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tralac’s Daily News selection
The selection: Friday, 5 February 2016
Sub-Saharan Africa: The distribution of consumption expenditure - inequality among all Africans (World Bank)
This paper uses a set of national household surveys to study the regional Sub-Saharan Africa distribution of consumption expenditure among individuals during 1993 to 2008. The analysis puts the disparities in living standards that exist among persons in Africa into context with the disparities that exist within and between African countries. Regional interpersonal inequality has increased (from a Gini index of 52% in 1993 to 5% in 2008), driven by increasing disparities in living standards across countries, while there has been no systematic increase in within-country inequality. For the African distribution as a whole, growth of consumption expenditure (from household surveys) has been low (around 1% per year). This growth has been uneven and as a result the richest 5% of Africans received around 40% of the total gains, while the bottom third stagnated.
Zambia, Angola, DRC sign trade deals (Daily Mail)
Minister of Commerce, Trade and Industry Margaret Mwanakatwe says Zambia signed trade agreements with Angola and the Democratic Republic of Congo to provide for duty-free and quota-free market access of most goods produced in the country. “We are also in discussion with our counterparts in Angola on the possibility of establishing a dry port at Lobito. This should transform Zambia’s market access giving us access to the eastern seaboard. It will also potentially expand our utilisation of the African Growth Opportunity Act initiative, which until now has been less than our intended target,” Mrs Mwanakatwe said.
On the DRC agreement: Mrs Mwanakatwe said they met to finalise the product list which is an annex to the trade agreement that was signed on August 6 last year in Lusaka. “We also agreed to establish a joint bilateral trade committee with the task of promoting the development of joint projects, to fight against fraud and to eliminate non-tariff barriers. Furthermore, the committee will review the list of products every six months to take into account the dynamics in trade and economic development of both countries,” Mrs Mwanakatwe said.
Why there is little to show for Kenya-Nigeria trade deals (Daily Nation)
Two years ago Kenya and Nigeria penned a trade agreement on agriculture produce, mainly tea and flowers. According to the deal, Kenya was supposed to start exporting farm produce to Nigeria. However, two years on the implementation of the agreement is still in the back burner. Last week, Nigerian President Muhammadu Buhari visited Kenya, reviving hopes of that the agreement would finally take off. Unfortunately, indications are that Kenya might have to wait longer before the deal is implemented.
Botswana: Weak diamond exports trigger P2bn trade deficit (Mmegi)
A trade deficit of P1.9 billion was recorded in November 2015 from a surplus of P370 million the previous month largely due to a significant fall in diamond exports. Due to the low exportation of rough diamonds from the aggregation process, total exports were valued at P2.3 billion in November, a decrease of 50.3 percent from the October 2015 value of P4.6 billion. [Download: November 2015 International Trade Statistics]
The impact of China’s slowdown and rebalancing on South Africa: three scenarios (World Bank)
If South African exporters can respond to growing import demand from China, China’s slowdown, coupled with rebalancing, could raise South Africa’s GDP by 4.4% ($31.8bn) by 2030, compared with the past trends scenario. South African terms of trade could improve by 0.4%, while world prices of natural resources could increase by 3.9% and services by 6%. In this scenario, South African exports to China are projected to expand by 4% ($480 million), while imports from China could decline by 3% ($462 million). In addition, a marginal but positive effect on poverty reduction is expected, with a decrease in the poverty headcount of 0.33 percentage points relative to the past trends scenario. The simulation results come with several caveats. [Note: See Box 1.1 in SA Economic Update]
Kenya: China’s exports to Kenya reach Sh295bn on railway construction (Business Daily)
Nairobi also imported rail locomotives worth Sh2.6 billion from Beijing last year alongside railway wagons worth Sh4.7 billion, the Kenya National Bureau of Statistics data shows. This cemented China’s position as the largest source market for Kenya’s imports, followed by India and the US. The KNBS data shows that Kenya’s imports from China grew to Sh295 billion in the first 11 months of last year, up from Sh222 billion in 2014. But bilateral trade is heavily skewed in favour of the world’s second largest economy, denying Kenya the much-needed hard currency inflows. Kenya exported less than Sh5 billion worth of goods to Beijing in the review period, official data shows. [Download: Leading Economic Indicator December 2015]
Related: Hez Gikang’a: 'Why Kenya now needs a strategy to engage with China' (Capital FM), Pakistan beat Uganda in Kenya's November trade (The Star)
The Regional Assembly is urging Partner States to “up their game” in sensitisation activities, particularly when it comes to the Common Market Protocol in order to raise awareness and showcase benefits to the citizens of the region. At the same time, the EALA wants Partner States to adopt a phased implementation of the EAC Common Market Protocol by prioritising aspects that carry quick wins or deliver immediate multiplier effects. This move shall endear citizens to take advantage of the benefits that shall accrue from the Common Market Protocol. The Assembly on 2 February 2016 debated and adopted the Report of an oversight activity on the Security-related challenges of implementing the Common Market Protocol along the Central Corridor.
Related: Malaba, Busia One-Stop Border Posts ready (The Observer), EALA approves 2013/14 Annual Report of the Community (EALA)
RBZ moves on illicit financial flows (NewsDay)
The Reserve Bank of Zimbabwe has put in place stringent prudential measures to plug illicit financial flows, as it emerged that close to $2bn was spirited out of the country last year by individuals and companies, worsening the liquidity situation. The new measures include, among others, getting rid of the concept of free funds, reporting of suspicious transactions and use of plastic money. A customer who wants to withdraw above $10 000 will now be required, with effect from today, to give the bank reasonable notice of at least a day. In his monetary policy statement delivered yesterday, RBZ governor John Mangudya said money was flowing out of the country dwindling the liquidity position of the economy.
