News Archive August 2019

tralac’s Daily News Selection

TICAD7: outcome documents

  1. pdf Yokohama Declaration 2019 (524 KB) : Advancing Africa’s Development through People, Technology and Innovation

    We underscore the importance of private sector development, digital transformation, and youth and women entrepreneurship as strategies for implementing the priority areas of TICAD 7. In this context, we welcome the active participation of private companies from both Japan and Africa in TICAD 7. We consider the continued involvement of the private sector to be an essential element of the TICAD process going forward, and commit to strengthening the enabling environment for doing business and further encouraging impact investment that creates wealth.

    We welcome the AfCFTA and the prospects it offers for deepening regional integration and enlarging markets, promoting trade facilitation, transforming agriculture and developing value chains. We commit to supporting the full implementation of the AfCFTA through measures that concretely link the African private sector with its counterparts in Japan, in order to achieve these objectives.

    We recognize the role of the private sector in Africa’s development, and the linkages between the private sector, connectivity, technology and innovation. We welcome the Japan Business Council for Africa established by the Government of Japan and the private sector to encourage and facilitate business interaction between Japan and African Union Member States, including through private sector from other countries. We encourage initiatives such as the G20 Compact with Africa. We appreciate the business training provided through the African Business Education Initiative for Youth (ABE Initiative), and commit to strengthening job training as well as micro, small and medium sized enterprises on the continent, recognizing they are the primary vehicle for job creation and entrepreneurship, including of youth and women. We welcome efforts to support women entrepreneurship through financial and technical assistance. We also welcome efforts by the international community to de-risk private investment, particularly for infrastructure and productive sectors. We commit to working together to promote a conducive business environment, accelerate inclusive industrialization, enhance domestic resource mobilization, and strengthen public finance and macroeconomic stability. We further commit to strengthening capacities in the field of trade negotiation and responsible and sustainable business practices, including the development of an AU corporate social responsibility strategy, and to support impact investments to widen business opportunities and decent jobs including for youth and women in line with the aspirations and goals of the AU Agenda 2063 and Agenda 2030.

  2. pdf Yokohama Plan of Actions 2019 (218 KB) : Actions for implementation of the Yokohama Declaration 2019

    The Yokohama Plan of Actions 2019 which accompanies the Declaration, lists actions expected to be implemented by the TICAD partners in order to promote focus areas of the three main pillars of the Yokohama Declaration 2019 adopted at TICAD 7. The Yokohama Plan of Action 2019 is an evolving document which will be updated at any time after TICAD 7 by each TICAD partner.

  3. pdf Japan’s contributions for Africa (120 KB) : selected extracts from the economy section

    Launch bilateral committee on improvement of business environment in 7 countries to discuss improvement in institutions; improve the investment environment through Enhanced Private Sector Assistance for Africa with AfDB (EPSA4: Joint target with AfDB of $3.5bn in 3 years)

    Support financing for Japanese private sector to expand business in Africa through Facility for African Investment and Trade Enhancement of JBIC ($4.5bn in 3 years)

    Enhance risk money supply for Japanese private sector by JOGMEC; Launch NEXI’s new trade insurance scheme covering 100% of import costs and project financing in cooperation with African Trade Insurance Agency and Islam Development Bank Group

    Promote quality infrastructure investment in line with the G20 Principles for Quality Infrastructure Investment particularly in three priority areas (East Africa Northern Corridor, Nacala Corridor and West Africa Growth Ring) where master plans were are completed

    Blue Economy: Train 1,000 people in 3 years in the areas of maritime security, port enhancement and marine resource management; support port facilities improvement, ports management and operations; provide ships and equipments; participate in the Indian Ocean Commission (IOC) as an observer

    Agriculture: Double rice production (from 28 million to 56 million ton) by 2030 through Coalition for African Rice Development (CARD); support agriculture transformation to increase farmers’ income through Smallholder Horticulture Empowerment & Promotion (SHEP); dispatch agriculture experts; support development of global food value chain; develop and expand agriculture technologies; promote innovation in agriculture by the public and private sectors

    Energy for manufacturing and service industries: Develop renewable energy including geothermal; promote off grid energy; revise MoC on Japan-US energy cooperation in Africa

  4. pdf TICAD6: 2016-2018 report (3.16 MB)

TICAD7 news updates:

Prime Minister Abe’s remarks at the Public-Private Business Dialogue Session (pdf). A country that is deeply indebted is a country difficult for you to penetrate into. We will choose ten priority countries each year for the next three years, for a total of thirty countries, and provide their officials with training in sovereign debt and risk management. To Ghana and Zambia, we will send advisers on debt management and macroeconomic management.

The World Bank and the Government of Japan have announced a new Africa-focused initiative aimed at advancing the goals of the Human Capital Project, a global effort to accelerate more and better investments in people for greater equity and economic growth. The multi-year initiative, announced during the seventh Tokyo International Conference on African Development, will support two key initiatives of relevance to African countries: (a) The Global Education Policy Dashboard. Together with the Bill & Melinda Gates Foundation and the United Kingdom Department for International Development, the World Bank is developing a policy dashboard focused on giving governments in low- and middle- income countries a better understanding of what’s going on in their education systems at the school and system level in basic education, so they can make, and track the impact of, real-time policy decisions at the national level; (b) A Japan-Africa higher education partnership aimed at increasing collaboration between Japanese universities and industries and African universities to address urgent developmental challenges in sub-Saharan Africa.

