Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Media Club South Africa

Boosting trade and investment in Sub-Saharan Africa: Wilton Park roundtable, 28-30 June. The purpose of this roundtable is to identify and develop channels that facilitate greater trade and investment within, between and beyond the borders of the leading Sub-Saharan economies. It aims to map out areas where developed and emerging states can partner with a range of countries in the region to share best practice in developing trade and investment policy with the long term goal of doubling both in a decade. [Download: Programme]

Concluding today: 30th Civil Society Pre-Summit Consultative Meeting on gender mainstreaming in the AU and Member States

Starting today: 4th AU High Level Panel on Gender Equality and Women’s Empowerment. Speech by AUC Chairperson, Mr Moussa Faki Mahamat

Nigeria: 2017 Resource Governance Index (Natural Resource Governance Institute)

Nigeria scores 42 of 100 points and ranks 55th among 89 assessments in the 2017 Resource Governance Index. It has the largest oil and gas reserves in sub-Saharan Africa with an estimated 37 billion barrels of oil and 188 trillion cubic feet of gas. Nigeria is one of the world’s most resource-dependent countries – oil and gas contributed the majority of government revenues and constituted 90 percent of Nigeria’s exports in 2015. Licensing is the weakest link in Nigeria’s value realisation component, with a score of 17 of 100, placing it 77th among 89 country licensing assessments. This score and ranking reflect high levels of opacity in key areas of decision-making, including qualification of companies, process rules and disclosure of terms. [Downloads: The complete Resource Governance Index, including data visualizations, a global report, country profiles and a downloadable data viewer]

Export controls and competitiveness in African mining and minerals processing industries (OECD)

The four case studies selected for the analysis concern the manganese sector in Gabon, the primary and secondary lead sector in South Africa, the copper sector in Zambia and the chromium sector in Zimbabwe. These cases cover a variety of conditions: they concern different types of minerals (base metals, minor and technology minerals), employ different kinds of export control policies, and the number of potential downstream activities differ significantly. The report describes developments in the industries over a 20-year time span from 1992 through 2013. Extract from the conclusion (pdf): In the light of the findings, it is hard to defend export restrictions as a tool for stimulating local mineral processing. There was no improvement in the comparative advantage of semi-processed products, which would have benefited from the measures taken. South Africa, Zambia and Zimbabwe all have developed smelting and refining competences and positioned themselves as exporter of certain semi-processed products, but these achievements cannot be attributed to the export control measures studied, which did not improve the relative export performance of these products.

A “dark side” to the commodity boom in Africa: new evidence on the resource curse (American Economic Association)

Afreximbank AGM: Speakers highlight need for regional integration

Activities marking the 24th Annual General Meeting of Afreximbank opened in Kigali with Claver Gatete, Minister of Finance and Economic Planning of Rwanda, calling for the building of regional value chains which have the potential to generate enormous benefits for African economies. “The creation of regional value chains in Africa along several product lines could ease the integration of African economies into global value chains,” said Mr Gatete in an opening address (pdf) during the seminars of the Afreximbank Advisory Group on Trade Finance and Export Development in Africa. “In this context, ongoing efforts to deepen regional economic blocks within Africa offers tremendous opportunities to draw on economies of scale to transcend the natural and environmental constraints imposed by geography,” he continued.

Build critical mass of experts to push economic integration agenda – BoG Governor (GNA)

Ernest Kwamina Yedu Addison, Governor of the Bank of Ghana, says a monetary union is a critical component of regional integration and urged central banks and finance officials across West Africa to build a critical mass of experts in this area. He said building a critical mass of experts was needed to enable the sub-region pick up its pace in its regional integration efforts. He made the statements in a speech delivered on his behalf by Ms. Catherine Ashley, Advisor to the Bank of Ghana, at the opening of a regional course on financial and economic issues in regional integration in Accra on Wednesday. Dr Addison bemoaned the lagging behind of Anglo West Africa in establishing a monetary union with a single currency as seen in francophone West African countries with the CFA zone, despite numerous efforts.

US-Africa Business Center: new reports

(i) US-Africa policy recommendations for the Trump Administration (pdf): The administration should push for an increase in focused bilateral dialogues with key markets and formalize a schedule with existing ones such as Nigeria, South Africa, and Morocco. These dialogues have proven to be beneficial to the business community, as they present opportunities to raise regulatory issues and allow for parties to voice challenges around the ease of doing business. Examples of successful dialogues can be found in the US-India Strategic and Commercial Dialogue and the US- China Joint Commission on Commerce and Trade. Furthermore, nations such as China and Brazil have had success in Africa because their presidents lead business missions to key partner countries. We recommend the following as a way to strengthen our commercial ties across Africa:

(ii) Inaugural Investor Confidence Indicator for Africa: The ICIFA assigns an overall score to each nation based on their performance in 12 bellwether international evaluations on essentialities for promoting security, development, and good governance rooted in the rule of law – the cornerstones of a strong society and vibrant business environment.

Ghana: Traders unaware of trade-related fees and charges – USAID study (News Ghana)

The study, which examined Ghana’s compliance with the WTO’s Trade Facilitation Agreement’s Fees and Charges, found out that a consolidated list of trade-related fees and charges was not easily accessible. “Traders are unclear of what ends up being paid to the Ministries, Departments and Agencies, what is paid in unofficial fees and how much goes directly to the freight forwarder,” the report stated. Mr Robert Jackson, the US Ambassador to Ghana, launched the study dubbed ‘The cost of trading in Ghana’ at the monthly luncheon of the American Chamber of Commerce. Extract from Amb. Robert Jackson’s speech: American companies are excited about the possibilities. But they will need to see action and tangible results. We are looking to the government to hold people accountable when laws are broken. We need to see a court system that works more efficiently and is willing to prosecute and convict guilty parties. We hope to see greater use of technology — technology that will: (i) facilitate business registrations and payment of fees; (ii) provide clear standards of service; (iii) help ensure transparency in the procurement process and in business transactions.

