East African Community legal notice: assorted Customs Union notices, related decisions (pdf, 30 June)

East African Business Council: Annual Report 2016/2017

During the past year, EABC has continued to grow stronger and stronger, representing the private sector at the regional level and playing the critical role of advocating for a conducive business environment in the region. It has not been easy, but the Secretariat has worked intensively beyond their capacity to ensure that EABC remained fully visible in the region and articulated key recommendations from the private sector to the policy makers. Some of the key achievements during the period are:

East and Southern Africa to develop trade database (SciDev)

The database, termed as an innovation to reducing barriers to free trade in Africa, will have data from 26 countries that make the tripartite free trade area of COMESA, EAC and SADC. It will use the non-tariff barrier mechanism that involves online and short message reporting information and communications technology tools supported by national and regional bodies that represent the public and private sectors. “We are here to help nations on how to develop information portals and a database on trade,” says Vonesai Hove, NTBs component manager of the Tripartite Capacity Building Programme. Hove says that under the programme, member states will receive financial and technical support to develop database that will contain information on countries’ prerequisites for trade. Such information, she says, will help traders adhere to health and environmental care standards, for example, as required by countries. The training involved ten countries: Botswana, Egypt, Kenya, Malawi, Rwanda, South Africa, Tanzania, Uganda, Zambia and Zimbabwe. The initiative is funded by the AfDB.

Rwanda: Cross-border women traders call for friendly operating environment (New Times)

Cross-border women traders have called on the government to support them and also improve the trading environment. The women traders operating between Rusizi-Bukavu and Rubavu-Goma border posts say corruption, sexual harassment and inadequate operating capital are affecting businesses. Janet Mukamunana, a member of Icyerekezo Cyiza Cooperative that sells tomatoes and onions, said these challenges have affected business growth and their earnings. “As a result, we cannot compete with traders from the DR Congo who deal in similar products”, she said during a recent tour of the cooperative by the Rusizi District leaders.

Kenya plans team of negotiators to steer trade talks (Business Daily)

Kenya seeks to set up a permanent team that will negotiate all trade agreements between Nairobi and other countries as it seeks to reap maximum benefits from such pacts. Kenya has no permanent national structure charged with negotiating trade deals, with the exception of a team that handles matters relating to the WTO. “There also lacks a mechanism of ensuring that experts from line ministries and private sector institutions who are seconded to undertake specific negotiations remain as standing committee members to ensure institutional memory, consistency and retention of capacity for trade negotiations in a core group/committee of negotiators,” reads the National Trade Policy unveiled last week.

Madagascar signs Tripartite Trade Agreement (EAC)

The Republic of Madagascar has become the 20th country to sign the Tripartite Free Trade Agreement. The Tripartite Agreement was signed on 13th July 2017 by His Excellency Mahafaly Solonandrasana Olivier, Prime Minister of the Republic of Madagascar, on behalf of the Government, in Antananarivo. At the Kampala meeting, the EAC Secretary General reported progress on the legal scrubbing of Annexes II, IV and X, negotiations on tariff offers and the signature and ratification of the Agreement. Amb Mfumukeko indicated that there had been limited progress on Phase II negotiations and the Agreement on the Movement of Business Persons. However, studies on Phase II issues had been undertaken and disseminated and that TTF was in the process of mobilizing resources to facilitate the necessary consultative meetings. [30 countries ratify protocol on African court]

Madagascar: 2017 Article IV Consultation (IMF)

The authorities and staff agree that the growth impact of scaling up public investment depends in part on promoting private investment, including FDI. The main impediments to private sector-led growth are weak governance, poor infrastructure (especially transport and electricity), and a shallow financial system with limited access to financial services. The authorities are focused on “quick win” reforms for improving the business climate, while still advancing on fundamental reforms. With support from the Word Bank, the Economic Development Board of Madagascar has a program to improve the country’s score in the Doing Business Indicators (it ranked 167th out of 190 countries in 2017, compared to the Sub-Saharan Africa average of 143rd). Already, there were improvements in the 2017 survey in opening a business and ease of international trade. Broader reforms to address key structural weaknesses, such as infrastructure (including roads, ports, and airports), electricity, and access to financing, are also vital but will take longer to yield fruit, despite the ambitious efforts underway. Moreover, the authorities are reviewing and revising commercial law. In March 2017, the decrees implementing the new Public Private Partnerships law were adopted, which creates new opportunities with appropriate safeguards for public finances. The authorities are also drafting new or revised laws intended to promote activity related to mining, petroleum, special economic zones, and industrial development. Selected Issues Paper: Madagascar’s governance indicators weakened significantly during the transition period 2009-13. Governance indicators that generally were on par with middle-income countries in Sub-Saharan Africa (SSA) ten years ago have regressed and converged to the average of fragile SSA countries. It is likely that this deterioration in governance is currently reducing Madagascar’s economic growth by about ½ percent a year (or possibly more) and the tax revenue-to-GDP ratio by 3 percent or more. More generally, corruption is associated with less macroeconomic and political stability, potentially creating a vicious circle. After the return of constitutional order in 2014, the government has started to address corruption, mainly through the introduction of new laws so far. More emphasis is needed on effective implementation and raising sufficient resources to fight corruption. This paper summarizes the current situation, surveys the economic costs of corruption, and provides a few ideas on how to advance anti-corruption reforms. [Madagascar: Economic Development Paper (prepared by member countries in broad consultation with stakeholders and development partners)]

