tralac’s Daily News Selection
Featured trade infographics: @ecn_africa: After years of stagnation, east Africa’s clothing industry has more than doubled its exports since 2009; @CB_CII: India’s major exporting and importing countries in Africa, 2016-17
Trade and development event pointers:
(i) Starting today, in Ahmedabad: 2017 Annual Meetings of the African Development Bank Group. The conference flagship publication The African Economic Outlook 2017: entrepreneurship and industrialisation is posted. Extracts from Chapter 3 (Trade policies and regional integration in Africa):
Complex issues including how to handle the conflicting terms of agreement in overlapping trade blocs and the rule of origin requirements need to be resolved to allow the full implementation of trade agreements (see Box 3.1 on rules of origin in Africa’s free trade areas). In such circumstances, managing integration across countries and multiple economic agreements becomes even more challenging. These complications tend to remain even if governments follow the linear step-by-step model of goods, labour and capital markets integration, and eventually monetary and fiscal integration. The institutions of trade policy in many African countries need to be stronger to efficiently participate in trade negotiations.
Similarly, over concentration on harmonising or regulating import tariffs at the expense of other important supply-side factors does not meaningfully help Africa’s integration agenda. A deeper integration that includes services, investment, competition policy and other domestic issues can address national-level supply-side constraints far more effectively than an agenda which focuses almost exclusively on border measures (Hartzenberg, 2011). This would certainly help to exploit opportunities to scale up African businesses and enhance over all competitiveness.
Private sector participation in trade policy formulation and negotiations can ease implementation by ensuring that real-world concerns are raised. The lack of political will and in some cases insurmountable practical implementation challenges are the main causes for the low implementation of regional trade agreements. For this reason, the involvements of the private sector in trade negotiations could address many hurdles that constrain trade and regional integration in Africa. Clearly, other factors such as a well defined government vision and mandate play a vital role in directing government and private sector resources towards improving conditions for business. This is where RECs can also play a transformative role towards a continent-wide integration.
Related: India-Africa ties provides limitless opportunities: Jaitley (Business Standard), Indian investments in Africa: scale, trends, and policy recommendations (ORF), Why the meeting of the African Development Bank in Gandhinagar is important (Hindustan Times)
(ii) Enabling Cross Border Trade: how Chambers of Commerce can lobby in support of the Single Window (22-23, Addis). The meeting (organised by PACCI, ATPC) aims to share with key stakeholders the experiences of African countries in implementing a Single Window to enhance the efficient exchange of information between trade and government, and discuss further what governments, with the support of international organizations, should do to implement the Single Window facility as a national policy. ‘The main objective of the meeting will be to discuss elements of the Trade Single Window, and the experiences in Kenya and Nigeria, as well as the progress made and the challenges encountered by Chambers of Commerce in the issuance of electronic certificate of origin’ said PACCI’s Leul Wondemeneh. ‘PACCI aims to hear from businesses and stakeholders who are involved in cross-border trading, what governments and international organizations should do to alleviate the problems’ explains Leul.
(iii) 1st Extra Ordinary Meeting of African Union Sub-Committee of DGs of Customs (23-25, Abuja): Entering into force of the WTO’s Trade Facilitation Agreement “Implication for African Customs Administration”. Mr Joseph Attah (Nigeria Customs Service): “The meeting will be first of its kind; during this period, the DGs will be discussing issues of mutual cooperation among customs administrations in the AU to forge a common position in the governance of World Customs Organisation.” He said that 50 DGs of various customs administrations in the AU would be in attendance. There would also be a sideline meeting of neighbouring countries like Nigeria, Benin Republic and Niger to discuss the issues of mutual importance.
