Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo source: Wu Hong | EPA

Featured infographic, @WandileSihlobo: Zambia’s 2017 maize crop is set to reach 3.6 million tonnes – a record harvest. The government has now lifted the maize export ban.

Launched, yesterday at the UN: World Economic Situation and Prospects as of mid-2017

Saturday’s EAC Summit: Trade deal with EU, Secretariat funding mechanism top agenda (New Times)

The annual report of the Council of Ministers, a progress report on the implementation framework for the EAC institutional review, and a report on the implementation of previous decisions of the summit, are also lined up for discussion. The Council’s report, a copy of which The New Times has seen, notes that while Bujumbura’s only concern is that “EU unilaterally suspended direct partnership with the Government of Burundi,” Tanzania maintains reservations and needs the EAC Secretariat to conduct a detailed analysis on the effects in order to bring about regional perspective to the Community. Tanzania’s 15 specific concerns include effects of EPA on EAC industrial development, effects of EU subsidies and domestic support on EAC farmers accessing EU market, bridging the gap of revenue losses resulting from substantial trade liberalisation, and effect of Brexit as UK is one of the major trading partner of EAC countries. Tanzania also questions the rationale of Burundi signing EPA while the EU has imposed an embargo on her exports.

Compact with Africa: fostering private long-term investment in Africa (GDI/DIE)

Extract (4.3: Urban agglomerations become main hubs of investment, pdf): Clusters are of importance to a city. Africa has four major city clusters, which are referred to as “FDI corridors”: (i) a North African corridor including Casablanca, Tunis and Tripoli; (ii) a Nile corridor including Cairo; (iii) a West African corridor including Lagos, Abuja, Abidjan and Accra; and (iv) a Gauteng-Maputo corridor, which includes Johannesburg, Midrand, Pretoria and Maputo (Wall, 2016). These corridors attract FDI because they are comprised of several primary cities in close proximity to each other and connected through good road and rail networks and port infrastructure.

FDI in Africa’s high-tech sector is much more concentrated in fewer highly urban areas – such as clusters around Nairobi, Johannesburg, Port Elizabeth, the West Africa corridor, the North Africa corridor and the Cairo corridor – than it is in other sectors. The quality of infrastructure (road, rail, airports and ports) is the most significant factor with regards to the production of high-tech goods and the distribution thereof. Among all the jobs directly created by FDI in Africa between 2003 and 2014, 83 per cent were located in cities. Over the same period, FDI in manufacturing is estimated to have directly created more than 646,000 jobs; FDI in services, 281,000 jobs; FDI in high-tech, 159,000 jobs; and FDI in resources (or non-urban FDI), 220,000 jobs (Wall, 2016). [The analysts: Robert Kappel, Birte Pfeiffer, Helmut Reisen]

A suite of new ICTSD, BRIDGES Africa postings:

Nicolette Cattaneo: Trade in services negotiations - a Southern African perspective. This paper explores the regional and international services negotiating landscape that impacts on the countries of the COMESA-EAC-SADC region and delves into the ways in which services negotiations can be harnessed to drive sustainable development outcomes for the region’s least developed and low income countries. After highlighting current trends, the structure of negotiations, and challenges and opportunities for Africa’s least developed countries, the author recommends a set of strategic policy responses that could be applied at the multilateral, regional, and bilateral levels in order to enhance the utilisation of the services sector for developmental purposes. [Related: Memory Dube, Patrick Kanyimbo: Leveraging trade facilitation to drive Africa’s regional integration agenda; Paul Batibonak: Africa and the Implementation of the Trade Facilitation Agreement; Ben Shepherd: How can Africa better participate in global value chains?]

SWIFT’s messaging traffic grows by 15.2% in Africa (SWIFT)

Data from SWIFT shows that Africa’s traffic growth has outperformed the total growth of SWIFT globally. In the year to date, total message traffic volumes grew by 15.2% versus 6.4% growth for SWIFT worldwide, illustrating that Africa plays an increasingly important role in SWIFT’s global business. Growth in Africa is underpinned by a significant increase in payments traffic. This indicates that, despite challenging global conditions including the downturn in the commodities cycle that has significantly impacted several markets, many countries in Africa continue to see relatively stable economic growth. African payment traffic volumes grew by 16.9% versus 11.6% for the same period last year. Growth was even more pronounced in SADC, which saw growth of 21.6%. The African securities segment has also witnessed a strong rise in volumes. Securities traffic grew by 14.6%. Compound annual growth for Africa since 2012 has been 13% year on year.

