News
tralac’s Daily News Selection
Launching today, in Geneva: UNCTAD’s Information Economy Report 2017. The Report will examine how increased digitalization is influencing international trade and what the implications might be for developing countries.
Tomorrow, in Geneva: UNCTAD meeting on implementing the Paris agreement – response measures and trade
Tomorrow, in Accra: 6th International Single Window Conference. The theme: Trade facilitation agreement and e-commerce development
Advance notice: 9th AU Private Sector Forum (13-15 November, Johannesburg). The theme Accelerating Africa’s industrialization through “digitization” and youth “techpreneurship”
Zambia: 2018 budget address (MoF)
External sector performance, policy: The performance of the external sector has improved relative to 2016. Zambia’s trade balance recorded a surplus of $388.3m during the first six months of 2017 compared with a surplus of $45.8m during the corresponding period in 2016. This was mainly driven by higher export earnings relative to imports. Total export earnings were 25.8% higher at $3.9bn compared with $3.1bn in the corresponding period in 2016. Copper export earnings were higher by 38.1% at $2.9bn from $2.1bn in the corresponding period in 2016. This was due to a rise in both export volumes and prices. Non-traditional exports, however, marginally declined to $811.7m during the first six months of 2017 from $835.5m during the same period in 2016.
Gross international reserves as at end-August 2017 were estimated at $2.3bn, relatively unchanged from the end-2016 level. This translates into 3.2 months of import cover. Government policy in the external sector will remain anchored on the maintenance of an open economy with a competitive and market-driven foreign exchange rate. The focus will be on promoting a diversified export base to increase exports, increasing foreign direct investment inflows, and maintain international reserves to at least 3 months of import cover. [Delivered by Minister of Finance, Felix C. Mutati]
Kenya: Quarterly GDP Report for Second Quarter 2017 (KNBS)
Real Quarterly Gross Domestic Product is estimated to have slowed down to 5.0% in the second quarter of 2017 compared to 6.3% in the corresponding quarter of 2016. The quarter in review was characterized by sharp increases in food prices as a result of adverse weather conditions and a notable rise in international oil prices. This led to a surge in inflationary pressures with the average inflation rate increasing more than two-fold from 5.36% in the second quarter of 2016 to 10.80% in the review quarter. The current account deficit widened to KSh 134.8 billion in the quarter under review from a deficit of KSh 114.1 billion in the corresponding quarter of 2016 on account of significant increase in the value of imports. During the quarter, the Kenyan Shilling marginally depreciated against the US dollar but appreciated slightly against the sterling pound. Performance of the Shilling against the Euro and the Japanese Yen remained largely unchanged during the quarter. In the regional front, the Shilling depreciated against the South African Rand and Tanzanian Shilling but appreciated slightly against the Ugandan Shilling. [Related: Quarterly Balance of Payments Second Quarter 2017]
South Africa: August trade figures (SARS)
South Africa’s August trade statistics recorded a trade balance surplus of R5.94bn. The year-to-date (1 January - 31 August) trade balance surplus of R43.45bn is an improvement on the deficit for the comparable period in 2016 of R13.67bn. Exports for the year-to-date grew by 5.8% whilst imports for the same period declined by 2.1%. [Infographic: @NKCAfrica]
AfDB approves $200m to SA’s IDC to support industrialisation projects in Africa (AfDB)
The Board of Directors of the AfDB group has approved a private sector multi-currency line of credit of $100m and R1.3bn to the Industrial Development Corporation Plc (IDC) of South Africa. Half of the funding (the rand tranche) will be used for projects in South Africa while the balance (the USD tranche) will be directed to regional projects in Mozambique, Malawi, Ghana, Kenya, Namibia, Mauritius, Swaziland and Sudan. The LOC is intended to support IDC’s 5-year Corporate Plan for the period 2016/17–2020/21. Specifically, it will be on-lent to IDC’s clients in key focus areas, including (i) priority industrial value chains such as chemical and pharmaceuticals, metals and mining, agro-processing and agriculture value chains.
