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tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Jonathan Ernst | World Bank

09 May 2017

Africa ponders challenges as WTO steps in way of AU self-financing model (New Times)

The WTO and the US government have written to a number of African Union member states on the legality of the implementation of the new self-financing mechanism. Among the aspects that the levy decision is allegedly in breach of is that WTO members may not apply tariffs on a product coming from one WTO member and not apply the same tariff on the same or like product when it originates in another WTO member. This argument depicts the Union’s self-financing mechanism as discriminatory. The other factor is that some African countries could have committed to the international trade body that they would have zero tariffs and would have duty free regimes. Among the options floated by experts to get around the hurdle is that, if Africa was to become a free trade area, then the levy would not be in breach of the organisation’s principles. Speaking to The New Times, African Union Commission chairperson Moussa Faki Mahamat said the hurdle was being addressed by a team of 10 finance ministers from across the continent. Faki said the Union was keen on going ahead with the planned levy mechanism but they were also engaging partners such as the US and WTO to find a way around it.

A look back at the World Economic Forum on Africa (Devex)

Discussions throughout the three-day summit were often underlined by a call to act urgently, though it is unclear if talk at WEF Africa will lead to action, a criticism levied during the event. Fewer heads of state and high-level government officials attended compared to previous years, and some veteran attendees told Devex this year’s event fell a bit flat. Still, the forum saw greater civil society participation and better engagement between civil society and the private sector, one NGO leader told Devex. The Gates Foundation and the Wellcome Trust sought to raise awareness for a new initiative bringing together philanthropists, governments and academics - the Coalition for African Research and Innovation - which will aim to improve research capacity, boost investment, enable career pathways for scientists and help countries meet the African Union target of spending 1 percent of gross domestic product on research and development.

Preview: 11th Biennial US-Africa Business Summit (13-16 June, Washington). Day one will focus on Navigating the African Market; day two will examine Africa and its role in the Global Supply Chain; and day three will explore Regionalization and the Future of Africa.

India, South Africa, US oppose G20 draft on investment facilitation (Mint)

The US, India and South Africa have pulled the plug on a draft deliverable on investment facilitation proposed by the German presidency at a G20 technical experts meeting in Berlin, according to people familiar with the development. The US which had already taken a strong position on investment facilitation said it is not in position to agree to the issue. India and South Africa said they do not see any merit for an outcome on investment facilitation because it would undermine their “policy space” and “right to regulate investment” in strategic sectors. Several countries such as Japan, China, Russia, Canada, Brazil, and Australia supported the German draft during the discussions. It sought to reaffirm “the Principles for Global Investment Policy Making endorsed in the Hangzhou communiqué (in September, 2016) and encourage policymakers to use them as reference and guidance.”

Pakistan overtakes Uganda as top buyer of Kenyan exports (Business Daily)

Official data shows that exports to Uganda grew slower by 27% to Sh9.4 billion in the first two months of the year, while exports to Pakistan more than doubled to Sh11.6 billion. Pakistan is the largest market for Kenya’s tea exports while Uganda mainly imports steel, paper, medicines and salt from Kenya. Kampala’s list of imports from Kenya has been narrowing over the years as investors set up factories in the country to manufacture goods previously imported from Nairobi, including edible oils and cement. The Netherlands, which is Europe’s key entry point for Kenya’s flowers, came in third with Sh8.1 billion worth of goods bought from Nairobi, the Kenya National Bureau of Statisticsdata shows. [KNBS: Table 13(a): Major destinations of domestic exports]

Regional trade in maize set to flourish (COMESA)

Experts from COMESA Secretariat and Heads of Bureau of Standards from Kenya, Rwanda and Uganda conducted a joint review of the COMESA Mutual Recognition Framework, an instrument meant to facilitate greater flexibility in trading of maize and maize products. The review meeting (2-4 May in Nairobi) also discussed the draft COMESA Mutual Recognition Agreement on conformity Assessment before its submission to the respective governments for signature. The signing will pave way for the implementation of the COMESA Mutual Recognition Framework (C-MRF). The C-MRF was launched in December 2015 by six COMESA States which have significant maize trade namely Kenya, Malawi, Rwanda, Zambia, Uganda and Zimbabwe. It was expected that by early 2016, they would have proceeded with negotiations for signature of the full MRA on conformity Assessment for trade in maize and maize products. However, there has been slow uptake of the C-MRF by the six countries.

Informal trade in Zimbabwe ‘will persist’ (IOL)

At the Beitbridge border between Zimbabwe and South Africa, more than 500 transporters cross the border daily to transport goods on behalf of traders and shop owners. Porters use bicycles while women transporters ferry goods on their heads and on their backs as they take goods across the 1.5km no-man’s-land between the two borders. “On a good day I make 5 trips and I am paid R100 to R150 for each trip as I also help with making sure the goods pass the Zimbabwe border without paying tax. I only get my passport stamped on the Zimbabwe side,” Patricia Chironza, a Beitbridge porter said.

Tanzania: Women to gain from Sh12 billion TMEA deal (The Citizen)

Tanzania will benefit from Sh12 billion committed to a trading programme courtesy of TradeMark East Africa to empower women entrepreneurs in the country to have access to the EAC and international markets. The cash will enable them to implement their project on cross border women traders during a Validation Workshop for a Baseline Survey that was conducted to ascertain status of Tanzania women traders export to EAC region in Dar es Salaam over the week end.

