tralac’s Daily News Selection
Third African Union Customs Expert Trade Facilitation Forum: Day 1 update
The estimate for growth in world merchandise trade volume in 2017 was raised to 3.6%. The previous estimate for 2017 was 2.4%, though this was set within a range of 1.8%-3.6%, reflecting the high level of economic and policy uncertainty. The new estimate puts the focus on the top end of that range. Growth of 3.6% would represent a substantial improvement on the lacklustre 1.3% increase in 2016. Reflecting the continued forecast risk arising from deep uncertainty about near-term economic and policy developments, the range of estimates for world trade growth has been adjusted to 3.2% - 3.9%. Stronger growth in 2017 was attributed to a resurgence of Asian trade flows as intra-regional shipments picked up and as import demand in North America recovered after stalling in 2016.
Egypt: Exports seen up 10% for year, China fastest growing investor (Reuters)
Egypt’s exports should grow about 10% this year to reach $22bn, Trade Minister Tarek Kabil said on Tuesday, as the country lures foreign investors keen on setting up manufacturing following economic reforms. Egypt has been looking to plug a gaping trade deficit that stood at $42.64bn last year but which has been narrowing in recent months, helped by a currency float that halved the pound currency’s value, making Egyptian goods cheaper abroad and buying more expensive. Earlier, he told a Euromoney financial conference that the trade balance this year had been reduced by 37%, with imports down 23% to almost $30bn and exports growing by 11.5% to $15 billion.
Algeria: Energy earnings boost cuts trade deficit (Reuters)
Algeria’s trade deficit fell to $7.32bn in the first eight months of 2017, down 40% from a year earlier due to a rise in energy earnings, but the imports bill remained high despite restrictions, official data showed on Wednesday. The deficit fall pushed up the coverage of imports by exports to 76% from 61% in the January-August period of 2016, according to customs figures. Oil and gas exports, which accounted for 94.71% of total sales abroad, were up 22.11% to $22.27bn in the first eight months of 2017, the figures showed. The value of overall exports rose 21.12% year-on-year to $23.51bn, while imports declined 2.56% to $30.84bn.
Zimbabwe: New customs sealing regulation hit Zimbabwe trade (IRU)
The implementation of new regulations on national customs seals in Zimbabwe is causing significant and costly delays at borders, with trucks waiting for up to five days. A multilateral, mutual recognition transit system would avoid the need for restrictive national procedures. IRU and FESARTA encourage Zimbabwe to consider harmonised international conventions, such as TIR, which would achieve the necessary customs controls, without jeopardising regional trade facilitation and the national economy. Unless the Zimbabwe Revenue Authority takes action, the country’s transporters and associated sectors risk losing out to competitors in Botswana, which offers an alternative route along this corridor. [FESARTA updates: SADC border chaos, 10km truck queue at Machipanda Border Post]
Uganda: Government enters Shs2b trade information portal deal (Daily Monitor)
The initiative is funded by TMEA with support from its partners such as UNCTAD and the International Trade Centre to the tune of about $500,000 for two years. It will, among other things, allow the ministry to control and manage a one-stop portal with information about export, import and transit. According to the TMEA-Uganda country director, Mr Moses Sabiiti whose organisation secured the $500,000 grant, to achieve the full benefit of the portal, it should be integrated with the Electronic Single Window which allows traders to clear their goods online.
Bridges Africa has posted its latest edition, on the theme Building an inclusive Continental Free Trade Area. Our profiled article, by David Luke, Jamie MacLeod: Bringing the CFTA about – key factors for success
With the imminent release of the latest edition in the Assessing Regional Integration in Africa report series, this article draws out key messages and recommendations to inform the design and implementation of a “win-win” CFTA. We commend them to African negotiators and policy makers, to stakeholders at all levels, and to our development partners. There are six key components of the CFTA that are especially important to “get right”: (i) non-tariff barriers, (ii) rules of origins, (iii) investment and cross-border movement of persons, (iv) services in general, (v) trade remedies, and (vi) monitoring and evaluation.
