News
tralac’s Daily News Selection
The selection: Friday, 9 September 2016
The headline analysis in this week’s tralac newsletter: Flexibilities in safeguard measures - possible options for the CFTA
EAC heads put off EPA signing for three months (Daily News)
According to the EAC Chairperson, President John Magufuli, it was not an easy job to reach to the decision and for delaying the signing of the EU pact. “Our discussions took a lot of time but as usual when we have any sensitive matter, we agree collectively to reach at a collective consensus in the best interest of our people,’’ he said at a press briefing after the closed door meeting. Uganda’s President Yoweri Museveni said the three-month extension of signing and ratifying the EU-EAC agreement was meant to synchronise their understanding on the pact that has 146 articles. “The EU should wait until January when we shall convene again so that we give a collective answer than giving fragmented ones,’’ he added.
Multinationals are preparing for strong compliance headwinds (Business Day)
Vodacom tax director Shane Govender says they are dealing with about 35 taxes that relate to the telecom industry in the DRC. In Tanzania, they have to deal with 25 different taxes. "That is a huge compliance burden and to remain on top of everything, especially if one does not have someone who has knowledge of the tax system in that particular country, is a major challenge." PPC tax director Sebueng Mthembu says language remains a barrier to understanding regulations to be fully compliant. Legislation in some African countries is not as comprehensive as in SA. "In the DRC, legislation is grey — and that is putting it politely. We have to deal with around 70 different taxes in the DRC." Mthembu says they have to employ a tax professional in every country in Africa, no matter how small the operations.
Mills Soko : ‘The do’s and don’ts of doing business in Nigeria’ (The Conversation)
South African business investments in Nigeria are under the spotlight again after hotel and casino group, Sun International, announced it is pulling out of the country. The company cited poor economic conditions and regulatory challenges. It joins a growing list of high profile South African business failures in Africa’s second largest economy. The Conversation Africa business and economy editor Sibonelo Radebe asked Professor Mills Soko to unravel the complexities of the Nigerian market.
East Africa govts urged to set up regional arbitration centre (The EastAfrican)
As East Africa embarks on major infrastructure projects in oil and gas industry, roads and railways, arbitrators in the region are calling for the creation of a dispute resolution centre. The arbiters, at the 4th East African International Arbitration Conference in Kampala on September 8, also debated on whether the tribunal should be independent from the regional governments or based on a public-private partnership.
Investing in Africa Forum: World Bank and China scale up support for Africa
The Investing in Africa Forum saw the launch of the Africa Think Tank Alliance (IATTA), a groundbreaking platform promoting knowledge sharing and partnerships among think tanks in Africa, China and worldwide. “The establishment of the Africa Think Tank Alliance is a win for all,” says Albert Zeufack, the World Bank’s Africa Region Chief Economist. “One of the major objectives of this initiative is to strengthen the research and analytical capacities of research institutes in Africa and to increase their influence on the international scene.” The IATTA will also inform capital-investment decisions by developing guidelines, investment plans and policy suggestions to client countries. [Address by WBG President Jim Yong Kim]
The impact of the UK’s post-Brexit trade policy on development (ODI)
This collection of essays (pdf) offers a number of perspectives on how a new UK trade policy towards developing countries and regions could be designed and implemented, in both the short and longer term. It also conveys the concerns, opportunities and expectations from a group of leading trade specialists from academia, international organisations and think tanks in the UK and elsewhere. The essays and this introduction are structured into five sections: Principles for a new UK trade policy and the relationship with developing countries; The potential effects of a new UK trade policy on developing countries: some scenarios; The value of preferential access to the UK market for developing countries; A new UK trade policy: opportunities beyond tariffs; Regional perspectives on a new UK trade policy.
Katarzyna Kaszubska: ‘A BRICS-only arbitration forum will not be the panacea imagined’ (The Wire)
Arbitration institutions are facing a number of challenges when it comes to ensuring long-term stability for themselves. Most recently, the London Court of International Arbitration (LCIA) decided to close its Delhi office due to an insufficient number of cases. Another example is the BRICS Dispute Resolution Centre Shanghai, which was established by the Shanghai International Economic and Trade Arbitration Commission last year for hearing commercial disputes between partners from BRICS countries. It has not received a single arbitration application since its inception. Finally, the existence of other reputed and well-trusted arbitration forums such as the International Court of Arbitration, LCIA or SIAC, poses a major challenge to these new institutions. [The author is a fellow at Observer Research Foundation]
Trade trends: China and Portuguese-speaking countries trade contracts 12%, Jan-July (MacauHub)
China’s trade with Angola amounted to $9bn (-27.69%), as a result of Chinese sales of $942m (-60.64%) and imports of Angolan products in the amount of $8.05bn (-19.84%). Chinese trade with Mozambique totalled $995m in the period (-28.92%), with Chinese exports worth $755m (-33.49%) and Mozambican exports of $239m (-9.23%).
Zambia mulls tit for tat (Financial Gazette)
Zambian exporters are piling up pressure on their government to come up with retaliatory measures to block imports from Zimbabwe, in what could be a big blow to Harare, which counts Zambia among its biggest export destinations. Last week, the Zambia National Farmers Union reported on its website that Zambia was toying around with the idea of restricting importation of key products from Zimbabwe in response to the imports ban. Zambia Association of Manufacturers executive director, Maybin Nsupila, told the Financial Gazette this week that after Zimbabwe’s moves, their country might have no option but to retaliate.
