Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Rob Beechey | World Bank

Underway, in Durban: Third meeting of the CFTA Technical Working Groups

The objective of the meeting is to continue the work that has already been undertaken since the beginning of the CFTA process by providing inputs to the relevant annexes and appendices of the CFTA Agreement for consideration by the CFTA Negotiating Forum. The breakaway sessions of the CFTA Technical Working Groups on Legal and Institutional Affairs, Non-Tariffs Barriers and Technical Barriers to Trade, Rules of Origins and Trade in Services will be held from 21–25 August. And from 28 August – 1 September, the Sessions of the CFTA Technical Working Groups will be dedicated to Sanitary and Phytosanitary Measures, Customs Procedures and Trade Facilitation, Trade Remedies and a Dedicated Session of CFTA Chief Negotiators to consider Annex A: Agreement on Trade in Goods.

ECA’s Vera Songwe: remarks at SADC summit (UNECA)

Ms Songwe congratulated the SADC leaders for their firm commitment and the strides made towards regional integration. “SADC is also home to some of the most liberal African economies, some of which have already achieved up to 100% in the Tripartite Free Trade Area negotiations, “ she said. The region is well ahead of the pack, adding the SADC Free Trade Agreement is fully functional with levels of ambition exceeding that of the CFTA itself in areas such as value addition, agro-processing and pharmaceuticals amongst others. “We should learn from the NAFTA negotiations on the continent and ensure that agreements in the area of trade in services and ICT are well addressed in the CFTA negotiations, and the SADC region with South Africa must take the lead on this. The goal of finalizing the CFTA discussions by 2018, as set by the African Union, is doable if we commit to it. There will be challenges no doubt, including with the international community, but we look to South Africa in the context of the global debates and the G20 to represent the uniquely Africa view on the subject. SADC’s experience illustrates that many challenges to regional integration can be overcome, and that the region is well positioned to take the leadership on the CFTA process. As ECA, we look forward to working with you on this signature issue,” said Ms Songwe.

African officials call for urgent regional integration, infrastructure development (Xinhua)

At the Infrastructure Africa 2017 in Johannesburg, Zambian Minister of Finance Felix Mutati encouraged Africans to speedily address infrastructural deficit. “We have to inject some sense of urgency in ourselves. If we remain captured by business as usual, we are headed for disaster,” said Mutati at the opening ceremony of the two-day event. “We need, as government, to define our roles, the things that government can do and those things that we cant do. Government must not monopolize investment in infrastructure. We need to develop further clarity on the question of the participation of the private sector and nature of partnerships that we need to develop with the private sector,” he added. SA’s Minister of Trade and Industry Rob Davies said infrastructure development is required to speed up regional integration for increased inter-regional trade and for industrialization in Africa. He said Africa is losing 40% of its competitiveness due to infrastructure deficit. Free trade areas, infrastructure development and cooperation are essential in promoting industrial development across the continent. [Infrastructure critical for Africa’s growth and development – Minister Davies]

Nigeria: FG to review trade, investment agreements 57 years after (BusinessDay)

The review described as ‘root and branch’ by Chiedu Osakwe, who heads the Nigeria Office for Trade Negotiations, is geared towards updating and modernising such agreements and MoU to benefit the ailing economy, and create jobs. “The review focuses on all our trade and investment agreements from 1960 till date,” Osakwe told BusinessDay. “It also dwells on reviews of all the memoranda of understanding that we have had on trade and investments; so that we can update, modernise them. It would also enable us to be sure that they carry net benefits for the Nigerian economy, in terms of improved dynamics, and also in terms of job creation.” Nigeria is said to have entered into well over 550 trade agreements over the years and signed more than 100 trade policies just in the last decade.

