Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Feliciano Guimarães | Wikimedia Commons

Featured trade finance tweet, from @AUTradeIndustry:

In 2014, SMEs constituted more than 80% of enterprises in Africa, but they accounted for only 28% of banks’ trade finance portfolio @AfDB

Starting today, in Dar es Salaam: AUC/USAID BIAT Workshop on Trade Finance and Trade Information

The workshop (13-15 September) provides a forum for exchange of information on Boosting Intra African Trade and specifically on trade information and trade finance. It will develop recommendations and best practices for consideration by AU policy organs. [To follow debates from the BIAT workshop: @InvestEAfrica, @AUTradeIndustry, #BIAT2017]

The PACCI/AU/UNECA/ATPC workshop on the CFTA and the African private sector finished yesterday in Accra.

Extract from the concept note: In spite of the importance that business groups attach to the creation of a single continental market for goods and services, this conference will be the first organized on CFTA from the private sector perspective. The initiative launched by UNECA/ATPC to support the private sector to work with governments, the AU Commission, UN and international organizations on boosting intra-African cooperation and integration was long overdue. By bringing the private sector in as a core partner in the formation of a continental free trade area, this conference is opening up a world of new possibilities to create opportunities for businesses to exploit and bring about benefits to ordinary citizens of Africa.

Ghana’s trade minister: Private sector will succeed through implementation of CFTA. The Minister of Trade and Industry, Alan Kwadwo Kyerematen, has assured that the private sector in Ghana and Africa will succeed if the implementation of the CFTA is pushed through. “In actual fact, whether there will be challenges or not as a continent we have no choice but to move ahead with this continental agenda. First, I’m not sure that there is any evidence of any country in the world that has achieved significant growth without taking advantage of the regional market. All the countries that have achieved superlative growth whether it is in Asia or is in North America you would find eventually that they’ve achieved that growth partly based on the advantage they’ve taken on the regional market. Also there is evidence that many of these countries have actually used regional markets as a stepping stone into the global market and so we should not be surprised if we find that most of the world’s advanced trading nations are also part of the most integrated regional economies,” he explained. [GNCCI: Africa needs CFTA to prosper economically]

Regional markets, politics and value chains: the case of West African cement (ECDPM)

This study points to the need to view cement not just as a background story to more important development policies or more ambitious narratives. With recent regional and national policies in West Africa increasingly focused on economic transformation and the potential role of low-value minerals-based industrialisation, cement is at the centre of a range of development processes through production, distribution and construction, often funded or co-funded by public money. Further, the cement sector seems to be at the nexus of a range of structural and current issues for development policy in West Africa: high local production and transport costs; cheap cement imports from East Asia; a regional power or hegemon placing national over regional interests; weak competition effects to counteract inefficiencies in production; and unpredictable and politically motivated policy-making. Lessons from the cement sector may be valuable for promoting value chain development in other sectors in the region. [The authors: Bruce Byiers, Karim Karaki, Jan Vanheukelom]

Cement wars: How Dangote price cuts drive competitors into loss territory (The EastAfrican)

The entry of Africa’s richest man, Aliko Dangote, into the cement business in Tanzania has rocked the industry in the region, with cement manufacturers looking at huge losses. The cutthroat competition introduced by Dangote Cement through price cuts, is forcing the firm’s competitors to sell their products at prices lower than their cost of production. In the past two weeks, two of the region’s cement players with more than 60 per cent combined market share in Tanzania, posted negative results which they blamed on the price wars that have seen them consistently sell their products below cost as they struggle to stay afloat.

COMESA-EAC-SADC TFTA: Mauritius to sign the agreement in October (GoM)

The COMESA-EAC-SADC TFTA Agreement will be signed by Mauritius in October 2017. The signature will take place during a national workshop on the COMESA-EAC-SADC TFTA which the country will host. The workshop aims at raising awareness, and sensitising stakeholders on the COMESA-EAC-SADC TFTA, including trade opportunities and benefits to be derived from an enlarged market of 26 African countries in the Eastern and Southern African region.

East Africa: A concrete step ahead on sustainable HS classification capacity (WCO)

Under the auspices of the WCO/JICA Joint Project, launched in July 2016 to support trade facilitation in Africa, a regional workshop for Master Trainers on HS Classification in East Africa was held in Kampala, 4-8 September. This is the last workshop in a series of three activities on HS Classification, jointly supported by JICA and WCO, which aims at developing (i) a pool of well-experienced trainers and (ii) training materials including case studies to be used by those trainers. Twenty-five customs officials from Burundi, Kenya, Rwanda, Tanzania and Uganda participated in the workshop.

Fiscal rules: Coping with revenue volatility in Lesotho and Swaziland (IMF)

Over the past decade, Lesotho and Swaziland have faced significant volatility in their fiscal revenues, owing to highly unstable SACU receipts. Based on model analysis, this paper explores the advantages of implementing fiscal rules to deal with such volatility. To successfully implement a rules-based fiscal policy framework in Lesotho and Swaziland, sufficient groundwork would be needed - strengthening the credibility of fiscal policy and of revenue management and expenditure controls, while building institutional and legislative frameworks. Immediate budgetary objectives - alleviating the impact of volatile SACU revenues - need to be rooted in medium-term fiscal plans. Thus, the impact could be mitigated by saving windfalls resulting from positive adjustments of SACU revenues and internalizing the downward adjustments when SACU transfer falls below the steady-state level. Developing a rules-based fiscal framework requires a government commitment to saving SACU revenue windfalls and prudent government spending in good times. This would require broad support of stakeholders amid political pressure. Greater savings of SACU revenues could be generated, if stakeholders perceive mitigating the volatility of output as welfare enhancing.

