There have been several attempts to foster deep integration within West Africa in times past to take advantage of the well-known gains from this regional integration. These gains include trade promotion and economic growth, but the focus of the current study is increased imports into Nigeria and the implications of these imports on trade creation and diversion, tariff revenues and welfare. West Africa has been involved with this regionalisation process, a process that has culminated in the Economic Community of West African States (ECOWAS) customs union that agreed on a Common External Tariff (CET) with Nigeria scheduled to implement it on 11 April 2015.

This study looks particularly at the impact of the ECOWAS regional trade agreement on trade and agro-processing in Nigeria. To complement this, the effect of a possible ECOWAS-European Union (EU) Economic Partnership Agreement (EPA) on trade, revenue and welfare is also examined. The Single Market Partial Equilibrium Modelling Tool (SMART) is used at a disaggregated six-digit level of the harmonised system for the product analysis.

Overall, the results indicate that a regional trade agreement with ECOWAS and the EU increases the imports of agro-processed products by Nigeria. This import growth is mostly driven by trade creation as a result of the lowering and/or the removal of tariffs. Côte d’Ivoire had the largest positive trade diversion effect among the ECOWAS partners and for the European Union (EU) it was the Netherlands. Nigerian consumers benefit from reduced prices, but the influx of new imports may not favour producers in the agro-processing sector. This is because expensive local production is substituted by cheaper imports. Though not analysed in this study, producers within the agro-processing sector may likely witness an impact of diminishing profits because of strong import competition. The analysis also indicates loss of tariff revenue for the Nigerian government but there is welfare gain in total, as expected.

The implementation of a Free Trade Area (FTA) within ECOWAS serves as a meaningful base provided trade policies are well coordinated and harmonised. The government, however, needs to come up with measures to enable producers of less competitive agro-processing sectors to remain relevant. The results show that Nigeria needs an approach to generate revenue to offset the tariff revenue losses caused by the implementation of the CET.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

Over the last fifty years or more the most remarkable feature of global economic growth has been the growth demonstrated by the so-called ‘Asian Tiger’ economies (Hong Kong, Singapore, South Korea, and Taiwan). After the early leadership in growth by Japan we saw the next group (Singapore, Hong Kong, Korea and Taiwan) progress through the developmental stages to become modern high-income countries. This group was followed by the next wave of countries (loosely Malaysia, India and perhaps China with the latter being more of a tsunami than a wave), and then possibly Thailand and Indonesia. More lately we are seeing the ‘Tiger Cubs’ (Vietnam, Laos – the Lao People’s Democratic Republic – and Cambodia). The missing aspirant here is the Philippines, which started with a growl that faded to a whimper.

The objective of this paper is to assess the economic profile and progress of South Africa against these Asian growth economies, with special reference to the role of manufacturing in their growth and to ask if South Africa’s aspirations to emulate these growth patterns are realistic. We concur that South Africa did not capitalise on the opportunities it had in the 1990s (and later) to move forward from its then strong industrial base and large pool of cheap labour to emulate the Asian success. We appreciate that South Africa was emerging from a troubled period in its history, but we counter this by pointing out that China, Vietnam, Cambodia and Laos were all similarly emerging from their own troubled periods.

The paper starts by examining growth rates from the early 1960s, and shows that over this period and, more importantly, over a period from around 1990 South Africa has not been measuring up to Asian standards. Much has been written on the so-called Asian growth miracle, and driving this wave have been a complex mix of factors and policies. But two common themes emerge, namely their industrialisation with the emphasis on exports to the United States of America (US) and their ability to build a sound economic and overall infrastructural base from which to launch this development assault. Are these options open for South Africa? Current policy indications are that they are not.

The objective for this paper is to examine intra-SACU (Southern Africa Customs Union) trade with a special emphasis on the position of Botswana in this trade and the role of re-exports. The latter has become possible with the publication by the International Trade Centre (ITC) of this re-export data, although we hasten to add that there is not a comprehensive coverage of the SACU in this data.