Boosting investments: Nigeria’s path to growth (pdf, PwC)

Based on our analysis of the dataset, we observe that the impact of country specific characteristics such as demography, economic size and political climate on growth is not statistically significant. As a result, the model is estimated without further adjustment. We find that Nigeria requires at least an investment of 20% of GDP per annum, far above the investment level of 12.6% of GDP in 2017 (see figure 5). Today, this translates to an investment of NGN20 trillion ($55bn), reflecting that Nigeria would have to nearly double its current investment level. Assuming Nigeria maintains its most consistent run in investment growth, similar to the trend recorded between 1996 and 1999, investment to GDP could potentially increase by 2 percentage points a year. This suggests that Nigeria could attain an investment rate of 20% of GDP by 2021.

Journal of African Trade: articles in press, available for download

(i) Trade facilitation and trade participation: are sub-Saharan African firms different? (Author: Abdoulaye Seck); (ii) Infrastructure, trade facilitation, and network connectivity in Sub-Saharan Africa (Author: Ben Shepherd); (iii) Structural change and industrial policy: a case study of Ethiopia’s leather sector (Author: Michael Mbate); (iv) Trade and economic growth in developing countries: evidence from sub-Saharan Africa (Author: Pam Zahonogo); (v) Modelling the economic impact of the tripartite free trade area: its implications for the economic geography of Southern, Eastern and Northern Africa (Authors: Andrew Mold, Rodgers Mukwaya)

Knowledge Platform on Inclusive Development Policies (INCLUDE): profiled recent outputs

(i) Boosting youth employment in Africa: what works and why? (pdf): The conference (30 May, The Hague) was attended by 140 experts from governments, the private sector, NGOs and knowledge institutes in Europe and Africa. The objective of the conference was to use state-of-the-art knowledge to answer the question: How can we achieve substantial progress in creating employment opportunities for large numbers of African youth? In preparation for the conference, the INCLUDE Secretariat developed a synthesis report outlining the main issues for debate.

(ii) Inclusive business strategies in Africa: The Rotterdam School of Management, the Eastern and Southern African Management Institute and the Netherlands-African Business Council hosted representatives of businesses, organisations and government bodies (22 June, Nairobi) to participate in the Inclusive Business Strategies in Africa, From Knowledge to Action conference. The main objective of the conference was to share the results of the two‐year NWO/WOTRO research programme, part of the INCLUDE Knowledge Platform on Inclusive Development Policies and to discuss how inclusive business strategies can contribute to inclusive development in Sub‐Sahara Africa. [Various downloads available]

Etihad Airways increases flight frequencies to Cairo and Lagos (Logistics Update Africa)

A fifth daily scheduled service will be introduced on the Cairo route, effective 1 October 2017, taking frequency to the Egyptian capital up from 28 to 35 flights a week. A new Saturday flight to Nigeria’s commercial capital of Lagos, beginning 2 December 2017, adds to the weekend travel option, increasing frequency from four to five services each week, and offering greater flexibility and convenience to local travellers.

Indonesia to promote, expand trade in South Africa, Nigeria (Jakarta Post)

A trade mission team is ready to visit South Africa and Nigeria (20-26 July) in a bid to expand trade with the non-traditional markets, which have large populations and high growth rates. “Both South Africa and Nigeria are gateways to access the larger African market,” said Trade Minister Enggartiasto Lukita in a press statement released on Wednesday. “South Africa is key to access members of SACU while Nigeria is a gateway to ECOWAS.” He added that the visit was slated to accelerate the signing of preferential trade agreements between Indonesia and each of the two African countries. Representatives from 21 firms will join the team.

China is training Africa’s next generation of transport and aviation experts (Quartz)

Plans to build five transportation focused universities and a China-Africa aviation school on the continent are going ahead, according to the dean of Chang’an University in Xi’an, China, speaking at a conference in South Africa last week. Starting this year, 500 aviation personnel from Africa will start training in China each year, Chinese officials said earlier this year.

Mali eyes direct India cotton trade (The Hindu)

Niankoro Yeah Samake, Mali’s Ambassador in India, told The Hindu here recently that about 20% of Mali’s cotton is consumed by India. However, most of the trade is through foreign companies. “So, there are opportunities to trade directly.” Currently, Europe and China are the biggest buyers of the West African nation’s cotton. Mali produces long staple cotton and only 5% of it is processed in that country and the rest is exported. Mali’s government agency buys cotton from all the farmers. Annual cotton production in Mali in the last two years increased from five lakh tonnes to eight lakh tonnes. Currently, there are no investments from the Indian textile sector in that country.

Quick Links: Neva Makgetla: Why too much pulling in different directions is killing SA’s growth story Keith Rockwell: Greater economic integration required for West Africa to attain its potential COSATU: Statement on BRICS Trade Unions Forum (24-27 July, Beijing) Mozambique: Imported products will soon be labelled in Portuguese – INNOQ High-Level Political Forum on Sustainable Development: Tuesday’s discussions summarised