency in the host country; anti-discrimination and equal access programs in the countries of origin; and portability of social benefits.
"The fundamental drivers of the ongoing migration crisis - conflict, economic deprivation, demographic pressures and environmental change - need to be addressed. The World Bank is looking into policies and programs that will help tackle these issues,” said Michal Rutkowski, Senior Director of the Social Protection and Jobs Global Practice at the World Bank.
The Brief presents the results of a survey, conducted by the International Labor Organization (ILO) and the Global Knowledge Partnership on Migration and Development (KNOMAD), on recruitment costs paid by low-skilled migrant workers. Reducing recruitment costs is a part of the Sustainable Development Goal (SDG) of promoting safe, regular and orderly migration. Such costs can be exorbitantly high in some corridors.
For example, a significant number of Pakistani construction workers in Saudi Arabia reportedly paid over $5,000 to recruitment agents, an amount equivalent to 20 months or more of earnings. Efforts to reduce recruitment costs would require curtailing the abuses and exploitation by illegal recruitment agencies, cooperation with bona fide overseas employers, and stronger bilateral coordination between labor sending and destination countries.
Regional Remittance Trends
Remittances to the East Asia and Pacific region are expected to rebound by 4.4 percent to $128 billion in 2017, reversing a decline of 2.6 percent in 2016. Remittances to the Philippines continue to remain resilient despite declining inflows from Saudi Arabia. Remittances to Vietnam, largely sourced from the United States, are also anticipated to recover this year, while flows to Indonesia will continue to shrink due to a government ban on female domestic workers to the Middle East. Growth in remittances to the region will be a modest 3.4 percent in 2018 to $132 billion.
After declining for three consecutive years, remittances to countries in the Europe and Central Asia region are expected to grow by 8.6 percent to $43 billion this year. The recovery is mainly due to the appreciation of the Russian ruble against the dollar. Going forward, the economic recovery in Russia, continued recovery in Kazakhstan, and increased employment in the Euro Area imply a more positive outlook for remittances for the region, which are expected to grow by a robust 6.8 percent to $46 billion in 2018.
Remittances to Latin America and the Caribbean are expected to increase by 6.9 percent to $79 billion in 2017. Economic growth and improvement in the labor market in the United States is having a positive impact on the outlook for remittance flows to Mexico, which will receive a record $31 billion this year. Growth in remittances has been particularly strong in Central America. However, growth in remittances to the region will moderate in 2018 to $82 billion.
After two years of decline, remittances to the Middle East and North Africaregion are expected to grow by 4.6 percent to $51 billion this year, largely driven by strong flows to Egypt, the region’s largest recipient, in response to the devaluation of the Egyptian pound. The growth outlook is, however, dampened by lower growth in the GCC due to oil production cuts and fiscal consolidation. Remittances to the region will grow by 2.9 percent to $53 billion in 2018.
Remittances growth to the South Asia region will be moderate at 1.1 percent to $112 billion this year, due to continuing impact of lower oil prices and ‘nationalization’ polices leading to constrained labor market conditions in the GCC. Remittances to India, the world’s largest remittance recipient, will grow by 4.2 percent in 2017 to $65 billion, following a decline of nine percent in 2016. Flows to Pakistan are expected to remain flat this year, while Sri Lanka, Bangladesh and Nepal will see a decline. Remittances to the region will grow by a weak 2.6 percent to $114 billion in 2018.
Buoyed by improved economic activity in high-income OECD countries, remittances to Sub-Saharan Africa are projected to grow by a robust 10 percent to $38 billion this year. The region’s major remittance receiving countries, Nigeria, Senegal and Ghana, are all set for growth. The region is also host to a number of countries where remittances account for a significant share of GDP, including Liberia (26 percent), Comoros (21 percent), and the Gambia (20 percent). Remittances will grow by a moderate 3.8 percent to $39 billion in 2018.
The Migration and Development Brief and the latest migration and remittances data are available at www.knomad.org
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Visa-free Africa by 2018: Where does Rwanda lie?
In 2013, the African Union adopted Agenda 63, as a blueprint to propel the continent to prosperity within the next 50 years.
As part of the agenda, African countries committed to abolishing visa requirements for all African citizens travelling within the continent by 2018.
According to the second Africa Visa Openness Index, released mid this year, 75 per cent of the countries in the top 20 most visa-open countries are in either Eastern or West Africa, while 20 per cent are in Southern Africa.
Only one country in the top 20 most open to visas is in North Africa (Mauritania), while no countries in Central Africa appear in the top 20.
On January 1, 2013, Rwanda eased visa requirements for African nationals.
All holders of African passports travelling to or transiting through the country are issued an entry visa upon arrival at any Rwandan entry point. And, some countries do not require visas at all.
For Rwandans, however, of the 53 African countries, only 29 allow holders of the Rwandan passport to enter without a visa or issue it on arrival.
Reaping from open borders
The Chief Executive of Rwanda Convention Bureau (RCB), Frank Murangwa, said opening borders to Africans has contributed to the growth of the economy, especially in terms of increasing in-bound delegate numbers.
“It has helped facilitate both local businesses and employment opportunities. This year alone, RCB has hosted big events like YouthConnekt Africa (1,000 delegates) and Transform Africa Summit (1,500 delegates), both bringing in delegates, most of whom were visiting the country for the first time. The delegates have a positive economic impact,” he said.
Murangwa said that African delegates are a growing target audience hailing the country’s decision to open its borders, thus easing the process of acquiring African Conferences, Events and Exhibitions.
Dr Frederick Golooba-Mutebi is a researcher and analyst. He told The New Times that travelling through Africa is hard for Africans because some of the countries on the continent sometimes make it even more difficult to obtain a visa than one to Europe or the US.
“I will give you an example. I wanted to go to Cameroon and I had to apply two months prior because that is the condition. Getting a British visa takes 15 working days, why should it take me that long to go to Cameroon?” he asked.
“As a Ugandan, when I apply for a visa to South Africa, I rarely get multiple entry visas that last more than two months. For Africans, it is relatively easier to travel to Europe or to the Americas than it is in some African countries and I think that is ridiculous,” Golooba-Mutebi added.
He said that while applying for a visa to Canada could get one a 10-year multiple entry visa, five to 10 years for the UK, 10 for the US, it is virtually impossible to get a 10-year visa to any African country.
Golooba-Mutebi said relaxing visa requirements like Ghana and Rwanda have done on can only be a good thing for Africans wishing to travel within the continent whether for work or tourism since it is easy to enter and easy to leave.
Indeed, North Americans need a visa to travel to only 45 per cent of African countries. They do not need a visa in 20 per cent of the countries and can get a visa on arrival 35 per cent.
The Africa Visa Openness index shows that to travel to other African countries, Africans need visas to enter 55 per cent of states within the continent.
“Only 20 per cent of nations allow Africans to enter without visas, with 25 per cent offering visas on arrival,” adds the report commissioned by the African Development Bank.
Lucy Mbabazi, a financial technology expert, said that though more was still needed to fine-tune the entire travelling process, the continued increase in the number of countries that Rwandans can visit now visa-free is great news.
“Hustle-free travel is everything. Being able to avoid having to go through the process of applying, paying, waiting is something great. There are definitely some improvements from a visa perspective though we still have a long way to go when it comes to flight connecting side. It should be affordable to buy a ticket, it should be easy to check in online and for Africa, it is still very manual but hopefully that too will change,” she said.
Justus Mucyo, the head of African Retail Operation at BBOXX, a local company providing affordable solar solutions, said the scrapping of entry visas is invaluable to a company that has plans to expand beyond the borders.
“I am looking forward to travelling the continent for professional reasons. I work for a company that has a vision of operating in as many African countries as possible so if I can travel without requiring a visa, then that is invaluable,” Mucyo says.
One of the arguments against opening up borders is security-related risks.
However, the head of communication and customer care at the Rwanda Immigration and Emigration, Yves Butera, said the benefits outweigh the challenges.
“If all parties collaborate in putting in place infrastructure to address the challenges, all citizens will benefit,” he said.
According to the World Tourism Organisation (WTO), in 2008, Africans comprised, on average 88 per cent of the world’s population to apply for a traditional visa. This decreased to 57 per cent in 2015 because many African countries have introduced travel facilitation measures such as visa on arrival and e-Visa.
The idea of easing travel for Africans within the continent is gaining momentum as African leaders are increasingly becoming open to integration.
The leaders believe the opportunities of trading with each other are under-exploited and, by easing travel, trade, tourism and cooperation will bring immense benefits for the African people.
According to the UN Conference on Trade and Development (UNCTAD) 2017 Economic Report on African Tourism, the fastest growing tourism in Africa is intra-African tourism which happens all year through.
UNCTAD secretary-general Mukhisa Kituyi recently told participants at the 41st Annual World Tourism Conference in Kigali that, for African tourism to thrive, there was need to change Africa’s image perception. He emphasised the importance of peace and security.
