tralac’s Daily News Selection
NEPAD’s integration into AU structures and processes: AU issues consultancy request
Dr Francis Mangeni: Customized trade remedies in Africa – the case of the COMESA-EAC-SADC Tripartite Free Trade Area
In addressing these issues, the overarching position taken in this paper is that trade remedies can serve a useful purpose in terms of encouraging countries to agree to ambitious levels of liberalization in RTAs, but every care should be taken to avoid abuse and to limit use to only the deserving cases. This position is backed by the policy and the relevant WTO rules, and by the overall flow of scholarship on the matter, as this paper tries to show. For the Tripartite Free Trade Area, if trade remedies are to be included, they should be flexible and simple to use, as indeed the negotiators instructed in the Terms of Reference establishing the Technical Working Group on Trade Remedies and Dispute Settlement. In addition, there should be concerted efforts by governments and partners to build the capacity of stakeholders especially the private sector and civil society including consumer organisations, as well as of all relevant line ministries that work to promote the public interest. Furthermore, to deal with the monopolistic abuses resulting from trade remedies, national and regional competition policy and law should complement market regulation interventions to ensure fair trading, to ensure efficient markets that support job and wealth creation especially among small economic operators, and to protect society at large.
Dar calls off Kenya trade row meeting (Business Daily)
Tanzanian officials have put off a meeting intended to iron out outstanding trade disputes with Kenya amid concerns Dar es Salaam was maintaining a hardline stance in the spat. Representatives of the two countries, including officials from cross-border trade agencies, were expected to meet from tomorrow in Tanzania, according to an agreement reached on August 3. But Kenya’s principal secretary for trade Chris Kiptoo, who was also scheduled to meet his Tanzania counterpart Adolf Mkenda on Friday, said the meeting was off following a note from Tanzania postponing the meeting to 9 September.
Enhancing the implementation of EAC protocols: mechanisms to support the legislative and oversight role of EALA in the timely implementation of EAC protocols that enhance trade (pdf, KEPSA)
India to restart FTA talks with Mauritius (Mint)
India is set to restart suspended negotiations for a free trade agreement with Mauritius starting October after it renegotiated the two decade-old double-taxation avoidance agreement (DTAA) last year that gives India the right to impose capital gains tax on investments routed via Mauritius. A commerce ministry official speaking on condition of anonymity said both sides have exchanged a request list for goods and services. ‘Tariff lists for goods have also been exchanged. Formal negotiation will begin starting October,’ he said. India’s exports to Mauritius grew 3% to $883m in 2016-17, but declined from $1.9bn in 2014-15. Imports from Mauritius are negligible at $18.4m in 2016-17 after contracting 10% from its previous year. However, Mauritius is the single largest source of FDI to India. FDI inflows from Mauritius to India stood at $15.7bn in 2016-17, constituting 34% of total FDI inflows to India.
Free movement of people in Africa and mitigating security impediments (AU PSC)
Council commended the Regional Economic Communities and Regional Mechanisms and Member States that signed and ratified all relevant AU instruments on free movement of people, and have already adopted mechanisms to facilitate free movement of people in their respective regions and countries, and encouraged others to emulate the example. In this respect, Council urged Member States to address all institutional and regulatory capacity gaps, in order to have a common policy on free movement of people in Africa. Council further commended the AU Commission on the progress made in the on-going efforts to develop the Protocol on Free Movement of Persons, Right of Residence and Right of Establishment in Africa, pursuant to Assembly decision [Assembly/AU/Dec.607 (XXVII)], and urged all Member States to fully participate in this process. In this respect, Council welcomed the consultations between the RECs/RMs and Member States on the draft Implementation Plan of the Draft Protocol and looked forward to the meeting of Experts from Member States to consider the draft Protocol and its draft Implementation Plan, to be held from 30 August to 2 September 2017, in Port Louis, Mauritius.
