Looking ahead: The 2018 Economic Report on Africa – scope of contents (UNECA)

The 2018 ERA will be structured in two parts. Part I will discuss both recent developments in the world economy and their implications for Africa, and examine recent trends and policy challenges in economic and social development. This part also provides forecasts on Africa’s medium-term economic outlook with the associated downside risk analysis. It also examines the social trends of relevance for growth and structural transformation in the continent. Part II of the report will address number of thematic issues and is currently conceptualised to comprise of six chapters. The chapters will cover the following:

Razia Khan: ‘Growth, Trump, and debt in Africa: key economic trends to watch in 2017’ (African Arguments)

In 2016, real GDP growth in sub-Saharan Africa is estimated to have been the weakest since the 2008-09 global financial crisis. This was largely because of the poor performance in its two largest economies, South Africa and Nigeria, which together make up about half of sub-Saharan Africa’s GDP. Although oil and mining economies were hurt by the commodity slowdown, much of East Africa as well as oil-importing Francophone economies such as Côte d’Ivoire and Senegal managed robust rates of growth of above 6%. The slowdown in Africa was not uniform. But what are the prospects for African economies in 2017?

Todd Moss: ‘What does the Trump Administration mean for Power Africa?’ (Forbes)

If the new White House team looks at the details of Power Africa, however, there are plenty of reasons it should appeal to Republicans focused on getting results and cutting waste. Here are five I see as crucial: [Otavio Veras: Trump effect on African oil]

India-East Africa trade and investment updates: India to host presidents of Rwanda, Kenya this week (Livemint)

Rwanda’s Kagame in India for business summit (New Times)

President Paul Kagame is today afternoon scheduled to speak at the opening ceremony of the Eighth Vibrant Gujarat Summit, a global business forum in India. The President will also hold bilateral talks with Prime Minister Modi as well as meet with the Minister for Gujarat State, Vijay Rupani. Over the 5 year period between 2011-2015, bilateral trade has been valued at $526 million. According to the Rwanda Development Board, between 2011 and 2016, Rwanda registered 66 investment projects from India valued at $317.5 million which have translated too over 3800 jobs in various fields including telecommunication, hospitality and education. “The State of Gujarati, due its proximity, has been the India’s most prominent source of business and investments into Africa, and especially into Eastern Africa,” RDB chief executive Francis Gatare said. [PM Modi to inaugurate 8th Vibrant Gujarat Summit]

What lies ahead for bilateral ties after Kenyan President’s visit to India (The Wire)

With the Kenyan economy expected to be among the star performers in Africa this year, India is looking at the East African economic powerhouse as a safe haven for investments and a hospitable market, but regaining the top spot for trade from China will be a hard climb. When Prime Minister Narendra Modi and Kenyatta meet later this week, it will be their third meeting in in as many years. An underlying theme of Kenyatta’s current visit to India is the implementation of the assurances made during Modi’s African sojourn. Officials said agreements to operationalise two lines of credit amounting to $45m extended during Modi’s 2016 visit for upgrading manufacturing capacity, including to refurbish a textile factory, could be signed on Wednesday. This is partly to improve Kenyan manufacturing capacity, which could go some way in balancing the yawning trade gap – a major concern for Nairobi. As per Indian government figures, out of around $4.3 billion bilateral trade, Indian exports to Kenya alone account for approximately $4bn. The major Indian export items are textile yarn, pharmaceuticals, steel products, vehicles and power transmission equipment. [India, Kenya MoU on agri gets Cabinet nod]

China to bail out TAZARA (Times of Zambia)

“The leaders of China, Zambia and Tanzania have already reached important consensus and the over-arching goal of revitalising TAZARA. China will once again show its due responsibility and play an important role in making a unique contribution for TAZARA,” China’s Foreign Affairs Minister Wang Yi said. Components of the revitalisation process will include a comprehensive reform the railway company’s management system, creating better cohesion between the railroad and relevant ports as well as building industrial and economic zones. Mr Wang said China wanted to see its intervention enable TAZARA to become a source for cooperation and development for Zambia and Tanzania and help to boost industrialisation and agricultural modernisation between the two countries and others in the region.