Consultancy opportunity: 2018 Commonwealth Trade Review (The Commonwealth)

Building on the success of the first review, the Secretariat is preparing the next report to be launched at CHOGM in London in 2018. The 2018 Review seeks to further expand analysis on the ‘Commonwealth effect’ by examining how more effective trade governance could lead to increased trade, as well as gains from trade, in the Commonwealth. The report will also consider how Commonwealth countries can harness digitisation and new technologies to grow future trade and investment, within this context.

South Africa’s Department of Trade and Industry: updates

(i) 2016/2017 Annual Incentive Performance Report (pdf). During 2016/17 a total of 1 549 enterprises were approved across all the Incentive Development and Administration Division incentives, totalling an amount of R12.8bn and attracting an estimated R39.4bn in investment. Throughout this reporting period 23 351 projected new jobs were recorded and claims amounted to R4.6bn were paid to beneficiaries. Overall, Gauteng took the lead with regard to number of approvals (597), and projected number of new jobs (8 647). Western Cape was in the second position with 556 approvals, and a projected 8 583 new jobs, and KwaZulu-Natal in third place with 211 approvals and an anticipated 4 513 new jobs.

(ii) 2016/17 Annual Report (pdf). A recent review of regional target markets highlighted the necessity for South Africa to leverage its unique value propositions to retain or improve current trade in identified target markets such as Asia, Africa and the Middle East, where distinct capabilities in technology and skills transfer, high-technology solutions, agro-processing and supply capabilities have been proved. South Africa’s value proposition is unique in that its proximity to African and Middle Eastern markets is uncontested, that it is the only African country with a sustained and effective membership to BRICS, and that it can leverage off trade agreements to which it is a signatory. These elements continue to be teased out to maintain South Africa’s lead position as a supplier of choice in several emerging high-growth markets, while increasing its share of high-value exports and locally manufactured products in markets where its position is currently less than optimal. The department is conducting a study towards the elaboration of a services export strategy that is aimed at assisting South African firms to integrate into the regional and global supply chains of multinational firms by actively promoting subcontracting in power, infrastructure programmes and the built environment.

Nigeria: Foreign trade in goods statistics (Q2 2017)

The total value of Nigeria’s merchandise trade at the end of Q2, 2017 was N5,697.5bn. This shows a slight increase of 7.7% from the value of N 5,292.4bn recorded in the preceding quarter. Total export for the period under review stood at N3,102.0bn, while total import stood at N 2,595.5bn. Imports in the review period showed an increase of 13.5% more than the value recorded in the preceding quarter, while exports grew at 3.2% when compared to the previous quarter. The marginal rise in exports as well as increased imports brought the country’s trade balance in Q2, 2017 to N506.5bn from N719.4bn recorded in the preceding quarter. This trade surplus of N506.5bn recorded during the period under review was therefore 29.6% lower than the figure recorded in Q1, 2017. Trade by Mode of Transport:

In Q2 2017, Nigeria’s major mode of transporting its goods to partner countries was by water. Transport of goods by water accounted for N3, 089.6bn or 99.6% of total export. The goods exported through the road were valued at N7.4bn while goods exported through the air totaled N5.1bn. For import trade, the major mode of transporting goods into the country was through water transport. The water transport accounted for N2, 450.7bn or 94.45. Goods that entered the country through Road transport accounted for N20.1bn or 0.7% while those that entered through Air transport accounted for N124.5bn or 4.8%. Other modes of transport were used but their contributions were low. [Download the accompanying tables] [Related: NBS develops trade database for data users] [Ports Authority harps on multimodal cargo haulage to ease traffic congestion]

Kenya plans to import sugar from COMESA (The EastAfrican)

Kenya plans to start importing sugar from COMESA member states after a four-months break that saw the country’s private firms ship in more than 250,000 tonnes of duty free sugar from countries outside the 19-member bloc. Kenya’s sugar directorate said the move aims to bridge the widening sugar deficit in the country, which is expected to hit 600,000 tonnes, from the current 300,000 tonnes, in the next three months. Last year, Kenya’s sugar demand was 900,000 tonnes against local production of 639,000 tonnes. This year’s demand is projected at one million tonnes against local production of about 400,000 tonnes, largely due to underperformance by Mumias Sugar Company and prolonged drought, according to the Sugar Directorate in Kenya’s Agriculture and Food Authority.

ECOWAP 2015-2025: A panoply of policy instruments to promote sustainable food systems in West Africa (ECDPM)

ECDPM’s Carmen Torres interviews ECOWAS Director Alain Sy Traoré, on how his organisation is seeking to use its new agricultural policy, ECOWAP 2015-2025, and various other policy tools, to promote agricultural development, food and nutrition security and the sustainability of food systems in West Africa. [Download latest GREAT Insights: Sustainable food systems]

Trade finance: Changing times call for a collaborative approach (GTR)

The International Chamber of Commerce Banking Commission’s new head of policy, Olivier Paul, discusses how the Banking Commission’s role will be critical as the trade finance industry adapts to unprecedented change.

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