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Building capacity to help Africa trade better

tralac’s Daily News Selection

News

tralac’s Daily News Selection

tralac’s Daily News Selection

This week’s tralac newsletter is posted. The lead article is written by Taku Fundira: Implementing the SADC EPA – challenges and impact

The SWAC/OECD weekly West Africa Brief is also posted (pdf)

Ahead of the First IORA Leaders’ Summit (5-7 March, Jakarta): selected postings

Rajiv Bhatia: ‘Blue Diplomacy’ to boost Blue Economy (Gateway House): Indonesia’s historic decision to convene the first ever summit of the Indian Ocean Rim Association, in March 2017, will heighten awareness about the Blue Economy, a subject that has generated some buzz, even if it has been muted so far. The event makes it imperative for India and other like-minded states to focus more purposefully on giving substance to the Blue Economy, a phenomenon of the current decade. It’s for years that a handful of diplomats and scholars have been pointing out the value of holding this summit to reinvigorate the 20-year-old IORA, but it took a strongly motivated leader, President Joko Widodo, with his conviction about the vital importance of oceans, to host it. A key endeavour at the Jakarta Summit will thus be to develop for the member states a roadmap for cooperation relating to the Blue Economy. [Companion analysis by Rajiv Bhatia: sharing commonalities]

SA Presidency statement on IORA Summit: South Africa serves as the current Vice-Chair of IORA, and is preparing to take over the Chair from Indonesia during the latter part of 2017. South Africa views the IORA as the pre-eminent organisation linking Africa, the Middle East, Asia, and Australasia via the Indian Ocean.

Industry upbeat to expand business with IORA, says FICCI survey (Indian Express): As a run-up to the Summit, FICCI, in its capacity as the Business Secretariat of IORA in India, conducted a perception survey to understand the current sentiment within the Indian industry on the economic potential of India’s engagement with the Indian Ocean region. The companies surveyed share deep trade and investment linkages with the IOR region. Responses were received from respondents across India and from participants of regional stakeholder consultations organized by FICCI in three metropolitan coastal cities including Kolkata, Mumbai and Chennai. [Download FICCI’s IORA survey: Industry perception survey: doing business with Indian Ocean neighbours (pdf)]

Gavin van der Nest: ‘The Blue Economy: opportunities for Africa’s sustainable development agenda’ (tralac): The Blue Economy has untapped potential and could possibly be at the forefront of African regional integration particularly due to the fact of the blessed abundance of oceans, seas and freshwater systems in the African continent. This Trade Brief introduces the Blue Economy, as well as discusses the pitfalls, benefits, and opportunities available within the Blue Economy. It will also discuss progress made on the African continent and will offer guidance and ideas for future policy direction.

Diarise: Third IORA Blue Economy Core Group: Environmental sustainability and the Blue Economy (10-11 April)

Commonwealth Trade Ministers meeting (9-10 March, London)

The Ministers Meeting will discuss areas where the Commonwealth can work together to strengthen trade and investment links between member countries and develop a policy agenda ahead of the 2018 Commonwealth Heads of Government Meeting. At present there is no inter-governmental coordination to help unlock the trade and investment potential of the Commonwealth – something that the meeting of Ministers seeks to address.

Overview of recent economic and social developments in Africa (AU)

Private consumption and investment as key drivers of growth: The positive economic growth performance in Africa was largely underpinned by the positive contributions of private and government consumption, and also by investment. Government consumption declined slightly, by 0.2 percentage points from 0.6% in 2015 to 0.4% in 2016 (figure 2). Similarly, growth of gross capital formation declined by about 0.5 percentage points, from 1 to 0.5% (mostly because of lower oil prices, slowing demand across the world especially in China, persistent pressures on currencies and import restrictions). The net contribution by exports to GDP growth declined from 0.6% in 2015 to -0.3% in 2016, because of lower export revenues as a result of low commodity prices and subdued external demand. The contribution by private consumption also declined, from 2.7% in 2015 to 1.0% in 2016, because of lower agricultural production resulting from adverse weather conditions, increase in inflation and a rise in interest rates, such as those experienced in Nigeria and South Africa.

Continued decline in African trade performance: Despite achieving a 17.1% increase in 2011, since then the growth rate of exports from Africa has continuously slowed, declining by 29.6% in 2015 to the lowest rate of all the regions (figure 7). This has come about after the vigorous recovery since 2010 of exports from Africa, which rebounded to their pre-2008 crisis levels mainly thanks, among other factors, to increased agricultural output in most of the countries in East and Southern Africa, increased investment in the mining sector in countries such as Mozambique, the Niger, Sierra Leone and Zambia, and increased demand by China for primary commodities, in particular base metals. Exports by Africa to the world remain poorly diversified and largely dominated by primary commodities, specifically crude oil, gas and petroleum. Indeed, over the period 2010-2015, 55% of African exports to external partners consisted of fuels, with manufactured goods accounting for only 18%. Manufactured goods continue to dominate African imports, however, mainly comprising heavy machinery, automobiles and chemicals. They also continue to constitute the largest share of intra-African trade, averaging some 43% of such trade between 2010 and 2015, although the intra-African trade share is only 16%.