Gavi sets ambitious goal to immunise 300 million people by 2025. Gavi, the Vaccine Alliance has called on donors to back plans to immunise an additional 300 million children, saving up to eight million lives, in developing countries between 2021 and 2025, launching a fundraising drive of at least $7.4bn. A total of $3.6bn will be invested by developing country governments in their own vaccine programmes over the period, up from $1.6n in 2016-2020. The 2021-25 Investment Opportunitywas launched at a special event at the Seventh Tokyo International Conference on African Development (TICAD) in Yokohama co-hosted by the Japanese government, which has supported Gavi with around $150m since 2011. [New Gavi impact figures released]

Profiled TICAD7 bilateral meetings: Japan-Mauritius, Japan-Rwanda, Japan-Ethiopia, Japan-Nigeria, Japan-Djibouti, Japan-Namibia, Japan-Zimbabwe

South Africa’s July trade figures record a R2.88bn deficit (SARS)

The R2.88bn trade deficit is attributable to exports of R112.94n and imports of R115.82n. Exports increased from June 2019 to July 2019 by R3.74bn (3.4%) while imports increased by R12.17bn (11.7%). The June 2019 trade surplus was revised upwards by R1.12bn from the previous month’s preliminary surplus of R4.42bn, to a revised surplus of R5.54bn as a result of ongoing Vouchers of Correction. The main month-on-month export movements are: vehicles and transport equipment (+R3 187bn, +22%), vegetable products (+R1 846bn, +28%), chemical products (+R1 366bn, +23%). The main month-on-month import movements are: machinery and electronics (+R4 825bn, +22%), vehicles and transport equipment (+R2 959bn, +32%), wood pulp and paper (+R 654m, +25%). The Africa zone figures (pdf): Exports of R30 585 million (an increase of R3 134 million from June 2019’s revised figures); Imports of R11 572 million (a decrease of R2 730 million). The Africa zone trade surplus of R19 013 million is an improvement of R5 863 million in comparison to the R13 150 million surplus recorded in June 2019.

Uganda: Toward scaled-up and sustainable agriculture finance and insurance (World Bank)

In March 2018, Uganda’s Ministry of Finance, Planning and Economic Development formally requested technical assistance from the World Bank Group to conduct a technical and diagnostic review of the Uganda Agricultural Insurance Scheme with the objective of providing recommendations to enhance the scalability and sustainability of the scheme going forward. This technical report covers the rapid assessment of agriculture finance and its recommendations, the findings of the situation and gap analysis of the UAIS, and where appropriate, presents the WBG’s recommendations for strengthening the scheme; it also includes a proposal for two additional insurance programs, one for crop and one for livestock, targeted at small-scale farmers. Related Policy Note: The financial Sector’s Role in Agricultural Transformation. With the objective of supporting and accelerating the transformation of the agricultural sector in Uganda, this policy note aims to identify the areas of investments (with costing) that the Government of Uganda may consider as part of the effort to scale up agriculture nance schemes and the UAIS. The analysis adopts the Maximizing Finance for Development (MFD) approach, seeking to use public sector resources to leverage and crowd in private sector capital for investment and risk management. The recommendations in this policy note are drawn from an in-depth technical report, Toward Scaled- Up and Sustainable Agriculture Finance and Insurance.

Diarise:

  1. Launch of The Digital Economy Report 2019 (4 September, Geneva). The report examines the development implications of the growing role of digital platforms, particularly in the big data sphere andc will assess what countries need to do to capture a fair share of the value created in the digital economy for their own development. The scope of this new analysis will include the market impact of new technologies, the consequences for small businesses in developing countries and the implications in terms of infrastructure, skills, respect for competition, data protection, and taxation, among other issues.

  2. Mining for change: natural resources and industry in Africa. The book, authored by John Page and Finn Tarp, will be available in January 2020. The book presents research results for Ghana, Mozambique, Uganda, Tanzania, and Zambia: each country study covers managing the boom, the construction sector, and linking industry to the resource.

tralac’s Daily News Selection

Madagascar has notified the WTO’s Committee on Safeguards that it has initiated three safeguard investigations: on soaps, lubricating oils and on vegetable oils and margarines

The East Africa Community will host a High Level Conference on Trade and Regional Integration (25-27 September, Nairobi) on the theme: Paradigm shifts in manufacturing value chains

Two EAC events presently underway, concluding tomorrow: 6th Meeting of the Ad Hoc EAC Competition Authority, Regional Technical Group on the East African Development Bank

Results and performance of the World Bank Group 2018: an independent evaluation (World Bank)

2018 was an ambitious year for the World Bank Group. At the Spring Meetings, the shareholders approved major capital increases for the International Bank for Reconstruction and Development and the International Finance Corporation, building on the “Forward Look,” IFC’s new strategy, “IFC 3.0,” and the commitments made as part of the 18th Replenishment of the International Development Association. The Bank Group has emphasized its ambition to achieve greater results and impact in all client segments as well as leading on global issues. IDA18 and the capital increase also bring with them a push to provide more financing, including for fragile and conflict-affected situations. This report provides a retrospective assessment of the Bank Group’s results and performance across its project and program portfolio. This is relevant for understanding the stock of achievements to date and the foundations on which the Bank Group is delivering on the Forward Look and its ambitious capital package. The report synthesizes trends in Independent Evaluation Group (IEG) ratings and identifies explanatory factors behind portfolio performance. Each of the three Bank Group institutions assesses results differently because of their differing reporting periods, operating models, and clients. Extract: Beyond the project level, ratings for country strategy outcomes for FY14–18 increased to 69 percent MS+, just below the FY17 corporate target of 70 percent. Country strategy outcomes in FCS were rated far lower, however, at 46 percent MS+. Ratings for Bank Group performance in country strategies were 62 percent good or above for all country strategies reviewed in FY14–18. This rating was particularly low in Africa and in FCS countries at 42 percent and 54 percent good or above, respectively.

