News
tralac’s Daily News Selection
The selection: Thursday, 27 October 2016
Launching today, in Kampala: The East African Community Common Market Scorecard 2016
Featured tweet, @Bonguglo: ’Amb Aparr, Uganda, at AU retreat says addressing NTBs is required to ensure CFTA grows weak intra-African trade’
Africa Trade Week 2016 (28 Nov - 2 Dec): preview
The African trade agenda is at a critical junction. All African sub-regions have engaged in negotiations for the EPA with the European Union. On June 24, 2016, the United Kingdom, a major trading partner for several of these EPAs sub-regions, voted to separate from the European single market. This development adds a significant complication to the African trade agenda. Furthermore, discussions are scheduled to begin next year on the post-2020 relation between the EU and the Group of African, Caribbean and Pacific countries. The United States of America, in September 2015, extended the African Growth and Opportunity Act for 10 years during which reciprocal trade agreements will have to be negotiated. Other major African trading partners such as Japan, India, China and Brazil are contemplating enhanced trade and investment ties with the continent. Moreover, the WTO ministerial in Kenya concluded in December 2015 with a symbolic face saving small package. This is the continuation of a process that has slowly undermined the development agenda that Africa had painfully and successfully inserted in the Doha Development Agenda. Finally, burgeoning mega-regional trade negotiations between the African region and major global trading partners is expected to significantly impact the African trade agenda.
More specifically, ATW2016 will aim at: (i) creating an agenda for effectively implementing the trade facilitation cluster of the BIAT (ii) building synergies, linkages and complementarities between the CFTA as well as the multilateral and bilateral trade agendas (iii) ensuring parliamentarians, private sector, and civil society have a better understanding of the CFTA and its coherence with the African structural transformation agenda (iv) creating a Pan-African platform to facilitate capacity development and harness parliamentarians, private sector and civil society contribution to the CFTA process. ATW2016 will have three main segments. The first component - the Africa Trade Forum, 28-30 November - will focus on the CFTA and its implementation as the main theme. The second segment will be a meeting of African Ministers of Trade, 29-30 November. The third segment is the 2nd African Trade Facilitation Forum, 1-2 December. It will consist of a high-level policy dialogue on the implementation of the trade facilitation cluster of BIAT, including the WTO Trade Facilitation Agreement.
Boosting Korea-Africa trade: Afreximbank, KEXIM sign MOU (Afreximbank)
Under the terms of the MOU signed by Afreximbank President Dr. Benedict Oramah and his KEXIM counterpart, Dr. Lee Duk-Hoon, KEXIM will make available a credit line of up to $100 million to Afreximbank to support trade transactions between South Korea and the African continent as part of a commitment by the two institutions to cooperate in matters of common interest. Afreximbank and KEXIM will also explore the possibility of establishing other financing schemes to promote trade between South Korea and Africa. In 2015, Africa’s imports from South Korea stood at approximately $9.8bn compared to $13bn in 2014 while the continent’s exports to South Korea amounted to $5.8bn in 2015 and $7.9bn in 2014.
Sovereign debt crises more likely, new mechanisms needed (UNCTAD)
The world needs a new mechanism to deal with sovereign debt crises, which represent a growing danger to the economic stability of many developing countries. The world needs a new mechanism to deal with sovereign debt crises, which represent a growing danger to the economic stability of many developing countries and would thwart the 2030 Agenda for Sustainable Development before it had taken off, UNCTAD said on Wednesday ahead of a UN meeting on sovereign debt restructuring. Countries in Africa and elsewhere have been stacking up debt, even as their ability to repay these debts is shrinking. Falling commodity prices, a rising dollar and the prospect of higher interest payments mean these debts may be harder than ever to repay. New research to be published in November 2016 shows that the latest round of borrowing goes back to 2006 when the Seychelles issued a sovereign bond, the first sub-Saharan African country with the exception of South Africa to do so in 30 years. In the decade since then, Angola, the DRC, Côte d’Ivoire, Ethiopia, Gabon, Ghana, Kenya, Namibia, Nigeria, Rwanda, Senegal, Tanzania and Zambia have accumulated more than $25 billion worth of bonds, with a principal amount of more than $35 billion. Many African countries are now facing repayment difficulties, the researchers, Aleksandr V. Gevorkyan and Ingrid Harvold Kvangraven, say. They point to the example of Ghana. [Aleksandr V. Gevorkyan, Ingrid Harvold Kvangraven: ‘The trouble with Sub-Saharan African debt’]
UNECA dialogue: Africa’s progress towards regional and global economic integration, impact of Brexit for the EAC (New Times)
Transformative regional integration could be achieved through collaboration between countries rather than through economic competition, economists and policymakers said yesterday. This was during a policy dialogue on regional integration organised by the Office for Eastern Africa of the UNECA, in collaboration with the University of Bremen in Germany, at the Kigali Convention Centre. Dr Thomas Kigabo, chief economist at the National Bank of Rwand, noted that the Brexit is “a very interesting example and experience.”
