Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: IBtimes

Dangote Cement achieves massive revenue increase across Nigeria, other African countries (Premium Times)

Dangote Cement, Africa’s largest cement producer, has announced its unaudited results for the six months ended June 30, posting a 12.6 per cent increase in sales volume across Africa. Revenues from operations in Nigeria increased by 34.5%, to ₦291.4bn, while pan-Africa revenue increased by 63.7% - to ₦124.4bn, from ₦76bn - mainly as a result of increased volumes and foreign exchange gains when converting the sales from country local currency into Naira. Analysis of the half year result revealed that sales volumes of African operations increased by 12.6% to 4.7 million metric tons with Sierra Leone making a 53 kilo ton maiden contribution. Record of sales from its operations scattered around the African continent revealed that a total of 1.1 million ‘metric tons of cement was sold in Ethiopia, almost 0.7 million metric tons sold in Senegal, 0.6 million metric tons sold in Cameroon, and 0.5 million tons in Ghana. Also, 0.4 million metric tons of cement was sold in Tanzania and 0.3 million tons in Zambia.

FG begs Dangote to complete refinery before 2019 to end fuel importation (Premium Times)

In his welcome address, Dangote explained that his group is building the world’s largest single line refinery, petrochemical complex and the world’s second largest urea fertiliser plant. The refinery will have the capacity to refine 650,000 barrels of crude oil per day. The petrochemical plant will produce 780 KTPA Polypropylene, 500 KTPA of Polyethylene, while the fertiliser project will produce 3.0 million metric tonnes per annum of Urea. “We will also save over $7.5bn for Nigeria annually through import substitution and generate an additional $5.5bn per annum through exports of the refined petroleum products, fertilizer and petro chemicals. We envisage that these projects, which would cost over $18bn, would be completed in 2019.” [Uddin Ifeanyi: If agriculture is to supplant crude oil as the economy’s engine]

Nigeria: States to be ranked on attractiveness to investors (BusinessDay)

The World Bank Ease of Doing Business ranking of Nigerian states, due by the first half of 2018 could make or mar the states’ investment appeal, amid a tussle to attract private capital to complement dwindling federal cash hand-outs. The drag on government revenue caused by low oil prices has had a knock-on effect on the states, most of which have gorged on allocations from the federal purse. Workers’ salaries have gone unpaid, while actual capital expenditure has plummeted. The sub-national rankings will be undertaken by the World Bank Group, with the Enabling Business Environment Secretariat and the Nigerian Investment Promotion Council providing support to the state governments as they implement their priority reforms. The eleven indicator areas to be ranked include four World Bank indicators and seven additional areas of interest that are governed or implemented by state governments. The 2018 Nigerian sub-national rankings will be the fourth in the series, following similar efforts by the World Bank in 2008, 2010, and 2014.

Nigeria’s Dr Okechukwu Enelamah elected MC11 WTO Vice Chairperson for Africa (Premium Times)

The Minister of Industry, Trade and Investment, Okechukwu Enelamah, has been elected Vice-Chairperson (Africa) for the 11th WTO Ministerial Conference. “At a General Council meeting on 26 July, WTO members elected three officials to serve as Vice Chairs for the WTO’s 11th Ministerial Conference in Buenos Aires. The officials are: Dr Okechukwu Enelamah, Minister of Industry, Trade and Investment (Nigeria); Mr Todd McClay, Minister of Trade (New Zealand); Mr Edward Yau, Secretary for Commerce and Economic Development (Hong Kong, China).

Why the quest for a single currency for West Africa won’t materialise soon (The Conversation)

In the current circumstances, the necessity of a single currency is untenable if trade is the main motivation, except the regional commission is hoping West Africa will trade more with itself or attract more investors after the launch. But that will not happen overnight. Even the Francophone countries which have used CFA Franc as their common currency since 1945 record less than 16% of intra-union trade. [The author, Tahiru Azaaviele Liedong, is Assistant Professor of Strategy, University of Bath]

Aubrey Hruby, Lexi Novitske: Africa’s big opportunity lies in data (CNBC Africa)

African markets – from Nigeria to Tanzania, Mali to Kenya – are simultaneously rich and poor in data. Their economies remain highly informal, and, although billions of data points are created on the continent every day as billions of cash transactions are made, only a miniscule amount is recorded in any way. Without records that can be sorted and mined in meaningful ways that would allow for lending and borrowing, African markets such as Lusaka City Market and Abidjan’s Adjame neighborhood remain teeming pools of information that immediately disappears after transactions are made. In informal cash-based systems, data from vendor sales is rarely translated into an accessible and manipulatable format, rendering it effectively useless. Even in formalised and regulated African sectors, like banking and telecoms, where some aggregated data does exist on customers, it is owned by the individual companies and usually inaccessible to businesses seeking growth. A new generation of entrepreneurs across Africa, however, are forging a path through the data desert and aiming to make it green by collecting, analysing, and monetizing data.

