News
tralac’s Daily News selection: 29 July 2015
The selection: Wednesday, 29 July
Remarks by President Obama to the People of Africa (AU)
Many of your nations have made important reforms to attract investment – it’s been a spark for growth. But in many places across Africa, it’s still too hard to start a venture and to build a business. Governments that take additional reforms to make doing business easier will have an eager partner in America. That includes reforms to help Africa trade more with itself, because the biggest markets for your goods are often right next door. Our work to help Africa modernize customs and border crossings started with the East African Community.
Now we’re expanding our efforts across the continent, because it shouldn’t be harder for African countries to trade with each other than it is for you to trade with Europe and America. Most US trade with the region is with just three countries – South Africa, Nigeria and Angola – and much of that is energy. I want Africans and Americans doing more business together in more sectors in more countries. So we’re increasing trade missions to places like Tanzania, Ethiopia and Mozambique. We’re working to help more Africans get their goods to market. Next year, we’ll host another US-Africa Business Forum to mobilize billions of dollars in new trade and investment – so we’re buying more of each other’s products and all growing together.
The next steps: a post-AGOA passage discussion (Manchester Trade)
Pointedly, the Obama Administration has already pointed out to African diplomatic missions that because it is negotiating mega trade agreements, there's a threat to the current competitive advantage provided to AGOA beneficiaries. The logic for the potential damage from the mega trade agreements is quite simple: if and when one concludes and then begins to implement, the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership mega trade arrangements between the United States and Pacific nations, and the European Union respectively will allow very competitive economies such as Vietnam to do more business with the U.S. under the same privileges AGOA beneficiaries currently receive.
While the mechanism may be different, many Vietnamese garment exports to the United States will receive similar benefits like those in AGOA's third country fabric provision. This will, without a doubt, displace some African exports given that Vietnam is a much more competitive apparel producer than any of the African countries. Fortunately, there's a whole host of vehicles outside of AGOA - legislative or regulatory – that can be used to enhance African opportunities and thus help offset some of the competitive disadvantage that these mega trade agreements could unleash.
To boost trade with Africa, US should focus on governance (World Politics Review)
USTDA commits to support increased trade & investment with Africa, DBSA, IDC
The option of a Framework Agreement in the Continental Free Trade Area negotiations (ATPC)
A framework agreement in international relations is an interim pact between countries that establishes the principles, scope and details of what has been agreed. A framework agreement normally includes a clear understanding that the outstanding issues will be concluded in an incremental manner and/or by a clearly established date. In the context of a trade agreement, a framework agreement may encompass ‘an early harvest’ in one or more areas under negotiation, modalities in other areas, a road map with bench marks and time lines to complete the agreement or provisions for the agreement to be completed in an incremental manner taking variable geometry principles into account. A major advantage of a framework agreement is that it enables the negotiating parties to reach an agreement in key areas within a relatively short period of time with a clear mapping of what remains to be accomplished, how and when. The ASEAN Free Trade Area Agreement which is an agreement in goods only with framework agreements in such areas as services and investment provides a good example of framework agreements as an interim outcome of trade negotiations. The ASEAN framework agreements also provide for the application of variable geometry. [The authors: David Luke, Simon Mevel] [Download]
Africa’s new trade zone needs insurance backing (Business Report)
SA digs in on African business visas (Business Day)
The Department of Home Affairs, which is leading SA’s negotiations on the movement of business people within a future African tripartite free trade area, is strongly resisting a bid by the East African Community (EAC) for business visas to be issued on arrival. Instead, home affairs had proposed extending the special BRICS visa to the 26 states which would be included in the tripartite agreement.
Improving food security in West Africa: removing obstacles to regional trade markets (World Bank)
A new commitment to regional trade in the region is needed to accelerate agricultural production, boost growth and ensure adequate food for more people, according to a new World Bank report. The report, Connecting Food Staples and Input Markets in West Africa: A Regional Trade Agenda for ECOWAS Countries, calls on governments in West Africa to move beyond nationally-focused food policies and address regional trade within ECOWAS. The report builds on the lessons of the World Bank report, “Africa Can Help Feed Africa,” and examines the specific circumstances in West Africa, home to one-third of the continent’s population, and bringing new analysis to the food staples trade and policies in the region. [Download]
Five countries revise lessons in agro statistics (UNECA)
Eastern Africa consultation: Common African Position on the World Humanitarian Summit (African Union)
The purpose of the AU consultative process is to stimulate a discussion among Regional Economic Communities and Member States on the emerging issues within the global and regional humanitarian landscape, in so doing undertake a “Political Process” for reform to strengthen the humanitarian system. The outcomes of regional consultations will be consolidated into an African Common Africa Position to be presented in the World Humanitarian Summit in Istanbul, Turkey 2016. Africa’s narrative in shaping a new humanitarian agenda in a globalized and rapidly changing humanitarian landscape will be grounded in AU’s vision to address root causes and progressively eliminate forced displacement on the continent.
