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tralac’s Daily News Selection
The selection: Tuesday, 13 September 2016
The 28th IGAD Extra-ordinary Summit of Heads of States and Government takes place today in Mogadishu. Official hashtag: #IGADMog2016
The Vienna Investment Conference 2016 opens tomorrow on the theme ‘Quality FDI, growth and development’.
Les Rencontres Africa 2016: the aim of this event (22-23 September in Paris) will be to enhance economic and human ties between Africa and France, in anticipation of the Africa - France summit that will bring together African and French leaders in Bamako in 2017. [Brochure (pdf)]
Sand in the wheels: Non-tariff measures and regional integration in SADC (UNCTAD)
The SADC region has made good progress in eliminating or substantially reducing tariffs but intra-regional trade has not reflected this progress. While poor transport links are a problem, the existence of non-harmonized technical NTMs and NTBs is an ongoing concern. The analysis presented here illustrates the potential benefits of regulatory convergence and removing NTBs in SADC but highlights the need for specific data relating to the particular impediments faced by SADC exporters. It is relatively simple to list the numerous non-tariff measures, but assessing their impact is more difficult. Two methods involve trying to measure the effect on quantity using a gravity model or by looking at the gap between world and domestic prices.
Data on NTMs for the SADC region is incomplete and a greater effort at data collection is needed. However, to illustrate the methodology and potential impacts of reducing barriers, we assume SADC countries have similar NTMs as the average for Africa. The impacts on trade, output, employment and incomes of reducing these barriers are assessed using a global general equilibrium model. Depending on the initial trade flows and the magnitude and scope for removing the trade distorting effects of non-tariff measures, the increases in national exports are up to 2.2%. National output, employment and incomes will also increase in all SADC countries. [The authors: David Vanzetti, Ralf Peters, Christian Knebel]
Cecile Fruman: ‘Achieving the SDGs and the role of standards - a World Bank Group perspective’ (ISO)
South-South trade is a key feature of the new international trade landscape. As evidence of this, global value chain-related trade between developing countries has quadrupled in the last 25 years. It is clear that trade will have a central role to play in achieving the SDGs. When I say “trade” it is really shorthand for many of the issues central to the international standards agenda: not just trade of goods and services, but also investment, as well as flows of technology, ideas, and people. Central to this is the role international cooperation on standards plays in building the confidence that underpins these different exchanges. Trade will enable the achievement of all the SDGs – not just those where it is specifically mentioned. Let me focus on a few: [ISO Action Plan for developing countries 2016-2020 (pdf)]
The SDG 8.7 Alliance: North and West Africa consultation (ILO Africa)
The SDG 8.7 Alliance calls for a rethink on how stakeholders work together to achieve this goal. This high-level meeting in Abidjan [before the official launch of the Alliance 8.7 in New York, 21 Sept] should lead to recommendations on how best to mobilize all key initiatives, particularly in North and West Africa, to end forced labour, modern slavery and trafficking of people by 2030 and to end child labour in all its forms by 2025. Conference documentation can be downloaded:
Carlos Lopes: ‘Mega carriers dominate our skies, African aviation cannot take off in their shadow’ (The EastAfrican)
Indeed, where African nations have liberalised their air space, either within Africa or with the rest of the world, positive benefits have resulted. For example, the agreement of a more liberal air market between South Africa and Kenya in the early 2000s led to a 69 per cent rise in passenger traffic. Indeed, just allowing the operation of a low-cost carrier service between South Africa and Zambia (Johannesburg-Lusaka) resulted in a 38 per cent reduction in fares and a 38 per cent increase in passenger traffic. The continent has to create more space for low-cost flying. In an interconnected world, air travel is no longer a luxury, it is a necessity for a prosperous continent.
Kenya: Subnational Doing Business report
Doing Business in Kenya 2016 (pdf) is the third report of the subnational Doing Business series in Kenya. It measures business regulations and their enforcement in 11 counties: Busia (Malaba), Isiolo, Kakamega, Kiambu (Thika), Kisumu, Machakos, Mombasa, Nairobi, Narok, Nyeri and Uasin Gishu (Eldoret). The report measures regulations affecting 4 stages of the life of a small or medium-size business: starting a business, dealing with construction permits, registering property and enforcing contracts. [Downloads, pdf: News release, Presentation]
South African trade policy updates:
Rob Davies tells of SA moves to position itself for CFTA, Brexit (Business Day): Focusing on continental integration, Davies said he had been having informal dialogue with the trade ministers of Kenya, Egypt and Nigeria on how to add impetus to the process of uniting Africa in a free-trade area. The SACU was involved in negotiations on tariff schedules with the EAC and Egypt and had set itself the target of developing tariff schedules — the guts of a continental free trade agreement — by the end of this year. SA also hoped to conclude a motor industry agreement with Nigeria. The aim is for SA to support Nigeria’s motor industry and in return be allowed to supply inputs and completely built-up units.
Credit insurance group seeks expanded role (Business Day): The state-owned Export Credit Insurance Corporation of SA is looking into whether it should expand its role to become an "eximbank", which would allow it to make loans directly to exporters. The investigation was prompted by a request by the Department of Trade and Industry that it expand to become a fully fledged trade finance institution. Currently the ECIC can only provide insurance to local banks and institutions, on a loan that exporters obtain from the bank. It has a particular focus on emerging markets in Africa that are considered too risky for insurers. In his foreword to the ECIC annual report (pdf), Trade and Industry Minister Rob Davies noted that a revision of the corporation’s founding legislation was necessary to enhance its global competitiveness. He said 30% of SA’s export trade is with the rest of Africa, most of it in value-added goods and services. "This underscores the strategic importance of the African continent in our efforts to diversify our export markets at a time when trade with our traditional trade partners has stagnated despite the depreciation of the rand."
