tralac’s Daily News Selection
Later this month: UNCTAD, in cooperation with other international organizations, will host the first International Forum for National Trade Facilitation Committees (23-27 January, Geneva)
Global Economic Prospects: Sub-Saharan Africa (World Bank)
Sub-Saharan African growth is expected to pick up modestly to 2.9% in 2017 as the region continues to adjust to lower commodity prices. Growth in South Africa and oil exporters is anticipated to be weaker, while growth in economies that are not natural-resource intensive should remain robust. Growth in South Africa is expected to edge up to a 1.1% pace this year. South African output will be held back by tight fiscal policy and high unemployment that is weighing on consumer spending. Nigeria is forecast to rebound from recession and grow at a 1.0% pace, as an anticipated modest improvement in oil prices, coupled with an increase in oil production, boost domestic revenues. Angola is projected to expand at a moderate 1.2% pace as high inflation and tight policy continue to weigh on consumption and investment.
In other mineral and energy exporters, the outlook is generally favourable. Ghana is forecast to surge to 7.5% growth pace as improving fiscal and external positions help boost investor confidence. Progress in developing Mozambique’s energy sector will help spur investment in that country’s natural gas production and contribute to an accelerated 5.2 percent growth rate. The post-Ebola recovery is anticipated to help Guinea grow by 4.6%, Liberia by 5.8%, and Sierra Leone by 6.9%.
Large infrastructure investment programs will continue to support robust growth among agricultural exporters, with Côte d’Ivoire and Ethiopia growing at or above 8%. However, political fragility will exert a drag on growth in countries such as Burundi and The Gambia. Among commodity importers, Cabo Verde is expected to grow at a 3.3% rate, Mauritius to rise moderately to 3.5%, and Seychelles to slow to a 3.5% clip as uncertainty in Europe weighs on tourism, investment, and trade flows. Lesotho, which is forecast to pick up to a 3.7% pace, and Swaziland, which should exit recession and resume growing at a 1.9% rate, are anticipated to benefit from regional trade and infrastructure investment.
Foresight Africa: top priorities for the continent in 2017 (Brookings)
In this year’s Foresight Africa, the Brookings Africa Growth Initiative scholars and outside experts explore six overarching themes that provide opportunities for Africa to overcome its obstacles to spur fruitful and inclusive growth. These six interconnected, crossing-cutting themes demonstrate the prospects for Africa’s success for its policymakers, businessmen and women, and all its citizens. [Africa Research Institute: 10 things to watch in 2017]
On the structural transformation of rural Africa (World Bank)
This paper describes the key undercurrents necessary for structural transformation to occur, with a focus on the role of agriculture, the current state of agricultural labour productivity growth in rural SSA, and the structural impediments currently slowing the rate of progress. The aim is to update contemporary African policy makers as they attempt to stimulate agricultural and rural transformation to foster sustained and inclusive economic growth that will accelerate poverty reduction in the region. Section 2 provides stylized facts on the path of structural transformation in agriculture with a brief review of the current state in SSA. Deep-seated factors impeding structural change in Africa’s agriculture and food systems are discussed in section 3, after which section 4 turns to nascent positive developments that merit monitoring. Section 5 outlines key policy priority areas, while the last section concludes. [The analysts: Christopher B. Barrett, Luc Christiaensen, Megan Sheahan, Abebe Shimeles]
Dr Akinwumi A. Adesina: ‘Building a partnership for resilience’ (pdf, First Africa Resilience Forum, AfDB)
Fourth, regional integration. We know that you cannot integrate fragile countries, but only resilient countries. Many African countries with fragile situations are landlocked with small internal markets, such as CAR, Burundi, South Sudan and Mali and depend for their access to regional markets on neighbors. As these countries build resilience, they will be able to harness the benefits of regional integration.
Rajiv Bhatia: ‘Reaching out to Africa’ (The Hindu)
Building on the path forged by its predecessor, the Modi government has already achieved much: holding the India-Africa Forum Summit in 2015 and an unprecedented political outreach to Africa through visits by the President, Vice-President and Prime Minister to a dozen countries in 2016. The time is ripe to implement the agreements that have been signed. India’s Africa experts have been disappointed with the decision to put off the next summit with Africa to 2020 instead of 2018 as was expected. South Block should consider convening a ministerial review meeting in early 2018. Nairobi, with its excellent location and conference facilities, could be an ideal choice and Mr. Kenyatta a willing partner.