Blue Okavango prepares SADC for regional cooperation, humanitarian assistance, disaster relief (Daily News)
Mozambique: More than 135000 people face food insecurity
Investment Policy Framework for the Southern African Development Community (OECD)
The objectives of the meeting, 21-22 July, were to agree on priorities for implementation based on SADC member states' needs; discuss how to monitor the implementation of the IPF; strengthen capacity, foster dialogue, and encourage policy reform on priority areas; and to assist member states in setting strategic direction to support the implementation of the IPF. This meeting followed on from 5 previous focus meetings held throughout 2013-2015 during which SADC member states and the OECD developed and honed the SADC Investment Policy Framework. [Addressing development challenges in Southern Africa: an investment policy framework for SADC]
The Promotion and Protection of Investment Bill protects investors: Minister Davies (the dti)
The Promotion and Protection of Investment Bill has been tabled in Parliament on following an extensive public consultation process. The Minister of Trade and Industry, Dr Rob Davies says the Bill seeks to promote investments and clarify the level of protection that an investor may expect in South Africa and ensure that the country remains open to foreign investment. “The Bill also aims to confirm Government’s right to pursue constitutionally-driven national development objectives and recognises the right of governments to regulate in the public interest. In addition, it promotes a balance between the rights and obligations of investors, ensures the equal treatment between foreign investors and domestic investors. It also provides clarity for the standards of protection applied to investment,” says Davies.
Zimra misses H1 revenue target (The Herald)
Zimra’s net revenue collections for the first half of the year fell 6% to $1,66bn against a target of $1,76bn. On a comparative basis the net collections were 3% lower than the $1,72bn collected during the same period last year. Zimra board chairperson Mrs Willia Bonyongwe attributed the failure by Zimra to meet the revenue target to a myriad of challenges which affected economic performance. These, she said, included liquidity constraints, limited lines of credit from financial institutions, power shortages, retrenchments and company closures. “The shrinking of the formal economy has led to the growth of the informal sector whose contribution to revenue is not significant."
Tanzania becomes east, central and southern Africa fibre optic information hub (IPPmedia)
Tanzania Telecommunication Company Limited (TTCL) plans to make its fiber optic cable to be the information hub in east, central as well as southern Africa. In an exclusive interview with ‘The Guardian’ at the week end, the TTCL acting Chief Executive Officer, Peter Ngota said that it was one of the company’s long-term plans. He said, currently, nearly all neighbouring countries depend on the TTCL fibre connectivity as a source of information. These are Burundi, Rwanda, Zambia, Malawi, Kenya and Uganda. Ngota said further that under the plans, TTCL has will ensure that all countries in east, central and southern Africa—particularly SADC use the TTCL fibre optic cable as the hub of information.
Advanced technology increasingly shaping Africa’s financial sector
The future shape of financial services in Africa 2015 report by PwC describes the sector as a marketplace without boundaries. It explains that compared to global markets – where the outlook for financial services is more solid – the risk of disruption in traditional African financial services market has triggered the need for entities to reassess their strategies. An Accenture report titled African financial services come of age, suggests a promising future for the region’s banking sector. It reveals that the development of consumer payment networks took years to become fully functional in mature economies, while many countries in Africa are now beginning to expand their traditional payments infrastructure to adapt to new international standards.
Does a Regional Trade Agreement lessen or exacerbate growth volatility? (IMF)
Now or Later? The political economy of public investment in democracies (IMF)
Countries should take action to reduce external imbalances: ESR is posted (IMF)
One in three payments between China and South Africa settled in yuan (South China Morning Post)
ITUC-Africa Human and Trade Union Rights Network: statement on illicit financial flows (Common African Position)
WTO: Declaration on the expansion of trade in information technology products
Azevêdo urges WTO members to hit the ground running in September (WTO)
SA, Botswana and Namibia discuss groundwater resources
Summary Record of the 18th Meeting of the DAC Network on Development Evaluation (OECD)
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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to over 300 recipients across Africa and internationally, serving in the AU, RECS, national government trade departments and research and development agencies. Your feedback is most welcome. Any suggestions that our recipients might have of items for inclusion are most welcome. Richard Humphries (Email: This email address is being protected from spambots. You need JavaScript enabled to view it.; Twitter: @richardhumphri1)