(iv) 2nd East African Manufacturing Business Summit and Exhibition (23-25 May, Kigali). Topics to be discussed include: manufacturing in the EAC region - public and private sector perspectives; the EAC Treaty and its protocols - objectives vis-à-vis reality; long-term and innovative financing for the manufacturing sector and the participation of the diaspora; and the role of EAC governments in promoting local content with a focus on iron, steel, mining and construction materials.[Conference website]
(v) Commonwealth African countries to discuss priorities for reviving world trade (25-26 May, Mauritius). The regional consultation will take into consideration the outcomes of the Commonwealth Trade Ministers’ meeting, held in March this year in London, particularly to explore avenues through which intra-Commonwealth trade and investment opportunities can be enhanced. The meeting will also provide a platform for African member states to assess various trade policy options, including UK-Africa trade relations post Brexit, advancing African integration through the Continental Free Trade Agreement, and priority issues for the upcoming Global Review of Aid for Trade in July. Past and present trade negotiators will also convene to finalise a proposal to establish an informal Commonwealth African Trade Negotiators Network. [Aid for Trade Global Review 2017: draft programme (pdf)]
18th Ordinary Summit of Heads of State of the East African Community: EAC leaders call for tougher stance on non-tariff barriers (New Times). “The heads of state noted with concern the declining intra-EAC trade and directed the Council to resolve the long-outstanding non-tariff barriers and report to the 19th summit,” reads part of a joint communique issued after the summit. Meeting before the summit, the central decision-making and governing organ of the regional bloc raised concerns that at least 19 non-tariff barriers remain unresolved as reported by a monitoring tool that was put in place. The ministers specifically raised concern over four longstanding NTBs whose solution, they said, requires policy guidance. They include the restriction by Uganda on beef and beef products from Kenya, since 1996. Others are requirement by Tanzania that cigarettes manufactured in Kenya and exported to Tanzania should have a 75% local content, and requirement by the Tanzania Foods and Drugs Authority that companies exporting to Tanzania should register, re-label and retest goods certified by other partner states. This trade barrier has existed since 2003. Raymond Murenzi, director-general of the Rwanda Standards Board, told The New Times that the issues concerning the TFDA are “very serious” as it is “very difficult for our products to be exported to Tanzania.” Another major trade barrier that the Council says has existed since 2009 is inadequate coordination among the numerous institutions involved in testing and clearance of goods at the borders. [Related: Joint communiqué, EAC seeks clarity on EU trade deal, End mistrust to attain EAC integration goals (editorial comment, The Citizen)]
Tanzania: Mega oil pipeline projects to spur economic growth (Daily News)
The government, yesterday, announced plans to set up three mega oil-pipelines connecting the seaports of Tanga and Dar es Salaam to upcountry regions and neighbouring countries partly to reduce fuel prices and spur economic growth. The announcement was made here by Energy and Minerals Minister, Prof Sospeter Muhongo. He was launching the downstream petroleum subsector performance review report for the year 2016. [Related: JPM hints at future oil bonanza for Tanzania, Only two gold mines declare profits despite rising exports, Taxation and the state of Africa Mining Vision implementation: the case of Tanzania, Eurobond: Tanzania renews bid on issuing]
Nigeria Economic Update: fragile recovery (World Bank)
This economic update provides an overview of recent developments in the Nigerian economy. The chapter second describes the World Bank’s view on Nigeria’s economic outlook for 2017. The chapter third summarizes the findings of a forthcoming Bank report Toward Sustainable Growth in Nigeria: Empirical Analysis and Policy options, which analyzes the patterns of economic growth in Nigeria; the underlying determinants of growth from both a macro and micro perspective; and policy priorities to support higher growth. In addition, analysis of constraints to doing business and the impact of current trade policies highlights the need to improve access to finance, improve the reliability of power supply, and adjust trade policies to promote productivity growth. [Chatham House: Collective action on corruption in Nigeria]
Nigeria: Afreximbank’s financing tops $35bn
Speaking on Tuesday when Nigeria’s Acting President, Prof. Yemi Osinbajo, received him in audience in Abuja, Dr. Oramah said that Afreximbank’s current credit exposure to Nigeria stood at $3.5bn. Some of those initiatives, which will be hosted in Nigeria, were the establishment of an internationally accredited inspection and certification centre to improve compliance of African exports with international technical and sanitary requirements; the creation of industrial and export processing zones dedicated to light manufacturing and agro-processing; and the construction of Africa’s first center of excellence in medical services through Afreximbank’s strategic alliance with King’s College Hospital, London, which aims to attract medical tourism and reduce the outflow of Africans seeking world-class treatment abroad. [ATI, International Credendo–Single Risk sign agreement to increase coverage of political risks in Africa]
ECOWAS: Trade expert calls for implementation of axle load policy (Graphic)
The failure of governments in West Africa to enforce the axle load limitation protocols has seen an increase in extortion of monies from drivers along major transit corridors within the sub-region. The Secretary General of the Ports Management Association and West and Central Africa, Mr Michael Luguje, told the Graphic Business in an interview that some of those challenges were hampering the promotion of transit trade. The axle load protocol standards, which came into effect in 2011, were aimed to protect West Africa’s road infrastructure from degradation by overloaded vehicles. Non-compliance ECOWAS member states were required under a proposed act to impose prohibitive sanctions for non-compliance. Presently, only Ghana has complied with weighbridges in ports and along the corridors thus limiting six-axle trucks to a load of up to 60 tonnes per transit journey. The rest of ECOWAS countries, Mr Luguje said, were still at preparatory and initial stages of the policy
Today’s Quick Links:
Trade between Ghana and Cape Verde drops from $5m to $200,000
Guinea-Bissau: IMF completes review visit
Kenya: GM East Africa retains lead as car sales decline
SA’s poultry industry on the road to recovery
Dalia Marin: Restoring competition in the Digital Economy
Roberto Azevêdo: Re-energising the multilateral trading system (East Asia Forum)
New Trump trade rep Lighthizer spars over protectionism in Asia (Reuters)
USTR Robert Lighthizer: statement on APEC trade meeting
Japan urges unity among 11 nations left in TPP pact (Bloomberg)
New Zealand splits with Malaysia over reworking TPP without US (Bloomberg)
GST to boost India’s export growth, says Sitharaman (The Hindu)