Rwanda Economic Update: Sustaining growth by building on emerging export opportunities (World Bank)

From a very low base, Rwanda’s exports have increased four-fold in the last decade from just $400m in 2007 to $1.6bn in 2016. Traditional agricultural exports - tea, coffee, and minerals - are still important export earners but overall performance has been mixed in recent years. Non-traditional merchandise exports have emerged in Rwanda, offsetting mixed performance of traditional sectors. Other minerals, agriculture, and manufacturing, that generated only $4m in 2004 reached $155m in 2016. Services exports are concentrated in traditional sectors of tourism and transport but exports in high-productivity ICT and financial services have started. Firm-level analysis of exporters in Rwanda reveals that the number of exporters has increased but the size of exporting firms is smaller than those in regional peer countries. The challenges of small exporting firms are survival and growth in the export markets. This update also highlights several policy considerations that are important for ensuring sustained export growth:

Rwanda’s 2016/17 coffee exports: update (New Times)

Rwanda’s coffee export revenues and volumes recorded during the last financial year fell below projections by the National Agricultural Export Board, the body’s annual report indicates. The country realised $58.5m (Rwf49.7bn) from coffee exports during the last financial year (July 2016 to June 2017), below $60.7m (Rwf51.6bn) registered during the previous fiscal year, indicating a 3.61% drop in earnings, the report shows. This was also lower than $67.8m (Rwf57.6bn) the agro-exports body had projected to earn from the beans during the reporting period. The drop was despite a relatively better price on the global market, averaging $3.16 per kilogramme compared to $3.10 per kilogramme the year before. NAEB attributed drop in coffee export receipts to the low coffee volumes sold in the period under review. [How Rwanda plans to be a global potato exporter]

Overview of the used clothing market in East Africa: analysis of determinants and implications (EA Trade and Investment Hub)

Among the data findings (pdf): (i) The used clothing industry creates an estimated 355,000 jobs in the EAC, which conservatively generates incomes of $230m that supports an estimated 1.4 million people. In addition to jobs, the import duties and value-added tax paid to EAC governments by importers of used clothing result in over $140m in estimated annual revenues. (ii) The United States supplies approximately 19.5% of total direct exports of used clothing to the EAC. However, when considering indirect exports from United Arab Emirates, China, Pakistan and India, the US share is significantly higher. (iii) Chinese exports of ready-made clothes to the EAC reached $1.2bn in 2016, dwarfing the value of used clothing imports by a factor of four. Although taxed at a higher ad valorem rate than used clothing, the vast majority of what enters EAC markets is undocumented and untaxed. Chinese imports, particularly the undocumented goods that flood the market, pose a much greater danger to EAC domestic industries.

Should EAC Partner States lose AGOA-eligibility, it would mean the loss of an important opportunity to grow the EAC’s competitive capabilities. In 2016, the EAC exported $435m in goods to the United States under AGOA, with the majority (88%) being apparel. In addition to loss of revenues, the EAC has the potential to lose 219,000 full-time jobs derived from the trade preference program, leaving 500,000 people in the region without income. [Related: US trade with sub-Saharan Africa, January-December 2016 (pdf), USAID opens new Southern Africa Trade and Investment Hub in Botswana]

Mauritius-China FTA: update (GoM)

Mauritius and China will explore new avenues of cooperation in technical training, traditional Chinese medicine, civil aviation and pharmaceutical production. This in turn will help to further strengthen the existing relationship that Mauritius and China share. This possibility was evoked during a working session between the Minister of Foreign Affairs, Regional Integration and International Trade, Mr Seetanah Lutchmeenaraidoo and the Ambassador of the People’s Republic of China, Mr Sun Gongyi, held last week in Port-Louis. Ambassador Gongyi underscored that the finalisation of a forthcoming free trade agreement between the two countries should open up new avenues of trade and investment. This will enable Mauritius to position itself as a business platform in the China-Africa corridor, he added.

Ghana: Trade minister woos Indian investors (Graphic)

The Minister of Trade and Industry, Mr Alan Kyeremanten capitalised on the India, West Africa Forum, which was held in Accra to market the country’s industrialisation plan to Indian investors who were present. Taking them through the plans of the government to shift the economy from commodity based to industrialisation, Mr Kyeremanten called on the Indian investors to partner the government in some of the projects. The India-West Africa Exhibition and Business Forum (Namaskar Africa 2017, 16-17 August) was a regional flagship programme organised by the Federation of Indian Chamber of Commerce and Industry. The forum brought together about 63 companies from India who came to explore investment opportunities in the areas of infrastructure and construction, healthcare and pharmaceuticals, as well as agriculture in Ghana and Africa.

