tralac’s Daily News Selection
Today in Cape Town: tralac is hosting a regional roundtable to consider global, African, and South African trade and trade-related developments of the past year and prospects for 2017
Today in Gaborone: Indicators for measuring, benchmarking productive capacities and structural economic transformation in Botswana
Profiled trade events to diarise: WTO@20 Conference (16-18 February, Delhi), From trade rules to trade deals: whither US trade policy in the Trump Administration? (TUTWA and partners, 28 February, Johannesburg), tralac’s Annual Conference 2017 (6-7 April, Cape Town), 50 years of doing business in Botswana (6-8 March, Gaborone)
Featured tweets on CFTA negotiations, now underway in Kigali: @AUTradeIndustry: The 1st @_AfricanUnion Technical Working Group Session on the Continental Free Trade Area, kicked off [Monday] in #Kigali, #Rwanda; @CK_Knebel: Today, joint technical working group on #SPS #TBT #NTB. Crucial work to boost intra-African #trade in #CFTA. @UNCTAD providing support.
CFTA negotiations perspectives, preparations:
Nigeria begins negotiations on CFTA adoption (The Guardian): In a statement made available to The Guardian by the office of the Federal Ministry of Industry, Trade and Investment, yesterday, the Minister noted that the Nigerian Negotiating team departed for Kigali, Rwanda, on Monday for another round of text-based negotiations in the Technical Working Groups of the Negotiating Forum for the Continental Free Trade Agreement. According to Okelamah, the Nigerian trade team will continue to argue for “flexibility” that allows it to safeguard the economy from a flood of imports, even as it remains an open economy. Consisting of eight negotiators drawn from the Ministry of Industry, Trade and Investment and the Ministry of Finance, the team is expected to engage colleagues from 53 other African nations on the emerging draft substantive text of the CFTA, being reviewed in the six TWGs.
Ghana: ‘Move quickly on the CFTA agreement’ - Director (GhanaWeb): Mr Nyame-Baafi (Director of Multilateral, Regional and Bilateral Trade at the Ministry of Trade and Industry), addressing a three-day workshop for members of the inter-institutional committee in Koforidua, stated that Ghana stood to gain substantially from the trade deal, given its competitive edge over many African countries, when it came to the export of goods and services. The goal was to sensitise and share information to allay any anxieties, to achieve a national consensus, particularly on specific trade and related matters so as to protect, preserve and promote the collective national interest at the on-going CFTA negotiations, expected to be concluded by the close of the year. The workshop also deliberated on the recent ratification of the WTO Trade Facilitation Agreement and the Ghana-European Union interim Economic Partnership Agreement.
Presentations from Brussels Briefing 47, Regional trade in Africa: drivers, trends and opportunities, are posted. Profiled presentations: (i) Ousmane Badiane (IFPRI) : Trends in African agriculture trade, (ii) Dominique Njinkeu (African Trade and Sustainable Development): Challenges and successes in implementing regional trade agreements
Afreximbank signs cooperation agreement with ACBF (Afreximbank)
Under the terms of the MOU, the two institutions will work together to build capacity for research and policy formulation and implementation through think tanks and private sector organisations to uncover innovations in effective economic integration, intra-African trade and export development. Other areas of collaboration include the promotion of the harmonization of standards across Africa and the leveraging of ACBF’s advocacy programme to support Afreximbank’s efforts to deepen intra-African trade and accelerate the implementation of the Bank’s new Strategic Plan.
Financing infrastructure in Africa: inaugural meeting of the AU STC on Transport, Transcontinental and Interregional Infrastructures, Energy and Tourism (13-17 March, Lomé)
The specific objectives are to: (i) review the implementation status of the Decisions and Declarations adopted at the previous ministerial conferences and African Union (AU) Assembly sessions on transport, energy and tourism; (ii) evaluate the progress made by major regional and international institutions in financing and investing in regional projects in the energy, transport and tourism sectors, especially those in the Priority Action Plan of the Programme for Infrastructure Development in Africa (PIDA-PAP) and other flagship projects under the AU Agenda 2063; (iii) analyse ways of increasing domestic and regional financial resources for funding regional transport, energy and tourism projects; (iv) adopt updated action plans for infrastructure programmes and initiatives to be undertaken for the period 2016-2018 at regional and continental levels. [Downloads: event resources]
Titled The economic impacts of counterfeiting and piracy, the report provides estimates on the wider social and economic impacts on displaced economic activity, investment, public fiscal losses and criminal enforcement, and concludes that these costs could reach an estimated US$1.9 trillion by 2022. Taken together, the negative impacts of counterfeiting and piracy are projected to drain US$4.2 trillion from the global economy and put 5.4 million legitimate jobs at risk by 2022. Frontier’s analysis builds on a 2016 report published by the OECD and the EU Intellectual Property Office, which estimated the value of the international trade in counterfeit and pirated products at $461bn in 2013, or as much as 2.5% of all international trade. This represents an increase of more than 80% over the findings in OECD’s ground-breaking 2008 report
The 2nd Eunomix report, published today on the Chamber’s website addresses the “missing” $19.5bn. All indications are that this amount is explained by gold sent by other countries for refining to the Rand Refinery in Germiston. Foreign gold now accounts for about 50% of the gold processed at that institution. Ghana and Mali are among the main customers. The discrepancies arise because some of those countries record the gold returned to them as imports. South Africa does not record such gold as exports, as the origin and ownership of the gold lies outside South Africa. The Chamber of Mines has requested Eunomix now to proceed with looking at the other South African discrepancies alleged as mis-invoicing by Unctad, namely $600 million in iron ore and $24 billion for silver and platinum.
