Building capacity to help Africa trade better

tralac’s Daily News Selection


tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Transnet Port Terminals

From the UN’s Africa Week 2017: remarks by Amina J. Mohammed, United Nations Deputy Secretary-General

Today, regional blocks in South and Central America, Southeast Asia and China play a major role in global economy. For instance, the ASEAN Free Trade Area was established in 1992 to eliminate trade and non-trade barriers and improve the Southeast Asia’s competitiveness. Consequently, intra-ASEAN trade more than doubled between 1995 and 2010, and kept increasing to reach around 24% of global trade last year – and 40% if trade with China is included. We can achieve the same success in Africa.

AfroChampions Initiative: full text of VP Osinbajo’s address

In the last few years, it has become obvious to many African countries that both momentum and common sense are in favour of the private sector leading our economies and championing initiatives that will drive-in traffic, trade and commerce. The role of the public sector is to catalyse, umpire and to incentivise. But whether we like it or not, the private sector in Africa is already building world class brands and trading everywhere and I think that was obvious from the last but one presentation. In manufacturing, the Dangote group is already manufacturing cement in several African countries; in banking, Ecobank, UBA, GTB, Access bank are all doing incredible things across the African continent. In Telecoms – MTN, & broadband infrastructure firm – MainOne, are doing business everywhere on the continent.

But these public sector initiatives need the sense of urgency that the private sector will bring, this is why we certainly believe in the AfroChampions Initiative because we think it is the private sector that will do what is required to bring the urgency and sense of mission to all that we have been trying to do in the African Union. We would like to see greater synergy and collaboration between the AfroChampions and all the organs of the AU involved in economic integration issues, their enthusiasm and energy is perhaps to shorten the arm that the AU needs at this time. [Related: Participants at the inaugural meeting launched two workstreams: CFTA, AfroChampions Charter]

Africa Sustainable Development Report: tracking progress on Agenda 2063 and the Sustainable Development Goals (UNECA)

The report is the first to simultaneously track progress on the 2030 Agenda for Sustainable development and Agenda 2063 (and its first ten-year implementation plan). This is possible due to the substantial convergence at the level of goals, targets and indicators. This is illustrated by a mapping of the links between the global and continental initiatives included at the beginning of each chapter. The report underscores the slow progress towards poverty reduction in Africa despite the accelerated growth enjoyed over the past decade. Noting the disproportionate prevalence of poverty among women and youth, the report highlights the lack of inclusiveness and sustainability of primary-commodity driven growth and reiterates the call for structural transformation anchored by commodity-based industrialization and accelerated reduction in inequality.

Supporting documentation prepared for the 10th Session of the Committee on Regional Cooperation and Integration – Implementation of the Continental Free Trade Area and shared gains (31 October - 2 November, Addis Ababa):

(i) International trade and intra-African trade (pdf). Recommendations and way forward. The forthcoming focus for the EU of its trade relationship with the African, Caribbean and Pacific Group of States will be on the implementation aspects of the economic partnership agreements. Therefore, regions that are implementing such an agreement should develop coherent, African integration oriented strategies to ensure that the transitional period is used effectively to build productive capacities, in which producers in the EU are expected to put pressure on domestic producers. This could be assisted by setting up an economic partnership agreement monitoring and evaluation framework at the continental level, including data gathering and analysis on the implementation of these agreements vis-à-vis regional free trade agreements and CFTA implementation, and providing analysis on the impact of the agreements. It is worth systematically extending the reflections on economic partnership agreements to the African pan-Euro Mediterranean partnership countries to ensure inclusive pan-African integration outcomes.

Noting the possible shift in the coming years with regard to the nature of the trading arrangements between Africa and the United States, lessons should be learned from the experience of the economic partnership agreements. In addition, where potential exists, African countries should aim to seize existing opportunities and reinforce their positions with regard to the United States market by using the flexibilities under the current African Growth and Opportunity Act scheme. In this view, due preparation is needed. The planned workshop will offer an opportunity to share experience and best practices and showcase the existing guidelines for strategic policy formulation regarding the Act.

