tralac’s Daily News Selection
PIDA Progress Report 2016 (NEPAD)
The lead implementing PIDA agency, the NEPAD Agency, with support from the AUC, AfDB, partners and stakeholders, continues to interact with the private sector. At the same time, it has provided technical support and capacity building to RECs to support PIDA implementation, while providing core administrative support to the programme to ensure its smooth implementation. There was a concerted effort to “crowd-in” private investors to invest in PIDA projects. This was undertaken via the CBN and aimed to de-risk PIDA infrastructure projects. The CBN Report on De-risking Infrastructure and PIDA Projects in Africa mirrors the agency’s drive to de-risk PIDA projects. It was presented at the CBN Dialogue with African pension and sovereign wealth funds, which was held in New York, where the report was also formally launched at Africa-NEPAD Week at the 71st UN General Assembly.
This complements NEPAD’s transport and logistics initiative, Move Africa, which wants to transform the African trans-boundary transport and logistics sector. NEPAD also launched the NEPAD RE endeavour, which aims to accelerate the development and implementation of African renewable energy projects. As part of the effort to address the lack of capacity for early stage project preparation at the national and regional level, the PIDA SDM and the NEPAD IPPF provided early stage project preparation and project feasibility support to PIDA programmes, in line with the tunnel-of-funds approach. [Virtual PIDA information Centre]
Africa Construction Trends Report 2016 (Deloitte)
Funding and ownership is defined as the country where the financier or owner of the project is domiciled. In line with ownership, Governments are increasing their funding of projects, funding a total of 81 projects (28.3%) in the period under review. Private domestic firms fund 40 projects and international Development Finance Institutions fund 39 projects, followed by China with 36 projects and African DFIs with 28 projects. The share of total projects that are being funded by International DFIs has decreased, while the share of funding provided by China has increased. Private Domestic companies are constructing 76 projects, while Chinese companies are busy with 64 projects. Italian firms are building 18 projects and French companies 14, while Portuguese and South African firms each are building 10.
Infrastructure Gas Projects Mozambique Summit 2017: linking local business with mega-projects
According to Paulo Fumane, Head of the Confederation of Economic Associations of Mozambique, those interactions should start at the very beginning, when foreign companies seek to position themselves in Mozambique. “It may mean retaining local legal advisors, for example,” the director of the Mozambican government’s official private sector dialogue partner explains. He also welcomes the US Embassy’s Maputo Trade Department initiative which will launch a series of oil and gas workshops later this month drawing local businesses’ attention to potential partnerships.
Global Investment Trends Monitor: African trends (UNCTAD)
FDI flows to Africa also registered a decline (-5% to $51bn), with the region sharing similar external vulnerabilities with Latin America. The low level of commodity prices continues to have an impact on resource-seeking FDI. Flows to Angola more than halved after surging in 2015. Mozambique saw its FDI fall 11%, but the level was still significant at an estimated $3bn. However, there was some uptick in flows to parts of Africa, centred on traditional FDI recipients such as Egypt (from $6.9bn to $7.5bn) and Nigeria (from $3.1bn to $4bn). Similarly South Africa saw a 38% increase in FDI inflows, though they remained at a relatively low level of US$2.4bn. [Access the complete report (pdf)]
Johnnie Carson on Trump’s Africa policy: ‘unclear and uncertain’ (African Arguments)
It is possible that Trump’s term in office will surprise us on Africa. Republican administrations have outperformed on this front before. President Bush certainly did, and his two landmark development initiatives – PEPFAR and MCC – remain extremely popular. But given the absence of any serious White House interest in Africa, Secretary Tillerson may become the key American player on Africa. He could put Africa policy on a solid footing by appointing an experienced Assistant Secretary of State for African Affairs; supporting key Bush- and Obama-era food, health and power development initiatives; and maintaining the business-focused policies of Obama. He could also throw his support behind USAID, the Overseas Private Investment Corporation and EXIM Bank, all of which strengthen US economic and development objectives in Africa.
A response by Stephen Lande: The absence of a Trump blueprint for Africa is a positive. Since it provides African governments and private sector leaders in Africa and in the US to draft and present a plan. Unlike other regions, with 55 countries, Africa must be treated as a group since individual countries are too small to support US based supply chains and distribution networks. Thus, Trump must engage African countries as a whole, not individually as is being done elsewhere.
UNIDO’s Li Yong: ‘Africa’s Decade of Industrialization’ (Project Syndicate)
The recent UN General Assembly resolution declaring 2016-2025 the Third Industrial Development Decade for Africa is yet another push in this direction. The organization that I represent, the UN Industrial Development Organization, has been tasked with operationalizing and leading the implementation of the concomitant program, including mobilizing the needed resources. All of these declarations and commitments are an important first step. But they will mean little unless they are translated into concrete and effective action that advances African industrialization, creates jobs, and fosters inclusive and sustainable economic growth and development. The question is how. The short answer is money and action.