“The most startling and interesting discovery in our study is that, by far, the fastest growing tourism in Africa is intra-African tourism, which happens 12 months a year. Over the last 10 years, intra-African tourism has grown from 34 per cent to 44 per cent of total African tourism revenues and is projected to be more than 50 per cent in the next 10 years,” Kituyi said.
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SADC looks to diversification to grow regional economy
“The diversification of our economies and industrialisation will ultimately put the region on its rightful path as a global economic player,” said President Jacob Zuma, who is also the chair of the SADC regional bloc, on Tuesday.
Tshwane assumed the chair of the Southern African Development Community (SADC) in August, with its tenure theme being ‘Partnering with the private sector in developing industry and regional value-chains’.
Through this theme, Tshwane seeks to build momentum and continuity in the collective aspiration towards regional sustainable economic development and industrialisation.
As such, it has identified key activities which will be the development of a high impact Annual Operation Plan, with targeted interventions and public policy tools to foster the development of regional value-chains in agro-processing, pharmaceuticals and mineral beneficiation.
Another issue the region needs to address is connectivity in information, technology, and communications. President Zuma said this must be addressed for the region to benefit from the Fourth Industrial Revolution, where industries are dominated by high-tech ICT.
In the SADC region – which consists of 15 countries with a population of 300 million people – only 16.3% of the population is using the internet, compared to a penetration of 47% globally.
The regional bloc is of the view that improved infrastructure can help to address socio-economic issues, ensure a better quality of life, boost regional economic integration, bridge the inequality gap and aid industrialisation efforts.
“Connectivity will ensure the attainment of the goals for regional economic integration, poverty alleviation and industrialisation,” President Zuma said.
The President was speaking at the second session of the South Africa-Zimbabwe Bi-National Commission (BNC) in Tshwane.
SA-Zimbabwe BNC
President Jacob Zuma is hosting his Zimbabwe counterpart Robert Mugabe, who is in the country for the session of the BNC. It is a forum where the two countries review their relations.
The two leaders used the session to exchange views on regional and global issues of mutual concern and development in the SADC region.
The session opened with a vow from the two countries to use their bilateral relations to push for the economic emancipation of their people.
While the task is not easy, the two neighbouring countries, which share cultural and historic links, are certain that their joint efforts through mechanisms such as the BNC will lead them there.
President Zuma said South Africa and Zimbabwe’s historical, fraternal and cultural bonds demand that they meet on a regular basis to strengthen and consolidate bilateral cooperation and partnership.
“We note with satisfaction the ever-growing cooperation between our two countries as evidenced by the existing 40 agreements and memoranda of understanding. These agreements are aimed at promoting political, economic and social cooperation.”
The agreements cover a wide range of areas including double taxation, justice, defence, transport, water, science and technology, health, migration, labour, economic and trade cooperation, and tourism.
The two countries have put in place monitoring mechanisms such as Mid-Term Reviews.
President Mugabe used his address to recall the historical relations that Zimbabwe and South Africa share. He said while one can “choose [their] friends, [they cannot choose their] neighbours. However, if Zimbabwe had a choice, they would “still have chosen South Africa”.
"When we come here, we know we are coming to our second home… We are one, one revolution, one struggle, one future.”
The senior statesman expressed his satisfaction on the programmes and projects undertaken by the BNC, as they secure a common future.
President Mugabe called for improved local business environments to attract investments and concerted efforts to promote cross-border investments.
“New investment opportunities should be opened in airports, railway and road systems. The respective private and public sectors should not miss out on the opportunities we are trying to facilitate.”
Zimbabwe is one of South Africa’s top five trading partners on the continent, with trade statistics showing annual growth.
In 2016, South Africa’s exports to Zimbabwe amounted to approximately R29.3 billion.
There are over 120 South African companies doing business in Zimbabwe in various sectors including mining, aviation, tourism, banking, property, retail, construction and the fast food sectors.
Beitbridge border in for a major overhaul
South Africa and Zimbabwe have established a joint committee to work on improving operations at the Beitbridge border post.
Beitbridge is the busiest road border on the continent, with much of the goods and services between Zimbabwe and South Africa passing through this strategic point. During the peak of the festive season in 2016, over 31 000 travellers passed through the border daily.
On Tuesday, President Jacob Zuma announced that a joint technical committee will be established with officials from SA and Zimbabwe to set up the Beitbridge One Stop Border Post (OSBP). The team will develop the necessary legal framework for this project.
South Africa and Zimbabwe held the second session of the Bi-National Commission (BNC) at the Sefako Makgatho Presidential Guesthouse in Tshwane.
President Zuma said it was necessary to bolster the efficiency of Beitbridge.
“I wish to underscore the strategic significance of a One Stop Border Post at the Beitbridge border. This border post is the busiest border post on the continent.” A One Stop Border Post aims to improve the legal movement of people and commodities across borders. Currently, travellers are processed at two facilities of the two respective countries. A One Stop Border Post would result in seamless movement at the border, as travellers would be processed at one facility.
The establishment of the Beitbridge One Stop Border Post forms part of government’s implementation of the Single Border Management Agency. Last year, South Africa and Mozambique integrated the Lebombo/Ressano Garcia border post, also known as Komatipoort.
President Jacob Zuma said Beitbridge is key to boosting the two countries’ economies and as such, unnecessary delays at the border must be avoided. Zimbabwe is one of South Africa’s top five trading partners on the continent, with trade statistics showing annual growth. In 2016, South Africa’s exports to Zimbabwe amounted to approximately R29.3 billion.
“It is important and urgent that we start in earnest the process of establishing a One Stop Border Post. Our two countries took a decision to do so as far back as 2009.”
President Zuma and President Mugabe urged the relevant ministers and officials to work speedily on the project. They want a progress report at the next BNC.
Joint Communiqué on the occasion of the second session of the Bi-National Commission (BNC) between the Republic of South Africa and the Republic of Zimbabwe held on 3 October 2017 in Pretoria, RSA
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At the invitation of His Excellency, Mr Jacob Gedleyihlekisa Zuma, President of the Republic of South Africa, His Excellency, Mr Robert Gabriel Mugabe, President of the Republic of Zimbabwe visited the Republic of South Africa on the 3rd of October 2017 on the occasion of the Second Session of the Bi-National Commission (BNC) between the Republic of South Africa and the Republic of Zimbabwe.
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The meeting of the two Heads of State was preceded by a Ministerial Meeting which took place on the 2nd of October 2017 and a Senior Officials’ Meeting held from the 28th to the 29th of September 2017.
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During the official talks, the two Heads of State exchanged views on a wide range of bilateral, regional and international issues of mutual interest.
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The two Presidents reviewed bilateral relations and expressed satisfaction with the state of those relations. They agreed that the implementation of the Agreement on the Bi-National Commission signed by both countries on the 8th of April 2015 was the most effective way of enhancing cooperation between the two countries. They also reaffirmed the strategic importance of the BNC mechanism in promoting political, economic, social, security, cultural, scientific and technical cooperation.
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The two Heads of State received a progress report from the Ministers on the implementation of agreements signed and commitments made as well as decisions adopted at the 1st Session of the Bi-National Commission. The two Heads of State expressed their satisfaction with progress so far achieved.
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Having noted the developments on the One Stop Border Post (OSBP) at Beitbridge, they welcomed the establishment of a Joint Technical Committee whose mandate, among other things, will be to develop the necessary legal framework for the Project. The two Heads of State reaffirmed the strategic importance of the OSBP and directed the relevant Ministers to fast-track its operationalisation.
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The two Heads of State noted the existence of more than forty (40) bilateral Agreements and Memoranda of Understanding (MoUs) between the two countries and directed that these Agreements be fully implemented. They further emphasised the need to finalise all outstanding Agreements and MoUs.
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The two Heads of State welcomed the signing of five (5) Agreements in the areas of Energy, Environment, Information Communications Technologies and Sports and Recreation during the Bi-National Commission.
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The two Heads of State reiterated their commitment to improving and strengthening the economic relations between the two countries by facilitating trade and removing impediments constraining bilateral trade and investments.
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The two Heads of State exchanged views on the political and security situation in the region. They further reaffirmed their commitment to working together in pursuit of sustainable peace, stability and economic development of the region.
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His Excellency, President Mugabe further congratulated His Excellency President Zuma for his election as the Chair of Southern African Development Community (SADC) and reassured him of Zimbabwe’s support during South Africa’s tenure as Chair of the regional organisation.
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The two Presidents reaffirmed their commitment to SADC and underscored the importance of having member states participate at the appropriate level during SADC Summits.
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The two Presidents welcomed the admission of Comoros into the SADC family.
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The two Presidents congratulated the people of the Republic of Angola for conducting peaceful, fair and credible elections.They further congratulated His Excellency President João Lourenço on his election as President of Angola and committed themselves to working with him in pursuit of peace, stability and economic integration of the region.
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The two Presidents reviewed developments in the region, in particular the situation in Lesotho and the Democratic Republic of Congo (DRC). They further urged the two countries to implement the relevant SADC decisions and recommendations.