Tanzania: Modern industrial parks will attract more investments – TPSF (The Exchange)

The Executive Director of the Tanzania Private Sector Foundation, Mr Godfrey Simbeye, made the call in Dar es Salaam ahead of a one-day working visit by China’s Foreign Affairs Minister, Wang Yilanded in the country on Monday. “The current model of Special Economic Zones in Tanzania is not suitable for attracting massive investments in terms of industries from China which has proved to boast of immense capital to invest in other countries,” Mr Simbeye noted. Mr Simbeye urged the government to form a team of facilitators from the Ministry of Industry and Trade and the Ministry of Finance and Planning to formulate business models of successful industrial parks from China. “Through this facilitation, we will be able to do away with unpredictable fiscal policies and overlapping of functions among regulatory bodies,” Mr Simbeye explained.

Related: TPSF makes push to China in pursuit of Belt group, Chinese Foreign Minister’s arrival reinforces China-Tanzania ties, China pledges to back TZ’s industrialisation, Ambassador DR Lu Youquing: ‘China can do, Tanzania also can do’, Chinese FM meets Madagascar’s president on cooperation under Belt-Road Initiative

Tanzania Export Handbook (TMEA)

The Tanzania Export HandBook is a single source of comprehensive information available to existing and prospective exporters. The handbook will focus on the export of non-agricultural products, food products, animal and animal products, manufactured goods, and minerals. [Note: access the handbook via the latest TradeMark East Africa weekly digest]

COMESA countries lift China shoe trade (Mediamax)

COMESA countries more than doubled their shoes imports from China in five years while intra-regional trade in footwear is on the decline. Chinese footwear exports to COMESA increased by 218.2%, from $241m in 2009 to $767m in 2014. A one-week forum in Hawasa, Ethiopia, organised by the Comesa Leather and Leather Products Institute (LLPI) noted that China’s relative importance in the regional market grew from contributing 61% to 72% of the footwear import bill in the same period. Comesa LLPI director general Mwinyikione Mwinyihija said the Asian nation’s exports into the region are much higher compared to intra-trade in footwear which has retreated to 2.2% from 6.8%.

Kenya: Exports to Uganda dip by 20% as trade volume contracts (The Standard)

Kenya’s exports to Uganda declined by 20% in the first 10 months of 2016 in a worrying trend that has seen the country lose out in other key markets. Latest data from the Kenya National Bureau of Statistics, besides drop in exports to Rwanda and the United Kingdom, showed exports to Uganda dipped from Sh52.2 billion last year to Sh41.8 billion in the 10 months to October. The KNBS data shows that exports to the United Kingdom recorded the second biggest decline, contracting by 7.8% to Sh30 billion in the period under review. This saw the UK, which was disrupted by the Brexit vote, slide from the second biggest export market last year to number four. The third biggest drop is Rwanda, with exports shrinking by 7.5% in the same period. [Note: For the Jan-Oct 2016 data, see Tables 10-14 in the KNBS report: Leading Economic Indicator November 2016 (pdf)]

Uganda: Finance Minister scraps incentive on rice imports (Daily Monitor)

The minister of finance, planning and economic development has instructed the minister of East African community affairs, Mr Kirunda Kivejinja to terminate the rice incentives given to importers. The directive which took effect of January 1, 2017 caught the importers unaware forcing some of them to rethink their operations. The importers argue that the directive is unfair and unjust as they were not given due notice to make adjustments in time.

With a little help: shocks, agricultural income, and welfare in Uganda (World Bank)

This study analyzes a nationally representative panel of 2,356 households visited four times between 2006 to 2012, in combination with data on conflict events, weather, and prices. The study describes the type of income growth households experienced and assesses the importance of these external events in determining progress. The study finds substantial growth in agricultural incomes, particularly among poorer households. Many of the gains in agricultural income growth came about because of good weather, peace, and prices, and not technological change or profound changes in agricultural production.

Trade between China and Portuguese-speaking countries falls 8.44%, Jan-Nov (MacauHub)

Angola’s with China in the same period totalled $14.23bn (-22.10%), with Angola purchasing goods from China worth $1.58bn (-53 84%) and selling goods worth $12.64bn (-14.77%). Mozambique’s two-way trade with China in the period reached $1.69bn (-22.91%), with China selling goods worth $1.26bn (-29.36%) and buying products worth $433m (+5.03%). Trade between China and the other Portuguese-speaking countries – Cabo Verde (Cape Verde), Guinea-Bissau, Timor-Leste (East Timor) and Sao Tome and Principe – amounted in the first 11 months of the year to $224m.

