Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection

Four events to diarise:

SA’s trade and industry minister Rob Davies: ‘Implications of changing international trade: the view from South Africa’ (8 March, Chatham House, London)

Africa and the WTO Trade Facilitation Agreement: the All-Party Parliamentary Group for Trade Out of Poverty, in collaboration with the UK Government’s Trade Policy Group, will host an invitation-only event (8 March, in London)

South Africa will host the Global Entrepreneurship Congress (13-16 March, Johannesburg)

SADC Extraordinary Summit (18 March, Swaziland): the Summit will deliberate on the state of peace and security in the region (Lesotho, DRC) and the implementation of the Revised Regional Indicative Strategic Plan.

An update from the WTO: South Africa’s Ambassador, Xavier Carrim, assumed office as Chair of the General Council of the WTO on 28 February. This is the first time a South African has been elected to this position and the fourth time this office has been held by an African.

ARSO forum begins in Falls (The Chronicle)

The second African Organisation for Standardisation (ARSO) forum began yesterday with a call on African governments to come up with strategies to support local industry and increase export production capacity. Opening the event, Industry and Commerce Minister Dr Mike Bimha said the continent’s international trade remains low at 20% when compared to 61% in EU countries. “It’s imperative that we adopt strategies that boost the productive capacity of our industries and build our capacity so as to have manufactured products to export as we continue to negotiate market access bilaterally, regionally and at multilateral level,” he said. Representatives from about 36 countries are attending the conference, which seeks to promote the ‘‘Made in Africa” concept. [Southern Africa Power Pool conference: update]

Mixed fortunes for African retail (African Business)

The revenues of the biggest retail companies in Africa and the Middle East grew by 19.1% in financial year 2015–16, with an average 5.8% net profit, according to Deloitte’s Global Powers of Retailing survey. The Deloitte report stated: “The rising middle class in Africa has contributed to the modernisation of the retailing sector, and many African economies are transitioning toward consumption-driven markets.” Only five retailers in sub-Saharan Africa make it into the world’s 250 biggest by retail revenue and all are South African.

Ethiopia: Fastest-growing African economy has banks lined up for entry (Bloomberg)

Over the past two years, Standard Bank Group Ltd., Africa’s biggest lender by assets, and KCB Group Ltd., Kenya’s largest lender, have joined the likes of Citigroup Inc., Commerzbank AG and Ecobank Transnational Inc. in setting up representative offices in sub-Saharan Africa’s second-most populous country. The lenders are hoping the government will eventually start granting licenses for fully fledged branches. They’re wagering that the country’s ambitions to join the WTO, coupled with increasing demand for capital to support the economy, will lead the government to open up an industry that’s been closed to investors since a Marxist junta nationalized banks four decades ago. “It has the potential to become one of the most exciting banking markets in the region,” said Robert Besseling, Johannesburg-based director at Exx Africa, which advises companies on business risks on the continent. “Government has hinted at liberalization and even privatization of state-protected sectors.”

Rwanda: Cross-border truckers upbeat over electronic cargo tracking system (New Times)

Rwandan cross-border truck drivers have expressed optimism that the soon-to-be launched electronic cargo tracking system will not only improve the safety of Rwanda-bound consignments from the east African coast but also avert possible conflicts between drivers and traders. TradeMark East Africa country director Patience Mutesi said national cargo tracking systems were a barrier to international and cross-border trade due to multiple arming, disarming and at times verification at all borders along the corridor; it involves a high cost of cross-border trade in terms of time and money; and is inconsistent with the regional integration agenda of trade facilitation and ease of doing business. [Related: Kenya and RECTS: Kenya began piloting the system with 1,500 gadgets so far. Uganda and Rwanda, which have both launched the system have the same number of devices although it requires at least 7,000 such gadgets to fully monitor cross-border business. There are also plans to roll out the system in South Sudan, Tanzania and ultimately to destinations outside the EAC bloc, including DRC in a bid to eliminate customs border checks and deal with cargo diversion that existed due to border changeover processes. [Tanzania: Ports get Sh20bn scanners to combat illicit drug trade]

What are development corridor strategies, and do they work? (IGC)

The Government of Liberia has also prioritised the creation of three new development corridors near population centres and existing markets (see Figure 2). Its goal in developing these corridors has been to maximise the economic multiplier effects that can be generated by infrastructure financed and supplied by mining concessionaires. But has this strategy actually worked? We recently completed a geospatial impact evaluation that rigorously estimates the impact of natural resource concessions in Liberia on local economic growth outcomes, in the years since the Johnson-Sirleaf administration assumed power. Here’s what we found: [The author: Bradley Parks]

SA-Nigeria trade dynamics: selected postings. Xenophobic attacks threaten Africa’s recovery: SA-Nigeria chamber warns (Business Day); Benedict Peters (CEO of Aiteo Group): Forget about being Africa’s biggest economy, we are better together (HuffPost); Linus Unah: ‘Who is South Africa to humiliate Nigeria?’; Peter Fabricius: ‘Xenophobia again jeopardises South Africa’s interests in Africa’ (ISS)

Zimbabwe: Capital flight and trade misinvoicing (Zeparu)

This paper estimates trade misinvoicing in Zimbabwe from major trading partners using the Morgenstern methodology. It uses trade data from 1980 to 2014 from the United Nations Commodity Trade Statistics Database. The results show that unrecorded capital outflows occur through trade with different countries including Italy, United States, Germany, and China, while unrecorded capital inflows into Zimbabwe are mainly from South Africa, Belgium, and Australia. Trade misinvoicing occurs mostly in exports of diamonds, gold, and nickel. Misinvoicing through imports is not rampant and occurs mostly through Germany, South Africa, and Zambia. The results show that capital flight increased during the period of macroeconomic and political instability. This indicates the need to ensure political and macroeconomic stability to reduce capital flight.