South Africa: Industrial Policy Action Plan (IPAP) 2017/18-2019/20 (dti)

Like many of its middle-income peers, South Africa is faced by complex and fast moving demands requiring fundamental economic transformations and transitions. They include adjusting to the end of the metals price boom; factoring in the gathering impacts of climate change and the looming challenges of the fourth industrial revolution; and, critically, grappling with profound domestic socio-economic inequality. The structural and systemic fault-lines in the South African economy have on the one hand caused slower and more fragile growth in manufacturing overall. On the other, they have contributed to a structural shift away from metals refining toward other sectors, especially auto and agro-processing. IPAP responds to these challenges in the following ways: [Downloads: IPAP 2017-2020 Part 1: brief overview (pdf, 1.49 MB), Part 2: engine room of change (pdf, 4.43 MB)]

Mozambique: Nacala coal terminal starts operating in full on 12 May (MacauHub)

The construction of both the terminal and particularly the railway line, which started in 2012, cost about $4.5bn and included the construction of some new sections as well as the reconstruction of others in both Mozambique and Malawi. Mozambican daily newspaper Noticias reported that after the inauguration scheduled for Friday, at least 21 trains will run on that line on a daily basis at one to two hour intervals. Metallurgical coal as well as thermal coal extracted in the mines of Moatize is destined for the markets of Brazil, China and Japan and, to date, about 6.5 million tonnes have been exported through Nacala. The target is to reach 18 million tonnes per year, which is the installed capacity of the port and the railway line.

Abidjan–Lagos Corridor: update (ECOWAS)

Road Infrastructure and legal experts from the ECOWAS Abidjan–Lagos Corridor countries of Benin, Cote d’Ivoire, Ghana, Nigeria and Togo, met in Abuja (4-5 May) to validate the interim report and draft Institutional, Legal framework and communication documentation that will govern the management of the corridor in accordance with the Project Treaty signed by the Presidents of the five countries in 2014. These documents will be finalized and presented at a final Draft Validation Workshop in July 2017. Once finalized and adopted by the Project Steering Committee, they will be presented to the Heads of State of the 5 Corridor Countries for their approval to enable the establishment and operationalization of the Corridor Management Authority. [EOI: Abidjan- Lagos Highway Construction]

Zambia-Tanzania-Kenya power interconnector study almost complete (COMESA)

The final draft report of the feasibility study for the 2,300km power line connecting Zambia, Tanzania and Kenya is expected to be ready by July this year. During the meeting (20-21 April, Livingston) updates on the progress of the ongoing feasibility and Environmental and Social Impact Assessment studies were presented to the delegates. They comprised representatives of Ministries of Energy and Power Utilities from Kenya and Zambia and regional power pools. Mobilization of financing for the remainder of the project will begin once the study report is done. To this effect, a financiers’ roundtable is planned for mid-August this year to be organized by the Office for Promoting Private Power Investment in collaboration with COMESA, NEPAD and the Nile Equatorial Lakes Subsidiary Action Programme.

Nigeria seeks $5.2bn from World Bank for electricity (Bloomberg)

The bank’s private-sector lending arm, the International Finance Corporation, may invest about $1.3bn in power projects and electricity distribution companies. Its political-risk insurer, the Multilateral Investment Guarantee Agency, could provide equity and debt of $1.4bn for gas and solar power programs, according to Power, Works and Housing Minister Babatunde Fashola. That’s in addition to loans of $2.5bn Nigeria is seeking from the lender to help improve the distribution of power, expand transmission-capacity and increase access to electricity in rural areas, Fashola said.

Ghana: Govt fights punitive cost of remitting money (Graphic)

The Ministry of Finance is hopeful that a $2.6m Remittance Grant Facility secured from the Switzerland government will help bring down the cost of remitting money to the country from the current 12% of every $200 remitted to 5%. Remittances from Ghanaians working overseas to their families back home dropped last year for the second consecutive time to $1.92bn amid moderation in the global economic growth that reflects the slowdown in China’s growth prospects and falling oil prices. Figures provided by the Bank of Ghana also show that the record of individual remittances through banks into the country in 2015 was 16.9% below what was recorded in 2014. [Government to construct 1200km of rail in next three years]

A new global network for efficiency in shipping (Ship-Technology)

The Global MTTC Network project, officially titled ‘Capacity Building for Climate Change Mitigation in the Maritime Shipping Industry’, focuses on enabling developing countries to effectively implement energy efficiency measures through technical assistance, capacity building and promoting technical cooperation. The heart of the project lies in setting up five Maritime Technology Cooperation Centres, located in Africa, Asia, Latin America, the Caribbean and the Pacific, which together will form a global network. [30th World Ports Conference: Enabling trade, energizing the world (7-12 May, Bali)]

Today’s Quick Links:

Rob Davies: Duty to protect SA steel industry

EAC Secretariat should improvise with the available funding

KeNHA mulls unmanned weighbridges on new roads

Continental workshop, 11-12 May: Framework for Sustainable Agricultural Mechanization in Africa

SADC moves towards a Simplified Trade Regime

Burundi: Great Lakes Regional Integrated Agriculture Development Project

Intergovernmental conference on international migration in 2018: update

German exports bolster economy as industrial output drops

Regional Economic Outlook: Asia Pacific

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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to recipients across Africa and internationally, serving in the AU, RECs, national government trade departments and research and development agencies.

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