The mounting debt at East Africa’s top supermarket chains is souring a rising middle class narrative (Quartz)

Analysts at Nairobi-based Cytonn Investments attribute the poor performance of retailers in Kenya to messy corporate governance practices and financial constraints related to rapid expansion and weak sales volumes. Although, the worst affected are Nakumatt and Uchumi, others such as Tuskys (the second largest in East Africa) and Naivas are not only facing herculean moments in servicing debt but also feeling the heat from rising competition by new players. Local suppliers produced a stinging report that showed retailers owed them around $400m of debt that had breached the usual 60-day payment agreement.The retailers (numbering over 100 with over 600 outlets in Kenya) were unwilling to share information on the scale of debt instead. Suppliers have complained of unfair trade practices practiced by retailers “due to an imbalance in the bargaining power between the retailers and the suppliers”.

Tanzania accuses Kenya of unfair trading practices

The government yesterday pointed an accusing finger at neighbouring Kenya for unfair trading practices in imposing both tariff and non-tariff barriers against some Tanzanian goods, describing the move as contrary to the regional integration treaty. Kenya has been deliberately imposing trade barriers by blocking imports of liquefied petroleum gas from Tanzania and slapping taxes on wheat flour from the country, the permanent secretary in the Ministry of Industry, Trade and Investments, Adolf Mkenda, said in a statement. “The Tanzanian government has lodged an official complaint to Kenya on this matter,” Mkenda added in the statement. The PS said Tanzania will also take its own measures against the trade restrictions, although he did not specify further on that course of action.

Central Corridor performs badly in the first quarter of this year (The Citizen)

The Central Corridor’s container trade contracted by 12% in the first quarter of 2017 despite overall growth in East Africa, a report has shown. The corridor connects the Dar es Salaam Port with Rwanda, Burundi, Zambia and the DRC. However, trade through the Northern Corridor that links the Mombasa Port with Uganda, South Sudan and parts of Rwanda expanded by one per cent year-on-year, according to Steve Felder, managing director at Maersk Line Eastern Africa. He says in the 2017 First Quarter East Africa Trade Report that aggregate trade levels in the region improved slightly since 2016.

Rwanda: Govt bans import of poultry products from South Africa, Zimbabwe over bird flu (New Times)

The ban that applies to chicken and other poultry products, is likely to affect hotels and airlines, who are among the buyers of imported poultry products. “The importation of chickens and poultry products (eggs and meat) from Southern African countries are temporally banned,” reads part of a statement signed by Minister Gerardine Mukeshimana. [Neighbours ban South African poultry over bird flu]

Zambia: No export ban will be imposed – Mutati (Daily Mail)

Minister of Finance Felix Mutati yesterday assured traders and buyers of grain that Zambia will no longer impose export bans and permits will be simplified to promote trade in the region. Mr Mutati said from the Zambian perspective what has caused challenges in trade with other countries in the region in the past is the issue of policy and documentation. Speaking at the Zambia Commodity Exchange hosted-regional grain trade facilitation forum yesterday, Mr Mutati urged Zambians to take advantage of the vast trade opportunities for grains in East Africa.

Western Cape on its way to becoming a halaal export hub (Business Day)

Earlier in June, Wesgro, the Western Cape’s trade and investment promotion agency, undertook a trade mission to Senegal. Five of the 12 companies that joined the mission are involved in the halaal goods sector. Michael Gamwo, Wesgro’s head of Africa unit, told Business Day this week that the agency was aiming to establish the Western Cape as a major exporter of halaal goods, and hence the launch of a programme focusing on that particular market. “We chose Senegal because it has a 90% Muslim population and it is a springboard to enter other countries in the subregion, such as Mali and Guinea,” said Gamwo. He said the halaal goods export strategy also focused on Nigeria, Cameroon, Asia and the Middle East. In 2015, the provincial government announced that a total of R1bn would be set aside for a halaal food park, which could generate up to R5bn for the local economy each year. Western Cape economic opportunities MEC Alan Winde said a feasibility study was being finalised.

Ravi Kanbur: The World Bank in the Era of Trump (Vox EU)

With the World Bank now far from the only game in town in providing development finance, this column argues that it should focus on issues which are truly global in scope, but questions the suitability of the World Bank’s signature instrument, the sovereign loan. The international community does rely on the Word Bank for one global public good – global consensus building – but the current situation of veto power in the hands of a US government which does not acknowledge global public good issues, as evidenced by its withdrawal from the Paris accord, is potentially lethal for perceived and actual independence in consensus building.

Robert Z Lawrence’s Punuka Annual Lecture 2016, Lagos (pdf)

Conclusions: (i) There are opportunities in the current global environment but Nigeria is poorly equipped to achieve them. (ii) It needs policies that facilitate structural change. (iii) In principle industrial and trade policies can help. (iv) But an appropriate macroeconomic environment with a competitive exchange rate is essential.

Today’s Quick Links

EAC-SACU tariffs negotiations to conclude by end-July

PwC’s Hotels Outlook 2017-2021: African Insights

Rwanda: Fast-track key integration projects, senators tell govt

Abolish difficult visa procedures, Dangote urges African leaders

East Africa Trade and Investment Hub benchmarking visit to Mauritius

Leveraging hydrography to fully exploit Mauritius exclusive economic zone

Kenya: Jubilee Manifesto

IMF Working Paper: Tipping the scale? The workings of monetary policy through trade

India to investigate Chinese textile products (Global Times)


Email This email address is being protected from spambots. You need JavaScript enabled to view it.
Tel +27 21 880 2010