Botswana’s data is available for 2015, but re-export data is only available for 2014. Namibian trade data is available for 2015 as mirror data, but re-exports are only available for 2013, while overall data for Swaziland is also available for 2015 in mirror data but re-exports are only until 2007. South Africa, the partner of most interest, does not have reported re-export data, and this is a significant omission from SACU’s trade data. Finally, Lesotho does not have re-export data either. Thus, we found that there was limited data to work with if we wanted to examine re-exports.

We find that reported re-exports from Botswana are minimal, but caution that because of the way in which the diamond trade is recorded in Botswana there is a degree of uncertainty about the concepts of imports, exports and re-exports of diamonds which flow through the country and only appear to be minimally processed to the extent of being sorted. This in turn may well have implications for the distribution of SACU tariff revenue from the tariff pool.

The objective of this paper is to examine the economic performances of the East African Community (EAC) members (Kenya, Tanzania, Uganda, Burundi and Rwanda). Emphasis will be placed on examining Kenya, and the overall question is: ‘Why is Kenya not an East Asian Tiger economy (Hong Kong, Singapore, South Korea, and Taiwan)?’ with respect to the dynamic economic growth of these Asian economies and the role of manufacturing in that growth. We fully recognise that this is a topic that has been intensely studied by many professionals, and that this short note is likely to raise more questions than answers. We at least hope that those some of points offered here are pertinent to the debate.

In summary, we find that although the Kenyan economy has done well by EAC and indeed African standards, it falls short of the stellar trademark performance of the so-called Asian Tiger economies. It is generally accepted that the key to the Asian Tiger economies has been trade, led by industrial exports, and while Kenya (and recently Tanzania) has led the EAC countries in trade as a share of the Gross Domestic Product (GDP) it does not compare with the Tigers. Probably as a consequence of this, EAC GDP growth rates do not compare with those of the Tigers and, in particular, we suggest that the dramatic increases in population in the EAC (and surrounding region) are a factor in the disappointing GDP per capita performance as well. Additionally, the role of governance is generally thought to be a factor in development, and the facts show that EAC members fall in the global bottom third in this measure.

However, our cursory analysis also shows that several Asian countries (notably China and the newer ‘Tiger Cubs’ also rank very low on this index, and we suggest that perhaps governance may be something that follows development as much as contributing to it. Finally, we offer some thoughts for Kenya’s way forward that are consistent with building the stronger foundations that have generally been a major factor in Asian development.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

The objective for this paper is to examine intra-EAC trade with a special emphasis on the position of Kenya in this trade and the role of re-exports. The latter has become possible with the publication by the International Trade Commission (ITC) of this re-export data, although we hasten to add that there is not a comprehensive coverage of the EAC in this data. Kenyan data is only available for 2013 in the most recent years, while re-export data is not available for Tanzania. This leaves 2015 re-export data available for Rwanda, Burundi and Uganda only.

We caution that overall there are many problems with African trade data. This includes the availability of direct (as supplied by the country under examination, in this case Kenya) trade data only for 2013 as the most recent year. To compensate for instances where direct is not available the ITC uses what is known as mirror data where the trade data from the relevant partner is used. For instance, Kenyan exports to Tanzania for 2014 and 2015 are reported by the values from Tanzanian imports from Kenya. This is not the first-order preferred situation, but it is the only alternative.

There are also anomalies in the Kenya trade data: for example, in mirror data for 2013 Kenya is reported as exporting around three quarters of a million dollars’ worth of petroleum products to Zambia, with Zambia reporting a similar amount in imports. A similar trade continues to be reported in Kenyan mirror exports for 2014 and 2015, with this representing around 10% of Kenyan exports. However, inquiries to Kenyan officials and experts seems to indicate that this is petroleum in fact trade from a third country that has been brokered by a Kenyan company.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

The objective of the East African Community (EAC) is to deepen the integration process within the Community through liberalisation and promotion of intra-regional trade. The EAC became a fully-fledged customs union on 1 January 2010, and has made strides in deeper integration by ratifying several protocols and agreements in order to achieve its stated goals, including the ratification and entry into force of the EAC Common Market Protocol by all the five EAC partner states on 1 July 2010.

