Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Sven Torfinn | PANOS

Featured tweet, @UrugwiroVillage: President Kagame is now (Saturday) hosting AU Reforms meeting with President Conde, AU Chair Moussa Faki, as well as a few former African Heads of State

Starting today, in Kampala: High-level, Africa-wide, civil society consultative meeting on WTO MC11, ACP-EU post-Cotonou Partnership (SEATINI Uganda)

SADC Summit: selected postings

Extracts from the communiqué: (i) Summit directed that a regional Natural Gas Committee be constituted to promote the inclusion of gas in the regional energy mix for industrial development; (ii) Summit urged Member States to speed the process of operationalizing the SADC Regional Development Fund in order to support the Industrialization Agenda; (iii) Summit noted progress in the implementation of the Industrialisation Strategy and Roadmap 2020-2063 in specifically profiling of value chains in the three priority sectors of agro processing, mining and pharmaceuticals and urged Member States to keep the momentum and develop and actualize the identified value chains; (iv) Summit admitted The Union of Comoros as a new Member of SADC and noted that the assessment of Burundi is work in progress; (v) Summit re-affirmed SADC’s support and recognition of the importance of the reforms at the African Union and emphasized the importance of complying with the African Union Constitutive Act, and the African Union guiding rules and procedures while carrying out the reforms. Further, the reforms that are contrary to the Constitutive Act should be implemented once the Constitutive Act has been amended. In this regard, Summit Mandated the Chairperson of SADC to submit the position of SADC on African Union Reforms to the Chairperson of the African Union.

Summit address by AfDB’s President Akinwumi A. Adesina. There’s no doubt, these are tough times for the SADC region, with commodity price declines and other external shocks slowing down growth. The Bank strongly supports the structural reforms to spur greater growth of South Africa, especially, for in its growth lies the accelerated economic recovery of the entire SADC region. What we must do is turn these trends around. While recovery of commodity prices has helped, and stronger macroeconomic reforms are needed, we must address fundamental structural challenges that have continued to hamper growth in SADC and Africa, as a whole. [President Jacob Zuma’s closing statement]

How can Uganda benefit from China’s economic rise? (IGC)

These risks and tradeoffs notwithstanding, China’s increased engagement with Uganda is mutually beneficial and presents several opportunities for growth and development, including: (i) the re-location of manufacturing value chains from China to Uganda (ii) an alternative to traditional development financing and (iii) increased trade and FDI linkages. However, to effectively harness these prospects, Uganda must put in place the right policies and incentives. For example, it must ensure a conducive investment climate with reliable power and transport links - a pragmatic approach to achieving this, while taking into account the government’s constraints and limited capacity, is through the active use of industrial parks and special economic zones. Second, the government must effectively manage its rising debt obligations and public investments, to safeguard against vulnerabilities and a resurgence of unsustainable debt levels. Lastly, the Government of Uganda must also take responsibility to ensure that environmental and social safeguards are enforced and that labour flows from China are properly managed through effective immigration policies and investment guidelines. [The authors: David Dollar, Akura Mugyenyi, Nicole Ntungire]

Uganda moves to tap regional food market (New Times)

Uganda has outlined strategies geared at enabling the country tap into the growing the regional food market. According to the country’s Ministry of Agriculture, food crops where Uganda has a comparative advantage over others and can be marketed in the EAC will be prioritised. Okasaai Opolot, the director crop resources at the country’s Ministry of Agriculture, the move will help position Uganda as a regional food basket. Food crops, including maize, rice, beans, bananas, and cassava, which are mainly consumed in the region, have so far been identified under this strategy.

Africa’s trans-boundary infrastructure development in focus at Nigerian Bar Association conference (UNECA)

A five-member high-level panel will lead participants in discussing issues that include investment and trans-boundary infrastructure projects in Africa; political, legal and policy issues which need to be addressed to achieve regional integration; laws and policies needed to support trans-boundary infrastructure projects and the role they play in institutionalizing Africa. Adeyinka Adeyemi, Senior Advisor and Head of the Regional Integration and Infrastructure Cluster in the ECA’s Capacity Development Division, will lead discussions. African leaders in 2016 tasked the ECA and NEPAD to develop a framework that would harmonize laws across the continent to make it easier for the private sector to invest in trans-boundary infrastructure. The result was the Model Law that will be endorsed by African Heads of State at their January Summit in Addis Ababa. It deals with the issues and concerns raised by the private sector in its interactions with NEPAD and ECA experts and these include issues of transparency, dispute resolution, project ownership, project preparation and others they considered as risks.

