Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Jan Hoffmann

From last week’s Kenya National Trade Week: the six trade policy documents

(i) The National Trade Policy: Transforming Kenya into a competitive export-led and efficient domestic economy

Balance of Trade Deficit: The Policy is cognizant of the prevailing situation in the trade sector, where overall trade performance, as measured by the Balance of Trade, has been poor and recording a deteriorating trend that is characterized by huge balance of trade deficits. In addition, the policy is developed in the context of the already documented fact about Kenya’s share in the regional and global market, which remains low, with huge potential already having been identified in sectors that Kenya has both comparative and competitive advantage. The fundamentals behind this situation are traced to a narrow export base, which is characterized by the predominance of primary products and dependence on limited traditional destination markets. Limited value addition in the manufacturing sector and the relatively underdeveloped intermediate and capital goods industries also explain the dismal trade performance.

Trade in Services: The Policy recognizes the important role that trade in services is poised to play in overall development of the economy. The service sector which comprises tourism; transport and communications; trade and related services; and financial and business services, accounts for 60 percent of GDP. Within the service sector, there are emerging trends of growth in domestic trade brought about by the liberalization of the capital markets and the privatization program. In addition, there are new developments of the domestic oriented Business Processing Outsourcing (BPO) and Information Technology Enabled Services which has created trade opportunities for MSMEs to provide Business Development Services. The Trade Policy will therefore facilitate improvements in the enabling of the environment for increased trade in stock and shares and outsourced services.

(ii) National Export Development Strategy 2017-2022 (pdf)

Over the last 15 years, Kenya has pursued an export-led growth strategy. However, Kenya’s exports have seen mixed results in various markets and the overall performance of the Export sector continues to lag behind the Vision2030 targets. The NEDPS will be a five-year sector development plan with defined actions on issues that affect export development. It is expected to specifically; induce synergies for higher production in specific export sectors to enable better export performance; enhance market access and sustained performance; identify and align constraints in the export sector and propose mitigation measures; allocate resources based on prioritised objectives and streamline the export sector management by defining and allocating responsibilities to specific institutions with best capacities, including implementation, monitoring and evaluation functions.

(iii) Buy Kenya Build Kenya Strategy (pdf)

The Buy Kenya-Build Kenya initiative is expected to enhance competitiveness of local firms; stimulate local production; and promote industrialization, a key priority area in Vision 2030. In addition, the strategy shall contribute towards mitigating the impacts of the trade deficits. Five key result areas and diverse deliberate interventions have been proposed for the successful implementation of this strategy. The key result areas have been broadly categorized into legal and regulatory framework to guide public procurement; provision of an enabling business environment; enhancing market access of locally produced goods and services; and, advocacy and institutional framework for sustainability related activities. Several strategies are proposed for each key result area whose implementation requires a well coordinated approach between state actors and private stakeholders. [(iv) The National Trade Facilitation Committee and its thematic working groups; (v) pdf Study on the Kenya Retail Trade Sector – Prompt Payments (1.16 MB) ; (vi) Guidelines for Kenya’s Trade and Investment Missions]

Rwanda: Coordinating public and private action for export manufacturing (ODI)

Rwanda is – along with Ethiopia – exceptional in Africa in that it has in place a nation-building project centred on the aim of economic transformation. Features of its political economy also mean Rwanda lends itself easily to comparison with the best-documented experiences in Asia. This paper (pdf) explores the ways in which international experience of success in manufacturing-based economic transformation can provide valuable insight for Rwanda, in the areas of government coordination, engagement with and representation of the private sector, and the experimental learning process. [The authors: David Booth, Linda Calabrese, Frederick Golooba-Mutebi]

Rwanda: Kanimba calls on Africa to renew efforts to protect its agriculture sector (New Times)

It is high time African countries embarked on special safeguard measures to protect the continent’s agriculture sector, François Kanimba, Rwanda’s Minister for Trade, Industry and East African Community Affairs, said Monday. Kanimba made the call at the opening of a week-long regional advanced trade negotiation simulation skills course for 32 English speaking African countries, in Kigali, at which participants discuss the impact of mega-regional deals on WTO processes. Kanimba said the agriculture sector, being the backbone of the continent, African countries should have placed it at the centre of negotiations. Kanimba said agriculture distorting subsidies are still unaddressed and “expose our small-scale farmers to unfair competition” from subsidised imports from rich countries. [Related: No breach of farm subsidy limits, India tells WTO; Farm subsidies: EU, Brazil join forces for global level-playing field]