David Hodnett: Regional banks in Africa need to balance risk with financial inclusion (Business Day)

With this background, it is clear that regional banks will need to become a bigger feature on the financial services landscape in Africa. With the decline in correspondent banking, regional banks are vital to ensure the continued connectedness of Africa to the global economy as banks across the world find it easier to maintain relationships with fewer groups that have a presence in multiple African countries. In this way, they can continue to ensure a connection into Africa for their clients, but also manage their risk by having to maintain a relationship with fewer banks that they can be comfortable with, that will implement the same policies and controls in all the countries in which they operate. Regional banks are also necessary to effectively and efficiently facilitate regional trade, particularly if Africa is to grow intra-continental trade.

Carl Manlan: A Universal African Basic Income (World Policy Blog)

The idea of a universal basic income is on the minds of policymakers around the world. The Indian government is considering such a program as an alternative to its current welfare system. Evidence suggests that giving $113 a year to every Indian citizen would cut absolute poverty from 22% to less than half of 1%. The combined population of all African countries is similar to the size of India, with comparable levels of poverty. If this works in India, it certainly has potential in Africa. But one thing India has that Africa lacks is solid data on its citizenry. More than 1 billion Indians are now enrolled in the country’s biometric database, making it easier for the government to figure out how an income grant program would work. In Africa, by contrast, four out of five known births occur in countries without complete birth registration systems, calling into question the reliability of civil registration or vital statistics systems. Governments therefore have no hard numbers on how many people would qualify for grants or how much such a program would cost.

Tanzania: Govt gets 63bn/- taxes from mobile money transactions (Daily News)

Mobile money transactions have brought in 63bn/- as taxes to the government coffers for the past four years, thanks to Telecommunications Traffic Monitoring System. The Deputy Minister for Works, Transport and Communication, Engineer Edwin Ngonyani, said that out of it 56 billion/- went to the treasury and the remaining 6bn/- was channeled to COSTECH for financing various researches.

Tao Zhang: Achieving Tanzania’s goal of middle-income status (IMF)

Tanzania, like many other countries, has learned the limits on the statist impulse to lead development. Governments have a key role to play providing stable policy and regulatory frameworks for development. But it is ultimately the private sector that is the engine of growth - creating employment and opportunities. A strong private sector can foster economic diversification, expand trade and deepen Tanzania’s integration into global value chains. So, government policy is most effective when its objective is to cultivate the private sector. Many African countries are addressing the same issue. And our advice includes the following steps that we believe to be useful for Tanzania: [The author is IMF Deputy Managing Director]

Rwanda: Trade deficit drops by over 10.5% in March (New Times)

According to the NISR report released on Monday, the country’s formal trade in goods deficit narrowed by 10.51% in March compared to the same period last year. However, it was recorded at $102.22m (about Rwf856.86 billion) in value over the reporting period, an increase of 34.6% compared to the month of February. The country’s export value rose by 39.56% in March, but was up by a lower margin of 23.40% on a yearly basis, NISR indicates. The import bill increased at lower percentage of 29.68% compared to February 2017, and dropped 1.08% compared to March 2016, according to the report.

Kenya: Export council chief wants team set up to address low earnings (Business Daily)

Newly appointed Export Promotion Council chief Peter Biwott has called for the formation of a joint public-private team to address issues pulling down export earnings and volumes. Mr Biwott said this would help build loyalty for Kenyan brands in the international market, thereby creating demand for processed products and raising production and incomes. He said EPC was engaging State regulatory agencies to promote local certification of exports to ensure they conform to international standards thereby helping Kenyan goods compete in foreign markets.

Zimbabwe: Govt commissions Electronic Cargo Tracking System (The Herald)

Government has commissioned a $1,2m Electronic Cargo Tracking System which was availed under a capacity building for public and economic management project being financed by the African Development Bank. The ECTS is expected to go a long way in reducing the cases of transit fraud and the dumping of illegal imports on the domestic market which is estimated at $1bn annually. Speaking at the commissioning ceremony on Monday, Finance and Economic Planning Minister Patrick Chinamasa said there is need for concerted efforts in tackling corruption but expressed confidence the introduction of the system would result in an increase in contributions to the fiscus.