Home-grown technology firms help drive eGovernment expansion in East Africa (World Bank)

A vibrant and innovative software industry is developing in East Africa, with the help of the WBG and other donors. The cost-effective commercial technology solutions being developed for both the public and private sectors are helping the region’s economies move quickly into the digital world: Many African jurisdictions now offer online G2B services which are comparable to those in middle- and upper-income countries in other regions.

KRA insists clearing agents must be vetted before licences are renewed (New Times)

The Kenya Revenue Authority has dug its heels in on rules it introduced this year governing business licence applications for clearing agents. While the agents want the revenue agency to release their licences unconditionally, KRA has insisted they must undergo vetting by April 1. The process entails filing bio-data forms where the agents will disclose crucial information about their business operations and clients. This, KRA said, would curb the rampant corruption witnessed at the ports and help fight drug trafficking.

Nigeria: Import adjustment tax and rising cost of essential drugs (Nigeria Today)

The Pharmaceutical Society of Nigeria (PSN) has raised an alarm over rising cost of essential medicines in the country following the implementation of the 20 percent Import Adjustment Tax on imported drugs in the country and the high exchange rate of N500 to $1. Arising from these factors, the PSN explained, the prices of essential medicines, such as anti-malarial drugs and antibiotics have risen by over 150 percent in less than two years.

Auditors find flaws in EU donor aid to sub-Saharan Africa

Attempts by the EU to help sub-Saharan African nations increase their rate of tax collection are flawed by a string of weaknesses in implementation, an in-depth study by auditors has found. But the survey of 15 such projects across sub-Saharan Africa found a variety of deficiencies, both in implementation of the schemes and the initial conditions set on the recipients. Some 20% of EU development money is channelled through such schemes, with sub-Saharan Africa being the largest recipient. Between 2012 and 2016, some €1.7bn went to sub-Saharan Africa on these projects. [Court of Auditors: The use of budget support to improve domestic revenue mobilisation in sub-Saharan Africa]

Review of recent trends in decentralised cooperation: mapping and analysing financial flows, actors and mechanisms in EU countries (pdf, OECD)

The central objective of the project is to take stock of recent trends and evolutions in development co-operation provided by regional, state and local governments, also known as decentralised co-operation (D.C.). The work seeks in particular to understand how D.C. can help strengthen local efforts to achieve the global commitments taken by governments as part of the 2030 Agenda for Sustainable Development, COP 22 or the New Urban Agenda (Habitat III). The project will include data collection on flows extended by local and state governments, an assessment of recent trends and persistent governance gaps, 4-5 pilot case studies, and recommendations on effective D.C. policymaking.

Cecile Fruman: ‘Economic diversification: a priority for action, now more than ever’ (World Bank)

The challenge of economic diversification was discussed extensively during the recent T&C Learning Week, where Bank Group staff, academics, and public- and private-sector representatives shared their experiences pursuing diversification strategies. The discussions made clear that there is no magic recipe for diversification. But they identified a number of elements that provide the foundation for private-sector-driven diversification. These include:

USTR: 2017 Trade Policy Agenda and 2016 Annual Report (pdf)

The overarching purpose of our trade policy – the guiding principle behind all of our actions in this key area – will be to expand trade in a way that is freer and fairer for all Americans. Every action we take with respect to trade will be designed to increase our economic growth, promote job creation in the US, promote reciprocity with our trading partners, strengthen our manufacturing base and our ability to defend ourselves, and expand our agricultural and services industry exports. As a general matter, we believe that these goals can be best accomplished by focusing on bilateral negotiations rather than multilateral negotiations – and by renegotiating and revising trade agreements when our goals are not being met. Finally, we reject the notion that the US should, for putative geopolitical advantage, turn a blind eye to unfair trade practices that disadvantage American workers, farmers, ranchers, and businesses in global markets. In addition to these basic principles, we will focus on the following key objectives: [For AGOA pointers: Section 6 deals with Sub-Saharan Africa, Section 8 deals with United States Preference Programs]

The OECD-WTO Balanced trade in services database (OECD)

The first edition of the Balanced Trade in Services (BaTIS) dataset covers the 1995-2012 period, 191 countries and partners, and all main EBOPS2002 categories. The dataset is being made available for comment and review by WPTGS members and other interested parties and stakeholders prior to public release. This paper describes the compilation methodology used in constructing the dataset in detail, while also providing background to its broader context and future plans. [Towards a handbook on linking trade and business statistics (pdf, OECD)]

Today’s Quick Links:

Latest edition of the IMF’s Finance & Development magazine (pdf), latest WIDERAngle newsletter, GSMA Humanitarian Connectivity Charter: Annual Report 2016

King vows to make of Rabat-Abuja alliance a framework for consultation on all African issues

Thierry Vircoulon: ‘L’Afrique à l’heure du nouveau régionalisme sécuritaire’

Nigeria’s Senate lauds enhancement of powers of ECOWAS Parliament

7th ASEAN Competition Conference 2017: Managing change in a competitive ASEAN (8-9 March, Kuala Lumpur)


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