tralac’s Daily News Selection
Featured African trade tweets:
@AnnMbiruru: Good news for transporters from Dar. Only 3 police roadblocks are official in Tanzania between Dar es Salaam and Mutukula, said TZ President @MagufuliJP during launch of Mutukula One Stop Border Post. = less transit time.
@diwahoza: Today was a good day for the Tanzania private sector; the final ground work was laid between @tpsftz and @ESRFTZ for the State of the Private Sector Report. The first report is expected to assess the contribution of the private sector to Tanzania’s economy in terms of exports, tax revenue, employment etc - a figure which has been illusive in the past. We expect to launch it at our next Ministerial Dialogue, in Dodoma, January 2018.
Featured infographics: Quartz Africa: Eurobond debt has grown rapidly in Africa between 2007-2016; Wandile Sihlobo: Sub-Saharan Africa’s wheat consumption is outpacing production - pushes imports higher
Namibia and SACU: Namibia’s struggle to get sugar rebate (The Namibian)
Under the current sugar arrangement in SACU, Namibia cannot develop downstream industries such as confectionery manufacturing because sugar becomes an industrial input, and a company in that position requires a reliable, sustainable, transparent and certain supply chain. Also, it appears that if Namibia sources sugar from South Africa, it cannot export value-added products manufactured from that sugar. Again, it will be blocking confectionery downstream manufacturing, plus it defeats the purpose of intra-SACU trade as it creates only one-way trade traffic in favour of South Africa. What appears to be a challenge in this process is that South Africa and Swaziland as SACU members do not support the Namibian sugar rebate application. Delaying tactics have been applied by sending the application from one meeting to another. And because SACU has no legal institutions to deal with such a process, ITAC has no obligation to Namibia to take its needs into consideration. In the end, it is the private sector which is losing; it is the development of the sector which is delayed; and generally, industrialisation sabotaged. In conclusion, SACU needs to sort itself out if it wants to seriously promote industrialisation and create employment through manufacturing. [The author, Maria Immanuel, is an international trade analyst, agricultural economist and entrepreneur]
Key characteristics of African tourism GVCs (Commonwealth Secretariat)
Africa’s tourism GVCs are notable for many features, including the durability of package booking channels, low domestic demand for tourism, the presence of global - rather than regional - lead firms and the corresponding implications for leakages from the local economy as well as the importance of business travel. This paper examines some of the most significant aspects of African tourism that influence the economic upgrading that is available to local stakeholders. It then concludes by identifying policy initiatives that may facilitate those upgrading trajectories. [The author: Jack Daly]
Aubrey Hruby, Jonathan Said: How to close Africa’s jobs gap (Devex)
Instead, governments that focus on a modern industrial policy - concentrating on trade-oriented sectors that can compete in the global marketplace and knocking down the barriers that can hold them back - tend to create more jobs. The word “modern” is deliberate. It means embracing - not shying away from - the globalized economy, technology, open trade, and markets. It means being politically savvy to foster a working partnership with the private sector that will form competitive industry clusters to create jobs at scale. However, even the best strategy will fail without effective implementation. In countries where government capacity is limited, partners should focus on working with and strengthening “islands of effectiveness,” or agencies staffed with technically competent employees who have sufficient authorization to develop strategies, coordinate players, execute directives, and implement, coordinate, and guide sector strategies. Examples include the Rwandan Development Board and Ethiopia’s Agricultural Transformation Agency. [AfDB consultancy: Research assistance on jobs in Africa project]
Tanzania: Commission launches report about national assessment on business (IPPMedia)
The Commission for Human Rights and Good Governance yesterday launched the national baseline assessment on business and human rights report showing large existing gaps in land laws and right of access to information. Delivering the findings to participants in Dar es Salaam during the programme for the multi-stakeholders workshop to launch the report, CHRGG chairman Bahame Nyanduga said that the baseline is the response that providing a comprehensive account of the status of protection of human rights with regard to business activities in Tanzania. The baseline was developed by CHRGG with technical support from the Danish Institute for Human Rights.
