Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection

African trade and regional integration policy issues featured in debate at yesterday’s Africa Knowledge Fest in Washington: scan @WorldBankAfrica tweets, or #AfricaKnowledgeFest

WTO’s Trade Facilitation Agreement enters into force (WTO)

Implementing the TFA is also expected to help new firms export for the first time. Moreover, once the TFA is fully implemented, developing countries are predicted to increase the number of new products exported by as much as 20%, with least developed countries likely to see an increase of up to 35%, according to the WTO study. DG Azevêdo welcomed the TFA’s entry into force, noting that the Agreement represents a landmark for trade reform. He said:

Related: Statements, commentaries by: ITC’s Arancha González, World Customs Organization, International Chamber of Commerce, Frank Appel (Deutsche Post DHL Group), ICTSD

Horizontal depth: a new database on the content of preferential trade agreements (World Bank)

This paper contributes to the literature in two ways. First, it presents a new database that offers a detailed assessment of the content of preferential arrangements, examining the coverage and legal enforceability of provisions. The database covers 279 agreements signed by 189 countries between 1958 and 2015, which reflects the entire set of preferential trade agreements in force and notified to the World Trade Organization as of 2015. Second, the paper presents some novel stylized facts on preferential arrangements based on the analysis of the data. The key insight is that preferential trade agreements became deeper over time.

China’s Belt and Road: implications for Africa (WWF)

The objective of this study is to summarize and analyze best available information on the Belt and Road Initiative in the context of China-Africa relations and develop scenarios on how the Initiative is likely to unfold in Africa. The study pursues this objective by offering a first-of-its-kind overview of key actors and institutional arrangements of the Belt and Road Initiative in China and Africa before developing a ranking of African countries that are likely to become part of the Initiative. The study finds that in addition to South Africa and Egypt, Angola, Kenya and Tanzania are likely to be immediate Belt and Road Initiative countries and the Republic of Congo, Ethiopia, Nigeria, Morocco, and Mozambique to join in the near future. [The analysts: Alex Demissie, Moritz Weigel, Tang Xiaoyang]

Arab Africa Trade Bridge: speech by ITC’s Arancha González

There are also huge opportunities for investment across the two sub-regions. Foreign Direct Investment can come with access to international supply chains, technology and know-how, and even infrastructure, with spillover benefits for local businesses. We need to change the narrative. When the trans-Saharan routes do make the news, it tends to be in the context of regional insecurity, or irregular migrants risking their lives to get to Europe. The Arab-Africa Trade Bridge has the potential to change this as increasing trade and investment across these regions would unleash growth and job creation, broadening economic aspirations for young and growing populations from Mauritania to the Gulf. An Afro-Arab trade renaissance would complement the ongoing revival of another ancient trade route: the Silk Roads linking China to the Middle East, Europe, and Africa. As part of Beijing’s ‘One Belt, One Road’ initiative, new rail links as well as road and energy infrastructure have already been constructed through Central Asia, and are extending into South Asia and the Middle East. They are being complemented with investments in maritime infrastructure from Eastern Africa to South East Asia.

South Africa: Budget 2017 (National Treasury)

Extract, Chapter 2 Economic overview (pdf): Export volumes decreased by 1% in the first three quarters of 2016. Over the same period, the value of exports increased by 8.1%, led by agricultural, manufacturing and precious metals items. Exports to Europe recorded the strongest growth in value terms, while exports to sub-Saharan Africa increased by 3% in line with the slower growth in the region. Export growth is expected to reach 5% in 2019, supported by higher global growth, fewer mining safety stoppages and sustained real depreciation of the rand. The broad decline in imports during the first three quarters of 2016 included petroleum oils, locomotives, vehicles, industrial machinery, computing equipment and electrical machinery. Over the medium term, imports are expected to recover in line with domestic demand. Higher exports will in turn boost imports, because large exporters tend to be major importers of intermediate inputs.

Export prices increased faster than import prices over the first three quarters of the year, driven by the uptick in commodity prices. This improvement in the terms of trade was reflected in higher nominal GDP and stronger growth in corporate income tax revenue. Moderate terms-of-trade gains should continue in 2017 but dissipate towards the end of the forecast period. The current account deficit is expected to remain at about 4% over the medium term. [Profiled departmental budget summaries: Trade and Industry, Economic Development, International Relations and Cooperation]

Shoprite: Non-RSA sales performance update (Shoprite Holdings)

The star performer during the reporting period was its Supermarkets Non-RSA division, which grew turnover by 32.3% to R12.88bn. Of the 14 countries in which it trades outside the borders of South Africa, Angola and Nigeria performed particularly well. The Group was able to overcome the foreign currency shortage in those countries and, unlike other traders, managed to keep shelves fully stocked. The result was that consumers flocked to its stores leading to a constant currency sales increase in Angola of 155.4% and 60.1% in Nigeria.

