tralac’s Daily News Selection
Digital Economy, trade and development (21 June, Stockholm)
5th Annual Secretary General’s Forum for Private Sector, Civil Society and Other Interest Groups (22-23 June, Bujumbura) on the theme: 15 Years of The EAC - towards a borderless community. This year’s forum will see the launching of Incubator for Integration and Development in East Africa (IIDEA) as one of the key events. IIDEA was developed as a joint initiative between the EAC Secretariat, Regional Dialogue Committee (RDC) and GIZ in order to demonstrate the tangible benefits of integration to citizens.
37th SADC Summit (19-20 August, Pretoria). The summit will be preceded by the Senior Officials’ Meeting on 11–14 August, the Ministerial Meeting on 16 August and the Double Troika on 18 August.
Association of African Central Banks: Ordinary Annual Meeting, Governors Symposium (12-16 August, Pretoria). At this annual meeting, the SARB will assume the chairmanship of the AACB. During our tenure as chair, we will continue to enhance cooperation among African central banks on cross-border banking supervision and payment systems, continental training on issues relating to banking supervision and regulation, and the collection of data needed to support bank supervisory activities.
This follows the adjournment in March 2017 of the Bureau of the 10th Joint Annual Meetings of the African Union Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration and the Economic Commission for Africa Conference of African Ministers of Finance, Planning and Economic Development. Acting Executive Secretary of the ECA, Abdalla Hamdok presented the 2016 Annual Report of the Executive Secretary to the Ambassadors. Ingrid Cyimana, Director of the Strategic Planning and Operational Quality Division, unveiled the annual report of the ECA.
German Chancellor Angela Merkel on Monday called some of the EU’s trade agreements with Africa unfair and said they should be renegotiated. “We’ll speak again at the EU Africa summit in autumn about how we need to renegotiate them,” Merkel said at an event for non-governmental organisations in Hamburg before the G20 summit, which she will host there next month. She said some trade contracts with Africa were “not right”. [Germany to focus on free, fair trade at G20 summit]
Related: EU ministers pledge more efforts for Africa partnership: The nine-page Council conclusions adopted yesterday stress that the EU and its member states are Africa’s main partner in the fields of foreign investment, trade, place of origin for remittances, development and humanitarian assistance, and security and defence. [Joint Africa – EU Partnership Strategy: CSOs Intercontinental Forum (28–30 June, Tunis)]
During the visit by the Chinese delegation, China’s Foreign Affairs Minister Wang Yi expressed interest in taking over the operations of the financially strapped TAZARA through a 30-year concession arrangement. This, however, is against the desires of the Zambian and Tanzanian governments for the project to be taken over for facelift by China under a three-to-five-year management contract arrangement. Yi stated that the request by his country was coming amid calls by mining companies that wanted to run the railway project, which is the major form of transport for their haulage of copper and other related products to the port of Dar es Salaam enroute to Europe. “Chinese firms who have interest in mining want to run the railway to move mining products and equipment through the railway but we can only allow that through a management contract arrangement with specific terms and conditions unlike the 30-year concession contract,” added Yi.
Crossing the national border increases price differences between South Africa and Lesotho by 21.5% over the full 2006 to 2009 period. This average masks a border effect that is rising over time from 17% in 2006 to 26% in 2009. The structure of relative prices also differs markedly, revealing a lack of convergence to a common set of internal relative prices. These results are robust to the choice of alternative production centres in South Africa and the imposition of distance thresholds between region pairs. The results indicate that the border between South Africa and Lesotho remains an impediment to trade flows and price competition, despite their joint membership in a customs union and monetary area. Trade agreements and monetary unions alone may not be sufficient to eliminate border-related impediments to international trade and competition. Additional mechanisms to enhance the efficiency at ports of entry, such as one-stop border posts, need to be considered. [The analysts: Mamello A. Nchake, Lawrence Edwards, Tresor N. Kaya]
South Africa: Quarterly Bulletin (Reserve Bank)
The shortfall on the services, income and current transfer account widened in the first quarter of 2017, largely due to a widening in the net income deficit following a significant decrease in dividend receipts from abroad. Combined with the broadly unchanged trade surplus, this led to a widening in the deficit on the current account of the balance of payments, from 1.7% of GDP in the fourth quarter of 2016 to 2.1% of GDP in the first quarter of 2017. The financing of the current account shortfall through the financial account of the balance of payments mainly took the form of net portfolio and other investment inflows in the first quarter of 2017. South Africa’s net international investment position retreated further to 3.6% of GDP at the end of December 2016, as the market value of the country’s foreign assets declined at a much faster pace than that of its foreign liabilities.
