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tralac’s Daily News Selection
The selection: Tuesday, 26 July 2016
Launching today: The State of East Africa Report. Twitter updates: #SOEAR16
AfDB Group’s Industrialisation Strategy for Africa 2016-2025 is approved
The strategy aims to: (i) Develop industrial sector and policy framework, (ii) Enhance trade and integrate Africa into the regional and international value chains and (iii) Boost competitiveness and value creation by expanding supply of business services to maximize impact on the performance of industries and vice-versa. It would also increase its level of funding and crowding-in third party resources to the tune of USD 35 to 56 billion over the next decade.
Trade Monitoring Report (WTO)
The report, discussed at a 25 July meeting of the WTO’s Trade Policy Review Body, shows that 22 new trade-restrictive measures were initiated by WTO members per month during the mid-October 2015 to mid-May 2016 review period. “The report shows a worrying rise in the rate of new trade-restrictive measures put in place each month — hitting the highest monthly average since 2011,” Director-General Roberto Azevêdo said. “We hope that this will not be an indication of things to come, and clearly action is needed."
South Africa’s Chamber of Mines responds to UNCTAD trade mis-invoicing report
The Chamber of Mines notes with concern the report published by the United Nations Conference on Trade and Development on Trade Mis-invoicing in Primary Commodities in Developing Countries. The report asserts systematic under-invoicing of South Africa’s commodity exports. The Chamber disputes the veracity of the data, the assumptions on which the research is based and the conclusions drawn as a result. A cursory review of the dataset referred to indicates significant gaps and errors. The assumption that companies are mis-pricing rather than that this ‘data’ is simply under- or over-reported is astounding. The Chamber has drawn the report to the attention of relevant local authorities and will engage with the author of the report in this regard. [Developing countries protest tax agreement]
Tanzania Local Content Forum: stakeholders urged to make local content concept a reality (IPPMedia)
Talking during the Tanzania Local Content Forum over the weekend, Prime Minister Kassim Majaliwa said local content concept is new, hence the need for concerted efforts to make it clear to a wide range of stakeholders and Tanzanians at large. “The idea of local content should be clearly understood from local government stage up to the central government level,” said the premier. The two-day meeting was organised by the National Economic Empowerment Council. Majaliwa said if local content concept will be clearly understood, it will significantly help to solve conflicts that sometimes happen between investors and citizens.
Namibia’s trade policy, trade diplomacy issues:
Fuming farmers urge government to intervene in export dilemma (New Era)
Fuming farmers from the length and breadth of the country have now accused South African authorities of using an animal health issue as an excuse to create a trade barrier for Namibian livestock, calling it nothing short of bullying tactics. Irate farmers at an open day of the Meat Board last week expressed their frustration with the new livestock import rules implemented by South Arica on July 1 and they urged the Namibian government to immediately address the situation. This comes three weeks after the border with SA was for all practical purposes closed for Namibian exports on July 1. The NNFU and producers across the country have now raised their voices, demanding that government brings the new import regulations of South Africa to the attention of the World Trade Organisation and put it on the agenda of the WTO Committee in October so that the world can see what SA is doing to Namibian producers. Namibia was set to present its case before the Sanitary and Phyto Sanitary Committee of the WTO in a bid to mitigate the new stringent livestock import restrictions by South Africa in March this year already but it did not materialise.
Dr Hage Geingob: speech at opening of Namibia’s Foreign Policy Review Conference
However, governments alone cannot resolve these deficits. We need the full participation of the private sector and all stakeholders. It is imperative for diplomats to engage private sector players abroad. Nothing prevents you from organizing inward or outward trade and investment missions. Here I would like to single out our mission in the United States, which over the past few years has been successful in arranging trade and investment events in the USA and facilitating numerous USA business and investment visits to Namibia. I encourage other missions to emulate this excellent example. Recently we had an excellent experience in business-to-business interaction during my State visit to Botswana. Whenever I visit another country, I would like a trade and investment event to be incorporated in the program. I expect to see more trade and investment facilitation from all our missions, especially from our main trading partners, like South Africa.
South Africa: Customs legislation is changing for the future (Reuters)
The current Customs and Excise Act 91 of 1964 is over 50 years old, and is getting a long overdue overhaul. The new Customs and Excise Acts aim to establish a world-class customs control system that meets international standards and best practices, while optimizing trade facilitation. The focus on technology and modernization in the way customs and global trade operate in a borderless world are aligned with the Constitution. This change also takes into consideration the revised Kyoto convention and the World Customs Organization’s Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework). Its aim is to harmonize, secure and facilitate the international trade framework.
