Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: UNDP | AusAid

Starting today: In Kigali, Afreximbank’s Annual General Meeting on the theme Promoting African trade and economic transformation. In Cotonou: The Africa Carbon Forum.

AU Summit update from 34th Session of the Permanent Representative Committee. The Chairperson highlighted the main issues to be considered during the PRC meeting, which include: Reform of the African Union, for which the follow-up of the implementation, in accordance with the July 2016 and January 2017 summit decisions, has been jointly entrusted to the Presidents Paul Kagame of Rwanda, Idriss Deby Itno of Chad and Alpha Conde of Guinea. This is in addition to migration, peace and security, and implementation of the decision of the 0.2% levy on imports of eligible products in order to ensure in predictable, sustainable and equitable financing of the AU. Mr Mahamat also highlighted the partnerships of the AU, noting “our strategic partnerships merit a new examination in order to make them more relevant to the requirements of our Agenda 2063, and to the pillars of the reform of our Union”. He called on the PRC to finalize the study on the evaluation of the AU strategic partnerships and to present it to the deliberative bodies. [Full text, in French], [Ethiopia nominates Neway Gebreab for AUC Economic Affairs Commission post]

Dance of the lions and dragons: how are Africa and China engaging, and how will the partnership evolve? (McKinsey)

Yet to date it has been challenging to understand the true extent of the Africa–China economic relationship due to a paucity of data. Our new report provides a comprehensive, fact-based picture of the Africa–China economic relationship based on a new large-scale data set. This includes on-site interviews with more than 100 senior African business and government leaders, as well as the owners or managers of more than 1,000 Chinese firms spread across eight African countries that together make up approximately two-thirds of sub-Saharan Africa’s GDP. Behind these macro numbers are thousands of previously uncounted Chinese firms operating across Africa. In the eight African countries on which we focused, the number of Chinese-owned firms we identified was between two and nine times the number registered by China’s Ministry of Commerce, until now the largest database of Chinese firms in Africa. Extrapolated across the continent, our findings suggest there are more than 10,000 Chinese-owned firms operating in Africa today (Exhibit 2).

We evaluated Africa’s economic partnerships with the rest of the world across five dimensions: trade, investment stock, investment growth, infrastructure financing, and aid. China is among the top four partners for Africa across all these dimensions (Exhibit 1). No other country matches this depth and breadth of engagement. On balance, we believe that China’s growing involvement is strongly positive for Africa’s economies, governments, and workers. However, there are areas for significant improvement.

At a national level, we focused on eight large African economies, and identified the following four distinct archetypes of the Africa–China partnership: (i) Robust partners: Ethiopia and South Africa have a clear strategic posture toward China, along with a high degree of economic engagement in the form of investment, trade, loans, and aid. (ii) Solid partners: Kenya, Nigeria, and Tanzania do not yet have the same level of engagement with China as Ethiopia and South Africa, but government relations and Chinese business and investment activity are meaningful and growing. (iii) Unbalanced partners: In the case of Angola and Zambia, the engagement with China has been quite narrowly focused. (iv) Nascent partners: Côte d’Ivoire is at the very beginning of developing a partnership with China, and so the partnership model has yet to become clear.

Kenya China Economic and Trade Association: We’re doing good work, Chinese companies in Kenya say (Daily Nation)

Large Chinese companies operating in Kenya want the public to know that they are doing good, operate on principles and want to help Kenyans and be model partners for communities. That was the message from the launch last Wednesday of a Chinese Enterprises in Kenya corporate social responsibility report (pdf) by the Kenya China Economic and Trade Association. China’s ambassador to Kenya, Dr. Liu Xianfa, said this was the first such report ever commissioned by a group of Chinese companies operating in any country in the world. The KCETA report highlights the efforts of 73 large companies to achieve partnership milestones with Kenyans. They include cultivating local talent and management, transferring technology, responsible business practices and working with communities. [Atlantic Council report: Chinese FDI in Latin America: new trends with global implications]

Report to the Ugandan people: American funding impacts Uganda’s health sector (The Independent)

The US Embassy report shows that in 2016, the US provided more than $840m (Shs 2.9 trillion) in assistance to Uganda and more than half; $488.3m (Shs 1.7 trillion), went to the health sector. The assistance makes Uganda one of the largest recipients of US aid in the world. Extract (pdf): It’s also why the bulk of our assistance – nearly $500 million (UGX 1.7 trillion) last year – is dedicated to the health sector. These programs are reducing mortality rates among mothers and newborns; helping HIV-positive Ugandans live longer, more productive lives; and training a new generation of health professionals to care for their fellow citizens. At the same time, we’re helping Ugandans become more prosperous. We encourage bilateral trade and U.S. investment in Uganda, as well as opportunities for Ugandan products to reach American consumers. Our programs seek to keep Uganda and its young entrepreneurs competitive in a rapidly changing global market. [Note: Section 3 in the report deals with economic issues]

DFID’s approach to supporting inclusive growth in Africa: a learning review (ICAI)

A new generation of centrally managed programmes has helped to boost delivery capacity. Having correctly identified that programming must be context-specific, it introduced the inclusive growth diagnostic to support country planning. Its approach has evolved through several strategy documents, leading to the 2017 Economic Development Strategy. At country level we found a more mixed record (pdf). The diagnostic work was of variable quality and did not always lead to greater prioritisation of effort and resources. Country portfolios show a clear focus on the poorest and include some innovative approaches to economic transformation, but their strategic focus is not always clear. Monitoring, evaluation and learning practices are not yet strong enough to support experimental programming. Our sampled programmes lacked an explicit approach to economic inclusion and to monitoring whether marginalised groups were being reached. Overall, we find DFID’s focus on economic transformation to be an appropriate response to the development challenges facing Africa and a welcome increase in the ambition of its economic development work.

