tralac’s Daily News Selection
The selection: Tuesday, 30 August 2016
Dr Ngozi Okonjo-Iweala: ‘African central banks: rethink role or stay the course?’ (The Bank of Uganda)
But we now live in an age of unconventional monetary policy. This raises a fundamental question for African central banks. Do we need a change in paradigm, or should African central banks stay the course established over the last decade, when have been focusing on price stability? Recall that, in earlier decades, they had a much broader remit that included being a source of fiscal deficit and development finance. This is the question I will be addressing in this Memorial Lecture honoring the memory of the brilliant Joseph Mubiru, whose life was tragically cut short, but whose legacy of excellence endures. [RBI’s annual report: Raghuram Rajan says India’s growth below potential]
TICAD V: Progress Report 2013-2015 (pdf, MOFA)
As of 2015, the implementation status of the TICAD V Yokohama Action Plan (2013-2017) is good. This report summarizes the progress from January 2013 to the end of December 2015 (the data of 2015 includes provisional figures and some crucial progress until March 2016). The details provided by respective implementing bodies will be uploaded on the MOFA website database. This progress report was co-written by TICAD co-organizers, and for the first time includes efforts made by Africa as well as Japan and TICAD partners.
Japan and Kenya sign Sh27.3bn deal to build Dongo Kundu hub (Daily Nation)
Kenya has secured Sh27.3bn from Japan to construct an industrial and commercial hub in Dongo Kundu, Mombasa. The first phase of the Special Economic Zone, which is expected to alter the coastal town in terms of infrastructure and business, is scheduled to be ready by 2019. An agreement signed by the governments of Kenya and Japan on the sidelines of the Tokyo International Convention on Africa Development shows that of the Sh27.3bn ($269.9 million), Sh21.36bn is a long term soft loan while Sh5.969bn is a grant.
Zimbabwe: Imports drop as trade deficit narrows (The Herald)
The country’s total import bill dropped 20,34% in the seven months to July due to a number of factors which include troubles in the external payment systems, import restrictions placed on selected products by Government, troubles in the external payment systems and weak industry demand for raw materials. Weakness in the South African rand, whose country is the biggest trading partner, has also contributed with the rand trading around 12,45 on the dollar last year against last month’s 13,9. Data from Zimstat shows that imports fell to $2,89bn from $3,62bn same period last year. Month on month, July imports fell 8,09% to $394,83m from June’s bill of $429,58m as foreign payments continue to face delays. The greatest effect has been payments to countries out of Africa where supplier terms are stricter.
How Rwanda can reduce the growing trade deficit (New Times)
Rwanda’s trade deficit has been widening as the import bill continues to outpace export receipts. This has in turn continued to exert pressure on the local currency with the dollar gaining ground on the franc. In fact, the local unit shed about 4.9% of its value against the greenback in the first half of the year. The central bank estimates indicate that the country’s formal imports grew by 3.3% in value to $1,171.3 million, up from $1,134.1 million in the first half of the year. However, Rwanda’s exports revenue declined by 2.4% to $268.6 million compared to $275.1 million recorded over the same period last year. Export earnings had dropped by almost 6.3%% in the same period in 2015, driven by 36.6% decline in mining sector export revenue, as well as tea and coffee, which shed 5.7% and 9.2%, respectively. According to the National Bank of Rwanda monetary policy and financial stability statement (pdf) released last week, the growing demand for imports has led to a 5.1% trade deficit to $902.69 million in the first six months of the year, up from $858.98 million in 2015.
EAC tea exports rise (Daily Monitor)
All East African Community member states have had a good tea harvest that has resulted into high trade volumes. This is contained in the latest report from Tea Brokers East Africa Limited which shows that at the June Mombasa auction, nine million kilogramme bags were offered, up from the 7.4 million bags recorded in the same period last year. “Out of this production, the region exported a total of 8.3 million kilogrammes up from 6.2 million kilogrammes exported the same time last year thus indicating a 24.8%,” the report said. Out of the cumulative tea auctioned, Kenya the market leader, sold 6.5 million bags up from 4.8 million bags traded last year.
Rwanda: Textile firm seeks tax exemptions on raw materials (New Times)
Heavy custom duties are hampering the Made-in-Rwanda campaign as the Government moves to phase out used clothes, textiles manufacturers have said. According to industrialists, the campaign, launched in 2014, might be slowed down if more incentives are not introduced to promote locally manufactured clothes. They single out the 25% levy charged on imported raw materials on top of the 18% Value Added Tax. This, according to the textiles players, is one of the biggest challenge coupled with lengthy checks and bureaucracies, and high transport and transaction costs of both imported and exported materials.
Dangote shakes Kenya’s cement market with Ethiopia imports (Business Daily)
Nigeria’s Dangote Cement has started its shake-up of the Kenyan market with importation of the commodity from its plant in neighbouring Ethiopia as it prepares to establish a local manufacturing plant. Dangote’s targeting of the Kenyan consumer with low-cost cement from Ethiopia is expected to further drive retail prices downward in a market where they have remained static for nearly 10 years.
Presidents Kenyatta and Mahama exchanged views on the need to establish Double Taxation Agreements between the two nations, protect investments in each other’s country and how Nairobi and Accra could serve as effective sub-regional aviation hubs in East and West Africa respectively. The two leaders sought the implementation of various agreements signed between the two nations two years ago, which include development of partnerships in Air Services and Trade, Tourism, Agriculture, Energy, Oil and Gas, Information and Communications Technologies, (ICTs), and Education.
TAZARA to triple profit margins (IPPMedia)
The Tanzania Zambia Railway Authority targets to triple its profits to $44.1m in the last half of this year due to a petroleum products contracts from the DRC and Malawi. In the same period, the annual freight traffic for the authority reached 130,000 tonnes in 2015/16 from 87,000 tonnes in 2014/15, representing an increase of 49 per cent. On the outlook, for the 2016/17 financial year, the company plans to improve its cargo traffic by 200% and reach 381,000 tonnes.
