Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: picture-alliance

Vera Songwe, a Cameroonian economist and banking executive, is the new UNECA Executive Secretary. Ms Songwe has been working as the International Finance Corporation’s regional director for Africa covering West and Central Africa since 2015.

Event postings:

Tomorrow, in New York: the UN-AU Annual Conference

World Bank-IMF Spring Meetings week: a note on the AfDB’s participation. Profiled events: The challenge and logic of greater financing for Africa (19 April, CGD), State of the Africa Region (22 April, World Bank). Profiled commentary, by Shawn Donnan: How a Trump presidency poses big questions for IMF and World Bank (FT)

Review of the implementation of the commitments made towards Africa’s development: a OSAA/NEPAD Stakeholder consultation (20-21 April, Midrand). OSAA aims to further the link between the United Nations Monitoring Mechanism, the 2030 Agenda and the AU’s Agenda 2063 follow-up and review framework at the regional and global levels, particularly through more interaction and alignment with the High-level Political Forum on Sustainable Development and the Africa Regional Forum on Sustainable Development. The UNMM could also facilitate the collection, compilation and analysis of data. The third report, which will be submitted to the 73rd session of the General Assembly in October 2018, will focus on the following themes, and five cross-cutting issues: Inclusive and sustainable industrialization and regional integration; Health, water and sanitation; Climate change; Finance and partnerships; Cross-cutting issues. Profiled thematic focus: Inclusive and Sustainable Industrialization and Regional Integration (pdf). Proposed structure: (i) Key African initiatives on industrialisation; (ii) Key related initiatives on regional integration; (iii) Partner financial support and investment in industrialisation, (iv) Related policy wider partnership issues including trade and technology transfer; (v) Overall assessment of progress and key challenges, including related peace and security issues.

ONE World No Hunger – future of the rural world (27-28 April, Berlin). One of the conference’s key elements will be the “Berlin Charter”. This document can serve as important political impetus and as guidance for decision-makers from the worlds of politics, business and civil society, with a view to boosting their involvement in efforts to foster rural development and youth employment. The document will be drafted in the run-up to the conference by an international advisory committee that will consult widely with non-governmental groups. The Charter will then be discussed at the conference before being officially presented to Federal Minister Gerd Müller. [Download: draft of the Berlin Charter (as at 16 March)]

Profiled commentaries:

(i) Nancy Birdsall, Ngozi Okonjo-Iweala: A Big Bond for Africa (Project Syndicate). But there may be a solution that helps Africa recover its growth in a way that Western leaders and their constituents find acceptable. We call it the “Big Bond” – a strategy for leveraging foreign aid funds in international capital markets to generate financing for massive infrastructure investment. Specifically, donors would borrow against future aid flows in capital markets. That way, they could exploit current low interest rates at home, as they generate new resources. With 30-year US Treasury rates of about 3%, donors would have to securitize only about $5bn to raise $100bn. That money could come from the $35bn in annual official development assistance (ODA) to Africa (which totals about $50bn) that takes the form of pure grants.

(ii) Carlos Lopes, Aliko Dangote, Tony Elumelu: Powering Africa’s transformation (New Times). Policymakers should take a few key steps to help transform Africa’s energy sector and boost long-term economic growth. For starters, making it easier, safer, and more financially attractive for private investors to enter power markets would boost competition, thereby spurring innovation and lowering costs. Moreover, African countries should seek opportunities to share infrastructure and create cross-border power pools. nother important step is to invest in renewable energy. Africa has an exceptionally rich portfolio of clean-energy assets, including almost nine terawatts of solar capacity, more than 350 gigawatts of hydropower capacity, and more than 100 GW of wind-power potential. This is more than enough to meet the continent’s future demand.

(iii) Amadou Sy, Amy Copley: Closing the financing gap for African energy infrastructure - trends, challenges, and opportunities (Brookings). Yet, aggregate figures like these obscure understanding of which actors are financing energy infrastructure, how, and where across the continent. The following paper analyzes the trends, strengths, and weaknesses of various sources of energy infrastructure financing in Africa—including domestic public domestic investment, PPI, ODF, and Chinese financing. Furthermore, it contends that although lack of both capital and bankable projects poses a significant obstacle for expanding infrastructure financing in the continent, particularly for renewable energy projects, a solution involving a greater participation of development banks in the earlier stage of projects and leaving private funds to finance the less risky, latter stages of projects should be explored.