To get non-tariff barriers right, a NTB mechanism should be included in the CFTA. Rather than duplicating the existing NTB mechanisms of the RECs, the CFTA mechanism should build on their successes by expanding their operations across Africa to include trade between and within all RECs. In particular, the successful Tripartite NTB mechanism could be expanded to cover trade across the continent. For investment and the cross-border movement of persons - which are often treated within the services section of a trade agreement - fully-fledged, standalone chapters in the CFTA Agreement are recommended. This would enable the comprehensive coverage of all aspects related to the supply of services through the establishment of commercial presence. Regarding the cross-border movement of persons, negotiators should design an approach that does not take away from African entrepreneurs what they already have in their RECs, while creating new opportunities for inter-REC movement.
CFTA governance: The current restructuring of the AU – as part of the AU reform – provides an opportunity for the AU to be reshaped so that flagship projects like the CFTA can be better institutionalised and implemented. However, designing an institutional framework for the CFTA will be challenging if the main aspects of the AU reform have not been finalised. Nevertheless, five principles can guide the formation of the CFTA’s institutions: use the Abuja Treaty as the backbone to the CFTA institutional form; use and empower existing structures of African integration where available; ensure that the institutions of the CFTA are accessible to the African people; support the joint implementation of the BIAT Action Plan alongside the CFTA; and develop practical institutional forms, rather than idealistic ones.
The Third Investing in Africa Forum (25-27 September, Dakar)
The third IAF will also mark the official debut of the “Investing in Africa Think Tank Alliance”, a platform to synergize the intellectual capabilities of research centres and the capital strengths of development finance institutions to promote sustainable and inclusive development in Africa. The IATTA was initiated at the first IAF in Addis Ababa in 2015 and launched at the second IAF in Guangzhou in 2016. This year, with the signing of the MoU and the launch of its first Report on the Drivers and Constraints of Technological Adoption and Innovation that will identify knowledge gaps and propose practical policy guidance on how to spur leapfrogging in African countries, the IATTA will take practical steps to place knowledge generation and dissemination of potentially transformative ideas at the centre of investment strategies and operations on the continent.
Leapfrogging: the key to Africa’s development – from constraints to investment opportunities (World Bank)
This book argues that it is time to go back to basics of development, think big, and foster the environment for more innovation and technology adoption, to provide the chance for Africa to experience major positive transformations. This is not a new idea; to the contrary, it is what economic theory and history teach. While it has become customary in the development practice to highlight and quantify constraints to investing in Africa, this book argues that those constraints must be and transformed into investment opportunities. Several factors, such as skills, service delivery, access to finance, energy, to name the few, are often pointed out as constraints to investment. Treating those constraints as investment opportunities, attracting the private sector, both domestic and foreign, and creating a conducive environment for technological diffusion is precisely how Africa will harness innovation toward its prosperity. Under the overarching theme of Leapfrogging, the book discusses the following six topics: (a) agriculture, (b) education, (c) energy, (d) finance, (e) governance, and (f) information and communications technologies. [Note: The six topics are the themes covered in next week’s third Investing in Africa Forum]
Trouble in the making? The future of manufacturing-led development (World Bank)
Shifting the attention from high-income countries, this report takes the perspective of developing countries to ask: (i) If new technologies reduce the importance of low-wage labour, how can developing countries compete? (ii) Do countries need to industrialize to develop? (iii) How can countries at different levels of development take advantage of new opportunities? Development strategies need to broaden. Different manufacturing sub-sectors can still provide productivity growth or jobs; fewer can deliver both. Many of the pro-development characteristics traditionally associated with manufacturing – tradability, scale, innovation, learning-by-doing – are increasingly features of services. With faster diffusion of technology, it will be all the more important for countries to improve the enabling environment, remain open to trade, and support capabilities of firms and workers to ensure future prosperity is shared. [The authors: Mary Hallward-Driemeier, Gaaurav Nayyar]
Today’s Quick Links:
Namibia’s Q2 GDP 2017 report was released this morning: download (pdf)
6th EU-Nigeria Business Forum: preview
UNSC Peacekeeping Reform debate: summary of statements, text of resolution