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tralac’s Daily News Selection

tralac’s Daily News Selection
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24 Jul 2017

Starting tomorrow, in Harare: Measuring and implementing trade facilitation in Zimbabwe

Next week, in Abuja: Establishing a trade facilitation roadmap in Nigeria

At WTO: Goods negotiations restart, members divided on transparency proposal

WTO members, on Friday, took up a proposal which proponents said would facilitate the participation of micro, small and medium-sized enterprises in global trade by establishing rules to bring about greater transparency and access to information pertaining to government regulations on food and product safety. The proposal received support from many Asian and European delegations as well as several delegations from Latin America. But opponents, which included many African members, including the African Group coordinator, some Latin American members and the United States, raised different types of concerns. Some are concerned that the adoption of this proposal might lead to an increased administrative burden in developing countries and may impinge on governments’ right to regulate.

World Economic Outlook Update: July 2017 (IMF)

In Sub-Saharan Africa, the outlook remains challenging. Growth is projected to rise in 2017 and 2018, but will barely return to positive territory in per capita terms this year for the region as a whole—and would remain negative for about a third of the countries in the region. The slight upward revision to 2017 growth relative to the April 2017 WEO forecast reflects a modest upgrading of growth prospects for South Africa, which is experiencing a bumper crop due to better rainfall and an increase in mining output prompted by a moderate rebound in commodity prices. However, the outlook for South Africa remains difficult, with elevated political uncertainty and weak consumer and business confidence, and the country’s growth forecast was consequently marked down for 2018. [World Bank: Assessing Africa’s policies and institutions - 2016 CPIA results for Africa]

South Africa: OECD’s Economic Survey

The Survey, presented today in Pretoria by OECD Secretary-General Angel Gurría and South African Minister of Finance Malusi Gigaba, identifies priority areas for future action, including continuing efforts to maintain macroeconomic stability, improve the business environment and deepen regional integration, all of which are critical for inclusive growth and job creation. Extract from the section on regional integration (pdf, pages 32-41): Moreover, the SACU arrangement has many internal difficulties with knock-on effects on SADC regional integration. Intra-union customs border posts have not been eliminated because revenue sharing is partially based on intra-SACU trade, thus reducing benefits of trade facilitation. Second, there is a substantial income transfer from South Africa to the other members. SACU revenues now represent the main source of government revenues for SACU members, except South Africa (Chapter 1). This has created perverse incentives across the other SACU members to resist any changes to tariffs and extension of the SACU union to new members (Flatters and Stern, 2006). Reforming the SACU sharing formula and mechanism of tariff settings would ease the negotiations toward customs policy harmonisation...The agreement between a fraction of SADC countries and the EU will increase the fragmentation of SADC trade agreements, which could hamper deeper SADC integration. To avoid this, members should agree to negotiate with external partners only under the SADC umbrella based on a binding and robust framework which guarantees that all countries’ concerns are taken into account. [Downloads]

Deepening SACU integration: the potential contribution of a regional development fund (GEG Africa)

This policy briefing summarises the results of four case studies in Botswana, Lesotho, Namibia and Swaziland. It describes the experiences of eight small firms in operating across SACU borders, and identifies opportunities for growing or diversifying their businesses within SACU. It also highlights a number of areas in which SACU member states could work together to improve the environment for cross-border trade and deepen regional integration. Conclusion (pdf): These results suggest that SACU should consider a two-pronged approach to deepening intra-regional value chains. Rather than focusing only on individual projects that serve the interests of specific countries and firms, it should first look to identify and alleviate the regulatory and infrastructure barriers that currently impede trade and investment flows across all sectors. With such an approach, the fund would likely also increase the number and feasibility of individual investment projects that would emerge to take advantage of improvements to the regional business environment. [The author: Yash Ramkolowan]

SACU and Namibia – the future: speech by Ms Paulina Elago (SACU)

Increased and expanded market within SACU offers one route to overcome the disadvantages of economic smallness, which characterise all the BLNS. In 2015, Namibia’s GDP was estimated at R147bn, Botswana, R167bn; Lesotho, R25bn; Swaziland R52bn; and South Africa R3.9 trillion. Individually, these economies are too small, on their own, to attract any major investment in the increasingly globalised economy. By belonging to SACU, Namibia has access to a single market of over 61 million people and a combined GDP of R4.384 trillion in 2015. Thus, SACU offers unlimited access to a wider market for the export of their goods and to some degree services within which traders and investors can take advantage of economies of scale. In order to exploit and maximise its benefits from SACU and other regional integration initiatives in general, Namibia would need to:

