Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection

Underway, in Arusha: EAC Sectoral Council Meeting on Trade, Industry, Finance and Investment

Today, in Addis: Arbitration in Ethiopia, East Africa, and beyond: prospects, possibilities, and challenges

South Africa’s April 2017 Merchandise Trade Statistics: surplus narrows to R 5,083bn

Economic benefits of Open Data in Africa (AfDB)

Open data programs are at a nascent stage in Africa, with most attention being focused on the objective of boosting transparency and accountability. As a consequence, the potential economic benefit to Africa has been largely overlooked, and this paper seeks to address this issue. Based on plausible and cautious assumptions, and using a variety of estimated methods, the economic potential of open data to Africa could equate to roughly 1–2% of the region’s GDP. There are particular opportunities to be gained for the Africa region in the agriculture sector, in public procurement, and in geospatial data, and there is far greater upside potential than downside risk. This report makes a number of recommendations to help Africa realize the economic potential of open data. Specifically, it calls for: [VOA: Could Big Data help end hunger on the continent?]

Joint Africa-EU Strategy Reference Group on Infrastructure: documentation (Africa-EU Partnership)

In the run-up to the 5th Africa EU Summit in November 2017, the objective of the RGI was to shape the future JAES infrastructure agenda in the areas of energy, transport, water and digitalisation for the period 2018-2020. More than 120 African and European stakeholders attended the event. “Energising Africa, Interconnecting Africa, Digitalising Africa and achieving Equitable and Sustainable Use of Water in Africa” will therefore be the proposed pillars for the future Africa-EU infrastructure agenda towards prosperity and well-being for our citizens of Africa and Europe. Spurring of investments in Africa with the European External Investment Plan as major engine for innovative private investment leverage will be the core deliverable of the future Africa-EU cooperation. The working papers and presentations can be downloaded: [Note: EU-Africa Business Forum, 7 June; EC, AUC agree on measures to strengthen financial management of AUC]

Sindiso Ngwenya: Regional integration - linking regional and national programmes (pdf, COMESA)

A cursory examination of different regional programmes in the COMESA region reveals that a higher share of the programme activities and resource allocation is used for facilitation, coordination, capacity building and other ‘soft’ public sector projects. The main concern is that such programmes in most cases are prepared without the involvement of the private sector who are supposed to be the key drivers of regional integration. Whereas, it is not in dispute that smart investments in public goods facilitate private sector investments, this may not have been the case as these investments do not result in “crowding in” of the private sector. This may partly explain why the EDF support at both the national and regional levels may not have achieved the expected results and impacts among other reasons. From the foregoing, one may be excused from asking a rhetorical question as to why these investments have not been catalytic in “crowding in” the private sector? One possible explanation is that there have been no radical reforms in the way that the national and regional programs are conceptualized, designed and implemented. This notwithstanding the laudable efforts by both the African countries and the cooperating partners to draw lessons from previous funding cycles. [Extract from his speech at the EU-East Africa seminar, Djibouti, 25 May], [IGAD: Executive Secretary participates in EU-East Africa Seminar]

COMESA, EU sign agreements worth €68m to reduce costs of cross border trade

The EU has signed two financing agreements to finance implementation of two programmes in the COMESA region. They are: Trade Facilitation programme (€53m) and Small Scale Cross-Border Trade programme (€15m). The programme on small-scale cross-border trade aims at increasing the formalization of informal cross-border trade and enhancing trade flows leading to higher incomes for small-scale cross border traders. This is being done through simplifying the Certificates of Origin, Customs document and addressing harassment of small scale cross border traders at the borders. The programme has identified five key areas of support.

