Profiled African trade, regional integration, infrastructure events:

(i) Update on the outcome of third meeting of the CFTA Technical Working Groups (20 August – 1 September, Durban). From 21 August to 1 September 2017, the AU Department of Trade and Industry convened the third meeting of the CFTA TWGs, in line with the revised CFTA Calendar of Meetings. The meeting aimed at giving the CFTA experts the opportunity to further make technical inputs in the draft CFTA texts. At the same time a dedicated session of the CFTA Chief Negotiators was convened for the drafting of Annex A on Trade in Goods. The output of these meetings will be on the Agenda for the 7th meeting of the CFTA-NF scheduled to be held on the 2-7October 2017.

TWG meetings, 21-25 August: (a) TWG on Legal and Institutional Affairs; (b) TWG on Non-Tariff Barriers and Technical Barriers to Trade; (c) TWG on Rules of Origin; and (d) TWG on Trade in Services. TWG meetings, 28 August – 1 September: (a) TWG on Sanitary and Phytosanitary (SPS) Measures; (b) TWG on Customs Procedures and Trade Facilitation; (c) TWG on Trade Remedies; and (d) A dedicated session of CFTA Chief Negotiators to consider Annex A: Agreement on Trade in Goods. Key outcomes of each TWG: [download (pdf)]

(ii) Underway, in Nairobi: 2nd meeting to prepare the EAC Trade Investment Report 2016 (4-8 September)

(iii) Underway in Arusha: Regional validation workshop for the EAC research agenda

(iv) Starting tomorrow, in Accra: Ghana hosts G-20 Compact With Africa. Finance Ministers from seven African countries participating in the G-20 Compact with Africa initiative will meet as a group for the first time in Accra. Ghana’s Ministry of Finance is convening the event as the first peer-to-peer meeting, with technical support from the African Center for Economic Transformation. The seven Compact countries – Côte d’Ivoire, Ghana, Ethiopia, Morocco, Rwanda, Senegal, Tunisia – will participate in the meeting. Other observer countries expected to attend are Burkina Faso, Benin, Gambia, Guinea, Liberia and Togo. Representatives of the African Development Bank, the World Bank and the IMF will share perspectives on the three Compact frameworks – macroeconomic, business and financial – and the roles they will play to support countries in implementation. [Download: The agenda]

(v) Launching, 18 September in New York: NEPAD 5% Agenda – Mobilizing domestic pension and sovereign wealth fund capital for PIDA and other African infrastructure projects. Extracts from the concept note: Few African banks are truly active and experienced in project finance. Africa only managed to close 158 project finance deals with debt totaling $59bn over the decade 2004-2013, which represents only 5% of infrastructure investment needs and 12% of the actual financial flows. A coherent and coordinated approach is needed to address these challenges and mobilize institutional investors while limiting their risk exposure. This requires specific policies to reduce risks at source and instruments to mitigate risks. National, sectoral and financial regulations also need reforms to lift impediments to invest in those asset classes. The NEPAD Agency will steer a dialogue that convenes key stakeholders responsible for investment allocation decisions (e.g. investment banks, pension funds, SWFs, credit rating agencies, financial policy experts and regulators, policy makers, project owners etc.). These stakeholders will provide input to the above roadmap and shall be convinced to support the implementation of this roadmap. It is foreseen that the roadmap and the campaign will have the following impact:

(vi) Kenya to host Africa-France business summit, 5-6 October. Kenya is set to host the second edition of Africa-France Summit next month that is expected to bring over 200 French companies in the country for investment opportunities. It is also projected to bring together over 2500 investors from Kenya, France and other African countries.

Nigeria and South Africa both saw Second Quarter GDP releases this morning:

(i) Nigeria: GDP, Q2 2017 (National Bureau of Statistics). In the second quarter of 2017, the nation’s Gross Domestic Product grew by 0.55% (year-on-year) in real terms (pdf) , indicating the emergence of the economy from recession after five consecutive quarters of contraction since Q1 2016. This growth is 2.04% higher than the rate recorded in the corresponding quarter of 2016 ( –1.49%) and higher by 1.46% points from rate recorded in the preceding quarter, (revised to –0.91% from –0.52%). Quarter on quarter, real GDP growth was 3.23%. During the quarter, aggregate GDP stood at N26,986,005.20million in nominal terms, compared to N23,547,466.91 million in Q2 2016, resulting in a Nominal GDP growth of 14.60%.