The EAC has also been active in the launch of the Tripartite Free Trade Area (TFTA) with Common Market for Eastern and Southern Africa (COMESA) and Southern African Development Cooperation (SADC), as well as being one of eight regional economic blocks to negotiate the Continental Free Trade Area (CFTA).

The objectives of this study are as follows: i) To identify the excluded tariff lines (sensitive list) from the CET for the EAC on a country-by-country basis and to seek the rationale for the exclusions; ii) To track the trade volumes since the customs union protocol entered into force and to analyse the impact of the exclusions on trade; iii) To draw implications of the exclusions on the proposed TFTA and CFTA; and iv) To investigate whether there are any other restrictions on trade within the customs union such as export restrictions as well as whether, and to what extent, tariffs or equivalent charges are still imposed on products traded within the customs union.

The report is organised as follows: section two reviews the sensitive products by country and the rationale for their choice and any other trade restrictions in place, section three provides trends trade and the likely impact of the excluded products, section four draws the implications of the sensitive list on TFTA and CFTA, while section five concludes and provides policy recommendations.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

The Southern Africa Customs Union (SACU) is the oldest existing customs union in the world. It was established in 1910 pursuant to a Customs Union Agreement between the then Union of South Africa and the High Commission Territories of Bechuanaland (now Botswana), Basutoland (now Lesotho), and Swaziland. With the advent of independence for these territories, the agreement was updated on 11 December 1969. It was relaunched as the SACU with the signing of an agreement between the Republic of South Africa, Botswana, Lesotho and Swaziland. The updated union officially entered into force on 1 March 1970. After Namibia’s independence from South Africa in 1990, it joined SACU as its fifth member.

This trade brief analyses bilateral trade among SACU countries using UNCOMTRADE Trade Map data from 2010 to 2015 at HS4 level, and is expressed in United States Dollars. The direct data is extrapolated for both top 10 exports and imports in goods, sources and their destinations using statistical and graphical illustrations. The analysis tries to understand if SACU countries trade among themselves, despite being a single customs territory with the Rest of the World.

Intra-SACU trade has been marginally growing since 2010, with South Africa dominating the intra-regional trade, both in terms of absolute values and percentage shares. Exports from South Africa are mainly petroleum oils (not crude), diamonds, trucks and motor vehicles, electrical energy, and maize, while imports are mainly odoriferous mixtures as raw materials for industry, diamonds, sugar, clothing and textiles. Bilateral trade among BLNS countries is small, and is mainly between Botswana and Namibia in agricultural commodities. Exports in livestock meat products are substantial. These BLNS countries import over 80% of their imports from South Africa, and 100% in the case of Lesotho. Essentially, BLNS countries are markets for South Africa’s exports.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

In today’s globalised world, production processes have been split up and different parts of production relocated around the world. Global value chains (GVCs) are now attributed to more than 60 percent of global trade, employing an estimated 16 million people worldwide, with developing countries’ share in global value added trade having grown to 42 percent from just 22 percent in 1990.

While the emerging relevance and importance of GVCs cannot be overemphasised, the challenge has been the statistical bias created by attributing the full commercial value to the last country of origin which can misrepresent the political debate on the origin of the imbalances and lead to misguided, and hence counter-productive, decisions. According to the World Trade Organisation, the challenge is to find the right statistical bridges between the different statistical frameworks and national accounting systems to ensure that international interactions resulting from globalization are properly reflected and to facilitate cross border dialogue between national decision makers.