Africa’s top lawyers take bold stand on reforms, investments, business competitiveness (BusinessDay)

African legal luminaries under the African Bar Associations (AfBA) have formed a formidable group with huge inspirations from the International Bar Conferences in Harare Zimbabwe in 2015. Now, the body which was strengthened after the Abuja 2016 council meeting tested their force with their successful interventions in the Gambia and Burundi crises. AfBA came to Port Harcourt, Rivers State, last week and resolved to pursue their new-found strength towards rescuing the continent in the economic front by using legal frameworks to create better business environments. The charge was led by a non-lawyer, a solder, economist and statesman, the immediate past president of Tanzania, Jakaya Kikwete, who examined and dissected the prospects of legal/regulatory framework for doing business in Africa.

Shadow value chains: tracing the link between corruption, illicit activity and lootable natural resources from West Africa (Chr. Michelsen Institute)

How are Liberian timber, Sierra Leonean diamonds, Malian gold and Nigerian oil traded outside, and intertwined with, legal value chains before ending up in what is often legal consumer markets? By collating recent knowledge of the ‘shadow value chains’ of these resources, this paper seeks to explore if and how illegally traded natural resources sponsor other types of illicit activity, such as organized crime and terrorism. Furthermore, how are these activities facilitated by corruption in the different cases? The paper gives a number of recommendations. The perhaps most important one is that in order to improve interventions, in-depth understanding of local power relations and incentive structures in these individual shadow value chains is crucial. [The authors: Åse Gilje Østensen, Mats Stridsman]

An exploratory analysis of measures to make trade facilitation work for inclusive regional agro-food value chains in West Africa (ECDPM)

The region and its member states seek to support the development of regional agro-food value chains and to improve the functioning of the regional market. This transpires from policy frameworks such as the ECOWAS Agricultural Policy, the UEMOA Agricultural Policy and the West African Common Industrial Policy. This study seeks to contribute to reflections and actions in this area, by looking at how corridor initiatives focused on trade facilitation could be made more ‘transformative’ by combining them with other developmental measures, in this paper referred to as “accompanying measures”. It focuses on the examples of the rice and livestock (cattle and small ruminants) value chains and takes political economy dimensions into account. Geographically, the study focuses on a particular subregion within West Africa, comprising the “Central Basin” and Senegal and Nigeria. [The authors: Carmen Torres, Jeske Seters, Rivaldo Kpadonou]

Unlocking capital flows for forest sector development in Africa: 2017 African Forestry Investment Conference report (AfDB)

The conference concluded with a plenary discussion on how to unlock purpose-built capital to finance plantation establishment in Africa. There was broad consensus that concessional finance from bilateral or multilateral donors, such as that provided by FIP in the AfDB/Form Ghana transaction, was essential to risk share alongside other capital providers. Such blended finance models are based on grant funding being provided in the form of 0% interest, long term loans in a subordinated position to other forms of capital, such as equity or debt from DFIs, private investors, commercial banks and possibly also institutional investors. With FIP funding being fully allocated, and the need to mobilise capital at a larger scale, the Green Climate Fund was identified as a potential source of concessional finance. Three potential delivery mechanisms for such blended finance were identified: [Download: Conference presentations]

How to expand agri-leasing in Africa (CTA, Nathan Associates)

Reliable estimates of the size of Africa’s agri-leasing market are near-impossible to find, according to Amalia Johnsson, co-author of Nathan Associate’s Agricultural Leasing Market Scoping Study (pdf) for Sub-Saharan Africa. However, the report outlines supply, demand and regulatory conditions for agri-leasing in Ethiopia, Ghana, Kenya, Mozambique, Nigeria, Tanzania, Uganda and Zambia and offers recommendations aimed at stimulating market growth.

COMESA Time Release Study report: workshop summary (AfDB)

The objective of the workshop was to enable COMESA Member States to discuss the findings and recommendations of the TRS Report and to further discuss a way forward in addressing the constraints and bottlenecks affecting trade in the COMESA region. Hence the workshop targeted all COMESA countries including those that did not take part in the study. In opening the workshop, the Bank’s Country Manager for Zambia, Damoni Kitabire urged COMESA countries and the COMESA Secretariat to implement regulatory reforms in order to reduce the costs of cross-border trade in the region. COMESA countries are expected to develop a roadmap to address some of the bottlenecks identified by the study and improve trade facilitation in the region. Speaking on behalf of the Secretary General of the COMESA Secretariat, Zerezghi Kidane reiterated that the recommendations of the TRS report will be shared with the COMESA Heads of Customs to enable further action on addressing the identified gaps and improving trade facilitation as part of the wider COMESA Customs and Trade Work programme 2018-2020.