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The two Presidents reaffirmed their commitment to the continental integration processes and called for the implementation of the African Union’s Agenda 2063 and its Action Plan.
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The two Heads of State reviewed the political developments on the continent and expressed their concern on the ongoing instability in some parts of the continent. In this regard, they reaffirmed their commitment to work together in pursuit of sustainable peace and stability.
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The two Presidents reaffirmed the two countries’ long standing solidarity with the peoples of the Saharawi Arab Democratic Republic (SADR) and Palestine. With regards to the SADR, the two Heads of State reaffirmed the need for SADC to convene a solidarity conference with the people of Western Sahara.
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The two Presidents reaffirmed their support and commitment to Agenda 2030 for Sustainable Development adopted by the United Nations in 2015. They reiterated the call for the reform of the multilateral system and in particular the UN Security Council.
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His Excellency, President Mugabe expressed his gratitude for the warm reception and hospitality accorded to him and his delegation. He extended an invitation to His Excellency President Zuma to a working visit in Zimbabwe in 2018 for the 3rd session of the BNC, on a date to be mutually agreed upon through diplomatic channels.
Done at Pretoria, Republic of South Africa, 3 October 2017
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tralac’s Daily News Selection
This week, in Abuja: Seventh meeting of the CFTA Negotiating Forum
The objective of the meeting is to consider the draft texts of the CFTA Agreement and its Annexes and Appendices proposed by the Technical Working Groups. Chief Negotiators will also discuss criteria for designating sensitive products and exclusion list in the modalities for tariff liberalization. Ambassador Chiedu Osakwe, Chair of the CFTA-NF, underlined that “the conclusion of the CFTA was a strategic economic priority for the continent for growth, structural transformation, job creation, welfare and prosperity. There was no Plan B and failure was not an option”.
This week, in Johannesburg: The first ILO Decent Work Academy in Africa
Under the overall theme of “the Sustainable Development Goals and Decent Work in Africa”, the key objective of this Academy is to share the latest global thinking on the world of work issues in order to find innovative solutions for some of Africa’s most pressing labour market challenges.
Tomorrow, in Paris: the AUC/OECD's 17th International Economic Forum on Africa on the theme Entrepreneurship and Africa’s industrialisation.
OECD Development Matters Africa commentaries: (i) Rémy Rioux: Helping entrepreneurs thrive in Africa, (ii) Tabea Lakemann, Jann Lay: Services, informality and productivity in Africa
Mozambique: Baseline assessment of Mozambique’s sanitary and phytosanitary measures and road map for reform (SPEED+)
Mozambique’s participation in the WTO SPS Committee meetings is occasional and irregular. The country therefore misses the opportunity to share information, hold bilateral talks and eventually seek support from trade partners, explore market access opportunities, and learn from the experiences of other countries with similar profiles, and it excludes itself from the development of natural alliances with countries with similar SPS concerns and profiles. Mozambique is also not an active SADC member state regarding SPS issues. Mozambique suffers from a generalized lack of or limited access to adequate training; the absence of modern technology and control capacity capable of responding to the entrance and rapid spread of new pests/diseases (recently illustrated in the Panama disease crisis in bananas, fruit fly; fall armyworm, aflatoxin, etc.); and outdated legislation, standards, and regulations, often not harmonized with international standards. Several laboratories lack well-qualified and trained staff, and existing equipment is in many cases obsolete or stalled due to malfunctions. Finally, and perhaps most crucially, SPS is not regarded by senior decision makers as a priority issue, and there is no national SPS strategy, which makes it difficult to build a dedicated national SPS agenda. [Download the draft report, pdf]
The cost of borders: Mbembe makes a strong case for African integration through open borders (AfDB)
Renowned African historian, Joseph Achille Mbembe, has made a solid case for Africa’s integration through open borders that allow free movement of people on the continent. “History tells us that the first thing you do to incapacitate people is to restrict their ability to move. Mobility allowed the stretching of societies; was determinant to trade and to building African civilizations,” Mbembe said. The erudite scholar made these arguments at the 21st edition of the African Development Bank’s Eminent Speakers series on the theme, The cost of borders. He said restricted mobility and limited open borders is a serious cost prohibitive issue in a continent saddled with hundreds of internal borders and is highly cost prohibitive. The biggest challenge facing Africa in the 21st century is for the continent to become a vast area of freedom of movement. The future of Africa does not depend on restrictive immigration policies and the militarisation of borders, he says. He further explained how barriers and political issues constrain continental efforts to integrate Africa through investments, trade, finance and free movement of people and skills.
Ethiopia eyes improved export trade in 2017/18 fiscal year (Xinhua)
The Ethiopian government on Thursday affirmed that the country’s export trade would improve during the just commenced 2017-2018 Ethiopian fiscal year. The announcement came amid dissatisfaction in the performance of the east African country’s export trade during the 2016-2017 fiscal year, in which the country was only able to secure $2.9bn, falling way short of the initial target of $4bn. According to the Ethiopian Ministry of Trade, the large number of industrial parks that went operational during the last fiscal year and earlier on the just commenced fiscal year would play a pivotal role in improving the performance of export trade. During the past fiscal year alone Ethiopia had registered a record $866m earnings from coffee exports. The exports of flower and other horticulture products had generated some $271m.
Ghana: Trade Minister inaugurates board of Export Promotion Authority (GhanaWeb)
Mr Alan Kyeremanten, the Minister of Trade and Industry, has inaugurated a 10-member board of the Ghana Export Promotion Authority with the task of focusing on the country’s export drive to facilitate economic growth. The board members were expected to improve the export sector since it has the propensity to create job opportunities and generate foreign capital and resources for the economy. GEPA confident of meeting US$10bn NTEs target: The Ghana Export Authority is confident of meeting its target of taking the volumes of non-traditional export (NTE) to $10bn by 2021. Per the four-year plan, NTEs, which include agriculture products, handicraft and processed and semi-processed products, are expected to rake in US$4 billion by the end of 2017, up from the US$2.46 billion recorded in 2016.
Nigeria earns N13.5 billion from cashew nuts, as federal government shores up non-oil exports (Premium Times)
The Minister of Agriculture and Rural Development, Audu Ogbeh, during a presentation on Thursday at the National Economic Council meeting said that the country’s agriculture exports in the second quarter of the year were largely driven by the export of cashew nuts which he said was worth N13.5 billion. Mr Ogbeh was briefing the NEC on Nigeria’s “Strategic Export Initiatives” which is a framework and action plan to grow and diversify the export of agro-products. The NEC meeting which is chaired by the country’s Vice President Yemi Osinbajo, has all the state governors, including the Minister of the Federal Capital Territory, and the Central Bank of Nigeria, CBN, as members.
Rwanda: MINAGRI, World Bank, EU launch partnership to increase evidence in agricultural policy-making (RWA News)
The Ministry of Agriculture and Animal Resources, World Bank Group, and European Commission have officially launched the WB-EU Partnership for Evidence-Based Policy Making in Agriculture. The objective is to increase the role of evidence in agricultural policy-making in the country, through the implementation of rigorous Impact Evaluations in key policy priority areas in the sector. The partnership will be spearheaded by Development Impact Evaluation – a unit within the World Bank’s Research Group that works with governments to design and implement impact evaluations to inform policy decisions, through its Impact Evaluation to Development Impact (i2i) program.
COMESA: Infrastructure experts review implementation of regional projects
Infrastructure experts from COMESA Member States have concluded a three days meeting in Zambia to review the status of domestication and implementation of programmes in transport and communications, energy and information technology in the region. Among the key projects in focus in the three sectors were; the establishment of a navigational route between Lake Victoria and the Mediterranean Sea known as VICMED, the regional power interconnectors and the proposed establishment of a cybercrime capacity building centre. This is the 10th meeting of the COMESA committee of infrastructure experts representing the 19 Member States. The technical experts meeting, which began on Saturday ended today, giving way to the 37th meeting of ministers in charge of infrastructure. During the technical session, progress report on the implementation of Zambia, Tanzania, Kenya Power Interconnector was presented. The project is under implementation and seeks to interconnect the three countries and create a link between the Southern African Power Pool and the East African Power Pool. This will make it possible for transmission of power from Cape to Cairo. According to a market study conducted on the project in December 2016, the link will make it possible to transfer as much as 600MW from Ethiopia, through Kenya to Tanzania and Zambia in the short-term and vice versa in the long-term.
ICE2017 issues the Douala Consensus (UNECA)
The 33rd meeting of the Intergovernmental Committee of Experts for Central Africa (ICE2017) has ended in Douala with calls for the adoption of well-targeted and sequenced counter-cyclical measures as a means to promoting resources-driven and trade-induced Industrialisation in Central Africa. In a document dubbed, “Douala Consensus” - issued at the end of the four-day deliberations - policymakers, industry captains and other stakeholders made the case for a paradigm shift “from a resources for infrastructure model to a resources for Industrialisation (R4Id) model.” The document notes the imperative to promote the "made in Central Africa" label; establish industrial zones and growth poles; accelerate the implementation of the AU’s Boosting Intra-Africa Trade programme; focus on the subregion’s rich natural resources as basis for its industrialization; and re-enforce inter-sectoral coordination and public-private dialogue.
