tralac’s Daily News Selection
TFTA update: Egypt’s cabinet approves COMESA, EAC, SADC free trade agreement
Tinashe Kapuya: ‘US-Africa trade and investment relations: what can we expect from a Trump Administration?’ (pdf, Agbiz)
As we consider the various scenarios of an Africa-US trade and investment relationship, it is important for the continent to craft its own vision of a bilateral trade relationship with the Americans. The fundamental lesson coming out of the first two weeks of a Trump Administration is that the US will be radically different and will have a different way of doing business. It will be important to observe how the Trump Administration will handle the AGOA annual review – and any emerging the out-of-cycle reviews – as these will serve as critical learning points that will deepen and broaden our understanding of what the future of Africa-US trade relationship will look like.
Regional infrastructure project preparation: NEPAD-IPPF update (AfDB)
Taking stock of achievements during 2016 at the Business Strategy Workshop for NEPAD-IPPF held at the headquarters of the AfDB in Abidjan, Shem Simuyemba (NEPAD-IPPF Fund Manager), said that during 2016, NEPAD-IPPF had approved a total of $14.8m for the preparation of eight regional projects covering energy, transport and water. Under its current strategic business plan for 2016-2020, NEPAD-IPPF requires funding of about $250m to prepare 80 to 100 regional infrastructure projects expected to generate $25bn in infrastructure investments. NEPAD-IPPF is also increasingly linking its project preparation work to financial closure and part of the thrust of its new business orientation is to engage early with project developers, financiers and investment houses to ensure that NEPAD-IPPF prepared projects respond better to investor needs.
COMESA, COIDIC discuss cooperation framework on infrastructure (COMESA)
COMESA and the Chinese Overseas Infrastructure Development and Investment Corporation have finalized negotiations for a memorandum of cooperation on infrastructure development in the COMESA region. This followed a visit to the COMESA Secretariat by the Deputy Chief Executive Officer of COIDIC Mr Nicholas Mitsosi and his team on Friday 3rd February 2017. The MoC is expected to cover all infrastructure projects go between member states and individual countries such as roads, rail, information and communications technologies and energy among others. [Global Customs Chief in COMESA to discuss partnership]
Africa’s cities: opening doors to the world (World Bank)
The report, Africa’s Cities: Opening Doors to the World, notes that to grow economically as they are growing in size, Africa’s cities must open their doors and connect to the world. Africa’s urban population stands at 472 million people today. As cities grow in size, another 187 million people will be added to urban areas by 2025. In fact, Africa’s urban population will double over the next 25 years, reaching 1 billion people by 2040. Extract: Because of manufacturing’s importance in entering regional and global markets, one can look at the share of manufacturing in GDP to see whether an urbanizing economy is opening its doors to the world — or closing them. For example, we compare the structures of non-African and African economies during periods when the urbanized share of the population rises to 60%. Based on a cross-section of African and non-African economies, the comparison shows that Africa’s cities are indeed trapped in the production of nontradables for local markets. As the African economies attain 60% urbanization, their share of manufacturing in GDP stays flat (or somewhat falling) at about 10%. In contrast, the manufacturing share of the non-African economies rises from 10% to nearly 20% (falling back only when urbanization exceeds 60%). Why have African urban economies remained local? Two reasons stand out:
Africa’s ports revolution: setting the scene for economic take-off (GCR)
Part 1: Africa’s port sector is grossly deficient in both quantity and quality of harbours, quays, cranage, storage systems and hinterland transport. How deficient? Although China and Africa have similar populations (respectively, 1.4 billion and 1.2 billion), in 2015 the five largest Chinese ports moved more than 118 million twenty-foot-equivalent units (teu), whereas Africa’s top five moved less than 10 million. According to Lloyd’s List, the entire continent accounts for just 3% of world container traffic. It is a remarkable fact that 90% of Africa’s total trade, including its internal variety, moves by sea. This is partly because it can’t move any other way: road networks within countries are often inadequate and, outside South Africa and the Maghreb, rail systems are “a losing game”, to quote a recent study by the African Development Bank. [The analyst: David Rogers]
Part 2: Africa’s ports revolution: West Coast to welcome the world
2016, bad year for Nigerian ports, official data show (Premium Times)
From 5369 in 2013, the number of vessels that berthed at ports in Nigeria dropped to 4025 in 2016, representing the lowest in four years. The National Bureau of Statistics made this known in its 2013-2016 Shipping and Port Related Activities Data, released on Wednesday. According to the bureau, the number of vessels dropped from 5369 in 2013 to 5349 in 2014. In 2015, the figure dropped to 5090 and reduced drastically to 4025 in 2016. Similarly, the report said the Gross Registered Tonnage at the ports peaked at 146,820,488 in 2014 and dropped to 144,207,122 in 2015 before sliding to 122,186,758 in 2016. [Downloads: Shipping and Port Related Activities Data report, infographics]
Nigeria, South Africa trade volume fell to N1.3 trillion in 2016 (Premium Times)
South African Ambassador to Nigeria, Lulu Aaron-Mnguni, says trade volume between the two countries dropped to about N1.3 trillion (R55bn) in 2016. The trade volume decreased by 11.29% from N1.5 trillion (R62bn) in 2015. The trade between the two countries increased steadily from N488 billion (R20.6bn) in 2010 to N1.5 trillion (R62bn) in 2015. He said the gradual movement was attributed to Nigeria’s demand for automotive parts, South Africa’s export cars, vehicles, structures and parts of structure, uncoated paper and paperboard.
