Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: CIFOR

Selected trade and development event pointers:

7th SADC River Basin Organisation officials’ workshop (22-24 May, Johannesburg)

UNCTAD/DTI regional seminar: Bankable Sustainable Development Goal projects (29-30 May, Johannesburg)

East African Organic Policy Forum (1-2 June, Arusha)

ACPC/ATPC seminar: How taking into account climate change can help Africa to pursue better trade policies, with a focus on food security (7-9 June, Purdue)

Nigeria’s 5th Trade Policy Review (13, 15 June, Geneva)

Selected updates from the AfDB Group’s 52nd Annual Meetings:

Prime Minister Modi’s speech at inauguration of the Annual Meeting: Africa-India trade has multiplied in the last fifteen years. It has doubled in the last five years to reach nearly $72bn in 2014-15. India’s commodity trade with Africa in 2015-16 was higher than our commodity trade with the United States of America. India is also working with United States and Japan to support development in Africa. Indian and Japanese research institutions have come up with a Vision Document. I congratulate RIS, ERIA and IDE-JETRO for their efforts in putting it together. This was done in consultation with think tanks from Africa. I understand the Vision Document would be presented at the Board meeting later. The idea is that India and Japan, with other willing partners, would explore joint initiatives in skills, health, infrastructure, manufacturing and connectivity.

Our partnership is not confined to Governments alone. India’s private sector is at the forefront of driving this impetus. From 1996 to 2016, Africa accounted for nearly one-fifth of Indian overseas direct investments. India is the fifth largest country investing in the continent, with investments over the past twenty years amounting to $54bn, creating jobs for Africans. We are encouraged by the response of African countries to the International Solar Alliance initiative, which was launched at the UN Climate Change Conference in Paris in November 2015. The Alliance is conceived as a coalition of countries rich in solar resources, to address their special energy needs. I am happy to note that many African countries have extended their support to this initiative.

Akinwumi Adesina: The time for Africa is now – we can’t slow down, we must quicken the pace. Adesina asked what use it is that Africa produces 75% of the world’s cocoa beans, but produces only 2% of its chocolate. “We simply have to transform African agriculture”, he said. “The African future is not, as some people think, based on oil and gas: you can’t drink oil or smoke gas. The future is food – you can eat food. Our continent’s food and agriculture markets will be worth $1 trillion within 13 years.”

Missing links to Indian-African trade and investment promotion identified: According to a theme paper (Africa-India Cooperation 2017: partnerships to industrialise and move Africa up the value chains) India has steadily opened up its markets to African exports. The result is that Africa’s trade surplus with India has increased rapidly, albeit driven in large part by a narrow range of suppliers and commodities. Consequently, today India’s export to Africa have increased almost four-fold from $7bn in 2005-2006 to $25bn in 2015-2016, accounting for 9.5% percent share in India’s total exports. Conversely, India’s imports from Africa, increased seven-fold from $4.9bn in 2005-2006 to $31.7bn in 2015-2016, accounting for 8.3% share in India’s imports total imports. India’s imports from Africa grew at an annual average of 29.8% during 2005-2006 to 2015-2016, as against India’s exports to Africa that grew at an annual average of 15.9% during the same period.

Selected African maritime trade updates:

FICCI Task Force: Blue Economy Vision 2025 – harnessing business potential for India Inc and international partners

Dynamar: East African to Indian Ocean container trade to grow by 7 million TEUs by 2020

Maersk Line Africa: Container sector enjoying boom in inter-Africa trade

Financing for Development: progress and prospects, 2017 (UN)

In 2016, the first full year of implementation of the Addis Ababa Action Agenda, efforts have begun at all levels to mobilize resources and align financing flows and policies with economic, social and environmental priorities. Progress can be reported in all seven action areas of the Addis Agenda. Nonetheless, a difficult global environment has impeded individual and collective efforts, and many implementation gaps remain. Extracts from Chapter III.D: International trade as an engine for development (pdf). To date, small and medium-sized enterprises are not benefiting sufficiently from the international trading system. Governments, with support from the international community where necessary, should ensure that SMEs have access to adequate and affordable trade finance, including by reducing limitations that hinder access, increasing the size of publicly backed trade finance programmes where possible, increasing capacity-building and support in the local banking sector, and maintaining an open dialogue with trade finance regulators. Higher wages for female employees are likely to have knock-on effects on the wider economy. Women’s participation in international trade supports several SDGs, but has been constrained by a number of challenges. To further efforts to address the constraints on women’s participation in trade, the international community should work collaboratively to enhance the availability of gender-disaggregated economic and social data in this field. Non-regulated trade can undermine the livelihoods of people, species and ecosystems. Governments should collectively reduce non-regulated trade such as poaching and trafficking of protected species and hazardous waste, among others

Funding the SDGs in resource-rich countries (UNDP)

We recently introduced the Extractives Dependence Index (EDI) to measure a country’s dependence on its oil, gas and mineral resources. We found that in 17 of the 27 Sub-Saharan Africa countries analysed in 2011, resource-dependence was driven mainly by export earnings and GDP value-added. However, revenue generation from the sector was comparatively low. The lower than average dependence on resource revenues in SSA countries does not reflect diversified tax bases as these countries do not generate significant non-resource-related corporate and income taxes. The fiscal revenue component of the EDI indicates that SSA countries face challenges in raising revenue from the extractive sector in general, posing challenges to finance the much-needed economic diversification and spending on the Sustainable Development Goals. [The analysts: Degol Hailu, Chinpihoi Kipgen]