Tanzania: Electronic Certificate of Origin payment system launched (Daily News)
Tanzanian traders are expected to benefit as import and export will become easier thanks to the launch of an electronic Certificate of Origin payment system which is expected to enhance trade efficiency. The system under the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) project through financial support of TradeMark East Africa was launched in Dar es Salaam over the weekend. It is to expedite application and issuance of delivery of Certificates of Origin (CO) by reducing physical movements and time taken to process the document and thus cutting on days of processing the vital certificates.
Botswana's June 2017 merchandise trade surplus (pdf, Stats Botswana)
Botswana recorded a trade surplus of P1, 146.1 million in June 2017, which is slightly higher than the May 2017 trade surplus of P1, 134.5 million. Five graphical presentations appear in this digest. Chart 1.1 shows imports, total exports and trade balance from January 2015 to June 2017. Charts 2.1 and 2.2 show Principal Commodity groups for imports and exports respectively, for June 2017. Charts 3.1 and 3.2 show imports and exports by major trading partner countries and regions for the month under review. [Matambo forecasts P8bn budget deficit for 2018]
Information Economy Report 2017: digitalization, trade and development (UNCTAD)
The UNCTAD Report shows that Africa is lagging behind the most in key aspects of e-trade readiness: connectivity, payment solutions, trade logistics, Internet security and legal frameworks. For example, less than 40% of African countries have adopted data privacy legislation. Nonetheless, digitalization is increasingly affecting African economies in a number of ways. The use of big data, artificial intelligence (AI) and three-dimensional (3D) printing are examples. In sub-Saharan Africa, large sets of data on soil characteristics are mined to help determine fertilizer needs and increase productivity. In the United Republic of Tanzania, recycled plastic bottles are being used to 3D-print prosthetics. And IBM is using its AI solution, Watson, to address development challenges in Africa in areas such as agriculture, health care, education, energy and water through the Project Lucy initiative. E-commerce is another area that is growing fast. The Jumia Group (formerly Africa Internet Group) founded in 2012, now has a presence throughout Africa. According to the company, half a million local African enterprises are conducting business on its portals every day. Jumia offers retail sales in 7 African countries (Cameroon, Côte d'Ivoire, Egypt, Ghana, Kenya, Morocco and Nigeria), and its marketplace is available in 14 countries. Its growth has been strong, with an increase in its Gross Merchandise Value rising from €35 million in 2013 to about €289 million in 2015.
National Assembly will ensure Nigeria is readmitted into EGMONT Group – Dogara (Premium Times)
The suspension of Nigeria from the EGMONT group is a major set back for the Federal government’s fight against corruption, Speaker of the House of Representatives, Yakubu Dogara, has said. Mr Dogara said the National Assembly was working to ensure that the suspension placed on Nigeria is lifted within the shortest possible time. Speaking when he received in audience the Director General of Inter-Governmental Action Group Against Money Laundering, GIABA, in West Africa, a unit of the Economic Community of West African States, ECOWAS, Adama Coulibaly, who was accompanied by the Director of the NFIU, Francis Usani in his office, the Speaker stated that Nigeria’s suspension was a rude shock because the APC government is committed to the fight against corruption. He said the fight against corruption cannot be successful without support and cooperation from other countries because in most cases proceeds of corruption are taken out of the country and kept in other jurisdictions.
Saharawi Republic takes part at 7th Meeting of the Continental Free Trade Area Negotiating Forum
Dangote Group denies 10-year tax waiver agreement
China’s Foshan City seek to increase trade with Namibia
Tanzania: (i) Peas get three new markets after India ban, (ii) Cereal producers fault India curbs on pigeon peas
Why President Kovind's Ethiopia, Djibouti visit is important for India
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“100 Days to the CFTA” – Chief Negotiators reconfirm their commitment to conclude negotiations on the CFTA by end of 2017
The African Union Commission is organizing the Seventh Meeting of the Continental Free Trade Area (CFTA) Negotiating Forum (CFTA-NF) from 02-07 October 2017 in Ethiopia.
The Objective of the meeting is to consider the draft texts of the CFTA Agreement and its Annexes and Appendices proposed by the Technical Working Groups (TWGs).
Furthermore, the Chief Negotiators will discuss criteria for designating sensitive products and exclusion list in the modalities for tariff liberalization.
The larger Vision of the CFTA as defined by the African Union Agenda 2063 is to build an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the global arena.
In his introductory remarks, Amb. Albert M. Muchanga, Commissioner for Trade and Industry of the African Union Commission, congratulated the participants for the progress attained so far and expressed his confidence in the good work that has been undertaken so far by the Negotiating Forum.
The Commissioner urged Member States to set minimum targets for this week in order to sustain the momentum to deliver on time and in full. “Let me as well stress that I am expecting at the end of your deliberations, that you will assist me reaffirm my current conviction that the negotiations are on track and on schedule,” he added.
Before he concluded, Amb. Muchanga said: “Let me remind you that there are less than hundred days to the deadline. I am, however, very hopeful that you will build on the progress attained so far and deliver to the people of Africa and the Assembly of the African Union Heads of State and Government by December this year, a legal instrument establishing the Continental Free Trade Area, with Annexes.”
During an exchange views session that followed, CFTA Chief Negotiators confirmed their commitment to conclude the CFTA Agreement by end of 2017 and outlined the benefits that will accrue from the establishment of the Continental Free Trade Area (CFTA).
The meeting is chaired by Amb. Chiedu Osakwe from Nigeria in his capacity as Chair of the CFTA-NF. Ambassador Osakwe concluded the exchange by underlining that, “the conclusion of the CFTA was a strategic economic priority for the Continent for growth, structural transformation, job creation, welfare and prosperity. There was no Plan B and failure was not an option”.
He commended AU Commissioner Muchanga for his leadership and the commitment of the AUC Team. He also praised the Chief Negotiators for their reaffirmation of the goals of the CFTA Negotiations.
The meeting is attended by Members of the CFTA Negotiating Forum, Trade Experts from the eight RECs (CEN-SAD, COMESA, EAC, ECCAS, ECOWAS, IGAD, SADC and UMA), members of the CFTA Continental Task Force (CTF), AFDB, UNECA and UNCTAD.
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New digital era must ensure prosperity for all
Digitalization is impacting every aspect of production and trade, from the largest corporations to the smallest traders, but there is a risk that it will lead to widening income inequalities, UNCTAD said on Monday in its Information Economy Report 2017: Digitalization, Trade and Development.
Information and communications technologies (ICTs), electronic commerce (e-commerce) and other digital applications are helping a growing number of small businesses and entrepreneurs in developing countries to connect with global markets and open up new ways of generating income. They are being leveraged to promote business, including the empowerment of women as entrepreneurs and traders, and to support productive activities.
The digital economy is expanding fast in the global South. Developing economies, led by China and India, accounted for nearly 90 per cent of the 750 million people that went online for the first time between 2012 and 2015 according to data from the International Telecommunication Union.
“We at UNCTAD are excited by the transformational power of digitalization, but we must recognize that the Internet is not a panacea,” UNCTAD Secretary-General Mukhisa Kituyi said.
“Effective national and international policies are needed to make sure the gains are spread evenly across as well as within countries,” Dr. Kituyi added.
The report points out that more than half of the world’s population remains offline, and the pace of growth in access and use is slowing. Specifically, in the world’s least developed countries only one in six people used the Internet in 2016.
Globally, the digitalization of economic activities has been fast-tracked thanks to expanding access to high-speed broadband and the drastic reduction of cost for ICT equipment and software. The average cost of 1 gigabyte of hard drive storage capacity, for example, fell from more than US$400,000 in 1980 to US$0.02 in 2016.
Digitalization is fuelling the rise of 3D printing, artificial intelligence, the Internet of things, cloud computing, big data and automation, including in developing countries. In Myanmar, for instance, farmers use a 3D printer to create parts for a sprinkler system and the internal mechanics for a solar pump. In the United Republic of Tanzania, recycled plastic bottles are being used as the raw material for 3D-print prosthetics.
Productivity gains from digitalization, however, may accrue mainly to a few, already wealthy and skilled individuals. Winner-takes-all dynamics are typical in Internet platform-based economies, where network effects benefit first movers and standard setters. The world’s top four companies by market capitalization are all closely linked to the digital economy: Apple, Alphabet (Google), Microsoft and Amazon.
The UNCTAD research released today comes amid rising concerns over widening income inequality. In countries of the Organization for Economic Cooperation and Development, where the digital economy has evolved the most, growing use of ICTs has been accompanied by an increasing income gap between the rich and poor.
Recommendations from UNCTAD experts include a call for countries to ensure an adequate supply of skilled workers with strong adaptive and creative skills necessary for “working with the machines”. More blue- as well as white-collar jobs may become obsolete due to automation.
