News Archive January 2016

tralac’s Daily News selection

The selection: Friday, 29 January 2016

Later today, from Pretoria: South Africa's December trade data figures will be released

Call for papers: COMESA-ACBF capacity building project in economic and trade policy analysis and research

The objective of this call is to seek for empirical or policy oriented research papers to address the issues of COMESA regional integration in the context of inclusive and sustainable industrialization in COMESA Member States. The research theme is 'Trade in services and trade facilitation for inclusive and sustainable industrialisation in the COMESA region'. Successful papers will be presented at the Research Forum in August 2016 and selected papers will be published in the 'Key issues for regional integration, Volume V' in 2016.

Highlights from the Tripartite Private Sector Platform workshop: 'Regional blocs urged to harmonise rules of origin' (New Times)

Lilian Awinja, the EABC executive director, said the objective of developing rules of origin should be to avoid trade deflection and encourage intra regional trade. “We must ensure that the final rules are not trade-restrictive but simplified and more general rather than product specific except in minor cases where it is necessary,” Awinja said. Ideally, tariff liberalisation under preferential arrangement should be accompanied by simple and flexible rules– which will make it easy businesses to access the market and take advantage of preferential treatment, she added.

Nigeria-Kenya trade updates:

Kenya-Nigeria seek to establish duty free trade zone (The Standard)

Kenya and Nigeria are seeking to establish a duty-free trade zone between the two countries. This comes following trade talks between Nigerian President Muhammadu Buhari and his Kenyan counterpart Uhuru Kenyatta. In Kenya, the unit will be housed under the KNCCI’s Nigeria-Kenya business council and chaired by Equity Bank CEO James Mwangi while in Nigeria it will be chaired by Sani Dangote, brother of Africa’s richest man Aliko Dangote and vice president of the Dangote Group.

Kenya-Nigeria Business Forum: speech by President Uhuru Kenyatta

Our relations and engagements have been growing over the last few years following the two state visits to Nairobi and to Nigeria in 2013 and 2014 respectively. The two visits yielded a number of agreements including the Bilateral Trade Agreement and the Memorandum of Understanding between the Kenyan and Nigerian Private sectors. I am reliably informed that Kenya and Nigeria have agreed to establish the Joint Trade Committee, which will address issues affecting our trade relations. I believe once the committee is in place it will clear some of the hurdles our business persons are experiencing in order to enhance our trade volumes. With the Bilateral Trade Agreement in place, I believe our experts will be able to discuss ways of dismantling any impediments to increasing trade between the two countries.

Related: Brookside plans for West Africa exports get Buhari visit boost (Business Daily), @gina_din: To get a container from China to Nigeria it takes a month. To get a container from Kenya to Nigeria it takes 3 months, @AdanMohamedCS: Kenya recognizes the important role Nigeria plays in influencing foreign trade in the continent

Tanzania trade deficit widens in 5 years - report (The Citizen)

Tanzania has continued to experience a negative trade balance in the last five years, a comprehensive review of a five-year development plan has revealed. The report, which was unveiled to MPs on Monday during a workshop, says that between 2011/12 and 2015/16 the country witnessed a significant widening of trade deficit due to a decline exports. The situation was caused by a fall in gold and traditional exports. Poor exports have also contributed to volatile exchange rates, according to economists.

US-Africa trade and investment policy updates:

'Beyond AGOA': remarks by Ambassador Michael Froman (USTR)

The question now is not whether AGOA is an important tool – it has been and, for many countries, will continue to be vital for the near future. The question is whether we also need to develop new trade policies for the new Africa, given the broad spectrum of countries that now make it up and the changing global trading system of which it is part. This is a question that is also on Congress’ mind, with the AGOA extension legislation passed last summer asking us to assess the prospects of putting us on a path to more permanent, reciprocal trade arrangements.

Drawing on the expertise of this diverse and distinguished group, we’ve been working to develop a better understanding of the challenges and opportunities for trade and investment between the U.S. and Africa, and how we can harness the full potential of the US-Africa trade and investment relationship. This input is critical as we prepare a public report, for delivery to Congress in June of this year that will lay out a set of options and roadmaps for advancing the US-Africa trade and investment agenda.

To build upon AGOA’s successes, the US government and its African partners launched the Trade Africa initiative with the East African Community in 2013, signing a multifaceted Cooperation Agreement in 2015 focused on compliance with WTO standards on trade facilitation, sanitary and phytosanitary measures, and technical barriers to trade. The US is currently working to expand the Trade Africa Initiative to involve new partners, including Cote d’Ivoire, Ghana, Mozambique, Senegal, and Zambia.