Somali Poverty and Vulnerability Assessment: findings from Wave 2 of the Somali High Frequency Survey (World Bank)

Remittances are central to the Somali economy and provide a lifeline to some segments of the population but not the most vulnerable. The World Bank implemented the second wave of the Somali high frequency survey in 2017-2018. This report is based on the most recent and first extensive household survey, wave 2 of the SHFS. The report is organized into six chapters. The first chapter presents an updated profile of monetary and nonmonetary dimensions of poverty for the Somali population, including the nomadic population. The second chapter explores in more detail spatial variation, with a focus on urbanization. The third chapter examines the impact of the 2016-2017 drought on livelihoods to identify the populations at risk and the factors that protected households against its negative effects. The fourth chapter provides an in-depth analysis of the internally displaced populations to identify displacement-related needs and to inform durable solutions. As a reaction to the analysis of poverty and vulnerabilities, the fifth chapter focuses on social protection as a means of promoting equity and building resilience against the effect of shocks on livelihoods. Similarly, the sixth chapter examines remittances and their role for livelihoods and resilience.

The #AF19 opens next week in Cape Town: previews

  1. What to expect from the World Economic Forum on Africa 2019. While young Africans are 13% more entrepreneurial than the global average, start-ups on the continent are 14% more likely to fail than elsewhere in the world. That’s why the World Economic Forum (4-6 September) will launch the Africa Growth Programme, a new platform to bring enterprises together with investors and institutions, helping them secure smarter funding. Among the 29 entrepreneurs heading to the meeting are fintech start-up Flutterwave and Evergreen, a Tanzanian company recycling waste plastic into furniture.

  2. Africa Growth Platform. A new World Economic Forum initiative, the Africa Growth Platform, will help Africa’s community of start-up enterprises grow and compete in international markets. The Africa Growth Platform will do this in three ways: firstly, by securing commitments from governments to implement policy reforms aimed at stimulating and accelerating business growth. Secondly, it aims to build a community of investors, whether private investors, foundations, multilateral institutions or corporate intrapreneurs to enable better coordination and pooling of resources that could facilitate larger subsequent rounds of funding. Third, the platform will create and sustain a community of start-up businesses themselves, promoting collaboration and sharing best practices. The need for an innovative approach to helping Africa’s start-ups reach the scale where they become sustainable is backed up by data. The founding members of the Africa Growth Platform: Alibaba Group, A. T. Kearney, Dalberg Group, Export Trading Group, US African Development Foundation, Zenith Bank


TICAD7 Updates:

  1. Keynote address by Prime Minister Shinzo Abe at the opening session. And so I will say it again: the Japanese government -- New TICAD -- will do its utmost to support Japanese enterprises that are betting on the future of Africa. We are in an era in which the challenges Africa faces will be resolved through S, T, and I -- science, technology, and innovation. At the Egypt-Japan University of Science and Technology and at Kenya’s Jomo Kenyatta University of Agriculture and Technology, we will foster 5,000 young people who will advance STI into the future. We want to cultivate seamlessly the generations that will come after them. Doing this means making science and mathematics subjects they understand. That’s what is included in the collaboration between Japan and Africa, and it is now significantly changing the classrooms of African primary education. The Japanese way, which values pupils’ involvement in such activities as cleaning classrooms and serving lunch, has just started to spread in Egypt in its elementary schools.

    A project to improve school management through community participation, or the “school for all” project, was launched by JICA in Niger and has now spread to more than 40,000 schools, including in Burkina Faso and Senegal. Our target for the near term is to have the number of children benefitting from reforms to primary education reach three million. This kind of human resource building is where Japan has invested the greatest amount of effort in Africa over the years. The ABE Initiative, which nurtures industry leaders, has grown as many as 2700 young people over the past five years. We now have twenty applicants vying for every opening. The number of Japanese companies welcoming them as interns is now 358, 5.4 times the number when the initiative was first launched.

  2. Japan-South Africa summit meeting. Prime Minister Abe added that the Japan-South Africa Business Council (tentative name) should be established to support Japanese companies entering the South African market in order to further enhance trade and investment relations between the two countries. He also mentioned the holding of the Special Conference on Promoting Cooperation in the Western Indian Ocean and stated that Japan intended to cooperate with South Africa to ensure that the Indian Ocean develops as a free and open ocean. Prime Minister Abe further called for South Africa’s participation in the “Osaka Track” that promotes international rule making for data distribution and electronic commerce and its support for WTO reform. In response, President Ramaphosa welcomed the establishment of the Japan-South Africa Business Council and appreciated Japan’s supports related to the establishments of a universal health insurance system as well as the Universal Health Coverage, to measures against marine plastic litter, to industrial human resources development, and to some other areas.

