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Building capacity to help Africa trade better

tralac’s Daily News Selection

News

tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: Asia Society

Comparative perspective: The Asian Economic Integration Report 2017

This year’s Asian Economic Integration Report (pdf) introduces a new composite index to gauge the progress of regional cooperation and integration (RCI) in Asia and the Pacific. RCI plays an important role in supporting economic growth and poverty reduction, and has been high on the development agenda for many Asian economies in recent years. Supporting RCI is one of ADB’s key strategic priorities for development assistance in the region. An index that calibrates the status of RCI can be a useful policy tool for assessing the progress of RCI efforts especially by various subregional initiatives. In 2016, Asia’s trade (by volume) grew faster than global trade, but remained below its economic growth. Asia’s trade growth picked up to 1.7% in 2016 from 1.4% in 2015, while the world trade growth decelerated to 1.3% from 2.6%. Ongoing global economic recovery lifted demand for the region’s exports, particularly from Japan; Taipei,China; Hong Kong, China; and Viet Nam.

South African industrial policy conference (CSIR)

Under the theme ‘Ideas that work for industrial development’, the 6th CSIR Conference (5-6 October) aimed to provide an interactive platform for stakeholders to share their experience and insights on broader issues relating to South Africa’s industrial development, as well as to engage on how stakeholders can collaborate to address the challenges and opportunities of industrial development. Presentations from the opening plenary sessions: Saul Levin: Industrial policy - where does innovation fit in?; Jorge Maia: Trends in and outlook for the global and South African economies; Sizwe Nxasana: Skills and innovation as a driver for industrial development in South Africa; Garth Strachan: Implementing localisation programmes in South Africa; Henk Langenhoven: Industrialisation and transformation through procurement - the Eskom experience; Ashley Bhugwandin: Localisation for industrial development [Downloads: Day 1, Day 2]

Two new tralac analyses of South Africa and global value chains:

(i) Value chains in the Global South: case studies of the Cape Town ICT sector. This paper explores the nature and dimensions of the South African ICT sector and within it, the Cape Town sub-sector. Of the sub-sectors within the ICT sector, business and software services are the highest value-add activities and these activities are the ones around which the Cape Town sector is largely based. The empirical section of the paper presents feedback from a sample of four firms located in this industry space, with a view to understanding the extent of their integration with value chains, their experiences with value chain governance and upgrading and the challenges they face in expanding their operations. [The author: John Stuart]

(ii) Global value chains – analysis of wine in South Africa. This working paper focuses on the wine industry in South Africa, highlighting the ‘big picture’ trade profile as well as key strategies that the wine industry is implementing to promote domestic, regional and global value addition. Specifically, it aims to address four issues: i) sector specificity of value chains and their impact on economic development; ii) the promotion of regional value chains as an alternative to global value chains; iii) the role of world cities as conduits for promoting value addition and the corporate services that they provide; and iv) issues of sustainability that value chains can affect (such as environmental and social side-effects). [The author: Taku Fundira]

Zimbabwe: Industry capacity utilisation drops (The Chronicle)

Capacity utilisation in the manufacturing sector for 2017 has slid by 2.3 percentage points to 45.1% from 47.4% in 2016, the Confederation of Zimbabwe Industries has said. In the 2017 manufacturing sector survey report released in Harare yesterday, CZI indicated that capacity utilisation was constrained by a number of factors with the cost or shortage of raw materials being the major constraint affecting productivity. Capacity utilisation was this year expected to reach 60% on the back of the successful bumper harvest as well as improved business conditions riding on the ongoing ease of doing business among other fundamentals.

Tanzania: Govt issues bold statement against EAC trade barriers (The Citizen)

The government has vowed to respond accordingly to any East African country which will impose trade barriers for products from Tanzania. The remark was made yesterday by the permanent secretary of the Industry Trade and Investment ministry, Prof Adolf Mkenda, when releasing findings of the top 100 mid-sized companies’ survey, whose winners will be named today. “Tanzania is totally committed to allow imports from other countries, but we won’t accept to be a dumping place,” noted Prof Mkenda. “We won’t spare those who will dare impose some barriers for our exports as opposed to the East African Common Market Protocol. They know very well on what can happen,” he said in response of a question on measures that they would take against those countries. He said the potential benefits of further reducing those obstacles are significant given that the opening of markets was important in boosting trade and economic growth in the region.

Uganda: 8th Sector Review Conference (Ministry of Trade Industry and Cooperatives)

This year’s Sector Review was organized under the theme ‘Promoting value addition and competitiveness in export growth’. Market expansion through regional and international trade agreements (pdf). The COMESA trading bloc is the main destination for Uganda’s exports for the period of 2005/06 to 2016/17, with the share in total export earnings increasing on average throughout the years (from $ 223.15m [26.58%] in 2005/06 to $ 1,243.29 [46.39%] in 2016/17). The EU market ranked the second highest destination for Uganda’s products, although the share in total export earnings has been reducing to 18.92% [$ 506.94m] in 2016/17. The Middle East bloc followed, accounting for 18.85% [$ 505.26m] of the total market share in the same period followed by Asia, Rest of Africa, Rest of Europe and America, in that order. Among the COMESA member countries that contributed significantly to export earnings were Kenya, South Sudan, Rwanda, DRC, accounting for $422.99m, $239.25m, $193.98m and $177.66m in 2016/17 respectively.

