tralac’s Daily News Selection
AU Summit press conferences today in Addis: Mrs Fatima Haram Acyl (Commissioner for Trade and Industry): ‘The Continental Free Trade Area: an opportunity for job creation in Africa’; Dr Anthony Mothae Maruping (Commissioner for Economic Affairs): ‘African Agenda 2063: Is there political buy-in? Is it implementable?’
The International Forum for National Trade Facilitation Committees is underway in Geneva: UNCTAD Secretary-General Mukhisa Kituyi outlined the goal of the forum as (i) to produce an overview of the implications and implementation requirements for the TFA, (ii) to establish and outline of the tools and good practices for the effective and efficient establishment and operation of NTFCs, (iii) to find synergies for development and inclusive prosperity for all through trade facilitation. [Profiled presentation: ‘WTO Trade Facilitation Agreement: state of play and the road ahead’ (pdf, Sheri Rosenow, WTO TFA Facility)]
Starting today in Nairobi, a joint ICTSD, TMEA workshop: Leveraging services and digital potential for inclusive economic growth
In 2017, we (at tralac) intend to support debate on the enormous opportunities ICTs present for African economies in a year where intense negotiations are expected to conclude with the signing of the Continental Free Trade Area agreement. This is recognised as a very ambitious target. Member states still have to agree on the level of ambition for the negotiations and other aspects of the modalities of the negotiations on trade in goods and services, and then the negotiations will begin. This Discussion Note reflects on the agenda of the inaugural UN World Data Forum which took place in Cape Town on 15-18 January 2017. [The analyst: Tarik Oguz]
Commentary by Mr Kiprono Kittony (Kenya National Chamber of Commerce and Industry): ‘AU: Business-first approach key to Africa’
The European Commission sees “no clear economic and legal grounds to justify the imposition of the bilateral safeguard measures,” EU Trade Commissioner Cecilia Malmstrom said in a January 11 letter to Rob Davies, South Africa’s trade minister. The letter was published on the Commission’s website. “It appears that the real problems of the South African poultry industry are not so much caused by the imports from the EU but that it is rather suffering from structural problems affecting its competitiveness,” Malmstrom wrote.
tralac’s Gerhard Erasmus: More trade disputes in 2017? Starting with measures against EU chickens
Rob Davies: ‘SA to pursue trade agreements with UK post-Brexit’ (IOL)
South Africa will continue to pursue bilateral and regional negotiations with the British government despite its exit from the EU, the Minister of Trade and Industry Rob Davies said on Tuesday. Speaking after his arrival from a two-day visit to the UK, Davies said the country’s strategy post-Brexit was to conclude a free-trade agreement with Britain. "We had a number of meetings with investors and parliamentarians to encourage and boost trade between South Africa and the UK," Davies said. "We don’t have a duty-free quota with the UK. Our our template going forward will be partnerships but in the long run we will have to have quotas." [UK-SA Business Process Services update]
Peter Leon: ‘Achilles heel of investment in SA’ (Business Day)
In redesigning SA’s foreign investment regime, of which the regulations form a key part, it is crucial that foreign investors are assured of access to a familiar, fair and effective system of dispute settlement. In so doing, SA should follow international best practice, such as the investor-state mediation rules approved by the International Bar Association in 2012. As currently drafted, the Department of Trade and Industry’s regulations are missing many vital elements of a credible mediation system.
Alexander Mathews: ‘Time for Botswana to confront hard truths’ (Business Day)
Botswana needs a fresh approach: one that is "outward-looking, embracing global integration, vigorously promoting and supporting companies that export goods and services, attracting inward foreign investment, welcoming foreign companies and individuals who wish to invest in Botswana, work in Botswana, and trade with Botswana," Jefferis says. [Job losses as new CEO shakes up Botswana Power Corporation]
Zimbabwe: Textile players rap taxman (NewsDay)
Textile players in Zimbabwe have condemned the Zimbabwe Revenue Authority for failing to enforce restrictions gazetted by government to protect the industry from an influx of cheap imports. In emailed responses to NewsDay, Zimbabwe Textile Manufacturers’ Association secretary-general, Raymond Huni said Zimra was failing to play its role of enforcing import restrictions imposed by government last year. As a result, the sector suffered tremendously due to cheap imports. “The industry did not perform as expected due to failure by Zimra to enforce all statutory instruments (SIs) granted to the textile sector by the Ministry of Finance in the year ,” he said.
