tralac’s Daily News Selection
On Sunday, in Kigali: President Kagame hosts African foreign ministers for AU reform talks. ‘It is an opportunity to engage with Africa’s top diplomats, and others present, on the foreseen impact of the reforms on the continent.’
Investors targeting Africa are broadening their horizons in their search for yield as sluggish growth and policy uncertainty in Nigeria and South Africa, the continent’s biggest economies, weigh on returns. Ivory Coast, Senegal, Ghana, Rwanda and Ethiopia are among countries featuring on the radar screens of investors attending the World Economic Forum’s annual gathering of the continent’s business and political leaders being held in Durban on South Africa’s east coast. All five economies should grow at more than the double the sub-Saharan region’s average forecast rate of 2.6% this year, the International Monetary Fund said last month. It expects both Nigeria and South Africa to expand 0.8%. [Africa can prosper if Nigeria and South Africa succeed: industrial leaders]
Speaking at the World Economic Forum on Africa in Durban, Finance Minister Schaeuble said: “The French election, Brexit - let’s set aside the new administration in Washington D.C. - but (these) are not the major geopolitical risks, with all due respect. I think we have to come back to Africa. We have to tackle the issue of inclusiveness,” he said. “If we fail to stabilize the African continent in the years and decades to come, we will face increasing geopolitical risks,” he said, citing the pressing problem of African migrants fleeing poverty, natural catastrophes, climate change and war. South African Finance Minister Malusi Gigaba welcomed Germany’s push. “Many African countries are coming on board, expressing their commitment to the compact,” Gigaba said.
Africa-EU Partnership: joint communication for a renewed impetus (European Union)
The 5th Africa-EU Summit, due to take place in November 2017, provides a critical opportunity for African and European Leaders to respond to this evolving context and reshape and deepen the Africa-EU partnership. This Communication proposes a revitalised framework for joint action that the EU and its Member States could bring to the Summit and that could be reflected in a Road Map for 2018-2020. It envisages a stronger, deeper and more action-oriented strategic partnership for more prosperity and stability in the two continents. It sets out policy priorities and an initial set of concrete initiatives for 2018-2020 and beyond, to be coordinated and strengthened with EU Member States and further developed jointly with African partners, in response to Africa’s own Agenda 2063 and building on the Global strategy for the EU’s Foreign and Security Policy. It pays particular attention to the aspirations and needs of youth, whose involvement in the overall process
Daniel Pelz: Germany’s Africa policy is well-meaning but lacks coordination (DW)
Nobody can accuse the present German government of failing to take sufficient interest in Africa. German government officials have unveiled a “Marshall Plan with Africa,” a “Compact with Africa” for the G20 and now they are presenting “Pro!Africa” at the World Economic Forum on Africa in Durban. All this has happened within the space of four months, since the beginning of the year. The trouble is that all these policy initiatives have been launched by individual German ministries, and while the ministers in question may bask in the glow of increased media overage, this doesn’t necessarily mean more help for Africa. The problem is one of approach. The German government does not need individual ministerial initiatives, it needs a single, clear, well-constructed, policy plan for Africa. If the individual ministries fail to cooperate with one another, then much time and effort will be needlessly frittered away. [Germany supports strengthening of ECOWAS maritime security architecture]
German industrial group Siemens aims to double its order intake in Africa to more than 3 billion euros ($3.3bn) by 2020, its chief executive officer Joe Kaeser said on Thursday. Siemens signed memoranda of understanding with Uganda and Sudan on the sidelines of the World Economic Forum on Africa in the South African city of Durban, as the company seeks to work more closely with the African countries in the areas of power supply, industry, transportation and healthcare.
Nigeria’s balance of trade projected to hit $3.8bn next year (ThisDay): Nigeria’s balance of trade is expected to improve from -$0.5 billion to $3.8 billion before the end of next year, the Chief Executive Officer of the Financial Derivatives Company Limited, Mr. Bismarck Rewane, has said. Rewane made the forecast in a presentation he delivered at a foreign exchange sensitisation seminar titled: “The Nigerian Foreign Exchange Market- Paving the Way towards Restoring Confidence: A Market Perspective,” that was organised by Access Bank Plc in Lagos on Wednesday. He however disclosed that Nigeria’s terms of trade in 2017 is now 15.9 as against 18.9 in 2015.
Why Nigeria Customs revenue fell N216 billion short of 2016 target: Hameed Ali (Premium Times): According to the Customs boss, the agency only succeeded in collecting N 720.7 billion, representing 76.8% of the target revenue between January and December last year. The decline, put at 23.1%, was against the original target of N 937.3 billion set for the year by the agency. The agency, Mr. Ali noted, collected N177.9 billion as Value Added Tax on imports, bringing the total revenue collection to N898.6 billion. Commenting on the drop in revenue, Mr. Ali explained that while there was a proposed policy to collect levies on luxury items consumed by the rich, there was no legal backing to enforce it, adding that luxury goods were imported all through 2016 without the payment of levies.