Botswana: 2017 Budget Speech (GoB)
The preliminary balance of payments projections for 2016 point to a surplus of P5 billion, compared to a deficit of P57 million recorded in 2015. The significantly larger surplus in 2016 is mainly due to a positive current account balance. The current account balance is projected to record a larger surplus of P25.7 billion in 2016, compared to P10.5 billion in 2015, underpinned by the anticipated trade balance surplus. Exports are expected to have grown by 21%, while imports are expected to decrease by 9% in 2016, mainly as a result of the slight recovery in the diamond market and continued depression of the domestic demand for imports. As at the end of December 2016, foreign exchange reserves stood at P76.8 billion, compared to P84.9 billion in December 2015, representing a decline of 9.5%. In terms of the US dollar and the Special Drawing Rights, these reserves stood at $7.2bn and SDR5.3 billion, respectively. A fall in reserves is primarily as a result of an increase in demand for foreign exchange to pay for imports, notably for imported electricity by Botswana Power Corporation. These levels of reserves are equivalent to 17 months of import cover of goods and services.
Angola: 2016 Article IV Consultation (IMF)
Spillovers: Outward spillovers to the region are generally limited given Angola’s marginal trade and financial flows with countries in the region, although a few countries, such as the Democratic Republic of Congo and Namibia, which border Angola, are being more affected by the economic difficulties in Angola through cross-border trade. Although Angola is Portugal’s largest export market outside the EU and several Portuguese banks are present in the Angolan banking system through joint-ventures with local investors, the magnitude of these interests remain relatively small if compared with the size of the Portuguese economy. On the other hand, inward spillovers from China and Europe could be tangible if their economic growth significantly slows down, putting further downward pressure on oil prices.
A power system master plan released on Monday by the Ministry of Energy and Minerals said 70% of capital expenditures would be financed by debt and the rest by the government’s own resources. "Currently, power supply in Tanzania cannot meet the demand. Such imbalance has to be solved as soon as possible," said the government’s updated power blueprint (pdf). "The power demand growth rates for industrial and commercial sectors are expected to reach 18% per year from 2015 to 2020," it added. Tanzania aims to boost power generation capacity to 10,000 megawatts over the next decade from around 1,500MW at present, by using some of its vast natural gas and coal reserves to end chronic energy shortages and boost industrial growth. [Related: Natural gas utlisation master plan 2016-2045 (pdf)]
Nigeria had over 200 functional factories in the 1980s, producing fabrics for the local and international markets. This is however not the case three decades after. For instance, the industry once created 500,000 direct jobs in the 1980s and about two million indirectly at that time. Up till the 80s, Nigeria generated $2bn naira annually as revenue from the textiles industry. And, between 1985 and 1991, the industry grew by an average of 65% annually. The textile subsector was responsible for 25% of the entire manufacturing sector in Nigeria. The subsector was a national pride then! There were other textile mills, mainly in Lagos, such as International Textile Ltd and First Spinner Ltd, etc. We had factories in Kano and Ibadan also. However, today, most of the factories have shut down due to frustration, poor protection, mismanagement, smuggling, little or no access to funds, power instability, and the high cost of inputs.
Kenya: Echoes of past as Midiwo betting Bill goes after foreign investors (The Standard)
A proposal to ban foreigners from holding a stake in betting firms has raised eyebrows among sector players. The Bill, by Gem MP Jakoyo Midiwo, is set to go through the Second Reading in Parliament this week, and has been characterised as attempting a controversial return to the past. The Betting, Lotteries and Gambling Amendment Bill of 2016 has several other radical proposals, including limiting winnings to Sh30 million. Adding its voice to opposition against the proposed law, the Kenya National Chamber of Commerce and Industry said it was largely “anti-business”, and could negatively affect foreigners’ perception of Kenya as an investment destination.
Dar, Lilongwe sign business accord (Daily News)
Tanzania and Malawi have signed corporation agreement in the areas of politics, diplomacy and air transport. The two countries met under a Joint Permanent Commission of Cooperation (JPCC) over the weekend and discussed ways to solve the Lake Nyasa conflict.
The impact of mining on spatial inequality: recent evidence from Africa (World Bank)
This paper investigates the relationship between mining and spatial inequality in Africa during 2001-12. The identification strategy is based on a unilateral causation between mining and district inequality. The findings show that when minerals are aggregated, mining increases district inequality. But an analysis of individual minerals shows that mining affects district inequality positively and negatively, suggesting that mineral wealth can be a curse and a blessing. Further analysis suggests that these results largely depend on whether mining is active or closed, the scale of mining operations, the value of minerals extracted, and the nature of mining activities -- important dimensions for shaping mining policies aimed at bolstering socioeconomic development in Africa. [The analysts: Tony Addison, Amadou Boly, Anthony Francis Mveyange]
Why is inequality high in Africa? (pdf, AfDB)
This study utilized unit record data from Demographic and Health Surveys for 44 countries in 102 waves covering the period 1989-2011 and approximately over a million households to analyze the drivers of wealth/asset inequality in Africa. This approach, besides having the advantage of utilizing household level information, it allows for consistent comparison of inequality across countries and time. The focus is mainly to understand the roles of inequality in opportunities that appeal to public policy such as those that operate through interventions in labor markets, particularly education and migration, and price distortions affecting asset markets. We undertook the analysis at two levels: inequality between and within countries. [The analysts: Abebe Shimeles, Tiguene Nabassagaa]
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