(ii) How African countries are boosting intra-African investment, with a view to sharing best practices among member States (pdf). Equally important will be improving the quality of and access to education, given that this will contribute to increasing the attractiveness of African economies, boost intra-African investment flows and promote associated technology and knowledge transfers. In this regard, it is critical to encourage the participation of women and men in the formal labour market to maximize the expected effects of intra-African investment through targeted and comprehensive strategies for young people and employment, including at the regional level. In the context of the CFTA, this would also allow for greater flexibility and better planning of factor market mobility, an element that could also be incorporated into the ongoing negotiations on the movement of business persons to ensure that Africa generates the jobs necessary for the growing population of young people.

African Governments must further ensure that their investment laws are designed to spur domestic and regional investment. For example, investment laws should list priority investment sectors, including manufacturing, and offer incentives to regional investors. These sectors, rather than commodities, offer greater opportunities for regional integration and more strategic entry points at the higher levels of regional and global value chains. Under conducive investment codes and regulations, imports of goods and services used for investment projects could be exempted from duties and value-added taxes. African companies could also enjoy exemptions from profit taxes and waivers from property taxes for a number of years. Governments should also be financially involved in infrastructure development costs associated with investment projects.

(iii) Status of food security in Africa: recommended policy options (pdf). The recommendations that pertain most to Africa’s food and nutrition security should be focused on the need to support poor smallholder farmers to boost agricultural productivity and withstand future shocks so that they contribute to long term food and nutrition security and to shoring up household access to sufficient and healthy food all the times. The recommendations at the continental/regional level are the following: (a) Promote regional agricultural cooperation involving the free movement of investment, knowledge and technology transfer and commodities within and between regional economic communities. Doing so should be a win-win situation, in which one country can benefit from the existence of high technology, capital surplus and a huge food export market in the other country or countries, which, in turn, will benefit from stable, consistent and relatively cheap food supplies derived from the extra food surplus in the other cooperating country; (b) Eliminate all barriers to intra-African trade in order to realize the full potential to enhance food self-sufficiency at the sub-regional level through the linking of regional food security and social protection efforts with regard to trade; (c) Boost intraregional trade through investment in cross-border infrastructure and the harmonization and coordination of trade policies to create a conducive environment for the realization of CFTA, thereby contributing to rapid regional integration.

(iv) Comprehensive report on developments in Africa’s regional integration in the context of trade, investment, infrastructure, industrialization, land management, food security and agriculture, with a view to influencing policy (pdf); (v) Progress on land policy formulation and implementation in Africa (pdf); (vi) Promotion of Africa’s industrialization through inclusive infrastructure development (pdf)

Global Mobility Report 2017: tracking sector performance (World Bank)

The Global Mobility Report 2017 is the first-ever attempt to examine performance of the transport sector globally, and its capacity to support the mobility of goods and people, in a sustainable way. The GMR is built around three components: (i) four global objectives that define “sustainable mobility”; (ii) quantitative and qualitative targets for those objectives, drawn from international agreements; and (iii) indicators to track country-level progress towards those objectives. It covers all modes of transport, including road, air, waterborne and rail.

Aiming towards a more integrated Africa: leveraging on technology to improve trade flows across the continent (Ziad Hamoui Blog)

This article looks into the use of technology to address some of these challenges. Each of the four applications (Cheetah; What3Words; Bifasor; Borderless e-Portal) addresses one or several of the problem areas already discussed and collectively offer a comprehensive solution to improve trade flows across the continent.