  3. Japan-Egypt summit meeting. Prime Minister Abe stated that he was pleased that both countries announced enhanced cooperation for the African development under the Japan-Egypt Triangular Cooperation Program at TICAD 7 co-chaired by Egypt, and stressed his intention to expand the scholarship program at Egypt-Japan University of Science and Technology (E-JUST) to include 150 African postgraduate students under the collaboration between Japan and Egypt. PM Abe also stated that we would newly establish “Japan-Egypt Business and Investment Promotion Committee, in addition to the existing Japan-Egypt Business Council which aims at business networking, and we would like to seek further support from Egyptian Government in improving the investment environment, which will further promote Japanese companies’ investment to Egypt. Furthermore, he stated that we would like to ask your continuous support towards removal of all the import restrictions on Japanese food products imposed after the Great East Japan Earthquake. In response, President El-Sisi stated that we would like to make efforts in this matter. [Short notes of other bilateral meetings (by Prime Minister Abe, Foreign Minister Kono) can be accessed here]

  4. Japanese and African business leaders hold first investment dialogue at TICAD. Top African and Japanese business leaders held the first business-focused meeting of the Tokyo International Conference on African Development on Thursday in Yokohama, underlining Japan’s strategic policy shift from government aid to promotion of investment as international competition on the continent grows. Akinwumi Adesina, president of the African Development Bank, said several influential countries now organize African summit conferences similar to TICAD. “Just think about it. TICAD by Japan. China-Africa forum. India-Africa forum. U.S.-Africa forum. And now, soon to be, the Russia-Africa forum. Africa should no longer be seen through the development lens. Africa should be seen from an investment lens. Japanese companies should not only be at the table, they should be on the ground in Africa. I encourage the Japanese private sector to form joint ventures in Africa for a win-win investment partnership.”

Duane Newman, Catherine Grant Makokera: The questions your company needs to ask as Africa frees up trade (Business Day)

As is the case with so much in life, the devil will be in the detail, and companies need to keep a close eye on these negotiations to see exactly where the opportunities will lie and where they will need to press for better access. The big questions any company needs to be asking are:

Anthony Asiwaju: Back again at draconic border closure policy (Punch)

But now, in August 2019, the country appears to be drifting back towards the draconic traditions of arbitrary border closure against our regional neighbours, beginning with the Nigeria-Benin to the west, especially in the South-West, our nation’s main gateway into ECOWAS, and the Nigeria-Niger to the north. I hear the closure, which took effect on August 20, is, as was done on 24 April 1984, temporary, a month for now, in the first instance. In 1984, which affected all our borders, remained officially in force till 1 March 1986, even in spite of the change in the military baton in August 1985 when the Buhari regime was booted out by a coup that brought in Babangida. Within the three days of the ongoing 2019 border closure, the sufferings of the local populations, at least here, in Imeko/Afon Local Government Area of Ogun State, where I live, the strains and stresses have been incalculable and economic losses colossal for predominantly rural and agrarian communities:

South Africa’s untapped rare earths mine plans for success amid US-China feud (Japan News)

The Steenkampskraal Mine may be about to become piping hot mining property thanks to some of the world’s highest-grade deposits of rare earth metals. “Steenkampskraal will become a very important source of rare earths for the global industry,” Trevor Blench, chairman of Steenkampskraal Holdings Ltd., said during a recent tour. The mine, located about 350 kilometers north of Cape Town, used to produce thorium, a component of nuclear fuel, in the 1950s and 60s. But now it’s been found to also have monazite ore which contains extremely high grade rare earth minerals including neodymium and praseodymium — elements vital to cutting-edge industries. Steenkampskraal has secured all the licences required to start mining. It plans an initial production of 2,700 tonnes a year once funding of $50 million has been secured, with further plans to expand.

The drivers, implications and outlook for China’s shrinking current account surplus: the individual country perspective (IMF)

Some Asian economies have benefitted from China’s current account decline. In line with China’s rapid increase in imports of computers, electronics, and electrical equipment, the trade balance vis-à-vis China - in both gross and value-added terms - has improved the most for Asian economies exporting those items to China (Taiwan Province of China, Singapore, and Korea). The rise in Korea’s trade balance - supported by the depreciation of the currency vis-à-vis renminbi towards end of 2007 - has been predominantly due to electronics exports, which constituted 41% of total exports to China in 2017, up from 28% in 2008.

The trade balance of others (e.g. Japan, India, Indonesia) deteriorated. Notably, Japan’s trade balance with China, though improving in recent years, deteriorated by around $33bn in the period 2008-2015—equivalent to a decline of 0.7 percentage points, when expressed as a share of Japan’s GDP. Japan’s imports from China, owing to items like electronics and textiles, outpaced exports, where the sales of electronics—the country’s top exports to China—slowed down possibly due to China’s own increase in high-tech electronics production. Outside Asia, Germany’s trade balance with China improved markedly, predominantly due to the rise in exports of motor vehicles and machinery. The share of vehicles - Germany’s top exports to China in 2017 - increased to 24% of Germany’s total exports to China from 15% in 2008. In addition, the commodity exporters (Brazil, Australia) witnessed higher trade balances with China. For the US and Canada, gross trade balance with China improved marginally while the value-added trade balance deteriorated moderately. [Note: Being the IMF’s new Selected Issues report]

tralac’s Daily News Selection

The Seventh Tokyo International Conference on African Development began today in Yokohama on the theme Advancing Africa’s development through people, technology and innovation. The summit is being attended by over 20 African presidents.