Museveni asks Indian automobile manufacturers to "make in Uganda" (The Hindu)

Mr Museveni did, however, put Indian automobile manufacturers on notice by announcing that the East African nation would soon be ending import of assembled automobiles. While admitting that the trade balance was in favour of India (Indian exports are projected to stand at $326.67 million this year compared with Ugandan exports to India at $46.7m), Mr. Museveni was keen that automobile manufacturers assembled vehicles in Uganda, creating the much-needed jobs. “It is true that bilateral trade is in favour of India, but that will now change. I have already held talks with Volvo to move their assembly plant from Mombasa to Uganda, and have also initiated talks with Mercedes. In today’s talks, I have asked Vice-President Ansari to alert Indian automobile manufacturers that they can get in early,” he said. [India to manufacture in Uganda with its skills, expertise, Rwanda, India and Africa: imperatives for cooperation]

Egypt: Suez Canal revenues decline in wake of sluggish global trade (Daily News)

Suez Canal revenues declined by 4% in January, compared to the same period in 2016. The total revenues registered at $395.2m in January versus $411.8m in the same month in 2016. Egypt recently expanded the Suez Canal by creating a second lane in the canal to reduce waiting times; the total investments of the project were around $8.2bn. In order for Egypt to gain a return on the Suez Canal expansion project investment, global trade volume would need to rise by around 9% a year for the canal to reach its traffic goal, according to a Capital Economics report.

11% growth: West Africa agricultural trade reaches $29.8m

The total value of agricultural commodities and livestock traded within the ECOWAS sub-region hit $29.8m as at 31 December 2016, Permanent Interstate Committee for Drought Control in the Sahel study has shown. The figure represents an 11% growth in intra-regional trade flows compared to $26.9m recorded in November of that same year. The study titled: “Intra-Regional Trade Flows of Agricultural Products and Livestock in the Sahel and West Africa”, covered eight countries namely Benin, Burkina Faso, Cote d’Ivoire, Ghana, Mali, Niger, Nigeria and Togo. The report showed that trade in the major staple crops of millet, sorghum and maize all saw significant increase over the previous month’s figures.

Agriculture in Africa – telling myths from facts: a synthesis (World Bank)

In a special issue of Food Policy, 12 papers revisit conventional wisdom on African agriculture and its farmers’ livelihoods using nationally representative surveys from the Living Standards Measurement Study-Integrated Surveys on Agriculture Initiative in six African countries. At times, the findings simply confirm the common understanding of the topic. But the studies also throw up several surprises, redirecting some policy debates while fine-tuning others. Overall, the project calls for more attention to checking and updating the common wisdom.

India’s exports: what is behind the slowdown? (IMF)

India’s exports have done remarkably well since the early 2000s, but export growth has slowed in recent years. This chapter [pp 34-41] analyzes India’s export competitiveness and explains the slowdown of India’s exports. Key factors underpinning the slowdown include weak trading partners’ demand and real appreciation of the Indian rupee, while India’s high tariffs and trade costs could also affect its export performance. Going forward, steps to further reduce barriers to trade and facilitate a focus on higher value-added products, as well as continued supply-side reforms, are vital to unleash India’s export potential. [Companion analysis: 2017 Article IV Consultation]

Trade in information and communications technology goods fell in 2015 (UNCTAD)

For the first time since 2009, the value of global imports of information and communications technology goods declined in 2015 by 3.6% in current prices to just over $2 trillion. Whereas the 2009 decline was connected to the 2008 global economic crisis, the 2015 slump came amid overall economic growth, and the appreciation of the US dollar. However, imports of ICT goods declined significantly less than international trade as a whole. This dipped by 10% in 2015, on the back of a manifest fall in commodity prices and currency fluctuations. Communications equipment was the only category of finished ICT goods that continued to record positive growth. Global imports of such equipment exceeded those of computers and peripherals for a second consecutive year. In developing countries, the trend was even more pronounced. For every dollar’s worth of imported computers and peripherals, developing countries spent $1.5 on imported communication equipment. This means that developing countries accounted for as much as 45% of global communications equipment imports in 2015. This share has been steadily increasing since the launch of smartphones in 2007.

The importance of manufacturing in economic development: has this changed? (pdf, UNIDO)

Manufacturing has traditionally played a key role in the economic growth of developing countries. It has been argued in recent years that the importance of manufacturing has diminished over the last 20-25 years, resulting in premature deindustrialization or non-industrialization in developing countries. This study explores whether the low levels of industrialization in developing countries are attributable to long-term changes in the development characteristics of manufacturing or to the manufacturing sector’s general global prospects. The study’s findings indicate that the decline in both manufacturing value added and manufacturing employment shares in many developing countries has not been caused by changes in the manufacturing sector’s development potential, but is primarily caused by the failures of manufacturing development in a large number of developing countries against the backdrop of rapid manufacturing development in a small number of countries, thus resulting in a concentration of manufacturing activities in developing countries. [The analysts: Nobuya Haraguchi, Charles Fang Chin Cheng, Eveline Smeets]

Today’s Quick Links:

DHL Express launches On Demand Delivery for the sub-Saharan Africa region

Committee of Directors General of National Statistics Offices and the Committee on Statistics: report

Barclays seals divorce agreement with African subsidiary

Enterprise Florida jetting off to South Africa

US and East African states ink trade deal

Morocco king signs 19 deals in Zambia

Israel, World Bank to increase joint work in Africa: water, cybersecurity, agriculture

Brazil: Agribusiness exports reach $5.87bn in January

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