Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Simon Davis | DFID

tralac’s Weekly e-newsletter is posted: The battle over safeguards on poultry imports from the EU continues

Profiled African trade and industrial policy events:

(i) Growing businesses of scale in Sub-Saharan Africa: job creation, innovation and industrialization (11 September, London): this event will launch a new Chatham House Africa Programme report on growing businesses of scale in sub-Saharan Africa

(ii) Developing inclusive and sustainable global value chains in the digital age (18-19 September, Kiel): The conference will also delve into current research on GVCs and explore ways to translate the lessons learnt from the Asian integration in global production networks into smart strategies for Africa and other developing regions. The conference, with themes that reflect the interests of the G20 under Germany’s presidency, will be organized under the auspices of the Think20 network and co-sponsored by the Federal Ministry for Cooperation and Development (BMZ).

(iii) Third industrial development decade for Africa (2016-2025): from political commitments to actions on the ground (22 September, New York)

Launched yesterday by the Atlantic Council’s Africa Center:

(i) Capturing the African consumer market. For America’s consumer goods companies, the latest shifts in African consumer trends hold much promise. Africa’s population is growing at an outstanding rate and spending by consumers and businesses on the continent is forecast to grow significantly over the next decade. However, US investors often oversimplify and misunderstand African markets, which remain highly segmented, fluid, and absent of a discernible “middle.” The report unpacks this complexity, and in doing so offers effective strategies for American companies to capture the opportunities afforded by Africa’s growth. [The author: Aleksandra Gadzala]

(ii) Escaping China’s shadow. China’s major financial commitments to Africa, coupled with its double digit returns, have discouraged American companies from breaking into African markets. Amid growing concerns regarding China’s expanding economic influence on the continent, a reassessment of America’s business edge and overall competitiveness is past due. Rather than engaging in a fist-fight for influence with Chinese competitors, the report argues that US companies should instead focus on their strengths and be more artful in leveraging the United States’ competitive advantages in unoccupied or less occupied spaces. Hruby outlines these ripe investment opportunities for US companies and maps a path to American business success on the continent. [The author: Aubrey Hruby]

China-Africa trade developments and impacts: case of China-Zambia relations (pdf, ZIPAR)

Against the forgoing observations, the study offers a number of policy suggestions for Zambia, Africa and China, including the following: (i) In order to cope with and mitigate the effects population growth and urbanization pressures, particularly the pressures on environmental sustainability in China and Africa, the blocs should formulate a common, standardized monitoring and evaluation system for measuring the “greenness” [“labour intensity”] of FDI funded activities and various China- and Africa-sponsored developmental projects. (ii) China and Africa should establish a common platform such as a Sino-Africa stock exchange through which investment vehicles, companies and project operators can be listed, and equity options offered. (iii) In order to prevent a potentially divisive scramble for Chinese financial resources among African countries, FOCAC should establish pro-rata quota-based and performance-based mechanisms for determining the allocations (of at least some portion) of FOCAC financial resource to African countries. [The authors: Caesar Cheelo, Pamela Nakamba-Kabaso, Zhun Che ]

Zambia: 83% of projects are done by Chinese companies – Mulusa (Lusaka Times)

National Planning and Development Minister Lucky Mulusa says over 10 years from 2011 to 2021, Zambia is envisaged to spend about $20bn of which 83% will be undertaken by Chinese companies. And Mr. Mulusa says in as much as Zambia has enjoyed the relationship with China, there is need to fine-tune to make sure that beneficiation is not skilled towards one partner against the other.

East Africa: SWIFT’s messaging traffic grows by 20.1% (SWIFT)

Data from SWIFT shows that FIN traffic growth in East Africa has outperformed the total growth of SWIFT globally. In the year to date, total message traffic volumes grew by 20.1% versus 8.2% growth for SWIFT worldwide. Data also shows that intra-regional FIN payments traffic is up 19.8% from 2015, and now accounts for 69% of FIN payments traffic in the region. The average daily number of messages has almost double since 2013, from 15,234 to 27,907 in 2016. SWIFT traffic growth in the East African Community is significantly higher than the rest of the continent, which also saw major growth. Total message traffic volumes in Africa have increased by 15.4% this year. This is still greater than in EMEA overall at 9.4%, the Americas at 7.8% and Asia Pacific at 5.4%.