  1. Abe pledges to push Japanese investment in Africa but steers clear of target at TICAD. in his opening speech Prime Minister Shinzo Abe pledged to aggressively promote private-sector investment in Africa but failed to set a new numerical target on funds to be funneled to the continent. Facing dozens of top African leaders at the Tokyo International Conference on African Development, Abe claimed the Japanese private sector invested $20bn in Africa over the past three years. “I make this pledge to you. The government of Japan will put forth every possible effort so that the power of Japanese private investment of $20bn in three years should, in the years to come, be surpassed anew from one day to the next,” Abe said, although he did not mention any specific investment goal. In the previous TICAD meeting in 2016, Abe pledged that the Japanese government and private businesses combined would invest a total of $30bn in Africa over the following three years. Now Japanese Foreign Ministry officials claim that Tokyo has met the $30bn target, as the government extended official development assistance totaling $10bn and the Japanese private sector invested $25.6bn in Africa during that period. But the goal was met only after the Foreign Ministry recently changed how it measured the investment, from using a net basis to a gross basis, which considerably boosted the total figure. Ministry officials claimed the gross total is more appropriate, because net investment does not include certain funds such as dividends paid by African subsidiaries to the parent company in Japan.

  2. Japan to drive Africa investment with enhanced trade insurance – Abe. Japan will offer enhanced trade insurance to boost private sector investment in Africa, Prime Minister Shinzo Abe said on Wednesday as his country competes with rival China for influence in the resource-rich continent. The enhanced insurance would fully cover loans to African governments, their affiliated institutions or private companies buying Japanese goods for infrastructure projects in Africa, according to government briefing materials and a state-run firm offering trade insurance. “For example, our cooperation with local financial institutions will create a new trade insurance that could cover 100% of your transactions,” Abe said in his speech.

African perspectives and TICAD7

  1. @AUC_MoussaFaki: The @_AfricanUnion team held a productive meeting with Japanese PM @AbeShinzo on how to further deepen the strategic partnership with Japan through high-level consultations, including regional and continental priority areas of work through AUDA [email protected]_Agency

  2. Kagame emphasises private sector role in development. President Paul Kagame on Wednesday told global leaders gathering in Japan’s capital, Tokyo to put the private sector at the heart of strategy for prosperity. He was speaking at the Tokyo International Conference on African Development, which he described as a valuable process that represents a spirit of optimism and partnership. Today, he said, many of TICAD’s innovations have become standard and the forum has continued to evolve in tandem with Africa’s priorities. “The key change is the importance given to the private sector in this TICAD,” he said. The Head of State cited Rwanda as a critical example for success when private sector development is put at the heart of strategy for prosperity. This, he said, was done using three types of investment:

  3. Sisi calls for boosting Japanese-African cooperation, invites private sector for investments. Sisi also urged regional, African and international financing institutions to play a role in funding development projects in Africa and providing financial guarantees for the capacity-building of the continent with the view to beefing up trade exchange and investments. He also stressed the dire need of backing the African Union’s Post-Conflict Reconstruction and Development policy, along with building the capacity of state institutions to undertake their duties in protecting their countries and shoring up peace and stability. [Japan-Egypt Summit Meeting]

  4. President Cyril Ramaphosa’s address to the South Africa-Japan Business Forum. The coming infrastructure revolution, combined with the Continental Free Trade Area, means that manufacturing in Africa is the best way to sell in Africa. African’s GDP is already $3 trillion and is projected to be $5 trillion by the end of 2030, and a new generation of consumers will be looking to purchase automobiles, televisions, cell phones, food products and so much more. This consumer market gives manufacturers in South Africa and on the African continent an incredible base from which to develop. It offers a source of growth and development that, when combined with a competitive and low-cost environment for production, can be used to then extend the reach of manufacturing to the rest of the world. As the most advanced industrial economy on the continent, South Africa is well positioned to serve as the launch pad into Africa and the global market. We are taking steps to support investment and local manufacturing in our country. To that end, we have embarked on a number of initiatives aimed at creating what we call an Entrepreneurial State. This is a state that can work with the private sector to promote competitiveness and assure the success of our business partners.

  5. @StateHouseKenya: The ongoing roll out of the UHC programme and the development of a Special Economic Zone in Dongo Kundu, dominated bilateral talks between President Uhuru Kenyatta and Prime Minister Abe Shinzo on the sidelines of the ongoing TICAD7 conference in Yokohama. During the talks, the PM said Japan will continue supporting Kenya’s ambition to achieve UHC through PPP arrangements. The two leaders also agreed that with the support of the Japanese government, Kenya will fast track commencement of Dongo Kundu SEZ & construction of Likoni Gate bridge.

Japan’s private sector and TICAD7

  1. Africa beckons as land of deals for Japan’s top banks. Japan’s trio of leading banks will form collaboration agreements this week with various African financial services providers, paving the way for greater Japanese corporate investment on the continent. Africa’s potential beckons Japanese companies, not only for resource and infrastructure projects but also its growing consumer markets. Yet Japan’s banks have made few inroads into the continent, until recently. Sumitomo Mitsui Banking Corp. looks to sign five memorandums of understanding during TICAD7. The Sumitomo Mitsui Financial Group unit’s partners will include Kenya Commercial Bank. Mizuho Bank plans to partner with South Africa’s Standard Bank Group, Africa’s largest private-sector financial institution, to form a team catering to Japanese corporate clients. Mizuho will sign a memorandum with Morocco’s Attijariwafa Bank as well.

