Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection

Featured tweet, @UKenyatta: Kenya and Mauritius have agreed to make our two countries the financial and trade hubs for Africa

Diarise: the German-African Business Summit will be held in Nairobi, 8-10 February

The East African Legislative Assembly convenes today in Kampala: statement by EALA Speaker, Daniel Fred Kidega

The harmonization/approximation of Laws in the EAC context is also fundamental for the region to move in tandem. A report of the Committee on Rules and Privileges of the Oversight activity on approximation of national laws in Partner States adopted by the Assembly in November 2016, indicates that Republic of Rwanda and Uganda have each harmonized 10 laws, Tanzania (6 laws), Kenya (4 laws) and Burundi (3 Laws). Let me also take this opportunity to urge the Council of Ministers to finalize the policy with regards to harmonization of academic and professional qualification regulations. The Assembly is also keen to enact legislation on cross-border practice of professional services and on social security portability. This shall address the regional services’ market which is currently fragmented by restrictive policies, many pegged on nationalistic requirements, in licensing, qualification, regulatory and educational requirements. Such legislation would institute a framework for professional workers across many sectors – be they legal, medical, education and others to move freely in the region thus operationalising Article 76 of the EAC Treaty.

A work in progress: integrating markets for goods, labor, and capital in the EAC (IMF)

Trade integration does not seem to have increased significantly since the implementation of the CU. External tariff rates in EAC countries have decreased significantly between 2000 and 2014, with the average external tariff rates converging to about 12–14%, while all EAC member states have reached zero effective tariff rates for intra-EAC trade. However, while intra-EAC trade has grown substantially in nominal terms, the share of intra-EAC imports in total imports has not increased since the implementation of the CU and remains low (single digit). On the export side, intra-EAC trade represents a higher share of total exports (about 20%) because the value of total exports is much lower than that of total imports. Gravity equation estimates show that the intensity of bilateral trade within the EAC lags behind that within Asia, America, and Europe even after controlling for size, level of development, culture, and distance. However, intra-EAC trade is more intensive than in any other region in sub-Saharan African, except for the West African Economic and Monetary Union (WAEMU) area. [Chapters: Analysis of merchandise trade integration in the EAC, Labor migration and remittances in the EAC, Financial integration in the EAC] [The analysts: Emre Alper, Wenjie Chen, Jemma Dridi, Herve Joly, Fan Yang]

Regional integration, poverty and the EAC: what do we know and what have we learnt? (ECDPM)

In the first section we provide a conceptual discussion of the relationship between trade liberalisation and poverty. In the second section we discuss the available evidence on poverty in East Africa and how it has changed over time. One of the messages that emerges from this discussion is the relative paucity of data on poverty for the countries of the East African Community, and even more so with regard to changes over time. In order to draw the link between regional integration and poverty reduction, in the third section we evaluate the extent of progress on integration in the EAC. The fourth section of the paper looks at some descriptive empirical evidence as to the impact on trade and then considers the more formal empirical evidence as to the impact of regional integration on poverty in the region. A key focus of the review is identifying to what extent there is evidence specific to integration processes as opposed to considering trade more generally. We find that the regional integration specific literature is limited and hence there are clear evidence gaps. The final section concludes. [The analysts: Michael Gasiorek, Bruce Byiers, Jim Rollo]

IMF’s Lagarde to visit Uganda next week (Daily Monitor)

West Africa: Cross-border co-operation and policy networks (SWAC/OECD)

This publication examines how policy actors involved in cross-border co-operation contribute to the regional integration process in West Africa. It uses a pioneering methodology, known as social network analysis, to visualise the formal and informal relationships between actors involved in cross-border policy networks, showing that borders have notable and diverse impacts on exchanges of information and the relative power of networks. The report then analyses a range of regional indicators of co-operation potential, visually demonstrating that borders can also affect the ability of sub-regions within West Africa to develop cross-border initiatives in a number of ways. Combining these two analyses with the perceptions of regional policy makers as to which border areas they consider as priorities for regional integration, the publication concludes with the analytical foundations for more effective place-based policies that can enhance cross-border co-operation in West Africa. [Table of contents: Part 1 - Towards a new approach to cross-border co-operation, Part 2 - Cross-border co-operation: potential, networks and political priorities]

Sahel trade routes: arms, people and drugs (Deutsche Welle)

In Niger, anti-smuggling efforts risk trading one crisis for another (African Arguments)

West Africa Brief: 1-9 January (SWAC/OECD)

ECOWAS Human Rights Day: statement

Catherine Grant Makokera: ‘Let’s not forget the region: trade facilitation in the face of protectionism?’ (TUTWA)

So what does 2017 hold for Southern Africa in terms of trade and economic development? There are a few key themes I would like to highlight, including trade facilitation and industrialisation. These are not new agendas but are anticipated to continue to dominate policy debates in the region in the coming year. Zimbabwe deserves a special mention as a market that offers great potential and is critical for regional initiatives as well.