TCdata360: Filling gaps in open trade and competitiveness data (World Bank)

The World Bank Group offers a variety of open data sources for public use. The newest platform, TCdata360, focuses on trade and competitiveness and aggregates thousands of data points from dozens of vetted sources. This type of high quality data helps us get an unbiased, objective, and comprehensive view of how the world economy works and demonstrates how all the pieces of the global economy are integrated. Without it, there would be no evidence base on areas that we know to be critical for development, such as global value chains, foreign direct investment, or even starting new businesses. TCdata360 has three distinct advantages over other data websites:

Transfer pricing and developing economies: a handbook for policy makers and practitioners (World Bank)

In practice, developing economies often have basic legal provisions around transfer pricing principles. But only a small number operate effective transfer pricing regimes that incorporate a thorough legal framework and credible enforcement capabilities. Drawing on our experience with tax authorities around the world, the handbook (pdf) summarizes approaches that have been successful and unsuccessful. Our aim is to present lessons learned and to provide a range of examples in building and implementing more effective transfer pricing regimes. We also discuss strategies to encourage taxpayer compliance and help to prevent and resolve disputes. To be clear, the handbook is a technical read. It gets into the details, and provides nuance for tax policy makers. We are trying to reach those who can make the day-to-day changes in the governments that need it most.

‘Significant discrepancies remain in commodity trading data’ (UNCTAD)

An early version of the UNCTAD report Trade Misinvoicing in Primary Commodities in Developing Countries: The cases of Chile, Côte d’Ivoire, Nigeria, South Africa and Zambia generated substantial interest and contributed to the debate on the broader issues of transparency in international trade statistics and fairness in the distribution of gains from globalization. The reactions to the report also revealed some areas of confusion in the interpretation of the results and inadequate understanding of the key concepts used in the analysis. The revised report provides a more detailed exposition of the methodology and the concepts used while further stressing the main messages from the analysis. In the revised report, the concept of trade misinvoicing is explained in greater detail, including its origin in the literature and the estimation methodology.

Maya Forstater: ‘Gaps in trade data ≠ criminal money laundering’ (CGD)

On December 23, UNCTAD published an updated version of the report. The new report and accompanying note do acknowledge that there are alternative explanations for the discrepancies (such as higher than expected transport costs), but it quickly dismisses them as being implausible. While the language of some of the claims is moderated and a couple of the calculations adjusted, the main conclusions remain unchanged. Why does UNCTAD remain so convinced?

Reconnecting with the Commonwealth: the UK’s free trade opportunities (Free Enterprise Group)

Phase Three & Four: The UK will need a number of African, Caribbean, and Pacific (ACP) deals to mirror or better the existing EU options which it will undoubtedly lose post-Brexit unless it can secure grandfathering rights. Failure to do so will damage the UK’s standing with developing markets especially when the UK represents a major European export destination. The UK should offer deals that are tariff free with no quota access with a view to more favourable asymmetric liberalisation on the ACP side. Special attention and priority should be given to South Africa given its strategic trading importance to the UK. [Teddy Y. Soobramanien, Mohammad Razzaque: Staging Brexit at the WTO (Commonwealth Trade)]

Today’s Quick Links:

Zimbabwe: National Trade Facilitation Committee workshop this week (UNCTAD)

South Africa: Buoyant exports save SA vehicle makers from a very rough road in 2016 (TimesLive)

Tanzania in talks with lenders for $1.4b in budget support

Uganda’s 2016 remittance estimates increase, says BoU

Zambia sets indaba for $6bn Batoka Gorge HEP scheme (Zambia Reports)

Samuel Oloruntoba, Chris Changwe Nshimbi: ‘If Africa is serious about a free trade area it needs to act quickly, and differently’ (The Conversation)

Jeffrey Kucik, Krzysztof J. Pelc: ‘Secret negotiations at the World Trade Organization create a big problem’ (Washington Post)

US-China Joint Fact Sheet on the 27th US-China Joint Commission on Commerce and Trade