tralac’s Daily News Selection

tralac’s Daily News Selection
Photo credit: EAC

08 Nov 2017

Underway in Moroni, Comoros: the 21st Meeting of Intergovernmental Committee of Experts – Eastern Africa on the theme Transformative growth in Eastern Africa – catalysts and constraints.

Profiled meeting reports:

The East African Monetary Union: ready or not? (pdf, draft report), Macroeconomic and Social Developments in Eastern Africa 2016-17 (pdf), Private sector development and manufacturing jobs in Eastern Africa (pdf), Background study on institutions, decentralization and structural transformation in Eastern Africa (pdf). Explore the full set of conference inputs here

Diarise: Promoting growth and economic transformation in Southern Africa: the challenges and implications of declining commodity prices (16-17 November, Walvis Bay, organised by the UNECA Office for Southern Africa, in collaboration with Walvis Bay Corridor Group)

Chirundu OSBP: improvement plan imminent (MoF Zambia)

Minister Mutati has noted that although Zambia and Zimbabwe were Africa’s pioneers in the establishment of the One Stop Border Post “we have not only been overtaken by other jurisdictions and regions in terms of the effectiveness of border operations, our inception target of eight hours clearance time for trucks has deteriorated to a dismal eight days or more.” He said: “We are going to take critical steps to address the problem and ensure that our regional and international competitiveness is escalated through reduction in cost of logistics and transport. In 2018, the Government will focus of domestic resource mobilisation; enhancing tax compliance; minimising revenue leakages; promoting a value for money mind-set; and, improving our general service delivery. The Government will implement service enhancement systems by the end of the year to improve monthly revenue collection targets,” and further added that “improved domestic resource mobilisation will enable the Government to effectively finance development programmes and service the public debt.”

Tanzania, Uganda one-stop border post to cut clearance time (Business Daily)

A second OSBP to be launched by the East Africa Community at Mutukula Town on the Uganda-Tanzania border will cut clearance time by one third, an official said. TMEA communications manager Ann Mbiruru cited a time and traffic survey at the Mutukula border which shows time spent crossing the border has reduced by over 50% after the first OSBP was opened. [George Wachira: Pipeline pact marks major milestone in success of LAPSSET]

Ghana: Police checkpoints still prevalent; 61 on Tema-Paga corridor (Graphic)

A recent fact-finding and advocacy trip on the Tema-Paga corridor by private and public sector stakeholders in the trade facilitation business showed that police checkpoints on the 766 kilometres road have risen from 42 in 2015 to 61 in the first week of November, this year. Organised under the theme “Promoting Ghana as a regional gateway; keeping goods and people moving”, the week-long event was a collaboration effort between the Borderless Alliance and West Africa Food Markets Program with support from USAID ADVANCE Project, Ghana Ports and Harbours Authority, the USAID West Africa Trade and Investments Hub, and the and Ghana Shippers Authority.

The Caravan team observed that beyond delaying the movement of goods, mostly transit trade meant for Ghana’s landlocked neighbours, the checkpoints are conduits for bribe-taking by security officers, who demand and take an average of GH¢10 to GH¢100 at every checkpoint. Mr Bright Senam Gowonu, a trade facilitation specialist at Borderless Alliance, said the team found that Burkinabe truck drivers hauling clinker from the Takoradi Port to that country pay the most bribes at the various police checkpoints. Unlike their counterparts, he said the clinker haulers, who are the new economic operators on the Ghanaian corridor, are mostly made to pay between GH¢50 and GH¢100 per police checkpoint, making them “an easy target for extortion and harassment”. Of the 61 checkpoints on the road, Mr Gowonu said 31 were found to be fixed while 30 were mobile. Seven are within the Accra-Kumasi Highway, nine on the Kumasi-Techiman Highway with 46 being on the Techima-Paga corridor, he added.