Doing Business 2017 – Country updates:
Egypt rises to 122 (Ahram), Kenya climbs 21 places (Business Daily), Nigeria advances one step to 169 (WorldStage), Tanzania shines in 2017 ‘doing business’ report (Daily News), Zimbabwe slips 4 places, to 161 (NewsDay)
South Africa: Medium Term Budget Policy Statement – 2016
Net exports and the current account (extract, Chapter 2, pdf): Exports grew by 3% in the second quarter of 2016 compared with the same period in 2015, supported by manufacturing and mining exports, particularly platinum group metals. The first half of the year saw a two percentage point decline in the share of exports to African markets compared with the same period in 2015, reflecting weaker economic conditions in the region.
In recent years, despite the large and sustained depreciation in the value of the rand, South Africa has not experienced strong export growth. Since 2010, the real effective exchange rate has depreciated by 20.9%. Yet the main factor in export growth is global demand, which has been moderate. A one-percentage-point increase in global demand could add as much as 0.3 percentage points to medium-term growth. Soft domestic demand was reflected in the decreased volume of imports, which fell by 3.1% in the first half of the year compared with the same period in 2015. Notable exceptions included vegetable products, oils and fats, where increases of between 43 and 60 per cent reflected the effects of the drought. Over the medium term, improved domestic demand should support import growth, but the weaker currency will limit the expansion of volumes. Imports are expected to contract in the current year and grow by 2.7% in 2017.
The current account deficit narrowed in the second quarter as net exports increased and the trade account recorded a surplus, despite some weakening of the terms of trade. The deficit was funded through an increase in net portfolio investment, mainly into government bonds, and a rise in net foreign direct investment. Over the next three years, the current account deficit is expected to average 3.9%, down from an average of 5.2% between 2013 and 2015. The forecast does not project any major gains in the terms of trade.
UK textile exporters take case to Africa (MRW)
A delegation has returned to the UK after a bid to persuade East African states to reverse their decision to outlaw imports of used textiles and leather goods. On 2 March 2016, heads of state of the East African Community (EAC), an intergovernmental organisation of Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda, passed a directive to phase out such products by 2019. This has been a concern for the Textile Recycling Association in the UK because of the jobs they fear will be lost in this country as EAC members account for a quarter of the exports to Africa – the biggest global market for the UK.
International Development Secretary Priti Patel: update on UK’s Africa trade initiatives
New support includes: (i) launching a new Invest Africa programme to encourage at least £400m of FDI into the most productive sectors – such as manufacturing – to create 90,000 direct and indirect jobs in Kenya and other African countries over the next decade. This builds on the UK’s role as the largest European investor into Africa. (ii) providing £95m over the next four years to increase Kenya’s trade by £1.3bn, building on the success of TradeMark East Africa – founded by UK aid – in breaking down the barriers to trade. This will create hundreds of thousands of new jobs, stimulate further growth and generate additional revenue for the Kenyan authorities that provide basic services for those in need.