COMESA seeks an integrated transport system for the region (COMESA)

COMESA is in a process of setting up a modern railway technology known as the Futran System. This is an automated system that can take a payload of up to 10 tons. Initial testing of the system is currently bring done with a 3-ton payload at the Milotek external test facility in South Africa. “This system’s advantages include being a low-cost carrier, low fuel consumption, less gas emission compared to other modes, bulk carrier, low external costs, reduces congestion and has a better safety record,” COMESA Secretary General Sindiso Ngwenya said. He said that the Secretariat will present the proposal to the COMESA Council of Ministers for consideration as a possible legacy project for Member States.

Tazara, Zambia Railways sign deal to ply on each other’s line (The Citizen)

Tazara managing director Bruno Ching’andu said in Dar es Salaam yesterday that the railway line has inked an Open Access Agreement (OAA) with the Zambia Railways Limited that will see the former extending its operations beyond Kapiri Mposhi. Under the OAA, Tazara and ZRL will now be able to run locomotives and wagons alike onto each other’s line. “It will enable us to extend our operational destinations to Lusaka, Livingstone and Ndola in Zambia while ZRL can run all the way to Dar es Salaam. This will help us to attain our target of transporting about 350,000 metric tonnes of cargo in the financial year 2017/18,” he said.

South Africa, Morocco amongst largest non-EU fruit and veg suppliers (FreshPlaza)

The EU’s main non-EU suppliers of fresh fruit and vegetables in 2016 were South Africa, with 1.63bn Euro; Morocco, with 1.38bn Euro; Costa Rica, with 1.27bn Euro and Turkey, with 1.11bn Euro, which together accounted for 35% of the total value of EU imports from third countries, which stood at €15.3bn, according to Eurostat data processed by FEPEX. EU imports from these four countries were further strengthened in 2016 compared to 2015, with growth of 4% for South Africa, 10% for Morocco, 7% for Costa Rica and 14% in the case of Turkey.

Could Kenya face COMESA sanctions for breaching its sugar quota rules? (The EastAfrican)

Nairobi’s decision to import sugar from outside Comesa is contrary to an agreement that the country increase its sugar quota of imports from Comesa to bridge its deficit. Industry insiders say Kenya has an agreement with the Comesa Council of Ministers to import sugar from the bloc and any move contrary to this requires approval of the Council. However, the Principal Secretary in charge of Trade, Dr Chris Kiptoo said the Kenyan sugar situation was unusual and required unusual intervention measures.

Thailand eyes new emerging cities for exports (VietnamPlus)

The Thai Ministry of Commerce is targeting emerging cities in ASEAN, China, India and Africa to increase its exports amid uncertainty for the global economy. Deputy Director General of the International Trade Promotion Department under the Commerce Ministry Vannaporn Ketudat said that the new export market plan will help the country achieve its goal of 5% export growth this year. Thai shipments enjoyed a year-on-year surge of 7.8 percent in the first half of the year, however, global uncertainty and the baht’s appreciation could fan headwinds for exports.

International financial system and development: advance, unedited UN SG report (UNDESA)

The present report (pursuant to General Assembly resolution 71/215) summarises information on trends in international public and private capital flows to developing countries, options to address financial stress in developing countries, and on-going efforts to strengthen the international financial system for the implementation of the 2030 Agenda for Sustainable Development. It highlights progress on commitments and actions in the Addis Ababa Action Agenda of the Third International Conference on Financing for Development.

With some countries, China is in the red: supply chains and commodity needs mean China doesn’t run massive trade surpluses with everyone (Bloomberg)

China’s big trade surpluses hog all the headlines, but imbalances go both ways. South Korea’s $72.2bn surplus with the People’s Republic in fact tops a list of more than 40 nations that export more to the country than they import from it, followed by Switzerland and Australia, data compiled by Bloomberg show. Besides commodity exporters such as Iran and machinery producers like Germany, smaller economies such as Ireland, Finland and Laos round out the tally.


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