To zero and beyond? Estimating South Africa’s structural trade balance (pdf, SARB)
The South African trade balance has improved significantly over the last three years from a 2.1% of GDP deficit in 2013 to an estimated 0% in 2016. According to the model developed in this note, roughly three-quarters of this improvement is cyclical and one quarter structural. If the export and import drivers were at their equilibrium (or structural) levels in 2016, the trade balance would have been -1,3% of GDP – instead of the estimated 0%. The trade balance could therefore deteriorate again should export and import values return to their trend values. [The analysts: Theo Janse van Rensburg, Erik Visser]
Swaziland: IMF completes 2017 Article IV visit
Strengthening public financial management and improving the management of public entities outside the central government is critical to implement fiscal adjustment plans. To this end, the IMF team welcomes the authorities’ intention to consider additional actions to contain the 2017/18 fiscal deficit within the original budget limit (8.2% of GDP) and start fiscal adjustment in next year budget.
Another session that raised particular attention was the one on Blockchain technology. Mr. Georges Al Medawar from Humaniq stated that we are now in what the 90s were for development of Internet. The speakers talked about the use of Blockchain technology in banking, agrifood, supply chain management, as well as for property registration. The advantage of Blockchain technology is that stored data is impossible to delete, alter, rewrite or illegally manipulate. The Single Window session also attracted a lot of attention, bearing in mind that Single Window represents another commitment under the WTO Trade Facilitation Agreement which entered into force in February 2017. The panel discussed governance issues and how to ensure that a Single Window system actually brings facilitation to the trade. Data has a critical role and data standards such as the Data Model can help. However, speakers pointed out to the multiple standards and multiple single windows as an obstacle to trade facilitation. Namely, the private sector has its own data standards and regulatory data has its own standards and the challenge is how to bring those two together so that the systems understand the same data in the same way. [WCO research paper: Implications of Big Data for customs (pdf)]
This book synthesises recent work by the OECD analysing services trade policies and quantifying their impacts on imports and exports, the performance of manufacturing and services sectors, and how services trade restrictions influence the decisions and outcomes of firms engaged in international markets. Based on the OECD Services Trade Restrictiveness Index - a unique, evidence-based tool that provides snapshots of regulations affecting trade in services in 22 sectors across 44 countries (representing over 80% of global trade in services) - the analysis highlights the magnitude, nature and impact of the costs entailed by restrictive services trade policies. The new evidence uncovered is meant to inform trade policy makers and the private sector about the likely effects of unilateral or concerted regulatory reforms and help prioritise policy action.
Call to action on gender and trade in South Asia (World Bank)
Despite current challenges, South Asia also presents unique opportunities for women. At the Delhi workshop (27-28 April) experts put forward several proposals to improve the environment for women following a very successful two-day discussion. These included plans to: (i) Build the capacity of women traders and their associations, and increase their awareness on trade requirements and border procedures; (ii) Collect gender-disaggregated data on cross-border trade flows; (iii) Enhance women’s use of ICT - especially to provide them with better networking opportunities and easier access to information, and (iv) Improve security and introduce gender-friendly facilities at the border.
Today’s Quick Links:
Mozambique’s Trade policy review: minutes of the meeting are now available
AU Summit January 2017: Executive Council decisions, recommendations (pdf)
Bill McKibben: The race to solar-power Africa
Dr Jaya Shukla: Manufacturing vs service sector: which way for Rwanda?
Allan Gichuhi: How Rwanda and Africa can attract more FDIs, spur growth