Russell Hillberry: Trade Facilitation Agreement’s benefits may extend well beyond cutting red tape (The Conversation)

Estimates of the economic benefits of this agreement vary widely: from $68bn to nearly $1 trillion per year. That translates to a gain of $9 to $133 a year for every person on the planet. The range of these estimates reflects several uncertainties. Countries may agree to implement reform, but do so imperfectly. Even if the reforms are implemented fully, their effects on the time and monetary costs of trading are uncertain. The quality of implementation and its effects on trade will also vary across countries, in ways that are difficult to predict. My own sense is that lower middle of the range represents a best guess, but the truth is that we cannot yet know. More important than the economic benefits discussed in these analyses, however, is the question of whether these trade reforms can boost the developing country governments’ capacities to administer complex systems. [The author is Associate Professor of Agricultural Economics, Purdue University]

Commonwealth African Regional Trade Consultation: eight downloads

Participants discussed the most pressing trade and development challenges for Commonwealth African member states, in the light of unfavourable global economic and trade patterns, rising protectionism and growing discontent about globalisation. The meeting also provided an opportunity to review the current issues for multilateral trade negotiations, especially since the WTO is hosting its 11th Ministerial Conference in Buenos Aires in December. The meeting also provided 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 6th Global Review of Aid for Trade in July.

India-Commonwealth SME Trade Summit: selected updates

(i) Commonwealth trade prop (Telegraph India). The Commonwealth countries are planning a business travel card that will allow business leaders from the 52-member club seamless travel without a visa within their territories. The Commonwealth is also considering a business-to-business portal especially for small- and medium-entities that will facilitate interactions in a bid to raise the trade within the member countries to $1trillion from $750m now. “I have proposed that the Commonwealth set up an e-commerce platform which lists firms by sectors to promote intra-commonwealth trade,” said Usha Dwarka-Canabady, foreign secretary of Mauritius, here to attend the first India-Commonwealth SME Trade Summit. The Commonwealth countries collectively exported and imported goods and services worth $4.3 trillion in 2015. However, intra-Commonwealth trade amounts to only 17% of the total trade.

(ii) Commonwealth can lead the growth in global trade. In her opening remarks, Rita Teatotia, Secretary, Commerce & Industry Ministry said SMEs accounts for huge percentage of economic activities. “The traditional image of SME sector has been that it is tradition based, it is small and low tech but in fact this is not the reality. The SMEs not just expand to the traditional sectors but it also goes to the high-tech areas,” she added. She stressed the need to create regular forum for interaction which would help in actualizing the potential of trade amongst commonwealth countries. Deodat Maharaj, Deputy Secretary General, Commonwealth Secretariat, said it is almost 19% more cost effective to trade within and amongst Commonwealth countries than to trade from Commonwealth to non-Commonwealth country. [India-Commonwealth summit ‘a win-win’ for all involved]

Russia-Africa: a structural approach to cooperation in the new economic reality (SPIEF-2017)

The last couple of years have seen a rise in Russia-Africa trade, with aggregate turnover reaching $14.5bn in 2016, up by $3.4bn year-on-year. The bulk of it ($10.1bn) was done by four countries, including Egypt ($4.16bn), Algeria ($3.98bn), Morocco ($1.29bn) and South Africa ($718m), with Algeria as the major growth driver adding $2bn. The rising trend was seen by 28 out of 55 African nations, with Ethiopia, Cameroon, Angola, Sudan and Zimbabwe doing better than neighbours, percentage-wise. According to the Eurasian Economic Commission, Africa was the only region to have expanded its trade turnover with Russia in 2016 (unlike the EU, MERCOSUR, APEC, and others). [SA’s Black Business Council to promote SMEs in BRICS regions]

EAC tax agencies unite in war on revenue leakages (Business Daily)

All the EAC states have missed their import duty collection targets in the nine months to March with Kenya, the biggest of the economies, recording Sh65.8bn against an expectation of Sh70bn. Official data shows that both the dry and wet cargo import volumes fell in the nine months, causing a cumulative effect even on consumption taxes. Following a meeting in Burundi last week, tax bosses from Kenya, Uganda, Rwanda, Tanzania, Burundi and South Sudan have agreed to implement a uniform system for valuing imports. This means that the customs authorities in the EAC would use the same formula in determining the value of goods coming into the bloc and by extension impose similar duties.

