Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Reuters | Charles Placide Tossou

Concluding today, in Kampala: ATAF, URA, AfDB high-level dialogue on the nexus between tax policy and tax administration

Concept note (pdf): Much of the traditional tax regime for taxing cross-border transactions is based on the taxing of small flows of cross border investment, relatively small numbers of companies engaged in international operations, heavy reliance on fixed assets for production and value creation, relatively small amounts of cross-border portfolio investments by individual and minor concerns with international mobility of tax bases and international tax avoidance. But all this has changed in recent years with the rapid globalisation and digitalisation of the world economy. Effective revenue administrations have to monitor changes in their country’s business and legislative environment and adapt their tax policies and implementation practices accordingly. There is a growing focus on the challenges African faces from multinational corporations who often adapt their business strategies so as package to shift their profits to low tax jurisdictions. These challenges have been exacerbated by the growth in from the digital economy. The corporate income tax base is also being eroded as a result of highly geared financing structures, mismatches between countries domestic tax rules and the abuse of double taxation agreements. [Updates: ATAF on Facebook, ATAF twitter: @ATAFtax]

Concluding today, in Pretoria: Association of African Central Banks. Theme: Monetary integration prospects in Africa - lessons from the experience of the European monetary and financial integration

Concept note (pdf): The main objective of the symposium is to promote exchanges among Central Bank Governors, policy-makers and the academic community on the prospects and challenges of monetary integration in Africa in the light of lessons learned from the experience of Europe, which established the single European monetary area in 1999, with the introduction of the euro as the common currency. It also aims at conducting in-depth reflections on the relevance of such a project in Africa, given the difficulties encountered by the euro area, in particular with the sovereign debt crisis, following which the issue of the exit of some countries from the euro area was raised. During this meeting, discussions should focus on the strategies to be adopted for the establishment of a sustainable monetary area in Africa, but also on sharing the experiences of countries or sub-regions that have already created a single currency in Africa as well as on the prospects of monetary integration in the Sub-regions. The discussions would focus on the following four sub-themes:

(i) President Zuma’s address at symposium of Governors of the Association of African Central Banks: South Africa remains committed to the development of the region and continent. I am very pleased to note that the South African Reserve Bank will assume the Presidency of the Association in the next year. I am sure that the Bank will, in collaboration with the other central banks on the continent, drive some concrete initiatives in support of Agenda 2063 during its Presidency. South Africa will also assume the chair of the SADC this month. We will ensure that the projects to be pursued in SADC are closely aligned with those of the African Union. Furthermore, South Africa will also chair the BRICS forum next year. The BRICS Africa Regional Centre of the New Development Bank will be opening its doors in Johannesburg next month. It is envisaged that this office will contribute to accessing the much needed resources to pursue our developmental goals on the continent. Finally, as the only African country in the G20, South Africa remains committed to ensuring that African interests are well represented in international deliberations and agreements.

(ii) Address by Dr Andreas Dombret (Deutsche Bundesbank): You may be thinking of specific regional disparities among African countries right now. But also in the euro area, “convergence” was a key word from day one. Even today, although almost all member states in the euro area are experiencing an economic upturn by now, economic cycles are not synchronous. And unemployment rates are highly divergent, standing at over 22% in Greece and below 7% in Ireland. So even 25 years after we initiated a far-reaching treaty of European integration, and after 18 years of sharing a common currency, we are not marching in step. Those asymmetries and structural differences between neighbouring countries are not necessarily a bad thing. But in a monetary union, dissimilar developments have extensive implications for two important challenges:

Second Annual SADC Industrialization Week: Sunninghill Declaration 2017 (Nepad Business Foundation)

Key points of the Sunninghill Declaration: (i) Conventional policy approaches are not always appropriate for rapidly changing conditions. Responsible policy-making requires: considered research and groundwork, taking into account the evolving regional political economy. (ii) There is the need to acknowledge the inequalities that exist within Member States, and particularly between Member States in the SADC region. (iii) Regional protocols, strategies and plans must be implemented at domestic level, subject to the sensitivity to the changing socio-political, economic and technological environments. (iv) It is essential to develop common awareness among the public and private sectors on the main elements of ‘quality infrastructure’ for SADC (and the African context), assessing the net long-term benefits and trade-offs. (v) A dearth of information discourages particularly micro, small and medium enterprises from participation in regional and global value chains. Table of contents: The SADC region prepares for industrialization; Key points of the Sunninghill Declaration; SADC value chain development; Agro-processing; Mining; Pharmaceuticals; SADC’s infrastructure sectors in support of value chain development; Supporting intra-regional and intra-African trade; Annex I. [Note: Additional conference documentation can be downloaded here, after registration]

Annual Review of Country Eligibility for Benefits under AGOA in Calendar Year 2018: documentation posted ahead of 23 August public hearing

(i) South Africa: Joint National Association of Automobile Manufacturers of South Africa, National Association of Automotive Component and Allied Manufacturers submission. On the elimination of barriers to US Trade and Investment (pdf): Other than certain regulatory technical, safety and health provisions, NAAMSA and NAACAM are unaware of any significant barriers to US Trade and Investment. Automotive trade between the United States and South Africa has shown consistent growth with imports into South Africa from the USA growing at a substantially faster rate, in many years, than South African automotive exports to the United States. [Please refer the economic commentary in section 4]. Where there are legitimate concerns on the part of US interests regarding barriers to trade and investment- these can and should be addressed between the respective governments/administrations. It is our understanding that the South African government remains open and willing to consider issues in this regard. NAAMSA and NAACAM are aware of the concern by the US administration and various US businesses about the unfair advantage enjoyed by European companies as a result of the South Africa/European Union Free Trade Agreement. Moreover, the United States has indicated a desire to move to more permanent trade and investment relations with South Africa. NAAMSA and NAACAM herewith reiterate preparedness to participate in discussions with the United States administration, via the South African government, on the possibility of a future bilateral trade agreement between the two countries. The South African government is aware of this. [The importance of AGOA for the SA Automotive Industry]