Zimbabwe: Govt repeals 15% levy on basic goods (The Chronicle)
The Government has shelved the implementation of Statutory Instrument 20 of 2017, which imposed a 15% VAT on basic consumer goods to pave way for further consultation. Businesses and suppliers had taken advantage of the new tax regime to increase prices by margins of up to 40% in the last few weeks thereby sparking public outcry. The suspended tax was proposed in the 2017 national budget and had been imposed on rice, margarine, cereals, maheu, potatoes, meat (pork, beef, fish and chicken) with effect from last month. Finance Minister Patrick Chinamasa said Zimbabwe and other SADC member states had ratified the SADC Protocol on Finance and Investment in which member states are mandated to harmonise taxation matters and coordinate tax regimes. In an endeavour to harmonise taxation matters, Minister Chinamasa said the SADC region has developed VAT guidelines, which enable member States to sustain and enhance tax revenues on an equitable and efficient basis. As such he said the regional bloc had agreed that the list of zero rated and exempt products should be streamlined. [South Africa announces end to special dispensation for Zimbabweans]
Three postings on Rwandan trade issues:
New RDB boss to prioritise services, exports promotion (New Times): The new chief executive of Rwanda Development Board, Clare Akamanzi, took office Thursday, promising to prioritise the services sector and increasing the volume of the country’s exports. She said one of the main things she would focus on during her tenure would be to help add value to locally produced commodities. Her other priority, she said, will be to promote innovation to help ensure that Rwanda’s journey to achieve its aspirations as a regional services hub is achieved. Akamanzi, who was sworn in on Wednesday, replaced Francis Gatare, who was moved to the newly created Mines, Petroleum and Gas Board – as its chief executive. Both officials are members of the cabinet.
Tea output increases in 2016, but export revenue drops (New Times): Rwanda’s tea production increased marginally last year, but the country’s annual export earnings dropped, according to the National Agricultural Export Board monthly report for December 2016. The report released yesterday indicates that tea output rose marginally by 1.82% to more than 108.3 million kilogrammes in 2016, up from 106.4 million kilos recorded in 2015. However, the sector’s export receipts declined to $63.42 million over the period, down from $72.86m earned in 2015, indicating a $9.44m, or 12.96% drop, compared to revenue recorded in 2015.
The political economy of import substitution in the 21st Century: the challenge of recapturing the domestic market in Rwanda (LSE): Import substitution has been marginalised from development policy discourse since the 1970s. This paper examines the Rwandan government’s recent attempt at reintroducing industrial policy with some attention devoted to ‘recapturing the domestic market’ – a term used to replace the ignominy associated with ‘import substitution.’ The paper examines two cases – cement and textiles – where such policies have been recently established in Rwanda. [The analyst: Pritish Behuria]
Zambia: 2017 copper output may climb to record as price rebounds (Bloomberg)
Finance Minister Felix Mutati said in an interview Thursday in Kenya’s capital, Nairobi that production is set to exceed 800,000 metric tons. That would beat the record 790,007 tons reached in 2013. “It’s looking cheerful, the price is close to $6,000 - at that level, most of the mines in Zambia are making money, they are beyond breakeven,” Mutati said.
Taveta traders accuse Tanzania border officials of harassment (Business Daily)
Taita Taveta traders using the Taveta-Holili border point have urged the government to engage Dar es Salaam to stop increased harassment by Tanzanian authorities. The traders accused the Tanzania creating obstacles that impede free trade between the two countries. The traders said despite Nairobi and Dar es Salaam signing a joint trade pact to allow traders to cross the border freely, Tanzanian police at the border continue to harass Kenyans arbitrarily. Taita Taveta Chamber of Commerce director Sofia Mnene said Kenyan traders thought the East African Community integration treaty would ease trade but it has instead became a nightmare.
Kenya: RVR faces losing deal over unpaid Sh600m concession fees (Daily Nation)
The operator of the Kenya-Uganda railway risks closure after the government issued the Egyptian-controlled firm a termination notice over unpaid fees amounting to Sh600 million. Kenya Railways Corporation (KRC) managing director Atanas Maina told Parliament that it had issued a termination notice to Rift Valley Railways (RVR) for failing to remit concession fees for the year to December 2016. RVR, which is 80% owned by Cairo-based Qalaa Holding, won a 25-year contract in November 2006 to run the 2,352km Kenya-Uganda railway for the cargo business, and a five-year contract for the passenger unit.
Germany warms up to Kenya in Sh3 billion plan (The Standard)
Yesterday, the European powerhouse signed a joint declaration of intent on the establishment of the Eastern African-German University of Applied Sciences in Kenya at the second German-African Business Summit, which is being held on African soil for the first time. The Sh3 billion deal will see the Thika-based institution offer undergraduate, masters and vocational vocational-oriented academic training in close co-operation with industry players. This will be key in providing technical and blue-collar competence to service German firms seeking to set up shop in Kenya and the region.
India unwilling to bend to WTO’s demand, to expedite talks (Economic Times)
India will send an expert team to Geneva in March to expedite negotiations on food security and a global agreement on services at the WTO before its ministerial meeting in Argentina in December. India is unwilling to bend or yield on WTO’s demand for a discussion on food security, commerce and industry minister Nirmala Sitharaman said after meeting WTO director general Roberto Azevedo on Thursday. “We will send a team to Geneva to talk on details...We will not start from zero,” the minister said, referring to the G-33 proposal that seeks to amend WTO rules on agriculture.
DG Azevêdo visit to India: ‘Advancing global trade and the role of the WTO’
2017 International IP Index (GIPC)
The US Chamber of Commerce has released its 5th annual International IP Index, The Roots of Innovation, rating 45 world economies on patents, trademarks, copyright, trade secrets, enforcement, and international treaties. The economies benchmarked in the 2017 Index account for 90% of global GDP.
Related: Intellectual Property index: India remains near bottom (The Hindu), GIPC’s Mark Elliott: India has the potential to become a leader among innovative economies
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