“All countries will need to adjust their education and training systems to deliver the skills required in the digital economy,” the report says.
With more trade going digital, and with data flows playing a more important role for companies, closer dialogue will be needed between the trade and Internet policy communities. Data flows and the Internet of things, for instance, raise concerns related to data privacy and security.
The policy challenge depends on countries’ readiness to engage in and benefit from the digital economy, with the least developed countries the least prepared. To ensure that more people and enterprises in developing countries have the capacity to participate effectively, the international community will need to expand its support. International support and collaboration on a massive scale are needed to prevent the evolving digital economy from widening the digital divides and existing income inequalities.
Key facts about the digital economy Growth:
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By 2019, global Internet traffic is expected to be 66 times higher than in 2005
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Production of ICT goods and services accounts for some 6.5 per cent of global GDP
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Some 100 million people are now employed in the ICT services sector
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Exports of ICT services grew by 40 per cent between 2010 and 2015
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Shipments of 3D printers are expected to grow from 450,000 in 2016 to 6.7 million in 2020, a fifteen-fold increase in just three years
Development challenges:
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With an estimated 16 per cent of individuals in the least developed countries using the Internet in 2016, the target of universal access to the Internet for these countries set in the Sustainable Development Goals is far off
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Urban-rural divide: 3G networks cover 89 per cent of urban areas, but only 29 per cent of rural areas; the gap is the most pronounced in low-income countries
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The Internet gender divide is most pronounced in developing countries
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E-commerce use in the least developed countries is typically below 2 per cent of population, compared with more than 50 per cent in many developed countries
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Only 4 per cent of the world’s 3D printers are used in Africa and Latin America
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In Africa, less than 40 per cent of countries have adopted data privacy legislation, and in Oceania, only the Cook Islands has such legislation.
Geographical concentration of headquarters of digital multinational enterprises,* 2016
Source: M Van Alstyne, 2016. How new biz models are changing the shape of industry. Presented at 3D Experience Forum, 10 May. Available at https://www.youtube.com/watch?v=8OFRD66pI0Y
* Digital multinational enterprises with a market capitalization of more than $1 billion
Top 10 importers of cross-border online business-to-consumer purchases, 2015*
Source: UNCTAD calculations.
Abbreviation: B2C, business to consumer
* Estimates by UNCTAD based on official and market research information.
African countries need to strengthen their digital readiness to benefit fully from digitalization, says UNCTAD
Digitalization is impacting every aspect of production and trade, from the largest corporations to the smallest traders, but there is a risk that it will lead to widening income inequalities, UNCTAD warned on Monday in its Information Economy Report 2017.
The digital economy is evolving in Africa but at different speeds. While in Nigeria, 32 million people started to use the Internet between 2012 and 2015, in other African countries (including the Central African Republic, Eritrea and South Sudan), mobile cellular services still reach less than a third of the population.
Africa may be the region with the lowest mobile broadband penetration, but it boasts also the highest growth rate of such penetration. Climbing mobile subscriptions have been accompanied by a rise in imports of communications equipment, as shown for Rwanda and Zambia (see figure).
“Many African countries need to become better prepared to take advantage of opportunities and to avoid negative impacts of digitalization,” says Ms. Shamika Sirimanne, Director of the Division on Technology and Logistics at UNCTAD.
The UNCTAD Report shows that Africa is lagging behind the most in key aspects of e-trade readiness: connectivity, payment solutions, trade logistics, Internet security and legal frameworks. For example, less than 40% of African countries have adopted data privacy legislation.
Nonetheless, digitalization is increasingly affecting African economies in a number of ways. The use of big data, artificial intelligence (AI) and three-dimensional (3D) printing are examples. In sub-Saharan Africa, large sets of data on soil characteristics are mined to help determine fertilizer needs and increase productivity. In the United Republic of Tanzania, recycled plastic bottles are being used to 3D-print prosthetics. And IBM is using its AI solution, Watson, to address development challenges in Africa in areas such as agriculture, health care, education, energy and water through the Project Lucy initiative.
E-commerce is another area that is growing fast. The Jumia Group (formerly Africa Internet Group) founded in 2012, now has a presence throughout Africa. According to the company, half a million local African enterprises are conducting business on its portals every day. Jumia offers retail sales in 7 African countries (Cameroon, Côte d’Ivoire, Egypt, Ghana, Kenya, Morocco and Nigeria), and its marketplace is available in 14 countries. Its growth has been strong, with an increase in its Gross Merchandise Value rising from €35 million in 2013 to about €289 million in 2015.
Preparing for the digital economy requires a concerted, holistic, cross-sectoral and multi-stakeholder approach to national policy making. Key national policy areas include ICT infrastructure, education and skills development in the labour market, competition, science, technology and innovation and fiscal issues, as well as trade and industrial policies. Most African countries also lack statistics on key aspects of the digital economy, hampering the ability to formulate evidence-based policies in this area.
“The international community needs to scale up its support to ensure that no-one is left behind in the evolving digital economy,” says Ms. Sirimanne. Despite the growing importance of the digital economy, the share of ICT in total Aid for Trade declined from 3% in 2002-2005 to only 1.2% in 2015. One way to capitalize on existing knowledge and maximize synergies with partners is to tap into the UNCTAD-led eTrade for all initiative.
Imports of communications equipment and mobile cellular subscriptions in Zambia (left) and Rwanda (right), 2000-2015
Source: UNCTAD secretariat calculations, based on UNCTADstat and ITU World Telecommunication / ICT Indicators database.
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tralac’s Daily News Selection
Launching today, in Geneva: UNCTAD’s Information Economy Report 2017. The Report will examine how increased digitalization is influencing international trade and what the implications might be for developing countries.
Tomorrow, in Geneva: UNCTAD meeting on implementing the Paris agreement – response measures and trade
Tomorrow, in Accra: 6th International Single Window Conference. The theme: Trade facilitation agreement and e-commerce development
Advance notice: 9th AU Private Sector Forum (13-15 November, Johannesburg). The theme Accelerating Africa’s industrialization through “digitization” and youth “techpreneurship”
Zambia: 2018 budget address (MoF)
External sector performance, policy: The performance of the external sector has improved relative to 2016. Zambia’s trade balance recorded a surplus of $388.3m during the first six months of 2017 compared with a surplus of $45.8m during the corresponding period in 2016. This was mainly driven by higher export earnings relative to imports. Total export earnings were 25.8% higher at $3.9bn compared with $3.1bn in the corresponding period in 2016. Copper export earnings were higher by 38.1% at $2.9bn from $2.1bn in the corresponding period in 2016. This was due to a rise in both export volumes and prices. Non-traditional exports, however, marginally declined to $811.7m during the first six months of 2017 from $835.5m during the same period in 2016.
Gross international reserves as at end-August 2017 were estimated at $2.3bn, relatively unchanged from the end-2016 level. This translates into 3.2 months of import cover. Government policy in the external sector will remain anchored on the maintenance of an open economy with a competitive and market-driven foreign exchange rate. The focus will be on promoting a diversified export base to increase exports, increasing foreign direct investment inflows, and maintain international reserves to at least 3 months of import cover. [Delivered by Minister of Finance, Felix C. Mutati]
Kenya: Quarterly GDP Report for Second Quarter 2017 (KNBS)
Real Quarterly Gross Domestic Product is estimated to have slowed down to 5.0% in the second quarter of 2017 compared to 6.3% in the corresponding quarter of 2016. The quarter in review was characterized by sharp increases in food prices as a result of adverse weather conditions and a notable rise in international oil prices. This led to a surge in inflationary pressures with the average inflation rate increasing more than two-fold from 5.36% in the second quarter of 2016 to 10.80% in the review quarter. The current account deficit widened to KSh 134.8 billion in the quarter under review from a deficit of KSh 114.1 billion in the corresponding quarter of 2016 on account of significant increase in the value of imports. During the quarter, the Kenyan Shilling marginally depreciated against the US dollar but appreciated slightly against the sterling pound. Performance of the Shilling against the Euro and the Japanese Yen remained largely unchanged during the quarter. In the regional front, the Shilling depreciated against the South African Rand and Tanzanian Shilling but appreciated slightly against the Ugandan Shilling. [Related: Quarterly Balance of Payments Second Quarter 2017]
South Africa: August trade figures (SARS)
South Africa’s August trade statistics recorded a trade balance surplus of R5.94bn. The year-to-date (1 January - 31 August) trade balance surplus of R43.45bn is an improvement on the deficit for the comparable period in 2016 of R13.67bn. Exports for the year-to-date grew by 5.8% whilst imports for the same period declined by 2.1%. [Infographic: @NKCAfrica]
AfDB approves $200m to SA’s IDC to support industrialisation projects in Africa (AfDB)
The Board of Directors of the AfDB group has approved a private sector multi-currency line of credit of $100m and R1.3bn to the Industrial Development Corporation Plc (IDC) of South Africa. Half of the funding (the rand tranche) will be used for projects in South Africa while the balance (the USD tranche) will be directed to regional projects in Mozambique, Malawi, Ghana, Kenya, Namibia, Mauritius, Swaziland and Sudan. The LOC is intended to support IDC’s 5-year Corporate Plan for the period 2016/17–2020/21. Specifically, it will be on-lent to IDC’s clients in key focus areas, including (i) priority industrial value chains such as chemical and pharmaceuticals, metals and mining, agro-processing and agriculture value chains.