North-South Corridor: Serenje-Mpika Section - ESIA, RAP summary (pdf, AfDB)
The project road was originally constructed as a bitumen surfaced road in 1970s and is now beyond its design life, notwithstanding the emergency and periodic maintenance interventions. It has received a number of rehabilitation and periodic maintenance since its initial construction, commencing with emergency maintenance between 1995 and World Bank funded periodic maintenance between 1998 and 2000. This intervention provided a limited design life intervention, with focus on partial reconstruction for severally deteriorated sections and double seal treatment for most sections. Follow up maintenance was not fully undertaken, and consequently in 2011 Government of Zambia commissioned two emergency repair works contracts for the section. The Bank is already financing the Chinsali–Nakonde section (approved July 2015) while the appraisal for the Mpika–Chinsalisection is advanced with EU/European Investment Bank support. The Serenje–Mpika (238km) section is complementary to these.
Trade facilitation, transport costs and the price of trucking services in East Africa (ODI)
We examine how the failure to reduce transit times on East Africa’s Northern Corridor contributes to higher prices of trucking services. We combine quantitative and qualitative data from both primary and secondary sources to shed light on the operating nature of the trucking services industry, and establish the potential savings that would emerge from different trade facilitation measures. We find that trade facilitation measures leading to a reduction in transit times have a higher savings potential than measures targeting direct pecuniary costs, such as bribery. At the margin, one additional day required to cover the route from Mombasa to Kampala leads to 6% higher transport prices. In total, we estimate that savings of up to 30% are attainable through a combination of several straightforward trade facilitation measures. [The authors: Andreas Eberhard-Ruiz, Linda Calabrese]
Kenya: Bechtel selected to build Nairobi-Mombasa expressway
The new 294-mile (473km) route will vastly improve the connectivity, efficiency and safety of road transport between Nairobi and the country’s main sea port, Mombasa, and will reduce the journey time from over 10 hours to under four hours. The expressway will serve as a central part of Kenya’s national transport system, helping to promote trade and development in Kenya and further into landlocked Uganda, Rwanda and Burundi. This project will complement the new Standard Gauge Railway to transform the 280-mile (450km) Nairobi-Mombasa corridor into a vibrant and continuous economic zone. It will have four lanes and 19 interchanges. Bechtel will employ over 4,000 people and provide training and capacity building. The project will also include master planning for three special economic zones along the alignment, and will be focused on developing business in coordination with the new SGR and local communities.
The value of face-to-face: search and contracting problems in Nigerian trade (VoxDev)
Being there in person to look for the most recent products and inspect the purchase can be very valuable for traders. However, travel is costly. In the survey data, Nigerian traders reported that the average cost of a trip to China was $2,154, with $1,229 spent on a visa alone. The fact that so many traders choose to travel in spite of the cost, combined with strong patterns in which traders choose to do so, allows us to infer what the value of solving search and contracting problems must be across a variety of product types and source countries. My estimates suggest that search and contracting problems reduce welfare in Nigeria by about 23% across a group of consumer goods that includes apparel, electronics, toiletries, hardware, and homewares, and accounts for one sixth of consumer spending. This is over half the size of welfare losses due to physical and regulatory trade costs combined, comprising a large fraction of the total trade barrier faced by Nigerians for these goods. [The author, Meredith Startz, is a post-doctoral fellow, Economics Department, Princeton]
Nigerian Shippers’ Council demands regulatory powers at ports (Business Post)
The Nigerian Shippers’ Council has requested legal backing to carry out regulatory activities within ports in the country. This, the association explained, would help tackle irregularities at the nation’s ports and usher in sanity. President of NSC, Mr Jonathan Nicol, in a statement to newsmen in Lagos, stressed that the absence of an enabling legal framework was a setback to many efforts of the Federal Government at the ports. ‘We believe that the introduction of a port economic regulator will fight irregularities and usher in sanity,’ he said. ‘If our port environment is not conducive for trade, of course, traders will relocate to a more liberal trade environment within the West and Central Africa regions,’ he warned.