US Secretary of Commerce Penny Pritzker: statement on Rwanda visit

Rwanda and the East African Community have a lot to offer US investors. East Africa is the most integrated and fastest-growing regional economic community in Africa. The PAC-DBIA members, as representatives of the American business community, have had the opportunity to share their perspective on policies that can foster deeper economic and trade ties between the EAC and the United States. As part of this visit, our delegation today met with President Kagame for a roundtable discussion on the opportunities presented by regional integration. While we continue to deepen our commercial relationships, our delegation arrived at a challenging moment. The United States has expressed its disappointment that President Kagame has chosen to run for a third term in 2017.

EAC to benefit from USAID Regional Strategic Plan 2016-2022 (EAC)

The visit constituted of a presentation of the draft USAID Regional Strategic Plan 2016-2022 to the Secretary General, and dialogue on ways in which the two organizations can align their key priorities for the next five years. USAID’s five-year strategic plan will focus on increased trade, investment and food security; health services and systems for marginalized and vulnerable populations; increased security of populations vulnerable to regional threats and strengthening East African institutions’ leadership and learning.

Electrify Africa Act: update (Atlanta Black Star)

In the next week, the U.S. House of Representatives is expected to vote on the Electrify Africa Act, passed by the Senate under unanimous consent late last year. This bill directs the President to establish a multiyear strategy to assist countries in sub-Saharan Africa, implement national power strategies and develop an appropriate mix of power solutions, including renewable energy, to provide access to reliable, affordable, and sustainable power in order to reduce poverty and drive economic growth. On behalf of the African Energy Leaders Group, a high-level public-private partnership launched last year, we welcome the leadership of the US Congress on this issue.

Mining and oil deals drop by half in East Africa (Business Daily)

The annual financial review by Burbidge Capital shows that the number of deals in the mining, oil and gas sectors halved due to the poor market. “2015 was a low year for the natural resources sector in East Africa as investor interest decreased, with around half the number of deals announced compared to 2014. The number of deals reduced to 23 in 2015 with Kenya accounting for almost 50% of the total deals recorded in the sector,” said the report. [Download]

East Africa: Regional states sign joint cargo tracking agreement (Daily Monitor)

The tracking system comprises satellites, a central monitoring centre and special electronic seals fitted on cargo containers and trucks, which give the precise location of goods in real time. The system triggers an alarm whenever there is diversion from the designated route, an unusually long stopover or when someone attempts to open a container. Besides curbing theft of cargo, the system also helps to seal loopholes that cause the country losses in revenue through suspected under-declaration of the value of exports or theft of cargo.

Busia town loses out as cross-border trade favours ‘cheaper’ Uganda economy (Business Daily)

Seamless trade is seen to have thrived more on Kenya and Uganda sides compared to Tanzania. Entering Tanzania from Isebania border in Migori, a Kenyan is subjected to checks and one cannot allowed to pass without a passport and yellow fever immunisation card. Use of national IDs at the exit/entry points by the citizens of Kenya, Uganda and Rwanda started two years ago. In Burundi and Tanzania, Kenyans cannot use national IDs to cross borders. Busia and Malaba are now like towns in the same country, save for difference in business environment. Kenya’s Luhya community speak Luganda language and vice-versa. But as businesses favour Uganda, Busia county government is seeking ways to woo back consumers. Following devolution, Busia town started attracting many entrepreneurs, but some are now eyeing the other side of the border.

Tweet by @UKenyatta: The dream of our continent will be achieved when our people are free to move without border restrictions

EALA: ‘Let us streamline acquisition of work and residence permits’ (EAC)

The Assembly is calling on the Partner States to commence the process of uniformly abolishing work and residence permit fees as well as in the facilitation of portability of social benefits. In the same vein, the Assembly is set to work jointly with regional advocacy bodies to engage in sensitization and popularization of the Common Market Protocol among other related issues. Late yesterday, the Assembly debated and adopted the Report of the Committee on General Purpose on the petition to EALA regarding work/residence permits in the EAC for the citizens of the Partner States.

Lesotho-South Africa Special Permit initiative: update (GCIS)

The thinking behind the Lesotho Special Permit initiative we explained in detail, in November 2015. This was after discussions between our two countries – the Kingdom of Lesotho and the Republic of South Africa. The SA Cabinet approved implementation in October, last year. In a nutshell, the purpose of the LSP is to regularise the stay of Lesotho nationals currently residing in South Africa illegally. It is meant to document Lesotho nationals who are working, studying or running businesses in South Africa, without appropriate documentation.