EALA report: Tanzanians wary of job, business losses under EA bloc integration (Daily News)

Stakeholders from Tanzania have expressed concern and wary of losing employment and business opportunities under a more integrated EAC Customs Union and Common Market protocols. That’s the most vivid reading here, at least as unveiled in a report presented to the East African Legislative Assembly, citing several factors such as lack of enough knowledge on the laws and regulations guiding operations of the EAC integration, but also harmonisation of taxation systems within, and among, partner states. Presenting the report to the House, Ms Patricia Hajabakiga said EALA Tanzania Chapter members who toured Dodoma, Morogoro and Zanzibar for sensitisation activities between April and May this year, received critical issues and concerns that need working upon – with immediate effect.

Tanzania: Private sector proposes reforms for inclusive industrialisation (IPPMedia)

Among changes presented during the annual general meeting of their umbrella body, the Tanzania Private Sector Foundation, include the latter’s participation in developing Special Economic Zones, creation of ministerial committees to coordinate investment at the regional level and establishment of an Industrial Development Bank as a strategic lender to local investors and entrepreneurs. Others include the establishment of economic processing zones in the Southern Agricultural Growth Corridor of Tanzania, which has rich economic potential, to ensure that crops produced in these areas are processed or semi-processed before export. This would in turn boost the performance of the newly-built Songwe International Airport in Songwe Region as well as the iconic Tanzania Zambia Railway Authority, the business community argued.

Nigeria: National Industrial Policy and Competitiveness Advisory Council inaugurated (NAN)

The Minister of Industry, Trade and Investment said the council represented what the government was working out in furtherance of the partnership between the public and private sector with respect to industrialisation. He said he was confident that the council would provide the formula that would work and produce results. The Council discussed the industrialisation priorities for the economy where Aliko Dangote said the council was a welcome development which if well utilised could ensure diversification of the economy. He urged that government should remove the constraints hindering industrialisation such as power, transportation, inconsistencies in policies, and challenges in land acquisition and communal violence. [Note: the article lists the full membership of the advisory council]

Competitiveness, comparative advantage, and role of NEXIM in export stimulation (Premium Times)

Capital remains a key constraint to the outlook and operations of NEXIM. To be functional as an ECA, NEXIM requires more capital than it has ever had since inception. According to the consolidated balance sheet released by the CBN in Q4 2016, NEXIM’s total asset stood at N66.5bn, or about $211m. It is no wonder that NEXIM could not provide any meaningful support as non-oil exports earnings continued on a free decline to N2.6bn by the end of 2016. How can NEXIM de-risk the sector with as little as $211m? How can it provide buyer credit and overseas investment loans to exporters and Nigerian companies abroad?

Sustainable banking as a driver for growth: a survey of Nigerian banks (pdf, Deloitte Nigeria Blog)

With the adoption of the Nigerian Sustainable Banking Principles (NSBP), most banks in Nigeria have been prompted to intensify their adoption of sustainable banking principles. Although the banks are at varying levels of engagement with these principles, and with sustainable banking in general, significant progress has been made since 2013. Deloitte surveyed 18 of the largest banks in Nigeria to understand how they have adopted sustainable banking principles, what their experience has been and what they need to overcome the challenges they have experienced so far. Some key highlights from the survey are outlined below:

International trade statistics: G20 trends, first quarter 2017 (OECD/WTO)

All G20 economies, with the exception of France (where exports contracted by 2.4%), saw export growth in the first quarter of 2017. Australia recorded the highest growth (7.2%) among OECD G20 economies. Growth was also robust in Korea (5.7%), the United Kingdom (3.3%), Canada (2.9%), the United States (2.7%) and Japan (2.5%) but was more subdued in the G20 euro area economies with Germany (1.3%) recording the highest growth. Export growth was especially strong in the BRIICS economies ranging from 3.5% in Indonesia to over 10% in Brazil and Russia. Imports grew in all G20 economies in the first quarter of 2017.

Today’s Quick Links

Mercosur-SACU: inaugural Preferential Trade Agreement Joint Administrative Committee statement (pdf)

Doing business in Africa not as difficult as perceived – report

2017 China Beijing International Fair for Trade in Services: update

COMESA, ESAAMLG sign pact to fight money laundering

Togolese soybean producers find new markets in Vietnam and Europe after ITC assistance

IMF: Inclusive Growth Framework (illustrated with reference to Senegal, Djibouti)


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