Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Mauritius Ports Authority

Diarise: Southern Africa Civil Society Forum (13-17 August, Johannesburg); China-Africa Investment Forum (27-28 November, Marrakesh)

UNCTAD SG Mukhisa Kituyi confirmed for a second term: ‘During my first term, I managed to build links and create trust with donor countries and now we have largest extra-budget resources. Among my second term priorities is to help lift Africa’s production capacity.’

TFTA Ministerial: update (New Times)

Ministers from 26 African countries are meeting in Kampala, today, in another attempt to see through overdue negotiations on a larger free trade area covering three regional economic communities. “There is some progress now. Initially, there were delays as some SADC countries did not have a clear position on tariff reductions. They have now given their proposal on how things can work and I think it will work now,” François Kanimba, the minister for trade, industry and EAC affairs, told The New Times yesterday. Dr Francis Mangeni, COMESA’s director of trade and customs, is optimistic that the Kampala meeting will deliver. The most important expected outcome, Mangeni said, is that three outstanding legal instruments – on rules of origin, trade remedies, and dispute settlement – will be adopted. ”This is what has been preventing some countries from signing and ratifying the tripartite agreement. We expect the tripartite agreement to be ratified and come into force quickly after this. The second expected outcome is that South Africa has said it will sign the Agreement at the ministerial meeting. This would bring the total number of countries that have signed to 19.”

Ethiopia rejects negotiation on CFTA implementation (Walta)

Prime Minister Hailemariam Dessalegn said Ethiopia rejects the negotiation for the implementation of the Continental Free Trade Area, considering its effect on the economy of the country. Seven countries including Ethiopia disagreed on the negotiations to fully open their doors for the CFTA. They argued the need to open their doors step by step as it requires readiness in the side of the countries, Hailemariam said during a press conference. To fully open its doors for the free trade area, Hailemariam noted that it is important that the country need to create a conducive atmosphere that complies with the situation. In this regard, Ethiopia believes that it is proper to open its doors to the free market step by step since its economy is not ready yet, he said. ”We took a stand on sensitive issues that would bring negative impact on the country and the people, and we are happy that this stand of ours has been accepted by other countries. Our decision is to work together and trade with our fellow African countries in areas other than the sensitive issue” Hailemariam underlined. “We are also happy that our difference was respected.”

Outcomes of the 29th Summit of the African Union: unofficial note by Désiré Assogbavi

The 29th ordinary Summit of the AU (July 2017) has just ended in Addis Ababa. The official decisions of the Summit are not expected to be publicly available before a couple of weeks but, based on meetings and discussions that I have had with several delegations around the Summit and after looking at some of the Summit documents, I would like to share the following unofficial note on the key outcomes of the Summit. In the coming days I will share on this blog, some personal analysis on these outcomes.

African, global air freight demand increases in May (IATA)

The International Air Transport Association has released data for global air freight markets showing that demand, measured in freight tonne kilometers, grew 12.7% in May 2017 compared to the year-earlier period. This was up from the 8.7% annual growth recorded in April 2017 and is more than three times higher than the five year average growth rate of 3.8%. African carriers’ posted the largest year-on-year increase in demand of all regions in May 2017 with freight volumes growing 27.6%. Capacity increased by 14.7% over the same time period. Demand has been boosted by very strong growth on the trade lanes to and from Asia which have increased by nearly 57% so far this year. IATA passenger data: African airlines’ traffic rose 11.7% in May compared to the year-ago period, which was more than twice as fast as the 5.1% rise in capacity. As a result, load factor jumped 4.0 percentage points to 67.5%. Demand is supported by recovery on the key Europe market.

G20 Summit commentaries: Joint IMF, WB, WTO statement on the need to reinvigorate trade; Simon Evenett, Johannes Fritz: Awe Trumps Rules: an update on this year’s G20 protectionism; Kimberley Botwright, Cristian Rodriguez Chiffelle: What trade rules are needed to support growth in the digital age?

East Africa and new 2025 global growth projections (Center for International Development)

The economic pole of global growth has moved over the past few years from China to neighboring India, where it is likely to stay over the coming decade, according to new growth projections presented by researchers at the Center for International Development at Harvard University. Growth in emerging markets is predicted to continue to outpace that of advanced economies, though not uniformly. The projections are optimistic about new growth hubs in East Africa and new segments of Southeast Asia, led by Indonesia and Vietnam. The growth projections are based on measures of each country’s economic complexity, which captures the diversity and sophistication of the productive capabilities embedded in its exports and the ease with which it could further diversify by expanding those capabilities.

