AU members should honour financial contributions: Namibia’s PM (New Era)

Prime Minister Saara Kuugongelwa-Amadhila has called on all member states of the AU to honour their assessed contributions on time and in full in accordance with the approved scale of assessment. “With regard to the 0.2% levy on eligible imports, while supporting principle of self-financing of the Union, it has become evident that the levy cannot be implemented until the Continental Free Trade Area is fully established in order to comply with the rules of the World Trade Organisation,” she said. The Prime Minister said bearing in mind CFTA negotiations are still ongoing, she is of the opinion that the July 2016 decision to implement the 0.2% levy by January 2017 should be deferred until domestic laws are amended and all the necessary structures at regional and continental levels are in place.

AU heading for world trade body conflict over membership levy (Business Day)

However, a confrontation between the AU and the WTO over the lawfulness of the new levy seems unavoidable. It would be “discriminatory in nature and a violation of most-favoured nation principles”, Gerhard Erasmus, associate at Trade Law Centre, says. “Since the AU levy will apparently be implemented as a new tariff, bindings under WTO schedules will be affected. Some African countries could have zero tariffs for the affected imported goods. WTO rules, in addition, require that any fee connected to the importation of goods must be a fair reflection of the cost of a related service and must not amount to a taxation for fiscal purposes,” Erasmus says.

Mozambique: National AGOA Utilization Strategy Report (SPEED+)

One of the additions to AGOA through the AGOA Extension and Enhancement Act is language in the legislation that states countries should produce AGOA Utilization Strategies to take advantage of the benefits. This AGOA Utilization Strategy (pdf) includes 21 recommendations on improving awareness of AGOA, competitiveness of specific sectors, and exploiting the benefits granted to goods made in Mozambique for the US market. Each recommendation includes identification of implementing entities as well as a recommended timeframe. As readers will note, there are a range timeframes from immediate to long term for Mozambique to better utilize AGOA and grow exports.

Ethiopia aims to generate $30bn from textile sector by 2030 (Xinhua)

Ethiopia has a target to generate $30bn in foreign exchange earnings from the textile and garment sector by 2030, according to Bogale Feleke, Ethiopian Deputy Minister of Industry. The deputy minister made the remarks while addressing a workshop organized to promote Ethiopia’s textile industry sector held in Addis Ababa yesterday. “We intend to increase our area of cotton production. At present, only 20% of the three million hectares are used for cotton production while we aim to increase to around 80%,” local media FBC quoted Feleke as saying. Noting his country’s commitment in developing 13 industrial parks in the near future, majority of them in the textile and apparel sector, Feleke revealed that Ethiopia intends to have close to 150 textile and garment companies by the year 2020.

Helping revive Egypt’s ‘white gold’ (UNIDO)

Tarek Kabil, Minister of Trade and Industry, highlighted the project’s relevance in the context of the importance of the textile industry to the national economy. He remarked that the sector contributes up to 3% of Gross Domestic Product, employs about one third of the country’s industrial labour force, and generates exports to the value of about US$2.6bn, constituting 15% of Egypt’s non-oil exports. The sector is therefore at the top of the Egyptian government agenda, as well as one of the strategic sectors included in the industrial strategy recently launched by the ministry.

SADC Industrialisation Week: update

SADC will hold the second Industrialisation Week in Johannesburg (31 July - 4 August) under the theme; Partnering with the private sector in developing industry and regional value chains. It will be co-hosted by the Department of Trade and Industry and DIRCO, in partnership with the SADC Secretariat and the Southern Africa Business Forum.

Inaugural EAC Competitiveness Report: preview

The EAC Secretariat has prepared the 1st regional Industrial Competitiveness Report 2017, which will be released to the public in October 2017. The report states that Manufacturing Value Added and manufacturing trade growth rates sustained by the EAC in recent years stand above global average but only around average of Sub-Saharan Africa. However, these growth rates fall short of some of the targets set in the EAC Industrialization Policy and stand below similar Regional Economic Communities in Sub-Saharan Africa, including ECOWAS. The same growth rates of the manufacturing sector have not kept pace with the service sector, thus insufficient to impress that acceleration needed to achieve the structural change targets set in the regional and in most national industrial policies/overarching development plans. The report argues that an important cause and at the same time consequence of this limited performance lies in the disconnected fabric of the industrial sector in the EAC Partner States, impressing only weak backward and forward linkages among manufacturing subsectors as well as with non-manufacturing sectors of the economy. Strong inter-linkages would strengthen the economy and foster a more robust industrialization process.

On the other side, the past 10-15 years have shown signs of upward convergence among Partner States both in terms of MVA and manufacturing trade values, particularly with Tanzania, Uganda and Rwanda growing significantly faster than their regional role model, Kenya. The EAC regional market proves to be one of the most dynamic markets in the world and hence provides a great opportunity for regional firms to expand. While in most cases EAC manufacturing firms managed to increase their intra-regional exports in certain dynamic sectors, this did not happen at the pace and extent needed to match the EAC demand growth, thus resulting in the EAC losing market shares particularly against emerging economies such as India (pharmaceuticals, heavy petroleum), China (iron and steel products and fertilizers) and Malaysia (fixed vegetable oils). [DEGRP: Industrial productivity, health sector performance and policy synergies for inclusive growth in Tanzania, Kenya]

Uganda Economic Update: Can public-private partnerships bridge the infrastructure finance deficit? (World Bank)

The Uganda Economic Update shows a shortfall of nearly $1.4bn in financing per year, equivalent to 6.5% of its GDP. Uganda needs to explore raising capital from the private sector to finance its infrastructure investments, which are key to driving growth, creating jobs and reducing poverty. The report shows Uganda’s economy growing at an annual rate of 2.5% by the of end March 2017. While this falls significantly short of earlier projected annual growth of 4.5%, GDP is still expected to rise to 5.2% in FY 2017/18, and to 6% in the following year. This is likely to be propelled by the development of oil-related infrastructure following the issuance of long-awaited oil exploration agreements. Its renewed tendency to grant tax exemptions and the low rate of collecting taxes - now at 13.5% of GDP - could undermine the government’s ability to provide services and support faster growth, notes the Update. Combined with poor return on public investments, this could make it difficult to service the country’s growing debt. Extract (pdf): While the growth rate for all sectors of Uganda’s economy decelerated, the services sector continued to be the main driver of economic growth. At present, the services sector accounts for 51% of the total value added to the economy. For the six months to December 2016, activity generated within this sector increased by 3.4%, relative to the level of activity in the corresponding period of 2015.