Mozambique to host SADC meeting on development corridors

“The meeting of ministers [26 July] will be attended by ministers of transport from Mozambique, South Africa, DRC, Malawi, Zambia, Zimbabwe, and Botswana, and will culminate in the approval and signing of two memoranda of understanding on the Beira and North-South Development Corridors”, read a statement from the Mozambican Ministry of Transport and Communications. Aspects of planning and development of quality strategic infrastructure necessary to enable the volumes of traffic of goods and passengers in growth in those corridors will be addressed.

Digital Mauritius 2030: strategic choices to shape the digital economy (GoM)

The one-day workshop brought together captains of the industry from the public and private sectors to strategise on the future of Digital Mauritius over the distinct timelines of 2020, 2025, 2030. Minister of Technology, Communication and Innovation, Mr Yogida Sawmynaden, said the Digital Mauritius 2030 Strategy would rest on several enablers which include the legal framework, regulatory arrangement, data protection foundations and institutional framework. Additional thematic consultative workshops will be organised to finalise the Strategy paper which will then be presented to Government for approval on the occasion of the 50th anniversary of Independence of Mauritius. [Statistics Mauritius: Information and Communication Technologies statistics - 2016]

Mauritius: Trade deficit widens 18.6% yr/yr in May (Statistics Mauritius)

Balance of Visible Trade showed a deficit of Rs 8,258m in May 2017 higher by 2.6% compared to the previous month and by 18.6% when compared to the corresponding month of 2016. In May 2017: total imports increased by 7.7% compared to April 2017, and by 6.3% compared to May 2016; total exports increased by 14.4% compared to the previous month but decreased by 5.3% compared to May 2016. Main trading partners in May 2017: France (11.9%), United Kingdom (11.1%), Italy (10.8%) and USA (9.9%) were the major exports destinations while the imports were mainly from India (19.3%), China (18.2%), France (9.2%) and South Africa (7.4%).

Trade experts fault US over AGOA review (New Times)

UNCTAD Secretary-General Dr Mukhisa Kituyi told The New Times that as one of those who was involved in negotiating the act, there was no clause that EAC would have to import second hand clothes. He added that the decision by the American government was politically and morally wrong and the region should not be bullied. Former AfDB President Dr Donald Kaberuka said the EAC should remain firm on doing the right thing which is to develop their textile industries and their value chains despite the threats. Dr Abdalla Hamdok the acting executive secretary of the United Nations Economic Commission for Africa said that AGOA has little impact on countries like Rwanda which do not export oil and minerals.

Rwanda: Hope for traders as four cross-border markets near completion (New Times)

In a recent interview with The New Times, François Kanimba, the Minister for Trade, Industry and EAC Affairs said that three markets; namely Cyanika (in Burera District) along the Ugandan border, Karongi and Rusizi I markets along the DR Congo border are in the final stages of completion. Also Construction works on (Rubavu) cross-border market is at 70%and will be completed by the end of this year, according to Kanimba. In 2016, cross-border informal trade brought in $150m up from $80m back in 2010 and there is a hope that the markets will boost the trade according to the minister. It is estimated that between 70-80% of cross-border traders are women mainly in informal trade, with 90% of the women traders relying on cross-border trade as their sole source of income.

Museveni clears $2.9b China loan for Malaba-Kampala SGR (The EastAfrican)

President Yoweri Museveni has approved the borrowing of Ush10.3 trillion ($2.9bn) for the construction of the standard gauge railway from the Malaba border with Kenya to Kampala in the clearest signal yet that the regional infrastructure project is back on track. In a letter to parliament last month, President Museveni said the loan, which is Ush2.1 trillion ($600 million) more than the $2.3 billion contained in the feasibility study, should be on condition that concerns over the technical specifications and project costs raised by the Parliamentary Committee on Infrastructure in February would be addressed.