AfDB Multi-Partner Somalia Infrastructure Fund: update
The AfDB has approved a framework document for the establishment of the AfDB Multi-Partner Somalia Infrastructure Fund. The fund will mainly focus on infrastructure rehabilitation and development in Somalia, with specific investments in the Energy, Water & Sanitation, Transport and ICT sectors, as well as related institutional capacity-building. Initial seed financing for the Fund has been provided by the UK’s Department for International Development and the Islamic Development Bank. The Bank intends to scale up its resource mobilization campaign for the Fund, by convening a Donor Roundtable meeting in November 2016, and a subsequent Infrastructure Investment Conference in early 2017.
Africans want cross-border data access reform, but they might get left out (CFR)
At the first session of the 2016 Forum on Internet Freedom in Africa, questions about cross-border data access—usually a dry topic—took center stage. The moderator and participants grilled representatives from Google and Facebook about the fairness of limited African access to African data held by U.S. companies, invoking the need for greater “internet sovereignty.” These remarks contrasted with one year ago, when I could find no one at this forum talking about African data access problems. Africans are now thinking about this issue, but the U.S. government is not really considering Africa as it debates the future of cross-border data requests. The standards outlined in the Obama administration’s draft proposal will be most easily met by favored U.S. partners; the United Kingdom appears to be first in line for a deal. Left-out countries will have few viable options for accessing data and may turn to damaging alternatives. [The analyst, Mailyn Fidler, is a fellow at the Berkman Klein Center for Internet and Society at Harvard]
Africa should pay heed to allocation of its IP addresses (IPPMedia)
The African Union has been facilitating payment to overseas carriers to exchange intra-continental traffic on behalf of African states, a process that was costly as it was inefficient. For this reason the AU provided the grant for the establishment of the Nairobi GRX, in addition to having increased the internet exchange points in the continent increased from 18 to 32 over the last five years. And, while on internet protocol exchange, industry experts have warned that Africa is set to run out of Internet Protocol addresses soon - actually as early as next year.
The cultural trade index: an introduction (World Bank)
The Cultural Trade Index aims to shed light on cultural trade and stimulate interest in how this little-known area can contribute to economic diversification, boost shared prosperity, and reduce extreme poverty. As the first index of its kind, the Cultural Trade Index would gather cultural trade data scattered across different sources, place them in one place, and show how countries are performing. Extract: In this case, according the figures in Table 2, at $759m, the Egypt leads the selected group of African nations in art crafts trade — it is followed by South Africa ($175m), and Ghana ($126m). That result, however, changes when looking at the percentages of art crafts trade in each country’s total trade. See Table 2.1. Ghana takes the second place and South Africa comes third. Under the index computed in Table 2.2, Egypt still leads, and again followed by Ghana, then South Africa. Ghana’s total trade is used in Table 2.2 as a base for illustrative purposes.
Mozambique: Good gas and bad governance (Africa Confidential), Trends and macroeconomic scenarios: presentation by Prof Sam Jones (UNU-WIDER)
South Africa: Exporters’ playing field put under pressure as DTI manages budget constraints (Engineering Weekly)
Rwandan exporters eye Congo-Brazzaville market (New Times)
Kenya: Sh14 billion second port to be put up in Kisumu County (The Standard)
Malawi National Single Window: consulting services to provide technical assistance (World Bank)
Kenya: Capacity assessment of the domestic construction industry consultancy (pdf, AfDB)
African Water Facility long term strategy 2017–2025: 27-28 October workshop (pdf, AfDB)
Uganda: IMF Staff concludes review mission
Statistical capabilities need major upgrade to achieve 2030 Agenda – UN agriculture chief
Pan African Business Forum endorses Hillary Clinton (NewsGhana)
tralac’s Daily News archive
Catch up on tralac’s daily news selections by following this link ».
SUBSCRIBE
To receive the link to tralac’s Daily News Selection via email, click here to subscribe.
This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to over 350 recipients across Africa and internationally, serving in the AU, RECS, national government trade departments and research and development agencies. Your feedback is most welcome. Any suggestions that our recipients might have of items for inclusion are most welcome.