Is Kenya overbanking on new Special Economic Zones to drive growth? (The Standard)

When politicians address charged crowds during these campaigns, they are less likely to make strategic economic road maps. This is as litany of promises roll out of their tongues. This is especially so during the electioneering period. Politicians would have the electorate believe that they have thought through a strategy to ensure that manufacturing will be fast tracked through Special Economic Zone, and that they have rationally made a plan including where these zones will be located. If the number of economic zones and industrial parks that are being doled out is anything to go by, then this noble venture to spur manufacturing may be turning into an instrument to promote corrupt cronyism and reward businesses that are close to powers that be is defeating the logic of setting them up.

Kenya Horticultural Council launched (The Star)

The Kenya Horticultural Council has been officially launched to champion compliance of domestic and international quality standards and other market access requirements. Also unveiled at the launch was KS 1758 part two, a standard practice code for exporters and handlers dealing in fruits and vegetables. KHC is also mandated to enhance industry growth and development by providing high level lobbying and advocacy services for the industry with the aim of facilitating and sustaining access to existing and emerging markets. Kenya’s horticultural exports have been finding it hard to access the rich European market since the block capped maximum residue level to 0.02 parts per million in 2012. The horticulture sector contributes substantially to Kenya’s GDP with approximately Sh102bn annual turnover.

ECOWAS experts meet to harmonise standards (GBN)

The Ghana Standards Authority is hosting an ECOWAS Commission standards harmonisation workshop, which aims at reviewing and finalising critical draft standards that would promote sustainable economic development in the sub-region. The meeting would examine the harmonisation work performed by national experts in the chemical product sector, building and construction sector and in the tourism services within participating countries. Professor Alex Dodoo, the Executive Director of GSA, said the Technical Committee which had been in place since 2013 had manage to harmonise 20 standards already and now the focus was on 30 other standards that were going to be reviewed with the ultimate goal of improving trade among member states.

Angola-Nambia: Angola promises to honour its N$2.6bn debt (New Era)

Angola has promised to honour its outstanding N$2.6bn financial obligations to Namibia in a 2015 currency conversion agreement that saw Angola unable to pay over on time the billions owed to Namibia. The governor of Angola’s central bank, Valter Filipe da Silva, promised President Hage Geingob that despite the ongoing economic challenges facing his country, Angola would continue to honour its repayment schedule. According to Bank of Namibia deputy governor Ebson Uanguta, BoN received about $51m from the BNA last week. The curency conversion agreement between BNA and Bank of Namibia aimed to address declining trade particularly at the once thriving trading hub of Oshikango. A shortage of US dollars, which contributed to the decline in trade, prompted the currency conversion agreement.

Zimbabwe-Mozambique: Call for Forbes Border Post upgrade (The Herald)

Government must urgently expand Forbes Border Post to be able to handle increased cargo coming in from Beira, Mozambique. In an interview after touring the border post last Friday, chairperson of the Shipping and Forwarding Agents Association of Zimbabwe Mrs Sheilla Mashiri said Forbes Border lacked capacity to handle growing exports and imports. She said this had resulted in serious congestion.

Trade-related developments: update by WTO Director General

Key findings: (i) WTO members implemented 74 new trade-restrictive measures during the review period (mid-October 2016 to mid-May 2017), including new or increased tariffs, customs regulations and quantitative restrictions, amounting to almost 11 new measures per month. This represents a significant decrease over the previous period and marks the lowest monthly average since 2008. (ii) WTO members applied 80 measures aimed at facilitating trade over this review period, including eliminated or reduced tariffs and simplified customs procedures. This equates to an average of over 11 new measures per month which is the second-lowest monthly average since trade monitoring began in 2008. (iii) During the review period, the estimated trade coverage for trade-facilitating import measures ($ 183bn) significantly exceeded the estimated trade coverage of trade‑restrictive import measures ($49bn). (iv) This Report highlights that initiations of trade remedy investigations represented 44% of the total number of trade measures taken during the review period; although the amount of trade covered is relatively small ($27bn for trade remedy initiations and $6bn for terminations).

Today’s Quick Links: NEPAD Infrastructure Project Preparation Facility: update Yongfu Huang: Can aid for trade be a salve to the poorest nations? Ethiopian Investment Commission: Chinese firms create over 28,000 jobs in Ethiopia over past five years IGAD: communique on South Sudan Maghreb future is tied to resolving Western Sahara conflict South Africa, Indonesia agree to identify sectors to exploit investment opportunities ITC: Training Indonesian diplomats to spot export potential, promote trade partnerships 25 Turkish companies set for Dar trade forum Nigeria’s Minister of Industry, Trade and Investment, Dr. Okechuwu Enelamah, feels the pulse of local manufacturers Nigeria agrees to cap oil output at 1.8mbpd Dhaka ratifies trade deal with D-8 countries Mauritius, Japan to sign Memorandum of Cooperation for infrastructure development WCO welcomes India’s progress with its National Trade Facilitation Action Plan