Tanzania signs new business deal with Kenya (The EastAfrican)

Kenya has lifted restrictions on wheat flour and cooking gas imports from Tanzania, which has in turn allowed milk and cigarettes from Kenya. The countries’ Foreign Affairs ministers said in Nairobi on Sunday that the move followed discussions between presidents Uhuru Kenyatta (Kenya) and John Pombe Magufuli. Kenyans will however still have to apply for visas when travelling to Tanzania for business, though Mr Mahiga said they were looking into the issue. “If there are still some bottlenecks, we are pledging to address them to allow our citizens to travel easily,” he said. The two countries would continue to man border posts jointly while the production of an East African Community (EAC) passport would help ease movement across the states, he said. The two countries also agreed to set up a joint technical committee chaired by the Foreign Affairs ministers and comprising the EAC Affairs, Trade, Finance, Interior, Energy, Agriculture, Transport and Tourism ministries and any other relevant government agency. [Charles Onyango-Obbo: 20 years forward, 40 years back; Lenin haunts EAC]

Kenya: Grand plan for regional bloc merger falters (The Standard)

Almost five years after its inception, the Lake Region Economic Bloc, is yet to realise its full objectives as many of its flagships projects remain stuck. The regional bloc is spearheaded by Kisumu, Kisii, Siaya, Migori, Homa Bay, Vihiga, Kakamega, Nyamira, Bomet, Busia, Bungoma, Kericho and Trans Nzoia counties. According to the Head of LREB secretariat, George Kabongah, only four governors have committed Sh800m towards the proposed LREB Investment Bank and seconded staff to the secretariat.

New pan-African fruit industry association to strengthen trade between Africa and EU (BizNews)

Afruibana, a pan-African association of fruit producers and exporters from Cameroon, the Ivory Coast, and Ghana was officially launched during Cameroon Trade Minister, Luc Magloire Mbarga Atangana’s visit to European institutions on 19 July 2017. The minister, as a representative of the African, Caribbean, and Pacific Group of States during the various Councils of Ministers addressing the banana industry, was lauded for this initiative. Several important meetings will be on Afruibana’s institutional agenda in the coming months:

India’s dollar diplomacy takes off, puts China’s domination under threat (Economic Times)

Although a late starter, India is fast catching up with China in extending credit world over to build infrastructure and push economic ventures. While Delhi extended LoC worth $10bn to its partners between 2003-2014 the figure has now touched $24.2bn since the Modi government came to power. 52 LoCs worth $14.2bn has been granted since May 2014 and more are in pipeline when King of Jordan and President of Belarus visits Delhi later this year. While correcting malpractices that had crept into India’s African endeavours, New Delhi had completed 20 major ventures in the past two years, official sources told ET. The focus under LoC extended through MEA’s Development Partnership Administration wing is now on key infrastructure projects and not just capacity building ventures, sources said referring to two such endeavours in Africa – Presidential office in Ghana (symbol of Indo-Ghana friendship) and National Assembly building complex.

India-Africa trade may touch $117bn by 2020-21 (India Express)

Indian exports to the African continent are expected to grow to $70bn by 2021-22 from $24bn in 2015 -16 due to rising complementaries, the PHD Chamber of Commerce and Industry said in the report. Imports from Africa too are likely to increase to $47bn by 2021-22 from $27bn in 2015-16. “India has been able to intensify its presence in African countries through a significant line a credit worth $10bn for development projects in Africa over a five-year period,” PHD Chamber President Gopal Jiwarajka said. “With consistent expansion in trade, diversification and widening of products should also be focused on while trading with African nations in the coming years,” he added.

Quick Links:

Jibrin Ibrahim: Breaking the yoke of Nigeria’s donor dependency

USAID: House committee approves foreign aid budget in late-night session

World Bank: Statement of loans to Africa, May 2017

New policy will reduce delays in procurement process of AfDB-funded projects

UNCTAD adviser, Alibaba’s Jack Ma, launches African Young Entrepreneurs Fund

Perez Tigidam: Why Jack Ma went to Kenya, Rwanda with 38 Chinese billionaires in tow

SABER country reports on engaging the private sector in education: Zambia 2016, Swaziland 2016, Malawi 2015, Ghana 2015

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This post has been sourced on behalf of tralac and disseminated to enhance trade policy knowledge and debate. It is distributed to recipients across Africa and internationally, serving in the AU, RECs, national government trade departments and research and development agencies.

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