European Investment Bank to announce largest private financing program in Ethiopia

The European Investment Bank is to announce a new multi-billion Ethiopian birr private enterprise financing program in Ethiopia. According to a statement issued by the Bank, Vice President of the European Investment Bank Pim van Ballekom who will be paying a two day official visit to Ethiopia this week will announce the financing program. The EIB delegation will discuss ongoing activity and future investment with Prime Minister Hailemariam Desalegn and Minister of Finance and Economic Cooperation, Dr. Abraham Tekeste, as well as meet business leaders.

Ghana Economic Update: Shifting Ghana’s competitiveness into a higher gear (World Bank)

Ghana’s business environment and competitiveness fall short of their potential. Ghana has been generally stagnant or declining in areas of competitiveness and business reform over the last few years. The World Bank’s Doing Business Report and the Word Economic Forum’s Global Competitiveness Index tell a similar story of Ghana’s relatively good performance against the West Africa average but a significant drop compared to its own performance 8 years ago or benchmarked against comparator countries. Although Ghana is one of the regional leaders in overall Doing Business rankings, its inability to sustain reforms severely affects its competitiveness globally.

Central Corridor ministers commit to reduce delays (Daily Monitor)

Transport ministers of the Central Corridor have signed a $30m (Shs108 billion) external fund which is expected to eliminate some of transport hurdles that have been causing delays. The Central Corridor route connects the Port of Dar-es-Salaam by road, rail and inland waterways to Burundi, Rwanda, Uganda and the Eastern part of the DRC and all of central and northern western Tanzania. Uganda’s transport minister, Ms Monica Azuba Ntege, speaking at the signing ceremony of a joint commitment at their 8th Interstate Ministerial meeting held in Kampala last week, said: “The economic success of all member countries and the subsequent well-fare of the people will depend on how well leaders will address the issues of infrastructure development in the Central Corridor.”

Kenya commits to SGR reaching Malaba (Daily Monitor)

Mr James Macharia, the Kenyan Cabinet Secretary for Works insists that Kenya has no intention of terminating the SGR in Kisumu. “We’ve agreed that we need to sit with the financiers and have these joint commitments that we’ve agreed upon. That way, the issue of a hanging railway – Kampala to Malaba or Nairobi to Kisumu – will be no more. It will be a joint seamless connected railway. We must synchronise the completion of the project. In terms of viability, we see it as one project - A to Z -, initially being Mombasa to Kampala,” he told reporters last week. Last week, the SGR cluster of the Northern Corridor Infrastructure Projects met in Kampala and on the sidelines, the Works ministers for Uganda and Kenya issued a joint statement on the project. The financiers of the project, EXIM Bank of China, are said to only be considering granting Kenya more financing for to Kisumu, only if there is a commitment to reach Malaba.

COMESA Annual Research Forum: Invest more in research to spur trade and devt, COMESA urged (New Times)

Speaking at the event, Robert Opirah, the director general of trade and investments at the Ministry of Trade, Industry and East African Community Affairs, cautioned that commitments made by member states to implement regional integration programmes may be overtaken by events, if not fast-tracked. “Regional integration is not a static process. Therefore, agreed commitments require evidence-based policy redirection in order to achieve the intended goal,” Opirah said.

Relief as 100 cleared trucks enter Namibia (New Era)

About 100 trucks which were among the approximately 400 haulage trucks seized in Zambia in January and February, and were recently cleared, yesterday left Zambia and entered Namibia via the Wenela border post, ending a long stand-off between Zambia and truck owners. The release of the trucks followed President Hage Geingob’s intervention after he personally telephoned his Zambian counterpart Edgar Lungu to resolve the deadlock. The trucks were held while the Zambian authorities verified permits and other relevant documentation, after they learnt that some companies were illegally harvesting mukula timber in Zambia, then transporting it illegally to the DRC and then to Namibia, South Africa or Tanzania for possible export to China. [Malawi: Govt to impose curfew on night buses, trucks]

Ghana and Polish trade Chambers sign MoU (Ghana News)

The MoU was signed on Tuesday at a one-day Ghana-Poland Business Forum in Accra. The forum, jointly organised by the GNCC and the Polish Chamber of Commerce, is to strengthen the co-operation between the two countries. Statistics from the International Trade Centre showed that Ghana’s exports to Poland stood at GH¢33.3m in 2016, while imports from Poland stood at GH¢37.4m.

To achieve $900bn export target, India needs to overhaul its trade policy (The Wire)

As the mid-term review of India’s foreign trade policy is on and a revised policy is expected to be announced on July 1, the country confronts multidimensional challenges – falling global aggregate demand, weakening linkage between global income and trade growth, the rise of protectionism and halted progress in mega regional trade agreements to name a few. As against a few changes here and there, addressing these challenges requires a radical shift in its trade policy. This is because most of these challenges demand structural changes in our trade policy to achieve the export target of $900 billion by 2020. For India to achieve this stated policy objective, concerted efforts are required to realign its foreign trade policy with the new global trading system. Currently, India’s trade policy faces several policy-related challenges – inadequate export diversification, rationalisation of the tariff regime and export promotion schemes, insignificant involvement of a majority of states in exports and factor market reforms which are critically linked with export performance. These challenges not only affect the productivity and competitiveness of domestic firms but also restrict them from participating in global production networks. [The authors, Bipul Chatterjee and Surendar Singh, are CUTS International staffers]

Today’s Quick Links:

An interview with the EABC chairperson: We can produce competitive products

Kenya: Interpol Uganda establishes business advisory units at border posts

Nigeria set to surpass Ghana in annual yam export - Minister

Kenya: Full text of the National Super Alliance manifesto

WEF: Five profiles that explain China’s consumer economy


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