While positioning itself for business, Kagame noted that Rwanda was part of a wider vibrant region, the East African Community and is involved in regional infrastructure development that have seen it become more appealing to the private sector. Kenyan President Uhuru Kenyatta, who also attended the forum, echoed Kagame’s remarks on the region’s attractiveness for business, saying the East African Community creates win-win situation for both the investors and the citizens of the East African region. On his part, their host, Indian Prime Minister Narendra Modi, said that they were keen to continue doing business with the rest of the world for mutual benefit. He noted particularly the focus on formalising the informal economy and the role of e-governance in developing economies. [Related: India-Rwanda Joint Statement, Declaration on Strategic Partnership]
Uhuru markets Kenya to Indian investors during tour (Daily Nation)
“President Kenyatta is expected to drum up support for Kenya as an attractive destination for Indian investors especially in the area of healthcare, a sector in which India is known for and an industry in which Kenya is keen to attract partners,” a statement from the Presidential Strategic Communications Unit said on Tuesday. President Kenyatta is also scheduled to attend the Kenya-India Business Forum, meet with Kenyans in India and hold a joint Press conference with Mr Modi. The visit is also expected to see the signing of a line of credit agreement between India’s government and the Kenyan Treasury of about $100 million (Sh1 billion) for agriculture mechanisation.
Nine Kenyan members of the EALA visited a post in Moyale, Marsabit County, on the Kenya-Ethiopia border on Monday while on their sensitisation mission on the importance of the assembly. “Instead of stamping goods and paying taxes [at] every border point in EAC countries, we have ensured they are inspected at one border point,” said Ms Pareno. Although Ethiopia is not a member of the EAC, it enjoys the benefits of trade owing to its border with Kenya. The EALA members regretted that in the 27 counties they had visited, many Kenyans they met did not seem to know much about the regional assembly.
India to trade partners: Sign new bilateral investment treaties by 31 March (LiveMint)
India is looking at a situation where it may not have a bilateral investment treaty with a large number of countries including those in the European Union (EU) on 1 April 2017. Commerce and industry minister Nirmala Sitharaman on Tuesday said India would unilaterally terminate all such existing treaties on 31 March, having given one year’s time to countries to renegotiate the treaties based on the model Bilateral Investment Treaty (BIT) passed by the cabinet. Sitharaman said India has written to all the countries with which it has investment treaties to come forward and negotiate based on the draft BIT. The model BIT approved by the cabinet excludes matters relating to taxation. Controversial clauses such as most favoured nation (MFN) have been dropped while the scope of national treatment, and fair and equitable treatment clauses, has been considerably narrowed down.
Ambassador Michael Froman: address at the Washington International Trade Association (USTR)
We have just witnessed a remarkable period in trade politics, a period in which the gap between perception and reality was wider than ever before. Poll after poll show that Americans understand that we live in a global economy, that we cannot wall ourselves off from the forces of integration, and that as a whole, the opportunity to engage internationally, to open other markets to our goods and services, to raise standards around the world, has been good for America. In fact, long-term surveys suggest that support for trade is higher now than at almost any time since the 1970s – and it is highest among young people who have grown up as global citizens in the Internet era. But, as the most recent campaign demonstrates, while public support for trade is high and widespread, it is largely passive, while opposition to trade – though perhaps held by only a minority -- is often vocal and passionate. This is not solely a US phenomenon. [Related: Roshan Kishore: Why obituaries to globalization are premature, Roselyn Hsueh: What will Trump change about trade relations with China? Here’s what you need to know.]
The Boao Forum, one of the main global economic conferences held in Asia every year, will have as its main theme for 2017 the defense of globalization amid protectionist trends that have emerged in the world, the organizers of the event said on Monday. ‘Globalization and free trade: the Asian perspectives’ will be the theme of the 9th edition of the forum, dubbed the “Asian Davos”, to be held in the southern Chinese city of Boao on Hainan Island, 23-27 March. “Asia and emerging economies are one of the biggest beneficiaries of globalization,” acknowledged Secretary General Zhou Wenzhong during the presentation of the forum.
Australia to tax all digital transactions (The Hindu)
Annabelle Gawer: ‘Big data: bringing competition policy to the digital era’ (pdf, OECD)
Tax systems in developing countries: Joel Slemrod’s keynote lecture (pdf, Zurich Centre for Economic Development)
Professor Robert Shiller (Yale University): ‘Narrative economics’ (Presidential Address to the American Economic Association)
12th AU-EU human rights dialogue: joint communiqué