Kenya: Launch of SGR cargo train service put off to December (Business Daily)

Transport Principal Secretary Paul Maringa said direct cargo haulage of the SGR’s portion of the port’s one million-a-year containers to Nairobi inland container depots will start by end year. Truckers and CFSs, which have thrived on congestion at the port, have previously raised concern over survival of their businesses in the era of fast trains. According to Kenya Railways, the country has received 25 freight locomotives out of the 43 on order. It has also received 763 wagons out of the 1,620 units ordered for.

Safaricom’s deal with Vodacom South Africa will help drive M-PESA to other markets in Africa (Quartz)

The news came after UK’s Vodafone Group transferred its 35% stake in Safaricom to its South African subsidiary, Vodacom. Subject to shareholder and regulatory approvals, the proposed transaction will cost Vodacom 34.6 billion rand ($2.6bn) in exchange for the stake. Safaricom, Kenya’s largest telecommunication company, said it gave “appropriate assurances” to the government of Kenya - which owns a 35% share in the company- about the deal. Vodafone will also retain a 5% stake in Safaricom, while 25% of the shares are on a free float being traded in the stock market. Aly-Khan Satchu, a financial analyst based in Nairobi, says that the deal would be lucrative for both companies and help “consolidate” their reach across Africa in new markets such as Ethiopia, Africa’s second largest country by population.

Cairo says ‘technical issues’ on Nile dam studies remain unresolved after tripartite committee meeting (Ahram)

Egypt, Sudan and Ethiopia have not yet resolved points of contention over studies evaluating the potential impact of the Grand Ethiopian Renaissance Dam after a tripartite committee meeting to discuss the dam concluded on Tuesday, Egypt’s irrigation ministry said. The ministry said that the committee of experts tasked by the three countries to oversee the studies, which concluded its 14th meeting in Addis Ababa on Tuesday, will discuss “outstanding technical points” about the impact studies in a future meeting.

4th SAWAP conference: update (GoG)

The 4th Conference of the Sahel and West Africa Program (SAWAP) in support of the Great Green Wall has ended in Accra. The conference brought together about 100 participants from 12 SAWAP countries and other partners to work together to ensure the coherent implementation of the activities that support sustainable land and water management projects, and to share and capitalize on the results achieved in the implementation of the SAWAP Program to address land degradation. The participating countries were Benin, Burkina Faso, Ethiopia, Ghana, Mali, Mauritania, Niger, Nigeria, Senegal, Sudan, Chad and Togo.

Q&A: Donald Kaberuka on financing the AU peace fund (Devex)

It’s a very small levy - 0.2% - and will have no impact on trade. But it could raise enough money for the AU to function. Remember that the European Union used to do exactly that a long time ago, so it has proven its worth. The Economic Community of West African States does that quite well; that’s how they fund the organization. The West African Economic and Monetary Union does the same; they raise enough money to run the organization and fund some of the programs. [ECDPM interactive map: Estimated assessed contribution of each member state of the AU]

Interactive guide: Exploring EuropeAid’s funding priorities (Devex)

Of the 5.1 billion euros ($5.6bn) covered by the dataset, sub-Saharan Africa will receive over 2 billion euros ($2.2bn), the most of any region. Over one billion euros ($1.09) of that will go to the sub-region of West Africa - much of it funneled through the EU’s Emergency Trust Fund for Africa to catalyze social and economic development in migration-prone countries. Asia will also receive over one billion euros ($1.09bn), although it will be distributed more equitably across its sub-regions [A Devex guide to EuropeAid]

Belt and Road Forum for International Cooperation: communiqué

We reaffirm our shared commitment to build an open economy, ensure free and inclusive trade, and oppose all forms of protectionism including in the framework of the Belt and Road Initiative. We endeavour to promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system with the WTO at its core. [Related: List of deliverables of Belt and Road forum, Think Tanks of the Belt and Road Initiative launch a new platform]

Today’s Quick Links:

Botswana: IMF concludes 2017 Article IV visit

Tanzania: Second hand underpants from Far East destroyed

The “Silicon Valley” of Lagos is facing tough questions about its future as a tech cluster

India’s first coastal corridor to drive manufacturing, growth

DelBene, Paulsen launch bipartisan congressional Digital Trade Caucus


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