tralac’s Daily News Selection
Nigeria: FG inaugurates Continental Free Trade Area negotiations committee (ThisDay)
The membership of the committee is drawn from the organised private sectors, ministries departments and agencies, the Nigerian Economic Summit Group, Nigeria Customs Service, CBN and the civil society. It was launched at the Nigerian Export Promotion Council office Thursday by Minister of Industry, Trade and Investment, Dr Okechukwu Enelamah. It is to advise government as the national multi-stakeholder technical platform on the CFTA negotiations on goods, services, investment, competition and intellectual property. It will also monitor the negotiations and undertake analysis to ensure that the negotiations and emerging results approximate the goals for the negotiations established by government. The committee is to also identify the opportunities and challenges facing the country in trade with other African countries, both intra and Inter-Regional Economic Communities and participate in the negotiations, as appropriate. [Nigeria needs to modernise economy through African trade integration – Enelamah]
The Ministry of Foreign Affairs, Regional Integration and International Trade had a working session yesterday with a high-level delegation from the Chinese government in a view to engage China in the Mauritius Africa Strategy, so as to explore new avenues of cooperation. The Chinese government delegation was headed by Mr Xu Jinghu, Special Representative of the Chinese Government on African Affairs. China can play a crucial role in the Mauritian strategy of setting up Special Economic Zones in targeted countries such as Ghana, Senegal and Madagascar. Chinese investors will find in the package of instruments that Mauritius proposes such as government-to-government agreements, as a very attractive possibility to mobilise investments in these new economic poles. Chinese investors are encouraged to use the Mauritius financial centre for their African operations.
First renminbi-denominated bond well received in Africa (China Daily)
Bank of China’s Johannesburg branch completes issuance of the first renminbi-denominated bond in Africa, marking another milestone in yuan’s internationalization. The three-year bond received subscription of 2.13 times, which helped tighten the yield to 4.88%. The 1.5 billion yuan raised will be used to bankroll the Belt and Road Initiative projects, according to a Monday report carried by Economic Daily.
How multinationals can grow in the Middle East and Africa (Harvard Business Review)
In doing research on multinational operations in the Middle East and Africa, we’ve learned that companies are well aware of how President Trump’s foreign and trade policies could affect their businesses there. However, the region has long been volatile and unpredictable (from coups and sharp changes in government policies, to currency shortages, to terrorism and large-scale population displacements), so operating under uncertainty is not new. Many companies are assessing their exposure to specific policy decisions (e.g., if the U.S. unilaterally pulls out of the Iran nuclear deal), building contingency plans, and diversifying their portfolio of markets. For instance, the relative scarcity of executive policy statements about Sub-Saharan Africa (compared with, say, Mexico or China) suggests that Sub-Saharan African markets may be able to pick up the slack should new policies cause a drop in demand in the Middle East and other areas. The region remains attractive. Our research forecasts that it will offer the second-fastest economic growth after the emerging Asia-Pacific in 2017. [The author, Martina Bozadzhieva, is MD for Europe, Middle East & Africa Research at Frontier Strategy Group]
Nigeria, US trade hits $1.36b in two months (The Guardian)
Nigeria’s trade with the United States rose by 70.44% from $799.93m in January and to $1.36bn in February, according to the latest US Census Bureau data. Data obtained from the Fact Sheet on Nigeria–US Relations, showed that petroleum products dominated the US import from Nigeria during the period in review. For instance, US crude oil import from Nigeria stood at $936.65m while gasoline import was $83.43m. According to the data, through February, 22 Customs districts posted trade surpluses with Nigeria while 13 had deficits. [US Census Bureau: US trade in goods, by country]
Kenya: AGOA doubts cut US exports 12% (Business Daily)
The 2017 Economic Survey shows apparel volumes exported declined to 74.4 million pieces in 2016 even as earnings increased to Sh35.2bn on the back of weak shilling. Under AGOA, the US has become Kenya’s largest apparel export destination. Textiles and apparel account for about 80% of Kenya’s total exports to the US under the pact. The Economic Survey shows direct employment generated by Agoa increased by 2.5% to 42,645 people in 2016. [Kenya Economic Survey 2017: launch speeches are now available]
East Africa: Double taxation pact put on ice as businesses cry foul (The EastAfrican)
East African Community member states are wavering on a plan to implement an agreement on double taxation avoidance, over fears that the deal could provide a loophole for tax evasion by companies. The states are now focusing on harmonisation of legislation on domestic taxes such as income tax, excise duty and value added tax to make the bloc a single, friendly investment destination.
President Muhamadu Buhari has vowed to ensure that Nigeria achieves its goal of attaining the Category C seat in the Council of the International Maritime Organisation. To this end, he stated that Nigeria would promote and support effective African participation in the council of the IMO, stressing however that this can only yield the desired results when African states speak with one voice at the global level for the enduring interest of Africa. He declared this yesterday while delivering his speech at the ongoing African Maritime Administrations (AAMA) annual conference holding in Abuja. [Related: Buhari: Africa’s blue economy crucial to food security, forex earning, Dogara: West Africa loses $1.3bn annually to illegal maritime operations, Dakuku Peterside: Nigeria engages maritime Africa]
The Director General of Tanzania Ports Authority, Eng. Deusdedit Kakoko, maintained yesterday that the volume of cargo has continued to record an upward trend during the last quarter of last year and first quarter of this year. “We recorded an impressive surge in traffic of cargo between October and December, last year and this was maintained during January to March, this year,” he explained.