BREXIT and Mauritius: PM chairs Ministerial Committee to review recent developments (GoM)

The Joint Working Group submitted a report on the impact of BREXIT on our economy with particular focus on three strategic thrusts, namely support to vulnerable companies; addressing the potential threats with regard to trade relations with United Kingdom; and seizing the new opportunities that may emerge. With regard to emerging opportunities, Government will pursue its diversification strategy and, in particular, capitalise on the strengths in the financial sector such as: (i) Position Mauritius as an attractive choice for asset managers to house their activities, (ii) Develop synergies between Mauritian services providers and new European Access Centres such as Luxembourg and Malta to set up support units in Mauritius, (iii) Market Mauritius as an ‘Insourcing Centre’ for UK banking and insurance institutions, (iv) Attract High Net Worth Individuals to shift part of their wealth to be managed from Mauritius. [Simon Fraser: Bracing ourselves for Brexit(Chatham House)

Anne Kiruku: A common market? First get leaders with a common purpose (IPPMedia)

There have been complaints that EAC integration is state-owned and presidents-led. This fact cannot be far from the truth going by the foregoing couple of incidents. The anger and vitriol that was spewed by Kenyans on social media opposed to the Kenyan government’s plan to hire Tanzanian doctors and the violent eruption of chaos due to orders to repatriate Kenyans from Tanzania do not portray countries that are on a path to integration. The ignorance of common citizens on the agreements signed by their leaders should be blamed on regional leaders, who sit in boardrooms and sign protocols without consulting their countrymen and women. Neither do they make efforts to inform and educate their citizens on the agreements reached. Under the EAC Common Market Protocol that came into force in 2010 and which enables free movement of all factors of production, there is supposed to be free movement of persons, services, workers, goods, and capital. The right of establishment and residence in any other partner state is also enshrined in the protocol. It is a shame that instead of implementing the protocols, leaders are issuing orders against the agreements.

The ECOWAS Trade Liberalization Scheme: myth or reality? (Deloitte)

Deloitte and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture recently organised a workshop to evaluate the realities of the ETLS. In attendance at the workshop were representatives of the ECOWAS Commission, Federal Ministry of Foreign Affairs, the Nigeria Customs Service and members of the private sector. This workshop (pdf) sought to demystify and unpack the ETLS in all its ramifications so that intended beneficiaries may be able to make more effective application of the scheme for the purposes of their businesses and thereby improve bottom line performance.

Tanzania’s oil and natural gas industry: General Report on Performance and Specialized Audit (pdf, National Audit Office)

The report gives insights based on individual performance audit reports on the extent to which government entities manage the oil and natural gas sector and ensure that there is effectiveness in execution of its interventions and risk management in oil and natural gas operations for the public sector. Main audited entities were the Ministry of Energy and Minerals, Ministry of Education Science and Technology, Vice President’s Office, Tanzania Petroleum Development Corporation and National Environmental Management Council. In general, the audits recognized government’s efforts in developing and managing oil and gas sector in the country through the Ministry of Energy and Minerals which is the parent organ accountable for the success of the entire sector. However, there are areas for improvement which MEM as principal ministry, should take charge and lead other government organs in achieving the goals set. These weaknesses are mainly found in planning, execution, monitoring and evaluation and management of risks associated with this sector.

Related AfDB oil, energy sector procurement postings:

(i) Study on the harmonisation of petroleum policies, legal, regulatory and institutional framework in the EAC: consultancy services. The scope of the study includes: (i) Review existing petroleum upstream, midstream and downstream policies, laws, regulatory and institutional framework in Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda indicating what would need to be revised or freshly prepared in each of the countries for a harmonised set of petroleum legislation in the region, (ii) Identify within the existing petroleum policies, laws, regulations and institutional frameworks provisions that hinder the attraction of investments.

(ii) Study on value chain analysis of the oil sector and potential contribution to African national economies. The specific objectives of the study includes: (i) Evaluation of entry barriers to the different components of the value chain for both private firms and governments, (ii) Development of a tool to avail options and permit assessment of possible policy trade-offs, (iii) Rigorously analyze value chains for oil to determine the type, inputs and scale of economic benefits feasible. This study will be part of the Centre’s contribution to the Bank’s “enabling environment” work streams for the industrialize Africa strategy.

