tralac’s Daily News Selection
Posted: tralac’s Weekly Newsletter
Akinwumi Adesina: Africa and India – sharing the development journey (IPPMedia)
And nowhere is this partnership more needed than on the issue of infrastructure. At the top of the list is power and electricity. Universal access requires large financial investments. By some estimates, Africa needs $43-$55bn per year until the 2030s, compared to current energy investments of about $8-$9.2bn. We must close this gap. And to do so, the mobilization of domestic resources will play a major role. Pension funds in Africa will reach $1.3 trillion by 2025. Already tax revenues have exceeded $500bn per year. Sovereign wealth funds in Africa stand at $164bn. India is already one of the top bidders for Bank projects. This is a reflection of its immense expertise in a diverse range of areas from engineering to education; from ICT to railway development; skills development to regional integration; and from manufacturing to industrialisation. It is our pleasure to partner with such an inveterate and committed investor in Africa. And may this investment be lucrative and justified, and may our mutual interest and cooperation continue for many years to come. [The author is President of the African Development Bank. The 2017 AfDB Annual Meetings will be held in Ahmedabad (22-26 May) on the theme Transforming agriculture for wealth creation in Africa.] [Brochure: Africa and India – a shared development agenda (pdf)]
At a Roundtable event in Nairobi, Ministers from across Africa sat together with investors and the private sector to determine how best to tackle the investment and credit risk hurdles in order to make African risks bankable. For African governments part of what is at stake are much needed foreign direct investments and access to affordable financing necessary to spur development and, specifically, to close the estimated $900bn infrastructure gap. Equally, the private sector stands to lose billions of dollars in lost opportunities if the requirements for a favourable investment environment are not adequately addressed. In 2016, ATI insured close to $2bn worth of trade and investments and the company is increasingly supporting some of the continent’s most important transactions such as Ethiopian Airline’s fleet expansion and a $660m investment in Lake Turkana, Africa’s largest wind farm and, to date, the single largest investment in Kenya. [Related: African governments to focus on growing intra-African trade]
SACU: Namibia chases equal share of revenue (Namibia Economist)
Finance Minister Calle Schlettwein said Namibia will continue to push for smaller economies in SACU to get a fair share of revenue from collective pool of trade tax. “We are entitled to our SACU share and what we want is a situation where the sharing does not favour others. We want the gains and loses to be equally shared among member countries,” Schlettwein told journalists in Windhoek on Wednesday ahead of the SACU chair’s visit to Namibia yesterday. “There are different issues that have been tabled for discussion including the industrialisation policy, the revenue sharing formula among others” he said. “We are entitled to our share from the SACU pool and we want to find a way were we deal with the skewed sharing in a manner that benefit all member states,” Schlettwein said.
The main objective of the paper is to provide a baseline outline and preliminary assessment of the rebate facilities in SACU. The paper looks at the types of rebates available, the rationale and legal basis, the policy implications of rebates in the SACU member states and, more particularly, their effect on industrial development. [The analysts: Khutsafalo Sekolokwane, Maria Immanuel, Moureen L. Matomola, Ron Sandrey]
ECOWAS Parliament: Nigeria’s Saraki warns against misuse of ECOWAS Free Trade Policy (ThisDay)
The Senate President, Bukola Saraki, wednesday warned on the dangers to misuse the ECOWAS Trade Liberalisation Scheme by member states, which according to him is capable of killing local industries and thereby negate the integration drive of the region. The Senate President, who was speaking at the first Ordinary Session of the Fourth Legislature of the ECOWAS Parliament in Abuja, urged the West African parliamentarians in their deliberations to come up with strategies and legal framework that would block leakages in their intra sub-regional trade engagement. “A situation where due to the ECOWAS trade liberalisation Policy, is manipulated by other countries to channel goods into the sub-region in a predatory manner to kill the local industry is not the intendment of the policy. This is today going on in the area of agricultural development and we must resist this and ensure that where there is a leakage in the trade engagement that enable this practice is nipped in the buds,” he added.
President John Magufuli has reached out to South Africa to invest in the ongoing construction of cross-country Standard Gauge Railway and other projects as a way of cementing bilateral relations with Tanzania. Speaking in Dar es Salaam yesterday after hosting talks between him and South African president Jacob Zuma, Magufuli also asked his counterpart to help Tanzania secure soft loans from the New Development Bank, which South Africa co-owns with other BRICS countries. The two presidents witnessed the signing of three bilateral contracts in tourism, infrastructure and foreign affairs sectors. Magufuli said they have agreed to strengthen cooperation in various other areas such as industry, trade and investment, education, health care, and defence and security. “We will have a monitoring mechanism to ensure that all the agreed issues are implemented in a proper and timely manner,” he added.
