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tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: AfDB | Aurélien Gillier

25 May 2017

To mark Africa Day 2017 why not explore the trade-related sections in the archives of the AU/OAU and the UNECA

Underway, in Kempton Park: inaugural Joint Administration Committee of the MERCOSUR-SACU PTA

The key recommendations from this week’s PACCI/ATPC Single Window workshop

Selected updates from the AfDB Annual Meetings:

(i) AfDB Annual Meetings end with call to see the potential of African agriculture

(ii) Annual Development Effectiveness Review 2017: Transforming Africa – Unlocking agriculture’s potential. This ADER (pdf) presents the contribution of the African Development Bank (AfDB, or the Bank) to Africa’s development. It outlines recent economic and social trends across the continent, particularly those relating to the Bank’s “High 5” priority areas. It analyses the opportunities and challenges facing Africa in the coming years, assesses how well the Bank has performed against its objectives, and discusses how the Bank will support Africa in achieving the inclusive and sustainable development that is highlighted in the Bank Strategy. This year the spotlight is on the Bank’s Feed Africa priority, as the ADER explores the theme of agricultural transformation. Extract from Chapter 4 Integrate Africa: This chapter sets out Africa’s progress on regional integration, using indicators from Level 1 of our new Results Measurement Framework (RMF). We also review the results of the Bank’s efforts on regional integration (from Level 2 of the RMF) and highlight lessons learnt from our work. We present our plans to rapidly scale up our programmes to address the challenges ahead, and also discuss how regional integration will support agricultural transformation across the continent. Under our Integrate Africa Strategy, which will be finalised in 2017, we are scaling up our operations to Integrate Africa by supporting regional economic integration. We will bolster talent mobility and improve the business climate to attract foreign direct investments.

(iii) AfDB Annual Report 2016 (pdf, 14.2 MB), AfDB Group Financial Presentation

(iv) India-Japan partnership to play key role in Asia-Africa corridor (Mint). India’s alliance with Japan is set to play a key role in the proposed ‘Asia Africa Growth Corridor’ as the island country looks to invest close to $200bn in the proposed project, according to two officials close to the development. One of these officials did not want to be named. “Japan is ready to commit about $200bn in the proposed growth corridor. An announcement on the same is expected to be made in the month of September this year. Japan has already invested about $32 billion in infrastructure projects in Africa. India is working on its investment plans and should be able to decide in the next few months. A detailed plan for the corridor should also be in place by then,” said Sachin Chaturvedi, director general of Research and Information System for Developing Countries (RIS), a New Delhi-based think tank. The four main components of AAGC listed in the vision document include development and co-operation projects, quality infrastructure and institutional connectivity, capacity and skill enhancement and people-to-people partnership. Further, AAGC include human resource training, setting up pan Africa E-network, developing capacities to sustain infrastructure, greenfield projects, investment opportunities, renewable energy, power grids, agriculture and agro processing, disaster management, joint venture projects and private sector financing.

2nd East African Business Manufacturing Summit: updates

(i) Highlight from keynote speeches: Rwanda’s Prime Minister, Rt. Hon Anastase Murekezi, said the average contribution of the manufacturing sector to GDP of EAC is about 10%. It is planned that this contribution will reach 25% by 2032. It is also expected that by the same year 2032, EAC will have diversified the manufacturing base and raised the value of the local content of manufactured exports to at least 40% from the currently estimated value of 8%. To be able to achieve these targets, EAC must focus on full implementation of the Common Market Protocol as well as on value addition for export products. The Executive Director of the East African Business Council, Ms Lilian Awinja, called for the EAC region to formulate Regional Local Content Policy with the aim of boosting the domestic value-add in the region.

(ii) Kenya has not reneged on ban on used clothing, says official (New Times). Betty Maina, principal secretary in the Kenyan ministry of labour and EAC affairs, told The New Times that Kenya has not made a U-turn on reduction of consumption of used clothing and that East Africans should have the dignity of wearing new clothing. She was emphatic that the communiqué of the 18th Ordinary Summit of the EAC Heads of State, held in Dar-es-Salaam last weekend, “clearly affirmed the commitment of east Africans to build up a competitive local textile industry” and Kenya was part and parcel of the Summit. According to François Kanimba, Rwanda’s minister for Trade, Industry and EAC affairs, the EAC Secretariat has completed a study on a roadmap how the region will implement the phase out and ultimate total ban of imports of used clothing. The EAC study, he said, will be discussed at the end of the month during which they will approve a detailed strategy on how to develop textile and leather industry in the region. Rwanda has already started implementing a phase out of importing used clothing.