Afreximbank plegdges support for Chad’s National Development Plan projects
Afreximbank is to arrange at least $500m in multi-sourced financing to support projects in agro-processing, energy, manufacturing, tourism and logistics sectors under Chad’s National Development Plan, following the country’s membership of the Bank, Afreximbank President Dr. Benedict Oramah has announced. [Afreximbank pledges financial, advisory supportfor Burundi’s economic development]
The role of applied import duties on intermediate goods in industrial development: the case of South African clothing (tralac)
This Trade Brief looks at how import tariffs are affecting access to intermediate inputs in this sector, given the broader context of industrial policy in South Africa where the import tariff is used as an instrument to achieve industrial policy objectives. Using the UN definition of intermediate goods, the overall average tariff on intermediate goods was found to be 12.1%, while on imports from China – that represent 67% of the total for these input goods – the average tariff was assessed at 15.9% during 2016. Currently, the clothing sector is operating in an environment where the overall tariff rate protection during 2016 was 39.14 %, with a significantly higher 43.66% rate levied against imports from the main import source of China. While high tariffs on final products may shield the domestic sector in the short to medium term, they will not assist in making it able it to compete internationally. More attention needs to be given to mitigating tariffs on intermediate inputs for a clothing sector that is struggling to remain competitive. [The author: Ron Sandrey]
SheTrades: Promoting SME competitiveness in Kenya (ITC)
Women make up almost half of Kenya’s labour force, yet they remain on the margins of business ownership – only 9% of Kenya’s firms are majority women-owned. Kenyan women entrepreneurs say they need better access to loans, business registries, patents, quality certifications and affordable internet access to address the gap, according to this new ITC SME Competitiveness Survey of women-owned businesses in Kenya’s services sector. The survey was carried out as part of the SheTrades initiative to connect one million women to markets by 2020. Improving support from trade and investment support institutions (pdf). Survey findings indicate the quality of services provided by private and public TISIs is inadequate; only 17% of small enterprises gave strong ratings to the quality of services provided by these institutions. TISIs can play an important role in setting the norms of any business ecosystem. If TISIs are better able to link to the firms they serve, and provide the services they require, businesses will be more competitive, both domestically and internationally. Often, TISIs are not cognizant of the gender dimension of doing business and the specific needs of women-owned MSMEs. Women-focused TISIs should therefore be supported to advocate on behalf of women entrepreneurs, and help address the bottlenecks faced by women-owned firms.
New pathways to e-commerce: a global MSME competitiveness survey (ITC)
This first ITC e-commerce survey provides valuable insights that will allow countries to shape policies and practices that address the real business needs on the ground. To ensure that micro, small and medium-sized enterprises (MSMEs) can benefit from e-commerce, they need better access to e-platforms, payment and delivery services; streamlined customs procedures; and targeted skill building. These are the key findings from this ITC survey of 2,200 MSMEs in 111 countries. In addition, the survey reveals that the share of logistics costs over final price is nearly double in developing countries than in developed countries and that product return is a significant cost factor for enterprises from least developed countries. Untapped potential in developing countries (pdf). Overall, respondents in developing countries are mostly micro and small-sized firms, whereas in developed countries, they are more evenly distributed between MSMEs. On average, companies in developed countries export to twice as many markets as those in developing countries, and three times as many as those in Africa. There is significant interest among the developing country companies on e-commerce: on average, more than half of the respondents not currently doing cross-border e-commerce have considered doing so, and this share is higher in developing countries (65%) and Africa (68%).
E-commerce: Some developing countries push back on idea of new WTO rules (IP-Watch)
A session organised by Our World Is Not for Sale network, and the Third World Network Africa on 27 September during the WTO Public Forum taking place from 26-28 September, gathered an Indian ambassador, and representatives of Rwanda, South Africa, and the intergovernmental South Centre. The session explored expectations and outcome of the 11th WTO Ministerial Conference taking place in Buenos Aires, Argentina in December. Among several issues expected to be discussed at the MC11, the delegates mentioned e-commerce. J.S. Deepak, Indian ambassador and permanent representative to the WTO, said, “We believe that there is no mandate for initiating negotiations on e-commerce. Often we are told e-commerce is good for SMEs [small and medium-sized enterprises],” he said, but added that what is confusing in the discourse is that it is trying to pass off benefits of e-commerce as the benefit of rulemaking in the WTO on e-commerce.
Peter Leon: International arbitration in Africa (Politicsweb)
Withdrawal from the system of investor-state arbitration thus signals a regression from the rule of law to the rule of realpolitik, which is even less conducive to equity, consistency and transparency than arbitration, and may expose developing states to even greater coercion and interference from powerful foreign interests. A better response to the risk of costly investor-state arbitration is for African states to build on their world-class international arbitration centres (notably those in Mauritius and here in Kigali) by investing in the development of greater local expertise and experience in international investment law. This in turn may provide African states with a strong pool of skilled negotiators (to aid the conclusion or renegotiation of more favourable treaties and contracts), as well as litigators and arbitrators. [An address at the Fifth Annual East Africa International Arbitration Conference]