USTR 2017 national trade estimate report on foreign trade barriers: US-South Africa (USTR)

Extract from the South Africa chapter (pdf): US exports face a disadvantage compared to EU goods in South Africa. The European Union-South African Trade and Development Cooperation Agreement of 1999 covers a significant amount of SA-EU trade. South Africa’s tariffs applied to imports from the EU on TDCA-covered tariff lines average 4.5% based on an unweighted average, while the MFN duty rate, which imports from the United States face, averages 18.4% for the same TDCA-covered lines. Final phase-in of the EU tariff preferences under the TDCA became effective in 2012. Key categories in which US firms face a tariff disadvantage include cosmetics, plastics, textiles, trucks, and agricultural products and machinery. The EU-SADC EPA will further erode US export competitiveness in South Africa and the region due to the greater disparities in tariff levels that US exports will face under the EPA compared to the TDCA. The US has raised concerns about the tariff disparity in bilateral discussions with South Africa, noting the unilateral benefits the US offers South African imports under the African Growth and Opportunity Act. South African authorities have emphasized that the only way to address this imbalance is through a free trade agreement.

South Africa: (i) International Cooperation, Trade and Security cluster briefing (GCIS), (ii) ANC statement following the NEC Lekgotla

Lesotho: Budget speech for the 2017/2018 fiscal year (GoL)

As we all know, Lesotho’s manufacturing activity is dominated by textiles and apparel and the sector’s exports are predominantly destined to the United States and South Africa. In 2015/16, 70% of Lesotho-made garments were exported to the United States under AGOA, while 30% terminated in South Africa. This represents a significant shift from reliance on the US market towards our neighbour, as only ten years ago, no more than 5% of Lesotho’s apparel entered the South African market. While textiles and clothing exports to non-AGOA destinations are expected to grow, exports to the US market are set to remain under pressure due to stiff competition from Asian producers.

Without fiscal consolidation, Government runs the risk of drawing down within the next year all its deposits, and thus jeopardise the parity between Loti and the Rand. Given Lesotho’s dependence on imports, a collapse in the peg between the Loti and the Rand would lead to fiscal and trade crises. Government will intensify efforts to reduce reliance on the volatile and pro-cyclical SACU receipts and move to a situation where all the recurrent expenditures are covered by domestic revenue sources. As it is, domestic taxes only cover wages and salaries, with the balance of spending funded by less reliable revenue sources. The development component of SACU revenue and any additional revenue resulting from over-performance of the revenue pool and donor funds should be used to finance one-off infrastructure and other capital expenditures and to build and maintain sufficient reserves for financing future capital spending. Capital expenditure should be directed to projects and programmes that aim at providing the minimum infrastructure required to support rapid private investment.

The Ministry will also present to Parliament the Business Licensing and Registration Bill, the Competition Bill and Trade and Tariff Administration Bill. When passed, these bills will simplify trade licensing, reduce uncompetitive firm behaviour, and consolidate the administration of tariffs under the SACU Agreement. [Delivered on 19 July by Dr Moeketsi Majoro, Minister of Finance]

Zimbabwe: Trade deficit narrows by 5% in first half (NewsDay)

Zimbabwe’s trade deficit in the first half of the year narrowed by 5% to $1,3bn, an indication that the country continues to rely on foreign-produced goods in spite of government efforts to halt the tide, latest trade data from the national statistics agency shows. In the same period last year, the trade deficit was $1,4bn. Information released by the Zimbabwe National Statistics Agency yesterday showed that imports to June amounted to $2,6bn against $1,3bn exports, which remain heavily skewed towards consumptive products. In the same period last year, the country’s imports were $2,5bn against exports of $1,1bn. Most of the imports in the first half of 2017 were consumptive products such as rice, bottled water, sugar, soap, mobile phone handsets, electronics, vehicle spares, vehicles, generators and second-hand vehicles.