Tanzania: China investments soar, still trails India (Daily News)

Chinese investments to Tanzania have soared in recent years, reaching $2.5bn (about 5.6tri/) as of May 2017, ten times the 2011’s $282m (over 620bn/-). According to Finance and Planning Minister, Dr Philip Mpango, China is Tanzania’s second major source of investments after India. The minister assured that more investors are coming, especially in the fields of mineral exploration, agriculture, industry and trade. Speaking at the sixth ESRF Annual National Conference in Dar es Salaam yesterday, Dr Mpango said estimates show that Chinese companies are executing over 70% of construction projects in the country.

Cape Town, Wesgro promote trade and investment opportunities in Ethiopia (CoCT)

‘The mission [this week] is a follow-up to Wesgro’s previous successful visits taken to Ethiopia and a reciprocal mission by the Addis Ababa Chamber of Commerce to Cape Town in October 2016. These missions are in accordance with the partnership agreement between Wesgro and the Addis Ababa Chamber of Business to facilitate reciprocal trade missions. Together with the Addis Ababa Chamber of Commerce and the Ethiopian Investment Commission, we are planning to increase the number of outward and inward missions to enable a substantial increase of business with the country in the next few years,’ said Wesgro’s Chief Business Officer, Yaw Peprah.

WCO welcomes 2017 G20’s recognition of its work on illicit financial flows

The 2016 G20 Hangzhou Meeting had welcomed the “communication and coordination with the World Customs Organization for a study report” to address “cross-border financial flows derived from illicit activities, including deliberate misinvoicing, which hampers the mobilization of domestic resources for development.” Following this mandate, and after Member’s deliberation, the WCO produced an Action Plan (pdf) to capture the strategy to counter IFFs and same has been communicated to the German G20 Presidency and the G20 Heads of Customs. The Action Plan will bring special attention to the question of trade misinvoicing and also touch on other methods such as transfer mispricing, tax evasion and avoidance, cash smuggling, and informal funds transfer systems. [Various downloads available]

Tourism: The untapped underdog of Aid for Trade (ITC, UNWTO, EIF)

Tourism is estimated to represent 10% of global GDP and generates directly or indirectly one in ten jobs globally. It is a resilient sector, which despite all challenges continues to see international tourist arrivals grow at an annual rate of over 4% since 2009. Generating 7% of all international trade, the sector is also of increasing importance to the trade community. It is important to recall that tourism is a form of services trade and that tourism accounts for 30% of the world’s trade in services. Tourism is of particular value for LDCs, where it represents 7% of total exports of goods and services, a figure that stands at 10% for non-oil LDC exporters. Tourism is also the major economic earner in many small island developing states. In view of the above, and as shown in this report (pdf), tourism has been recognized as a key sector for trade-related technical assistance in LDCs. Forty-five out of 48 Diagnostic Trade Integration Studies – an important coordination instrument for trade-related technical assistance – analysed for this report feature tourism as a key sector for trade development. Accordingly, the Enhanced Integrated Framework has become increasingly active in this sector. Close to 10% of its so-called Tier 2 project portfolio is currently dedicated to tourism. This stands in stark contrast with the less than 1% allocated in total Aid for Trade to tourism. [Related: Namibia records regional tourist boom]

Africa’s rise poses threat to Bangladesh’s apparel export (Daily Star)

The upward trend of garment exports from Africa, thanks in part to Bangladeshi investors, poses a threat to Bangladesh’s second position in the global apparel trade. In recent years, nearly a dozen Bangladeshi garment makers have invested either in joint ventures or individually in different African countries, especially Ethiopia and Kenya. The impact of the upward trend of exports from the AGOA nations has already started to show on Bangladesh’s apparel exports: for the first time in 15 years, the growth was not even in single digit in 2016-17. Apparel export growth last fiscal year was just 0.20%. In contrast, growth was more than 13% in the last 10 years. The receipt of $28.14bn is way below the target of $30.37bn. The AGOA nations are faring well in basic garments – a market segment where Bangladesh also has huge concentration. Lower-end products account for 75% of the country’s apparel exports.

Quick Links:

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UN High-Level Political Forum on Sustainable Development: summary of first day’s debate, report links

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