tralac’s Daily News Selection
Yesterday in Addis: Dlamini-Zuma hands over AU Commission chair
Twelve points for the new African Union Commission Chairperson (International Crisis Group)
Mr Faki arrives at a time of upheaval for the AU. At January’s summit, heads of state agreed to proposals from Rwanda’s President Paul Kagame that the organisation should focus only on a limited number of key priorities with continental scope, such as political affairs, peace and security and continental integration, and that institutional structures should be redesigned to reflect this. He will have to carefully manage this radical reform, as well as Morocco’s recent re-admission, to avoid aggravating existing tensions and divisions and maintain morale in a beleaguered secretariat. The geopolitical context for multilateral diplomacy is also changing rapidly.
Dr Richard Sezibera: Africa must trade itself out of poverty (The EastAfrican)
Africa must trade itself out of poverty. That is why it is critical to implement the Market Integration Pillar of the Tripartite Free Trade Area. Unless and until this is done, a continental free trade area will remain a mirage. Important, but not insurmountable challenges to implementation remain. Tariff offers must be concluded, rules of origin agreed, and business persons must be allowed to move freely. It is unacceptable that some countries and regions would like to offer their African partners less than they have offered the rest of the world, or simply those tariff lines that are currently zero rated. Rules of origin should not serve protectionist interests that frustrate intra-African trade. They should simply provide a framework to avoid to trade deflection. The focus should be on promoting cross national value chains that provide a basis for shared industrialisation. The temptation to adopt SADC-type rules of origin, for example, should be resisted. These rules are protectionist, and have failed to advance the development of regional value chains.
Efosa Ojomo: For African countries, innovation must trump our focus on trade (Quartz Africa)
Considering Africa’s lackluster performance, it is no coincidence that many African countries and global development institutions are now prioritizing a strategy of trade over aid. But what if focusing on trade - such as partnerships with Chinese and American governments and companies - is the wrong way to look at the problem? What if instead, African countries focused on innovation? The opportunities for growth and prosperity would be much brighter. [The author is attached to the Clayton Christensen Institute for Disruptive Innovation]
Southern Africa has the potential to mobilise more than $1.2bn from alternative and innovative sources as part of efforts to reduce the reliance on donor support. According to a series of studies commissioned by the SADC Secretariat, the Southern African Development Community could access a huge pool of resources available in the region if it adopts some or all of the six options on alternative and innovative sources of funding being proposed. The six options for innovative sources of financing regional integration in SADC are the introduction of an export and import tax; a tourism levy; a financial transaction tax; a lottery system; philanthropy; and regional events.
Kenya: Kinyua steps into Amina, Adan fight for control of trade docket (Business Daily)
President Uhuru Kenyatta’s chief of staff, Joseph Kinyua, has stepped in to try to resolve a simmering row between Cabinet secretaries Amina Mohamed and Adan Mohamed over control of the international trade docket. Mr Kinyua has written to the Foreign Affairs ministry rescinding an earlier transfer of functions related to economic cooperation and commercial diplomacy to the Ministry of Trade and Industrialisation. The State House chief of staff had in May 2016, through an executive order, moved international trade to the Industrialisation and Trade ministry, causing friction between the two ministers.
Needless charges and regulations as well as closed skies are bottlenecks to cross-border business in East Africa, a lobby has said. The East African Business Council now wants the regional parliament to fast-track the removal of these barriers to boost trade. The council executive director Lilian Awinja said the slow pace of opening up the borders exposes local traders and professionals to cutthroat competition from importers and consultants servicing individual markets directly.
WCO Global Transit Conference: update
Today’s international trade landscape is characterized by high trade costs related to transportation and administrative requirements, constituting one of the challenges to the accelerated economic growth and development of developing countries. The highest trade costs are still in Africa, accounting for an ad valorem tariff equivalent of over 260, which means that for each dollar it costs to manufacture a product, another US$ 2.60 will be added in the form of trade costs. These trade costs relate to transportation costs, tariff and non-tariff measures, Customs fees and charges, information costs, and the costs of possible delays. Improvement of transit potential and the elimination of unnecessary and adverse burdens from transit operations, will contribute to increased trade volume, better interconnectedness of global markets, and integration of peripheral landlocked economies into global supply chains. The WCO Global Transit Conference will be held 10-11 July at WCO Headquarters in Brussels where the new WCO tool, Transit Guidelines, will be presented to Customs administrations, governments, international organizations and the private sector. [Draft agenda, pdf]
The Minister of Transport and Communications, Kitso Mokaila has made known plans to privatise Botswana Railways, a move he says will ease the financial burden of running the parastatal from government coffers. “It is important to privatise these parastatals and give investors an opportunity to come up with strategies that would make them self-sustainable thus creating jobs in return. Government needs to privatise to ensure that the economy grows,” he said. Although no details were availed on the intended privatisation of BR, it is expected that an unbundling exercise would be carried out first to ring-fence the parastatal’s key national strategic assets as was done with BoFiNet. Among some of BR’s key assets include land and subsidiaries such as BR Properties and Sea Rail Botswana.
Ugandan president Yoweri Museveni will this week meet officials from the country’s works and finance ministries to discuss the possibility of changing the country’s envisaged standard gauge railway route from Kenya to Tanzania. The officials are expected to table before the Ugandan leader a comparative cost analysis of Uganda’s SGR project in relation to Kenya and Tanzania’s costs. They will also brief him on the progress of various infrastructure projects, particularly upgrading the Lake Victoria ports of Bukasa, Port Bell and Jinja that are meant to connect Uganda to the southern corridor via Musoma to Tanga, and the central corridor via Mwanza/Bukoba to Dar es Salaam.