Nigeria: Manufacturers boosted by new foreign currency policy (Bloomberg): The Nigerian central bank’s creation of a market-driven foreign-currency window has given hope of revival to manufacturers faced with closure or shrinking capacity by easing their raw material imports, an industry group said. “The recent pronouncement of the central bank comes as a relief,” Segun Ajayi-Kadir, director-general of the Manufacturers Association of Nigeria, said in a May 3 interview in Lagos, the commercial capital. “If the intervention is sustained, there’s no doubt that we will have continued improvement in sourcing raw materials.”
ATI, which is owned by 13 African governments, said that the West Africa hub will enable it to open up in Anglophone West Africa. “We already have two West African francophone states as members but we need to cover most of the region in the next two years,” ATI CEO George Otieno said. ATI which was founded in 2001 by Africa states to cover trade, political and investment risks of companies doing business in Africa reported a net profit of 6.4 million U.S. dollars for 2016. ATI member states include Kenya, Uganda, Tanzania, Burundi, Malawi, Zambia, Zimbabwe, Democratic Republic of Congo, Cote d’Ivoire, Ethiopia, Benin and Madagascar. Kenya is currently the largest shareholder of ATI. The multilateral investment insurer is currently in active talks with Ghana, Nigeria, Cameroon and Sierra Leone so that they join the body by investing a minimum of 7.5 million U.S. dollars. [ATI pledges dividend in 2017 after 15 years]
Plans to set up the Africa Regional Centre of the New Development Bank, formerly referred to as the Brics Bank, are at an advanced stage, Minister of International Relations and Co-operation Maite Nkoana-Mashabane said on Wednesday. She said the bank would compete with the Development Bank of Southern Africa. [Gauteng seeks R30bn for mega projects]
Turkey and COMESA have signed a Memorandum of Understanding to promote industrial and technical cooperation. Specifically, the MoU targets to boost business links between entrepreneurs in COMESA and Turkey through joint ventures, production and technology transfers. This will be facilitated through the Foreign Economic Relations Board of Turkey.
The World Bank Board of Executive Directors have approved an $80m million credit to the Malawi Government for general budget support. This is the first budget support financing approved by the World Bank for Malawi in four years. The budget support operation, fully referred to as the Agricultural Support and Fiscal Management Development Policy Operation, is the first of a proposed series of two operations. It aims to improve incentives for private sector participation in agricultural markets and to strengthen fiscal management through more effective expenditure controls and greater transparency.
More than 50 representatives from local wildlife law enforcement agencies and international conservation NGOs attended a workshop promoting the use of the Africa Trade in Wildlife Information EXchange (AFRICA-TWIX) platform: an online collaborative tool developed to facilitate the exchange of information and promote co-operation between law enforcement officers in Central Africa. AFRICA-TWIX comprises a mailing list (Internet Forum), and a database of seized wildlife species and products, and criminal offences. It is modelled on the European Union’s EU-TWIX, which for more than a decade has facilitated information exchange between enforcement officials in European countries.
The Mobile Economy: West Africa 2017 (GSMA)
For the first time in the GSMA’s Mobile Economy series, we focus on West Africa, home to more than 175 million unique mobile subscribers and one of the world’s fastest-growing mobile regions. The study includes operational and financial forecasts out to 2020, and outlines the role of mobile in driving innovation and addressing socio-economic challenges across the 15 markets in West Africa.
India faces a piquant situation at the World Trade Organization after two South American countries - Argentina and Brazil - used New Delhi’s proposal on trade facilitation for services as a basis for discussing a “WTO Instrument on Investment Facilitation”—a proposal to which India remains opposed, according to people familiar with the development. As India presents its TFS proposal formally at the Doha negotiating group on services Wednesday, it could face awkward reminders about what would be its stance on investment facilitation, which is being pushed aggressively by China, Pakistan, Brazil, Argentina, Russia, Hong Kong (China), Mexico, Nigeria, Colombia, Korea, and Australia, among others. Three countries - the US, India, South Africa - have firmly opposed any discussion on investment facilitation at the G20 meeting of Trade and Investment Work Group in Germany more than two months ago.
Rajrishi Singhal: Rising trade walls and shrinking standards (Mint)
The more plausible justification is that these moves - particularly by Australia and the US - are perhaps designed to blunt India’s attempts to introduce trade facilitation in services agreement, somewhat identical to the trade facilitation agreement in goods which came into force in February. According to India’s concept note - introduced in the WTO on 27 September 2016 - like the TFA is intended to “…expedite the movement, release and clearance of goods as well as cooperation on customs compliance issues…”, the TFS can result in “…reduction of transaction costs associated with unnecessary regulatory and administrative burden on trade in services”. India followed up the concept note with an ‘element paper‘ in November 2016 and a draft legal text in February 2017. The TFS is also now pitted directly against TiSA, or Trade in Services Agreement, currently being negotiated outside the WTO by 23 members comprising mostly developed countries. It is aiming for an ambitious overhaul of the General Agreement on Trade in Services, which it hopes will attract more members and eventually be ratified in the WTO. Both India and China (as well as many other emerging nations) are not members. It is, therefore, safe to expect that trade politics and diplomacy will probably focus a lot on services trade in the immediate future, especially at the WTO’s December ministerial in Buenos Aires.
Today’s Quick Links:
Diamond industry conundrum: How to reform Kimberly Process
SA-EU seminar on the circular economy: speech by Minister Edna Molewa (GCIS)