Kenyan firms struggling with gender inequality, corruption - UN (Business Daily)
Kenyan companies lead their African peers in the race to adopt sustainable business practices even as they struggle with gender inequality, graft and failure by firms to publish sustainability reports, the United Nations has said. The UN Global Compact executive director, Lise Kingo, said that Kenyan firms account for nearly a third of its membership base in Africa after signing up to its binding creed of sustainable pillars like anti-corruption, gender equity, labour, governance and environment. “Kenya provides us with the largest membership in Africa and that’s quite encouraging since it shows more firms here are striving to reach sustainability goals,” Ms Kingo said in an interview in Nairobi where she is on an official visit. The agency has a membership pool of 650 companies in Africa, with Kenya leading with 200 firms. [Kenya: Strike revives automation call in world’s top tea exporter]
The SADC Committee of Ministers of Transport have endorsed Beitbridge, Kazungula, Kasumbalesa and Chirundu One-Stop Border Posts for the piloting of the NEPAD Agency MoveAfrica’s Traffic Light System, as well as the roadmap for implementation of the TLS on the selected pilot border posts. The roadmap for the implementation of the TLS on the pilot border posts will be done in a 3-phase approach. Phase 1, will look at the reporting of different indexes and sources. Phase 2, will look deeper into the market dynamics, investment potential vis-à-vis risk assessments to ascertain the type and level of effort needed in a particular corridor by classifying the One-Stop Border Posts into A, B or C categories. Phase 3 will give the overall ranking based on the variables in the first two sections to arrive at the traffic light categories of Green, Orange and Red.
Mutukula OSBP to ease trade between Tanzania, Uganda (New Vision)
Loopholes for revenue collection sealed as both Tanzania Revenue Authority and Uganda Revenue Authority have recorded marked improvement in their revenue collections at Mutukula. TRA records show it has collected Tsh 27,776,716,217.00 ($12m) since August 2016 to June 2017, the time within which OSBP operations took form, compared to the year 2014/2015 where Tsh 18,646,417,015.00 ($8.1m) was collected. URA has more than doubled its revenue collection from sh70,332,001,143 (or $20m) in 2014 to sh147,724,206,969 (or $43m) in 2017. On daily basis, 542 vehicles (310 of those cargo trucks) pass through Mutukula border post. [The author, Moses Sabiiti, is TMEA Country Director, Uganda], [Uganda: Establishment of OSBP at Lamia, Kyanika and Bunagana Border Crossings: consultance service pdf]
Members of the House of Representatives and other prominent Nigerians on Thursday warned Nigeria against supporting the application by Morocco to join ECOWAS. They also said Nigeria must not consider the option of exiting ECOWAS, having sacrificed so much for regional integration in the West African sub-region. The stakeholders spoke at a public hearing in Abuja organised by the House Joint Committees on Foreign Relations and Cooperation/Integration in Africa. All the stakeholders held the view that Morocco joining ECOWAS would have regrettable economic and political consequences for the sub-region, particularly for Nigeria. They also noted that Morocco and West Africa had no geographical closeness and would be a direct breach of the ECOWAS Treaty to admit a non-regional country into the bloc. Both Akinterinwa and Falana noted that Nigeria was the target of Morocco’s plan, as the latter would use its tariff-free ties with the European Union to flood the country with foreign goods. [By trading with Morocco, Buhari in breach of AU position on Western Sahara]
A position paper, submitted by Dr Femi Badejo (CEO/Chief Economist Global Trade Policy Initiatives), to the High-level roundtable on the EU-West Africa Economic Partnership Agreement EPA, 24 October held in Lagos. [Cameroon: No more chicken, please (pdf)]
South Africa: Financial Stability Review (SARB)