This paper looks at the recently released new statistical profiles on GVCs for 61 economies and more specifically looking at the BRICS economies of Brazil, Russia, India, China, and South Africa. The objective is to use the available data and provide a comparative analysis of the level of participation in GVC trade. It is important to note that the aim of the analysis is to provide a snapshot of the state of trade in value added (TiVA) based on available data. As this is a snapshot analysis, the ultimate goal is to start the discussion on how developing countries, especially in Africa, can get increasingly involved in the GVC trade.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

While the recent focus on Africa’s merchandise trade has been the spectacular rise of trade with the BRIC countries of Brazil, Russia, India and China and the commensurate decline of the US and EU, almost unnoticed has been the trade with Japan which has quietly continued at a modest but steady level. This paper documents and discusses this Japanese trade flow profile over the years 2001 to 2014 inclusive.

The paper begins with the African perspective – an overview of Africa’s aggregate global imports and exports, before focusing on the Japanese perspective – an analysis of Japan’s exports to Africa and imports from Africa, as well as Japan’s trade with Africa by country (top six export destinations and top six import sources). It is clear that Japan has been a consistent and reliable trading partner for Africa in recent years.

From an historical perspective it is well to keep in mind that Japan has remained an important global trader over the part thirty or so years despite the perception that its status has diminished. The WTO’s World Trade Report 2013 states that in 2011 the four top-ranked global exporters were China, US, Germany and Japan in that order, while during 1980 they were the US, Germany, Japan and France with China a distant 30th. The US was the top importer for both 2011 and 1980, while the global import rankings were very similar in that Japan held the same fourth rank here for the two periods as for exports while China, second place in 2011, was a lowly 22nd in 1980.

In the shadow of China’s dramatic rise as a world trading power and the tendency to treat the EU as a single entity, it is easy to see how Japan may have become ‘the forgotten partner’. In the same vein, although this paper does not discuss global services trade, Japan was number two in 1980 and still number five in 2011, according to the WTO.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

The main feature of global trade since at least 2000 has been the relentless rise of exports from the BRIC countries (Brazil, Russia, India and China) and, in particular, China. Much of this increase has been at the expense of the European Union (EU) and to a lesser extent the United States of America (US), while Africa has slowly increased its share of global exports and imports. This BRIC growth has been most clearly seen in manufacturing exports and natural resource imports.

Are these trends going to continue? In this paper we use a computer model to assess likely trade trends through to the year 2025. Our economies of interest are Africa as a whole, South Africa, Kenya, Nigeria and Egypt, as we believe that this selection provides a solid base to forecast the 2025 trading patterns for Africa. These trends are firmly anchored in the trade patterns of recent years and rely on the most recently accepted global macroeconomic trends through to at least 2020 from the World Bank, the International Monetary Fund (IMF) and others. Using a computer model of the global economy ensures that we force consistency in these forecasts; meaning that changes in one area will force commensurate changes elsewhere in the global system. They are not therefore mere estimates presented in isolation from other developments in the global economy. We present our (IMF and others) macroeconomic assumptions of the immediate future for the world so that the reader may be able to see what is driving these changes, and indeed see how these macroeconomic changes are at the same time driving global trade flows in a simultaneous relationship.

Over the period to 2025 the global growth in BRIC dominance is likely to continue but at a slightly modified rate, with China driving these BRIC results. We can also expect similar increases in the shares for the rest of the world as we have defined it in this paper, with a commensurate decline in the trade performance from the EU and to a lesser extent the US. Africa is projected to continue its modest rise in the global importance of both exports and imports.

At the more detailed level intra-African trade is likely to increase faster than African global trade, both in aggregate and for many of the individual trade commodity sectors (and in our aggregate services sector). Of special interest to Africa is that its natural resources exports to the world are likely to grow at a slower rate than overall exports, while the Chinese domination of the TCF (textile, clothing and footwear) sectors is set to decline. There are also some bright glimmers of hope for many of the African manufacturing sectors, although much of this trade is off low bases.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.