Zim, SA cross-border dialogue pays dividends (The Herald)
The harassment of Zimbabwean immigrants in South Africa by authorities or employers has been declining in the last five years following the launch of the Cross-Border Migration Management Stakeholders’ Forum, an official has said. Zimbabwe’s Consul-General to South Africa, Mr Batiraishe Mukonoweshuro, said in an interview yesterday that the forum had been useful in addressing challenges on labour disputes and harassment of Zimbabweans during deportations. The forum was launched in 2011.
Tanzania: Govt caves in, admits to 42% business slump at Dar port (IPPMedia)
After push came to shove, the government finally caved in and admitted that recent introduction of the Value Added Tax on transit goods and the single customs territory was hurting business at the Port of Dar es Salaam. Tanzania Ports Authority director general, Eng Deusdedit Kakoko, said the port was now trying to lure back traders, especially from the DRC, who shunned the port following the introduction of the two services. Briefing a parliamentary committee on Industry, Trade and Investment and the ports’ stakeholders, Eng Kakoko said intensified cut-throat competition in DRC has led to cargo diversion to other regional competing ports. He said to lure the customers back the government would engage local stakeholders with Congolese businessmen through a one –on-one sharing of experience and dissemination of right information, including measures being taken to improve services offered at the port. [Update: DRC, Rwandan traders to revert to Dar es Salaam Port]
Horn of Africa livestock export trade: a business at a crossroads (EA Business Journal)
The livestock export industry is the lifeblood of the 17 million pastoralists throughout the HoA region. The greater HoA region with its vast livestock population of nearly 300 million head (including Sudan) shows enormous promise for development and value addition, bringing billions of dollars and supporting millions pastoral livelihoods in HoA nations, provided the export trade in livestock and meat can be responsibly and professionally managed so that we protect our importing partner countries. Returns on an investment to ensure disease-free trade and add value to livestock in the Horn of Africa are robust with IRRs running 30 – 40%. In addition, there is a strong social bottom line so this represents an exceptional opportunity to do well by doing good. [The author: Dr Chip Stem]
Africa and Asia/South East Asia Air Corridor: update (GoM)
The launching in March 2016 of the Air Corridor between Africa and Asia/South East Asia using Mauritius and Changi Airport as hubs has led to an increase in total traffic during the period April to July 2016, as compared to the same period in 2015, with three direct flights to Singapore. The Mauritius-Singapore Air Corridor concept is based on the use of Mauritius and Singapore as hubs with a view to promoting origin and destination traffic flows between Africa and Asia/South East Asia.
Africa Green Revolution Forum: address by Akinwumi A. Adesina (pdf, AfDB)
I know the power of mobile phones very well. As Minister of Agriculture in Nigeria, I supported the launch of the electronic wallet system that allowed farmers to access subsidized farm inputs via their mobile phones. It was built on a public-private partnership. Farmers paid for inputs themselves, bought them directly from the private sector, and Government simply provided targeted subsidies. The system linked farmers, mobile phone companies, banks and input suppliers. Within four years, close to 15 million farmers in Nigeria accessed farm input through their mobile phones, allowing the country to boost its food production by an additional 21 million metric tons. The e-wallet system also helped to substantially curtail corruption in the fertilizer and seed distribution system, empowering farmers. A silent revolution on mobile phone payment system for farm inputs across Africa is on its way, through public-private partnerships. Some 30 countries have approached the African Development Bank to support the rollout of the e-wallet input distribution system.
De-risking, renminbi, internationalization, and regional integration (Brookings)
This paper takes a close look at sub-Saharan Africa’s (SSA) trade and payment integration with the rest of the world as well as its regional integration. Using a unique dataset of cross-border payments (MT 103 messages from the Society for Worldwide Interbank Financial Telecommunication, SWIFT) as well as bilateral trade data from the IMF (Direction of Trade Statistics-DOTS) from 2003 to 2014, we find a number of stylized facts: [Lucy Corkin: Kenya’s mobile money story and the runaway success of M-Pesa (ORF)]
Services and performance of the Brazilian economy: analysis and policy options (pdf, Working Party of the Trade Committee, OECD)
Compared to countries of similar development, Brazil has a large services sector and has experienced significant growth of business and government services. Services inputs also account for nearly two fifths of Brazil’s manufacturing value added and an even larger share in the sectors prioritised for industrial development. However Brazilian services are oriented towards serving domestic demand and underperform in export markets. Services inflation has been surging fuelled by a distorting tax system and productivity levels lagging behind other sectors of the economy. The growth of Brazil’s services exports has not kept pace with other large emerging economies, leading to a widening services trade deficit.
WCO supports finalization of SACU’s Preferred Trader Programme external procedure manual
EIU forecasts Angolan economy to grow 0.6% in 2016
Rwanda, Singapore in new drive to boost trade ties
‘Singapore could be largest commodity trading hub in the world: IE Singapore’
South Africa: FirstRand has R7bn for Africa deals
Zimbabwe: Cotton industry on verge of collapse?
African Development Forum: Abdalla Hamdok preview of the theme, Migration and Africa’s transformation
UNU-WIDER’s Responding to Crises conference: Tony Addison preview
UN Peacekeeping Defence Ministerial: London communiqué, conference summary
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