International Customs Day 2016: MRA launches National Single Window and Taxpayers’ portal (Government of Mauritius)

The Mauritius Trade link will act as a single web-based online portal for the submission and processing of import/export permits and respective clearance from Government agencies. Various benefits will be derived from the National Single Window project by the business communities in general such as reduction in dwell time for import/export permits processing and clearance; reduced cost of doing business; 24/7 access to the portal via internet; and facilities for traders to track the progress of their applications/declarations in real time among others. [Setting up of a commodities exchange (Government of Mauritius)]

Local Sourcing for Partnerships: project update (Comesa Business Council)

As a strategic response, the LSP project aims to increase local sourcing by large corporate companies in the COMESA region from small growth enterprise within the hospitality and agro-industry sector, focusing mainly on food and beverages. The project is being piloted in six COMESA states namely Ethiopia, Kenya, Malawi, Rwanda, Uganda and Zambia. In Zambia, the Zambia Association of Manufactures is the implementing partner for the project. A number of Multinationals often decide to source outside the region due to various reasons such as: the majority of local suppliers fail to meet the international quality standard requirements demanded for food and beverages suppliers, and most Multinationals have limited credible information on local suppliers. Additionally, local sourcing partnerships are viewed as difficult, unstable processes due to the inconsistence of supplying as well as their small production units and quantities.

WTO releases new statistical profiles on global value chains

Trans-Kalahari railway dream still an office job (The Namibian)

No investor has yet been selected to fund the project, as no tendering or calling for proposals to invest in the project has been done at this stage. Although the project was estimated to cost about N$100 billion in 2014, it is estimated to be nearly double that figure with today's exchange rate. Asked if there were major challenges that could hamper the development, Kalomoh said that at this stage none “that cannot be mitigated” could be foreseen. “Those saying the project is off are merely spreading unfounded rumours,” Kalomoh said.

India-Africa Partnership: a civil society perspective (Voluntary Action Network India)

The objective of the meeting was to reflect on the expectations and promises of the outcome documents of the IAFS and discuss civil societies’ possible contribution to upholding the spirit of India-Africa partnership and achieving the transformational change it envisions. In addition, the meeting provided a forum for bringing the national NGO platforms of Africa and India together to have a dialogue on current challenges and opportunities, and share their learnings and experiences.

China-Africa Trends & 2015 FOCAC: policy brief from the China-Africa Research Initiative (Johns Hopkins)

Namibia: Banks gear up for Chinese clients (The Namibian)

How the internationalisation of China’s currency could offset the global trade slowdown (ODI)

Agribusiness rules lag in agriculture dependent countries (World Bank)

Countries where agriculture is a major economic activity have greater room for improving key regulations that govern the agribusiness sector, a new World Bank report finds. In contrast, countries where agriculture accounts for less than 25 percent of GDP have better regulatory systems that foster agribusiness and ensure quality control and safety of food production, says the first edition of Enabling the Business of Agriculture 2016: Comparing regulatory good practices. The report, released today, examines regulations that affect private enterprise in agribusiness in 40 countries around the world. [Downloads available]

Zim moves to draft GM labelling laws (Southern Times Africa)

Kaberuka named head of AU Peace Fund (New Times)

The volume woes of Indian goods export (Livemint)


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tralac’s Daily News selection

29 Jan 2016
The selection: Friday, 29 January 2016 Later today, from Pretoria: South Africa's December trade data figures will be released Call for papers: COMESA-ACBF capacity building project in economic and trade policy analysis and...
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Regional blocs urged to harmonise rules of origin

Experts have called on Africa’s three trade blocs of COMESA, EAC and SADC to expedite the harmonisation of rules of origin to boost industrialisation and intra-regional trade on the continent.

According to the experts, harmonising rules of origin will encourage competitiveness for the African private sector, and accelerate regional integration.

Rules of origin are the criteria needed to determine the national source of a product.

The importance is derived from the fact that duties and restrictions in several cases depend on the source of imports.

And according to the experts, stakeholders should move fast and have the rules harmonised to help avoid trade deflection on the continent.

The desire to merge Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC), and the Southern Africa Development Cooperation (SADC), was first mooted in 2008.

In June 2015, the Heads of State and Governments of the, EAC and SADC officially launched the COMESA-EAC-SADC Free Trade Area (FTA), commonly known as the Tripartite FTA.