Trade and investment opportunities in Africa: Kenya (pdf, ECIC): Kenya is South Africa’s second largest trading partner (after Nigeria) on the continent outside the SADC region. Total trade between the two countries stood at $756m in 2014 - a 5.2% growth from $490m in 2005. The trade balance has been in favour of South Africa, with the latter exporting more than it is importing from Kenya. According to Figure 10, Kenya tends to import manufactured goods from South Africa. These include chemicals and related products, machinery and transport equipment, and manufactured goods. The surge in imports from South Africa over the past decade was estimated at 5.5%, showing a sustained demand for South African products. Tariffs imposed on South African exports to Kenya for 2014 are listed below (Table 6). The highest tariff of 71.9% is seen in the export of sugars and sugar confectionary. The tariffs for dairy, cereal, furniture and iron and steel exports have increased from 2013.
COSATU to make its submissions on the Border Management Authority Bill: COSATU will not agree to any attempt to locate the BMA, an armed security organ of the state, outside the public service. Such a move would be unprecedented within the history of South Africa. Any attempt to ram this bill through the throats of the workers in its current form, will lead to mass mobilisation and industrial action by COSATU unions inside and outside the public service. COSATU is unwavering in its opposition to any attempt to weaken and fragment the state, through unaccountable government agencies. [Today’s Parliamentary hearings: update]
Kenya: Eveready seeks COMESA watchdog’s approval to distribute global brands (Business Daily)
“The Comesa Competition Commission wishes to notify the general public and stakeholders that it has received requests for authorisation of agreements between Eveready East Africa Limited and the multinationals for distribution of their products,” said CCC in a statement. The commission is seeking views from the competitors, suppliers and customers who are required to submit written representations to it with regard to the agreement between Eveready and the said multinationals. Eveready is trying to diversify its business by widening their revenue stream at a time when the loss making company is struggling to remain relevant in the competitive market.
Singapore-Ethiopia Business Forum: speech by Dr Mohamad Maliki Osman (GoS)
Ethiopia has been one of Singapore’s earliest partners in Sub-Saharan Africa. We enjoy excellent political links and have been regular visitors to each other’s countries. Economic links, while less substantive, have been increasing steadily. In 2015, trade between Singapore and Ethiopia amounted to $24m, an increase of over 17% from the previous year. In all honesty, the geographical distance between Singapore and Ethiopia has for a long time kept our two economies apart and contributed to our unfamiliarity with each other. However, I am pleased to note that a handful of Singapore companies have taken the first step to base their operations in Ethiopia.
Chinese firms encouraged to invest in Africa (New Vision)
Uganda is one of seven African countries that have signed cooperation agreements with China’s southern province of Guangdong to boost investment on the continent. The countries will benefit from Guangdong’s development experience and investment in agriculture and agribusiness, manufacturing, renewable energy, skills training, trade and tourism.
Uganda: Understanding the prospective local content in the petroleum sector (pdf, AfDB)
The objective of the study is to understand the prospective local content of the petroleum (energy) sector given the backward and forward linkages embedded in the available economy wide data base, the 2007 Social Accounting Matrix. This is expected to facilitate the understanding of what kind of local content policies should be designed and why.
Agricultural research in Africa: investing in future harvests (IFPRI)
What SSA needs is rural capacity that incentivizes the delivery and uptake of new technologies and motivates the adaptation and innovation of these technologies across the extraordinary heterogeneity of African smallholder farming systems. Such an evolving rural innovation system will enable farmers, agribusiness firms, input and service suppliers, research institutes, and other public-sector institutions to continuously identify technology bottlenecks and to generate adequate solutions to overcome them. Improvements in education and training, better access to markets and information, and more fully developed links between farmers and service providers are also needed to increase productivity – in particular, to encourage the adoption of productivity-enhancing technologies.
Natural Resource Revenue Sharing (NRGI)
This NRGI and United Nations Development Programme report Natural Resource Revenue Sharing (pdf) provides a comprehensive summary of resource revenue sharing regimes around the world and offers advice to policymakers establishing or reforming their systems. The report draws on more than 30 case studies, eight of which are presented in the report. Based on this review, we provide 10 recommendations for designing and implementing efficient, fair and stable resource revenue sharing systems. [Dianna Games: DRC jungle mine builds wealth above ground]
Amiti Sen: ‘India need not genuflect at RCEP’ (The Hindu)
So, as the Government has been saying, India’s gains from a deal with RCEP would mostly lie in the area of services. Indian negotiators take pride in stating that due to their insistence, services would be part of a single undertaking and not carved off as a separate agreement as was done in the case of the FTA with Asean. In the India-Asean FTA, India got a raw deal in services as the pact on goods had already been signed and it did not have any bargaining chips left, but this time, negotiators say, they will not make the same mistake. Unfortunately, despite efforts by India to get members to give substantial offers in services, especially for professionals, the offers made so far are insignificant. Including a toothless pact on services in the proposed RCEP would not justify India’s participation in a trade pact where China is to be ultimately provided unrestricted market access for most products. [Cabinet nod for expanded trade with China, Asia-Pacific nations]
ECOWAS, other RECs urged to review peacekeeping approach
Senior UN officials highlight importance of South-South cooperation for sustainable development
Four things not to miss in shaping the new Global Action Agenda for Transport
COSATU International School: opening address
Meet on future use of satellite data in Africa opens in Kigali
G20 makes trade promises that the WTO cannot fulfill
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