Malawi: Is smuggling of maize necessarily bad? (IFPRI)

In recent days, Malawi Defence Force troops have been deployed to the northern border to prevent the smuggling of maize into Tanzania and Zambia. While this action seems a natural response during a year of national food shortage, four factors should give us pause for thought. [The author, Dr Bob Baulch, directs the Malawi Country Strategy Support Programme] [Related: Council urges EAC nations to lift ban on grain exportation, Robert Shaw: Worrying scenario as bigger national food crunch looms]

Call to harmonise seed regulatory framework in COMESA region (New Times)

According to Argent Chuula, the chief executive officer of the Alliance for Commodity Trade in Eastern and Southern Africa at COMESA, lack of quality seed contributes significantly to food insecurity and nutrition deficiency in the region as only a handful of countries are food secure. Access to quality seed and animal breeds by smallholder farmers in the COMESA region is at only 20%, she added, saying most of the seed is imported from outside the COMESA region. Dr Charles Mukama, the Uganda COMSHIP Focal Point, said it is imperative for member states to harmonize rules surrounding this particular trade to help improve the livelihood of the small-scale farmers and production of more food at regional level.

Scaling-up the Purchase for Progress (P4P) Model of pro-smallholder market development in Africa: the vital role and impact of the public sector (pdf, WFP/AERC)

Extract from declaration: Recognizing that because agriculture will continue to underpin a majority of African livelihoods in the coming decades, inclusive growth in Africa cannot be achieved without a fundamental transformation of African agriculture – a transformation that must itself be inclusive; Further recognizing that because smallholder farmers will continue to dominate African agriculture long into the future, a central challenge facing policy makers in Africa today is how to promote inclusive and self-sustaining processes of growth fueled by technological advances in smallholder agricultural production and trade; Comprehending the large body of evidence generated by researchers in Africa and beyond showing that deeper market participation and engagement by smallholders are vital to agricultural transformation, but that such participation and engagement are constrained by a range of structural factors inherent to smallholder systems – e.g., the wide spatial dispersion of farms, lack of on-farm storage capacity, high risk, and thin and unstable input and output markets;

New UN guidelines to make international trade in plants and seeds safer (FAO)

Adopted last week by the Commission on Phytosanitary Measures, the governing body of the International Plant Protection Convention, the new standard (pdf) will help harmonize the ways countries deal with the complexities of the international seed trade. The efforts are also expected to facilitate trade in seeds – valued at about $12bn annually – while ensuring that such shipments safeguard food supplies for a growing global population. [Summary of outcomes: twelfth Session of the Commission of Phytosanitary Measures]

B20’s High-Level Digitalization statement

On 6-7 April, the G20 Digital Ministers met for the first time ever. On this occasion, the B20 issued the following statement co-signed by more than 50 leading business representatives. At the end of the two-day meeting, the G20 Digital Ministers presented a joint plan as an international framework for action. It includes a programme with various targets to be achieved by the G20 in the coming years. [Various downloads available]

Geneva meeting on used cars exporting pollution to developing countries (Devex)

Transport leaders from around the world have met for the first time to discuss the flood of non-fuel efficient and unsafe second-hand vehicles into developing countries, and taken the first steps toward agreeing voluntary regulations and standards on the often secretive trade. At a side meeting in Geneva - organized by the Inland Transport Committee, which is part of the the United Nations Economic Commission for Europe - delegates from 90 nations, including approximately 30 developing countries, gathered to share information. The Geneva meeting marked the first of its kind, according to Rob de Jong, head of transport at UNEP. There are currently no regional or global agreements that rationalize and govern the flow of second-hand vehicles.

Today’s Quick Links:

Towards a COMESA-China Framework Agreement: update

Foreign investment continues in Ethiopia’s clothing sector

Botswana: Morupule B expansion stalled as Japanese contractor demands P8bn surety

Kenya: Export promotion agency appoints new chief executive

Tanzania: Influx of regulatory bodies burdens industrialisation

India: Is our obsession with the World Bank’s ease of doing business rankings justified?

Dani Rodrik: Too late to compensate free trade’s losers?

BRICS Plus’ can be new model of integration

World Bank: Perception of political risk hurting FDI flow in Africa


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