News
tralac’s Daily News Selection
President Kagame: Report on the implementation of the institutional reform of the African Union
The Implementation Matrix already handed [today] to you leaders in this room is offered as a realistic guide to what it will take to deliver the reform in a timely manner. The reform can be substantially complete by our Summit in January 2019, which would adequately reflect the urgency of seizing the narrow window of opportunity before us. This target is ambitious, but also achievable, if we work together with the same spirit of openness and conviction that has brought us this far. Maintaining this pace requires a very strong and capable Reform Implementation Unit. Since the structure and mandate of this group was often raised during our consultations, allow me to say a few words about it...
There is enough flexibility built in to the Financing Decisions to deal with any challenges that might arise. We have been here before in the past, only to retreat. We should maybe not want to repeat the same. We should look at this process as the last best chance for the African Union to fix its finances and enhance its capabilities and finally secure the esteem of the people we serve, of this continent. The fact that many countries, almost one-fifth of our Members, have already begun to implement the 0.2% levy on eligible imports shows that it can be done. Even more Member States are actively preparing to do so. They are all to be commended.
Boosting intra-Africa trade requires political will – Kagame (New Times)
President Paul Kagame has said that boosting intra-Africa trade should go beyond financial investments to political will. President Kagame was speaking at the closing of the Afreximbank Annual General Meeting 2017. “Trade depends on more than finance, many trade facilitation efforts require little more than political will. We have examples in some regions where removal of barriers to trade has greatly improved the business environment. This needs to be shared widely across the continent so that Africans can reap the full benefits of integration,” he said. [Afreximbank announces stellar 2016 results]
Ratification updates:
(i) Tripartite Free Trade Area. A paltry eight African have so far ratified the Tripartite Free Trade Area more than two years after it was launched in Egypt, raising fears of a failed continental effort to create an expanded trade barrier free market. COMESA’s secretary general Sindiso Ngwenya confirmed in an interview last week that only eight countries have ratified the TFTA while several were still undertaking formalities with respective authorities before ratifying. But Ngwenya regrets the delays by members states over ratification fearing that most countries may have veered off course the ‘spirit’ under which they signed agreement. Many countries had actually pledged during the summit to expedite the ratification before the end of 2015 after finalising formalities from their respective parliaments. “The member states spoke in unison that they would all fulfill all formalities and ratify the TFTA before the end of 2015 or by mid 2016, but we have only seen a paltry eight ratifying it despite repeated reminders for them to hasten the process so that we can integrate as one Africa under a common market.”
(ii) EAC Cooperative Societies Act. Kenya plans to ratify the EAC Cooperative Societies Act before the end of 2017 to help boost regional integration, a senior official said Saturday. Cabinet Secretary in the Ministry of Industry, Trade and Cooperatives Adan Mohamed told journalists that all the heads of state of EAC member states will also assent to the regional law as soon as possible. The EAC Cooperative Societies Act was passed by the East African legislative Assembly in 2015. Once all trading bloc nations ratify the law, cooperatives in one member states will be able to draw membership from other partner states.
BRICS: New Development Bank’s General Strategy 2017–2021 (NDB)
On 30 June 2017, the Board of Governors of the New Development Bank approved the Bank’s General Strategy document for 2017-2021. The General Strategy of the Bank lays out how the NDB intends to fulfill its mandate of mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development. Extract (pdf): NDB operates in a very different world from that in which existing multilateral financial institutions operated when they were created. The economic, political and social realities that shaped the second half of the 20th century have shifted markedly, and a new set of relations are now being built - between individuals, firms, countries, and between humanity and the physical environment. In many ways, the current global context is defined by non-linear, disruptive technological changes. Conventional infrastructure - energy, transportation, urbanization - will continue to be critical. Demand will be driven by the rate of economic growth, per capita income, demographics and urbanization - what can be called linear trends. But a non-linear trend has begun where infrastructure is becoming green at an exponential rate. Costs of solar and other renewables, for instance, have reached parity with those of fossil fuel-based energy in many countries. This trend is bound to accelerate as more and more countries commit to renewables, pushing costs down. Green energy is the present - not the future. The world will see many more non-linear trends beyond green. It used to be that productivity enhancements meant vast investments in new plant and machinery. This is no longer the case. Companies are generating enormous productivity gains while undermining traditional ways of doing business in many areas, such as accommodation provision, retail sales and transport services.
Mozambique creates new agency to promote investment and exports (Macauhub)
The leaders of Mozambique’s newly created Investment and Export Promotion Agency (Apiex) are expected to approve investment projects estimated at US$9 billion by the end of the year, according to the local press. Apiex is the result of the merger of three institutions – the Investment Promotion Centre, the Office of Economic Zones for Accelerated Development and the Institute for the Promotion of Exports.
Tanzania: Mining lobby asks govt to delay passage of new laws (IPPMedia)
The Tanzania Chamber of Minerals and Energy has asked for more time to review three landmark bills submitted to parliament last week for the overhaul of the legal, regulatory and fiscal framework of the country’s extractive industry, citing a lack of stakeholder engagement. The government wants the Natural Wealth and Resources Contracts (Review and Re-Negotiation of Unconscionable Terms), the Natural Wealth and Resources (Permanent Sovereignty) and the Written Laws (Miscellaneous Amendments) bills to be passed by parliament this week under a certificate of urgency. But TCME warned that the proposed legislation would have far-reaching consequences on Tanzania’s mining sector and urged the government to rethink its decision of rushing the bills through parliament. A parliamentary source told The Guardian yesterday that the mining lobby’s pleas for the legislative process to be delayed will likely fall on deaf ears.