South Africa: Cyril Ramaphosa’s address at the Black Business Council Dinner (GCIS)
Radical economic transformation requires that we create a new generation of black industrialists. Government, through its development finance institutions and other agencies, is putting significant resources into this effort. To date, the Department of Trade and Industry has approved over R1bn in grant finance to 36 projects undertaken by black-owned and managed businesses. Together, these projects have a combined project value of over R3bn. The private sector needs to support this programme, whether through provision of additional funding, the transfer of skills and technology, or providing access to supply chains. This programme, once it reaches scale, will both contribute to the reindustrialisation of our economy and help redefine our approach to black economic empowerment.
Zimbabwe: Seven Bills to promote ease of doing business (The Herald)
Government has made strides towards creating a conducive business environment to transform the economy and attract Foreign Direct Investment after tabling seven Bills to do with the ease of doing business during the first quarter of this year. This is in keeping with Government’s pronouncement last year that 13 laws will be promulgated in the first quarter of the year to create a conducive investment climate by addressing concerns previously raised by foreign investors. Some of the Bills include:
The 2017 Foreign Direct Investment Confidence Index (A.T Kearney)
Emerging markets account for 28% of the positions this year, rebounding from a historical low of 20% of the Index last year. This could signal a nascent trend of global investors increasing their risk tolerance and eyeing emerging markets for growth opportunities. The top two emerging market performers on the Index are China and India—both in the top 10 this year—and these are also the two emerging markets about which investors are most optimistic on economic prospects compared with a year ago. Investors are more mixed on the economic outlooks of other emerging markets, which could mean that weaker economies are seen as either opportunities in terms of the price of making investments now or long-term rather than short-term growth opportunities, or both. South Africa: Coming in at 25th, South Africa makes a comeback to the Index for the first time since 2014. This would seem to suggest that recent FDI trends may continue: FDI inflows rose 38%to an estimated $2.4bn last year after falling to its lowest level in 10 years the previous year. According to UNCTAD, the 2015 slump was a result of weak economic growth, low commodity prices, and high electricity costs coupled with divestments from non-core assets in the first quarter of 2016.
Ejeviome Eloho Otobo: Africa’s opportunity and reasons for a reset (The Guardian)
Africa now has an opportunity and several reasons to reset its priorities. The opportunity for a reset is offered by the election or appointment of new heads of the three major regional institutions. The President of AfDB assumed office in November 2015; The Chairperson of AU in March 2017; and the Executive Secretary of the Economic Commission for Africa was appointed in April, 2017. There are several compelling reasons for a reset and re-alignment of priorities. The AUC bears a special responsibility for achieving these strategic objectives but also has to make the most adjustments because it has taken on too many responsibilities than it can possibly manage or finance. African countries cannot depend on the generosity and goodwill of partners forever to deliver on their aspirations. [The author is a non-resident senior expert in peacebuilding and global economic policy at the Global Governance Institute in Brussels]
G-24: Statement on international monetary affairs and development (World Bank)
We reiterate our support for a stronger WBG to provide continued assistance to developing countries of all income levels, as laid out in its Forward Look. In the meantime, we are concerned with the IBRD’s and IFC’s strained financial capacity and the consequent expected decrease in annual lending over the coming years. This will adversely affect the WBG’s ability to engage its member countries and to catalyze private financing, which are essential to meet the ambition of its Forward Look. To strengthen the financial capacity of the IBRD and IFC and build on their ability to leverage their shareholders’ capital, we call for exploring all options, including capital increases, further balance sheet optimization, and review of financial transfers from IBRD and IFC to IDA. Furthermore, we recognize the importance of having a balanced portfolio, which contributes to the financial sustainability of IBRD. We welcome the shift in the WBG’s development financing approach towards greater strategic use of official resources to further catalyze public and private investments and mobilize private capital. [IMFC Statement by Minister Malusi Gigaba (pdf), issued on behalf of Angola, Botswana...)
India: Trading away our digital rights (The Hindu)
The WTO ministerial in Argentina in December 2017 will be a key battleground for whether WTO should start negotiating digital trade issues. These issues also figure in the Regional Comprehensive Economic Partnership talks among ASEAN-plus countries (including India). India must resist any digital trade negotiations at this time. It has little to gain from them, and much to lose. It must first build its digital sovereignty — and digital rights — before it can begin negotiating a part of it in global trade talks. [The author, Parminder Jeet Singh, works with the Bengaluru-based NGO, IT for Change]
Today’s Quick Links:
Richard Baldwin, Paul Collier, Richard Venables: Post-Brexit Britain should cotton on to an opportunity to transform global trade
Public Development Banks: towards a better model