Sandra Uwera, the Chief Executive Officer, COMESA Business Council and secretary general of the Tripartite Private Sector Regional Dialogue, said the way the rules of origin are designed and implemented on the continent will have profound implications on trade flows and the extent of regional integration.

It is, therefore, very imperative to put in place more effective and simplified transparent rules of origin that will boost the continent’s private sector to tap into a market share of more than 625 million consumers.

“Having rules harmonised in such a market comes with economies of scale on which the private sector can leverage to boost intra-regional trade,” said Uwera.

Uwera was speaking during the first tripartite private sector regional dialogue organised by Private Sector Federation in Kigali, yesterday.

The two-day dialogue brought together more than 21 countries and more than 200 business leaders from COMSESA, EABC and the Association of SADC Chambers of Commerce and Industry (ASCCI).

She added that producers on the continent will be able to produce massively for export markets once the rules have been harmonised.

“Even as we look towards the advantages of the Tripartite FTA, one cannot ignore the challenges faced in this ambitious agenda of harmonising a preferential trade regime for 26 countries. Key among these are long distances and geographical locations among states which is further complicated by the poor infrastructure, inefficient logistics and cumbersome customs procedures,” Uwera noted.

To live up to its potential, the Tripartite FTA needs to effectively enhance the connectivity and linkages among member states.

Lilian Awinja, the EABC executive director, said the objective of developing rules of 0rigin should be to avoid trade deflection and encourage intra regional trade.

“We must ensure that the final rules are not trade-restrictive but simplified and more general rather than product specific except in minor cases where it is necessary,” Awinja said.

Ideally, tariff liberalisation under preferential arrangement should be accompanied by simple and flexible rules– which will make it easy businesses to access the market and take advantage of preferential treatment, she added.

Oswell Binha, the vice president of the Association of SADC Chambers of Commerce and Industry, said harmonising the rules has the potential to transform regional trade through market integration and product diversification.

“It will also allow us regional accumulation, enhanced trade cooperation, and reduced cost of doing business on the continent.”

Renewed commitment

According to Emmanuel Hategeka, the permanent secretary at Ministry for Trade and Industry, rules of origin have become increasingly important to match the rise in regional and global value chain trade.

“Intra African trade remains low at about 12 per cent because of various constraints which includes unharmonised rules of origin,” Hategeka, said.

It’s therefore, high time the private sector leaders started reflecting on how to get trade rules that will contribute to policies that will enhance trade on the African continent.

“Commitment at the political level should be matched with a sense of urgency when it comes to harmonising rules of origin; we also need not to forget that increasing connectivity and industrialisation on the African continent requires among other things harmonised rules of origin,” added Hategeka.

The rules of origin should be administered in a consistent, uniform, impartial, transparent and reasonable manner, he warned.

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Regional blocs urged to harmonise rules of origin

29 Jan 2016
Experts have called on Africa’s three trade blocs of COMESA, EAC and SADC to expedite the harmonisation of rules of origin to boost industrialisation and intra-regional trade on the continent. According to the experts,...
1 ~ 607

Agribusiness rules lag in agriculture dependent countries

Countries where agriculture is a major economic activity have greater room for improving key regulations that govern the agribusiness sector, a new World Bank report finds.

In contrast, countries where agriculture accounts for less than 25 percent of GDP have better regulatory systems that foster agribusiness and ensure quality control and safety of food production, says the first edition of Enabling the Business of Agriculture 2016: Comparing regulatory good practices. The report, released on 28 January 2016, examines regulations that affect private enterprise in agribusiness in 40 countries around the world.

Global population is estimated to grow to 9 billion by 2050, from the current 7.3 billion people, and food demand is projected to rise by 20 percent over the next 15 years. The largest increases are expected in Sub-Saharan Africa, South Asia and East Asia. As countries accelerate their efforts to achieve the new Sustainable Development Goals (SDGs), ending poverty and hunger will require well-performing agriculture and food sectors that can cater to the rising demand, which in turn depends on smart regulations that enable agribusinesses to thrive. 

“Well-designed agribusiness laws and regulations are the bedrock of national and global efforts to address these daunting challenges. By focusing on key elements of the food production and distribution value chain, Enabling the Business of Agriculture hopes to promote regulatory systems that enable sustainable and inclusive agribusinesses to take root and thrive,” said Preeti Ahuja, Manager in the World Bank’s Agriculture Global Practice, which produced the report jointly with the Global Indicators Group in the Development Economics Vice Presidency.