Dar es Salaam Maritime Gateway Project: updates from World Bank
(i) The capacity of the Port of Dar es Salaam will be increased to 25 million tons over the next seven years following the World Bank Board of Executive Directors’ approval of a $345 million credit and a $12m grant to the new Dar es Salaam Maritime Gateway Project. The investments in the port will also improve waiting time to berth from 80 hours to 30 hours as well as overall productivity. The port handled 13.8 million tons in 2016, up from 13.1 million tons in 2013, and 10.4 million tons in 2011, reflecting an average growth of 9 percent per year over the last five years. While recent numbers indicated a slowdown, the respite is likely to be short lived as projections for the long term suggest the Port’s volumes could double, from the current 14 million tons to 38 million tons by 2030, in an unconstrained scenario.
(ii) Trade from Zambia, Burundi, Uganda, Rwanda, and the DRC accounted for up to 35% of the Port of Dar-es-Salaam’s volume of cargo in 2015 - the equivalent of over 5.1 million tons. Forecasts suggest this component alone could almost double to 9.7 million tons by 2030. [Fact Sheet]
Railway projects in Africa, by Africa (Business Report)
WBHO, the listed construction and engineering group, is targeting rail construction projects on the African continent. This emerged at a Competition Tribunal hearing last week about the proposed merger between WBHO Construction and Faku Family Enterprises with Grindrod Rail Construction South Africa and Grindrod Rail Construction Company, which are part of the listed integrated logistics service supplier Grindrod. The tribunal approved the merger without conditions. David Colman, the divisional financial director at WBHO Construction, highlighted that they were currently working in 12 or 13 African countries but had more than 50 to 60 rail opportunities throughout Africa that they were tracking. Colman said these opportunities could lead to WBHO Construction expanding into 20 to 30 other countries in Africa. However, he said only one or two rail opportunities were closed each year.
A suite of bilateral trade updates:
(i) Zambia, DRC sign Kasumbalesa trade deal. Zambia and the DRC have signed a bilateral trade agreement to begin operations on the one-stop border post at Kasumbalesa in Chilabombwe District on the Copperbelt Province. The agreement was signed by Zambia’s Minister of Commerce, Trade and Industry Margaret Mwanakatwe and DRC’s External Trade Minister Jean Lucien Bussaa Tongba in Ndola yesterday. The governments agreed to form a joint-border post committee to facilitate cross-border trade and construct trade centre zones at Kasumbalesa and to officially launch the Simplified Trade Regime. Zambia and DRC will request COMESA to support the implementation of the STR through the construction of trade information desks to facilitate cross-border trade.
(ii) Zambia’s trade deficit with South Africa continues to widen. Zambia’s trade deficit with South Africa has continued unabated with South Africa exporting goods worth ZMW1.91bn to Zambia in May alone. A look at the Central Statistics Office monthly bulletin for June 2017 (pdf) shows that Zambia only exported goods worth ZMW 320m to South Africa. Efforts to lower the deficit seems not to be bearing fruit as Minister of Trade Magerate Mwanakatwe and Zambia’s Ambassador to South Africa, Emmanuel Mwamba in 2015 and 2016 organized a series of meetings by the business councils of both Zambia and South Africa to operationalise some of the bilateral agreements that would remove the impediments to Zambian businesses accessing the South African market. The recent upsurge of shopping malls mostly promoted by South African businesses which house a lot of South African consumer goods traders and supermarkets have even led to further increase in the trade deficit. These supermarkets have ended up importing even fresh fruit and vegetables products and other simple products which they could easily develop a local supply chain.
(iii) SA, Tanzania must even out trade imbalance. Economic Counsellor for the South African High Commission in Tanzania, Frans van Aardt, says South Africa and Tanzania must work to address the trade imbalance between the two countries. ”Currently, the trade balance is skewed in South Africa’s favour and efforts should be doubled to address the imbalance. Tanzania is an emerging economy with high growth potential, relatively diversified economy and a number of opportunities remain untapped in many sectors,” said Van Aardt on Thursday. A delegation of 21 business people arrived in Dar Es Salaam in Tanzania on Thursday to participate in the second leg of the Outward Selling Mission being led by the Department of Trade and Industry.
(iv) Avenues exist for Nigerian investments in South Africa, says envoy. The Nigerian High Commissioner to South Africa, Martin Cobham, has called for more Nigerian investments in that country, to enhance the balance of trade between the two countries. Cobham told the News Agency of Nigeria in Pretoria that the Federal Government should use the Nigeria-South Africa Bi-National Commission to open up avenues for more of such investments. “For a start, we can have Mr Biggs, or a Nigerian bank to cater for the Nigerian community in South Africa. The South African banks have stringent measures,” he said. The high commissioner suggested that relevant bodies like the Nigerian Economic Summit Group and the Nigerian-South African Chamber of Commerce, could also be used to open up avenues for such Nigerian investments.
(v) Egypt wants to increase trade and investments with Zambia. Egyptian Foreign Affairs Minister Sameh Shoukry has said his country desires to increase trade and investments with Zambia. Speaking during a bilateral meeting with his Zambian counterpart Harry Kalaba in Addis Ababa, Ethiopia, on Saturday, Mr Shoukry said his country was looking for more investment opportunities in Zambia. He hailed the excellent relations existing between the two countries, and renewed Cairo’s invitation for President Edgar Lungu to undertake a State visit to that country.
(vi) Rwanda, Congo sign finance cooperation deal. Rwanda’s Minister for Finance and Economic Planning, Claver Gatete, said the agreement will facilitate collaboration in entire planning and finance process. Ingrid Olga Ebouka Babakas, the Congolese minister for planning, statistics and regional integration, said: “This step started a year ago during the meeting of AU Heads of State. Beyond the words, we have to proceed with actions.”