OSBP Sourcebook: Govts challenged to enhance intra-Africa trade, ease travel (New Times)
Efforts aimed at deepening trade among African countries have been boosted by the launch of a new trade facilitation tool. Launched yesterday, the One-Stop Border Post Sourcebook is tipped to help governments improve cross-border and intra-regional trade across Africa and enhance the continent’s competitiveness. Dr Ibrahim Assane Mayaki, the New Partnership for Africa’s Development chief executive officer, said the trade facilitation tool seeks to promote a co-ordinated and integrated approach towards easing trade, the movement of people, and consolidating security. Mayaki was speaking at a regional domestication workshop for the OSBP sourcebook yesterday. The workshop, which started yesterday, ends on March 16.
Rwanda/DRC informal trade: Rubavu cross-border traders decry unsolved challenges (New Times)
Rwanda signed a trade facilitation agreement with the DR Congo over a year ago that sought to improve trade between the two countries. The deal, signed by trade ministries of both countries was also geared at supporting people involved in cross-border trade around border areas in Rubavu District. Despite this deal, there are still many challenges faced by cross-border traders and customs officials. However, William Musoni, the deputy commissioner for custom services at Rwanda Revenue Authority, said some of the traders were abusing the trade facilitation agreement and engaging in smuggling. Trade data: Informal trade between Rwanda and the DRC took a lion’s share of informal cross-border exports last year at 74.7% of the total informal cross-border exports compared to that with other neighbouring countries Tanzania (6.24%), Uganda (19.1%), and Burundi (0.02%). Total informal cross-border exports were recorded at $121.93m over the year, up from $100.45m in 2015. However, informal cross-border imports rose 41.2% to $30.52m, from $21.62 million the previous year. The DR Congo represented 9% of the total informal imports.
Tanzania: Monthly Economic Review, February 2017 (pdf, BoT)
During the year ending January 2017, exports of goods and services increased by 5.1% from the corresponding period in 2016 to $9,342.1 million. The improvement occurred in exports of gold, traditional crops and travel receipts (Chart 4.1). Import of goods and services amounted to U$10,495.8 million in the year ending January 2017, being 15.3% lower than the import bill in the corresponding period in 2016. All the categories of goods import declined, except for industrial raw materials (Table 4.2 and Chart 4.5). A significant decline was marked in capital goods, oil, fertilizers, and food and food stuffs.
BRICS Contact Group on Economic and Trade Issues: Investment facilitation, e-commerce to top BRICS meet agenda (The Hindu)
BRICS nations will soon consider a proposal to frame ‘guiding principles’ for investment policymaking to boost investment flows into Brazil, Russia, India, China and South Africa as well as take steps to promote e-commerce among the five leading emerging economies. In addition, the BRICS Contact Group on Economic and Trade Issues (CGETI) meeting – slated for early next week in Beijing – will also discuss measures for closer cooperation among the BRICS countries for developing their respective national single window for trade facilitation, official sources told The Hindu. China, the current BRICS chair, wants to push ‘investment facilitation’ and ‘e-commerce’–related issues, the sources said. Beijing’s proposal for ‘Guiding Principles for BRICS Investment Policymaking’ is similar to ‘Guiding Principles’ agreed by the G20 Trade Ministers at Shanghai in July 2016 under the Chinese G20 Presidency, they said.
G20’s Compact with Africa: Germany, the G20, and Inclusive Globalization (Project Syndicate)
For these reasons, the G20 during the German presidency is working to intensify its partnership with Africa. A central pillar of this effort is the “Compact with Africa,” which provides a framework for supporting private investment, including in infrastructure. We propose that, with the G20’s political backing, African governments, international organizations, and bilateral partners prepare comprehensive, country-specific investment compacts to encourage private-sector investment. Each country is to implement a bespoke package of measures to decrease its investment risks. Essentially, the Compact with Africa is a contribution to implementing the African Union’s Agenda 2063 blueprint for economic development. That AU agenda provides guidance for improving macroeconomic, business, and financial frameworks across the continent. While the Compact with Africa is open to all African countries, five have already committed to pioneering this new approach: the finance ministers of Côte d’Ivoire, Morocco, Rwanda, Senegal, and Tunisia want to work on compacts and have expressed this in writing. I have invited them to attend the G20 Finance Ministers and Central Bank Governors meeting on March 17-18 in Baden-Baden. [The author, Wolfgang Schäuble, has been Germany’s Federal Minister of Finance since 2009]
WTO’s Committee on Anti-Dumping Practices: South Africa’s semi-annual report (1 July-31 December 2016) under Article 16.4
Featured tweet, EAC Sec General @LMfumukeko: Just arrived for a 3 day official visit in South Sudan. Accelerating adoption of EAC policies and programmes to feature in talks.
Featured multimedia: Breaking down Ethiopia’s fast-growing economy - an interview with Arkebe Oqubay, an adviser to Ethiopia’s Prime Minister
Baseline survey of production capacities of edible oil manufacturers in EAC: request for proposals
South Africa: Rand 20th most traded currency in the world
AERC call for proposals: Growth in fragile and post-conflict states in Africa – country case studies
Mauritius: Opening of one-day workshop on Ocean Economy
The G20 Consumer Summit is underway on the theme ‘Building a digital world consumers can trust’
Can Brazil benefit from President Trump’s trade policy? Wilson Center report
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