  2. Corporate expansion in spotlight at Africa conference. TICAD 7 will also be more business-oriented than previous iterations as the Japanese private sector is “finally becoming serious” about the African economy, said Shigeru Ushio, director-general of the African Affairs Department of Japan’s Foreign Ministry in a recent interview. “The (Japanese) private-sector businesses have requested (the Japanese government) to let them take the driver’s seat and speak during a plenary meeting of TICAD for the first time,” he said. As a result, TICAD 7 will have a business dialogue session by representatives of the private and government sectors on 29 August. In the past, such a session was organized as a side event, but this time it will be upgraded to a plenary meeting for the first time. There are clear reasons for Japanese firms to be more serious about business in Africa:

  3. Japan’s foreign direct investment stocks in Africa stood at just $8.7bn at the end of 2017: meanwhile, France made the largest direct investment in Africa with $64bn the same year, followed by the Netherlands with $63bn, the US with $50bn, Britain with $46bn and China with $43bn.

  4. Keidanren’s proposals for TICAD VII. Keidanren, Japan’s most powerful business lobby: “Africa has realized high economic growth thanks to its rich natural resources and other factors. The gross domestic product surged from $632bn in 2001 to $2.1 trillion in 2016, as the economy expanded 3.4 times.”

  5. TICAD7 Public-Private Roundtable Meeting: recommendations by the Japanese private sector (pdf). With a view to strengthening the “TICAD brand”, we would like to propose a “model change” to the TICAD process incorporating voices of Japanese companies which operate in Africa and understand the problems and issues of Africa from experience while leveraging its characteristic as an open multiple-stakeholder forum. This process should be the vital element of TICAD. Moreover, we propose the “Japan Business Council for Africa” be established as a permanent platform with participation of Japanese private companies doing business in Africa in a manner that reorganizes and develops the existing Public-Private Round Table Meeting.

    In the Council, it is expected to identify issues and challenges to be dealt with in the TICAD process (mainly issues to call on the African side to reform or improve) and priority areas in the strategy on Africa through public-private partnership. Proposing policy recommendations to the Japanese government and conduct a policy dialogue with African government leaders, ministers, and others along with the TICAD process are also envisioned. Furthermore, Working Groups on the specific themes and fields should be set up under the “Japan Business Council for Africa” with participation of private companies, ministries and agencies concerned to improve the effectiveness of recommendations by the Council.

  6. JETRO to utilize TICAD to recover ‘lost opportunities’ in Africa. “Africa is far away from Japan, but we want to let Japanese companies know that there are business opportunities there,” JETRO Chairman Nobuhiko Sasaki said at a press conference in Tokyo. “JETRO’s role is to make a path for Japanese companies at the initiative of the private sector.” However, Japan’s presence in Africa remains notably low with exports to the continent at about $10.8 billion in 2018, down 27.3 percent over a decade, while the world’s exports to the region rose 17.2 percent in the same period, according to data provided by JETRO, which views this as “lost opportunities” for Japan. Under the theme of “Tsumugu: Intertwining Japan and Africa’s Future,” JETRO has focused on four areas: encouraging small and midsize companies to make inroads into the African market, boosting cooperation with entities in third-party countries, connecting African start-ups with Japanese companies and improving business environments.

Selected TICAD7 Side Events:

Science and Technology in Society Forum: address by President Ramaphosa. South Africa endorses the focus on science, technology and innovation as a priority theme for TICAD 7, given its great potential to accelerate African development through mutually beneficial partnerships with Japan. We seek more initiatives of this kind [the Square Kilometre Array project] and we wish to encourage global pharmaceutical companies to locate at least one of their innovation laboratories in an African country and to invest in young full time African researchers.

AUC, OECD Development Centre High-Level Policy Dialogue: Achieving productive transformation in Africa


Selected G7 Summit outcomes

  1. G7 Leaders’ Declaration: Trade issues. The G7 is committed to open and fair world trade and to the stability of the global economy. The G7 requests that the Finance Ministers closely monitor the state of the global economy. Therefore, the G7 wishes to overhaul the WTO to improve effectiveness with regard to intellectual property protection, to settle disputes more swiftly and to eliminate unfair trade practices. The G7 commits to reaching in 2020 an agreement to simplify regulatory barriers and modernize international taxation within the framework of the OECD. [DG Azevêdo tells G7 leaders: WTO reform is opportunity to tackle inequalities]

  2. The Business for Inclusive Growth (B4IG) coalition launched. A group of major international companies has pledged to tackle inequality and promote diversity in their workplaces and supply chains as part of an initiative sponsored by the French Presidency of the G7 and overseen by the OECD. Spearheaded by Emmanuel Faber, Danone Chairman and CEO, the coalition brings together 34 leading multinationals with more than 3 million employees worldwide and global revenues topping $1 trillion. Members have agreed to sign a pledge to take concrete actions to ensure that the benefits of economic growth are more widely shared. The platform, chaired by Danone, consists of a three-year, OECD-managed programme.