Nigeria’s custom agents: Shipping firms violating FG’s Ease of Doing Business directive (ThisDay)

Customs agents in the country have called on the federal government to urgently check the unlawful activities of shipping companies and terminal operators whose actions they said hinder imports and exports and violate the ease of doing business directives issued by the government. In a petition addressed to Vice President Yemi Osinbajo, the customs agents alleged that the shipping companies and terminal operators’ charges on storage contravene Sections 20, 31 and 97 of the Customs and Excise Management Act that limit the days for rent charges and conferred authority to Nigeria Custom to charge rent after specific days by the board.

Indonesia-Nigeria trade: Osinbajo canvasses repositioning of Africa’s economy (The Tide)

Vice President Yemi Osinbajo has called on Africa to reposition its economy in the direction that will attractive investors because investment depends on the advantages derivable. Osinbajo made the call while interacting with a committee of African Ambassadors to Indonesia, led by the dean of the group, Ms Alice Mageza of Zimbabwe, on the sideline of his two-day working visit to Jakarta. The Ambassadors included those of Egypt, Ethiopia, Algeria, Libya, Morocco, Mozambique, Somalia, South Africa, Sudan and Tunisia. On the kinds of investments that Africa desires, Osinbajo said Africa must focus on the manufacturing sector. He noted: “the most important thing for Africa is that whoever wants to invest in our countries should start in manufacturing.” He, however, urged African diplomats in Indonesia to work together in the quest for attracting investment opportunities to Africa. Osinbajo said “if you negotiate together, it is probably going to be more effective than if we negotiate separately”.

The 25 best-performing companies in Africa 2016 (Global Finance)

It is a diverse group of companies that makes the list this year. The ranking is dominated by South African firms, which hold 14 spots. Egypt boasts five companies in the list, and Kenyan companies take up three places. Rounding out the rankings, in addition to Morocco’s third-place showing, are Chobe Holdings, an ecotourism company from Botswana - in sixth place - and Tunisian auto dealer Artes (Automobile Réseau Tunisien et Services). One key difference in this year’s list is that it includes decidedly fewer petrochemicals and mining companies—a clear indication of the impact extended low oil and commodity prices are having on major economies in the region.

Africa Financial Markets Index (OMFIF)

The Index ranks the maturity, openness and accessibility of 17 financial markets in Africa, based on both qualitative and quantitative criteria. Development of local investor capacity and ability to attract foreign capital are key points of focus. The markets surveyed are Botswana, Egypt, Ethiopia, Ghana, Ivory Coast, Kenya, Mauritius, Morocco, Mozambique, Namibia, Nigeria, Rwanda, Seychelles, South Africa, Tanzania, Uganda and Zambia. The Index intends to track progress annually, supplying a toolkit for countries wishing to build financial infrastructure. Given its size and historical position, South Africa tops the 2017 list, despite poor recent macroeconomic performance, based on the strength of its financial markets as well as its relative openness and transparency for transactions. Others are closing the gap. Mauritius and Botswana have strengths in tax and regulation and access to foreign exchange. Kenya and Ghana provide signs of progress. Ivory Coast, with a low overall score, is home to a growing regional bourse, pointing to future improvement. Ethiopia shows the highest GDP growth prospects of the 17 countries – even though it comes bottom of the list in terms of financial market prowess.

African leaders urged to create gas pricing index (ThisDay)

Africa should develop a gas pricing index based on the cost of electricity set midway between existing global benchmarks to ensure fairer pricing in new export projects on the continent, two African ministers said. “The pricing of the LNG coming into Africa is going to be more than 50 percent for electricity, so it will be fixed to the price of electricity,” Equatorial Guinea’s minister Gabriel Obiang Lima told Reuters during the Africa Oil Week conference. “What we need to calculate is the pricing of the power to be able to have this index and that should be something between (the U.S. gas exchange) Henry Hub, which is very low, and the Asian index, so we are talking about a range of between $3-$7 dollars,” he said on the sidelines of the meeting in Cape Town.

Generation 2030 Africa 2.0 (UNICEF)

According to UNICEF’s report Generation 2030 Africa 2.0, some 11 million education and health personnel will be needed to keep pace with the projected unprecedented population growth of children in Africa – an increase of 170 million children between now and 2030. “We are at the most critical juncture for Africa’s children,” Ms. Pakkala underscored. “Get it right, and we set the foundation for a demographic dividend, which could lift hundreds of millions out of extreme poverty, and contribute to enhanced prosperity, stability, and peace. The report identifies three key issues for investment: health care, education and the protection and empowerment of women and girls. Concretely, to meet minimum international standards in health care and best practice targets in education, Africa will have to add 5.6 million new health workers and 5.8 million new teachers by 2030.

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