Malawi: From falling behind to catching up – a country economic memorandum (World Bank)

The book places a strong emphasis on assessing Malawi’s growth experience since independence from a comparative international perspective. This book first discusses Malawi’s macroeconomic situation and challenges in fiscal management, reviewing and drawing lessons from the instability, slippages, and shocks experienced since independence. Second, it explores the current state of agricultural markets, given the critical role of this sector in poverty reduction. Third, looking at the factors that may constrain higher growth in the future, challenges in private sector development and job creation are discussed. Building on the analysis of challenges, the book concludes with a summary of policy recommendations to help Malawi to begin catching up with its peers. Extract (pdf):

Malawi’s trade volumes are relatively small and highly imbalanced between imports and exports, which drives up trade costs. Despite impressive growth in the volume of Malawi’s trade, trade remains small by international standards at around 3 million tons a year. Trade is highly imbalanced between imports and exports, and this imbalance is exacerbated by Malawi’s narrow basket of products, as discussed in chapter 3. Most products traded undergo seasonal fluctuations, so large volumes are traded during the harvest season with moderate volumes throughout the remaining months (figure 4.4). Seasonal demand for transport leads to price spikes if the supply of transport services cannot adjust.

Trade imbalances are also exacerbated by the geographical trade pattern, as only a few trade routes are being used for Malawi’s cargo (figure 4.5). Certain goods have preferred corridors, and the segmentation of trade leads to further trade imbalances among the different corridors, especially because transport equipment is not always suitable for the return cargo (for example, fuel imports enter on tankers while agricultural exports exit in containers). Empty backhauls (as a result of imbalanced trade) are one of the key drivers of high international transport costs. Malawian transporters face a range of difficulties in competing with foreign transporters on international corridors. For a landlocked country like Malawi, efficient transit operations and procedures are of vital importance. However...: [ The authors: Richard Record, Praveen Kumar, Priscilla Kandoole]

Nigeria seeks to narrow budget gap with more non-oil revenue (Bloomberg)

Nigerian President Muhammadu Buhari is projecting the nation’s budget shortfall will narrow next year as revenue from non-oil sources increases. Buhari asked lawmakers on Tuesday to approve the 2018 budget with a deficit of 2 trillion naira ($5.6 billion), compared to this year’s estimated fiscal gap of 2.4 trillion naira. Non-oil revenue is projected to triple to 4.2 trillion naira and will include funds raised from “restructuring of government’s equity in joint ventures,” he said in his budget speech in the capital, Abuja, without providing more details. Lawmakers are required to approve the budget before spending can start. In the last two years delays of as much as six months in signing the budget into law held back spending on projects and weighed on economic growth. Africa’s biggest oil producer is rebounding after the economy contracted by 1.6 percent in 2016, the first such performance since 1991. [Related: Full text: President Buhari’s 2018 budget speech, Remarks of Senate President Dr Bukola Saraki at the 2018 Budget Presentation, Kemi Adeosun: Offshore tax havens, avoidance schemes not illegal, Moody’s downgrades Nigeria’s sovereign issuer rating to B2 with a stable outlook: statement]

Cape Verde aims for global trade hub status (Afreximbank)

Prime Minister Jose Correia e Silva of Cape Verde opened the Advanced Structured Trade Finance Seminar and Workshops organized by Afreximbank, saying the country was determined to become an international trade hub. “Cape Verde intends to be an international market,” the Prime Minister told Seminar participants. “We have developed a specific agenda to achieve that objective.” He stated that, in order to address the challenge of inadequate transportation lines among African countries, Cape Verde had initiated a plan to connect Africa and the rest of the world, using Cape Verde Island as a hub. That plan involved the inauguration of flights to Lagos and Accra next month and to Abidjan, Dakar and many other African cities thereafter, in order to increase intra-African trade. [AFREXIM to harness over $100bn investible funds for intra-African trade]

Gender and enterprise development in Sub-Saharan Africa: a review of constraints and effective interventions (World Bank)

Female participation in entrepreneurial activities is higher in Sub-Saharan Africa than in any other region. However, women-owned businesses significantly underperform those owned by men. In Sub-Saharan Africa, entrepreneurship is very important for women’s livelihoods, representing almost 50% of women’s non-farm labor force participation. Women are equally represented among entrepreneurs as men (Hallward-Driemeier, 2013). This sets Sub-Saharan Africa apart from all other regions in the world, especially the Middle East and North Africa, where there is a large gender gap in participation in entrepreneurship (Hallward-Driemeier, 2011; Kelley et al., 2012). However, even in Sub-Saharan Africa there are still important differences between businesses owned by women and those owned by men. Women entrepreneurs are very likely to work alone, while men are more likely to have employees, which is a reflection of the different sizes of their businesses. Moreover, firms owned by women tend to underperform those owned by men on a number of dimensions including profitability, survival rates, average size, and growth trajectory.