Regional dimensions of recent weakness in investment drivers, investment needs and policy responses (World Bank)

Section VII. Sub-Saharan Africa: Sub-Saharan Africa accounted for a modest 2% of global investment, on average, during 2010-15. However, it suffered the sharpest investment growth slowdown among EMDE regions despite large-scale public investment efforts until recently. Investment growth slowed from nearly 8% in 2010 to 0.3% in 2015, on average - well below the long-term (1990-2008) average of about 6%. The investment growth slowdown in Sub-Saharan Africa is concentrated in South Africa and oil exporters. It reflected domestic political tensions, a sharp terms of trade deterioration and, in some economies, domestic policy tightening. Investment needs remain sizable in agriculture, infrastructure, and health and education. Section VII.1. How has investment in the SSA region evolved? [Companion paper: Weakness in investment growth : causes, implications and policy responses]

Understanding intra-regional transport: Competition in road transportation between Malawi, Mozambique, South Africa, Zambia, and Zimbabwe (UNU-WIDER)

In addition, there has in the past five years been a clear shift towards the transportation of goods for Malawi, Zambia, and Zimbabwe via Beira, which is having a direct impact on loads carried via South Africa - though, while the majority of exports from these countries may be directed via ports in Mozambique, certain goods such as consumer products are still imported from South Africa. The net effect is that the problem of a lack of return loads will likely be enhanced over time. We summarize the major findings and insights below: [The analysts: Thando Vilakazi, Anthea Paelo]

Multimedia: A Two-way Street. This UNU-WIDER mini-documentary explains why supermarkets in southern Africa often stock imported goods from another continent – even when the goods are made cheaply in the region.

Abidjan-Dakar Highway construction in sight (Daily Observer)

Phase II of the ECOWAS experts meeting to construct a six-lane road to connect seven coastal countries in West Africa will end today in Monrovia. The meeting, which began 1 March, expects experts to give an update about implementation status of the highway. The experts are also expected to present a draft architecture design of the road outlook and adopt a final report, which they will take to a ministerial meeting at a later date. The highway referred to as “Dakar-Abidjan Road Corridor” is estimated at $13bn.

Vale Mozambique ends 2016 with a loss of $105m (MacauHub)

Coal transported along the Sena and Nacala lines totalled 8.8 million tonnes in 2016, more than double the 4.1 million tonnes carried in 2015 and the coal shipped at ports totalled 8.7 million tonns, also more than double the 3.7 million tonnes recorded in 2015.

South Africa: Significance of SONA for the dti Mandate (pdf, dti)

Presentation by Trade and Industry Minister, Rob Davies: Invest SA will be formally launched on 17 March 2017. It will be involved in active promotion and improved facilitation of investments. Cabinet identified pipeline of approximately 40 projects that are capable of being brought to fruition before the end of this term of government. [Impact of the Foreign Service Bill: presentation by Trade and Investment South Africa to the Portfolio Committee (pdf)]

Rwanda: Local producers urged to promote Made-in-Rwanda at EAC summit (New Times)

The 2nd edition of the summit will be held in Kigali during the first week of May 2017 under the theme “Harnessing the Manufacturing Potential for Sustainable Economic Growth. The trade and exhibition summit offers a platform where investors, enterprises, researchers and academia can collectively showcase new products and services as well as latest innovations in manufacturing, particularly those with relevance to small and medium enterprises. It is expected to bring together more than 500 top industrialists, policy makers and experts to discuss strategies to expedite regional industrialisation. The high-level conference is co-hosted by the Rwanda Association of Manufacturers and the Ministry of Trade, Industry and EAC Affairs. It is also supported by all national Manufacturers Associations from the EAC partner states.

Tanzania: Mineral sand exports banned (Daily News)

President John Magufuli yesterday banned investors from exporting mineral sands, directing the Energy and Mineral Minister, Prof Sospeter Muhongo, to fully enforce the sanction. Dr Magufuli earlier outlawed the export of mineral sands in July last year during his tour of Kahama District. But, it seems, the order was not fully executed, prompting the head of state to reissue the directive afresh. “I believe this event is beamed live and the minister (of energy and minerals) is following it closely...no more exports of sand from the country is allowed because these people have stolen from us for many years,’’ the President said here on his first day of a working tour of three regions -- Coast, Lindi and Mtwara -- that kicked off at Mkuranga-based Goodwill Tanzania Ceramic Company Limited.

Preventing conflict in Africa: March UNSC work programme (UN)

The Security Council would organize its work in March around the theme “Preventing conflict in Africa”, Matthew Rycroft (UK), its President for March, said. Outlining the Council’s priorities, he said it would first dispatch a mission to the Lake Chad Basin area, where members would visit Cameroon, Chad, Niger and Nigeria from 2-7 March. The objective was to examine the threat posed by Boko Haram and the humanitarian crisis in the subregion, he added. On 23 March, the UK’s Secretary of State for Foreign and Commonwealth Affairs would preside over a meeting on South Sudan.

Commission on State Fragility, Growth and Development (IGC)

The commission is chaired by David Cameron together with Donald Kaberuka and Adnan Khan (IGC/LSE). Tim Besley (LSE) and Paul Collier (Oxford) serve as its Academic Directors. It will run from March 2017 to June 2018. It will draw on evidence given in public sessions by policymakers, academics, business leaders, and other practitioners with expertise in fragile and conflict situations. Running throughout 2017, the evidence sessions will cover the following five key dimensions of fragility: (i) Building legitimate government, (ii) Generating effective state capacity, (iii) Promoting private sector development, (iv) Establishing security and reducing conflict, (v) Building resilience to shocks. The Commission is sponsored and fully funded by the LSE and Blavatnik School of Government, Oxford. [Commissioner profiles]

Today’s Quick Links:

Standard Bank’s African operations contributes 30% of income

Chinese construction giant picks Nairobi for Africa offices

Tanzania to send 160-man team to Berlin international travel trade show

IGAD Centre validates regional strategy for preventing and countering violent extremism

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