TPSF set to form Dar-Ankara secretariat (Daily News)
The Tanzania Private Sector Foundation has embarked on procedures to form a secretariat for the Business Council between Tanzania and Turkey at a high pace following President John Magufuli’s directive to fast-track stronger trade relations between the two countries. The Business Council came to fruition during the Tanzania-Turkey Trade Forum after the business community from both countries signed the Memorandum of Understanding aimed at strengthening business and trade ties among them. [Govt optimistic of increased trade volume with Turkey, TZ seeks to rival Kenya as trade hub with SGR project]
Turkey, Mozambique ink 6 agreements (World Bulletin)
Turkey and Mozambique on Tuesday signed six agreements in various domains during President Recep Tayyip Erdogan’s visit - the second stop of his southeastern African tour. Turkish Foreign Minister Mevlut Cavusoglu signed two memorandums of understanding - a mutual visa exemption agreement and a political consultation mechanism for diplomatic services and special passport holders - between the two countries. A trade and economic cooperation agreement and another on protection of mutual investments were signed by Turkish Economic Minister Nihat Zeybekc. [Turkey-Mozambique eye more collaborative projects]
Tanzania: World Bank VP for Africa Region visits (World Bank)
Makhtar Diop, World Bank VP for Africa Region, will visit Tanzania (24-26 January) and will hold high level discussions with President John Magufuli as well as other top government officials. In addition, Diop will meet with representatives of the private sector and civil society. The World Bank is currently supporting 27 national projects amounting to $4.2bn in addition to seven regional operations through which Tanzania accesses $551m in financing, reaching a total commitment of $4.75bn. The bulk of this support (22%) is towards the transport sector, followed by urban development (20%).
Kenya: Fund managers, economists worried of forex cover drop (Business Daily)
A new survey of money market players has revealed rising concern over the continued drop in the country’s forex cover in defence of the shilling, which has depreciated by 1.4% to the dollar this year. The country’s forex reserves have dropped by $940 million since the beginning of October (from $7.79bn to $6.85bn), pulling down the value of the imports cover from 5.2 months to 4.49 months. [George Wachira: A reality check on promised quick exports of Turkana oil]
Growth was estimated to come to a halt in 2016, with the non-oil sector contracting by ½ percent dragged down by the industrial, construction, and services sectors; industrial production, despite the potential for import substitution, was constrained by shortages of imported inputs due to limited availability of foreign exchange. Annual inflation was estimated to reach 45% by end 2016 - the highest rate in over a decade - reflecting higher domestic fuel prices, a weaker kwanza, and the lagged effects of loose monetary conditions until the first half of the year. Non-oil primary balance in 2015-16 showed an improvement of 18% of GDP mainly through spending rationalization. The current account deficit, which peaked at 10% of GDP in 2015, is projected to be halved in 2016-17, as imports continue adjusting to limited availability of foreign exchange.
Industrial commodities prices to surge in 2017 (World Bank)
In its January 2017 Commodity Markets Outlook (pdf), the World Bank is holding steady its crude oil price forecast for the year at $55 per barrel, a 29% jump from 2016. The energy price forecast assumes members of OPEC and other oil producers will partially comply with an agreement to limit production after a long period of unrestrained output. The Bank is raising its metals price forecast to an increase of 11% from the 4% rise anticipated in its October outlook on further tightening of supply and strong demand from China and advanced economies. A Special Focus shows how commodity-exporting emerging and developing economies have been hit hard by slowing investment growth, which has declined from 7.1% in 2010 to 1.6% in 2015.
The Banking Commission of the International Chamber of Commerce, the Wolfsberg Group, and the Bankers Association for Finance and Trade jointly announce the publication of the Trade Finance Principles. The guidance document updates the Wolfsberg Group’s Trade Finance Principles paper last revised in 2011. This broader industry edition now addresses the due diligence required by global and regional financial institutions of all sizes in the financing of international trade. The document was updated to reflect the growing regulatory expectations, as well as the more stringent application of existing regulations faced by the industry today.
This paper uses comprehensive and comparable firm-level manufacturing census data from four Sub-Saharan African countries (Cote d’Ivoire, Ethiopia, Ghana, Kenya) to examine the extent, costs, and nature of within-industry resource misallocation across heterogeneous firms. The paper finds evidence of severe misallocation in which resources are diverted away from high-productivity firms toward low-productivity ones in all four countries, although the magnitude differs across countries. The paper shows that a hypothetical reallocation of resources that equalizes marginal returns across firms would increase manufacturing productivity by 31.4% in Cote d’Ivoire and as much as 162.7% in Kenya.
Corruption Perceptions Index 2016 (Transparency International): Sub Saharan Africa: 2016 saw elections across the African continent with the results providing a good reflection of corruption trends in the region. In Ghana, for example, voters voiced their dissatisfaction with the government’s corruption record at the polls where, for the first time in Ghana’s history, an incumbent president was voted out.
Today’s Quick Links:
The NEPAD Agency’s 2016 Annual Report is posted
Western Cape: overview of tourism sector
EU’s Malmström: Trump’s trade policy ‘doomed to fail’
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