EPA meeting flops as member states fail to provide trade data (The EastAfrican)
The East African Community meeting that was to be held this weekend to discuss the Economic Partnership Agreement between the region and the EU was postponed after several member states failed to hand in key trade data, putting in doubt a subsequent meeting that would have set the agenda for the upcoming EAC Heads of States Summit in February. “Tanzania, Burundi and Uganda are yet to hand in their data to the Secretariat, while Kenya has already done so. We are not sure when they will, so upcoming meetings have been delayed indefinitely until the Secretariat receives all the data,” The EastAfrican was told. The delay has hampered an impact analysis on the trade sectors and tax revenues that was commissioned by the EAC Secretariat as the consultant lacks data to compete the task. The consultant was expected to hand in a report on the impact of the EAC-EU EPA and tax revenue streams on the region’s industrialisation drive.
The Great Lakes Trade Facilitation Project: implementation status review (World Bank)
The Great Lakes Trade Facilitation Project (GLTFP) was approved by the World Bank Board on 25 September 2015. The project became effective in Rwanda on 25 January 2016, for COMESA on 4 April 2016, and in the Democratic Republic of Congo on 15 September 2016. In Uganda the project still awaits Parliamentary approval. Approval has been delayed due to the February elections, swearing in of the new Parliament, and the constitution of a new Parliamentary Committee which must conduct a review prior to recommending the project for approval. The Parliamentary Committee met with Ministry officials on 5 December 2016 and approval is expected in January 2017, with the goal of reaching effectiveness shortly thereafter.
With the notable exception of Uganda, all other project partners, Rwanda, DRC and COMESA, have reached effectiveness and made progress in preparation of key activities over the reporting period. Key staff for project implementation units as defined in the legal covenants all have been hired in the DRC and COMESA, while in Rwanda all the required staff have been hired except for the project coordinator, whose appointment awaits approval by the PS and Minister of MINEACOM. Worked has focused on delivering comprehensive action plans, paving the way for more comprehensive implementation of project activities in 2017.The team assesses an overall rating for the project as Moderately Satisfactory, noting the considerable progress made over the period in COMESA, the DRC and Rwanda but also the need to now expedite activity implementation and the lack of approval/effectiveness in Uganda. [The author: Paul Brenton] [Further project documentation]
Christine Lagarde: Financial stability and pan-African banking (IMF)
The expansion of cross-border banking has been impressive. Ten African banks now have a presence in at least 10 countries on the continent, and one is present in more than 30 countries. This expansion inevitably has brought a host of new complexities. With varying regulatory regimes across countries at different stages of financial sector development, it should not be surprising that effective oversight of cross-border banking presents immense challenges. Unified accounting and reporting standards are absent. Data weaknesses abound. National secrecy laws and constraints on information flows impair cooperation among supervisors in home and host countries. The key is to ensure that supervision takes place on a consolidated basis.
“Our Alliance started with 7 member countries, and now has 17 countries on board representing a market of about 360 million people,” said President Paul Kagame at the Smart Africa board meeting on the sidelines of the 28th AU Summit in Addis Ababa. Membership includes war-torn nations like South Sudan – whose government is still struggling to restore security in the vast nation. Others include Egypt, Kenya, Mali, Senegal, Ivory Coast and Benin. Tanzania and Burundi – both neighbors to Rwanda and belonging to the same bloc – East African Community.
The overall objective of this consultancy is to develop a 2016-2030 Regional Disaster Risk Reduction Strategic Plan for the SADC Region, taking into account the lessons drawn from implementing the 2010 - 2015 DRR Strategic Plan, the international and regional instruments and/or frameworks for disaster risk reduction and humanitarian assistance. In order to accomplish the above objective, the Consultant will carry out the following tasks:
Namibia, Germany signs new merchant shipping agreement (Namibia Economist)
In a statement announcing the agreement, the two teams stated: “Shipping is the most cost-effective way to transport the vast majority of goods in international trade and will be central for global sustainable development and growth. Germany ranks first in the World Bank’s global Logistics Performance Index 2016. Short turn-around times, the interlinking of different modes of transport and advanced logistics strategies help make this possible. Under the agreement and the envisaged cooperation projects, German companies can provide this know-how to make a major contribution to more trade and growth in and with Africa.”
According to the preliminary results for the 2015/16 financial year (pdf), Namibia’s Gini coefficient now stands at 0.572. This is a 25 points decrease in the index from the 0.597 recorded in the 2009/10 financial year. “In spite of the challenging economic environment we should take pride in the fact that we are one of the few economies which have brought about a consistent reduction in income inequalities and poverty through growth and targeted policy interventions,” finance minister Calle Schlettwein said in his first meet with the media last week.
The interstate trade data estimates are really new. It suggests that there is a lot more in the way of trade between states than was previously assumed. Interstate trade is estimated to generate close to 54% of GDP. In fact, in many cases, inter-state trade between contiguous states exceeds the intra-state trade. The data are surprising because one of the major roadblocks when it comes to the ease of doing business is the friction caused by differentials in state taxes and laws. There are permanent 5 km long jams caused by trucks being held up at every state border and every business operating in India alleges endemic corruption in every state excise department. In fact, the GST is supposed to ease this situation. The Survey suggests that the surprisingly high levels of interstate trade despite the frictions is because the current system of taxation creates distortions where inter-state trade is more profitable than intra-state trade due to Value Added Tax offsets. Hence, goods are moved across borders (or shown to be moved across borders) since that is more tax-efficient. [The analyst: Devangshu Datta]
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