  3. Affirmative Finance Action for Women in Africa: G7 leaders provide AfDB’s AFAWA initiative with $251m. “I am particularly proud, as the current G7 president, that the programme we are supporting today, the AFAWA initiative, comes from an African organisation, the African Development Bank, which works with African guarantee funds and a network of African banks,” Macron stated at a press conference at the G7 Summit in Biarritz. AfDB president Akinwumi Adesina: “Currently, women operate over 40% of SMEs in Africa, but there is a financing gap of $42bn between male and female entrepreneurs. This gap must be closed, and quickly,” he added. AFAWA aims to raise up to $5bn for African women entrepreneurs and the African Development Bank will provide $1bn financing. [UK backing for AFAWA]

  4. G7 and Africa Partnership: remarks by President Cyril Ramaphosa. Our focus at this Summit on the digital economy is equally important. Through the cooperation we have envisaged here, we can work together to ensure digitisation reduces inequality and supports inclusive economic growth. The African Union Commission is currently developing a comprehensive Digital Transformation Strategy for Africa that will provide a common, coordinated response to realise the digitisation of the continent. This will lay the basis for the development of infrastructure and the institutions we need to maximize the opportunities presented by the fourth industrial revolution. It will also unleash the African spirit of enterprise and creativity and will generate more homegrown digital solutions and content. [G7 Summit’s Session on Climate, Biodiversity and Oceans: Environmental challenges greatly concern Egypt]

tralac’s Daily News Selection

Victor Harison, Mario Pezzini: Firms must drive Africa’s transformation (Project Syndicate)

But if the AfCFTA is to fulfill its promise, African firms will need to prepare for a new, more competitive economic landscape. Between 2000 and 2018, the African market grew by 4.6% per year, and domestic demand drove 69% of that growth. But now is the time for the continent to reach its full potential with respect to economic development, job creation, and poverty reduction. With around 22% of working-age Africans starting new businesses – compared to 19% in Latin America and 13% in Asia – Africa has the highest entrepreneurship rate in the world. But African firms will need to improve their organizational, productive, and technological capabilities. To that end, the upcoming second edition of the African Union’s flagship economic report, Africa’s Development Dynamics, produced in partnership with the OECD Development Centre, offers a three-pronged strategy for both business leaders and policymakers to follow.

While African firms now file three times more International Organization for Standardization certifications per year than they did in 2000, Malaysian firms alone filed as many certifications in 2015. Matching grants or low-cost loans, which could help more innovative firms cover the costs of certification, would be well worth the expense. Evidence from 41 African countries shows that manufacturing firms with an ISO certificate have 77% higher sales per employee, and certified services firms have 55% higher sales per employee. [The authors: Victor Harison is the African Union Commissioner for Economic Affairs; Mario Pezzini is Director of the OECD Development Centre]

Arancha González Laya: Factories are no longer the sure route to prosperity – here’s why (WEF)

When Kenyan avocado farmers are able to obtain international health and safety certification and connect to foreign retailers, it can translate to four times more money in their pockets for each avocado they sell. For pineapple producers in Benin, better branding, marketing, and packaging – together with improved physical infrastructure – opens the doors to regional and international sales far more lucrative than selling unprocessed fruit in local markets. As for services, the digital revolution has made cross-border trade feasible for everything from programming to accounting and legal services. But value addition and trade in services aren’t just about technology parks in Bangalore or call centres in Dakar. They’re about hotels in Lao People’s Democratic Republic building commercial ties to local farms and tour operators. They are about young people in refugee camps in Kenya using freelancing platforms like Upwork and Fiverr to do internet ad design for clients in other countries. The upcoming World Economic Forum on Africa meeting in Cape Town will be looking at how to maximize the contribution of digital trade to growth and job creation in sub-Saharan Africa. Ongoing talks on e-commerce at the World Trade Organization offer the prospect of international rules of the game on digital trade, enhancing predictability and reducing transaction costs for businesses of all sizes. [The author is Executive Director, International Trade Centre]

Egypt’s non-oil exports are improving but not as much as experts might have wished (Ahram)

Egypt’s non-oil exports grew 2.3% in the first half of 2019 to $13.04bn, up from $12.75bn during the same period last year, according to figures released by the General Organisation for Export and Import Control. “The growth rate is not high enough, but it is good to see progress,” Sherif Fahmy, general manager at NGage Consulting, told Al-Ahram Weekly, adding that according to the International Trade Centre’s Trade Map website there was an untapped export potential for Egypt worth $18.3bn in countries like Saudi Arabia, the UK, Italy, the US, France, Spain, Turkey, Russia and some Arab countries. Compared to other middle-income countries that started at the same level or below in the early 2000s, Egypt’s exports-to-GDP ratio remains much lower, the World Bank’s Egypt Economic Monitor July 2019 report has said. It showed that Egypt’s exports of goods fell from 17 to 5.6% of GDP between fiscal years 2006 and 2016, although they picked up again in 2018 to reach 10.3% of GDP. Egypt exported around $2bn worth of goods in fiscal year 2017-18, 65% of which were non-oil exports. Many had hoped that the floatation of the pound, which caused it to depreciate by 50%, would work in favour of Egyptian exports because it would mean they would be sold at more competitive prices. However, that improvement was only meagre.