Afreximbank plegdges support for Chad’s National Development Plan projects
Afreximbank is to arrange at least $500m in multi-sourced financing to support projects in agro-processing, energy, manufacturing, tourism and logistics sectors under Chad’s National Development Plan, following the country’s membership of the Bank, Afreximbank President Dr. Benedict Oramah has announced. [Afreximbank pledges financial, advisory supportfor Burundi’s economic development]
The role of applied import duties on intermediate goods in industrial development: the case of South African clothing (tralac)
This Trade Brief looks at how import tariffs are affecting access to intermediate inputs in this sector, given the broader context of industrial policy in South Africa where the import tariff is used as an instrument to achieve industrial policy objectives. Using the UN definition of intermediate goods, the overall average tariff on intermediate goods was found to be 12.1%, while on imports from China – that represent 67% of the total for these input goods – the average tariff was assessed at 15.9% during 2016. Currently, the clothing sector is operating in an environment where the overall tariff rate protection during 2016 was 39.14 %, with a significantly higher 43.66% rate levied against imports from the main import source of China. While high tariffs on final products may shield the domestic sector in the short to medium term, they will not assist in making it able it to compete internationally. More attention needs to be given to mitigating tariffs on intermediate inputs for a clothing sector that is struggling to remain competitive. [The author: Ron Sandrey]
SheTrades: Promoting SME competitiveness in Kenya (ITC)
Women make up almost half of Kenya’s labour force, yet they remain on the margins of business ownership – only 9% of Kenya’s firms are majority women-owned. Kenyan women entrepreneurs say they need better access to loans, business registries, patents, quality certifications and affordable internet access to address the gap, according to this new ITC SME Competitiveness Survey of women-owned businesses in Kenya’s services sector. The survey was carried out as part of the SheTrades initiative to connect one million women to markets by 2020. Improving support from trade and investment support institutions (pdf). Survey findings indicate the quality of services provided by private and public TISIs is inadequate; only 17% of small enterprises gave strong ratings to the quality of services provided by these institutions. TISIs can play an important role in setting the norms of any business ecosystem. If TISIs are better able to link to the firms they serve, and provide the services they require, businesses will be more competitive, both domestically and internationally. Often, TISIs are not cognizant of the gender dimension of doing business and the specific needs of women-owned MSMEs. Women-focused TISIs should therefore be supported to advocate on behalf of women entrepreneurs, and help address the bottlenecks faced by women-owned firms.
New pathways to e-commerce: a global MSME competitiveness survey (ITC)
This first ITC e-commerce survey provides valuable insights that will allow countries to shape policies and practices that address the real business needs on the ground. To ensure that micro, small and medium-sized enterprises (MSMEs) can benefit from e-commerce, they need better access to e-platforms, payment and delivery services; streamlined customs procedures; and targeted skill building. These are the key findings from this ITC survey of 2,200 MSMEs in 111 countries. In addition, the survey reveals that the share of logistics costs over final price is nearly double in developing countries than in developed countries and that product return is a significant cost factor for enterprises from least developed countries. Untapped potential in developing countries (pdf). Overall, respondents in developing countries are mostly micro and small-sized firms, whereas in developed countries, they are more evenly distributed between MSMEs. On average, companies in developed countries export to twice as many markets as those in developing countries, and three times as many as those in Africa. There is significant interest among the developing country companies on e-commerce: on average, more than half of the respondents not currently doing cross-border e-commerce have considered doing so, and this share is higher in developing countries (65%) and Africa (68%).
E-commerce: Some developing countries push back on idea of new WTO rules (IP-Watch)
A session organised by Our World Is Not for Sale network, and the Third World Network Africa on 27 September during the WTO Public Forum taking place from 26-28 September, gathered an Indian ambassador, and representatives of Rwanda, South Africa, and the intergovernmental South Centre. The session explored expectations and outcome of the 11th WTO Ministerial Conference taking place in Buenos Aires, Argentina in December. Among several issues expected to be discussed at the MC11, the delegates mentioned e-commerce. J.S. Deepak, Indian ambassador and permanent representative to the WTO, said, “We believe that there is no mandate for initiating negotiations on e-commerce. Often we are told e-commerce is good for SMEs [small and medium-sized enterprises],” he said, but added that what is confusing in the discourse is that it is trying to pass off benefits of e-commerce as the benefit of rulemaking in the WTO on e-commerce.
Peter Leon: International arbitration in Africa (Politicsweb)
Withdrawal from the system of investor-state arbitration thus signals a regression from the rule of law to the rule of realpolitik, which is even less conducive to equity, consistency and transparency than arbitration, and may expose developing states to even greater coercion and interference from powerful foreign interests. A better response to the risk of costly investor-state arbitration is for African states to build on their world-class international arbitration centres (notably those in Mauritius and here in Kigali) by investing in the development of greater local expertise and experience in international investment law. This in turn may provide African states with a strong pool of skilled negotiators (to aid the conclusion or renegotiation of more favourable treaties and contracts), as well as litigators and arbitrators. [An address at the Fifth Annual East Africa International Arbitration Conference]
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E-Commerce: Some developing countries push back on idea of new WTO rules
While the profile of electronic commerce is rising in diverse international fora, some developing countries are saying they do not want to discuss a new negotiating mandate for e-commerce rules at the World Trade Organization.
The current work programme on e-commerce is still adequate, they find, and the WTO Ministerial Conference in December should address more pressing issues, such as agriculture, or completing the Doha Development Round negotiations.
A session organised by Our World Is Not for Sale network, and the Third World Network Africa on 27 September during the WTO Public Forum which took place from 26-28 September, gathered an Indian ambassador, and representatives of Rwanda, South Africa, and the intergovernmental South Centre. The session explored expectations and outcome of the 11th WTO Ministerial Conference (MC11) taking place in Buenos Aires, Argentina in December.
Among several issues expected to be discussed at the MC11, the delegates mentioned electronic commerce (e-commerce).
J.S. Deepak, Indian ambassador and permanent representative to the WTO, said, “We believe that there is no mandate for initiating negotiations on e-commerce.”
“Often we are told e-commerce is good for SMEs [small and medium-sized enterprises],” he said, but added that what is confusing in the discourse is that it is trying to pass off benefits of e-commerce as the benefit of rulemaking in the WTO on e-commerce.
The dominance of retail platforms often give bad deals to SMEs, according to Deepak. Unless SMEs have a choice of which platform on which they want to operate, they are open to exploitation, and this is something which needs to be addressed, he said.
The direction technology is evolving is uncertain and agreeing to any kind of rulemaking or to a change in the work programme would be like a leap in the dark which could have disastrous consequences for the membership at large and in particular for companies and SMEs and the people in the developing world.
The present work programme with its bottom-up approach needs to continue, he argued, adding that many aspects need to be explored before thinking of changing that programme.
He said India can be an e-commerce power, but “data is the new oil,” but “you don’t have to import it,” and “we should not let it go for free.”
The current WTO work programme on e-commerce was adopted in September 1998. Four WTO bodies are in charge of carrying out the work programme. These are: the Council for Trade in Services; the Council for Trade in Goods; the Council for TRIPS [WTO Agreement on Trade-Related Aspects of Intellectual Property Rights]; and the Committee on Trade and Development.
Édouard Bizumuremyi, commercial attaché at the Permanent Mission of Rwanda, concurred and said, “We have seen texts that were presented containing rules such as the free flow of data, no localisation requirement.” The African Group rejected any discussions on e-commerce rules, and called to maintain the current work programme, he added.
The African Group, said Bizumuremyi, sees effort at new discussions on e-commerce as a disguised manoeuvre to have a mandate on e-commerce, while Africa needs policy space for its digital industrial policy.
Mandatory binding rules would prevent the preservation of this policy space, he said. He cited as an example the proposal for no localisation requirement, which he said would be a special preferential treatment awarded to giant digital companies to locate their data centres wherever they want, maximising profit, benefitting from economies of scale, and if they chose to be located in the European Union, for example, be able to provide data to marketers without investment, or tax.
Digital economy is emerging, he said, it is difficult to evaluate its impact on the global scale, but its consequences on Africa are uncertain. He cited the generalisation of 3D printing in the manufacturing industry, which he said “is set to have a devastating impact” on Africa’s objective of industrialisation.
Cross-border E-Commerce called Asymmetrical, Oligopolistic
Vahini Naidu, counsellor at the South African Permanent Mission to the WTO, said although e-commerce can be used for development and has many benefits, the kind of rules being proposed are not necessarily going to contribute towards development.