(ii) South Africa: GDP, 2nd Quarter 2017 (Stats SA). South Africa’s GDP grew by 2,5% in the second quarter of 2017. The largest positive contributor to growth in GDP in the second quarter was the agriculture, forestry and fishing industry, which increased by 33,6% and contributed 0,7 of a percentage point to GDP growth. Finance, real estate and business services increased by 2,5% and contributed 0,5 of a percentage point. The mining and quarrying industry increased by 3,9%, and contributed 0,3 of a percentage point to GDP growth. In contrast general government services decreased by 0,6%, contributing -0,1 of a percentage point to GDP growth. [Various downloads available]

Mozambique to set up sovereign fund (AIM)

The Mozambican government intends to set up a sovereign fund, to create the reserves needed to finance development projects, according to the Minister of Economy and Finance, Adriano Maleiane. The new fund, Maleiane said, will be known as the National Development Fund, and one of its main sources of funding will be the capital gains tax paid on the sales of shares in the country’s mineral resources. This is clearly a Sovereign Wealth Fund in all but name. Setting up such a fund is a break with the policies of the previous government, headed by President Armando Guebuza, which repeatedly refused to put extraordinary revenues, such as those from capital gains tax, into a special account. It is likely that the first money to go into the sovereign fund will be the $350m in capital gains tax to be paid on the sale by the Italian energy company ENI to the US oil and gas giant ExxonMobil of a 25% share in Area Four of the Rovuma Basin.

Smart industrialisation through trade in the context of Africa’s transformation (ODI)

Africa’s experience of industrialisation has been disappointing. Globally, the share of manufacturing in total output rises with per capita income until countries reach upper-middle-income status, then declines as services become more prevalent at higher incomes; however, this has not been the case in Africa. Fresh thinking is needed on how to achieve Africa’s industrialisation objectives, and trade has a key role to play. This brief, produced in partnership with the United Nations Economic Commission for Africa, explores how the idea of using trade and trade policy to support industrialisation has experienced a recent resurgence, and provides a set of policy recommendations for African economies looking to industrialise smartly through trade. [The authors: Lily Sommer, Linda Calabrese, Maximiliano Mendez-Parra, David Luke]

Ninth BRICS Leaders’ Summit: Xiamen Declaration

In order to serve the demand arising from rapid growth of trade and investment among the BRICS countries, we agree to facilitate financial market integration through promoting the network of financial institutions and the coverage of financial services within BRICS countries, subject to each country’s existing regulatory framework and WTO obligations, and to ensure greater communication and cooperation between financial sector regulators. We agree to take an active part in the efforts to implement and improve International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation in FATF, including through cooperation among BRICS Heads of Delegation on AML/CFT, also in the context of the work of BRICS CTWG and by using other platforms and to safeguard integrity of national financial systems. We agree to communicate closely to enhance currency cooperation, consistent with each central bank’s legal mandate, including through currency swap, local currency settlement, and local currency direct investment, where appropriate, and to explore more modalities of currency cooperation. We encourage the BRICS Interbank Cooperation Mechanism to continue playing an important role in supporting BRICS economic and trade cooperation. We commend the progress in concluding the Memoranda of Understanding among national development banks of BRICS countries on interbank local currency credit line and on interbank cooperation in relation to credit rating.

African countries hope to attract more Chinese investment (Xinhua)

Delegates from African countries are hoping to attract more Chinese investment at the ongoing 11th China-Northeast Asia Expo in Changchun, capital of northeastern Jilin Province. Representatives from Ethiopia, Kenya, Zambia and Mozambique presented a variety of collaborative projects at the expo, ranging from grain and dairy processing, light manufacturing, to machinery and construction, in the hope of finding Chinese counterparts to invest in their countries.

Chinese carmaker plans aggressive push into South Africa with R1bn factory in Port Elizabeth (Business Tech)

In April 2017, BAIC announced its entry to the South African motor vehicle market through the launch of its D20. The group has now also launched its SUV – the X25 – to the local market, which is currently being produced in China ahead of going into local production in Port Elizabeth. Within the next two weeks, the X25 will be sold and served by BAIC dealers in Johannesburg, Pretoria, Polokwane and other cities. The carmaker said it plans to have a chain of dealers in 22 South African cities by the end of 2017.

Related: Africa hopes to become new growth pole through cooperation with BRICS; Xi asks Business Council, NDB to ensure more BRICS cooperation

India: Trade policy review only after resolving exporters’ cash woes, says Ministry (The Hindu)

The Commerce Ministry will come up with the mid-term review of the foreign trade policy, initially scheduled this month, only after resolving the liquidity issues faced by exporters under the Goods and Services Tax regime, a government official has said.

FAO Director-General calls for greater international support for Uganda’s growing number of refugees

The FAO Director-General José Graziano da Silva called for greater funding for a sustainable response to the refugee crisis in Uganda, after concluding a visit today to refugee settlements in the country’s north. Uganda is host to the fastest-growing refugee crisis in the world. Since July last year, more than one million South Sudanese refugees have crossed into Uganda. The refugees are predominantly women and young people and come from farming or livestock herding communities. [José Graziano Da Silva: Refugee influx - Africa’s largest silent crisis]

France’s Macron sets up advisory body to help shape Africa policy (France24)

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