Moving money across borders in the SADC region (tralac)
This briefing will explore two alternative (to traditional bank transfers and money transfer operators (‘MTOs’) such as Moneygram and Western Union) channels of remittances that rely on existing networks for funds transmittal – mobile money, which uses the mobile phone network, and retailer remittances, which use the networks of retail stores. These channels not only offer potential competition in the space occupied by banks and traditional MTOs, but potential to reach further – in both a geographical and socio-economic sense – than traditional providers. This trade brief therefore also considers what else SADC could do to play a leadership role in encouraging an environment to better facilitate the cross‑border movement of money through these channels in the region to enhance competition and thereby potentially reduce prices. [The analyst: Ashly Hope]
The rise of mobile money in West Africa (CPI Financial)
Zooming in on the WAEMU [also known as UEMOA] region comprised of Francophone West Africa (Benin, Burkina Faso, Côte d’Ivoire, Guinea Bissau, Mali, Niger, Togo, Senegal), one could see it as one of a kind success story when it comes to conducive regulation triggering increase of financial services for the poor. At end September 2015, users’ performance revealed that 347 million transactions valued at $8.5 billion were accounted for in the region, of which Côte d’Ivoire, Burkina Faso and Mali are the most dynamic markets. On average more than 1.2 million transactions were processed every day during that period. Strikingly, today, digital cross border remittances are increasingly dominating the traditional rapid money transfer services, particularly on corridors between Côte d’Ivoire and Burkina, Mali and Senegal, Togo and Benin. In addition, microfinance services and government services are progressively being processed on digital wallets. [The analyst, Maimouna Gueye is a digital finance expert attached to the AfDB] [WAEMU stays afloat on trade]
Can the internet reboot Africa? (The Guardian)
By 2020 there will be more than 700m smartphone connections in Africa – more than twice the projected number in North America and not far from the total in Europe, according to GSMA, an association of mobile phone operators. In Nigeria alone 16 smartphones are sold every minute, while mobile data traffic across Africa is set to increase 15-fold by 2020. Internet penetration in Africa jumped from very low levels in 2009 to 16% of individuals in 2013 and over 20% in 2015. But the proportion of people online is still far behind the global average – 17.4% of individuals have access to mobile broadband, while fixed broadband connections remain very low. Countries will have to keep up with rising demand for bandwidth in order to drive innovation and enable the shift to digital across all sectors. [The authors: Mark Rice-Oxley, Zoe Flood]
The good, the bad and the ugly of African capital markets (IPPMedia)
The above indicates that African pension funds are growing rapidly and have the legislative ability to invest into listed equities, particularly, in their own jurisdictions. The increased availability of local capital for development should lead to an increase in the number of African initial public offerings (IPOs) and listings, which in turn, should contribute to an increase in the liquidity of the African stock exchanges. What is needed is more sizable local businesses coming to market in their local jurisdictions. There have been 39 new primary listings in various African countries (including 22 primary listings in South Africa) during the past two years and many of these new listings have included an IPO which has been fully subscribed and in some cases oversubscribed. [The author, Robbie Cheadle, is attached to KPMG]
Financial systems in new middle-income African economies: the opportunities and the risks (UNU-WIDER)
This paper examines the possible implications for the financial systems of low-income African economies and in particular Tanzania of their stated aspiration to achieve middle-income status. In doing so it finds little evidence that the mere increase of gross domestic product per capita will lead necessarily to financial systems that are larger, deeper, or more inclusive. The paper examines both theoretical and econometric evidence to pin down this central conclusion. It also identifies a number of critical structural features that retard progress with financial sector development in some countries and advances a set of plausible hypotheses about the likely sequencing of development in different parts of the financial system—banks, capital markets, pensions, etc. [The author: Alan Roe]
Will robots ravage the developing world? (Bloomberg)
Today, many developing countries are still counting on this model. The problem is that robotics may fundamentally upend it. Even as global growth slowed, industrial robot sales grew 12% between 2014 and 2015, and have grown fourfold since 2009. As robots get cheaper and better, the advantage of employing a low-skilled labourer starts to fade. In other words, where poorer countries could once use their cost advantage to lure manufacturers, now all cost advantages are disappearing in the robotics age. A robot costs the same to employ whether in China, the U.S. or Madagascar. That's why Adidas is now making shoes in Germany -- in a largely automated factory, closer to its customers and free from the risks, costs and complexities of a lengthy supply chain. It's not alone. The implications of this shift shouldn't be underestimated. The days of international trade growing at near double-digit rates might be over. Trade has historically grown at twice the rate of gross domestic product, but in the past few years it has stagnated, leaving it 15% lower than would be expected, according to the Peterson Institute for International Economics. It may well have permanently stagnated.
COMESA Adjustment Facility: seventh call for submissions
This current call is the seventh Call for Submissions and is being made for continued support to eligible countries that have established Regional Integration Implementation Programmes (RIIPs). The financing modalities under which each Member State is eligible to receive RISM financial support in 2016 will be determined by the EU at the point of assessment of the submissions and at the point of disbursement. The COMESA Secretariat will provide the necessary guidance to Member States about their respective eligible status when the EU provides its assessment.
Mauritius to establish an air corridor with India, says Prime Minister (GoM)
“Mauritius is envisaging to establish an air corridor with India similar to that of the Asia-Africa air corridor launched earlier this year. Our ambition is to transform Mauritius into an important regional aviation hub that will connect Africa and Asia and we are determined to promote all possible opportunities for trade and investment between these continents”. The Prime Minister, Sir Anerood Jugnauth, spoke at the opening of the India-Mauritius Global Partnership conference. Over 200 delegates from India namely Ministers, eminent intellectuals, successful businessmen, potential investors and prominent artists of the Indian diaspora are attending the conference.
Reshaping India's trade policy (The Hindu)
Trade data for June 2016 brought cheers as India’s merchandise exports showed positive growth after 18 excruciating months. However, in their effort to take exports to the next level, India’s trade policymakers face four major challenges: How to encourage foreign investments, obtain a balanced outcome of Free Trade Agreements, improve ease of doing business, and reduce dependence on export promotion schemes? Coincidentally, all four concerns can be addressed by just one action: carrying out a selective reduction in basic custom duties
Okonjo-Iweala: ‘Diversification cannot happen over four years’ (Naija)
Kenya: Monetary Policy Committee statement (Reuters)
Ethiopian leader’s visit now gives Lapsset project renewed impetus (Daily Nation)
Rwanda: AGOA Action Plan submitted to the Ministry of Trade and Industry (East Africa Trade and Investment Hub)
Cananda’s internal trade: Premiers reach 'unprecedented' internal free-trade deal, ‘Tear down these walls’ (pdf, Senate Committee on Banking, Trade and Commerce)
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