The current edition presents country-level results on six topics: Seed; Fertilizer; Machinery; Finance; Transport; and Markets. Four additional topics – Information and Communication Technology (ICT); Land; Water; and Livestock – are under development and will be included in next year’s report. Two overarching themes – environmental sustainability and women’s participation – are embedded in the indicators developed under each topic.

The report finds that urbanized countries have on average smarter regulations in the topic areas measured by the report than countries where agriculture accounts for a larger role. Of the 40 countries surveyed, the urbanized economies of Colombia, Denmark, Greece, Poland and Spain perform above average on the measured areas.

But in most countries, performance is mixed and challenges remain. Bosnia and Herzegovina, an urbanized economy, has good regulations for plant protection and fertilizer but faces challenges in regulating credit unions and e-money. Morocco (urbanized) and Mozambique (where agriculture accounts for over 50 percent of GDP) have smart regulations in place for registration, certification and development of new seed varieties but need to strengthen regulations in agricultural finance. Vietnam, where agriculture accounts for around 20 percent of GDP, has strong regulations for fertilizer quality control and plant protection, but can improve safety standards for farm machinery.

The indicators presented in this report look at whether national regulatory systems enable agribusiness start-ups and operations; have provisions for plant protection, safety standards for agricultural machinery and quality control for seeds and fertilizers; and facilitate trade of agricultural inputs and products.

“Improved knowledge and understanding of the environment in which agribusinesses operate can lead to better national strategies and policies that not only optimize sustainable food production and distribution but also achieve maximum development impact to end poverty and boost shared prosperity,” said Federica Saliola, Program Manager at the World Bank’s Global Indicators Group.

In terms of regions, the regulatory quality and efficiency of OECD high-income countries stand out in areas measured by EBA, followed by Latin America and the Caribbean, and Europe and Central Asia.

South Asia and Sub-Saharan Africa show levels of regulatory strength that are generally lower than the global average across the areas measured.

» Download the full Enabling the Business of Agriculture 2016 report (PDF, 6.25 MB) or select individual chapters below.


About Enabling the Business of Agriculture

The Enabling the Business of Agriculture (EBA) project focuses on identifying and monitoring regulations that affect agriculture and agribusiness markets. EBA aims to inform and encourage policy decisions that support inclusive participation in agricultural value chains and foster an environment that is conducive to local and regional businesses in agriculture. The project is supported by several donors, namely United Kingdom’s Department for International Development (DFID), the Government of Denmark, the Government of the Netherlands, Bill and Melinda Gates Foundation, and the United States Agency for International Development (USAID). 

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Agribusiness rules lag in agriculture dependent countries

29 Jan 2016
Countries where agriculture is a major economic activity have greater room for improving key regulations that govern the agribusiness sector, a new World Bank report finds. In contrast, countries where agriculture accounts for...
1 ~ 607

Mining and oil deals drop by half in East Africa

Deal making in East Africa’s natural resources sector slumped in 2015 due to the falling price of commodities in the international market.

The annual financial review by Burbidge Capital shows that the number of deals in the mining, oil and gas sectors halved due to the poor market.

“2015 was a low year for the natural resources sector in East Africa as investor interest decreased, with around half the number of deals announced compared to 2014. The number of deals reduced to 23 in 2015 with Kenya accounting for almost 50 per cent of the total deals recorded in the sector,” said the report.

The number of deals in the oil and gas sector reduced to nine in 2015 from 14 a year earlier while in mining the deals stood at seven from 14 deals reported in the previous year. The energy sector was the most vibrant driven by interest from private equity and venture capital firms.

“M-Kopa secured a total of $31.5 million (Sh3.2 billion) in form of debt and equity from a consortium of PE and VC investors in two separate transactions. The petroleum sector recorded the least number of transactions compared to all the natural resource sub-sectors although a notable development was Ethiopia and Djibouti’s agreement to construct a 550km refined petroleum products pipeline estimated to cost $ 1.55 billion (Sh155 billion) linking the two countries,” said the report.

There has been some capital raising too for the energy sector since the beginning of the year.

Powerhive, a California-based company with offices in Kenya and the Philippines, announced that it had raised Sh2 billion to invest in solar mini-grids in Kenya and other African countries.

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Mining and oil deals drop by half in East Africa

29 Jan 2016
Deal making in East Africa’s natural resources sector slumped in 2015 due to the falling price of commodities in the international market. The annual financial review by Burbidge Capital shows that the number of deals in the...
1 ~ 607