Cross-border e-commerce is highly asymmetrical in nature, she said, very concentrated and dominated by six countries. The wider digital transformation of which e-commerce is a little part is important but very disruptive, she said. Automation and artificial intelligence also mean job losses and governments need the ability to have foresight in terms of adopting innovative policies to address this.
South Africa only very recently started looking at the 4th industrial revolution and to incorporate it into the industrial action plan, she said, adding that the time it will take is uncertain. She cited the car service Uber which led to civil unrest because it disrupted the taxi industry in South Africa.
Cross-border e-commerce is also oligopolistic, she said. When big players want to enter a market, they either decimate smaller players or buy them out, so in terms of developing national industries, it is becoming increasingly difficult without having certain policies to tackle those issues, she explained.
The African Group organised a panel discussion in June about digital industrial policy and development, she said. The report of the panel stated that “while the world is getting more connected, international bandwidth is unequally distributed and that most developing and least developed countries continue to lag far behind.” Citing the UN International Telecommunication Union, the report says that “more than half of the world’s population is not using the Internet, notably 75% of people in Africa.”
Developing countries need to look beyond the possible benefits of digital solutions, the report said, calling for those countries to start assessing the impact that the lack of digital and technological capabilities would have in cementing and widening the technology divide.
Digital Economy Challenge for Industrialisation
Aileen Kwa, coordinator, Trade and Development Program at the South Centre, said the digital economy brings huge challenges in terms of industrialisation. As pointed out in a UBS white paper [pdf] titled, “Extreme Automation and Connectivity: The global, regional, and investment implications of the Fourth Industrial Revolution,” written for the World Economic Forum, many developing country economies have not finished coping with the 2nd and the 3rd industrial revolution and might not do well in the 4th one, she said.
Two models of liberalisation under e-commerce are present in current WTO discussions, she said, the first is the 1998 work programme, and the second is the set of new rules that some members are suggesting to introduce at the WTO, such as the European Union, Japan, the United States, and others, she said.
The 1998 work programme is based on existing WTO agreements and how they can be fine-tuned to apply to e-commerce, she said, while new rules are about free data flows, no localisation rules, and no disclosure of source.
Those new rules are about comprehensive opening, she said, resulting in a complete opening of countries’ digital economies. The two models have led to a complete stalemate in discussions, Kwa asserted.
If those developing countries that are not on the forefront of new technologies, such as artificial intelligence, open their markets, they risk being “swamped” and this would further de-industrialisation. If countries want to have digital industrialisation, they need have a model creating markets also for domestic players, she said.
Agriculture, Doha Round
Deepak said the issue of public stock holding for food security and the quest for a permanent solution is one of the most important points of the upcoming MC11.
Public stockholding programmes are used by some developing countries to purchase food at administered prices for food security purposes, according to the WTO. In 2015, at the Nairobi Ministerial Conference, ministers adopted a Decision on Public Stockholding for Food Security Purposes [pdf] calling the countries to find a permanent solution to this issue. Such programmes are considered by some as trade-distorting.
Trade constraints and agreements cannot be allowed to come in the way of the fight against hunger, Deepak said.
He also mentioned an issue of domestic support for agriculture, and agricultural subsidies, pointing out what he said were unfair rules in the WTO Agreement on Agriculture, such as special safeguard mechanism left from the preceding Uruguay Round of negotiations, through which developed countries can subsidise their agriculture.
Bizumuremyi said “harmful” subsidies have led to cheap imports that have devastated many commodities in Africa, such as poultry and maize, and advocated for domestic support for agriculture.
Free trade is important, but fair trade is equally important, he said.
Bizumuremyi further talked about the effort of the African continent on the renewal of industrial development. He underlined the “extreme” importance of concluding the Doha Round. He said the African Group also supports the public stock holding for food security purposes.
Kwa also called for the conclusion of the Doha Round, and said developing countries are spending more and more money on food imports.
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Zambia: 2018 Budget Address
“Accelerating fiscal fitness for sustained inclusive growth, without leaving anyone behind”
Budget Address delivered by the Minister of Finance, Hon. Felix C. Mutati, to the National Assembly on Friday, 29 September, 2017
During the official opening of the second session of the twelfth National Assembly, His Excellency, Mr. Edgar Chagwa Lungu, President of the Republic of Zambia reminded the nation of the need to uphold our national values and principles, which are centred on patriotism and love for one another as enshrined in our national anthem “one land and one nation is our cry”. I wish to reiterate the President’s call, as it is critical if we are to effectively implement our development agenda and meet our aspirations as a nation, without leaving anyone behind.
The people of Zambia deserve peace and stability, decent employment, quality public services and a conducive environment where they can thrive, create their own wealth and prosper. Achieving these outcomes is the task with which the Zambian people have entrusted us.
This we shall attain through the diligent pursuit of the strategic objectives contained in the recently launched Seventh National Development Plan. We aspire to make a reality of the Plan’s theme of “accelerating development efforts towards the Vision 2030, without leaving anyone behind”.
During the nine months of implementing the Economic Stabilisation and Growth Programme, dubbed “Zambia Plus”, a lot has been achieved. The Patriotic Front Government is cognisant of the fact that our people deserve much more. We have made strides, yet challenges still remain. Youth unemployment and poverty levels remain high. To this end, Government is resolved to work tenaciously to uplift the wellbeing of our people and enhance their meaningful participation in the economy.
Inclusive growth is only possible if we are steadfast in collectively implementing bold policy decisions and reforms. This year, Government implemented austerity measures that have started showing positive results in securing a sustainable growth going forward. Through these measures Government significantly reduced the accumulation of arrears. As a result of the reforms, Zambia’s credit rating outlook and investor confidence have improved. Government is mindful that despite this positive outlook, the measures in the short term have not yet favourably impacted on the welfare of the people. The long term benefits will be inclusive growth and prosperity.
By working collectively, we can ensure that our goals and priorities are clearly defined. Our resolve for inclusive development remains unwavering. Our actions remain fiscally prudent. It is in this context that the theme of the 2018 Budget is “Accelerating fiscal fitness for sustained inclusive growth, without leaving anyone behind.”
Part I: Global and domestic economic developments in 2017
The global economy is projected to grow by 3.5 percent in 2017, compared to 3.2 percent in 2016. This is mainly premised on a projected 4.6 percent growth in the large emerging and developing economies, driven by the gradual improvement in commodity prices.
Growth in advanced economies is expected to strengthen to 2.0 percent in 2017 from 1.7 percent in 2016. Sub-Saharan African growth is projected to expand to 2.7 percent in 2017 from 1.3 percent in 2016, driven by increased agricultural and mining output.
As global economic activity gains momentum, commodity prices are expected to continue strengthening in 2017. Copper prices are projected to average US$5,827 per tonne in 2017 compared with an average of US$ 4,868 per tonne in 2016. Similarly, international crude oil prices are expected to surge upwards to an average of US$49.0 per barrel in 2017 from an average of US $42.8 per barrel in 2016.
The Zambian economy in 2017 has continued to rebound. Growth is expected to be above 4.0 percent from 3.8 percent in 2016. Key drivers will be the mining, agriculture and manufacturing sectors supported by improved electricity generation. It is worth noting that the Zambian economy has outpaced the Sub-Saharan African economic growth of 2.7 percent. This is a reflection of the sound economic policies that this Government has put in place.
External Sector Performance
The performance of the external sector has improved relative to 2016. Zambia’s trade balance recorded a surplus of US$388.3 million during the first six months of 2017 compared with a surplus of US$45.8 million during the corresponding period in 2016. This was mainly driven by higher export earnings relative to imports. Total export earnings were 25.8 percent higher at US$3.9 billion compared with US$ 3.1 billion in the corresponding period in 2016.
Copper export earnings were higher by 38.1 percent at US$ 2.9 billion from US$ 2.1 billion in the corresponding period in 2016. This was due to a rise in both export volumes and prices. Non-traditional exports, however, marginally declined to US$ 811.7 million during the first six months of 2017 from US$835.5 million during the same period in 2016.
Gross international reserves as at end-August 2017 were estimated at US$2.3 billion, relatively unchanged from the end-2016 level. This translates into 3.2 months of import cover.
Part II: Macroeconomic objectives, policies and strategies for 2018
Accelerating fiscal fitness is critical for sustained inclusive growth, diversification and job creation. These outcomes are in conformity with the strategic objectives of the Seventh National Development Plan. In this regard, the macroeconomic objectives and policies for 2018 will be to:
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achieve real GDP growth of at least 5.0 percent;
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maintain single digit inflation in the range of 6.0 to 8.0 percent;
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maintain international reserves of at least 3 months of import cover;
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attain domestic revenue mobilisation of at least 17.7 percent of GDP;
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limit the fiscal deficit, on a cash basis, to 6.1 percent of GDP;
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limit domestic financing to no more than 4.0 percent of GDP;
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accelerate implementation of measures towards diversification of the economy;
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reduce the stock of arrears and curtail the accumulation of new arrears; and
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Slow down the contraction of new debt to ensure debt sustainability.