(iii) CUTS/FAO report launch: Business-friendly regulations will help formalise cross-border trade (New Times). A business-friendly regulatory environment and a tax regime that favours small-scale traders are some of the incentives that will entice informal cross-border traders to formalise their business. These recommendations are contained in a report dubbed Formalization of informal trade in Africa: trends, experiences and socio-economic impacts, that was conducted by Consumer Unity and Trusts Society with support from the FAO. According to FAO Representative to Rwanda, Attaher Maiga, informal cross-border trade has been contributing about 42% to Africa’s GDP. Alice Twizeye, Director of External Trade at the Ministry of Trade, Industry and EAC Affairs, said that women account for about 80% of informal cross-border traders in Rwanda, adding that the government has been supporting them through capacity building and access to finance. She noted that informal cross-border trade contributed 30 to Rwanda’s total exports.

Tanzania: ‘Çover-up’ uncovered (IPPMedia)

Tanzania’s mining industry appears to have been literally turned on its head in the wake of yesterday’s stunning revelation that well over 1 trillion/- worth of gold, copper and other authentic gemstones were found in just 277 containers impounded at the port of Dar es Salaam in March this year with loads with mineral sand ready to be shipped abroad for processing. The findings are contained in a much-awaited report compiled by a committee of experts appointed by President John Magufuli in March this year to verify the actual amount of real minerals in the ‘sand’ – otherwise known as gold-copper concentrate ores – stored in the containers. Among its key findings, the probe team led by Prof Abdulrahman Mruma reported that the containers impounded at the port had real minerals worth 1.339trn/- in total, which had not been declared for taxation or recorded by the Tanzania Mineral Audit Agency. The government therefore has not seen a single cent in terms of tax from these minerals,” the report said. It added that the minerals found in the concentrates and not declared for taxation included real gold, silver, copper, metal and sulphur, plus other strategic minerals such as helium, nicon, zinc, lithium and ledium. According to the report, the strategic minerals alone from sampled containers were valued at between 129.5bn/- and 261.5bn/-.

Related: Report shows how Tazania lost 13trn/- in mineral royalties, Sombre mood grips dossier presentation, Sacking of Muhongo bares herculian task at ministry, We have nothing to hide, says Acacia amid damning report

Innovative trade finance fund targets African SMEs and producers (GTR)

Africa’s newest trade finance fund, Savia Trade Finance Impact Fund, is set to pilot later this year and will use a pool of concessional funds to support riskier credit structures, commonly found in the agriculture sector and SMEs. Savia will be Africa’s first trade finance impact fund. As a debt fund, Savia will seek to address Africa’s unmet demand for trade finance by utilising blended finance – a combination of concessional and commercial funding – solutions. It will specifically target smallholder farmers and SMEs with sales of less than US$10mn, with a greater focus on those companies involved in intra-African trade.

Zimbabwe: Banks reject rand adoption (Daily News)

Zimbabwean banks say adopting the South African rand will not help solve the country’s economic challenges. Addressing delegates at the two-day Financial Markets Indaba in Harare last week, Barclays Bank Zimbabwe managing director George Guvamatanga said more has to be done to solve the current liquidity crunch. “Adopting the rand is not the solution. The question we must all answer is do we want to be subjected to the South African monetary authorities” he said. [Mineral exports up 27%]

Mauritius: China’s Vice Minister of Commerce strengthens bilateral relations (GoM)

The Vice Minister of Commerce, Mr Qian Keming, emphasised that under the Belt and Road Initiative, Mauritius is called upon to play a strategic role to link China with Africa for forthcoming grand projects. He further stressed for deeper cooperation between Mauritius and China in the fields of aviation, tourism, trade, financial services and agriculture.

How trade with China boosts productivity (IMF)

Our new research shows that for advanced economies: (i) Productivity growth has been faster in countries and industries that have been more exposed to China’s opening to trade, all else equal; and (ii) As much as 12% of the increase in productivity over the 12 years from 1995 through 2007 can be attributed to China’s integration into world trade. Trade improves productivity in three important ways: [The analysts: JaeBin Ahn, Romain Duval]

Today’s Quick Links:

EU hooks most of SA’s fish exports

Nigeria’s EPA trade dilemma

EU-EAC trade deal: why has it been a hard sell?

Mobilitas-AGS inaugurates multimodal logistics platform in Gauteng

Initiative for Global Development’s Frontier 100 Forum (5-6 May, Durban): outcomes

In Beijing: ‘African countries restate commitment to digital migration’

To Make in India, Modi govt approves Buy in India

India: Concept note for the Mid-Term Review of the Foreign Trade Policy (2015-2020) (pdf)

Ecuador withdraws from its remaining investment treaties

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