(ii) AFL-CIO submission on Swaziland (pdf): The Government of Swaziland has not established or made continual progress towards establishing internationally recognized worker rights, as required under 19 USC § 3703(1)(F). The country should remain ineligible for benefits under the African Growth and Opportunity Act. The Government of Swaziland continues to restrict internationally recognized worker rights in both law and practice, including the right to freedom of association and the right to organize and bargain collectively. Efforts at reform have been slow and only partially address the legal barriers that prevent workers for exercising their rights.

(iii) The Secondary Materials and Recycled Textiles Association (pdf): Conclusion and Recommendation: The proposed EAC ban on second hand clothing imports violates the requirements for continuing eligibility for benefits under AGOA. Moreover, the aforementioned negative effect on the second hand clothing industry in the United States from increased duties on imports of used clothing into Kenya, Tanzania, Uganda, and Rwanda, coupled with the anticipated negative economic consequences and dramatic job losses if the proposed ban on imports of used clothing is implemented, further justifies taking action through this annual review. SMART, therefore, requests that the TPSC recommend suspending duty-free access to the United States under AGOA for all currently eligible apparel imports from Kenya, Tanzania, Rwanda, and Uganda until such time as those countries roll back all increased import duties on used clothing and commit not to implement their proposed ban on imports of used clothing.

Zimbabwe: Grain imports reach $201,4m (NewsDay)

Zimbabwe imported grain worth $201,4m in the first half of the year, an indication the nation was still a net importer of agricultural products despite the land redistribution programme, latest trade data from Zimbabwe National Statistics Agency has shown. Data gathered from Zimstat revealed that Zimbabwe was still a net importer of grain, with maize imports leading with $91m. This also comes at a time when the country was boasting of a bumper harvest. In the period under review, the southern African nation imported durum wheat worth $52 million, rice $44 million, soya bean ($13m) and sorghum worth $1,4 million.

Lord Price: Setting the stage for the UK’s post-Brexit trade relations with southern Africa (New Era)

That was the key purpose of my visit to Southern Africa – meeting with trade ministers and representatives from Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland, to discuss how we can work together on an arrangement that replicates the effects of the EPA once the UK has left the EU. I’m pleased that we’re like-minded on this: we agreed that this should be a straightforward task in our mutual interest. As a development-focused trade agreement first and foremost, the EPA provides a high degree of market access. This will continue. More than this, however, the EPA aims to increase development, support regional integration around trade, help develop regional value chains, and ultimately create a stable business climate so UK and African businesses can trade with confidence.

Plans afoot to spearhead Dar, Cairo agreements (Daily News)

Following agreements reached by Presidents John Magufuli and Abdel Al-Sisi of Egypt, the Joint Permanent Commission, which met for the last time 20 years ago, is to meet immediately to push for realisation of the pacts. Among key areas discussed include investments in the health sector such as construction of a pharmaceutical industry; exchange of experts and increase of local students to study in Egypt, tourism and construction of a meat factory.

Tanzania: Ex-CAG stresses effective monitoring of tax exemptions (Daily News)

The Retired Controller and Auditor General, Mr Ludovick Utouh, under his umbrella organisation, WAJIBU, yesterday launched Accountability Report which among others show low implementation of the CAG 2015/16 recommendations and called for close and effective monitoring on tax exemptions as they can be abused. The WAJIBU accountability report dwells on CAG 2015/16 reports, and is based on three areas of central government, local government and public institutions. Speaking at the launch of the report, Mr Utouh who is the WAJIBU Executive Director said for the 2015/16 financial year, the audited reports show that 1.10tr/- tax exemptions were offered which is equal to 1.14 per cent of tax revenue.

What’s the current state of solar equipment import trade in Africa? Updates from Kenya, Nigeria (Solar Magazine)

To enforce proper standards across the value chain, Kenya’s Energy Regulatory Commission specifies certifications and qualification for manufacturers, distributors and contractors, which helps to limit the negative impact of substandard products and substandard services. This has provided a conducive environment for quality imported products to thrive. This narrative on solar equipment import is not uniform across Africa. In Nigeria, arguably one of the largest solar markets in Africa, the market is a little less structured and a little less regulated. Solar power equipment use and deployment in Nigeria does not boost of similar levels of order made possible by Kenya’s ERC. Frameworks for certification and training across the value chain are still being fine-tuned.

East African Centre for Renewable Energy and Energy Efficiency: executive board meeting update

The meeting also took note of the proposal presented by UNIDO on the tentative agenda for conducting a sustainable energy forum for EAC by EACREEE in February 2018. The meeting commended the initiative by UNIDO and requested the formation of a joint organizing committee.

The nature of trade and growth linkages (World Bank)

In this paper, we aim at shedding some light on these issues by focusing on whether the structural features of trade connections affect the trade-growth nexus. That is, the main contribution of this paper lies in providing new cross-country empirical evidence on how the growth effect of openness depends not only on the size of cross-border trade but also on a variety of characteristics of trade relations. Following several recent studies, we analyze the issue empirically with a two-step system-GMM approach that addresses endogeneity and controls for unobserved country-specific factors in order to estimate the growth effect of openness as well as those of other relevant variables. Our sample covers 118 countries during 1960-2010. Overall, two set of results emerge from our analysis.


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