Key Integrated Multi-Sectoral Policies and Interventions
The Seventh National Development Plan has adopted an integrated multisectoral approach to development. This entails that sectors have to work together in clusters to achieve the objectives of the Plan. In this vein, the policy and structural interventions to be undertaken in 2018 will be aligned to the following five pillars of the Plan:
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economic diversification and job creation;
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poverty and vulnerability reduction;
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reducing development inequalities;
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enhancing human development; and
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Creating a conducive governance environment for a diversified and inclusive economy.
There is need to create a supportive environment for effective implementation of the Plan. This will be done by creating a stable macroeconomic environment and fiscal space, while consolidating policy and structural reforms as outlined in the Economic Stabilisation and Growth Programme.
Related News
South Africa Merchandise Trade Statistics for August 2017
South Africa trade surplus narrows in August
South Africa’s trade surplus decreased to R5.94 billion in August of 2017 from an upwardly revised R9.33 billion surplus in July, but beating market expectations of a R3.2 billion surplus.
Exports increased 11 percent while imports advanced at a faster 16.3 percent. Considering the January to August period, exports increased 5.8 percent and imports decreased 2.1 percent, shifting the country’s trade balance into a R43.5 billion surplus from a R13.7 billion gap in the same period of 2016.
Compared with the previous month, exports increased to R103.4 billion from R93.1 billion, led by higher shipments of mineral products (21 percent); precious metals and stones (20 percent); base metals (12 percent); machinery and electronics (12 percent) while those of vehicles and transport equipment fell 17 percent. Major destinations for sales were China (9.9 percent); the US (8.1 percent); Germany (6.8 percent); Japan (4.7 percent) and Botswana (4.6 percent).
Imports advanced to R 97.4 billion from R83.8 billion, due to higher purchases of mineral products (65 percent); prepared foodstuffs (36 percent); textiles (27 percent); original equipment components (29 percent) and machinery and electronics (11 percent). Imports came mostly from China (21.3 percent of total imports); Germany (14.1 percent); the US (7.8 percent); India (5.6 percent) and Saudi Arabia (5.2 percent).
Excluding trade with neighbouring Botswana, Lesotho, Namibia and Swaziland, the country posted a trade deficit of R1.9 billion in August compared to a R2.6 billion surplus in July.
The South African Revenue Service (SARS) on 29 September released trade statistics for August 2017 recording a trade balance surplus of R5.94 billion. These statistics include trade data with Botswana, Lesotho, Namibia and Swaziland (BLNS). The year-to-date (01 January to 31 August 2017) trade balance surplus of R43.45 billion is an improvement on the deficit for the comparable period in 2016 of R13.67 billion. Exports for the year-to-date grew by 5.8% whilst imports for the same period declined by 2.1%.
Including trade data with Botswana, Lesotho, Namibia and Swaziland (BLNS)
The R5.94 billion trade balance surplus for August 2017 is attributable to exports of R103.38 billion and imports of R97.44 billion. Exports increased from July 2017 to August 2017 by R10.28 billion (11.0%) and imports increased from July 2017 to August 2017 by R13.67 billion (16.3%).
Exports for the year-to-date (01 January to 31 August 2017) grew by 5.8% from R719.38 billion in 2016 to R761.24 billion in 2017. Imports for the year-to-date of R717.79 billion are 2.1% less than the imports recorded in January to August 2016 of R733.05 billion, leaving a cumulative trade balance surplus of R43.45 billion for 2017.
On a year-on-year basis, the R5.94 billion trade balance surplus for August 2017 is an improvement from the deficit recorded in August 2016 of R8.91 billion. Exports of R103.38 billion are 15.2% more than the exports recorded in August 2016 of R89.76 billion. Imports of R97.44 billion are 1.3% less than the imports recorded in August 2016 of R98.67 billion.
July 2017’s trade balance surplus was revised upwards by R0.34 billion from the previous month’s preliminary surplus of R8.99 billion to a revised surplus of R9.33 billion as a result of ongoing Vouchers of Correction (VOC’s).
Trade highlights by category
The main month-on-month export movements: R’ million |
||
Section: |
Including BLNS: |
|
Mineral Products |
+R4 189 |
+21% |
Precious Metals & Stones |
+R2 990 |
+20% |
Base Metals |
+R1 289 |
+12% |
Machinery & Electronics |
+R 928 |
+12% |
Chemical Products |
+R 848 |
+15% |
Prepared Foodstuff |
+R 637 |
+16% |
Vehicles & Transport Equipment |
-R2 321 |
-17% |
Total |
+R8 560 |
83% |
Total Movement |
+R10 284 |
100% |
The main month-on-month import movements: R’ million |
||
Section: |
Including BLNS: |
|
Mineral Products |
+R5 616 |
+65% |
Machinery & Electronics |
+R2 169 |
+11% |
Original Equipment Components |
+R2 076 |
+29% |
Prepared Foodstuff |
+R 916 |
+36% |
Textiles |
+R 878 |
+27% |
Total |
+R11 655 |
85% |
Total Movement |
+R13 674 |
100% |
Trade highlights by world zone
The world zone results from July 2017 (revised) to August 2017 are given below.
Africa:
Trade Balance surplus: R16 922 million – this is a deterioration in comparison to the R17 394 million surplus recorded in July 2017.
America:
Trade Balance surplus: R 54 million – this is an improvement in comparison to the R884 million deficit recorded in July 2017.
Asia:
Trade Balance deficit: R12 230 million – this is a deterioration in comparison to the R9 769 million deficit recorded in July 2017.
Europe:
Trade Balance deficit: R5 707 million – this is a deterioration in comparison to the R3 588 million deficit recorded in July 2017.
Oceania:
Trade Balance deficit: R63 million – this is a deterioration in comparison to the R 395 million surplus recorded in July 2017.
Excluding trade data with Botswana, Lesotho, Namibia and Swaziland (BLNS)
The trade data excluding BLNS for August 2017 recorded a trade balance deficit of R 1.89 billion. This was a result of exports of R91.55 billion and imports of R93.44 billion.
Exports increased from July 2017 to August 2017 by R8.46 billion (10.2%) and imports increased from July 2017 to August 2017 by R12.98 billion (16.1%).
The cumulative deficit for 2017 is R17.08 billion compared to R83.28 billion deficit in 2016.
Trade highlights by category
The main month-on-month export movements: R’ million |
||
Section: |
Excluding BLNS: |
|
Mineral Products |
+R4 145 |
+23% |
Precious Metals & Stones |
+R2 207 |
+15% |
Base Metals |
+R1 273 |
+13% |
Chemical Products |
+R 702 |
+14% |
Machinery & Electronics |
+R 684 |
+11% |
Wood Pulp and Paper |
+R 489 |
+42% |
Vehicles & Transport Equipment |
- R2 346 |
-18% |
Total |
+ R7 154 |
85% |
Total Movement |
+ R8 464 |
100% |
The main month-on-month import movements: R’ million |
||
Section: |
Excluding BLNS: |
|
Mineral Products |
+R5 605 |
+65% |
Machinery & Electronics |
+R2 170 |
+11% |
Original Equipment Components |
+R2 076 |
+29% |
Base Metals |
+R 859 |
+20% |
Prepared Foodstuff |
+R 828 |
+39% |
Total |
+R11 538 |
89% |
Total Movement |
+R12 980 |
100% |
Trade highlights by world zone
The world zone results for Africa excluding BLNS from July 2017 (Revised) to August 2017 are given below.
Africa:
Trade Balance surplus: R9 088 million – this is a deterioration in comparison to the R 10 687 million surplus recorded in July 2017.
Botswana, Lesotho, Namibia and Swaziland (Only)
Trade statistics with the BLNS for August 2017 recorded a trade balance surplus of R7.83 billion. This was a result of exports of R11.82 billion and imports of R3.99 billion.
Exports increased from July 2017 to August 2017 by R1.82 billion (18.2%) and imports increased from July 2017 to August 2017 by R0.69 billion (21.0%).
The cumulative surplus for 2017 is R60.53 billion compared to R69.61 billion in 2016.
Trade Highlights by Category
The main month-on-month export movements: R’ million |
||
Section: |
BLNS: |
|
Precious Metals & Stones |
+R 783 |
+7266% |
Machinery & Electronics |
+R 244 |
+17% |
Prepared Foodstuff |
+R 192 |
+18% |
Chemical Products |
+R 146 |
+16% |
Plastics and Rubber |
+R 85 |
+20% |
Total |
+R1 451 |
80% |
Total Movement |
+R1 820 |
100% |
The main month-on-month import movements: R’ million |
||
Section: |
BLNS: |
|
Chemical Products |
+R 230 |
+42% |
Precious Metals & Stones |
+R 224 |
+38% |
Prepared Foodstuff |
+R 88 |
+22% |
Live Animals |
+R 61 |
+13% |
Textiles |
+R 51 |
+11% |
Total |
+ R 655 |
94% |
Total Movement |
+ R 694 |
100% |