The projections warn of a continued slowdown in global growth over the coming decade. India and Uganda top the list of the fastest growing economies to 2025, at 7.7% annually, but for different reasons. Uganda joins three other East African countries in the top 10 fastest growing countries, though a significant fraction of that growth is due to rapid population growth. On a per capita basis, Uganda is the only East African country that remains in the top 10 in the growth projections, though at 4.5% annually its prospects are more modest. On the other hand, the researchers attribute India’s rapid growth prospects to the fact that it is particularly well positioned to continue diversifying into new areas, given the capabilities accumulated to date. India has made inroads in diversifying its export base to include more complex sectors, such as chemicals, vehicles, and certain electronics. [Manufacturing in India and other BRICS countries: a stuttering performance]

South Africa: 2017 Article IV Consultation (IMF)

Rising integration between South Africa and its partners has been mutually beneficial but has also increased their interdependence. In 2016, South Africa’s imports and exports of goods and services were each equivalent to about 30% of GDP (11 and 9 percentage points of GDP higher than in 1994, respectively), with sub-Saharan Africa its largest regional recipient (28% of total goods exports) (See Figure 6: Rising Trade and Foreign Direct Investment Integration, p28). During the same period, FDI integration almost quadrupled as a share of GDP. Greater linkages have contributed to more significant inward and outward transmission of shocks. The decline in commodity prices has had not only a direct impact on South Africa, but also indirect effects through a slowdown in other commodity-exporting trading partners in sub-Saharan Africa. Similarly, a growth slowdown in South Africa would have adverse repercussions for its regional partners.

The current account deficit is expected to narrow further in 2017 before gradually widening over the medium term. The current account deficit is projected to decline to 3% of GDP this year as the surplus on the goods balance is boosted by mining and agricultural exports. Meanwhile, the deficit on the transfer balance is expected to widen moderately to its 2010–16 average. Over the medium term, the current account is projected to return to just below 4% of GDP as the surplus on the trade balance dissipates. External debt is seen rising to almost 50% of GDP over the medium term (Figure 11 and Annex IV. External Debt Sustainability Analysis).

South Africa: Supermarkets’ capture must fall‚ Competition Commission hears (Times Live)

The big-name supermarkets should be compelled to stock products produced by “smallholders” and new shopping mall developments should be made to allocate 25% of floor space to local township businesses‚ it has been suggested to the Competition Commission. The submission‚ to the Commission’s Grocery Retail Sector Market Inquiry‚ was jointly made by the Sustainable Livelihoods Foundation‚ the DST-NRF Centre of Excellence in Food Security and the Institute for Poverty‚ Land and Agrarian Studies at the University of the Western Cape.

Namibia: Does fiscal policy benefit the poor and reduce inequality? (Namibia Statistics Agency, World Bank)

This report demonstrates that Namibia’s progressive income tax and generous social spending programs substantially reduce poverty and inequality, but the analysis also underscores the limits of what redistributive fiscal measures alone can accomplish. The economy must ultimately create more jobs for the poorest members of society to change the underlying distribution of what might be called ”pre-fiscal” income; i.e., the income before households pay taxes and receive benefits from social programs. This will require structural transformation through greater investment in activities that create employment for unskilled workers and offer the potential for continuous productivity increases. This report aims to measure the effectiveness of these efforts and draws comparisons to the experiences of other countries.

Kenya: Eight percent of medicines enter Kenya unlawfully, study shows (Capital FM)

A market study sponsored by the Kenya Association of Pharmaceutical Industry and conducted by pharmaceutical applied researchers from the University Of Nairobi School Of Pharmacy, has confirmed an 8% prevalence of unregulated or gray medicinal brands. Speaking during the release of the study, Kenya Association of Pharmaceutical Industry Chairperson Dr Anastasia Nyalita said such products unlike those imported through the official channels, pose grave danger to the patients using them as their efficacy and quality remains questionable. “Unregulated or gray medicines, Dr Nyalita said, are those that have entered the market through irregular channels and have not undergone the necessary regulatory scrutiny and market conformity by the Pharmacy and Poisons Board,” she added. Nyalita noted that the findings will serve as a basis for broad discussion among stakeholders, to further enhance the regulation, while raising awareness among the general public. She however cited that there is need for stricter market regulation to curb trade in unregulated medicines while calling for an inter-agency management programme to boost surveillance to ensure that all products available in the Kenyan market are regulated.

Mauritius hosts 20th Plenary Session of the Contact Group on Piracy off the Coast of Somalia (GoM)

The Contact Group on Piracy off the Coast of Somalia is holding its 20th Plenary Session in Mauritius (5-7 July) attended by some 200 participants from 20 countries, international and regional organisations, associations, and NGOs. They will discuss the policies to be adopted and will devise a common plan aimed at fighting piracy and restore maritime safety and security in the western coast of the Indian Ocean. The Contact Group’s four Working Groups are:

A brutal lesson for multinationals: golden tax deals can come back and bite you (The Guardian)

This is not a simple story. No one comes out of it looking good. Acacia may not have stolen billions of dollars worth of minerals – but it did make a deal that was hard to defend. Meanwhile, it is unclear whether President Magufuli’s tactics will benefit or harm the country in the long term. Barrick Gold and the Tanzanian government are now in talks in the hope of finding a solution. But reaching a balanced agreement will be difficult, with so many contested facts and so much bad blood, on all sides. And even if Magufuli “wins” in the high-pressure negotiation with Acacia, it could be at the cost of losing the confidence of investors in Tanzania. [The authors: Maya Forstater, Alexandra Readhead]

Today’s Quick Links

South African stainless steel imports surged by 44% in 2016

Kenya’s sugar imports up 36% in four months on shortage

FAO: Monthly global food price index up 1.4%; cereal stocks set to hit new record

World Bank Commodities Price Data: June data

David Omozuafoh: Revamped APRM is now tracking African Union Governance commitments. Should it still be voluntary?

Pacific Alliance eyes new trade deals with creation of “Associate Member” role


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