UNDP-Nigeria: Country programme document for Nigeria (2018-2022)
The country programme document emphasizes two UNSDPF result areas: (a) governance, peace and security, and (b) sustainable and inclusive economic growth and development. The overall strategy is to address the governance deficit through: (i) economic sustainability and diversification, focusing on livelihoods and youth employment, (ii) governance, focusing on transparency, access to justice and public service reform, conflict prevention and peace-building; and capacities for the humanitarian response, and (iii) environmental sustainability. The SDGs are integrated throughout the programme and aligned to aspirations 1, 3, 4 and 6 of Agenda 2063. The programme theory of change is based on the following assumptions: [UNDP Executive Board: Second regular session, 5-11 September, advance documentation]
Tanzania: Economic growth drops to 5.7% in first quarter of 2017 (IPPMedia)
Tanzania’s economic growth slowed to 5.7% in the first quarter of 2017 following poor performance in agriculture and other sectors that dominate the economy, the National Bureau of Statistics said in its latest release (pdf). The NBS said in a statement that in the first quarter of 2016, the revised GDP grew by 6.8%. Agriculture which accounts for over 25% to the GDP grew by 2.6% compared with 2.7% recorded in the previous first quarter. It added that the construction sector recorded a growth rate of 8.4 per cent in first quarter of 2017 compared to 8.9 per cent recorded in the corresponding quarter of 2016.
Mauritius: IMF staff completes 2017 Article IV mission
The authorities seek to graduate Mauritius to a high-income economy within the next 10 years on the basis of an ambitious public investment program and improvements to the business climate. Attaining the next level of economic development will require Mauritius to use strong and independent institutions to overcome the variety of policy challenges outlined above. Early signs are promising, with both the pending formation of the National Economic Development Board, and the drafting of the Financial Sector Blueprint, important welcome steps towards harmonizing the policy direction and implementation across sectors. Considering Mauritius’ track record of reinventing its economic model, there are grounds for optimism that the country will successfully manage the reform process. Mauritius has made great strides over the last decade to top the competitiveness rankings in Sub-Saharan Africa, but still lags emerging market peers as lackluster productivity and rapid real wage growth in recent years have reduced cost competitiveness. The recently-adopted Business Facilitation Act is a welcome step to improve Mauritius’ business environment. Broader structural reforms in areas such as the labor market including the promotion of youth and female labor participation in the labor force, higher education and innovation policies will be key drivers of Mauritius’ economic transformation going forward.
Ghana: Government outlines 10 points agenda for industrial transformation (GNA)
Addressing stakeholders at the opening of the Second Edition of the National Policy Summit, President Nana Addo Dankwa Akufo-Addo mentioned the industrial agenda which were anchored on the following areas: building competitive businesses of existing local industries by facilitating access to medium and long term financing at low interest rate and implementing the One District, One Factory initiative designed to bring industrialisation to the doorsteps of the people. The summit, organised by the Ministry of Information which featured the Ministry of Trade and Industry, is on the theme: ‘‘The Industrial Transformation of Ghana’’.
South Africa: ConCourt upholds scrap metal export provisions (Engineering News)
The Constitutional Court has dismissed local scrap metal exporter SA Metal Group’s request for leave to appeal the High Court’s decision to uphold the State’s scrap metal export provisions, known as the price preference system, as well as the International Trade Administration Commission of South Africa’s decision to refuse to issue export permits to the company, in accordance with the price preference system. The ConCourt noted that it had no reasonable prospect of success.
DRC: Current acute food insecurity overview June 2017 - December 2017 (UN)
More than one in ten people living in rural areas of the Democratic Republic of the Congo are hungry due to escalating and prolonged conflict and displacement, United Nations agencies today reported, warning that the situation will worsen unless urgent support comes in time. ‘7.7 million people face acute hunger – a 30% increase over the last year,’ said the UN FAO and the WFP said. In a new report, the UN agencies said that between June last year and June this year, the number of people in ‘emergency’ and ‘crisis’ levels of food insecurity – levels that precede ‘famine’ – rose by 1.8 million, from 5.9 million to 7.7 million. The Integrated Food Security Phase Classification analysis also notes that the humanitarian situation has worsened due to the spread of fall armyworm infestations, and cholera and measles outbreaks. [Ethiopia: FAO warns that drought-stricken herders face massive losses]
Today’s Quick Links:
South Africa-based Old Mutual eyes Kenya expansion
Anzetse Were: Top economic agenda for incoming Kenyan leaders
Rwanda: Why foreign aid should be used to diversify local exports sector
Stephen Yeboah: The economic costs of illicit financial flows in Africa’s extractive sector
AfDB Policy Brief series – How they did it: China’s financial mechanisms for industrial development (pdf)
Caroline Freund: US needs China trade deals, not ‘remedies’
India’s foreign trade, July 2017: merchandise trade and trade in services (pdf)