Mohamed A. El-Erian: 'An opportunity for Egypt and the IMF' (Project Syndicate)
The Egyptian authorities and International Monetary Fund staff have struck a deal. If the IMF Board agrees next month, Egypt will receive a $12 billion loan to support the implementation of economic reforms. The primary objective of the three-year program will be to unleash Egypt’s considerable potential, enhance growth and job creation, and tackle foreign-exchange shortages. But the deal also represents an important opportunity to improve relations between Egypt and the IMF – an outcome that would yield far-reaching benefits for both sides. Egypt’s relationship with the IMF has long been rocky.
Coalition for an effective SADC Tribunal: statement on the reinstatement of the SADC Tribunal (with access to individuals)
On the occasion of the 36th Summit of the Heads of State and Government of the Southern Africa Development Community, we the undersigned members of the Coalition for an Effective SADC Tribunal, are raising serious concerns over state parties insistence in denying access to justice to the citizenry of this region as per the revised SADC Tribunal Protocol. The Protocol strips the Tribunal of its jurisdiction to hear complaints from individual citizens of SADC. This is inspite of the guaranteed right for people’s participation in the SADC Declaration and Treaty under Article 23. [Jay Naidoo: The future we want - Africans rising to build a New Africa]
The regional Integration pillar aims to widen the economic space for development and create incentives for industry to expand, thus providing opportunities for economies of scale, clustering and economic linkages. Specific interventions under this pillar include full implementation of the SADC Free Trade Area to cover all Member States; a common external tariff by 2025; gradual phase-down and abolition of rules of origin by 2025; liberalization of exchange controls to allow free movement of capital within SADC by 2030; and ratification of the SADC Protocol on Trade in Services for implementation by 2020.
IGAD Member States representatives, regional and continental stakeholders, private sector actors as well as IGAD, FAO, AUC, and NPCA are attending a two day consultative workshop (29-30 August) to review the IGAD Regional Investment Plan 2016-2020. This workshop is organized with support from the FAO, and in close cooperation with the AUC. It will engage stakeholders in the review of the Investment Program Areas detailed in the IGAD-RIP and in the preparation of the official validation by Ministers of IGAD Member States on 31 August 2016.
The ECOWAS Strategic Planning Coordinating Committee is holding its 11th meeting in Lagos, 29-30 August. The meeting, organized with support from the GIZ, will discuss the finalization of the strategic action programme of all institutions and agencies, and will discuss and review the implementation arrangements for the Community Strategic Framework, among others. The CSF was adopted by the ECOWAS Council of Ministers in December 2015 and is already being implemented; as the 2016 Community Budget was based on the CSF. All ECOWAS Institutions/Agencies are expected to draw their programmes from this framework. [CSOs want ECOWAS countries to address economic inequalities]
The three-year project (launched 29 August) aims to enhance external sector statistics quality and close data gaps in key areas such as balance of payments statistics, the international investment position, and external debt statistics. The opening workshop brought together mid– and senior–level central bank officials of 17 Francophone beneficiary countries. Representatives of the Central Bank of West African States, and of the Bank of Central African States, also participated in the workshop.
CEMAC: common policies of member countries (IMF)
CEMAC is buffeted by the oil-price shock. The outlook has deteriorated, as members continue to suffer from the shock. Regional and national authorities have yet to take appropriate measures to address the economic downturn, whilst continuing to face substantial capacity constraints. Although the banking sector has weathered the downturn so far, government payment delays could undermine its soundness. Risks are significant: a weaker-than-expected oil price recovery or deteriorating security conditions could jeopardize macroeconomic stability. Policy recommendations: [Money changers return as Congolese Franc weakens]
Extractive industries: maximizing human development outcomes (AfDB)
The AfDB's African Natural Resources Centre has published five case studies that look at the different ways in which countries [Ghana, Botswana, SA, Chile] are designing policies and partnering with investors to reap social and economic benefits from extractive industries. The case studies were commissioned by ANRC to bridge the knowledge gap as relates to natural resources project-driven small and medium enterprise development, supply chain-based domestic linkages, extractives revenue management, public-private partnerships and fiscal policy formulation. They showcase a range of extractives project-related initiatives and policies deployed in four countries and the positive effects these have on local and national economies. The case studies include: [OECD: Corruption in the extractive value chain (pdf)]
African Union calls for uniform fishing regime (Business Daily Africa)
The AU is pushing for uniform fishing laws and increased investment in the sector to control the Sh250 billion worth of resources currently trawled away by advanced nations. Mr Bruce Mukanda, a senior programme officer at the AU’s Animal Bureau said all member states need to adopt a framework already developed by the continental body. “At the continental perspective, we are looking at individual country policies as we aim to harmonise them across the continent in order to harness this huge fisheries resource,” Mr Mukanda said in Nairobi during a Ticad VI side event. The forum brought together over 10 ministers of Agriculture who discussed how Africa can best benefit from its vast aquatic resources. [Ministerial conference on ocean economies and climate change in Africa]
Regional workshop for Africa: towards productive, sustainable and inclusive agriculture, forestry and fisheries (FAO)
The objective of the Regional workshop for Africa (19-21 September, Kigali) is to discuss how the principles for sustainable food and agriculture can promote joint action to strengthen the contribution of agriculture, forestry and fisheries to sustainable development, and to identify priorities for FAO's support at national and regional levels. The workshop will identify priorities for action in the context of FAO’s Regional Initiative 2 (RI2) on “Sustainable Intensification of Production and Value Chain Development in Africa”. The following outputs are expected from the workshop:
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