Merged agency races to grow exports, boost Kenya’s image (Business Daily)

Kenya has unveiled a new agency to promote its brand and push for its exports across the world. The Kenya Export Promotion and Branding Agency (Keproba) resulting from the recent merger of Kenya Export Council and Brand Kenya, is a convergent point for public and private sector organisations. The Cabinet approved the merger of the two agencies in October last year as part of the national exports development strategy. Prior to that, EPC concentrated in growing export markets while Brand Kenya worked to improved the country’s image abroad. Keproba chief executive Peter Biwott said the agency’s main task will be to help Kenyan companies and self-help groups to identify foreign markets as well as ensuring local products meet set international standards.

Uganda’s agricultural ministry concerned about EU ban on Uganda’s agriculture exports (New Vision)

EU reportedly accuses Uganda of exporting poor quality products and also of shipping products that presented with high contents of poorly mixed agrochemicals used to treat or preserve them. Agriculture Minister Vincent Ssempijja revealed that the EU has resolved to audit the sector in October for compliance with international and EU Health standards. If the products fail the audit, Uganda could be slapped with a ban for non-compliance with EU Phytosanitary (plant health) standards. According to Ssempijja, Uganda has on several occasions received warning over severe chemical contamination of horticulture exports over the last four years. [EU approves Uganda’s bid to export marijuana]

South Africa’s oranges take the world by storm (City Press)

One in every 10 oranges eaten around the world now comes from South Africa. The country’s flourishing fruit industry has increasingly made up a bigger proportion of the international trade, said the Bureau for Food and Agricultural Policy in its latest agricultural outlook for the period 2018 to 2028. Citrus, grapes and pome fruits, in particular, have strengthened their market position in the past decade. Citrus’ market share has risen from 4% in 2001 to more than 10% last year, followed by table grapes (5% to 7%) and pome fruits (3% to 6%). Citrus is South Africa’s biggest and most important fruit export, according to value and volume. By the year 2028 the country could be exporting 25% more cartons than last year, said the bureau. [South Africa: Booming blueberry industry predicted to create 14 000 jobs in four years]

Mozambique: Diagnostic report on transparency, governance and corruption (IMF)

Mozambique’s economy is at a turning point, and efforts to address governance and corruption vulnerabilities can have a lasting positive impact. The current levels of public debt have caused us to take a hard look at our governance and anti-corruption framework and have prompted various reforms to address the vulnerabilities exposed in this framework. In general, the problems in our society, and specifically corruption, have been examined in detail recently and are clearly macro-critical. One study estimated the costs of corruption to Mozambique during the period 2002 to 2014 at up to $4.9bn (approximately 30% of the 2014 GDP). The impact of these costs is widespread, affecting taxpayers, public service providers, the financial and private sector, as well as Mozambique’s international reputation. These costs are especially harmful at a time when our country has been hit by a series of shocks, notably the fall in commodity prices, drought, the withdrawal of donor budget support, and, more recently, Tropical Cyclones Idai and Kenneth. At the same time, Mozambique stands poised to reap significant revenues from natural resource reserves, and our duty as the government is to ensure the responsible stewardship of those funds for both current and future generations. By taking meaningful steps now to implement the governance and anti-corruption framework in an evenhanded, consistent, and effective manner, and to support efforts toward transparency and individual and institutional accountability, as the government, we can aim to achieve enduring results. [Note: The Government of Mozambique would like to thank the IMF Legal and the IMF Fiscal Affairs Departments for providing technical assistance to the preparation of this report]

EXIM Board votes to notify Congress of proposed $5bn financing to support US exports to Mozambique LNG project

EXIM’s financing could support an estimated 16,400 American jobs over the five-year construction period, including jobs at suppliers in Texas, Pennsylvania, Georgia, New York, Tennessee, Florida, and the District of Columbia. Through follow-on sales, thousands of additional jobs may be generated across the United States. Through fees and interest earned, the transaction also could create more than $600 million in revenue for US taxpayers, according to EXIM projections. The Mozambique LNG project would begin to develop the Rovuma Basin, one of the world’s most extensive untapped reserves of natural gas. “With the backing of the Trump Administration, U.S. investment in Africa has taken on a new urgency,” said Secretary of Commerce Wilbur Ross, an ex officio member of EXIM’s board of directors. US Trade Representative Robert Lighthizer, also an ex officio member of the EXIM board: “America’s energy companies offer the best goods and services in the world.”

Eswatini: Statement issued by IMF staff on conclusion of visit (IMF)

Eswatini faces a challenging economic environment. Since 2016, rising government spending and low revenue from SACU have increased public debt and contributed to large domestic arrears. International reserves have declined, although remain broadly adequate, and real GDP growth has been sluggish. The new government that was appointed in late 2018, continues to formulate its policy agenda to address these macroeconomic challenges. In the absence of policy action, the economic outlook remains fragile. Discussions focused on recent economic developments, in particular budget execution and planning, economic prospects, and the scope for further policy action. The 2019 Article IV consultation—annual review of the economy—with Eswatini is planned for late 2019.

Today’s Quick Links:

Kenya: East African Cables decries steep costs on SGR use

SA retailer Shoprite takes Sh571m Stanbic loan for Kenya stores

Uhuru flags off first crude oil shipment

Standard Bank, Africa’s largest bank joins Marco Polo trade finance network

Ghana needs skills upgrade and free trade to make automotive tax breaks work

Reuters: New Congo government shows influence of former president