Kenya: Middlemen cut as state unveils key trade portal (The Star)

The Ministry of Trade yesterday launched a one-stop trade portal that provides market place information for both local and international trade. The portal is expected to expand market for local traders and service providers while bringing convenience for buyers who will now access market information like commodity prices at a click of a button. It is also expected to cut out middlemen from the trade chain. Information in the portal is provided my multi-sectional stakeholders including KNBS, Council of Governors, Kebs, KRA, KAM, Kephis, Kenya National Chamber of Commerce, Retail Traders Association among others. Speaking while unveiling the portal, dubbed Kenya trade portal, Cabinet Secretary Trade and Industrialisation Adan Mohamed said it will have information ranging from products available in the country, licensing requirements in the counties, wholesale and retail markets as well as licensed traders who could be targeted by manufacturers for distribution throughout the country.

Kenya: New customs system goes live on 25 October (Business Daily)

The iCMS will replace the Simba system which has been blamed for revenue leaks and delays in customs clearance. TradeMark East Africa that co-financed the iCMS estimates that it would lead to a reduction of cargo clearance time by about 60%. “Other gains include pre-lodgement of more than 80% of customs documents; linkages with the National Single Window System to reduce complexity for traders in obtaining official approvals, and streamlining of processes between Kenya and other revenue authorities in the region” it further said. Kenya currently lacks an integrated customs management system aligned with those used by other EAC states. The iCMS is expected to provide an efficient interface with the customs management systems of the EAC neighbours.

Better roads and automation cut East Africa freight costs (Business Daily)

The cost of transporting a 40 foot container between Mombasa and Kampala, Kenya’s biggest transit trade market, has gone down 34.2% in the last four years on the back of better roads, reduced police checks and efficiency at weighing points, a new report shows. Road freight costs decreased to Sh230,858 ($2,237) in 2016 from Sh350,880 in 2011. Automation at weigh stations greatly enhanced efficiencies, shows the 2016 Logistic Performance Survey launched in Nairobi last week by the Shippers Council of Eastern Africa. Cost from Mombasa to Nairobi for a 40 foot container declined from Sh134,160 in 2011 to an average of Sh90,712 in 2016. The average cost of transporting a 20ft container by sea was Sh186,792 and Sh279,672) for a 40ft container from the UK to Mombasa by sea. On the other hand, it cost Sh213,624 and Sh318,888 for a 20ft and 40ft containers respectively from the UK to Dar es Saalam, Tanzania.

Kenya launches new council to handle full range of trade negotiations (Xinhua)

Kenya on Wednesday launched the National Trade Negotiations Council to handle bilateral, regional and multilateral trade talks. Principal Secretary in the Ministry of Industry, Trade and Cooperatives Chris Kiptoo told a media briefing in Nairobi that the National Committee on World Trade Organization has been providing the institutional framework for trade consultations and negotiations at the national level. “This framework worked well but only catered for the multilateral trade negotiations. The framework did not cover regional and bilateral trade though both processes benefited from the existence of the NCWTO,” Kiptoo said.

Nigeria’s aviation attracted $4bn in 2016; needs $50bn to grow (ThisDay)

For the aviation industry to grow in Nigeria to be in tandem with what is obtained in other parts of the world and for the country to actualise its desire to become a hub in West and Central Africa, the industry needs an injection of $50bn in the next 30 years. This was the projection given by industry expert and CEO of RTC Advisory, Opeyemi Agbaje, during a presentation at the Colloquium 2017, Vision 2050 for Aviation Industry held in Lagos on Tuesday. Agbaje said the Nigerian aviation industry attracted $4bn FDI in 2016, noting that in 2010, the sector attracted $6bn, $7.1bn in 2012; $5.6bn in 2013; $4.6bn in 2014 and $8bn in 2015.

Today’s Quick Links:

A bridge to African self-reliance: the big bond

East Africa: Cross Border Trade Bulletin, October 2017

MDBs announce new coordination platform to accelerate support for economic migration and forced displacement


Email This email address is being protected from spambots. You need JavaScript enabled to view it.
Tel +27 21 880 2010