Uganda paves the way for implementation of Regional AEO Electronic Identifier in the EAC (WCO)

While URA is the first country in the region to achieve this milestone, four other countries of the EAC region (Burundi, Kenya, Rwanda, Tanzania) have committed to deploy the regional AEO identifier on their systems by the end of September 2017. Once this critical landmark is achieved, the level of application of the regional AEO benefits across the region will be enhanced and customs clearance time of regional AEO declarations be reduced, hence contributing to regional economic development.

COMESA Sindiso Ngwenya: Harmonized policies to underpin mineral resource gains in Africa

Speaking at the Africa Down Under conference on mining in Perth, Mr Ngwenya said sound institutional frameworks will enable COMESA’s national and sub-national governments to have a say in decisions regarding the use of the resources located in their territories. “Good governance underlines the sustainable exploitation of mineral resources,” Mr Ngwenya said. “Harmonization of national and regional mining policies will thus underpin sustainable and broad-based socioeconomic development in the African region for the benefit of all the citizens.”

Geography, international economic agreements, and foreign direct investment: evidence from emerging markets (World Bank)

How do international economic agreements influence the investment patterns of firms from emerging economies? This paper studies the ways in which bilateral investment treaties and preferential trade agreements interact with geographic and cultural distance to influence firms’ investment patterns. How does geographic and cultural proximity affect the impact of international economic agreements on foreign direct investment flows? This question is answered using data from an original survey of 700 firms from four emerging (or newly-emerged) economies: Brazil, India, the Republic of Korea, andSouth Africa. The findings suggest that bilateral investment treaties and preferential trade agreements increase the likelihood of foreign direct investment. Yet, the effects of these agreements on foreign direct investment depend on the distance between the origin and potential destination countries. Moreover, trade and investment agreements appear to interact differently with distance.

Sustainability provisions in RTAs: options for multilateralisation (Tutwa)

Sustainable development is increasingly becoming mainstream in trade agreements. The past few years have seen a significant upsurge in the inclusion of SDPs in regional trade agreements, particularly in deep-integration RTAs – i.e. those seeking commitments beyond WTO obligations. There has been interest in using RTAs as building blocks towards the multilateralisation of SDPs. [The authors: Peter Draper, Nkululeko Khumalo, Faith Tigere]

Raghuram Rajan: Govt’s export-led growth strategy a failure so far (Livemint)

Former Reserve Bank of India governor Raghuram Rajan on Thursday said that the export-led growth strategy of the Narendra Modi government as part of its Make In India campaign has been a failure so far. “One of the things that was implicit in the Make In India campaign was that we are going to get export-led growth for the next few years. That export-led growth thus far measured by exports is a failure,” Rajan said, speaking at the launch of his book I Do What I Do, following a year of self-imposed silence after leaving office in September last year. Rajan said the government used to say that our exports are not picking up because the world economy is growing slowly. “But the rest of Asia is seeing their exports grow. How much is it because our small and medium industry is in difficulty because of the series of hits they have taken? Can we focus on things like building the logistics infrastructure, can we focus on improving the export promotion we do? Why is it that we are not pushing our exports stronger than we are?” Rajan asked.

India-Singapore trade can reach $25bn by 2019-20: FIEO (Business World)

“We can easily reach $25bn trade with Singapore by 2019-20, up from the current level of $17bn,” Federation of Indian Export Organizations chief Ganesh Kumar Gupta said here on Thursday. India’s export to Singapore grew by 23% in the last fiscal though overall exports grew by only 4%, he said, pointing out that the bilateral trade between India and Singapore was only 2.52% of India’s overall trade. FIEO will be increasing participation by its small and medium scale manufacturers and retailers, Gupta said at the opening of the four-day Singapore International Indian Expo.

Today’s Quick Links:

Afreximbank woos Kenyan investors

Visa denials force organisers to cancel US-Africa energy summit

Kenyan election standoff hurting the economy, says business lobby

Kenya: Duty-free sugar imports window abused

Cross-border power trade expected to rise as Southern Africa returns to surplus

South Africa’s export strategy aims to boost capacity for value-added goods, services trade

African leaders validate AfDB’s Feed Africa Strategy at African Green Revolution Forum

FAO: Global cereal output heading for a new record, lifting consumption and stocks  

SADC ICT ministerial: keynote address by Minister Ayanda Dlodlo

EU to launch global Alliance for Torture-Free Trade


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