Related: Zimbabwe’s January 2016 Monetary Policy Statement, Zimbabwe, China central banks have yet to agree on yuan settlement (ecns)
Zimbabwe imposes value added tax on nearly 40 imported basic foods (Business Day)
In the January 22 Government Gazette, Finance Minister Patrick Chinamasa amended section 78 of the VAT Act by repealing clauses that until now allowed the imported food commodities to be taxed at zero rate. The tax is effective from February 1.
Zimbabwe, neighbouring countries losing millions in taxes due to illegal fish trade (NewsDay)
Food price index starts 2016 dropping to nearly 7-year low (FAO)
The global Food Price Index, calculated by the United Nations Food and Agriculture Organization on a monthly basis, fell in January, slipping 1.9% below its level in the last month of 2015, as prices of all the commodities it tracks dropped, sugar in particular. Meanwhile, weather patterns associated with El Niño are sending mixed signals about the early prospects for cereal crops in 2016, especially in the Southern Hemisphere, according to FAO's Cereal Supply and Demand Brief, also released today. It notes that 2016 crop prospects have been "severely weakened" in Southern Africa, and a 25% cut in wheat production in South Africa now appears likely. Conditions for the crop are generally favourable in the Russian Federation and the EU, but winter plantings declined in the United States and Ukraine. The area under wheat is also expected to be cut in India, following a poor monsoon and below average rains since October.
Kenya: Treasury keen to evade Parliament in Mauritius tax row (Daily Nation)
Treasury Permanent Secretary Kamau Thugge in court papers said the agreement was not subject to parliamentary scrutiny. Dr Thugge said that the Double Tax Agreement was not a treaty and was thus exempted from ratification.
Tanzania: Why govt's five-year growth plan failed to impress MPs (The Citizen)
The implementation of the first Five-Year Development Plan has miserably failed, as the government itself has not been able to pass a precise overall grade of the plan ending in June this year. This was revealed here last week when the Ministry of Finance presented to Members of Parliament a number of reports including a comprehensive review of the FYDP 2011/12 - 2015/16. The comprehensive review report for the implementation of the plan notes that while in some areas there were 'reasonable' achievements, efforts were needed in other areas to reach envisaged targets. "It is difficult to pass a precise overall 'grade' on whether the implementation of the five-year development plan has surpassed 50 per cent mark or above," reads part of the report circulated to the lawmakers.
Malawi: new online collateral registry and business registration system (World Bank)
Malawi has become the third country in sub-Saharan Africa, after Ghana and Liberia, to establish a modern online collateral registry system to enable businesses and individuals access loans using movable assets. As in many other countries, financial institutions in Malawi traditionally require fixed assets such as land or buildings as collateral for loans. The collateral registry, officially called Personal Property Security Registry was launched today together with the Malawi Business Registration System. The collateral registry is an online public database that allows financial institutions to register security interests in movable property such as livestock, machinery, and vehicles facilitating the use of such collateral for loans.
East Africa Power Pool to be fully connected by end of year 2018 (Xinhua)
The ten member Eastern African Power Pool will be fully connected by the end of 2018, officials said on Thursday. EAPP member states include Kenya, Uganda, Tanzania, Rwanda, Burundi, Democratic Republic of Congo, Sudan, Egypt and Ethiopia. Kenya Electricity Transmission Company acting managing director Fernandes Barasa said Kenya is fast tracking its electricity interconnection with Uganda, Tanzania and Ethiopia, adding that the Kenya-Ethiopia transmission line should be completed in the next two years.
A new road map for Power Africa (Devex)
Power Africa spent its first year focused on grid-scale generation deals, but leaders of the initiative are now looking ahead to ambitious connections targets — Power Africa-supported projects have the potential to lead to more than a million direct connections — and making changes based on lessons already learned. Generation and access goals, for example, are “actually two totally different things,” Andrew Herscowitz, Power Africa coordinator, told Devex. As a result, the road map lays out specific plans for each goal, and progress will be measured in actual connections. “We’ve learned a ton,” Herscowitz said. “We don’t just trust everything people say at conferences. We focus on analysis and data.”
Modelling growth scenarios for biofuels in South Africa’s transport sector (UNU-WIDER)
South Africa has a nascent biofuels industry and emerging regulatory framework, and although water scarcity limits local supply potential, that of the southern African region appears substantial. This paper describes the results and modelling approach of an assessment of potential biofuel demand from South Africa’s transport sector to 2050 that may respond to this supply under a number of scenarios.
Christine Lagarde: 'The role of emerging markets in a New Global Partnership for Growth' (IMF)
This is why we need what I call a new “partnership for growth”. Both emerging and advanced economies need to play their part to promote faster and more sustainable convergence. With this in mind, I would like to address three questions: First, what are the key challenges facing emerging markets and what are the interlinkages between emerging and advanced economies? Second, how can we forge a new partnership for growth? Third, what can be done to support this process—including by institutions like the IMF?
Uganda: URA revels in Shs 47 billion mid-term surplus (The Independent)
SA, Nigeria lead Africa online retail (Fin24)
India to defer finalizing trade pact with Australia (Livemint)
Médecins Sans Frontières statement on TPP
Trans-Pacific Partnership: Ministers’ Statement (USTR)
China's efforts to expand the international use of the renminbi (Brookings)
Aldo Caliari: 'Financing infrastructure in financial markets - why civil society should be alert' (Heinrich Boell Foundation)
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