tralac’s Daily News Selection
Finishing today, in Mauritius: The Commonwealth’s African Regional Consultation on multilateral, regional and emerging trade issues
Next week: 1st India-Commonwealth Small and Medium Enterprises trade summit (30-31 May, Delhi). Among the topics to be discussed: Brexit, deepening intra-Commonwealth trade, trade facilitation in services and cross-border e-commerce. The 2017 Development Finance Forum: unlocking private investment in African markets (31 May - 1 June, Accra). The forum is organized by the World Bank Group and the African Center for Economic Transformation. Provisional programme (pdf)
Profiled commentaries: US Commerce Secretary, Wilbur Ross: Most Favored Nation rule hurts importers, limits US trade (a letter to the WSJ); President Uhuru Kenyatta: Kenya an ambassador for Africa and partner to powerful nations (Daily Nation)
The new self-financing mechanism of the African Union: can the proposed AU levy be a step towards financial independence? (tralac)
The new formula is a forward-looking proposal to finance the AU’s own agenda but questions around modalities of implementation, transparency and compliance by Members must still be worked out. Rationalization and prioritizing of existing projects seem to be necessary. The AU’s challenges are to be met against the background of bigger picture issues; such as the fact that some are of the view that “the classic system of financing regional integration in Africa has reached its limit”. [The analyst: Gerhard Erasmus], [The AU’s Financing of the Union website]
Tanzania: Gold output at 10-year high in 2016 (Daily News)
Full-year gold output rose 4.4% to 1.42 million ounces in 2016, government data showed on Tuesday, as the government moved to claim to a bigger share of revenue from mineral exports. Tanzania is Africa’s fourth-biggest gold producer after South Africa, Ghana and Mali and gold exports are a key source of foreign exchange. “Gold production from gold bars and copper concentrate products by six major gold mines increased by 4.4% from 1.36 million troy ounces in 2015 to 1.42 million troy ounces in 2016,” the state-run Tanzania Minerals Audit Agency said in a report (pdf). The increased output - the highest since 2007 - was buoyed by improved production at three of the six large-scale gold mines, the mining audit watchdog said.
South Africa: Economic Development Dept Budget Vote 2017/18. Highlights from speech by Minister Ebrahim Patel:
Last year, the competition authorities and government worked together on opening up markets and placing development at the top of their agenda. Through these efforts: (i) some 58 000 workers have been covered by job-protection commitments and 6 500 new jobs will be created through merger proceedings; (ii) R4,8bn has been raised to support small business development and job-creation through competition-linked measures; (iii) 120 000 spaza shops and retail outlets will have the freedom to open a part of their sponsored fridge space to products that compete with the near-monopoly large suppliers.
Africa’s relationship with China will need to be managed carefully. China is now Africa’s largest economic partner country. A new research report by McKinsey ranks China as (i) Africa’s largest trade partner [with more than $188bn in goods trade], (ii) the biggest investor in infrastructure [at $21bn], (iii) the fastest growing source of FDI [rising by 25% per annum with FDI stock of $49billion, placing China at number four on the continent}; and (iv) the 3rd biggest aid donor [with $6bn in grants]. It estimates there are more than 10 000 Chinese-owned firms on the continent, ranging from small family-owned shops to large multi-national corporations. Our job as government is to ensure we protect South Africa’s national interest and sovereignty, that Chinese investment and market access is directed at creating local jobs, ensuring technology transfers and local supply-chains are built and exporting more manufactured goods and value-added products to China and global markets. In other words, Africa is not only a market; it should be developed into a world-class manufacturing centre. [SEZ practitioners are off to China]
SA faces stiff maize export competition (Business Day)
The South African maize industry has made a remarkable rebound and it is expecting a bumper crop this season. However, new developments have compelled me to revise parts of my recent maize export market analysis, particularly regarding maize export opportunities within the African continent. The dynamics in African agricultural markets have changed dramatically. [The analyst: Wandile Sihlobo], [Western Cape an exception amid signs of recovery in agriculture]
India: Government plans talks with African cashew exporting countries (The Hindu)
The government will convene talks with ambassadors of 12 raw cashew exporting African countries in Thiruvananthapuram to explore ways for direct purchase of cashew by the proposed Cashew Board. The aim is to avoid exploitation by traders involved in import of raw nut, Minister for Cashew Industry J. Mercykutty Amma told the media here on Thursday.
Gujarat on Wednesday signed MoUs with business entities from three African countries, namely, Ghana, Zambia and Mozambique. The state government also entered into an MoU with the Republic of Togo as part of the ongoing AfDB annual meetings being held in Gandhinagar. The pacts were signed by Gujarat Agro Industries Corporation with Zambia’s Fidanna Limited, the Association of Ghana Industries and Limpopo Agricola e Desenvolvimento Lda of Mozambique for areas such as agriculture and agri-productivity, power generation, automobiles, technology transfers and tourism.
Kenya: US polls fever cuts apparels export 2% (Daily Nation)
The annual performance report for the Export Processing Zones shows the apparels exported declined from 84.6 million pieces in 2015 to 74.0 million pieces in 2016. “This could be attributed to market uncertainty in US towards the general election in the course of year 2016,” the authority says. In the year under review EPZ Authority says it oversaw market diversification on apparel exports to include Europe and Canada. [Data: Kenya’s US exports, via OTEXA], [The AfDB’sFashionomics Africa initiative]
Uganda: Fiscal Transparency Evaluation (IMF)
Uganda meets at least the standard of good or advanced practice in 13 of the 36 dimensions of the first three pillars of the IMF’s Fiscal Transparency Code, while 23 of the 36 dimensions are scored as basic or not met, reflecting issues with the coverage, quality, and reliability of some information. Addressing these issues will assume greater importance, as additional fiscal policy challenges emerge. In particular: (i) From 2020, it is expected that there will be new revenues from oil, estimated at up to 3% of GDP at peak production; (ii) Uganda is a signatory of the East African Monetary Union Protocol, which targets the adoption of a single currency in the region by 2024.
Speaking on Monday during a panel discussion organized by the Association of African Development Finance Institutions on the sidelines of the Annual Meetings of the AFDB, Kanayo Awani, MD of Afreximbank’s Intra-African Trade Initiative, said opportunities for such partnerships existed in the areas of capacity building and project preparation. Partnerships were also needed in the mobilization of long term financing required to develop industrial parks and export processing zones that had required infrastructure “inside” and “outside the fence”, especially for projects in the countries those institutions operated.
Botswana: CAAB decries restrictive African air agreements (Mmegi)
The growth and development of air services in Africa could be undermined by restrictive bilateral agreements of most intra-African aviation markets, the Civil Aviation Authority of Botswana has warned.
Today’s Quick Links:
EABC conference: How region’s Diaspora community can spur the manufacturing sector
A game changer: the prospects and pitfalls of mobile money in Somalia
Deodat Maharaj: The Caribbean’s weak trade
Nancy Birdsall, Scott Morris: Five innovations at the AIIB