South Africa offers cheaper frozen beef to Indonesia (Jakarta Post)

South Africa has offered frozen beef to Indonesia at prices that are roughly half of the current retail prices, Trade Minister Enggartiasto Lukita has said. The minister said his ministry would, in assessing the offer, refer to regulations set in the 2014 Animal Health and Husbandry Law, hygiene standards set by the Agriculture Ministry and halal standards set by the Indonesian Ulema Council. “South Africa has seriously asked us for a chance to export its beef. So far, most of our beef imports come from Australia. We have also imported meat from India, Mexico and Chili,” he told reporters on Monday. “We don’t mind getting the beef from South Africa as long as it meets the country’s standards.”

Tanzania: Govt now turns to AfDB to fund standard gauge railway project (IPPMedia)

Speaking in Dar es Salaam yesterday after meeting deputy minister of finance and planning Dr Ashatu Kijaji, AfDB’s executive director representing the East African region, Dr Weggoro Nyamajeje, pledged to work hand-in-hand with Tanzania on the landmark project by providing a soft loan. Nyamajeje said this was because the continental bank is satisfied with the work done by the fifth phase government led by President John Magufuli. He noted that the central railway line is important for the economies of not only Tanzania, but the entire Great Lakes region as it links countries like Rwanda, Burundi, Uganda and the DRC, and thereafter be connected with the northern railway on the Kenyan side.

Kenya: RVR finally loses its 25 year railway contract (Business Daily)

Kenya Railways has finally terminated Rift Valley Railways’ 25-year contract to run the Kenya-Uganda railway after the State corporation failed to resolve long-standing business disputes with the concessionaire. Kenya Railways managing director Atanas Maina and his RVR counterpart, Isaiah Okoth, Monday agreed that RVR will hand back operations, employees and assets of the 100-year-old railway to the agency within 30 days. The deal was sealed at the High Court, where RVR had in January rushed to contest Kenya Railways’ impending termination of the contract.

Kenya: Diaspora remittances hit a new monthly record (Business Daily)

Monthly data released by the Central Bank of Kenya showed that diaspora remittances reached $161.50 million (Sh16.78 billion) in May, a growth of 10.04% compared to $146.76 million (Sh15.25 billion) the same month last year. Month-on-month, the rise is 16.5% compared to $138.60 million (Sh14.40 billion) the previous month the CBK, which tracks inflows from formal channels, reported. “The May 2017 improvement reflects higher inflows from North America and Europe,” the CBK said in a remittances report (pdf).

Compilation of seven fisheries subsidies proposals circulated to WTO members (WTO)

As requested by members behind seven fisheries subsidies proposals, the chair of the WTO Negotiating Group on Rules (NGR), Ambassador Wayne McCook (Jamaica), circulated to WTO members on 28 July a document compiling these submissions in the form of a matrix. The compilation is intended to help WTO members prepare over the summer for intensive negotiations in September. The compilation matrix reflects seven textual proposals from: [Downloads available]

Iron Ore Market Report 2017 (UNCTAD)

The iron ore industry saw a marked improvement last year after the slower growth, lower prices and squeezed profit margins suffered in 2015, according to the new UNCTAD Iron Ore Market Report. The report shows the key indicators of demand and supply, seaborne trade and price, all made gains through the year and says the market outlook is steady. Although Chinese consumption remained relatively low, and prices did not improve for much of 2016, the market started to improve late in the year, with prices exceeding US$80/dry metric ton (dmt) in December 2016. Global iron ore production grew 5% year-on-year in 2016, according to the report, hitting a total of 2,106 million tons. This was primarily driven by an additional 30 Mt of direct shipping ore from Australia, which was the major source of new fine-products entering the Chinese market.

Mobile broadband subscriptions on track to hit 4.3 billion in 2017 (ITU)

New data from the International Telecommunication Union also show that 48% of the world’s population now uses the Internet. The proportion is 71% for the group of young people aged 15-24. Of the 830 million young people online worldwide, 320 million, or 39%, are in China and India, the report finds.

Today’s Quick Links:

Richard Dowden: Peter Pham - President Trump’s perfect pick for top Africa post?

Andrew Selous - appointed as UK Prime Minister’s Trade Envoy to South Africa

ORF: India must constantly revise its Africa plans and strategies

Border efficiency – the forgotten side of NAFTA


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