South Africa Economic Update: private investment for jobs (World Bank)

Using firm level data, the report examines the effectiveness, cost, and impact of investment tax incentives granted to the various economic sectors for additional investment and job creation. It contends that if targeted well, ITIs can result in increased investment and job creation as intended and support poverty alleviation as each job created lifts about one person out of poverty. However, the report reveals that the current set of ITIs, which the government of South Africa has deployed among other policy instruments that are aimed at promoting industrial development, have not yielded a significant reallocation of private capital toward industrial sectors, nor produced higher industrial employment as expected. Instead, private investment has in recent years increasingly gone to less productive sectors, generating negative total factor productivity growth.

Djibouti breaks ground on massive Chinese-backed free trade zone (Reuters)

The president of Djibouti on Monday formally launched the construction of a project touted as Africa’s largest free trade zone, to be built in the tiny Horn of African nation with Chinese backing. "(Djibouti) aims to become a gateway not only to Ethiopia but to South Sudan, Somalia and the Great Lakes region," Aboubaker Omar Hadi, chairman of the Djibouti Ports and Free Zone Authority, told Reuters. "This new free zone will be the country’s first employment reservoir, with more than 15,000 direct and indirect jobs created."

Kenya: Tullow strikes more oil in Turkana ahead of early export plan (Business Daily)

Kenya has hit another oil bonanza, taking the country closer to hitting one billion barrels of recoverable reserves. British explorer Tullow Oil on Tuesday announced more finds at the Erut-1 well in Turkana basin, in what is set to lift the country’s estimates of the black gold from 750 million barrels.

Mauritius: ICT/BPO Industry Review 2016 (GoM)

Referring to the eight main indicators which govern the ICT sector (amongst which the UN e-Governance survey and the World Economic Forum’s Network Readiness Index), Mr Sinatambou observed that Mauritius ranks 1st in Africa. Now, he said, we have to compare with other frontline players, that is, two giants in the IT sector: India and China. Looking at the figures, out of the eight key indicators, Mauritius is actually doing better than India and China in five of them, the Minister stated. Total employment in the ICT-BPO industry has crossed the 20 000 threshold and presently stands at 23 000. The BPO segment remains the main generator for jobs with 53% of total employment in the segment of call centres, BPO non-voice and shared services. The key drivers highlighted in the 2016 Survey include (pdf): [Regional e-Governance Academy to be set up in Mauritius]

Trump-Africa commentaries: Connor Gaffey: ‘What we’ve learned about Donald Trump’s Africa policy’ (Newsweek), Janet Eom: ‘Donald Trump’s team has questions about China in Africa. Here are answers.’ (Washington Post), Nico Vermuelen: ‘Too early to speculate on US trade policy, says South African auto body’ (Engineering News), Daniel Pelz: ‘Obama’s Africa legacy: more trade than democracy’ (DW)

WEO UPDATE: A shifting global economic landscape (IMF)

After a lackluster outturn in 2016, economic activity is projected to pick up pace in 2017 and 2018, especially in emerging market and developing economies. However, there is a wide dispersion of possible outcomes around the projections, given uncertainty surrounding the policy stance of the incoming US administration and its global ramifications. The assumptions underpinning the forecast should be more specific by the time of the April 2017 World Economic Outlook, as more clarity emerges on US policies and their implications for the global economy. With these caveats, aggregate growth estimates and projections for 2016–18 remain unchanged relative to the October 2016 World Economic Outlook. The outlook for advanced economies has improved for 2017–18, reflecting somewhat stronger activity in the second half of 2016 as well as a projected fiscal stimulus in the United States. Growth prospects have marginally worsened for emerging market and developing economies, where financial conditions have generally tightened. Near-term growth prospects were revised up for China, due to expected policy stimulus, but were revised down for a number of other large economies - most notably India, Brazil, and Mexico. [Transcript of a WEO press briefing]

Services and performance of the Indian economy: analysis and policy options (Working Party of the Trade Committee, OECD)

To set in motion such a virtuous cycle, services sector reforms are needed. India scores well above the average on the STRI in most sectors and among the highest of all countries in some sectors. The scores stem partly from a general business environment that imposes significant costs of establishing and conducting business. Among these are restrictions on the movement of people for the purpose of providing services, restrictions on access to land and real estate, rules and regulations related to establishing a branch or subsidiary and relatively burdensome administrative procedures for obtaining the permits and licenses needed to conduct business. Thus, liberalising international trade and FDI alone would not make a sufficient dent in the cost of establishing and conducting business to obtain the objectives of the Make in India initiative. [Services trade to top India’s agenda during WTO Chief’s February visit]

Today’s Quick Links:

Kaddu Sebunya: ‘Beyond China’s ivory ban’

Poland targets Asia and Africa with new trade agency

SADC Logistics cell situation report: week 01 2017, tables and charts

US files WTO complaint against Chinese aluminium subsidies (WTO)

Update of ANNEX III to ‘WCO Guide for Technical Update of Preferential Rules of Origin’

UNCTAD Briefing on the UN Oceans Conference 2017: the trade and development perspective

Opening Plenary of the UN World Data Forum: remarks by Wu Hongbo

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