UNDP Africa Policy Brief: Strengthening strategic alignment for Africa’s development – lessons from the UN 2030 Agenda for Sustainable Development, the AU’s Agenda 2063, and the AfDB’s High Fives

Philippe Isler: Time to get serious about red tape at Africa’s borders (New Times)

Investment promotion agencies, key players in facilitating investment into priority sectors, must make the link between trade and investment. Similarly, customs and border agencies must understand the impact that improving service delivery has on productive sectors. African countries are investing heavily in trade facilitation projects aimed at accelerating the movement of goods. This is a difficult task and a fine balancing act as they also have to preserve and secure government revenue. Yet, to maximise the yield of these investments, successfully achieve TFA objectives, and in the end increase FDI, it is essential that such projects are implemented in a coordinated, structured and sustainable way. [The author is the executive director, Global Alliance For Trade Facilitation]

Nigeria: Gross Domestic Product Report, Q1 2017 (Bureau of Statistics)

In the first quarter of 2017, gross domestic product contracted by –0.52% (year-on-year) in real terms, representing the fifth consecutive quarter of contraction since Q1 2016. This is 0.15% higher than the rate recorded in the corresponding quarter of 2016 (revised to –0.67% from –0.36%) higher by 1.21% points from rate recorded in the preceding quarter, (revised to –1.73% from –1.30%). Quarter on quarter, real GDP growth was –12.92%. [Rafiq Raji: Can Nigeria replicate the Singapore model like Mauritius did?]

Economic performance indicators for Cape Town: trade and investment (pdf, City of Cape Town)

Africa was Cape Town’s largest export region in 2016, accounting for 43,4% of the city’s global exports, followed by Europe with a share of 24,2%. African markets appear prominently among Cape Town’s export markets with five of the top 10 markets coming from Africa. Namibia was Cape Town’s top export market in 2016, valued at R9,5bn and accounting for 12% of all exports. Other top export markets were Botswana, the US and the UK. Mozambique was the fastest growing export market, among the top 10 with 68% growth between 2015 and 2016, followed by the US and China with growth of 18% and 14,8% respectively. Asia was the largest import region for Cape Town accounting for 53% of all global imports. This demand was dominated by China with imports amounting to R31,86bn in 2016, having increased by 9% from its 2015 level. [Western Cape business delegation to UK]

Swaziland, Namibia trade non-existent (Southern Times)

The two southern African countries drafted several MoUs in 2014 but fast forward 2017 and no agreement has been signed. The two countries are now looking at taking advantage of the SACU summit next month, in an attempt to the said agreements through. The agreements include the exchange of airhostess, trading of sugar from Swaziland to Namibia and the use of Namibia’s Walvis Bay port by Swaziland. The two countries are particularly keen on the areas of industrialisation in line with the SADC and SACU industrialisation policies.

Kenya: State to open one-stop centre for all investors (The Star)

Investment promotion agency, the Kenya Investment Authority, says one-stop shop for investors will be opened by end of next month. The centre, which has been on the cards since 2014, is part of the plan to grow foreign direct investments from less than two per cent of the country’s gross domestic product to the targeted 10 per cent under the long-term development blueprint, the Vision 2030. KenInvest managing director Moses Ikiara said about Sh140 million has been spent on setting up the new ultra-modern centre at the 33-storey UAP Old Mutual Tower – the country’s tallest building. That included the cost of training officers from key state departments and agencies to help hasten the process of setting up business by foreign investors.

Agro-industry players push for regional harmonization of policies and regulatory frameworks (COMESA)

Close to 50 participants composed of agro-industry companies, horticulture processing and producer companies, dairy companies, corporates and SMEs within the agriculture sector, standard setting institutions, agriculture regulatory and trade institutions attended the 2nd Agro-Industry Dialogue (17-18 May) in Kenya. Among the key recommendations from the forum was the need to harmonize policies and regulatory frameworks governing agro industries in the COMESA region as a way of promoting intra-regional trade. The recommendations will be streamlined into an advocacy position for the CBC that will feed into the upcoming COMESA Trade and Customs and policy organs meetings in 2017.

Neglected drivers of urbanisation in Africa (IGC)

Using DHS data from 23 countries in sub-Saharan Africa I calculated rates of natural population increase broken down by rural and urban residence. Somewhat surprisingly, natural urban growth exceeded natural rural growth in nearly a quarter of the country-years analysed. In other words, in these countries and years urbanisation would have happened without a single person moving from a rural area to an urban one. In some countries natural urban growth regularly outpaces natural increase in rural areas (Table 1). [The analyst: Sean Fox]

Today’s Quick Links:

African Organisation for Standardisation: recent report to the WTO’s TBT Committee

Ghana International Bank is best in trade finance

AU Commissioner Amani Abou-Zeid: AU-EU Partnership is one of the strongest partnerships that Africa has

Conference of Directors General of Customs of the Americas/Caribbean Region: update

New phase for hub and spokes trade initiative launched at Barbados workshop


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