The SADC Integrated Regional Electronic Settlement System (pdf): The September 2013 and March 2015 editions of the Financial Stability Review reported on the plans to establish the SADC Integrated Electronic Settlement System (SIRESS) and provided an update on progress with SIRESS. The SIRESS system is one of the building blocks that contribute to greater regional financial integration, one of the key goals of SADC. Over the last two and a half years, participation in SIRESS has grown from nine to 14 countries, with at least one bank in each country being active on the SIRESS platform. The overall number of participants has also increased to 83 banks of which seven are central banks and 76 are commercial banks (Table 8). SIRESS volumes and values have shown gradual growth over the last two years. Volumes have grown from an average of around 22 000 transactions per month in the third quarter of 2015 to about 24 000 transactions per month in the second quarter of 2017. Values settled have also increased steadily from about R90bn per month in the third quarter of 2015 to just below R100bn per month in the second quarter of 2017. The total values settled since inception reached the R1 trillion mark in April 2015 and by end July 2017 the total value and volumes of transaction settled were R3.49 trillion (US$267.59 billion) and 813 551 respectively (Figure 43). Given the increasingly important role that SIRESS plays in the regional payment settlement environment and the significant values of transactions settled, it is likely that SIRESS will be formally designated a financial market infrastructure participant active in the payment area, warranting closer attention and supervision in terms of the Principles for Financial Market Infrastructure and will probably be designated a domestic systemically important financial institution. It is also likely that SIRESS will be able to fill some, but not all, of the gaps brought about by the decline of correspondent banking relations in SADC associated with the derisking that have taken place recently in the region by some globally active banks.
‘Flexible mediation’ in Chinese province strengthens China-Africa trade (Front Page Africa)
A trade and commerce mediation committee established in 2013 to probe misunderstanding between Chinese businessmen – manufacturers or middlemen – and foreign exporters or traders is making “significant progress” in a major import-export concentrated city in Eastern China. The mediation committee, comprising of Ethiopians, Sudanese and Chinese nationals, is based in Yiwu City, a coastal Zhejiang Province in eastern China. The province also has the second largest African community in the entire China. There are over 3,000 African residents living in the city. Guangzhou, in Guangdong Province – southern China, has the largest African community. Merchants from over 100 countries are based in Yiwu city. Most of the mediators are African merchants themselves living in the city and they too are traders who export tones of commodities back to the continent.
China’s ambitions in Sub-Saharan Africa: efforts to rebalance bilateral relations still needed (Coface)
The slowdown in the Chinese economy and the reorientation of its growth model towards private consumption are reflected in a weakening of demand for commodities from Africa. This will have inevitable consequences for exporters. According to Coface economists’ calculations, sub-Saharan Africa had a significantly higher export dependency ratio (on a 0-to-1 scale) than other emerging countries in 2016, at 0.24 compared to 0.16 for South-East Asia (one of China’s largest trading partners) and 0.19 for Russia, Brazil, and India. The differential is even greater with the European Union (0.07) and the United States (0.12). Unsurprisingly, the countries that have benefited the most from China’s expansion and those with a less diversified economy are likely to feel the effects of lower demand more acutely. The strongest trade dependency is concentrated around crude oil exports and, according to the index established by Coface, South Sudan has been at the top of the ranking since its independence was declared in 2011, followed by Angola and Congo. The Gambia, which produces wood, is not far behind. Eritrea, Guinea, and Mauritania are also among the most dependent countries because of their exports of metal ores (iron, copper, aluminium).
The hardscrabble business of Chinese manufacturing in Africa (Harvard Business Review)
Irene Yuan Sun, a consultant at McKinsey, explains why so many Chinese entrepreneurs are setting up factories in Africa. She describes what it’s like inside these factories, who works there, what they’re making—and how this emerging manufacturing sector is industrializing countries including Lesotho and Nigeria. Sun’s new book is The Next Factory of the World: How Chinese Investment Is Reshaping Africa. Transcription of interview: [Africa will take China’s place as the next factory of the world]
Today’s Quick Links:
Mauritius: Prime Minister denies Mauritius being a tax haven (GoM)
Jaindi Kisero: Kenya deep in the middle of debt trap
Horasis Asia Meeting (26-27 November, Kolkata): Asia needs more dialogue on trade