South Africa: Agricultural trade balance remains positive (Agbiz)

Despite the worst drought in more than a decade, South Africa’s agricultural sector recorded a positive trade balance of $2.3bn in 2016. This was boosted by growth in exports of edible fruits, beverages, spirits and vegetables, with the total agricultural export value amounting to $8.6bn, up 6% from 2015. These products are mainly grown in the Western Cape province, which was not as severely affected by the 2016 drought as the rest of the country. Meanwhile, imports also increased by 26% y/y reaching $6.3bn - driven by a notable uptick in grain imports on the back of the drought. Africa remained South Africa’s largest market, accounting for 44% of agricultural exports – which is 9% below the 5-year average share. The EU accounted for 26% of South Africa’s agricultural exports in 2016, with Asia taking up 22%. Americas and the rest of the world accounted for 5% and 3%, respectively. After falling by 18% y/y in 2015, South Africa’s agricultural exports to Africa recovered by 4% in 2016 – reaching $3.8bn (see Chart 2). This uptick was driven by sugar and sugar confectionery, milling products, as well as exports of edible vegetables and certain roots and tubers.

Nigerian investor sets up $135m commodities exchange (Bloomberg)

The exchange, Integrated Produce City Ltd., will be located near the southern city of Benin, about 300kms east of Lagos, Nigeria’s commercial hub, a site accessible to nearby growers of cocoa, palm oil, rubber and cassava, Chief Executive Officer Pat Utomi said in an interview. The company has put up 20% of the required $135m and is in talks with lenders and investors from South Africa, China and Australia for additional capital, Utomi said, declining to name them. Integrated Produce City signed an agreement with KPMG LLP’s Nigerian unit on Monday to help it raise more capital, Vitus Akudinobi, a spokesman for the new exchange, said

Food price collection in Africa: approaching real-time data and use of crowdsourcing, 2013-2016 (pdf, AfDB/EC)

Large agricultural commodity price swings observed in recent years have made the importance of accessible, timely, accurate and frequently updated price data more obvious. This study investigates the potential of innovative web and mobile phone technologies and alternative data collection methods such as crowdsourcing in order to collect food price data in Africa. The report summarises these experiences through the lessons learned and provides a detailed overview and assessment of different aspects of the collected data that can be of help for the success of future food price collection exercises.

Informal entrepreneurship and cross-border trade between Zimbabwe and South Africa (pdf, SAMP)

This report, part of SAMP’s Growing Informal Cities series, sought to provide a current picture of ICBT in Zimbabwe by interviewing a sample of 514 Harare-based informal entrepreneurs involved in cross-border trading with South Africa. ICBT in Zimbabwe remains a female-dominated activity, and women made up 68% of this sample. Furthermore, traders exhibit a relatively youthful profile, with a mean age of 33 years in this sample. On average, the ICBT traders are highly mobile, spending only 1.8 days in South Africa on average per visit, although some stay for several weeks (particularly if they are taking goods to sell). The traders travel relatively frequently to South Africa, with 67% making at least one trip a month and 82% travelling more than four times a year. The traders make important contributions to both the Zimbabwean and South African economies. [The authors: Abel Chikanda, Godfrey Tawodzera]

Global Commission on the Future of Work: ILO launches panel to address rapid transformations in the world of work

“It is fundamentally important that we confront these challenges from the conviction that the future of work is not decided for us in advance,” said Guy Ryder, Director-General of the ILO at the launch of the Global Commission on the Future of Work. According to ILO, the global body is expected to undertake an in-depth examination of the future of work that can provide the analytical basis for the delivery of social justice in the 21st century. Co-chairs Ameenah Gurib-Fakim (President of Mauritius) and Stefan Löfven (Prime Minister of Sweden) announced the 20 members of the Commission, as the ILO chief underscored that the membership “reflects a balance of geographical regions, of different disciplines. There is gender balance and there is representation of workers and employers.” [A commentary by the co-chairs: The future of work is ours to create]


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