Ethiopia sets sights on $30bn apparel exports (Just-Style/The Herald)
Ethiopia is raising the bar on its garment and textile ambitions, targeting exports worth $30bn by 2025: a huge goal for a country whose annual shipments currently sit at just $115m. Speaking for the first time about the plans, Dr Arkebe Oqubay, a minister and special advisor to Prime Minister Hailemariam Desalegn, shares the “bold vision” he believes will transform this East African nation into a compelling new sourcing hub for brands, retailers and their suppliers. “It is a challenge, but one we are confident we can achieve. We believe if Vietnam can do it, if Bangladesh can do it, Ethiopia can do it even better.”
Mauritian lender SMB Holdings, through subsidiary SBM Africa, has named high-profile personalities to its board and appointed an acting CEO to lead strategy for its operations in Kenya. The lender, which has a presence in Mauritius, Madagascar and India, completed the acquisition of Fidelity Bank on Wednesday for Sh100 and will inject in $20.6m fresh capital. The acquisition process was first made public on November 22 last year. SBM Group is also among the lenders looking to acquire a majority stake in Chase Bank, which was put under receivership on 7 April.
Zimbabwe: ‘Local content policy formulation under way’ (The Herald)
Zimbabwe has started formulating the Local Content Policy, which will stipulate percentage thresholds for goods that will qualify as locally produced to support domestic production, Industry and Commerce Minister Dr Mike Bimha said yesterday. The local content regulations would form a key part of Government broad industrialisation initiatives and would be considered as “smart” protectionism measures, said Dr Bimha while delivering a key-note address during the opening of the Zimbabwe Association of Pension Funds’ 42nd AGM yesterday.
Nigeria: SON seeks adoption of ADR for trade, business, others (The Nation)
To save costs and mitigate the suspension of economic activities that may arise from enforcing its statutory regulatory functions against importers of sub-standard goods to the country, the Standards Organisation of Nigeria, may soon deploy Alternative Dispute Resolution mechanisms in resolving several disputes. Although the general provisions in the new SON Act has empowered the agency to prosecute perpetrators of substandard products manufacture, importation and distribution while also providing stiffer penalties for convictions including jail terms, the agency is exploring measures at resolving conflicts without wasting resources or stalling economic activities.
The court case on the matter, to be heard on 18 May, could set a legal precedent that would have an important impact on the status of Western Sahara. The NM Cherry Blossom was seized in Port Elizabeth in the Eastern Cape following a maritime court order obtained by the Sahrawi Arab Democratic Republic and the Polisario Front on 1 May. Legal experts say the case is the first of its kind in South Africa.
Prior to the discovery of oil, Ghana was one of the stars of the ‘Africa rising’ story, with an established track record of macroeconomic stability and fiscal discipline. When oil was discovered, there were great hopes that Ghana would avoid the ‘resource curse’. Initial signs were promising - the Petroleum Revenue Management Act was established in 2011 to lay down the key parameters for accounting and collecting of petroleum. However, by 2014 the economic situation had deteriorated so badly that Ghana requested another IMF bailout. What went wrong?
Governments are resource and bandwidth constrained, and hence need to prioritize productivity-enhancing policies. To do so requires information on the nature and magnitude of market failures on the one hand, and government’s capacity to redress them successfully on the other. The paper reviews perspectives on vertical (sectoral) and horizontal (factor markets, cluster) policies with an eye to both criteria. [The analysts: William F Maloney, Gaurav Nayyar]
Ministers of Interior and Justice of the Member States of ECOWAS this week adopted an ambitious regional Plan of Action to end statelessness in West Africa. Gathered at a joint ECOWAS/UNHCR Conference hosted by the Government of the Republic of the Gambia, the Ministers agreed on concrete measures and a specific timeframe that aim at resolving the obstacles to the acquisition of nationality so as to end statelessness by 2024. “One million people are statelessness in West Africa,” says Volker Türk, Assistant High Commissioner for Refugees.
China-Africa trade enjoys 16.8% boost in Q1 (China Daily)
China’s imports from the continent in the first three months amounted to $18.4bn, up 46% from a year earlier. Among them, agricultural products grew by 18%, according to the ministry. The nation’s exports to African countries continued to decline, by 1 percent year-on-year in the period, but the rate of decline has slowed.
Today’s Quick Links:
London Somalia Conference 2017: communiqué (pdf)
West African International Arbitration Conference: update
Africa Finance Corporation infrastructure summit: 15-16 May, Abuja
What our government clients think in fragile countries: a perspective from the World Bank’s country surveys