‘African disputes should be arbitrated in Africa’ (ThisDay)

The Chartered Institute of Arbitrators Nigeria Branch, held its 2017 Annual Conference in Lagos last week on the theme Strengthening the building blocks of arbitration in Africa. The Chairman of the Institute, Adedoyin Rhodes-Vivour, discussed frontline issues in Arbitration and ADR in Africa, and soliciting the support of the three arms of Government, to enhance Arbitration in Nigeria.

Assessment of laboratory competencies in the SADC region (pdf, UNIDO)

Recognizing the value of quality infrastructure for economic development, many Southern African countries requested UNIDO’s assistance for facilitating global trade and regional integration. As the quality culture improves in Africa, tested and certified products are winning consumers’ confidence and they demand better and safe products. To prove and verify the quality of goods, conformity assessment certificates are sought for. However, these certificates from the SADC region are often not nationally/internationally recognized, creating a barrier to trade. From the 175 laboratories assessed, only 31 are accredited against ISO/IEC 17025. 138 laboratories are not accredited, meaning they cannot provide internationally recognized services. Although 67% of the laboratories claim that they use the laboratory management standard ISO/IEC 17025, 73% of those laboratories have not been appropriately trained to deploy these standards. Thus, there is a need to increase the capacity of Southern African countries to verify compliance to standards and quality requirements.

Roadmap to accreditation: enhancement of laboratory competencies in Nigeria (pdf, Nigeria)

Over 60 of the original 78 laboratories remain committed and are continuing to strengthen their systems in preparation for accreditation some 18 months after the initial training. Approximately 20 of them are ready for accreditation and it is expected that many of the remaining 40 will achieve the same status. Laboratories representing other sectors in the Nigerian economy have indicated interest in this initiative. Labs, particularly, in the mineral sector, are coming forward to participate. [Related: Directory of Accredited Conformity Assessment Bodies in West Africa: August 2017 (pdf), ECOWAS holds consultative meeting towards Regional Quality Infrastructure]

Zambia launches its first National Financial Inclusion Strategy (World Bank)

The Government of Zambia has launched its National Financial Inclusion Strategy, as well as its Financial Sector Development Policy, and Financial Capability Survey Report with support from the World Bank Group. The strategy’s implementation is expected to hit several targets by 2022, including: (i) an increase in overall financial inclusion (formal as well as informal) from 59% now to 80% in 2022, and an increase in formal financial inclusion from 38% now to 70% then; (ii) and improved physical access to high-quality financial services, including bank branches, agents, and ATMs, so that the number of financial access points will increase from approximately 7 to 10 per 10,000 adults.

Botswana: State of the Nation Address 2017 (GoB)

Inflation, Trade and Foreign Exchange Reserves: According to Statistics Botswana, total imports for 2016 were valued at P66.9 billion, against P73.2 billion recorded in 2015, representing a fall of 8.6%. Total exports for the same period were valued at P80.3 billion, an increase of 26.5%, compared to P63.5 billion recorded in 2015. As a result, our trade balance was in surplus of P13.5 billion in 2016, resulting in a balance of payments surplus of P2.8 billion, in contrast to the deficit of P0.57 billion that was recorded for 2015. As of the end August 2017, our foreign exchange reserves were valued at P 76.6 billion, which is equivalent to 17 months of import cover. Of the total reserves, the Government Investment Account amounted to P32.1 billion. Our exchange rate policy continues to support competitiveness of local industries in both domestic and international markets by maintaining the stability of the Pula against a basket of leading currencies.

Today’s Quick Links:

Preview: Joint EAC Heads of State Retreat on Infrastructure and Health Financing and Development

EAC, EABC meet to discuss areas of collaboration

IGAD Operational Plan 2018: workshop update

World Bank: Small firm death in developing countries

5 things you may have missed from the ICC Banking Commission’s 2017 Technical Meeting

UN Security Council urges ‘comprehensive response’ to piracy off Somali coast